[Federal Register Volume 63, Number 230 (Tuesday, December 1, 1998)]
[Rules and Regulations]
[Page 66001]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-31976]


=======================================================================
-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

SUMMARY: The Board of Governors has amended its Regulation A on 
Extensions of Credit by Federal Reserve Banks to reflect its approval 
of a decrease 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 DATES: The amendments to part 201 (Regulation A) were 
effective November 17, 1998. The rate changes for adjustment credit 
were effective on the dates specified in 12 CFR 201.51.

FOR FURTHER INFORMATION CONTACT: Jennifer J. Johnson, Secretary of the 
Board (202/452-3259); for users of Telecommunications Device for the 
Deaf (TDD), please contact Diane Jenkins, (202/452-3544), Board of 
Governors of the Federal Reserve System, 20th and C Streets NW, 
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 Banks' discretion, for 
extended credit. In decreasing the basic discount rate, the Board acted 
on requests submitted by the Boards of Directors of the twelve Federal 
Reserve Banks. The new rates were effective on the dates specified 
below. Although conditions in financial markets have settled down 
materially since mid-October, unusual strains remain. With the 75-
basis-point decline in the federal funds rate since September, 
financial conditions can reasonably be expected to be consistent with 
fostering sustained economic expansion while keeping inflationary 
pressures subdued.

Regulatory Flexibility Act Certification

    Pursuant to section 605(b) of the Regulatory Flexibility Act (5 
U.S.C. 605(b)), 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. The rule does not impose any 
additional requirements on entities affected by the regulation.

Administrative Procedure Act

    The provisions of 5 U.S.C. 553(b) relating to notice and public 
participation were not followed in connection with the adoption of the 
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 fostering sustainable economic growth.
    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.

List of Subjects in 12 CFR Part 201

    Banks, Banking, Credit, Federal Reserve System.

    For the reasons set out in the preamble, 12 CFR part 201 is amended 
as set forth below:

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

    1. The authority citation for 12 CFR part 201 continues 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:

------------------------------------------------------------------------
        Federal Reserve Bank             Rate            Effective
------------------------------------------------------------------------
Boston.............................          4.5  Nov 18, 1998
New York...........................          4.5  Nov 17, 1998
Philadelphia.......................          4.5  Nov 17, 1998
Cleveland..........................          4.5  Nov 19, 1998
Richmond...........................          4.5  Nov 18, 1998
Atlanta............................          4.5  Nov 18, 1998
Chicago............................          4.5  Nov 19, 1998
St. Louis..........................          4.5  Nov 19, 1998
Minneapolis........................          4.5  Nov 19, 1998
Kansas City........................          4.5  Nov 18, 1998
Dallas.............................          4.5  Nov 17, 1998
San Francisco......................          4.5  Nov 17, 1998
------------------------------------------------------------------------

    By order of the Board of Governors of the Federal Reserve 
System, November 24, 1998.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 98-31976 Filed 11-30-98; 8:45 am]
BILLING CODE 6210-01-P