[Federal Register Volume 65, Number 28 (Thursday, February 10, 2000)]
[Rules and Regulations]
[Pages 6531-6533]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-3031]


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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 an increase 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 
February

[[Page 6532]]

2, 2000. 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; for users of Telecommunications Device for 
the Deaf (TDD), contact Diane Jenkins, at (202) 452-3544, Board of 
Governors of the Federal Reserve System, 20th and C Streets NW, 
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 increasing the basic discount rate from 5 percent 
to 5.25 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 25-basis-point increase in 
the discount rate was associated with a similar increase in the federal 
funds rate approved by the Federal Open Market Committee and announced 
at the same time.
    The Board and the Reserve Banks remain concerned that over time 
increases in demand will continue to exceed the growth in potential 
supply, even after taking account of the pronounced rise in 
productivity growth. Such trends could foster inflationary imbalances 
that would undermine the economy's record economic expansion.
    Against the background of their long-run goals of price stability 
and sustainable economic growth and of the information currently 
available, the Board and the Reserve Banks believe the risks are 
weighted mainly toward conditions that may generate heightened 
inflation pressures 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.....................................               5.25  February 2, 2000.
New York...................................               5.25  February 2, 2000.
Philadelphia...............................               5.25  February 2, 2000.
Cleveland..................................               5.25  February 2, 2000.
Richmond...................................               5.25  February 2, 2000.
Atlanta....................................               5.25  February 2, 2000.
Chicago....................................               5.25  February 2, 2000.
St. Louis..................................               5.25  February 2, 2000.
Minneapolis................................               5.25  February 3, 2000.
Kansas City................................               5.25  February 2, 2000.
Dallas.....................................               5.25  February 4, 2000.
San Francisco..............................               5.25  February 2, 2000.
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[[Page 6533]]

    By order of the Board of Governors of the Federal Reserve 
System, February 4, 2000.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 00-3031 Filed 2-9-00; 8:45 am]
BILLING CODE 6210-01-P