For release at 4:30 PM EST H.3 (502) June 8, 2000 SPECIAL NOTICE Data for reserves and the monetary base have been updated to incorporate revisions to historical data that are not seasonally adjusted (n.s.a.) and to the factors that adjust for discontinuities in required reserves, including annual indexations of the low reserve tranche and the reserve requirement exemption levels (break factors). Starting in February 1984, seasonal factors for required reserves and the surplus vault cash component of the monetary base have been re-estimated using the revised break-adjusted n.s.a. data.(fn.1) The revisions to break-adjusted, seasonally adjusted data for any maintenance period generally were small, with a few exceptions that amount to about $600 million for reserves and about $1.5 billion for the monetary base in individual periods. The historical revisions to n.s.a. data for reserves and the monetary base reflect a re-aggregation of revised data from depository institutions. The revisions to the break-adjusted data for reserves and the monetary base that result from annual indexations begin in January 1999. The actual 2000 low reserve tranche and reserve requirement exemption levels are a bit lower than those estimated in early 1999. The differences between the actual and the previously estimated low reserve tranche and exemption levels result in upward adjustments to the 1999 data of less than $200 million. To make 2000 data comparable with historical data, the 2000 data have been break-adjusted using estimates of the low reserve tranche and reserve requirement exemption that will take effect in January 2001. The estimate for the low reserve tranche for 2001 was updated by extrapolating the actual growth rate of seasonally adjusted net transaction deposits from June 1999 to April 2000, and that for the reserve requirement exemption was updated by extrapolating the actual growth rate of total reservable liabilities over the same period. The updated estimates of $43.7 million for the low reserve tranche and $5.1 million for the exemption level are close to preliminary estimates made last year, resulting in revisions to the 2000 data under $20 million. Revised historical data for measures of reserves will soon be available in printed form from the Monetary and Reserve Analysis Section, Division of Monetary Affairs, Mail Stop 72, Board of Governors of the Federal Reserve System, NW, Washington, DC 20551, (202) 452-3062. See the note at the end of table 3 of this release for information on how to obtain current and historical data for the reserve aggregates and the monetary base as well as their components through the Federal Reserve's web site and other electronic means. 1. The Monetary Control Act of 1980 established a reserve ratio of 3 percent against the first $25 million in net transaction deposits (low reserve tranche) at each depository institution. Since 1982, the low reserve tranche has been indexed each January by 80 percent of the previous year's (June 30 to June 30) growth rate of net transaction deposits at all depository institutions. At present, the low reserve tranche is $44.3 million. Under the Garn-St Germain Depository Institutions Act of 1982, the first $2 million of reservable liabilities of each depository institution was exempted from reserve requirements. Since 1983, this exemption amount has been indexed each year by 80 percent of the rate of increase of the reservable liabilities at all depository institutions over the preceding year (June 30 to June 30). At present, the reserve exemption level is $5.0 million. Both of these indexations take effect each year in a reserve maintenance period that begins around January 1 for weekly respondents to the FR 2900 report. 1 FEDERAL RESERVE STATISTICAL RELEASE H.3 (502) Table 1 For Release at 4:30 p.m. Eastern Time June 8, 2000 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND THE MONETARY BASE Adjusted for changes in reserve requirements1 Averages of daily figures, seasonally adjusted unless noted otherwise Millions of dollars ------------------------------------------------------------------------------------------------------------------------------------------- Reserves of depository institutions Borrowings of depository institutions from the Federal Reserve, NSA --------------------------------------------------- -------------------------------------------------- Special Date total2 nonborrowed3 required excess NSA4 Monetary total6 adjustment seasonal Liquidity base5 Facility7 ------------------------------------------------------------------------------------------------------------------------------------------- 1999-May 44381 44254 43159 1222 533813 127 39 89 June 42758 42613 41463 1295 536549 145 18 127 July 42035 41726 40911 1124 540488 309 83 226 Aug. 41910 41566 40750 1160 544354 344 72 271 Sep. 41772 41434 40563 1209 550333 338 56 282 Oct. 41339 41058 40189 1150 557847 281 52 221 8 Nov. 41560 41325 40231 1330 569432 236 157 71 7 Dec. 41742 41422 40434 1308 591188 320 179 67 74 2000-Jan. 43113 42739 41088 2025 591965 374 296 31 46 Feb. 41635 41527 40521 1113 573419 108 45 44 19 Mar. 40453 40274 39244 1209 571162 179 101 71 7 Apr. 40919 40615 39768 1152 572449 304 184 120 0 May p 41347 40985 40390 957 573445 362 86 276 Two weeks ending 2000-Apr. 5 41093 40904 39461 1632 572332 189 104 85 0 19 40322 39954 39238 1083 572286 368 264 104 0 May 3 41601 41325 40581 1019 572708 276 120 156 17 40573 40271 39660 913 572704 303 65 238 31p 42066 41626 41078 987 574344 440 100 340 --------------------------------------------------------------------------------------------------------------------------------------------- 1. Reserves and monetary base figures incorporate adjustments for discontinuities, or "breaks", associated with regulatory changes in reserve requirements. For more information, see Table 3. 2. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, break-adjusted required reserves plus unadjusted excess reserves. (Also, see footnote 2 on Table 2 and footnote 2 on Table 3.) 3. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted, break-adjusted total reserves less unadjusted total borrowings of depository institutions from the Federal Reserve. 4. Excess reserves NSA equals unadjusted total reserves (Table 2, column 1) less adjusted required reserves (Table 2, column 3). 5. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally adjusted, break-adjusted total reserves plus (2) the seasonally adjusted currency component of the money stock plus (3), for all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters whose vault cash exceeds their required reserves, the seasonally adjusted, break-adjusted difference between current vault cash and the amount applied to satisfy current reserve requirements. (Also see footnote 3 on Table 2 and footnote 4 on table 3.) 6. Total borrowing includes borrowing under the extended credit program. 7. Borrowing at the discount window under the terms and conditions established for Century Date Change Special Liquidity Facility in effect from October 1, 1999 through April 7, 2000. p--preliminary 1 H.3 (502) Table 2 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND THE MONETARY BASE Not adjusted for changes in reserve requirements1 Averages of daily figures, not seasonally adjusted Millions of dollars ------------------------------------------------------------------------------------------------------------------------------------------- Reserves of depository institutions Vault cash5 -------------------------------------- -------------------------------------- Reserve used to Net carryover Date total2 nonborrowed required Monetary base3 balances total satisfy surplus7 of reserve with F.R. required balances8 Banks4 reserves6 ------------------------------------------------------------------------------------------------------------------------------------------- 1999-May 44828 44700 43606 539942 10019 42590 34809 7781 June 42331 42186 41036 542732 8467 42624 33864 8760 July 41762 41452 40637 548006 7745 44081 34017 10064 Aug. 41702 41358 40542 550773 7721 44603 33981 10622 Sep. 41314 40976 40105 555336 7646 44448 33669 10779 Oct. 40733 40451 39583 562681 6777 47039 33956 13083 Nov. 40970 40735 39641 578975 6283 50830 34688 16142 Dec. 41655 41334 40347 607934 5263 60630 36392 24238 2000-Jan. 44232 43859 42207 604626 5169 74015 39063 34952 Feb. 42095 41987 40982 579134 5078 63764 37017 26747 Mar. 39742 39563 38533 576917 6515 48946 33227 15719 Apr. 40584 40280 39433 577910 7078 46454 33507 12947 May p 41548 41186 40591 579385 7655 44634 33893 10740 Two weeks ending 2000-Apr. 5 40516 40327 38883 577090 7186 48613 33330 15283 61 19 39600 39232 38516 578091 6715 47144 32885 14259 84 May 3 41869 41593 40849 578052 7491 44594 34378 10216 71 17 40842 40540 39929 579048 7615 44116 33227 10889 91 31p 42185 41745 41198 580008 7730 45160 34455 10705 115 -------------------------------------------------------------------------------------------------------------------------------------------- 1. Reflects actual required reserves, with no adjustments to eliminate the effects of discontinuities, or "breaks", associated with regulatory changes in reserve requirements. 2. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve requirements. 3. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total reserves plus (2) required clearing balances and adjustments to compensate for float at Federal Reserve Banks plus (3) the currency component of the money stock plus (4), for all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters whose vault cash exceeds their required reserves, the difference between current vault cash and the amount applied to satisfy current reserve requirements. Currency and vault cash figures are measured over computation periods ending on Mondays. 4. Excludes required clearing balances and adjustments to compensate for float and includes other off-balance sheet "as-of" adjustments. 5. Vault cash eligible to satisfy reserve requirements. It includes only vault cash held by those banks and thrifts that are not exempt from reserve requirements. Dates refer to the maintenance periods in which the vault cash can be used to satisfy reserve requirements. 6. All vault cash held during the lagged computation period by "bound" institutions (i.e., those whose required reserves exceed their vault cash) plus the amount of vault cash applied during the maintenance period by "nonbound" institutions (i.e., those whose vault cash exceeds their required reserves) to satisfy current reserve requirements. 7. Total vault cash eligible to satisfy reserve requirements, held by depository institutions not exempt from reserve requirements, minus the amount used to satisfy reserve requirements. 8. Consists of carryover only at depository institutions maintaining reserves on the basis of two-week maintenance periods. Reflects excess (+) or deficit (-) reserves eligible to be carried forward into the two-week reserve maintenance period ending on the date shown. p--preliminary 1 H.3 (502) Table 3 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND THE MONETARY BASE Adjusted for changes in reserve requirements1 Averages of daily figures, not seasonally adjusted Millions of dollars --------------------------------------------------------------------------------- Reserves of depository institutions --------------------------------------- Date total2 nonborrowed required3 Monetary base4 ---------------------------------------------------------------------------------- 1999-May 44925 44798 43703 533142 June 42446 42301 41151 535874 July 41899 41590 40775 541017 Aug. 41861 41518 40702 543894 Sep. 41496 41158 40287 548405 Oct. 40935 40653 39785 555697 Nov. 41195 40960 39866 572012 Dec. 41889 41568 40580 600632 2000-Jan. 44229 43856 42204 596899 Feb. 42102 41994 40989 571789 Mar. 39754 39575 38545 570029 Apr. 40600 40296 39449 571090 May p 41568 41206 40611 572552 Two weeks ending 2000-Apr. 5 40530 40341 38897 570107 19 39616 39249 38533 571315 May 3 41885 41610 40866 571251 17 40861 40559 39948 572139 31p 42207 41767 41220 573244 p--preliminary pe--preliminary estimate 1. Figures reflect adjustments for discontinuities, or "breaks", associated with regulatory changes in reserve requirements. 2. Break-adjusted total reserves equal break-adjusted required reserves (Table 3, column 3) plus excess reserves NSA (Table 1, column 5). 3. To adjust required reserves for discontinuities due to regulatory changes in in reserve requirements, a multiplicative procedure is used to estimate what required reserves would have been in past periods had current reserve requirements been in effect. Break-adjusted required reserves are equal to break-adjusted required reserves against transactions deposits. 4. The break-adjusted monetary base equals (1) break-adjusted total reserves plus (2) the (unadjusted) currency component of the money stock plus (3), for all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters whose vault cash exceeds their required reserves, the break-adjusted difference between current vault cash and the amount applied to satisfy current reserve requirements. Note: Current and historical H.3 data are available each week on the Federal Reserve Board's web site (http://www.federalreserve.gov/). Monthly data are available back to January 1959, and weekly data are available back to January 1975 for most series. For information about individual copies or subscriptions, contact Publications Services at the Federal Reserve Board (phone 202-452-3245, fax 202-728-5886). For paid electronic access to current and historical data, call STAT-USA at 1-800-782-8872 or 202-482-1986.