For immediate release

The Federal Reserve Board has voted to move from a system of contemporaneous reserve requirements to one where reserves are maintained on a lagged basis. The change will go into effect with the reserve maintenance period beginning July 30, 1998. The switch will make it easier for depositories to calculate their required reserve balances for the current maintenance period and will increase the accuracy of information on aggregate required reserve balances, which is needed by the Open Market Trading Desk to carry out its operations. Under the lagged system, the reserve maintenance period for weekly reporting institutions will 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 notice is attached.

Summary only | Summary and final rule (19 KB PDF)

1998 Banking and consumer regulatory policy