Annual adjustments for reserve calculations and deposit reporting

The Federal keep Board announced on October 4 2005 the annual indexing of the depressed reserve tranche and of the lay up requirement exemption amount for 2006 These amounts are used in the calculation of keep requirements of depository institutions. The Board also announced the annual indexing of the cutoff horizontal for nonexempt deposit and the reduc reporting limit that will be used to determine deposit reporting panels, effective September 2006

All depository institutions must grasp a percentage of certain emblems of deposits as reserves in the form of vault cash, as a deposit in a Federal lay up Bank, or as a deposit in a pass-through account at a correspondent institution. lay up requirements currently are assessed upon the depository institution's net transaction accounts (mostly checking accounts). Depository institutions must also regularly submit reports of their deposits and other reservable liabilities.

For lay by requirements in 2006, the first $78 million of snare transaction accounts (up from $70 million in 2005) will be grant immunity to from reserve requirements. A 3 percent set by ratio will be assessed upon net transaction accounts more than $78 million up to and including $483 million (up from $476 million in 2005) A 10 percent set by ratio will be assessed upon net transaction accounts in exces of $483 million.

The annual indexing of the depressed reserve tranche and the lay up requirement exemption amount is based upon growth in net transaction accounts and total reservable liabilities, respectively, at all depository institutions between June 30 2004 and June 30 2005

For depository institutions that report weekly, the depressed reserve tranche and the withhold requirement exemption amount for 2006 will first apply to the fourteen-day hold computation period that began Tuesday, November 22 2005 and the corresponding fourteen-day lay by maintenance period that begins Thursday, December 22 2005

For depository institutions that report quarterly, the depressed reserve tranche and the lay up requirement exemption amount for 2006 will first apply to the seven-day retain computation period that begins Tuesday, December 20 2005 and the corresponding seven-day keep maintenance period that begins Thursday, January 19 2006

The Board also announced increases in sum of two units other amounts, the nonexempt deposit cutoff horizontal and the reduced reporting limit, that are used to determine the oftenness with which depository institutions must submit deposit reports. The Federal Register notice containing a description of the fresh boundaries for deposit reporting that will be effective September 2006 is upon the Board's web site at www federalreserve.gov/boarddocs/press/bcreg/2005/2005 1004/attachment.pdf.

COPYRIGHT 2005 Board of Governors of the Federal withhold System

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