Regulatory Alerts2021-01-08 | 2020-28755Regulation D: Reserve Requirements of Depository Institutions
The Board of Governors of the Federal Reserve System proposes to amend Regulation D to replace the separate interest on required reserves and interest on excess reserves rates with a single interest on reserve balances rate. The proposal simplifies the interest calculation formula by applying the new rate to total daily balances in master accounts and excess balance accounts, eliminating the previous penalty-free band distinctions. These conforming changes align regulatory definitions and payment mechanisms with the zero reserve requirement ratios established in March 2020.
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