Fed announces updated reserve requirements

Northwestern Financial Review, Nov 1-Nov 14, 2004

The Federal Reserve Board announced the annual indexing of the low reserve tranche and of the reserve requirement exemption amount for 2005. These amounts are used in the calculation of reserve requirements of depository institutions. For net transaction accounts in 2005, the first $7.0 million., up from $6.6 million in 2004, will be exempt from reserve requirements.

A 3 percent reserve ratio will be assessed on net transaction accounts over $7.0 million up to and including $47.6 million, up from $45.4 million in 2004. A 10 percent reserve ratio will be assessed on net transaction accounts in excess of $47.6 million.