[Federal Register: November 18, 2002 (Volume 67, Number 222)]
[Rules and Regulations]
[Page 69467]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18no02-1]
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Rules and Regulations
Federal Register
________________________________________________________________________
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to and codified in the Code of Federal Regulations, which is published
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[[Page 69467]]
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.
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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.
DATES: The amendments to part 201 (Regulation A) were effective
November 6, 2002. 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, at (202) 452-3259, Board of Governors of the Federal Reserve
System, 20th and C Streets NW., Washington, DC 20551; for users of
Telecommunications Device for the Deaf (TDD) only, contact (202) 263-
4869.
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 for up to 30 days. In decreasing the basic discount
rate from 1.25 percent to .75 percent, 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. The
50-basis-point decrease in the discount rate was associated with a
similar decrease in the federal funds rate approved by the Federal Open
Market Committee (FOMC) and announced at the same time.
In a joint press release announcing these actions, the FOMC and the
Board stated that the FOMC continues to believe that an accommodative
stance of monetary policy, coupled with still-robust underlying growth
in productivity, is providing important ongoing support to economic
activity. However, incoming economic data have tended to confirm that
greater uncertainty, in part attributable to heightened geopolitical
risks, is currently inhibiting spending, production, and employment.
Inflation and inflation expectations remain well contained. In these
circumstances, the FOMC believes that this additional monetary easing
should prove helpful as the economy works its way through this current
soft spot. With its recent action, the FOMC believes that, against the
background of its long-run goals of price stability and sustainable
economic growth and of the information currently available, the risks
are balanced with respect to the prospects for both goals in the
foreseeable future.
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 price stability and 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:
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Federal Reserve Bank Rate Effective
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Boston................................ .75 Nov. 7, 2002.
New York.............................. .75 Nov. 6, 2002.
Philadelphia.......................... .75 Nov. 7, 2002.
Cleveland............................. .75 Nov. 7, 2002.
Richmond.............................. .75 Nov. 7, 2002.
Atlanta............................... .75 Nov. 7, 2002.
Chicago............................... .75 Nov. 7, 2002.
St. Louis............................. .75 Nov. 7, 2002.
Minneapolis........................... .75 Nov. 7, 2002.
Kansas City........................... .75 Nov. 7, 2002.
Dallas................................ .75 Nov. 6, 2002.
San Francisco......................... .75 Nov. 6, 2002.
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Dated: November 12, 2002.
By order of the Board of Governors of the Federal Reserve
System.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 02-29193 Filed 11-15-02; 8:45 am]
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