December 07, 2020
FED announces annual indexing of reserve requirement exemption amount & of low reserve tranche for 2021
For release at 11:00 a.m. EST
The FED on Monday announced the annual indexing of the reserve requirement exemption amount & the low reserve tranche. The annual indexation & publication of these amounts are required by statute but will not affect depository institutions’ reserve requirements, which will remain zero.
For all net transaction accounts in 2021, the reserve requirement ratio was set to zero percent in March 2020; therefore, all net transaction accounts are exempt from reserve requirements. The reserve requirement exemption amount will be set at $21.1 million, up from $16.9 million in 2020, & is the amount of a depository institution’s reservable liabilities that will always be exempt from reserve requirements. The low reserve tranche will be set at $182.9 million, up from $127.5 million in 2020, & is the amount of a depository institution’s net transaction accounts that may be subject to a reserve requirement ratio of not greater than three percent (& which may be zero). A depository institution’s net transaction accounts greater than the low reserve tranche may be subject to a reserve requirement ratio of not greater than 14 percent (& which may be zero).
These annual adjustments to the reserve requirement exemption amount & the low reserve tranche are based on growth in total reservable liabilities & net transaction accounts, respectively, at all depository institutions between June 30, 2019, & June 30, 2020.
The Board also announced the annual indexing of two other amounts, the nonexempt deposit cutoff level & the reduced reporting limit, that are used to determine the frequency with which depository institutions must submit deposit reports. The attached Federal Register notice contains a description of the new boundaries for deposit reporting that will be effective in 2021.
For media inquiries, call 202-452-2955
December 07, 2020
Source: Federal Reserves
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