Full text of Federal Reserve Bank of New York Circulars : 8955. Discount Rates

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FEDERAL RESERVE BANK
OF NEW YORK

Circular No. 8955
November 14, 1980

D IS C O U N T R A T E S
To A ll Depository Institutions
in the Second Federal Reserve District:

E f f e c t i v e Mo nday,
Bank, w i t h the
Re se rv e

System,

November

17,

1980,

the d i r e c t o r s of this

a pp r o v a l of the Bo a r d of G o v e r n o r s of the F e d e r a l
h ave r a i s e d the Ba nk's d i s c o u n t rate

cent to 12 pe rcent,

and have

f ro m 11 p e r ­

a d op t e d a s u rc h a r ge of 2 p e r c e n t on

f re q u e n t use of the d i s c o u n t w i n d o w b y large borrowers.
The

following

to d a y by the

is q u o t e d

from the text of a s t a t e me n t

is sued

Bo a r d of G ove rno rs :

The Federal Reserve Board today announced an increase in the "basic
discount rate from 11 percent to 12 percent and the adoption of a sur­
charge of 2 percentage points on frequent use of the discount window by
large borrowers.
These actions, which are effective on Monday, November 17, were
taken in view of the current level of short-term market interest rates
qnd the recent rapid growth in the monetary aggregates and bank credit.
The surcharge above the basic discount rate will apply to bor­
rowings for short-term adjustment purposes of institutions with deposits
of $500 million or more. It will be charged when discount borrowing
occurs in two or more successive weeks in a calendar quarter or when
borrowing takes place in more than four weeks in a calendar quarter.

A cop y of this Ba nk 's O p e r a t i n g C i r c u l a r No.
d i s c o u n t rates,




13,

regarding

w i l l be sent to y o u shortly.

A nthony

m

. Solom on,

President.