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FEDERAL RESERVE BANK OF NEW YORK Circular No. 9224 ~l [ December 30, 1981 J AMENDMENT TO REGULATION D Change in Dollar Limits of Reserve Requirement Classifications To All Depository Institutions in the Second Federal Reserve District, and Others Concerned: Following is the text of a statement by the Board of Governors of the Federal Reserve System: The Federal Reserve Board has announced adjustment of the amount of net transaction accounts to which the lowest — 3 percent — reserve requirement will apply in 1982. The change increased the amount of net transaction accounts to which the 3 percent requirement applies from $25 million to $26 million in any one depository institution. The Board made the change in accordance with provisions of the Monetary Control Act of 1980. The Act requires that the Board amend its Regulation D (Reserves of Depository Institutions) annually to increase the amount of transaction accounts against which the 3 percent reserve requirement will apply in the next calendar year to 80 percent of the percentage increase in transaction accounts held by all depository institutions on the previous June 30. The growth in total net transaction accounts of all depository institutions from June 30, 1980 to June 30, 1981 was 5.25 percent. The statutory rule thus requires an increaseof4.2 percent, or to $26 million. Printed on the reverse side is the text of the amendment, effective December 31, 1981, which has been reprinted from the Federal Register. Also, enclosed is a copy of a revised Supplement to Regulation D reflecting the Board’s current action. Questions regarding this matter may be directed to our Statistics Department (Tel. No. 212-791-5794).__ A n th o n y M. S o l o m o n , President. (OVER) institutions that are required to maintain reserves pursuant to the MCA are Federally-insured commercial banks or 12CFR Part 204 any such bank that is eligible to apply to [Docket No. R-0378; Reg. D] become insured by the Federal Deposit Insurance Corporation; any mutual or Reserve Requirements of Depository stock savings bank; any savings and Institutions; Reserve Requirement loan association that is a member of a Ratios Federal Home Loan Bank or insured by, or eligible to apply for insurance with, AGENCY: Board of Governors of the the Federal Savings and Loan Insurance Federal Reserve System. Corporation; and any credit union that is ACTION: Final rule._____________________ insured by, or eligible to apply for SUMMARY: The Board is amending insurance with, the National Credit Regulation D—Reserve Requirements of Union Administration Board. One of the Depository Institutions (12 CFR Part major functions of the imposition of 204)— to adjust the dollar amount of universal reserve requirements is to transaction accounts subject to a enhance the ability of the Federal reserve requirement ratio of 3 per cent Reserve to conduct monetary policy. for depository institutions. Edge and The initial reserve requirements Agreement Corporations and United imposed under the MCA were set at 3 States branches and agencies of foreign per cent for each depository institution’s banks, as required by the Monetary transaction accounts of $25 million or Control Act of 1980 (Title I of Pub. L. 90- less and at 12 per cent on transaction 221). Under the amendment, the first $26 accounts above $25 million, which the million of an institution’s net transaction Board is authorized to vary between 8 accounts will be subject to a 3 per cent and 14 per cent. The MCA further reserve ratio, and amounts in excess of provides that the Board shall issue a $26 million will be subject to a 12 per regulation before December 31 of each cent reserve ratio. Presently, only the year, beginning in 1981, adjusting for the first $25 million of a depository next calendar year the total dollar institution’s net transaction accounts are amount of the transaction account subject to a 3 per cent reserve ratio. tranche against which reserves must be maintained at a ratio of 3 per cent. The e f f e c t iv e DATE: December 31,1981. The increase in the tranche is to be 80 per first reserve maintenance period to cent of the percentage increase in total which the amendment applies transaction accounts for all depository commences January 14,1982. institutions determined as of June 30 of FOR FURTHER INFORMATION CONTACT: each year. The growth in the total net Gilbert T. Schwartz, Associate General transaction accounts of all depository Counsel (202/452-3625), Paul S. Pilecki, institutions from June 30,1980, to June Senior Attorney (202/452-3281) or Veryl 30,1981, was 5.25 per cent In V. Miles, Attorney (202/452-3611), Legal accordance with these provisions of the Division, Board of Governors of the MCA, the Board is amending Regulation Federal Reserve System. Washington, D to increase the amount of the low D.C. 20551. reserve tranche for transaction accounts SUPPLEMENTARY INFORMATION: The for 1982 to $26 million. Monetary Control Act of 1980 (Title I of The provisions of 5 U.S.C. 553(b) Pub. L 96-221) (“MCA") requires each relating to notice and public depository institution to maintain with participation have not been followed in the Federal Reserve System reserves connection with the adoption of this against its transaction accounts and amendment because the change to be nonpersonal time deposits, as effected involves an adjustment prescribed by Board regulations. prescribed by statute and, thus, the Included in the definition of depository FEDERAL RESERVE SYSTEM Board believes that notice and public participation is unnecessary. The Board’s extended rulemaking procedures (44 FR 3957 (1979)) have not been followed because the amendment relieves a burden on depository institutions and because following such procedures could interfere with necessary and prompt action that would be in the public interest. The effective date of the amendment has not been deferred pursuant to 5 U.S.C. 553(d), since the Board’s action relieves a restriction by reducing the reserve requirements of depository institutions and since deferring the effective date would be inconsistent with section 103 of the MCA (12 U.S.C. 461(b)(2)(C)). PART 204— RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS Effective December 31,1981, pursuant to the Board’s authority under section 19 of the Federal Reserve Act, 12 U.S.C. 461 et seq.. paragraph (a) of § 204.9 of Regulation D, 12 CFR Part 204, is revised to read as follows: § 204.9 Reserve requirement ratios. (a) Reserve percentages. The following reserve ratios are prescribed for all depository institutions. Edge and Agreement Corporations and United States branches and agencies of foreign banks: Category Reserve requirement Net transaction accounts: 0 to S26 rmlhon................................ 3 pet crt amount. Over $26 million............................. $780,000 plus 12 pet of amount over $26 million. Nonpersonal time deposits: By original maturity (or notice period): Less than 4 years... . 3 p ci 4 years or more............. 0 pet Eurocurrency liabilities........... ......... 3 pet • • • By order of the Board of Governors, December 16,1981. William W. Wiles, Secretary of the Board. PRINTED IN NEW YORK, FROM FEDERAL REGISTERyOL. 46, No. 245 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS SUPPLEMENT TO REGULATION D (effective December 31, 1981) As amended effective for reserves required to be maintained during the seven-day period beginning January 14, 1982, against deposits outstanding during the seven-day period beginning on December 31, 1981. SECTION 204.9 — RESERVE REQUIREMENT RATIOS (a) Reserve percentages. The following reserve ratios are prescribed for all depository institutions, Edge and Agreement Corporations and United States branches and agencies of foreign banks: Category Reserve requirements Net transaction accounts: $0-$26 million Over $26 million 3% of amount $780,000 plus 12% of amount over $26 million over $2 million$10 million $140,000 + 9%% of amount over $2 million over $ 10 million$100 million $900,000 + 11%% of amount of over $ 10 million over $100 million$400 million $11,475,000 + 12%% of amount over $100 million over $400 million $49,725,000 + 16%% of amount over $400 million Savings deposits 3% Time deposits Nonpersonal time deposits: (subject to 3% minimum specified by law) By original maturity (or notice period) less than 4 years 4 years or more 3% 0% Eurocurrency liabilities 3% (b) Reserve ratios in effect during last computation period prior to September 1, 1980. Category 7% For purposes of computing the reserves under this Part, that would have been required using the reserve ratios that were in effect on August 31, 1980, the reserve ratio on time deposits of a member bank shall be the average time deposit ratio of the member bank during the 14-day period ending August 6, 1980, except that the reserve ratio on 3% 6% 180 days to 4 years 2%% 4 years or more 1% Accounts authorized pursuant to Section 303 of Public Law 96-221 offered by member banks located in States outside Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont 12% Deposit Tranche: [Enc. Cir. No. 9224] Less than 180 days $0-5 million over $5 million Reserve Requirement Net Demand Deposits $0-$2 million By initial maturity: Club accounts 3% time deposits of a nonmember bank that was a member bank on or after July 1, 1979, but which became a non member bank before March 31,1980, may be the average time deposit ratio of the non-member during the 14-day period ending August 27, 1980.
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