[Federal Register Volume 66, Number 8 (Thursday, January 11, 2001)]
[Rules and Regulations]
[Page 2211]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-784]


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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 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.

DATES: The amendments to part 201 (Regulation A) were effective January 
4, 2001. 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, at (202) 452-3259; for users of Telecommunications Device for 
the Deaf (TDD), contact Janice Simms, at (202) 872-4984, 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 for up to 30 days. In decreasing the basic discount 
rate from 6.0 percent to 5.5 percent, the Board acted on requests 
submitted by the Boards of Directors of the twelve Federal Reserve 
Banks. The new rate of 5.5 percent was effective for all twelve Reserve 
Banks on the dates specified below. (Seven of the twelve Reserve Banks 
reduced the basic discount rate in two steps, from 6.0 percent to 5.75 
percent, then from 5.75 percent to 5.5 percent, as specified in the 
footnote to Sec. 201.51 of revised Regulation A.) The 50-basis-point 
decrease in the discount rate was associated with a 50-basis-point 
decrease in the federal funds rate approved by the Federal Open Market 
Committee.
    These actions were taken in light of further weakening of sales and 
production, and in the context of lower consumer confidence, tight 
conditions in some segments of financial markets, and high energy 
prices sapping household and business purchasing power. Moreover, 
inflation pressures remain contained. Nonetheless, to date there is 
little evidence to suggest that longer-term advances in technology and 
associated gains in productivity are abating.

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 price stability and 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:

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         Federal Reserve Bank            Rate        Effective \1\
------------------------------------------------------------------------
Boston................................    5.5  January 4, 2001
New York..............................    5.5  January 4, 2001
Philadelphia..........................    5.5  January 4, 2001
Cleveland.............................    5.5  January 4, 2001
Richmond..............................    5.5  January 4, 2001
Atlanta...............................    5.5  January 4, 2001
Chicago...............................    5.5  January 4, 2001
St. Louis.............................    5.5  January 5, 2001
Minneapolis...........................    5.5  January 4, 2001
Kansas City...........................    5.5  January 4, 2001
Dallas................................    5.5  January 4, 2001
San Francisco.........................    5.5  January 4, 2001
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\1\ On January 3, 2001, the rate for adjustment credit was 5.75 percent
  for the following Federal Reserve Banks: New York, Cleveland, Atlanta,
  Kansas City, Dallas, and San Francisco. On January 4, the rate for
  adjustment credit was 5.75 percent for the Federal Reserve Bank of St.
  Louis.


    By order of the Board of Governors of the Federal Reserve 
System, January 5, 2001.
Robert deV. Frierson,
Associate Secretary of the Board.
[FR Doc. 01-784 Filed 1-10-01; 8:45 am]
BILLING CODE 6210-01-P