Regulation D
November 25, 1997
Circular No. 10998

Proposal to Maintain Reserves on a Lagged Basis

Comments due January 12, 1998

To All Depository Institutions in the Second Federal Reserve District:

The Following is from a statement by the Board of Governors of the Federal Reserve System:

The Federal Reserve Board has requested public comment on a proposal to move from a system of contemporaneous reserve requirements to one where reserves are maintained on a lagged basis.

The switch would make it easier for depositories to calculate their required reserves and would increase the accuracy of information needed by the Open Market Trading Desk to carry out its operations.

Comment is requested by January 12, 1998.

Under the proposed lagged system, the reserve maintenance period for weekly reporting institutions would begin 30 days after the beginning of the two-week reserve computation period. Under the current system, the reserve maintenance period begins only two days after the beginning of the computation period.

The Board's proposal as published in the Federal Register of November 12 is available as a file (pdf - 20kb). Comments must be submitted by January 12, 1998, and may be sent to the Board, as specified in the notice.