Federal Reserve banks: Extensions of credit (Regulation A); discount rate change,

[Federal Register: December 1, 1998 (Volume 63, Number 230)]

[Rules and Regulations]

[Page 66001]

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

[DOCID:fr01de98-2]

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 DATES: The amendments to part 201 (Regulation A) were effective November 17, 1998. The rate changes for adjustment credit were effective on the dates specified in 12 CFR 201.51.

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 NW, Washington, DC 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. Although conditions in financial markets have settled down materially since mid-October, unusual strains remain. With the 75- basis-point decline in the federal funds rate since September, financial conditions can reasonably be expected to be consistent with fostering sustained economic expansion while keeping inflationary pressures subdued.

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.............................

   4.5 Nov 18, 1998 New York...........................

   4.5 Nov 17, 1998 Philadelphia.......................

   4.5 Nov 17, 1998 Cleveland..........................

   4.5 Nov 19, 1998 Richmond...........................

   4.5 Nov 18, 1998 Atlanta............................

   4.5 Nov 18, 1998 Chicago............................

   4.5 Nov 19, 1998 St. Louis..........................

   4.5 Nov 19, 1998 Minneapolis........................

   4.5 Nov 19, 1998 Kansas City........................

   4.5 Nov 18, 1998 Dallas.............................

   4.5 Nov 17, 1998 San Francisco......................

   4.5 Nov 17, 1998

   By order of the Board of Governors of the Federal Reserve System, November 24, 1998. Jennifer J. Johnson, Secretary of the Board.

   [FR Doc. 98-31976Filed11-30-98; 8:45 am]

   BILLING CODE 6210-01-P