Federal Reserve banks; extensions of credit (Regulation A): Discount rate change,

[Federal Register: October 23, 1998 (Volume 63, Number 205)]

[Rules and Regulations]

[Page 56785-56786]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr23oc98-3]

FEDERAL RESERVE SYSTEM

12 CFR Part 201

[Regulation A]

Extensions of Credit by Federal Reserve Banks; Change in Discount Rate

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

SUMMARY: The Board of Governors has amended its Regulation A on Extensions of Credit by Federal Reserve Banks to reflect its approval of a decrease in the basic discount rate at each Federal Reserve Bank. The Board acted on requests submitted by the Boards of Directors of the twelve Federal Reserve Banks.

EFFECTIVE DATE: The amendments to part 201 (Regulation A) were effective October 15, 1998. The rate changes for adjustment credit were effective on the dates specified in 12 CFR 201.51.

[[Page 56786]]

FOR FURTHER INFORMATION CONTACT: Jennifer J. Johnson, Secretary of the Board (202/452-3259); for users of Telecommunications Device for the Deaf (TDD), please contact Diane Jenkins, (202/452-3544), Board of Governors of the Federal Reserve System, 20th and C Streets N.W., Washington, D.C. 20551.

SUPPLEMENTARY INFORMATION: Pursuant to the authority of sections 10(b), 13, 14, 19, et. al., of the Federal Reserve Act, the Board has amended its Regulation A (12 CFR part 201) to incorporate changes in discount rates on Federal Reserve Bank extensions of credit. The discount rates are the interest rates charged to depository institutions when they borrow from their district Reserve Banks.

The ``basic discount rate'' is a fixed rate charged by Reserve Banks for adjustment credit and, at the Reserve Banks' discretion, for extended credit. In decreasing the basic discount rate, the Board acted on requests submitted by the Boards of Directors of the twelve Federal Reserve Banks. The new rates were effective on the dates specified below. Growing caution by lenders and unsettled conditions in financial markets more generally are likely to be restraining aggregate demand in the future. Against this backdrop, further easing of the stance of monetary policy was judged to be warranted to sustain economic growth in the context of contained inflation.

Regulatory Flexibility Act Certification

Pursuant to section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Board certifies that the change in the basic discount rate will not have a significant adverse economic impact on a substantial number of small entities. The rule does not impose any additional requirements on entities affected by the regulation.

Administrative Procedure Act

The provisions of 5 U.S.C. 553(b) relating to notice and public participation were not followed in connection with the adoption of the amendment because the Board for good cause finds that delaying the change in the basic discount rate in order to allow notice and public comment on the change is impracticable, unnecessary, and contrary to the public interest in fostering sustainable economic growth.

The provisions of 5 U.S.C. 553(d) that prescribe 30 days prior notice of the effective date of a rule have not been followed because section 553(d) provides that such prior notice is not necessary whenever there is good cause for finding that such notice is contrary to the public interest. As previously stated, the Board determined that delaying the changes in the basic discount rate is contrary to the public interest.

List of Subjects in 12 CFR Part 201

Banks, banking, Credit, Federal Reserve System.

For the reasons set out in the preamble, 12 CFR Part 201 is amended as set forth below:

PART 201--EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS (REGULATION A)

1. The authority citation for 12 CFR part 201 continues to read as follows:

   Authority: 12 U.S.C. 343 et seq., 347a, 347b, 347c, 347d, 348 et seq., 357, 374, 374a and 461.

2. Section 201.51 is revised to read as follows:

   Sec. 201.51 Adjustment credit for depository institutions.

   The rates for adjustment credit provided to depository institutions under Sec. 201.3(a) are:

   Federal reserve bank

   Rate

   Effective

   Boston............................ 4.75 October 15, 1998. New York.......................... 4.75 October 15, 1998. Philadelphia...................... 4.75 October 15, 1998. Cleveland......................... 4.75 October 16, 1998. Richmond.......................... 4.75 October 16, 1998. Atlanta........................... 4.75 October 15, 1998. Chicago........................... 4.75 October 15, 1998. St. Louis......................... 4.75 October 15, 1998. Minneapolis....................... 4.75 October 15, 1998. Kansas City....................... 4.75 October 15, 1998. Dallas............................ 4.75 October 16, 1998. San Francisco..................... 4.75 October 15, 1998.

   By order of the Board of Governors of the Federal Reserve System, October 19, 1998. Jennifer J. Johnson, Secretary of the Board.

   [FR Doc. 98-28499Filed10-22-98; 8:45 am]

   BILLING CODE 6210-01-P