[Federal Register Volume 62, Number 153 (Friday, August 8, 1997)]
[Proposed Rules]
[Pages 42708-42712]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20957]


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FEDERAL RESERVE SYSTEM

12 CFR Part 204

[Regulation D; Docket No. R-0980]


Reserve Requirements of Depository Institutions

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Proposed rule.

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SUMMARY: The Board is proposing to amend its Regulation D, Reserve 
Requirements of Depository Institutions, to allow U.S. branches and 
agencies of foreign banks and Edge and Agreement corporations to choose 
whether to aggregate reserves on a nationwide basis in a single account 
at one Reserve Bank or to continue to have separate accounts on a same-
state/same-District basis as they do today. The amendments would also 
update and clarify the pass-through account rules in Regulation D for 
all institutions. These amendments would facilitate interstate banking 
and eliminate certain restrictions applicable to pass-through accounts.

DATES: Comments must be submitted on or before September 12, 1997.

ADDRESSES: Comments, which should refer to Docket No. R-0980, may be 
mailed to Mr. William W. Wiles, Secretary, Board of Governors of the 
Federal Reserve System, 20th Street and Constitution Avenue, N.W., 
Washington, D.C. 20551. Comments addressed to Mr. Wiles also may be 
delivered to the Board's mail room between 8:45 a.m. and 5:15 p.m. and 
to the security control room outside of those hours. Both the mail room 
and the security control room are accessible from the courtyard 
entrance on 20th Street between Constitution Avenue and C Street, N.W. 
Comments may be inspected in Room MP-500 between 9:00 a.m. and 5:00 
p.m.

FOR FURTHER INFORMATION CONTACT: Oliver Ireland, Associate General 
Counsel, (202/452-3625) or Stephanie Martin, Senior Attorney (202/452-
3198), Legal Division. For the hearing impaired only, contact Diane 
Jenkins, Telecommunications Device for the Deaf (TDD) (202/452-3544), 
Board of Governors of the Federal Reserve System, 20th and C Streets, 
N.W., Washington, D.C. 20551.

SUPPLEMENTARY INFORMATION: To facilitate interstate banking, the 
Federal Reserve Banks will begin to implement a new account structure 
on January 2, 1998, that will provide a single Federal Reserve account 
for each domestic depository institution. This structure will enable 
the Federal Reserve Banks to establish a single debtor-creditor 
relationship with each chartered entity, thereby providing an effective 
means for Reserve Banks to carry out their risk management 
responsibilities, and will improve the efficiency of account management 
for depository institutions. To determine the Federal Reserve Bank 
where a bank with interstate branches will hold an account, the Board 
adopted amendments to its Regulation D (12 CFR part 204, Reserve 
Requirements of Depository Institutions) and Regulation I (12 CFR part 
209, Issue and Cancellation of Capital Stock of Federal Reserve Banks) 
(62 FR 34613, June 27, 1997). These amendments define a domestic 
depository institution's location for purposes of Federal Reserve 
membership and reserve account maintenance.
    U.S. branches and agencies of the same foreign bank and Edge and 
Agreement corporations \1\ of the same parent bank were not included in 
the new single-account structure or in the final amendments to 
Regulations D and I, pending further consideration of legal and 
operational issues. The Board is now proposing amendments to Regulation 
D under which the Federal Reserve Banks will offer a single account to 
these institutions on an optional basis. Under this proposal, foreign 
banks and Edge corporations could choose either to designate one office 
to hold a single account at one Reserve Bank or to continue to have 
separate accounts on a same-state/same-District basis as they do today. 
The Board is also proposing changes to the pass-through account rules 
in Regulation D to accommodate the single-account option and to make 
other changes applicable to all institutions that will simplify and 
clarify the pass-through rules.
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    \1\ Edge corporations are organized under section 25A of the 
Federal Reserve Act (12 U.S.C. 611-631), and Agreement corporations 
have an agreement or undertaking with the Board under section 25 of 
the Federal Reserve Act (12 U.S.C. 601-604a). For purposes of this 
docket, the term ``Edge corporation'' includes Agreement 
corporations. Similarly the term ``branch'' of a foreign bank 
includes both branches and agencies.
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    The Board believes making a single account optional rather than 
required for families of foreign bank branches is reasonable in light 
of certain operational, legal, and supervisory differences between U.S. 
branches and agencies of foreign banks and domestic banks.\2\ For 
example, certain foreign banks have historically managed their U.S. 
offices as independent entities that do not necessarily coordinate 
lending and investment decisions from a central office. Further, each 
office of a foreign bank family must have a separate license, either 
state or federal. The majority of U.S. offices of foreign banks are 
state-licensed and not federally insured and are thus would be 
liquidated separately based on the law of each licensing state. In 
addition, U.S. bank supervisory authorities treat U.S. branches of 
foreign banks as independent units for other purposes, such as asset 
maintenance requirements. As a result of these differences, U.S. 
branches of foreign banks may be placed at a disadvantage if they were 
required, in the short term, to adopt a single account structure.
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    \2\ The distinguishing characteristics of U.S. branches of 
foreign banks do not necessarily apply to Edge corporations. As a 
result, the legal, supervisory, and risk management treatment of 
multiple offices of the same Edge corporation differs from that of 
multiple U.S. offices of foreign banks. Unless otherwise noted, the 
following points apply mainly to U.S. branches of foreign banks. 
Because of the historical parallel regulatory treatment of these 
entities, however, the account structure for U.S. branches of 
foreign banks applies to Edge corporations as well.
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    To ensure stability in account relationships and to move the 
foreign banks and Edge corporations toward the preferred long-run 
account structure, the optional single account, where possible, would 
be a one-way election. That is, once an entity selects a single account 
it would not be permitted to switch back to multiple accounts without 
the Board's approval. The single account would be available to U.S. 
branches of foreign banks and Edge corporations effective January 2, 
1998.

[[Page 42709]]

Amendments to Regulation D

Eligible Pass-Through Correspondents

    Under the International Banking Act of 1978, branches of foreign 
banks are treated as separate banks for reserve purposes, which implies 
that each branch has a separate reserve liability. Reserves may be held 
in the form of vault cash, a balance held directly with a Federal 
Reserve Bank, or in a pass-through account. Regulation D allows foreign 
bank branches and Edge corporations to pass their reserves through an 
account of another office of the same institution, subject to the pass-
through rules applicable to all depository institutions.
    The Board proposes to expand this provision to clarify that a 
foreign bank or Edge corporation family may choose any eligible 
institution as a pass-through correspondent, such as a domestic 
depository institution or a branch of another foreign bank, in addition 
to an office of its own family. Although the Board believes that these 
entities will generally choose one of their own offices as the pass-
through correspondent, allowing the choice is comparable to the 
treatment of domestic depository institutions under Regulation D. If a 
foreign bank chooses to have a single Federal Reserve account, it would 
likely aggregate all of the reserves of its nationwide branches in that 
account, i.e., the account would hold the reserves of the account-
holding branch and function as a pass-through account for the reserves 
of the remaining branches.

Account Maintenance

    To accommodate the single account, the Board is proposing 
amendments to the pass-through provisions in Regulation D. Section 
204.3(i)(3) currently requires a pass-through correspondent to maintain 
pass-through accounts at each Federal Reserve Bank in whose District 
the respondent institutions are located. The Board proposes to remove 
the requirement that pass-through accounts must be held in the District 
where the respondent is located. This proposal would apply to pass-
through accounts for all depository institutions as well as for foreign 
bank branches and Edge corporations.
    Regulation D also provides that, when respondents are located in 
the same District as the pass-through correspondent, the correspondent 
may choose to maintain its own reserves and the passed-through reserves 
in a single commingled account or in two separate accounts. Under the 
Board's proposal, correspondents would hold pass-through balances in a 
single commingled account, along with the pass-through correspondent's 
own reserves (if any) at the Reserve Bank in whose District the pass-
through correspondent is located. The Board specifically requests 
comment on whether correspondents should continue to have the option of 
separate accounts for their own reserves and the reserves they hold on 
a pass-through basis. The Board believes that separate accounts are 
probably not necessary, as subaccounts could suffice for purposes of 
segregating correspondent transactions.
    Regulation D is currently unclear as to whose money is in the pass-
through account, that is, whether the pass-through account is a Reserve 
Bank liability to the pass-through correspondent or to the 
respondent.\3\ The proposed amendments to Sec. 204.3(i)(3) would 
clarify that the balances held by the pass-through correspondent are 
the property of the correspondent and represent a liability of the 
Reserve Bank solely to the correspondent, regardless of whether the 
funds represent the reserve balances of another office or institution 
that have been passed through the correspondent.
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    \3\ The call report instructions are more clear, stating that, 
from the perspective of the Federal Reserve Bank, pass-through 
balances are treated as balances due to the correspondent, not to 
the respondent.
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    These proposed changes regarding account maintenance would apply to 
pass-through accounts for all depository institutions, in addition to 
those for foreign bank branches and Edge corporations.

Reporting

    For those foreign banks or Edge corporations that choose to have a 
single Federal Reserve account, the Board is soliciting comment on an 
amendment to Sec. 204.3(a)(1) of Regulation D to allow the family to 
submit an aggregated report of deposits for all offices. The submission 
of a single aggregated report would be similar to the current 
Regulation D reporting rule, which requires foreign bank and Edge 
corporation offices in the same state and same Federal Reserve District 
to aggregate deposits for purposes of reserve-related reports. The 
current same-state/same District aggregation provides a convenience for 
offices that maintain reserves in the same Federal Reserve account or 
pass-through account by allowing them to submit a single report to the 
Reserve Bank that holds the account. Nationwide aggregation would 
extend the same convenience to foreign banks and Edge corporations who 
opt for a single nationwide account by allowing them to file a single 
report. It would be most consistent with current reporting arrangements 
if this single report was sent to the Reserve Bank that holds the 
account with the family's reserves.
    The Board also requests comment on whether reporting changes are 
necessary for all depository institutions that hold their reserves in 
pass-through accounts. Current Sec. 204.3(i)(2) of Regulation D 
requires depository institutions to file reports of deposits with the 
Reserve Bank in whose District the institution is located, regardless 
of whether the institution maintains reserves in its own account or in 
a pass-through account. The Reserve Bank notifies the reporting 
institution of its reserve requirements and also notifies the pass-
through correspondent, if one exists. Each respondent is responsible 
for reporting; the pass-through correspondent is not responsible for 
reporting errors made by the respondent, but it is responsible for 
maintaining the required reserve balances in accordance with the 
reports. Under the proposed pass-through rules, a depository 
institution located in one Federal Reserve District could hold reserves 
in a pass-through account located in another District. In this 
situation, it may be appropriate for that depository institution's 
deposit reports to ``follow the money,'' that is, for the depository 
institution to send its deposit report to the Reserve Bank that holds 
the account, rather than the Reserve Bank of the institution's 
District.
    In addition, the Board requests comment on whether it is 
appropriate for all reports of all institutions (depository 
institutions as well as foreign bank branches and Edge corporations), 
including both supervisory and monetary reports, to go to the Reserve 
Bank that holds the account where that institution's reserves are held. 
On the one hand, requiring reports to follow the money could provide an 
efficient means of administering reserve requirements because only one 
Reserve Bank would be responsible for determining the accuracy of the 
reports and assessing deficiency penalties. On the other hand, if the 
Reserve Bank in whose District the institution is located is 
responsible for supervising the institution, having the institution 
submit supervisory reports to another Reserve Bank could effect the 
depth and timeliness of the supervising Reserve Bank's knowledge of the 
institution's condition.\4\ Currently, this

[[Page 42710]]

dichotomy would exist only for foreign bank branches, as the Federal 
Reserve Act requires each member bank to hold reserves directly with 
the Reserve Bank of its District and does not permit member banks to 
hold reserves through a pass-through correspondent.
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    \4\ However, split reporting (requiring a depository institution 
to file supervisory reports with one Reserve Bank and other reports 
with another Reserve Bank) would lead to inefficiencies in other 
areas for both the depository institution and the Federal Reserve. 
The depository institution would have to deal with more than one 
Reserve Bank on reporting and data editing issues. For the Federal 
Reserve, each Reserve Bank collecting data from a particular 
depository institution would have to become knowledgeable about that 
institution's structure, operations, and balance sheet in order to 
perform effective data editing and analysis.
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Low Reserve Tranche And Exemption Amounts

    Current Regulation D provides that foreign bank and Edge 
corporation families share one low reserve tranche and exemption amount 
among all related offices.\5\ Regulation D sets out separate provisions 
(Sec. 204.3 (a)(1) and (a)(2)) for foreign bank branches and Edge 
corporations covering allocation of the low reserve tranche. The 
regulation also contains a separate provision (Sec. 204.3(a)(3)) on 
allocation of the reserve exemption, which applies to depository 
institutions as well as foreign bank branches and Edge corporations. 
Proposed Sec. 204.3(a)(2) would combine the existing provisions on 
allocation of the low reserve tranche and the reserve exemption among 
offices of depository institutions, foreign bank branches, and Edge 
corporations. These allocation rules would continue to apply to offices 
of the same institution that report deposits separately, such as 
branches of a foreign bank that choose to continue filing on a same-
state/same-District basis and depository institutions that are in 
transition from a multiple to a single reporting and account structure. 
No allocations would be necessary for institutions that hold reserves 
in a single account.
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    \5\ The amount of an institution's net transaction accounts in 
the low reserve tranche ($0 to $49.3 million) carries a lower 
reserve requirement (3 percent) than the amount above the tranche 
(which carries a 10 percent requirement). The first $4.4 million of 
any institution's reservable liabilities are exempt from reserve 
requirements.
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Location of Institution

    As noted above, in June the Board amended Sec. 204.3(b) to set 
forth where a domestic depository institution is located for purposes 
of determining the Federal Reserve Bank where the institution will 
maintain its reserve balances. Specifically, an institution is 
considered to be located in the Federal Reserve District specified in 
its charter or organizing certificate, or, if no such location is 
specified, the location of its head office. The Board can make 
exceptions to the general rule for a particular institution after 
considering certain criteria. The Board proposes to apply the same rule 
to foreign bank branches and Edge corporations. For foreign banks and 
Edge corporations that choose a single account structure and pass all 
reserves through one office, the location of the office that is the 
pass-through correspondent would determine which Reserve Bank holds the 
account.

Services

    Section 204.3(i)(5) contains provisions regarding the services 
available to pass-through correspondents and respondents. The Board 
proposes to remove these provisions from Regulation D. The terms of 
services offered by the Reserve Banks are covered in Regulation J (12 
CFR part 210) and the Reserve Banks' operating circulars.

Technical Changes

    In addition to the sections discussed above, the Board is also 
proposing editorial and conforming amendments to Secs. 204.3(i) and 
204.9(b) of Regulation D.

Initial Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (5 U.S.C. 601-612) requires an 
agency to publish an initial regulatory flexibility analysis with any 
notice of proposed rulemaking. Two of the requirements of an initial 
regulatory flexibility analysis (5 U.S.C. 603(b)), a description of the 
reasons why action by the agency is being considered and a statement of 
the objectives of, and legal basis for, the proposed rule, are 
contained in the supplementary material above. The proposed rules 
require no additional reporting or recordkeeping requirements and do 
not overlap with other federal rules.
    Another requirement for the initial regulatory flexibility analysis 
is a description of and, where feasible, an estimate of the number of 
small entities to which the proposed rule will apply. The proposal will 
apply to all institutions subject to the regulations, regardless of 
size. The proposal would not impose any significant burden on any 
institution, but rather would provide increased flexibility for many 
institutions. Approximately 90 foreign banks and 10 Edge corporations 
that currently have multiple Federal Reserve accounts would have the 
option of consolidating their reserves in a single account under the 
proposal. Approximately 36 pass-through correspondents for domestic 
depository institutions would no longer have to hold pass-through 
accounts at multiple Federal Reserve Banks under the proposal.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3506; 5 CFR 1320 Appendix A.1), the Board reviewed the proposed revised 
rule under the authority delegated to the Board by the Office of 
Management and Budget. The proposed rule contains no new collections of 
information and proposes no substantive changes to the existing 
collections of information pursuant to the Paperwork Reduction Act. The 
collection of information requirements that could be affected by this 
proposal are found in 12 CFR 204. All types of depository institutions 
file these information collections, but only a small subset of 
respondents, Edge corporations and U.S. branches of foreign banks, has 
the potential to be affected by the reporting burden reductions 
implicit in this proposal.
    Edge corporations and U.S. branches of foreign banks currently file 
deposits and Eurocurrency reports (FR 2900 and FR 2951; OMB No. 7100-
0087) aggregated by each state and Federal Reserve District in which 
their offices are located. If offices of the same institution are 
located in more than one state/District, they must file an additional 
report annually (FR 2930; OMB No. 7100-0088) to allocate the single low 
reserve tranche and exemption they share.
    As noted in the sections above, U.S. branches of the same foreign 
bank and Edge corporations of the same parent bank could choose to 
establish a single Federal Reserve account beginning January 2, 1998. 
Respondents with a single account would file one FR 2900 report and one 
FR 2951 report, aggregated nationwide, with the Reserve Bank that holds 
the account. Since no allocations are necessary for institutions that 
hold reserves in a single account, these respondents would no longer be 
required to file FR 2930. Thus the proposed changes could reduce FR 
2900, FR 2951, and FR 2930 reporting burden for these U.S. branches of 
foreign banks and Edge corporations. This in turn would reduce at least 
somewhat the total burden for the affected information collections.
    The Federal Reserve invites comments on the effect on reporting 
burden of the proposed changes. Copies of such comments may also be 
sent to the Office of Management and Budget, Paperwork Reduction 
Project (7100-0087 and 7100-0088), Washington, DC 20503.

[[Page 42711]]

List of Subjects in 12 CFR Part 204

    Banks, banking, Federal Reserve System, Reporting and recordkeeping 
requirements.
    For the reasons set out in the preamble, 12 CFR part 204 is 
proposed to be amended as set forth below.

PART 204--RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS 
(REGULATION D)

    1. The authority citation for part 204 continues to read as 
follows:

    Authority: 12 U.S.C. 248(a), 248(c), 371a, 461, 601, 611, and 
3105.

    2. Section 204.3 is amended as follows:
    a. Paragraphs (a)(1) and (a)(2) are revised and paragraph (a)(3) is 
removed;
    b. In paragraph (b) as revised at 62 FR 34616 effective October 1, 
1997, the last sentence of paragraph (b)(1) is removed and paragraph 
(b)(2)(i) is revised; and
    c. Paragraph (i) is revised to read as follows:


Sec. 204.3  Computation and maintenance.

    (a) * * *
    (1) United States branches and agencies of foreign banks; Edge and 
Agreement corporations. (i) A foreign bank's United States branches and 
agencies and an Edge or Agreement corporation's offices shall prepare 
and file a report of deposits on an aggregated basis either:
    (A) For each group of branches and agencies, or each group of 
offices, operating within the same state and within the same Federal 
Reserve District; or
    (B) For all branches and agencies, or all offices, operating in the 
United States.
    (ii) A foreign bank or an Edge or Agreement corporation that elects 
to aggregate deposits for all branches and agencies, or all offices, 
operating in the United States may not subsequently elect to aggregate 
deposits in another manner without the Board's approval.
    (2) Allocation of low reserve tranche and exemption from reserve 
requirements. A depository institution, a foreign bank, or an Edge or 
Agreement corporation shall, if possible, assign the low reserve 
tranche and reserve requirement exemption prescribed in Sec. 204.9(a) 
to only one office or to a group of offices filing a single aggregated 
report of deposits. The amount of the reserve requirement exemption 
allocated to an office or group of offices may not exceed the amount of 
the low reserve tranche allocated to such office or offices. If the low 
reserve tranche or reserve requirement exemption cannot be fully 
utilized by a single office or by a group of offices filing a single 
report of deposits, the unused portion of the tranche or exemption may 
be assigned to other offices or groups of offices of the same 
institution until the amount of the tranche (or net transaction 
accounts) or exemption (or reservable liabilities) is exhausted. The 
tranche or exemption may be reallocated each year concurrent with 
implementation of the indexed tranche and exemption, or, if necessary 
during the course of the year to avoid underutilization of the tranche 
or exemption, at the beginning of a reserve computation period.
    (b) * * *
    (2) (i) For purposes of this section, a depository institution, a 
U.S. branch or agency of a foreign bank, or an Edge or Agreement 
corporation is located in the Federal Reserve District that contains 
the location specified in the institution's charter, organizing 
certificate, or license or, if no such location is specified, the 
location of its head office, unless otherwise determined by the Board 
under paragraph (b)(2)(ii) of this section.
* * * * *
    (i) Pass-through rules--(1) Procedure. (i) A nonmember depository 
institution, a U.S. branch or agency of a foreign bank, or an Edge or 
Agreement corporation required to maintain reserve balances 
(respondent) may select only one institution to pass through its 
required reserves. Eligible institutions through which respondent 
required reserve balances may be passed (correspondents) are Federal 
Home Loan Banks, the National Credit Union Administration Central 
Liquidity Facility, and depository institutions, U.S. branches or 
agencies of foreign banks, and Edge and Agreement corporations that 
maintain required reserve balances at a Federal Reserve office. In 
addition, the Board reserves the right to permit other institutions, on 
a case-by-case basis, to serve as pass-through correspondents. The 
correspondent chosen must subsequently pass through the required 
reserve balances of its respondents directly to a Federal Reserve Bank. 
The correspondent placing funds with a Federal Reserve Bank on behalf 
of respondents will be responsible for account maintenance as described 
in paragraphs (i)(3) and (i)(4) of this section.
    (ii) Respondents or correspondents may institute, terminate, or 
change pass-through arrangements for the maintenance of required 
reserve balances by providing all documentation required for the 
establishment of the new arrangement or termination of the existing 
arrangement to the Federal Reserve Banks involved within the time 
period provided for such a change by those Reserve Banks.
    (2) Reports. (i) Every depository institution that maintains 
transaction accounts or nonpersonal time deposits is required to file 
its report of deposits (or any other required form or statement) with 
the Federal Reserve Bank of its District, regardless of the manner in 
which it chooses to maintain required reserve balances.
    (ii) The Federal Reserve Bank receiving such reports shall notify 
the reporting depository institution of its reserve requirements. Where 
a pass-through arrangement exists, the Reserve Bank will also notify 
the pass-through correspondent of its respondent's required reserve 
balances.
    (iii) The Board will not hold a correspondent responsible for 
guaranteeing the accuracy of the reports of deposits submitted by its 
respondents to a Federal Reserve Bank.
    (3) Account maintenance. A correspondent that passes through 
required reserve balances of respondents shall maintain such balances, 
along with the correspondent's own required reserve balances (if any), 
in a single commingled account at the Federal Reserve Bank in whose 
District the correspondent is located. The balances held by the 
correspondent in an account at a Reserve Bank are the property of the 
correspondent and represent a liability of the Reserve Bank solely to 
the correspondent, regardless of whether the funds represent the 
reserve balances of another institution that have been passed through 
the correspondent.
    (4) Responsibilities of parties. (i) Each individual depository 
institution, U.S. branch or agency of a foreign bank, or Edge or 
Agreement corporation is responsible for maintaining its required 
reserve balance either directly with a Federal Reserve Bank or through 
a pass-through correspondent.
    (ii) A pass-through correspondent shall be responsible for assuring 
the maintenance of the appropriate aggregate level of its respondents' 
required reserve balances. A Federal Reserve Bank will compare the 
total reserve balance required to be maintained in each account with 
the total actual reserve balance held in such account for purposes of 
determining required reserve deficiencies, imposing or waiving charges 
for deficiencies in required reserves, and for other reserve 
maintenance purposes. A charge for a deficiency in the aggregate level 
of the

[[Page 42712]]

required reserve balance will be imposed by the Reserve Bank on the 
correspondent maintaining the account.
    (iii) Each correspondent is required to maintain detailed records 
for each of its respondents in a manner that permits Federal Reserve 
Banks to determine whether the respondent has provided a sufficient 
required reserve balance to the correspondent. A correspondent passing 
through a respondent's reserve balance shall maintain records and make 
such reports as the Board or Reserve Bank requires in order to insure 
the correspondent's compliance with its responsibilities for the 
maintenance of a respondent's reserve balance. Such records shall be 
available to the Reserve Banks as required.
    (iv) The Federal Reserve Bank may terminate any pass-through 
relationship in which the correspondent is deficient in its 
recordkeeping or other responsibilities.
    (v) Interest paid on supplemental reserves (if such reserves are 
required under Sec. 204.6) held by a respondent will be credited to the 
account maintained by the correspondent.


Sec. 204.9  [Amended]

    3. In section 204.9, the reference in paragraph (b) to 
``Sec. 204.3(a)(3)'' is revised to read ``Sec. 204.3(a)(2)''.

    By order of the Board of Governors of the Federal Reserve 
System, August 4, 1997.
William W. Wiles,
Secretary of the Board.
[FR Doc. 97-20957 Filed 8-7-97; 8:45 am]
BILLING CODE 6210-01-P