Federal Reserve System January 30, 2009 – Federal Register Recent Federal Regulation Documents

The Board is requesting public comment on proposed amendments to Regulation D, Reserve Requirements of Depository Institutions, to authorize the establishment of limited-purpose accounts at Federal Reserve Banks (``Reserve Banks'') for the maintenance of excess balances of eligible institutions (both as defined in Regulation D). These excess balance accounts (``EBAs'') would contain only the excess balances of the eligible institutions participating in such accounts, although the participating eligible institutions (``EBA Participants'') would authorize another institution (``EBA Agent'') to manage the EBA on their behalf. The authorization of EBAs is intended to allow eligible institutions to earn interest on their excess balances at the excess balance rate in an account relationship directly with the Federal Reserve Bank as counterparty without disrupting established business relationships with their correspondents. Continuing strains in financial markets and the configuration of interest rates support the implementation of EBAs; however, the Board will evaluate the continuing need for EBAs when more normal market functioning is restored. The Board seeks comment on all aspects of the proposal.