WASHINGTON (MNI) – The following is the text of a statement by the
Federal Reserve Board Monday announcing changes it plans to implement in
2011 to the fee structure for collaterized as well as uncollaterized
daylight overdrafts:
The Federal Reserve Board on Monday announced that it will
implement changes to its Payment System Risk (PSR) policy in early 2011.
A specific implementation date will be announced at least 90 days in
advance. In December 2008, the Board adopted revisions to the policy and
said that the Federal Reserve would implement these changes between late
2010 and early 2011.
The revised PSR policy explicitly recognizes the role of the
central bank in providing intraday credit to healthy depository
institutions predominantly through collateralized daylight overdrafts.
The policy encourages institutions to pledge collateral to cover
daylight overdrafts by providing collateralized daylight overdrafts at a
zero fee and by raising the fee for uncollateralized daylight overdrafts
to 50 basis points (annual rate).
In anticipation of depository institutions’ changing needs for
collateral management under the revised policy, the Federal Reserve, in
collaboration with the industry, assessed and identified opportunities
to improve System operational systems.
The Reserve Banks have been implementing enhancements to their
operational systems and processes that will improve the efficiency and
effectiveness of pledging, withdrawing, and monitoring collateral. Many
of these operational improvements will be available to institutions on
or before the implementation date of the PSR policy changes.
** Market News International Washington Bureau: 202-371-2121 **
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