The Federal Reserve today issued a technical clarification stating that its account access guidelines apply to excess balance accounts, or EBAs.
An EBA is a limited-purpose account at a Federal Reserve Bank established for maintaining the reserve balances of eligible institutions, according to the Fed. The guidelines are six risk-based principles for Fed banks to consider when evaluating requests for access to their accounts and services. Currently, the guidelines do not expressly state that EBA arrangements fall within their scope. The clarification changes that.
“While EBAs are not used to access Reserve Bank financial services, they are, in fact, limited-purpose Reserve Bank accounts,” according to the Fed. “This clarification, therefore, would prevent depository institutions that do not qualify for access to Federal Reserve accounts and services under the guidelines from accessing the Federal Reserve’s balance sheet through EBAs.”
The clarification is effective upon publication in the Federal Register.
