Full text of Federal Reserve Bank of New York Circulars : 6262. Discount Rates

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

FEDERAL RESERVE BANK
OF N EW YORK
r Circular No. 6 2 6 2 ~l
U December 17, 1968 J

DISCOUNT RATES

To All Member Banks, and Others Concerned,
in the Second Federal Reserve District:

With the approval of the Board of Governors of the Federal Reserve System,
the directors of this Bank have increased the Bank’s discount rate from 5% to 5x/>
per cent, effective Wednesday, December 18, 1968.
Following is the text of a statement issued today by the Board of Governors
of the Federal Reserve System:
The Board of Governors of the Federal Reserve System announced today its approval
of action by directors of the Federal Reserve Banks of Boston, New York, Philadelphia,
Cleveland, Richmond, Atlanta, Chicago, Minneapolis, and Dallas, increasing the discount
rate of those banks from 5% to 5% per cent, effective Wednesday, December 18.
This discount rate increase was approved in recognition of the advances that have taken
place in other market interest rates in recent months and also in light of the resurgence in
inflationary expectations that is impeding the restoration of economic stability. The objec­
tive o f Federal Reserve policy is to foster financial conditions conducive to the reduction of
inflationary pressures, with a view toward encouraging a more sustainable rate of economic
expansion and attaining reasonable equilibrium in the country’s balance of payments. The
present action is being taken in furtherance of a policy of restraint.
The discount rate is the interest rate charged member banks for borrowing from their
District Federal Reserve Banks. The increase restores the rate to the level prevailing
between April 19 and August 15, 1968. This level is the highest in nearly four decades.
Voting for this action were Vice Chairman Robertson and Governors Mitchell, Daane,
Maisel, Brimmer, and Sherrill. Chairman Martin was absent and did not vote.

Enclosed is a copy of this Bank’s Operating Circular No. 13, regarding discount
rates. Additional copies of the enclosure will be furnished upon request.




A

lfred

H

ayes,

President.

Federal
of

R eserve
N

ew

Y

Bank

ork

Circular No. 13 *1
Revised December 18, 1968 J
[ Operating

DISCOUNT RATES

To All Member Banlcs, and Others Concerned,
in the Second Federal Reserve District:

1. This Bank has established the following new rates, effective
December 18, 1968:
A rate of 5V2 per cent per annum on advances to, and discounts
for, member banks under sections 13 and 13a of the Federal
Reserve Act.
A rate of 6 per cent per annum on advances to member banks
under section 10(b) o f the Federal Reserve Act.
A rate of 7 per cent per annum on advances to individuals,
partnerships, and corporations other than member banks under
the last paragraph of section 13 of the Federal Reserve Act.
Shown below is the schedule of rates now in effect at this Bank on
advances and discounts made under the Federal Reserve Act.
2. This circular supersedes our Operating Circular No. 13, Revised
August 30, 1968.
A

lfred

H

ates

,

President.

Rate Schedule, Effective December 18, 1968
Per Cent
Per Annum

Advances to and discounts for member banks:
( a ) A d v a n ce s and d iscou n ts u n d er section s 13 and 13a o f the

5y2

F e d e ra l R e se rv e A c t
( b ) A d v a n ce s u n d er section 1 0 ( b ) o f the F e d e ra l R eserve A c t

6

Advances to individuals, partnerships, and corporations
other than member banks:
A d v a n ce s u n d er la st p a ra g r a p h o f section 13 o f the F ed era l
R e se rve

A ct

U n ited States




secu red

by

d irect

o b lig a tio n s

of

the
7