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Release Date: May 30, 2001

For immediate release

The Federal Reserve Board is requesting comment on a proposed interim policy statement and a package of short- and long-term proposals pertaining to its Payments System Risk (PSR) policy. In addition, the Board is rescinding the interaffiliate transfer policy.

The proposed actions take into account the significant changes that have occurred in the banking, payments, and regulatory environment in recent years and reflect ongoing efforts by the Board to balance the costs, risks, and benefits associated with the provision of Federal Reserve intraday credit.

More specifically, the Board is issuing and requesting comment on an interim policy that allows depository institutions with self-assessed net debit caps to pledge collateral voluntarily to the Federal Reserve Banks to gain access to daylight credit in excess of their net debit caps. The interim policy should provide flexibility to depository institutions in meeting any increased intraday liquidity needs brought about by payment system initiatives.

The interim policy is effective immediately, with comments due by August 6, 2001.

The Board is also requesting comment on other potential changes to its PSR policy. In particular, the Board proposes to increase the percent of capital used in the net debit cap calculation for most U.S. branches and agencies of foreign banks, modify the posting time of electronic check presentments to depository institutions' Federal Reserve accounts for purposes of measuring daylight overdrafts, and retain the current book-entry securities transfer limit.

Comment is requested by August 6, 2001.

In addition, the Board is requesting comment on the benefits and drawbacks to several potential longer-term changes to its PSR policy, including lowering self-assessed net debit caps, eliminating the two-week average caps, implementing differential pricing for collateralized and uncollateralized daylight overdrafts, and rejecting payments with settlement-day finality that would cause an institution to exceed its daylight overdraft capacity level.

Comment is requested by October 1, 2001.

Finally, the Board is rescinding its interaffiliate transfer policy, effective January 1, 2002. The Board believes that the risks associated with the interaffiliate transfer policy are appropriately addressed through the existing supervisory process.

The Board's notices are attached.

Interim policy statement (67 KB PDF)
Foreign banking organizations (47 KB PDF)
Electronic check presentments (32 KB PDF)
Book-entry securities transfer limit (25 KB PDF)
Potential longer-term policy changes (72 KB PDF)
Interaffiliate transfers (20 KB PDF)

2001 Banking and consumer regulatory policy

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Last update: May 30, 2001