January 29, 2009
Board requests public comment on proposed changes to Regulation D to authorize the establishment of limited purpose accounts
For immediate release
The Federal Reserve Board on Thursday 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.
The Board will evaluate the continuing need for EBAs when more normal market functioning is restored.
The public comment period ends March 2, 2009.
The Board's notice is attached.