17 October 2008
[Federal Register: October 17, 2008 (Volume 73, Number 202)]
[Rules and Regulations]
[Page 61657-61658]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17oc08-1]
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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
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[[Page 61657]]
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 decrease 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 October
17, 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.
The Board approved requests by the Reserve Banks to decrease by 50
basis points the primary credit rate in effect at each of the twelve
Federal Reserve Banks, thereby decreasing from 2.25 percent to 1.75
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 2.75 percent to 2.25
percent under the secondary credit rate formula. The final amendments
to Regulation A reflect these rate changes.
The 50-basis-point decrease in the primary credit rate was
associated with a similar decrease in the target for the federal funds
rate (from 2.00 percent to 1.50 percent) approved by the Federal Open
Market Committee (Committee) and announced at the same time. A press
release announcing these actions indicated that:
Incoming economic data suggest that the pace of economic
activity has slowed markedly in recent months. Moreover, the
intensification of financial market turmoil is likely to exert
additional restraint on spending, partly by further reducing the
ability of households and businesses to obtain credit. Inflation has
been high, but the Committee believes that the decline in energy and
other commodity prices and the weaker prospects for economic
activity have reduced the upside risks to inflation.
The Committee will monitor economic and financial developments
carefully and will act 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 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).
12 CFR Chapter II
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................................ 1.75 October 8, 2008.
New York.............................. 1.75 October 8, 2008.
Philadelphia.......................... 1.75 October 8, 2008.
Cleveland............................. 1.75 October 8, 2008.
Richmond.............................. 1.75 October 8, 2008.
Atlanta............................... 1.75 October 8, 2008.
Chicago............................... 1.75 October 8, 2008.
St. Louis............................. 1.75 October 9, 2008.
Minneapolis........................... 1.75 October 8, 2008.
Kansas City........................... 1.75 October 8, 2008.
Dallas................................ 1.75 October 8, 2008.
San Francisco......................... 1.75 October 8, 2008.
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(b) Secondary credit. The interest rates for secondary credit
provided to depository institutions under 201.4(b) are:
[[Page 61658]]
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Federal reserve bank Rate Effective
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Boston................................ 2.25 October 8, 2008.
New York.............................. 2.25 October 8, 2008.
Philadelphia.......................... 2.25 October 8, 2008.
Cleveland............................. 2.25 October 8, 2008.
Richmond.............................. 2.25 October 8, 2008.
Atlanta............................... 2.25 October 8, 2008.
Chicago............................... 2.25 October 8, 2008.
St. Louis............................. 2.25 October 9, 2008.
Minneapolis........................... 2.25 October 8, 2008.
Kansas City........................... 2.25 October 8, 2008.
Dallas................................ 2.25 October 8, 2008.
San Francisco......................... 2.25 October 8, 2008.
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* * * * *
By order of the Board of Governors of the Federal Reserve
System,
Dated: October 9, 2008.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. E8-24519 Filed 10-16-08; 8:45 am]
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