The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL RESERVE BANK
OF NEW YORK
rCircular No. 7 1 9 7 "[
L
July 31, 1973
J
REVISED SUPPLEMENTS TO REGULATIONS D AND Q
To A ll M em ber Banks, and Others Concerned,
in the Sccond Federal R eserve D istrict:
The Board of Governors of the Federal Reserve System has
amended the Supplements to its Regulation D, “ Reserves of Member
Banks,” and Regulation Q, “ Interest on Deposits.”
The Supplement to Regulation Q has been changed, effective July
16, 1973, to remove interest rate ceilings on multiple maturity time
deposits of $100,000 or more, and on multiple maturity time deposits
with maturities of 4 years or more in denominations o f $1,000 or more.
Accordingly, there is no longer any distinction in the Supplement
between single maturity and multiple maturity time deposits with
respect to the maximum rates of interest payable by member banks
on such deposits.
The amended Supplement to Regulation D requires that all time
deposits of $100,000 or more, including multiple maturity time deposits,
that were outstanding during the week ended May 16, 1973 must be
included in a member bank’s base for purposes of calculating the mar
ginal reserve requirement on time deposits. Effective August 30, 1973,
the required reserves on all such deposits will be maintained in accord
ance with these changes, as described in the Supplement. The amended
Supplement also clarifies the application o f the marginal reserve
requirement to time deposits represented by such obligations as promis
sory notes, acknowledgments of advance, due bills, “ finance bills” , and
bank-related commercial paper or similar obligations issued by a
member bank’s affiliate.
Enclosed are copies o f the revised Supplements to Regulations D
and Q; additional copies will be furnished upon request.
A
lfred
H
ayes,
President.
B O A R D O F G O V E R N O R S O F THE FEDERAL. R E S E R V E SYSTEM
S U P P L E M E N T T O R E G U L A T IO N Q
Effective July 16,1973
SECTION 217.7 — M AXIMUM RATES OF INTEREST PAYABLE
BY MEM BER BANKS ON TIM E AND SAVINGS DEPOSITS
Pursuant to the provisions of section 19 of
the Federal Reserve Act and § 217.3, the Board
of Governors of the Federal Reserve System
hereby prescribes the following maximum
rates1 of interest per annum payable by mem
ber banks of the Federal Reserve System on
time and savings deposits:
(a)
Time deposits with no maximum rate
prescribed. There is no maximum rate of in
terest presently prescribed (1) on any time
deposit of $100,000 or more, or (2) on any
time deposit of $1,000 or more with a maturity
of 4 years or more.
1 T he limitations on rates ot interest payable b y
m em ber banks o f the Federal Reserve System on time
and savings deposits, as prescribed herein, are not
a pplicable to any deposit w hich is payable on ly at an
office o f a m em ber bank located outside the States of
the United States and the District o f Colum bia.
(b ) Time deposits with maximum rates pre
scribed. Except as provided in paragraph (a),
no member bank shall pay interest on any
time deposit at a rate in excess of the ap
plicable rate under the following schedule:
Maturity
Maximum per cent
30 days or more but less
than 90 days
5
90 days or more but less
than 1 year
0V2
1 year or more but less
than 30 months
6
30 months or more
6V2
(c) Savings deposits. No member bank
shall pay interest at a rate in excess of 5 per
cent 011 any savings deposit.
P R I N T E D IN ' N E W Y O R K
B O A R D OF G O V E R N O R S OF THE F E D E R A L R E S E R V E S Y S T E M
S U P P L E M E N T TO R E G U L A T IO N D
Effective August 30, 1973
S E C T IO N 2 0 4 . 5 - -R E S E R V E R E Q U I R E M E N T S
(a)
Reserve percentages. Pursuant to the provi
sions o f section 19 o f the Federal Reserve A ct and
§ 204.2(a) and subject to paragraph (c) o f this
section, the Board o f G overn ors o f the Federal
Reserve System hereby prescribes the follow in g
reserve balances that each m em ber bank o f the
Federal Reserve System is required to maintain
on deposit with the Federal Reserve Bank o f its
district:
(1) If not in a reserve city—
(i) 3 per cent o f (A ) its savings deposits and { B)
its time deposits, open accoun t, that constitute
deposits o f individuals, such as Christmas club
accounts and vacation chib accounts, that are
made under written contracts providing that no
withdrawal shall be m ade until a certain number
o f periodic deposits have been made during a
period o f not less than 3 months; and
(ii) 3 per cent o f its other time deposits up
to $5 m illion, plus 5 per cent o f such deposits
in excess o f $5 m illion:
Provided, however. That a m em ber bank shall
maintain a reserve balance equal to S per cent o f
the am ount by w hich the daily average am ount
o f time deposits o f the types hereinafter specified
exceeds either the daily average am ount o f such
time deposits outstanding during the com putation
period ending M ay 16, 1973, or $10 m illion,
w hichever is greater, and such 8 per cent reserve
percentage shall apply with respect to time de
posits o f the follow in g types:
(a) time deposits o f $1 00 ,0 00 or m ore;
( b ) time deposits represented by prom issory
notes, acknow ledgm ents o f advance, due bills,
or similar obligations issued by a m em ber
bank’s affiliate, as provided in § 2 0 4 . 1 ( f ) ; and
( c ) time deposits represented by bank ac
ceptances, as provided in § 2 0 4 . 1 ( f ) ;
and
(iii) (a) 8 per cent o f its net dem and deposits if
its aggregate net dem and deposits are $2 million
or less, (h) $ 1 60 ,0 00 plus I.O'/i per cent o f its net
dem and deposits in excess o f $2 million if its
aggregate net dem and deposits are in excess o f
S2 million but less than $10 m illion, ( c ) $1 m illion
plus 12Vi per cent o f its net dem and deposits in
excess o f $10 m illion if its aggregate net dem and
deposits are in excess o f $ 10 m illion but less than
$100 m illion, or (d) $1 2,25 0,00 0 plus 13V2 per
cent o f its net dem and deposits in excess o f $100
m illion.
(2)
If in a reserve city (except as to any bank
located in such a city that is permitted by the
Board o f G overn ors o f the Federal Reserve Sys
tem, pursuant to § 204.2(a)(2), to maintain the
reserves specified in subparagraph (1) o f this
paragraph)-—
(i) 3 per cent o f (A ) its savings deposits and (B)
its time deposits, open account, that constitute
deposits o f individuals, such as Christmas club
accounts and vacation club accounts, that are
m ade under written contracts providing that no
withdrawal shall be made until a certain num ber
o f periodic deposits have been made during a
period o f not less than 3 months; and
(ii) 3 per cent o f its other time deposits up to
$5 m illion, plus 5 per cent o f such deposits in
excess o f $5 million:
Provided, however, That a m em ber bank shall
maintain a reserve balance equal to 8 per cent
o f the am ount by w hich the daily average am ount
o f time deposits o f the types hereinafter specified
exceeds either the daily average am ount o f such
time deposits outstanding during the com putation
period ending M ay 16, 1973, or $10 million,
w hichever is greater, and such 8 per cent reserve
percentage shall apply with respect to time de
posits o f the follow in g types:
(a) time deposits o f $100,000 or m ore;
( b ) tim e deposits represented by prom issory
notes, acknow ledgm ents o f advance, due bills,
or sim ilar obligations issued by a m em ber
bank’s affiliate, as provided in § 2 0 4 .1 ( f ) ; and
( c ) time deposits represented by bank ac
ceptances, as provided in § 2 0 4 .1 ( f ) ;
and
(iii) $5 2,7 5 0 ,0 0 0 plus 18 per cent o f its net
dem and deposits in excess o f $400 million.
( over)
PUIXT KI) IN NF.W YU KK
(b) C urrency and coin . T h e am ount o f a m em
ber bank’s curren cy and coin shall be coun ted as
reserves in determ ining com p lian ce with the re
serve requirem ents o f paragraph (a) o f this section.
(c) Reserve percentages against certain deposits
by foreign banking oilices. Deposits represented
by prom issory notes, acknow ledgm ents o f ad
vance, due bills, or similar obligations described
in § 2 0 4 .1 (f) to foreign offices o f other banks, 8 or
to institutions the time deposits o f w hich are
exem pt from the rate lim itations o f Regulation Q
pursuant to § 21 7 .3 (g ) th ereof, shall not be subject
to paragraph (a) o f this section or to § 20 4.3(a )(1)
and (2); but during each week o f the fou r-w eek
period beginning June 21, 1973, and during each
successive fou r-w eek (“ m aintenance” ) period, a
m em ber bank shall maintain with the Reserve
Bank o f its district a daily average balance equal
to 8 per cent o f the daily average am ount o f
such deposits during the fou r-w eek com pu tation
period ending on the W ednesday fifteen days
b efore the beginning o f the m aintenance period.
A n excess or deficien cy in reserves in any w eek
o f a m aintenance period under this paragraph
8
A ny banking office located outside the States of
the United States and the D istrict of Columbia of a
bank organized under dom estic or foreign law.
shall be subject to § 204.3(a)(3), as if com pu ted
under § 204.3(a)(2), and deficiencies under this
paragraph shall be subject to § 204.3(b ): 9
Provided, That any bank that, under the terms
o f S 204.5(c) o f Regulation D as in effect prior
to June 21, 1973, 10 was deducting fo r the c o m
pulation period ending on M ay 9, 1973, an earlier
p eriod ’s corresponding daily average total o f such
deposits (hereinafter called “ reserve-free base” )
in calculating its reserve requirem ents shall c o n
tinue to be entitled to do so in accord a n ce with
the terras o f such form er section, but such reservefree base shall not exceed progressively low er
ceilings established hereunder by reducing the
am ount o f its reserve-free base for the com p u ta
tion period ending on M ay 9, 1973, in ten
increm ents, each e q u a l'to 10 per cent o f its base
in such com putation period ending on M ay 9,
1973, applied consecutively in each succeeding
com pu tation period beginning with the period
ending on August 1, 1973, until such reserve-free
base is exhausted.
9 The term ‘ ‘computation period" in § 2 0 4 .3 (a ) ( 3 )
and ( b ) shall, for this purpose, be deemed to refer to
each week of a maintenance period under this para
graph.
10 35 Federal Register 18658.
@FedFRASER