Effective date for FRB Reg D changes
The Federal Reserve Board has announced its approval of a final rule amending Reg D (Reserve Requirements of Depository Institutions) to make changes to the calculation of interest payments on excess balances maintained by depository institutions at Federal Reserve Banks. Under the current rule, if the rate of interest paid on excess reserves (the IOER rate) has changed in the middle of a two-week reserve maintenance period, the change is not fully reflected in the interest payments to depository institutions until the beginning of a new maintenance period. The final rule bases interest payments to depository institutions with excess balances on the IOER rate in effect each day and the level of balances held each day, rather than on the average IOER rate and average level of excess balances over the maintenance period. The final rule is effective July 23, 2015.