[Federal Register Volume 72, Number 164 (Friday, August 24, 2007)]
[Rules and Regulations]
[Pages 48548-48549]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-16764]


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FEDERAL RESERVE SYSTEM

12 CFR Part 201

[Regulation A]


Extensions of Credit by Federal Reserve Banks

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
has adopted final amendments to its Regulation A to reflect the Board's 
approval of a reduction in the primary credit rate at each Federal 
Reserve Bank. The secondary credit rate at each Reserve Bank 
automatically decreased by formula as a result of the Board's primary 
credit rate action.

DATES: The amendments to part 201 (Regulation A) are effective August 
24, 2007. The rate changes for primary and secondary credit were 
effective on the dates specified in 12 CFR 201.51, as amended.

FOR FURTHER INFORMATION CONTACT: Jennifer J. Johnson, Secretary of the 
Board (202/452-3259); for users of Telecommunication Devices for the 
Deaf (TDD) only, contact 202/263-4869.

SUPPLEMENTARY INFORMATION: The Federal Reserve Banks make primary and 
secondary credit available to depository institutions as a backup 
source of funding on a short-term basis, usually overnight. The primary 
and secondary credit rates are the interest rates that the twelve 
Federal Reserve Banks charge for extensions of credit under these 
programs. In accordance with the Federal Reserve Act, the primary and 
secondary credit rates are established by the boards of directors of 
the Federal Reserve Banks, subject to the review and determination of 
the Board.
    The Board approved requests by the Reserve Banks to reduce by 50 
basis points the primary credit rate in effect at each of the twelve 
Federal Reserve Banks, thereby decreasing from 6.25 percent to 5.75 
percent the rate that each Reserve Bank charges for extensions of 
primary credit. As a result of the Board's action on the primary credit 
rate, the rate that each Reserve Bank charges for extensions of 
secondary credit automatically decreased from 6.75 percent to 6.25 
percent under the secondary credit rate formula. The final amendments 
to Regulation A reflect these rate changes.
    The Board's action narrows the spread between the primary credit 
rate and the Federal Open Market Committee's target federal funds rate 
to 50 basis points. As indicated in the Board's press release 
announcing this action, the changes to the primary credit discount 
window facility are intended to promote the restoration of orderly 
conditions in financial markets. In addition, the press release stated:

    The Board is also announcing a change to the Reserve Banks' 
usual practices to allow the provision of term financing for as long 
as 30 days, renewable by the borrower. These changes will remain in 
place until the Federal Reserve determines that market liquidity has 
improved materially. These changes are designed to provide 
depositories with greater assurance about the cost and availability 
of funding. The Federal Reserve will continue to accept a broad 
range of collateral for discount window loans, including home 
mortgages and related assets. Existing collateral margins will be 
maintained.

Regulatory Flexibility Act Certification

    Pursuant to the Regulatory Flexibility Act (5 U.S.C. 605(b)), the 
Board certifies that the new primary and secondary credit rates will 
not have a significantly adverse economic impact on a substantial 
number of small entities because the final rule does not impose any 
additional requirements on entities affected by the regulation.

Administrative Procedure Act

    The Board did not follow the provisions of 5 U.S.C. 553(b) relating 
to notice and public participation in connection with the adoption of 
these

[[Page 48549]]

amendments because the Board for good cause determined that delaying 
implementation of the new primary and secondary credit rates in order 
to allow notice and public comment would be unnecessary and contrary to 
the public interest in fostering price stability and sustainable 
economic growth. For these same reasons, the Board also has not 
provided 30 days prior notice of the effective date of the rule under 
section 553(d).

List of Subjects in 12 CFR Part 201

    Banks, Banking, Federal Reserve System, Reporting and 
recordkeeping.

Authority and Issuance

0
For the reasons set forth in the preamble, the Board is amending 12 CFR 
Chapter II to read as follows:

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

0
1. The authority citation for part 201 continues to read as follows:

    Authority: 12 U.S.C. 248(i)-(j), 343 et seq., 347a, 347b, 347c, 
348 et seq., 357, 374, 374a, and 461.

0
2. In Sec.  201.51, paragraphs (a) and (b) are revised to read as 
follows:


Sec.  201.51  Interest rates applicable to credit extended by a Federal 
Reserve Bank.\1\
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    \1\ The primary, secondary, and seasonal credit rates described 
in this section apply to both advances and discounts made under the 
primary, secondary, and seasonal credit programs, respectively.
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    (a) Primary credit. The interest rates for primary credit provided 
to depository institutions under Sec.  201.4(a) are:

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         Federal Reserve Bank            Rate           Effective
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Boston................................    5.75  August 17, 2007.
New York..............................    5.75  August 17, 2007.
Philadelphia..........................    5.75  August 17, 2007.
Cleveland.............................    5.75  August 17, 2007.
Richmond..............................    5.75  August 17, 2007.
Atlanta...............................    5.75  August 17, 2007.
Chicago...............................    5.75  August 17, 2007.
St. Louis.............................    5.75  August 20, 2007.
Minneapolis...........................    5.75  August 17, 2007.
Kansas City...........................    5.75  August 17, 2007.
Dallas................................    5.75  August 17, 2007.
San Francisco.........................    5.75  August 17, 2007.
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    (b) Secondary credit. The interest rates for secondary credit 
provided to depository institutions under 201.4(b) are:

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         Federal Reserve Bank            Rate           Effective
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Boston................................    6.25  August 17, 2007.
New York..............................    6.25  August 17, 2007.
Philadelphia..........................    6.25  August 17, 2007.
Cleveland.............................    6.25  August 17, 2007.
Richmond..............................    6.25  August 17, 2007.
Atlanta...............................    6.25  August 17, 2007.
Chicago...............................    6.25  August 17, 2007.
St. Louis.............................    6.25  August 20, 2007.
Minneapolis...........................    6.25  August 17, 2007.
Kansas City...........................    6.25  August 17, 2007.
Dallas................................    6.25  August 17, 2007.
San Francisco.........................    6.25  August 17, 2007.
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* * * * *

    By order of the Board of Governors of the Federal Reserve 
System, August 20, 2007.
Jennifer J. Johnson,
Secretary of the Board.
 [FR Doc. E7-16764 Filed 8-23-07; 8:45 am]
BILLING CODE 6210-02-P