Full text of L.5.3 Borrowings from Federal Reserve Banks by Reserve City Member Banks : July 26, 1973 : Letter

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FEDER *• I RESERVE.BANK
o« > N S S CITY
BOARD OF GOVERNORS

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of the
— Research Library —
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551

D I V I S I O N O F DATA P R O C E S S I N G

July 26, 1973
TO RECIPIENTS OF THE L.5.3 AND L.5.4:
Several fundamental issues have arisen concerning these
two reports and comments from the report users would be appreciated
to aid in resolving these issues.
First, there is the basic question of the utility of the
reports as a method of presenting borrowings data. With agreement
among the recipients, the reports could be discontinued if they lack
utility. This would free badly needed resources that would be used
in other areas of our operation and would be in line with current
System efforts under Operation Elbowroom.
A second issue is to effect needed revisions in the reports
to reflect changes in reserve requirements given that they have basic
utility. In November, 1972 the reserve city and country bank classifications were eliminated by the common reserve requirements and this
is not reflected in the groupings used in the report. Also, the reports
do not segregate seasonal borrowings. A survey will be conducted among
users to further define conceptual changes needed in the reports to
bring them up to date.
A third issue concerns computer programming problems in the
required reserve calculation used in the report program. The required
reserve figures used in the reports do not include reserves required
against commercial paper, Eurodollars, or the new marginal reserves on
large CD s and finance bills. In addition, the algorithm used to calculate reserves against deposits does not conform to basic Regulation D
requirements. Programming resources to correct these problems have been
set aside but the task could not be completed until this Fall at the
earliest.
On balance, our proposal is to suspend publication of these
two reports pending review of the whole question of proper presentation
of borrowing data and if they are to be continued pending completion of
the required modifications. Your comments on these issues and the proposed
report suspension would be appreciated.




Sincerely,

C. Wm. Schleicher, Jr.
Chief, Data Production Section
Division of Data Processing.