WASHINGTON (MNI) – The following is the text of the statement by
the Federal Reserve Monday:
The Federal Reserve Board has authorized up to five small-value
offerings of term deposits under the Term Deposit Facility (TDF) to be
conducted in coming months. The Board had indicated in its announcement
on April 30 that it anticipated conducting such small-value offerings.
These small-value offerings are designed to ensure the effectiveness of
TDF operations and to provide eligible institutions with an opportunity
to gain familiarity with term deposit procedures. The development of the
TDF and the small-value TDF offerings are a matter of prudent planning
and have no implication for the near-term conduct of monetary policy.
The Board also approved a basic structure for the small-value TDF
offerings. Similar to many money market instruments, the term deposits
offered will be simple fixed-rate instruments with maturities of 84 days
or less and will be issued primarily through competitive single-price
auctions. TDF offerings will also include a noncompetitive bidding
option to ensure access to term deposits for smaller institutions.
The first small-value TDF offering could be held as early as
mid-June. More information about the timing and other details of these
small-value TDF offerings will be announced at a later date. Terms and
conditions for the small-value TDF offerings as well as information
about the steps that institutions must complete to be eligible to bid
for term deposits are available at
http://www.frbservices.org/centralbank/term_deposit_facility.html
** Market News International Washington Bureau: 202-371-2121 **
[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$,MT$$$$]
