The Federal Reserve Board has requested public comment on proposed changes to Regulation D (Reserve Requirements of Depository Institutions) to authorize the establishment of limited purpose accounts, called "excess balance accounts" (EBAs), at Federal Reserve Banks.
The authorization of EBAs for the excess balances of institutions eligible
to receive earnings on their balances maintained at Federal Reserve Banks is
intended to address pressures on
correspondent-respondent business relationships in the current market environment.
The establishment of EBAs would allow EBA participants to earn interest at the excess balance rate in a Federal Reserve Bank account managed by a correspondent or other agent without EBA participants having to open a separate individual account at the Federal Reserve Bank.
See the press release for full details.