Board of Governors of the Federal Reserve System.
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.
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.Start Further Info
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.End Further Info End Preamble Start Supplemental 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.Start List of Subjects
List of Subjects in 12 CFR Part 201End List of Subjects Start Amendment Part
For the reasons set out in the preamble,End Amendment Part Start Part
PART 201—EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS (REGULATION A)End Part Start Amendment Part
1. The authority citation forEnd Amendment Part Start Amendment Part
2. Section 201.51 is revised to read as follows:End Amendment Part
The rates for adjustment credit provided to depository institutions under § 201.3(a) are:
|Federal Reserve Bank||Rate||Effective|
|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.|
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]
BILLING CODE 6210-01-P