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A: The time span during which a depository institution holds balances at the Federal Reserve to satisfy its reserve balance requirement.
A: A reserve balance requirement is the amount of funds that a depository institution must hold in reserve against specified deposit liabilities that is not satisfied by its vault cash and therefore must be maintained either directly with a Reserve Bank or in a pass-through arrangement.
A: A common two-week maintenance period consists of 14 consecutive days beginning on a Thursday and ending on the second Wednesday thereafter that will be the same period for all institutions with reserve balance requirements.
A: The Federal Reserve is creating a common two-week maintenance period to simplify the existing maintenance period structure. The existing maintenance period structure is unnecessarily complex for the implementation of monetary policy. In addition, a common maintenance period of two weeks was selected so that depository institutions would at least retain, if not increase, the current amount of flexibility in meeting their reserve balance requirements.
A: No. The common two-week maintenance period does not change the frequency or the amount of data an institution must report to the Federal Reserve.
A: No. For depository institutions that report their deposits weekly, the relationship between the weekly reporting periods and two-week maintenance periods will not change.
A: Yes. For depository institutions that report their deposits quarterly, the quarterly reporting periods will not change, but a new relationship will be established between quarterly reporting periods and two-week maintenance periods. Each quarterly report will be used to calculate a depository institution’s reserve balance requirement for an interval of either six or seven consecutive two-week maintenance periods, depending on when the interval begins or ends. More information on interval lengths is available in the Press Release (Off-site Link) dated April 5, 2012.
Q: Will the existing Reserve Maintenance Calendars be updated to reflect the relationship between reporting periods and two-week maintenance periods?
A: Yes. An updated version of the Reserve Maintenance Calendars will be available closer to the implementation of the common two-week maintenance period.
A: Yes. Annual reporters and nonreporters with an account at a Federal Reserve Bank will be paid interest on the average balances maintained over a two-week period, instead of a one-week period, at the interest rate on excess balances.
A: Yes. The average balances maintained in an excess balance account will be paid interest over a two-week period, instead of a one-week period, at the interest rate on excess balances.
A: The first common two-week maintenance period will begin on June 27, 2013.
A: Reserve balance requirements for all depository institutions that report their deposits weekly and quarterly will be calculated roughly one week before the start of a maintenance period.
A: Information on a depository institution’s reserve balance requirement will be available through the Reserves Central—Reserve Account Administration application. Details on how to access to Reserves Central—Reserve Account Administration are available on the Reserves Administration Enhancements Resource Center.
A: Yes. The Board of Governors sought comment on the proposed rule to create a common two-week maintenance period. More information is available in the Press Release (Off-site Link) dated October 11, 2011.
A: If you need additional information, please contact your Reserves Central District Contact.
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