[Federal Register Volume 59, Number 109 (Wednesday, June 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13867]


[[Page Unknown]]

[Federal Register: June 8, 1994]


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FEDERAL RESERVE SYSTEM

12 CFR Part 201

[Regulation A]

 

Extensions of Credit by Federal Reserve Banks; Change in Discount 
Rate

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

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SUMMARY: The Board of Governors has amended its Regulation A on 
Extensions of Credit by Federal Reserve Banks to reflect its approval 
of an increase in the basic discount rate at each Federal Reserve Bank. 
The Board acted on requests submitted by the Boards of Directors of the 
twelve Federal Reserve Banks.

EFFECTIVE DATE: These amendments to part 201 (Regulation A) were 
effective June 2, 1994. The rate changes for adjustment credit were 
effective on the dates specified in Sec. 201.51.

FOR FURTHER INFORMATION CONTACT: William W. Wiles, Secretary of the 
Board (202/452-3257); for the hearing impaired only, Telecommunications 
Device for the Deaf (TDD) (202/452-3544), Dorothea Thompson, Board of 
Governors of the Federal Reserve System, Washington, DC 20551.

SUPPLEMENTARY INFORMATION: Pursuant to the authority of sections 10(b), 
13, 14, 19, et al., of the Federal Reserve Act, the Board has amended 
its Regulation A (12 CFR part 201) to incorporate changes in discount 
rates on Federal Reserve Bank extensions of credit. The discount rates 
are the interest rates charged to depository institutions when they 
borrow from their district Reserve Banks.
    The ``basic discount rate'' is a fixed rate charged by Reserve 
Banks for adjustment credit and, at the Reserve Bank's discretion, for 
extended credit. In increasing the basic discount rate, the Board acted 
on requests submitted by the Boards of Directors of the twelve Reserve 
Banks. The new rates were effective on the dates specified below. The 
increase was made to maintain favorable trends in inflation and thereby 
sustain the economic expansion. This action, combined with other 
adjustments by the Federal Open Market Committee, substantially removes 
the degree of monetary accommodation that prevailed throughout 1993.
    The provisions of 5 U.S.C. 553(b) relating to notice and public 
participation were not followed in connection with the adoption of this 
amendment because the Board for ``good cause'' finds that delaying the 
change in the basic discount rate in order to allow notice and public 
comment on the change is impracticable, unnecessary, and contrary to 
the public interest in maintaining favorable trends in inflation and 
thereby sustaining the economic expansion.1
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    \1\ The Board's Rules of Procedure provide that advance notice 
and deferred effective date will ordinarily be omitted in the public 
interest for changes in discount rates. 12 CFR 262.2(e).
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    The provisions of 5 U.S.C. 553(d) that prescribe 30 days' prior 
notice of the effective date of a rule have not been followed because 
section 553(d) provides that such prior notice is not necessary 
whenever there is good cause for finding that such notice is contrary 
to the public interest. As previously stated, the Board determined that 
delaying the changes in the basic discount rate is contrary to the 
public interest.

Regulatory Flexibility Act Analysis

    Pursuant to section 605(b) of the Regulatory Flexibility Act (5 
U.S.C. 601-612), the Board certifies that the change in the basic 
discount rate will not have a significant adverse economic impact on a 
substantial number of small entities. Although the change increases the 
rate of interest charged to borrowers from Reserve Banks, the Board 
believes that the higher cost of funds is outweighed by the salutary 
effect on the economy.

List of Subjects in 12 CFR Part 201

    Banks, banking, Credit, Federal Reserve System.

    For the reasons outlined in the preamble, the Board of Governors 
amends 12 CFR part 201 as follows:

PART 201--EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS (REGULATION 
A)

    1. The authority citation for 12 CFR part 201 is revised to read as 
follows:

    Authority: 12 U.S.C. 343 et seq., 347a, 347b, 347c, 347d, 348 et 
seq., 357, 374, 374a and 461.

    2. Section 201.51 is revised to read as follows:


Sec. 201.51  Adjustment credit for depository institutions.

    The rates for adjustment credit provided to depository institutions 
under Sec. 201.3(a) are: 

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          Federal Reserve Bank               Rate         Effective     
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Boston...................................       3.5  May 17, 1994.      
New York.................................       3.5  May 17, 1994.      
Philadelphia.............................       3.5  May 17, 1994.      
Cleveland................................       3.5  May 18, 1994.      
Richmond.................................       3.5  May 17, 1994.      
Atlanta..................................       3.5  May 17, 1994.      
Chicago..................................       3.5  May 17, 1994.      
St. Louis................................       3.5  May 17, 1994.      
Minneapolis..............................       3.5  May 17, 1994.      
Kansas City..............................       3.5  May 17, 1994.      
Dallas...................................       3.5  May 17, 1994.      
San Francisco............................       3.5  May 17, 1994.      
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    3. Section 201.52 is revised to read as follows:


Sec. 201.52  Extended credit for depository institutions.

    (a) Seasonal credit. The rate for seasonal credit extended to 
depository institutions under Sec. 201.3(b) is a flexible rate that 
takes into account rates on market sources of funds, but in no case 
will the rate charged be less than the rate for adjustment credit as 
set out in Sec. 201.51.
    (b) Extended credit. For extended credit to depository institutions 
under Sec. 201.3(c), for credit outstanding for more than 30 days, a 
flexible rate will be charged that takes into account rates on market 
sources of funds, but in no case will the rate charged be less than the 
rate for adjustment credit, as set out in Sec. 201.51, plus one-half 
percentage point. At the discretion of the Federal Reserve Bank, this 
time period may be shortened, and the rate may be the discount rate 
applicable to adjustment credit.

    By order of the Board of Governors of the Federal Reserve 
System, June 2, 1994.
William W. Wiles,
Secretary of the Board.
[FR Doc. 94-13867 Filed 6-7-94; 8:45 am]
BILLING CODE 6210-01-P