Regulatory Alerts2023-01-13 | 2023-00417Regulation D: Reserve Requirements of Depository Institutions
The Board of Governors of the Federal Reserve System issued a final rule amending Regulation D to increase the interest rate paid on reserve balances (IORB) from 3.90 percent to 4.40 percent. This 0.50 percentage point adjustment aligns with the Federal Open Market Committee’s December 2022 decision to raise the federal funds target range to 4.25–4.50 percent and strengthens IORB’s effectiveness in monetary policy implementation. The amendment bypasses standard notice-and-comment procedures under the Administrative Procedure Act due to good cause, taking effect on January 13, 2023, with retroactive applicability to December 15, 2022.
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