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 E W Y ORK
[
Circular No. 9749
Novem ber 8, 1984
R ESERVE REQ U IR EM EN TS
Supplem ent to Regulation D, Effective Ja n u a ry 1, 1985
To All Depository Institutions, Edge and Agreement Corporations, and Branches
and Agencies o f Foreign Banks, in the Second Federal Reserve District:
Following is the text o f a statem ent issued by the Board o f Governors o f the Federal Reserve System:
The Federal Reserve Board has announced an increase in the amount of net transaction accounts to which the lowest
— 3 percent — reserve requirement will apply in 1985 from $28.9 million to $29.8 million. The Board also increased the
amount of reservable liabilities in depository institutions that are subject to a zero percentage reserve requirement from
$2.2 million to $2.4 million.
The Board made the changes in accordance with provisions of the Monetary Control Act of 1980 and the Garn-St
Germain Depository Institutions Act of 1982.
The Monetary Control Act requires the Board to amend its Regulation D (Reserve Requirements of Depository Insti
tutions) annually to increase the amount of transaction accounts subject to a 3 percent reserve requirement in the next
calendar year to 80 percent of the annual percentage increase in transaction accounts held by all depository institutions.
The growth in total net transaction accounts of all depository institutions from June 30, 1983 to June 30, 1984 was 3.8
percent. The statutory rule thus requires an increase of $900 million, or to $29.8 million.
The Garn-St Germain Act requires the Board to amend Regulation D to adjpst the amount exempt from reserve
requirements for the upcoming year by 80 percent of the annual percentage increase in total reservable liabilities. Growth
in total reservable liabilities was 9.1 percent from June 30, 1983 to June 30, 1984, requiring an increase in the reserve
requirement exemption to $2.4 million.
The adjustments take effect beginning January 1, 1985.
In its official notice o f the changes, the Board also stated, with respect to the effective date:
The tranche adjustment and the reservable liabilities exemption adjustment for weekly reporting institutions will be
effective starting with the reserve computation period beginning on January 1, 1985, and with the corresponding reserve
maintenance periods beginning January 3, 1985, for net transaction accounts, and on January 31, 1985, for other
reservable liabilities. For institutions that report quarterly, the tranche adjustment and the exemption will be effective with
the computation period beginning on December 18, 1984, and with the reserve maintenance period beginning January 17,
1985. In addition, all entities currently submitting Form FR 2900 will continue to submit reports to the Federal Reserve
under current reporting procedures.
(OVER)
Enclosed is a copy of a revised Supplement to Regulation D, reflecting the Board’s action. The full text of the
Board’s official notice will be published in the F e d e r a l R e g is te r ; copies will be furnished upon request directed to our
Circulars Division (Tel. No. 212-791-5216). Questions regarding Regulation D may be directed to the following:
Reporting Requirements:
Richard J. Gelson, Vice President (Tel. No. 212-791-8225)
Nancy Bercovici, Manager, Statistics Department (Tel. No. 212-791-8227)
Paula B. Schwartzberg, Chief, Deposit Reports Division (Tel. No. 212-791-8590)
Maintenance Requirements:
Leon R. Holmes, Assistant Vice President (Tel. No. 212-791-7768)
Patricia Hilt-Lupack, Chief, Accounting Control Division (Tel. No. 212-791-5803)
Interpretation of Regulation D:
Joyce E. Motylewski, Assistant Counsel, Legal Department (Tel. No. 212-791-5024)
Ann Calabrese, Chief, Regulations Division (Tel. No. 212-791-5914)
A
nthony
M.
S
olom on
.
P r e s id e n t.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
SU PPLEM EN T TO REG U LA TIO N D
Reserve R equirem ent Ratios
Effective January 1, 1985, pursuant to the Board’s authority under section 19 of the Federal
Reserve Act, 12 U.S.C. § 461 et seq ., 12 CFR Part 204 is amended by revising paragraph (a) of
section 204.9 to read as follows:
SECTION 204.9 — RESERVE REQUIREMENT RATIOS
(a)(1) 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:
C ATEG O RY
RESERVE REQ U IREM EN T
Net transaction accounts
$0 to $29.8 m illio n .................................3% of amount
Over $29.8 million...................................$894,000 plus 12% of
amount over $29.8 million
Nonpersonal time deposits
By original maturity
(or notice period):
Less than 1Vi y e a r s .................................. 3%
1Vi years or more...................................... 0%
Eurocurrency liabilities................................3%
(2) Exem ption fro m reserve requirem ents. Each depository institution, Edge or Agreement
Corporation, and U . S . branch or agency of a foreign bank is subject to a zero percent reserve require
ment on an amount of its transaction accounts subject to the low reserve tranche in paragraph (a)(1),
nonpersonal time deposits, or Eurocurrency liabilities or any combination thereof not in excess of
$2.4 million determined in accordance with section 204.3(a)(3) of this Part.
[Enc. Cir. No. 9749]
FEDERAL RESERVE
SYSTEM
Regulation D
[12 CoF. Ro Part 204]
[Docket HOo R-0530]
RESERVE REQUIREMENTS OF DEPOSITORY" INSTITUTIONS
Reserve Requirement Ratios
AGENCY:
Board of Governors of the Federal Reserve System,,
ACTION:
Final rule.
SUMMARY:
The
Board
is
amending
12 C F R
Part 2 04
(Regulation D— Reserve Requirements of Depository Institutions)
(1) to increase the amount of t r a n saction accounts subject to a
reserve requirement ratio of three percent,
Monetary
Cont r o l
12 U.S.C.
and
each
(2)
Act
of
§ 461(b)(2)(C))
to
increase
depository
1980
(Title I
as r e quired b y the
of
Pub. L c 96-221?
from $28.9 mi l l i o n
the amount
institution
r e q u i r e m e n t of zero percent,
of
that
to
r e servable
is
subject
$29.8 m i l l i o n
liabilities
to
a
of
reserve
as r e q u i r e d b y the G a r n - S t G e r m a i n
D e p o s i t o r y Institutions Act of
1982
(Pub. L. 97-320;
12 U.S.C.
§ 4 6 1 ( b ) ( 1 1 ) ( B ) ) from $2.2 m i l l i o n to $2.4 million.
E F F E C T I V E DATE:
FOR
FURTHER
January 1, 1985.
INFORMATION
CONTACT:
Assoc i a t e
General
Counsel
Jorgenson,
Senior
Attorney
(202/452-3625)
20551.
[Ref. C i r 0 No,
9749]
Reserve
T.
or
(202/452-3778),
Board of Governors of the Federal
DoCo
Gilbert
Schwartz,
John
Legal
System,
Harry
Division,
Washington,
-2 -
S U P P L E M E N T A RY
("MCA")
the
INFORMATIONS
The M o n e t a r y C o n trol A c t
requires each d e p o s i t o r y
Federal
Reserve
i nstitution
System reserves
regulations.
The
the
set
MCA
were
institutions
at
initial
at
reserve
three
before
December 31
calendar
year
the
of
the Board
each
total
year*
dollar
each
imposed
above
shall
of
less and
$25 m i l l i o n 0
The
issue a r e g u l a t i o n
adjusting
a mount
under
depository
$25 m i l l i o n or
12 p e r c e n t on transaction accounts
that
transaction
as prescribed b y Board
for
transaction accounts of
M C A further provides
its
require m e n t s
percent
1980
to main t a i n w i t h
against
a ccounts and nonpersonal time deposits*
of
for
the
the
next
transaction
acco u n t tranche against w h i c h r eserves must be m a i n t a i n e d at a
r a t i o of three percent,,
80 p e r c e n t
accounts
of
Th e
increase
the p e r c e n t a g e
for
all
in the tranche
i ncrease
depository
in
i n stitutions
total
is to be
transaction
determined
as
of
J une 30 of e a c h year.
At present,
the amount of
the low r e s e r v e tranche on
trans a c t i o n accounts is $28.9 million.
net
t r a n saction acco u n t s
J une 30,
1983,
$378.3 b i l l i o n
p r o v i s i o n of
to
to
of
all
June 30,
$392.7
the MCA,
depository
1984,
billion)„
the
B o ard
The growth in the total
was
In
3.8 p e r c e n t
ac c o r d a n c e
is a m e n d i n g
increase the amount of the low r e s e r v e
institutions
f rom
(from
with
this
Regula t i o n
D to
tranche for t r a n s a c t i o n
a c c o u n t s for 1985 b y $0.9 m i l l i o n to $29.8 million.
Section
411
of
I n s t itutions Act of 1982
the
Garn^St
Germain
("Garn-St G e r m a i n Act"),
Depository
p r o v i d e s that
“ 3-=
$2 m i l l i o n
of
institution
shall
requirement.
Board,
this
subject
to
a
of
zero
each
depository
percent
reserve
in accordance with the rules and regulations of
to designate
re serve
transaction
otherwise
be
liabilities— ^
The Garn-St Germain Act permits each d e p o s i t o r y
institution,
the
reservable
the
reservable
requirement exemption
accounts
be
subject
are
is to apply <>
designated,
to a
liabilities
only
three p e r c e n t
those
reserve
to w h i c h
However*
that
if
would
requirement
(^0e ° , transaction accounts w ithin the low reserve r e q u i r e m e n t
tranche) m a y be so designated.
amen d m e n t
is
to
^29.8 million,
percent
m o dify
the
effective
reserve
As a result,
low
reserve
J a n u a r y 1,
requirement
on
tranche
1985)
the
the e ffect of this
to
first
(which
apply
a
$2 m i l l i o n
is
zero
of
t ransaction accounts and a three p e r cent reserve requ i r e m e n t on
the remainder of the low r e s e r v e tranche,
or to p r o vide a z ero
percent
nonpersonal
time
1-1/2
years
or
subject
to
depo s i t s
rese r v e
with
Eurocurrency
requirem e n t
maturities
liabilities,
tranche
of
on
less
than
of
which
both
are
a
r e s e r v e r e q u i r e m e n t r a t i o of three percent.
The Garn-St G e r m a i n A c t a l s o p r o v i d e s
shall
issue
a r e g ulation
before
December
31
that
of
the Board
e a c h year,
adju s t i n g for the next calendar year the d ollar amo u n t of
i/
The G a r n - S t Germ a i n A c t d e f i n e s r e s e r v a b l e l i a b ilities as
transaction
accounts,
nonpersonal
time
deposits,
and
E u r o c u r r e n c y liabilities, as d e f i n e d in s e c t i o n 19(b)(5) of the
Federal Reserve Act.
-4-
rese r v a b l e
liabilities
exempt
from reserve requirements,.
The
change in the amount is to be made o n l y if the total reservable
liabilities h e l d at all d e pository institutions
one year to the next.
is
to b e
80
of
d e t ermined
as
reser v a b l e
liabilities
June 30,
1983,
a mending
of
June
to
$777.7 b i l l i o n
provision
the
liabilities
of
30
of
Ju n e
the
Garn - S t
R e g ulation
perce n t a g e
all
each
all
30,
to $848.0
of
from
The percentage increase in the exemption
percent
reser v a b l e
increases
D to
increase
depository
year „
The
was
billion).
In
Germain
in
total
institutions
9d
percent
from
(from
accordance
with
the
is
Act,
increase
total
institutions
growth
depository
1984,
in
Board
the amount
of
the
this
also
reserve
r e q u i r e m e n t exemption for 1985 b y $0.2 m i l l i o n to $2.4 million.
The
tranche a d j u s t m e n t and
e x emption adjustment
e f fective
starting
beginning
on
the reserv a b l e
for w e e k l y r e p o r t i n g
with
January
the
1,
reserve
1985,
and
institutions will be
computation
w ith
the
accounts,
reservable
liabilities.
quarterly,
the
and
tranche
on
For
J a n u a r y 31,
adjustment
and
the
1985,
1985,
institutions
p eriod
c o r r e sponding
r e s erve m a i n t e n a n c e pe r i o d s b e g i n n i n g J a n u a r y 3,
trans a c t i o n
liabilities
for
that
for net
other
report
e x e mption
will
be
effective with the c o m p u t a t i o n p e r i o d b e g i n n i n g on December 18,
1984,
and
J a n u a r y 17,
with
the
1985.
reserve
In
maintenance
addition,
all
period
e ntities
beginning
currently
submi t t i n g Form F R 2900 will cont i n u e to submit r e p orts
Fede r a l Reserve under c u r r e n t r e p o r t i n g procedures.
to the
-5 -
T h e provisions of 5 U.S.C.
§ 553(b) relating to n o t i c e
and p u b l i c p a r t i c i p a t i on h a v e not b e e n followed in c o n n e c t i o n
with
the
involve
Board
adoption of
adjustments
believes
that
these amendments because
prescribed b y
notice
and
statute,.
public
the amendments
Accordingly,
pa r t i c i p a t i on
the
is
u n n e c e s s a r y and contrary to the public i n t e r e s t 0
L i s t of Subjects in 12 C F R Part 204
Banks,
banking;
Currency;
Federal
Reserve
System;
Penalties and Reporting r e q u i r e m e n t s 0
E f f e c t i v e Janu a r y
authority
under
section
1,
19
of
1985,
the
pursuant
to
the
Federal
Reserve
Board's
Act,
12 U . S . C c
§ 461 et s e g . , 12 CFR Part 204 is amended b y r evising
paragraph
(a) of section 204.9 to read as follows:
S E C T I O N 204.9 —
( a ) (1)
Reserve
RESERVE R E Q U I R E M E N T RATIOS
percentages.
The
fol l o w i n g
ratios are p r e s c r i b e d for all d e p o s i t o r y institutions,
A g r e e m e n t Corporations,
r e s erve
Edge a n d
and U nited States b r a n c h e s and a g encies
of foreign banks:
Category
Reserve r e q u i r e m e n t
Net transaction accou n t s
$0 to $29.8 m i l l i o n
over $29.8 m i l l i o n
3 p e r c e n t of am o u n t
$ 8 9 4 , 0 0 0 p l u s 12% of
am o u n t over $29.8 m i l l i o n
Nonpe r s o n a l time deposits
By original m a t u r i t y
(or notice period)s
Less than 1-1/2 years
3%
1-1/2 years or more
0%
E u r o c u r r e n c y liabilities
(2)
3%
Exemption
d e p o s i t o r y institution,
from
reserve
requirements0
Edge or A g r e e m e n t Corporation,
and U.So
b r a n c h or a g e n c y of a foreign bank is subject to a zero pe r c e n t
reserve
subject
requirement
to
n onpersonal
the
on an amount of
low
r e s erve tranche
time deposits;
its
in
transaction a c counts
paragraph
or E u r o c u r r e n c y
(a)(1),
liabilities
or
any
c o m bination thereof not in excess of $2*4 m i l lion de t e r m i n e d
a c c ordance with section 2 0 4 * 3 ( a ) (3) of this Part*
*
*
*
*
*
By order of the Board of Governors, November 1, 1984*
(signed) W illiam W. W iles
W i l l i a m W* W i l e s
S e c r e t a r y of the Board
in
E ach
@FedFRASER