H.3 (502) June 14, 2007 SPECIAL NOTICE Data on reserves and the monetary base have been revised to reflect the results of annual reviews of break factors and seasonal factors. Revisions to seasonal factors start in January 1999, and they are the major source of revisions to the data. Revisions to break factors begin in January 2006, and revisions to break-adjusted data do not exceed $120 million in any maintenance period. The maximum revision to total reserves, nonborrowed reserves, required reserves, and the monetary base (Table 1) in any maintenance period was $1.3 billion; most revisions were less than $600 million. Break factors remove discontinuities (or “breaks”) associated with regulatory changes in reserve requirements, such as the annual indexations of the low-reserve tranche and the reserve requirement exemption levels.1 Seasonal factors for required reserves and the surplus vault cash component of the monetary base have been reestimated with the revised break-adjusted data. A more detailed description of the methods for constructing break factors and seasonal factors is available under “Annual Review of Break and Seasonal Factors” on the Federal Reserve’s web site (http://www.federalreserve.gov/releases/h3/hist/). Historical data, updated each week, are available there as well. For paid electronic access to current and historical data, call STAT-USA at 1-800-782-8872 or 202-482-1986. 1. The Monetary Control Act of 1980 established a reserve ratio of 3 percent against the first $25 million in net transaction deposits (low-reserve tranche) at each depository institution. Since 1982, the low-reserve tranche has been indexed each January by 80 percent of the previous year's (June 30 to June 30) growth rate of net transaction deposits at all depository institutions. For all reserve maintenance periods ending in 2007, the low-reserve tranche is $45.8 million. Under the Garn-St Germain Depository Institutions Act of 1982, the first $2 million of reservable liabilities of each depository institution was exempted from reserve requirements. Since 1983, this exemption amount has been indexed each year by 80 percent of the rate of increase of the reservable liabilities at all depository institutions over the preceding year (June 30 to June 30). For all reserve maintenance periods ending in 2007, the reserve exemption level is $8.5 million. 1 FEDERAL RESERVE STATISTICAL RELEASE H.3 (502) Table 1 For Release at 4:30 p.m. Eastern Time June 14, 2007 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND THE MONETARY BASE Adjusted for changes in reserve requirements(1) Seasonally adjusted unless noted otherwise Millions of dollars -------------------------------------------------------------------------------------------------------------------------------------------- Reserves of depository institutions Borrowings of depository institutions from the Federal Reserve, NSA -------------------------------------------------- -------------------------------------------------- Date total(2) non- required excess Monetary total primary secondary seasonal borrowed(3) NSA(4) base(5) -------------------------------------------------------------------------------------------------------------------------------------------- Month(6) 2006-May 44653 44478 42849 1804 804413 175 24 0 151 June 45173 44920 43388 1784 804378 253 16 0 237 July 44135 43784 42589 1546 804007 350 39 0 312 Aug. 42838 42469 41304 1534 804600 369 26 0 343 Sep. 43113 42710 41352 1761 805350 403 66 0 338 Oct. 42891 42663 41218 1674 806900 229 24 0 205 Nov. 43185 43025 41479 1706 810085 160 48 0 112 Dec. 43315 43124 41498 1817 812579 191 111 0 80 2007-Jan. 42199 41988 40658 1540 813411 211 187 0 24 Feb. 42435 42405 40929 1506 812172 30 8 0 22 Mar. 42340 42286 40696 1644 813799 54 21 5 28 Apr. 42722 42643 41189 1533 816098 79 32 0 48 May p 43160 43057 41716 1444 817933 103 14 0 90 2 weeks ending(7) 2007-Apr. 11 42760 42680 40949 1810 815014 80 44 0 36 25 42072 41990 40739 1333 816039 83 32 0 52 May 9 44462 44391 42977 1485 818651 71 6 0 65 23 41918 41805 40623 1296 817043 113 22 0 92 June 6p 43868 43745 42210 1659 818683 124 10 0 114 --------------------------------------------------------------------------------------------------------------------------------------------- 1. Reserves and monetary base figures incorporate adjustments for discontinuities, or "breaks", associated with regulatory changes in reserve requirements. (For more information, see Table 3). 2. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, break-adjusted required reserves plus unadjusted excess reserves. (Also, see footnote 2 on Table 2 and footnote 2 on Table 3.) 3. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted, break-adjusted total reserves less unadjusted total borrowings of depository institutions from the Federal Reserve. 4. Excess reserves NSA equals unadjusted total reserves (Table 2, column 1) less adjusted required reserves (Table 2, column 3). 5. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally adjusted, break-adjusted total reserves plus (2) the seasonally adjusted currency component of the money stock plus (3), for all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters whose vault cash exceeds their required reserves, the seasonally adjusted, break-adjusted difference between current vault cash and the amount applied to satisfy current reserve requirements. (Also see footnote 3 on Table 2 and footnote 4 on Table 3.) 6. Prorated averages of biweekly averages. 7. Averages of daily figures. p preliminary 1 H.3 (502) Table 2 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND THE MONETARY BASE Not adjusted for changes in reserve requirements(1) Not seasonally adjusted Millions of dollars ------------------------------------------------------------------------------------------------------------------------------------------- Reserves of depository institutions Vault cash(5) -------------------------------------- -------------------------------------- Reserve used to Net carryover Date total(2) nonborrowed required Monetary balances total satisfy surplus(7) of reserve base(3) with F.R. required balances(8) Banks(4) reserves(6) ------------------------------------------------------------------------------------------------------------------------------------------- Month(9) 2006-May 45440 45265 43636 811900 10650 48294 34789 13504 June 45048 44795 43264 812213 9911 48982 35137 13845 July 44864 44513 43318 811744 9611 49617 35253 14365 Aug. 42683 42314 41149 809737 8794 50243 33888 16355 Sep. 42612 42208 40851 809990 9111 49402 33501 15901 Oct. 41755 41526 40081 809234 8254 50093 33502 16591 Nov. 42234 42074 40528 815381 8455 48961 33779 15181 Dec. 43282 43091 41465 825289 8479 50901 34803 16098 2007-Jan. 44658 44447 43118 823718 8801 52165 35857 16309 Feb. 42665 42635 41159 819695 7722 53737 34943 18795 Mar. 40772 40718 39128 820795 7519 49731 33253 16478 Apr. 42550 42470 41016 822638 8561 48805 33989 14816 May p 44028 43924 42583 825093 9205 48651 34823 13828 2 weeks ending(10) 2007-Apr. 11 39906 39826 38095 821613 7781 49002 32125 16877 163 25 43948 43866 42615 822897 8689 48912 35259 13653 157 May 9 44451 44381 42966 824168 9920 48075 34531 13544 62 23 43722 43609 42426 824221 8664 49392 35058 14334 -4 June 6p 44087 43964 42428 827661 9346 48003 34741 13262 -117 -------------------------------------------------------------------------------------------------------------------------------------------- 1. Reflects actual required reserves, with no adjustments to eliminate the effects of discontinuities, or "breaks", associated with regulatory changes in reserve requirements. 2. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve requirements. 3. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total reserves plus (2) required clearing balances and adjustments to compensate for float at Federal Reserve Banks plus (3) the currency component of the money stock plus (4), for all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters whose vault cash exceeds their required reserves, the difference between current vault cash and the amount applied to satisfy current reserve requirements. Currency and vault cash figures are measured over computation periods ending on Mondays. 4. Excludes required clearing balances and adjustments to compensate for float and includes other off-balance sheet "as-of" adjustments. 5. Vault cash eligible to satisfy reserve requirements. It includes only vault cash held by those banks and thrifts that are not exempt from reserve requirements. Dates refer to the maintenance periods in which the vault cash can be used to satisfy reserve requirements. 6. All vault cash held during the lagged computation period by "bound" institutions (i.e., those whose required reserves exceed their vault cash) plus the amount of vault cash applied during the maintenance period by "nonbound" institutions (i.e., those whose vault cash exceeds their required reserves) to satisfy current reserve requirements. 7. Total vault cash eligible to satisfy reserve requirements, held by depository institutions not exempt from reserve requirements, minus the amount used to satisfy reserve requirements. 8. Consists of carryover only at depository institutions maintaining reserves on the basis of two-week maintenance periods. Reflects excess (+) or deficit (-) reserves eligible to be carried forward into the two-week reserve maintenance period ending on the date shown. 9. Prorated averages of biweekly averages. 10. Averages of daily figures. p preliminary 1 H.3 (502) Table 3 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND THE MONETARY BASE Adjusted for changes in reserve requirements(1) Not seasonally adjusted Millions of dollars --------------------------------------------------------------------------------- Reserves of depository institutions --------------------------------------- Date total(2) nonborrowed required(3) Monetary base(4) ---------------------------------------------------------------------------------- Month(5) 2006-May 45518 45344 43715 804750 June 45143 44890 43359 804938 July 44974 44623 43428 804674 Aug. 42799 42430 41265 802726 Sep. 42737 42334 40977 803169 Oct. 41882 41653 40208 802355 Nov. 42370 42211 40665 808597 Dec. 43362 43171 41545 818400 2007-Jan. 44646 44435 43106 816823 Feb. 42691 42662 41185 812911 Mar. 40813 40759 39169 813942 Apr. 42605 42526 41072 815963 May p 44097 43993 42652 818621 2 weeks ending(6) 2007-Apr. 11 39955 39876 38145 814652 25 44006 43923 42673 816373 May 9 44514 44443 43029 817694 23 43791 43678 42495 817788 June 6p 44164 44040 42505 821121 1. Figures reflect adjustments for discontinuities, or "breaks", associated with regulatory changes in reserve requirements. 2. Break-adjusted total reserves equal break-adjusted required reserves (Table 3, column 3) plus excess reserves NSA (Table 1, column 5). 3. To adjust required reserves for discontinuities due to regulatory changes in in reserve requirements, a multiplicative procedure is used to estimate what required reserves would have been in past periods had current reserve requirements been in effect. Break-adjusted required reserves are equal to break-adjusted required reserves against transactions deposits. 4. The break-adjusted monetary base equals (1) break-adjusted total reserves plus (2) the (unadjusted) currency component of the money stock plus (3), for all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters whose vault cash exceeds their required reserves, the break-adjusted difference between current vault cash and the amount applied to satisfy current reserve requirements. 5. Prorated averages of biweekly averages. 6. Averages of daily figures. p preliminary Note: Current and historical H.3 data are available each week on the Federal Reserve Board's web site (http://www.federalreserve.gov/). Monthly data are available back to January 1959, and weekly data are available back to January 1975 for most series. For information about individual copies or subscriptions, contact Publications Services at the Federal Reserve Board (phone 202-452-3245, fax 202-728-5886). For paid electronic access to current and historical data, call STAT-USA at 1-800-782-8872 or 202-482-1986.