Reserve Requirement – Regulation D

The Federal Reserve Board amended Regulation D (Reserve Requirements for Depository Institutions) to reflect annual indexing and the low reserve tranche for 2016.

The new low reserve threshold will apply to the fourteen-day reserve maintenance period that begins January 21, 2016.
For institutions that report deposit data weekly, this maintenance period corresponds to the fourteen-day computation period that begins December 22, 2015.
For institutions that report quarterly, this maintenance period corresponds to the seven-day computation period that begins December 15, 2015.
The new value levels will be used to determine the frequency at which an institution submits deposit reports effective in either June or September 2016.

Reserve Liability                                         Reserve Requirement
Net Transaction Accounts:
$0 to $15.2 million (from $14.5 million)                          0% of amount
$15.2 million to $110.2 million (from $103.6 million)             3% of amount
$Over $110.2 million                                              $2,850,000 + 10% of the amount over $110.2 million
Nonpersonal time deposits                                         0%
Eurocurrency liabilities                                          0%

https://www.federalregister.gov/articles/2015/11/17/2015-29336/reserve-requirements-of-depository-institutions

Also, effective December 17, 2015, the Federal Reserve changed the rate of interest on balances maintained to satisfy reserve requirements (IORR) and excess balances (IOER) maintained at the Reserve banks – both from 0.25 to  0.50%.

https://www.federalregister.gov/articles/2015/12/22/2015-32099/reserve-requirements-of-depository-institutions

 

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