Fed Issues Final Rule Amending Regulation D

The Federal Reserve today issued a final rule amending Regulation D, which addresses reserve requirements of depository institutions. The rule eliminates references to an “interest on required reserves” rate and to an “interest on excess reserves rate,” replacing them with a reference to a single “interest on reserve balances” rate.

In the final rule, the Fed also simplified the formula used to calculate the amount of interest paid on balances maintained by or on behalf of eligible institutions in master accounts at Federal Reserve Banks. The final rule takes effect on July 29.