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The Purpose and Use of the FR2900 Report. Gina Manco. Test your knowledge… 1.) How many Federal Reserve Banks exist?. Test your knowledge…. 2.) Who was President in 1913 when the Federal Reserve was created?. Woodrow Wilson. Test your knowledge….

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test your knowledge
Test your knowledge…

2.) Who was President in 1913 when the Federal Reserve was created?

Woodrow Wilson

test your knowledge4
Test your knowledge…

3.) What is the current target Fed Funds Rate?

1.5%

(As of October 8, 2008)

questions to be addressed
Questions to be addressed…
  • Why does the FR2900 report exist?
  • What is the purpose of FR2900 Report?
  • Where can the data be found?
  • Who is required to file the report?
  • When does panel determination occur?
w hy does the fr2900 exist
Why does the FR2900 exist?
  • A Brief History Lesson
    • Data collection for banks’ deposits began in 1929
    • In 1966, reports combined and accelerated to weekly
w hy does the fr2900 exist7
Why does the FR2900 exist?
  • Monetary Control Act of 1980
    • Reserve requirements on all depository institutions (DIs)
    • Set the low-reserve tranche
      • $48.3 million in 2006
  • Garn St. Germain Act of 1982
    • Established an exemption amount
      • $7.8 million in 2006
w hy does the fr2900 exist8
Why does the FR2900 exist?
  • Regulation D
    • The filing and collection of data is in compliance with Regulation D
    • Specifies the reserve ratios to be applied to an institution's reservable liabilities in order to determine the reserve requirement.
    • www.federalreserve.gov/regulations/default.htm#d
w hat is the purpose of the fr2900
What is the purpose of the FR2900?

There are two main purposes for the FR2900 Report:

  • Calculation of required reserves
  • Construction of monetary aggregates

Both used by the Board and the Federal Open Market Committee (FOMC) in the formulation of Monetary Policy.

w hat is the purpose of the fr290010
What is the purpose of the FR2900?
  • Calculation of Required Reserves
    • The following FR2900 line items are included in the calculation of Required Reserves
      • A1A – Demand Balances Due to DIs
      • A1B – Demand Balances Due to U.S. Government
      • A1C – Other Demand Deposits
      • A2 – ATS and NOW Accounts
      • AA1 – Ineligible Acceptances maturing in < 7 days
      • B1 – Demand Balances Due From DIs
      • B2 – Cash Items In Process
w hat is the purpose of the fr290011
What is the purpose of the FR2900?
  • Construction of monetary aggregates
    • M1
      • Coins and currency
      • Demand deposits
      • NOW accounts
    • M2
      • M1
      • Savings deposits
      • Time deposits < $100,000
      • Non-institutional money-market funds
w hat is the purpose of the fr290012
What is the purpose of the FR2900?
  • What is Monetary Policy?
    • Actions taken by the Federal Reserve to influence the terms and conditions under which money and credit are provided to the economy
w hat is the purpose of the fr290013
What is the purpose of the FR2900?
  • Three tools of Monetary Policy
    • Discount Rate - interest rate on loans from the discount window
    • Reserve requirements - amount of funds a DI must hold in reserve against specified deposit liabilities
    • Open Market Operations - purchases and sales of U.S. Treasury and federal agency securities
w hat is the purpose of the fr290014
What is the purpose of the FR2900?
  • Federal Reserve of New York Trading Desk
    • Open market operations
      • FOMC provides directive to Trading desk between meetings based on intended fed funds rate
      • Trades made daily to either purchase or sell U.S. Government securities in the open market, most often repurchase agreements
w here can the data be found
Where can the data be found?
  • Publications
    • Federal Reserve Bulletin
      • Starting in 2006, published online as it becomes available
  • Statistical Releases
    • H.3, Aggregate Reserves of Depository Institutions and the Monetary Base
    • H.6, Money Stock Measures
    • Published each Thursday at 4:30 pm
      • www.federalreserve.gov/releases
flow of data

Board of Governors

Reserves

Regional Economic Analysis

Flow of Data

Federal Reserve Banks

Processing/Analysis

Money & Reserves Projections

Federal Open Market Committee

FRB NY - Open Market Desk

Public - Statistical Releases

w ho is required to file the fr2900
Who is required to file the FR2900?
  • All depository institutions are subject to file; frequency is based on:
    • Net Transaction Accounts
      • NTA = A3+AA1–B1–B2
    • Total Deposits
w ho is required to file the fr290018
Who is required to file the FR2900?
  • Non-Exempt
    • NTA > $7.8 million  subject to a Reserve Requirement
  • Exempt
    • NTA < $7.8 million  not subject to a Reserve Requirement
w ho is required to file the fr290019
Who is required to file the FR2900?

2006 Exemption levelsDeposits < $ 7.8MNTA < $ 7.8M (exempt)Deposits >$ 7.8M & < $ 1.206BNTA < $ 7.8M (exempt)Deposits < $ 229.1MNTA > $ 7.8M (non-exempt)Deposits >$ 229.1M & < $ 1.206BNTA > $ 7.8M (non-exempt)orDeposits >$ 1.206B

w hen does panel determination occur
When does panel determination occur?
  • Annually in July
    • FR 2900 weekly:Daily average data for each of the 13 report weeks ending with the last report week in June
    • FR 2900 quarterly:Daily average data for March and June report
    • FR 2910a:Data reported for the June report
final exam
Final Exam
  • The Monetary Control Act of ______ allows the Fed to require reserves on all depository institutions.
    • 1970
    • 1978
    • 1980
    • 1982
final exam23
Final Exam
  • lp
  • All of the below are tools of Monetary Policy except:
    • Open market operations
    • Discount rate
    • Reserve requirements
    • Woodrow Wilson
final exam24
Final Exam
  • lp
  • All of the below are tools of Monetary Policy except:
  • Net Transaction Accounts are calculated with which formula?
    • A3+AA1–B1–B2
    • A3+C1+D1
    • A2-AA1-B1-B2
    • A3-B1-BB1
slide26
Gina Manco, Sr. Financial Analyst
    • 216-579-2952
    • gmanco@clev.frb.org