To: All Member Banks and Others Concerned in the Third Federal Reserve District

Attention: Chief Executive Officer

Subject: Proposed Amendment to Regulation A - Extensions of Credit by Federal Reserve Banks


The Federal Reserve Board has published for comment a proposed amendment to Regulation A that would replace the existing adjustment and extended credit programs with new discount window programs called primary and secondary credit, respectively. The interest rate on the primary credit would be above, rather than below, short-term market rates. The proposed restructuring of Federal Reserve credit programs is designed to improve the functioning of the discount window and does not represent a change in the stance of monetary policy. The proposed rule also would reorganize and streamline existing provisions of Regulation A. The Board solicits comment on all aspects of the proposal.

Comment Requested: Comments on the proposed rule must be received not later than August 22, 2002. Comments should refer to Docket Number R-1123 and should be mailed to Ms. Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, D.C., 20551 or sent electronically to:

Additional Information: A copy of the revisions is attached (195 KB, 20 pages). For additional information, contact the Regulations Assistance Unit at this Reserve Bank at (215) 574-6568 or David A. Stein, Senior Attorney, or Dan S. Sokolov, Attorney, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, at (202) 452-3667 or 452-2412.