[Federal Register Volume 73, Number 89 (Wednesday, May 7, 2008)]
[Rules and Regulations]
[Pages 25505-25506]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-10021]


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FEDERAL RESERVE SYSTEM

12 CFR Part 201

[Regulation A]


Extensions of Credit by Federal Reserve Banks

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
has adopted final amendments to its Regulation A to reflect the Board's 
approval of a decrease in the primary credit rate at each Federal 
Reserve Bank. The secondary credit rate at each Reserve Bank 
automatically decreased by formula as a result of the Board's primary 
credit rate action.

DATES: The amendments to part 201 (Regulation A) are effective May 7, 
2008. The rate changes for primary and secondary credit were effective 
on the dates specified in 12 CFR 201.51, as amended.

FOR FURTHER INFORMATION CONTACT: Jennifer J. Johnson, Secretary of the 
Board (202/452-3259); for users of Telecommunication Devices for the 
Deaf (TDD) only, contact 202/263-4869.

SUPPLEMENTARY INFORMATION: The Federal Reserve Banks make primary and 
secondary credit available to depository institutions as a backup 
source of funding on a short-term basis, usually overnight. The primary 
and secondary credit rates are the interest rates that the twelve 
Federal Reserve Banks charge for extensions of credit under these 
programs. In accordance with the Federal Reserve Act, the primary and 
secondary credit rates are established by the boards of directors of 
the Federal Reserve Banks, subject to the review and determination of 
the Board.
    The Board approved requests by the Reserve Banks to decrease by 25 
basis points the primary credit rate in effect at each of the twelve 
Federal Reserve Banks, thereby decreasing from 2.50 percent to 2.25 
percent the rate that each Reserve Bank charges for extensions of 
primary credit. As a result of the Board's action on the primary credit 
rate, the rate that each Reserve Bank charges for extensions of 
secondary credit automatically decreased from 3.00 percent to 2.75 
percent under the secondary credit rate formula. The final amendments 
to Regulation A reflect these rate changes.
    The 25-basis-point decrease in the primary credit rate was 
associated with a similar decrease in the target for the federal funds 
rate (from 2.25 percent to 2.00 percent) approved by the Federal Open 
Market Committee (Committee) and announced at the same time. A press 
release announcing these actions indicated that:

    Recent information indicates that economic activity remains 
weak. Household and business spending has been subdued and labor 
markets have softened further. Financial markets remain under 
considerable stress, and tight credit conditions and the deepening 
housing contraction are likely to weigh on economic growth over the 
next few quarters.
    Although readings on core inflation have improved somewhat, 
energy and other commodity prices have increased, and some 
indicators of inflation expectations have risen in recent months. 
The Committee expects inflation to moderate in coming quarters, 
reflecting a projected leveling-out of energy and other commodity 
prices and an easing of pressures on resource utilization. Still, 
uncertainty about the inflation outlook remains high. It will be 
necessary to continue to monitor inflation developments carefully.
    The substantial easing of monetary policy to date, combined with 
ongoing measures to foster market liquidity, should help to promote 
moderate growth over time and to mitigate risks to economic 
activity. The Committee will continue to monitor economic and 
financial developments and will act as needed to promote sustainable 
economic growth and price stability.

Regulatory Flexibility Act Certification

    Pursuant to the Regulatory Flexibility Act (5 U.S.C. 605(b)), the 
Board certifies that the new primary and secondary credit rates will 
not have a significantly adverse economic impact on a substantial 
number of small entities because the final rule does not impose any 
additional requirements on entities affected by the regulation.

Administrative Procedure Act

    The Board did not follow the provisions of 5 U.S.C. 553(b) relating 
to notice and public participation in connection with the adoption of 
these amendments because the Board for good cause determined that 
delaying implementation of the new primary and secondary credit rates 
in order to allow notice and public comment would be unnecessary and 
contrary to the public interest in fostering price stability and 
sustainable economic growth. For these same reasons, the Board also has 
not provided 30 days prior notice of the effective date of the rule 
under section 553(d).

List of Subjects in 12 CFR Part 201

    Banks, Banking, Federal Reserve System, Reporting and 
recordkeeping.

Authority and Issuance

0
For the reasons set forth in the preamble, the Board is amending 12 CFR 
Chapter II to read as follows:

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

0
1. The authority citation for part 201 continues to read as follows:

    Authority: 12 U.S.C. 248(i)-(j), 343 et seq., 347a, 347b, 347c, 
348 et seq., 357, 374, 374a, and 461.


0
2. In Sec.  201.51, paragraphs (a) and (b) are revised to read as 
follows:

[[Page 25506]]

Sec.  201.51  Interest rates applicable to credit extended by a Federal 
Reserve Bank.\1\
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    \1\ The primary, secondary, and seasonal credit rates described 
in this section apply to both advances and discounts made under the 
primary, secondary, and seasonal credit programs, respectively.
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    (a) Primary credit. The interest rates for primary credit provided 
to depository institutions under Sec.  201.4(a) are:

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        Federal Reserve Bank           Rate           Effective
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Boston..............................   2.25  May 1, 2008.
New York............................   2.25  April 30, 2008.
Philadelphia........................   2.25  May 1, 2008.
Cleveland...........................   2.25  April 30, 2008.
Richmond............................   2.25  May 1, 2008.
Atlanta.............................   2.25  April 30, 2008.
Chicago.............................   2.25  April 30, 2008.
St. Louis...........................   2.25  May 1, 2008.
Minneapolis.........................   2.25  May 1, 2008.
Kansas City.........................   2.25  April 30, 2008.
Dallas..............................   2.25  May 1, 2008.
San Francisco.......................   2.25  April 30, 2008.
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    (b) Secondary credit. The interest rates for secondary credit 
provided to depository institutions under Sec.  201.4(b) are:

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        Federal Reserve Bank           Rate           Effective
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Boston..............................   2.75  May 1, 2008.
New York............................   2.75  April 30, 2008.
Philadelphia........................   2.75  May 1, 2008.
Cleveland...........................   2.75  April 30, 2008.
Richmond............................   2.75  May 1, 2008.
Atlanta.............................   2.75  April 30, 2008.
Chicago.............................   2.75  April 30, 2008.
St. Louis...........................   2.75  May 1, 2008.
Minneapolis.........................   2.75  May 1, 2008.
Kansas City.........................   2.75  April 30, 2008.
Dallas..............................   2.75  May 1, 2008.
San Francisco.......................   2.75  April 30, 2008.
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* * * * *

    By order of the Board of Governors of the Federal Reserve 
System, May 1, 2008.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. E8-10021 Filed 5-6-08; 8:45 am]
BILLING CODE 6210-01-P