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 Federal Reserve System 12 CFR Part 201
[Regulation A]
 AGENCY: Board of Governors of the Federal Reserve System.
 ACTION: Final rule.
 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 an increase in the primary credit rate at each Federal Reserve Bank. The secondary credit rate at each Reserve Bank automatically increased by formula as a result of the Board's primary credit rate action.
 DATES: The amendments to part 201 (Regulation A) are effective September 28, 2005. 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 increase by 25 basis points the primary credit rate in effect at each of the twelve Federal Reserve Banks, thereby increasing from 4.50 percent to 4.75 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 increased from 5.00 percent to 5.25 percent under the secondary credit rate formula. The final amendments to Regulation A reflect these rate changes. The 25-basis-point increase in the primary credit rate was associated with a similar increase in the target for the federal funds rate (from 3.50 percent to 3.75 percent) approved by the Federal Open Market Committee (Committee) and announced at the same time. A press release announcing these actions indicated that: Output appeared poised to continue growing at a good pace before the tragic toll of Hurricane Katrina. The widespread devastation in the Gulf region, the associated dislocation of economic activity, and the boost to energy prices imply that spending, production, and employment will be set back in the near term. In addition to elevating premiums for some energy products, the disruption to the production and refining infrastructure may add to energy price volatility. While these unfortunate developments have increased uncertainty about near-term economic performance, it is the Committee's view that they do not pose a more persistent threat. Rather, monetary policy accommodation, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Higher energy and other costs have the potential to add to inflation pressures. However, core inflation has been relatively low in recent months and longer-term inflation expectations remain contained. The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal. With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain 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. 
                    ( print page 56564) 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 For the reasons set forth in the preamble, the Board is amending 12 CFR chapter II as follows: PART 201—EXTENSIONS OF CREDIT BY FEDERAL RESERVE BANKS (REGULATION A)
 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. 2.In § 201.51, paragraphs (a) and (b) are revised to read as follows: § 201.51
 [1]
 (a) 
                            *Primary credit.*
                             The interest rates for primary credit provided to depository institutions under § 201.4(a) are: Federal Reserve Bank
Rate
EffectiveBoston
4.75
September 20, 2005.New York
4.75
September 20, 2005.Philadelphia
4.75
September 20, 2005.Cleveland
4.75
September 22, 2005.Richmond
4.75
September 20, 2005.Atlanta
4.75
September 22, 2005.Chicago
4.75
September 20, 2005.St. Louis
4.75
September 21, 2005.Minneapolis
4.75
September 20, 2005.Kansas City
4.75
September 20, 2005.Dallas
4.75
September 22, 2005.San Francisco
4.75
September 20, 2005.
 (b) 
                            *Secondary credit.*
                             The interest rates for secondary credit provided to depository institutions under 201.4(b) are: Federal Reserve Bank
Rate
EffectiveBoston
5.25
September 20, 2005.New York
5.25
September 20, 2005.Philadelphia
5.25
September 20, 2005.Cleveland
5.25
September 22, 2005.Richmond
5.25
September 20, 2005.Atlanta
5.25
September 22, 2005.Chicago
5.25
September 20, 2005.St. Louis
5.25
September 21, 2005.Minneapolis
5.25
September 20, 2005.Kansas City
5.25
September 20, 2005.Dallas
5.25
September 22, 2005.San Francisco
5.25
September 20, 2005.
 By order of the Board of Governors of the Federal Reserve System, September 22, 2005. Jennifer J. Johnson, Secretary of the Board.


# Footnotes

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. Back to Citation


[FR Doc. 05-19395 Filed 9-27-05; 8:45 am] BILLING CODE 6210-01-P