[Federal Register Volume 73, Number 59 (Wednesday, March 26, 2008)]
[Rules and Regulations]
[Pages 15861-15862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-6107]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
week.
========================================================================
Federal Register / Vol. 73, No. 59 / Wednesday, March 26, 2008 /
Rules and Regulations
[[Page 15861]]
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.
-----------------------------------------------------------------------
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 March
26, 2008. 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.
On the dates listed below, the Board approved requests by eight
Reserve Banks to reduce by 25 basis points the primary credit rate in
effect at those Federal Reserve Banks, thereby decreasing from 3.50
percent to 3.25 percent the rate that each of those Reserve Banks
charged for extensions of primary credit. As a result of the Board's
action on the primary credit rate, the rate that each of those Reserve
Banks charged for extensions of secondary credit automatically
decreased from 4.00 percent to 3.75 percent under the secondary credit
rate formula. The rate changes for primary and secondary credit were
effective on the dates specified in the following tables.
Primary credit under 12 CFR 201.4(a)
------------------------------------------------------------------------
Federal Reserve Bank Rate Effective
------------------------------------------------------------------------
Boston............................. 3.25 March 17, 2008.
New York........................... 3.25 March 16, 2008.
Cleveland.......................... 3.25 March 17, 2008.
Richmond........................... 3.25 March 17, 2008.
Chicago............................ 3.25 March 17, 2008.
Minneapolis........................ 3.25 March 17, 2008.
Kansas City........................ 3.25 March 17, 2008.
San Francisco...................... 3.25 March 17, 2008.
------------------------------------------------------------------------
Secondary credit under 12 CFR 201.4(b)
------------------------------------------------------------------------
Federal Reserve Bank Rate Effective
------------------------------------------------------------------------
Boston............................. 3.75 March 17, 2008.
New York........................... 3.75 March 16, 2008.
Cleveland.......................... 3.75 March 17, 2008.
Richmond........................... 3.75 March 17, 2008.
Chicago............................ 3.75 March 17, 2008.
Minneapolis........................ 3.75 March 17, 2008.
Kansas City........................ 3.75 March 17, 2008.
San Francisco...................... 3.75 March 17, 2008.
------------------------------------------------------------------------
The Board's action narrowed the spread between the primary credit
rate and the Federal Open Market Committee's target federal funds rate
to 25 basis points. As indicated in the Board's press release
announcing this action, the changes to the primary credit discount
window facility were intended to bolster market liquidity and promote
orderly market functioning. In addition, the press release stated that
the Board had approved an increase in the maximum maturity of primary
credit loans to 90 days from 30 days.
Subsequently, the Board approved requests by each of the twelve
Federal Reserve Banks to decrease the primary credit rate in effect at
each of the Reserve Banks to 2.50 percent. 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 to
3.00 percent under the secondary credit rate formula. The final
amendments to Regulation A reflect these rate changes.
The decrease in the primary credit rate was associated with a
similar decrease in the target for the federal funds rate (from 3.00
percent to 2.25 percent) approved by the Federal Open Market Committee
(Committee) and announced at the same time. A press release announcing
these actions noted that:
Recent information indicates that the outlook for economic
activity has weakened further. Growth in consumer spending has
slowed and labor markets have softened. Financial markets remain
under considerable stress, and the tightening of credit conditions
and the deepening of the housing contraction are likely to weigh on
economic growth over the next few quarters.
Inflation has been elevated, and some indicators of inflation
expectations have risen. The Committee expects inflation to moderate
in coming quarters, reflecting a projected leveling-out of energy
and other commodity prices and an easing of pressures on resource
utilization. Still, uncertainty about the inflation outlook has
increased. It will be necessary to continue to monitor inflation
developments carefully.
Today's policy action, combined with those taken earlier,
including measures to foster market liquidity, should help to
promote moderate growth over time and to mitigate the risks to
economic activity. However, downside risks to growth remain. The
Committee will act in a timely manner as needed to promote
sustainable economic growth and price stability.
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 amendments because the Board for good cause determined that
delaying
[[Page 15862]]
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 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\
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
(a) Primary credit. The interest rates for primary credit provided
to depository institutions under Sec. 201.4(a) are:
------------------------------------------------------------------------
Federal Reserve Bank Rate Effective
------------------------------------------------------------------------
Boston............................. 2.50 March 18, 2008.
New York........................... 2.50 March 18, 2008.
Philadelphia....................... 2.50 March 20, 2008.
Cleveland.......................... 2.50 March 18, 2008.
Richmond........................... 2.50 March 19, 2008.
Atlanta............................ 2.50 March 19, 2008.
Chicago............................ 2.50 March 18, 2008.
St. Louis.......................... 2.50 March 19, 2008.
Minneapolis........................ 2.50 March 19, 2008.
Kansas City........................ 2.50 March 18, 2008.
Dallas............................. 2.50 March 18, 2008.
San Francisco...................... 2.50 March 18, 2008.
------------------------------------------------------------------------
(b) Secondary credit. The interest rates for secondary credit
provided to depository institutions under 201.4(b) are:
------------------------------------------------------------------------
Federal Reserve Bank Rate Effective
------------------------------------------------------------------------
Boston............................. 3.00 March 18, 2008.
New York........................... 3.00 March 18, 2008.
Philadelphia....................... 3.00 March 20, 2008.
Cleveland.......................... 3.00 March 18, 2008.
Richmond........................... 3.00 March 19, 2008.
Atlanta............................ 3.00 March 19, 2008.
Chicago............................ 3.00 March 18, 2008.
St. Louis.......................... 3.00 March 19, 2008.
Minneapolis........................ 3.00 March 19, 2008.
Kansas City........................ 3.00 March 18, 2008.
Dallas............................. 3.00 March 18, 2008.
San Francisco...................... 3.00 March 18, 2008.
------------------------------------------------------------------------
* * * * *
By order of the Board of Governors of the Federal Reserve
System, March 21, 2008.
Robert deV. Frierson,
Deputy Secretary of the Board.
[FR Doc. E8-6107 Filed 3-25-08; 8:45 am]
BILLING CODE 6210-02-P