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FEDERAL RESERVE statistical release · .- For release at 4.30 PM EDT April 12, 1990 H.3(502) NOTICE Historical rev~s~ons have been made to a number of series on the H.3 release. These revisions are the result of 1) a minor definitional change to the monetary base, 2) a data correction to the measure of "total vault cash" used in computing "surplus vault cash", and 3) a data correction to required clearing balances, as follows: 1. The monetary base can be expressed as the sum of reserve balances (including as-of adjustments) and currency in circulation. In addition, there is an adjustment for the lag in applied vault cash at bound institutions (i.e., those institutions whose required reserves exceed their vault cash) . In this adjustment, vault cash currently held by bound institutions is subtracted from the monetary base, while their applied vault cash--vault cash held earlier but applied to meet current 1 reserve requirements--is added. This adjustment is limited to bound institutions on the view that, at bound institutions, lagged vault cash supports deposit creation, while at nonbound institutions, current vault cash fills this role. Until now, in the calculation of this adjustment, applied vault cash at bound institutions was defined to include applied vault cash at both weekly and quarterly reporters on the Report of Transactions Accounts, Other Deposits and Vault Cash (FR 2900), while vault cash currently held by bound institutions included current vault cash at weekly reporting institutions only. Because this treatment appears to overstate the monetary base, the adjustment has been redefined to be the difference between applied vault cash and vault cash 2 currently held, at bound weekly reporters only. That is, applied vault cash at bound quarterly reporters is no longer added to the base. This redefinition affects monetary base data since the beginning of 1981. For recent months, it lowers the monetary base by about $250 million but has negligible impact on growth rates. 1. Certain additional adjustments are made for the break-adjusted and seasonally-adjusted versions of the monetary base. 2. Extending the argument for confining the adjustment to bound institutions, the adjustment should not involve bound quarterly reporters because, except for one week in every thirteen, current vault cash at quarterly reporters can not be applied to meet reserve requirements in some future maintenance period. ·- -2- 2. "Total vault cash", used in the calculation of "surplus vault cash", is vault cash available to meet reserve requirements at institutions currently subject to reserve requirements--those institutions reporting on the FR 2900, either weekly or quarterly. Since the beginning of contemporaneous reserve accounting, .it is measured as the sum of 1) vault cash held by weekly FR 2900 reporters lagged four weeks and 2) vault cash held by quarterly FR 2900 reporters lagged from one to thirteen weeks, starting four weeks after the as-of date of their last quarterly FR 2900 report. Until now, the latter component has been incorrectly measured. This revision affects data for both "total vault cash" and "surplus vault cash" since February 1984. This revision does not affect the monetary base. 3. Historical data for required clearing balances have been corrected for a timing error for the period from February 1984 through April 1989. (More recent data have been correct.) These revisions to required clearing balances--amounting to about $25 million in absolute value, on an average bi-weekly basis--feed through to other series as well, including total reserves, nonborrowed reserves, excess reserves, reserve balances, and the monetary base. FEDERAL RESERVE statistical release H.3 15021 Table 1 For Release at 4:30 p.m. Eastern Time ~?u~~dE~~l~n~~~nE~~~! ~~i~!!~~ITORY INSTITUTIONS AND THE MONETARY BASE Averages of daily figures, seasonally adjusted unless noted otherwise Millions of dollars APRIL 12 , 1990 Borrowings of depository institutions from the Federal Reserve, NSA Reserves of depository institutions nonborrowed plus exte~ded credit required e~~:~s Monetaty base total seasonal extended credit4 Date total 2 1989-MAR. APR. MAY JUNE 59929 59374 58831 58597 58117 57084 57111 57107 59451 58791 58308 58024 59023 58575 57796 57692 906 799 1035 905 278177 278198 278526 279020 1813 2289 1720 1490 139 213 345 431 1334 1707 1197 917 JULY AUG. SEP. 58867 58906 59289 58173 58231 58596 58279 58272 58618 57901 58021 58351 966 885 938 279957 280756 281806 694 675 693 497 490 452 106 41 22 OCT. NOV. DEC. 59640 59646 60033 59085 59297 59767 59106 59318 59787 58620 58701 59110 1020 945 922 282786 283222 284946 555 349 265 330 134 84 21 59896 60215 60316 59456 58768 58193 59482 59302 60143 58880 59227 59449 1016 989 867 287509 289711 291822 440 1448 2124 47 51 78 26 535 1950 1990-JAN. FEB. MAR. p nonborrowed 3 21 20 Two weeks ending 1990-FEB. 7 21 60092 60233 59227 58753 59260 58886 58872 59265 1220 968 289057 289313 865 1480 44 50 33 133 MAR. 7 21 60303 60294 58337 58115 60178 60110 59506 59537 797 756 291162 291326 1967 2179 60 75 1841 1995 60358 58201 60166 59286 1072 292980 2157 96 1965 APR. 4p p--preliminary 1. 2. 3. 4. 5. 6. pe--prel iminary estimate Reserves and monetary base figures incorporate adjustments for discontinuities, or "breaks", associated with regulatory changes in reserve requirements. I For more information, see Table 3. I Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, break-adjusted required reserves plus unadjusted excess reserves. !Also, see footnote 2 on Table 2 and footnote 2 on Table 3. I Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted, break-adjusted total reserves less unadjusted total borrowings of depository inst1tutions from the Federal Reserve. . Extended credit consists of borrowing at the discount window under the terms and conditions established for the extended credit program to help depository institutions deal with sustained liquidity pressures. Because there is not the same need to repay such borrowing promptly as there is wilh traditional short-term adjustment credit, the money market impact-of extended credit is similar to that of nonborrowed reserves. Excess reserves NSA equals unadjusted total reserves (Table 2, column 11 less unadjusted required reserves (Table 2, column 31. The seasonally adjusted, break-adjusted monetary base consists of I l l seasonally adjusted, break-adjusted total reserves plus (2) the seasonally adJusted currency component of the money stock plus (3), for institutions whose vault cash exceeds their required reserves, the seasonally adJusted, break-adjusted excess of current vault cash over the amount applied to satisfy current reserve requirements. (Also, see footnote 3 on Table 2 and footnote 4 on Table 3.) H.3 1502 J Table 2 AGGREGATE RESE~VES OF DEPOSIT9RY INSTITUTIONS AND THE MONETARY BASE Not adjusted for changes 1n reserve regy1rem~nts Averages of daily figures, not seasonally adJusted Millions of dollars Vault cashs Reserves of depository institutions base Reserve balances with F.R. Banks 4 Moneta~y total used to satisfy require(! reserves6 surplus 7 Date total 2 nonborrowed required 1989-MAR. APR. MAY JUNE 60161 61310 58916 59587 58349 59021 57196 58097 59255 60511 57881 58681 278759 281377 280448 283087 34572 35854 33204 33852 27882 27613 28111 28088 25589 25456 25712 25735 2293 2158 2398 2352 JULY AUG. SEP. 60254 59559 60126 59560 58884 59433 59288 58674 59188 285209 284063 283615 33902 32823 33556 28807 29364 29091 26351 26735 26570 2455 2629 2521 OCT. NOV. DEC. 60397 60989 62810 59842 60640 62544 .59378 60044 61888 284328 287189 •292554 33123 33941 35436 29910 29549 29812 27275 27048 27374 2636 2502 2439 62931 60623 60676 62491 59175 58553 61914 59634 59809 292131 290022 292377 34090 30929 33426 31301 32489 29581 28841 29693 27250 2461 2795 2331 1990-JAN. FEB. MAR. p Net carryover of reserv1 balances Two weeks ending 1990-FEB. 7 21 60955 60553 60090 59073 59735 59585 288802 290339 29799 30597 34175 32780 31156 29956 3019 2824 70 116 MAR. 7 21 60430 60768 58463 58590 59633 60012 290608 292787 32724 33764 30220 292.59 27706 27004 2514 2255 69 37 60719 58562 59647 293041 33445 29585 27274 2311 46 APR. 4p p--preliminary l. 2. 3. 4. 5. 6. 7. 8. pe--preliminary estimate Reflects actual required reserves, with no adjustments to eliminate the effects of discontinuities, or "breaks", associated with regulatory changes in reserve requirements. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve requirements. The monetary base, not break-adjusted and not seasonally adjusted, consists of total reserves plus required clearing balances and adjustments to compensate for float at Federal Reserve Banks plus the currency component of the money stock plus, for institutions whose vault cash exceeds their required reserves, the excess of current vault cash over the amount applied to satisfy current reserve requirements. After the introduction of CRR, currency and vault cash figures are measured over computation periods ending on Mondays. Excludes req~,~ired clearing balances and adjustments to compensate for float and inc}.udes other off-balance sheet "as-of" adjustments. Dates refer to the maintenance periods in Which the vault cash can be used to satisfy reserve requirements. Under contemporaneous reserve reguirements, maintenance periods end 30 days after the lagged computation periods in which the balances are held. All vault cash held during the lagged computation period by "bound" institutions ( i'.e., those whose required reserves exceed their vault cashl plus the amount of vault cash applied during the maintenance period by "nonbOl,.lnd" institutions (i.e., those whose vault cash exceeds their required reserves) to satisfy current reserve requirements. · Total vault cash held by depository institutions minus the amount applied to satisfy reserve requirements. Consists of carryover only at depository institutions maintaining reserves on the basis of two-week maintenance periods. Reflects excess (+) or deficit 1-J reserves elig1ble to be carried forward into the two-week reserve maintenance period ending on the date shown. H.3 ( 502 J Table 3 AGGREGATE RE$ERVES OF .DEPO~ITORY INSTITUTIONS AND THE MONETARY BASE Adjusted for change~ 1n reserve requ1rements. Averages of daily f1gures, not seasonally adJusted Millions of dollars Reserves of depository institutions Date total 2 nonborrowed required 3 Monetary base4 1989-MAR. APR. MAY JUNE 58918 60081 57786 58485 57105 57791 56066 56995 58011 59282 56750 57580 275420 278038 277464 280070 JULY AUG. SEP. 59044 58399 59025 58350 57725 58332 58078 57515 58087 282009 281026 280655 OCT. 59272 59869 61669 58717 59520 61404 58252 58924 60747 281344 284114 289447 61579 59199 59253 61139 57751 57130 60563 58210 58386 288671 286499 288866 NOV. DEC. 1990-JAN. FEB. MAR. p Two weeks ending 1990-FEB. 7 21 59456 59146 58591 57666 58235 58177 285191 286900 MAR. 7 21 59048 59354 57082 57175 58251 58597 287007 289405 59256 57100 58184 289414 APR. 4p p--preliminary 1. 2. 3. 4. pe--preliminary estimate Figures reflect adjustments for discontinuities, or "breaks", associated with regulatory changes in reserve requirements. Break-adjusted total reserves equal break-adjusted required reserves (Table 3, column 3J plus excess reserves NSA !Table 1, column 5J. To adjust required reserves for discontinuities due to regulatory changes in reserve requirements, a multiplicative procedure is used to estimate what reguired reserves would have been in past periods had current reserve requirements been in effect. Break-adJusted re~ired reserves includes required reserves against transactions deposits and nonpersonal time and sav1ngs deposits I but not reservable nondeposit liabilit1es. J Break-adjusted monetary base equals (1J breaK-adjusted total reserves plus (2) the (unadjusted! currency component of the money stock plus (3), for institutions whose vault cash exceeds their requi1~d reserves, the break-adjusted excess of current vault cash over the amount applied to satisfy current reserve requirements. Note: Historical data are available from the Money and Reserves Projections Section, Division of Monetary Affairs, Board of Governors of The Federal Reserve System, Hashington, D.C. 20551
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