Federal Reserve System December 31, 2009 – Federal Register Recent Federal Regulation Documents

Reserve Requirements of Depository Institutions Policy on Payment System Risk
Document Number: E9-31040
Type: Proposed Rule
Date: 2009-12-31
Agency: Federal Reserve System, Agencies and Commissions
The Board is requesting public comment on proposed amendments to Regulation D, Reserve Requirements of Depository Institutions, to authorize the establishment of term deposits. Term deposits are intended to facilitate the conduct of monetary policy by providing a tool for managing the aggregate quantity of reserve balances. Institutions eligible to receive earnings on their balances in accounts at Federal Reserve Banks (``eligible institutions'') could hold term deposits and receive earnings at a rate that would not exceed the general level of short-term interest rates. Term deposits would be separate and distinct from those maintained in an institution's master account at a Reserve Bank (``master account'') as well as from those maintained in an excess balance account. Term deposits would not satisfy required reserve balances or contractual clearing balances and would not be available to clear payments or to cover daylight or overnight overdrafts. The proposal also would make minor amendments to the posting rules for intraday debits and credits to master accounts as