Full text of Federal Reserve Bank of New York Circulars : 8022. Supplement To Regulation D

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F E D E R A L R E S E R V E BANK
O F N EW YORK

Circular No. 8 0 2 2 * 1

[ December 29, 1976

J

SUPPLEMENT TO REGULATION D
Effective December 16, 1976

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

Our Circular No. 8016, dated December 20, 1976, announced a reduction by the
Board of Governors of the Federal Reserve System in reserve requirements on
the net demand deposits of member banks. The new reserve requirements apply to
demand deposits outstanding in the week beginning December 16, 1976 and there­
after and affect reserves held by member banks in the week beginning December
30, 1976 and thereafter.
Enclosed is a copy of a revised Supplement, effective December 16, 1976, to
Regulation D, ‘‘Reserves of Member Banks,” which reflects the Board’s action.
Additional copies of the enclosure will be furnished upon request.




P au l A .V olc k er ,

President.

Board of Governors of the Federal Reserve System
SUPPLEMENT TO REGULATION D

Effective December 16, 1976
SECTION 204.5—RESERVE REQUIREM ENTS
(a) Reserve percentages. Pursuant to the
provisions of section 19 of the Federal Reserve
Act and §204.2(a) and subject to paragraph
(c) of this section, the Board of Governors of
the Federal Reserve System hereby prescribes
the following reserve balances that each member
bank of the Federal Reserve System is required
to maintain on deposit with the Federal Reserve
Bank of its district:
(1) If not in a reserve city—
(1) 3 per cent of (A) its savings deposits
and (B) its time deposits, open account, that
constitute deposits of individuals, such as Christ­
mas club accounts and vacation club accounts,
that are made under written contracts providing
that no withdrawal shall be made until a certain
number of periodic deposits have been made
during a period of not less than 3 months; and
(ii) 1 per cent of its time deposits outstand­
ing on or issued after October 16, 1975, that
have an initial maturity of 4 years or more; 2)4
per cent of its time deposits outstanding on or
issued after December 25, 1975, that have an ini­
tial maturity of 180 days or more but less than
4 years; 3 per cent of its time deposits up to
$5 million, outstanding on or issued after Oc­
tober 16, 1975, that have an initial maturity of
less than 180 days, plus 6 per cent of such
deposits in excess of $5 million.
Provided, however, that in no event shall the
reserves required on its aggregate amount of
time and savings deposits be less than 3 per cent.
(iii) (a) 7 per cent of its net demand deposits
if its aggregate net demand deposits are $ 2
million or less, fb) $140,000 plus 9% per cent
of its net demand deposits in excess of $ 2 mil­
lion if its aggregate net demand deposits are in
excess of $ 2 million but not more than $ 1 0 mil­
lion, (c) $900,000 plus 11 % per cent of its net
demand deposits in excess of $ 1 0 million if its
aggregate net demand deposits are in excess of
$ 1 0 million but not more than $ 1 0 0 million, or
(d) $ 1 1 ,4 7 5 , 0 0 0 plus 1 2 % per cent of its net
demand deposits in excess of $ 1 0 0 million.
(2) If in a reserve city (except as to any
bank located in such a city that is permitted by
the Board of Governors of the Federal Reserve
System, pursuant to §204.2(a) (2), to maintain
the reserves specified in subparagraph ( 1 ) of
this paragraph) —
(i) 3 per cent of (A) its savings deposits and
(B) its time deposits, open account, that con­
stitute deposits of individuals, such as Christ­
mas club accounts and vacation club accounts,
that are made under written contracts providing

that no withdrawal shall be made until a certain
number of periodic deposits have been made
during a period of not less than 3 months; and
(ii) 1 per cent of its time deposits outstand­
ing on or issued after October 16, 1975, that
have an initial maturity of 4 years or more; 2%
per cent of its time deposits outstanding on or
issued after December 25, 1975, that have an ini­
tial maturity of 180 days or more but less than
4 years; 3 per cent of its time deposits up to
$5 million, outstanding on or issued after Oc­
tober 16, 1975, that have an initial maturity of
less than 180 days, plus 6 per cent of such
deposits in excess of $5 million.
Provided, however, that in no event shall the
reserves required on its aggregate amount of
time and savings deposits be less than 3 per cent.
(iii) $49,725,000 plus 16% per cent of its
net demand deposits in excess of $400 million.
(b) Currency and coin. The amount of a
member bank’s currency and coin shall be
counted as reserves in determining compliance
with the reserve requirements of paragraph (a)
of this section.
(c) Reserve percentages against certain de­
posits by foreign banking offices. Deposits rep­
resented by promissory notes, acknowledge­
ments of advance, due bills, or similar, obliga­
tions described in §204.1 (f) to foreign offices
of other banks, 7 or to institutions the time de­
posits of which are exempt from the rate limita­
tions of Regulation Q pursuant to §217.3 (g)
thereof, shall not be subject to paragraph (a)
of this section or to. §204.3(a)(1 ) and (2 );
but during each week of the four-week period
beginning May 22, 1975, and during each suc­
cessive four-week (“maintenance”) period, a
member bank shall maintain with the Reserve
Bank of its district a daily average balance equal
to 4 per cent of the daily average amount of
such deposits during the four-week computation
period ending on the Wednesday fifteen days
before the beginning of the maintenance period.
An excess or deficiency in reserves in any week
of a maintenance period under this paragraph
shall be subject to §204.3(a) (3), as if computed
under §204.3(a) ( 2 ), and deficiencies under this
paragraph shall be subject to §204.3(b).8
7 Any banking office located outside the States of the
United States' and the District of Columbia of a bank
organized under domestic or foreign law.
8 The term “computation period” in §204.3 (a) (3)
and (b) shall, for this purpose, be deemed to refer to
each week of a maintenance period under this para­
graph.

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