Reserve requirements are calculated on the basis of the Report of Transaction Accounts, Other Deposits, and Vault Cash (FR 2900) and, if applicable to the reporting institution, the Report of Certain Eurocurrency Transactions (FR 2950/2951).
A reserve requirement is the amount determined by applying the reserve ratios specified in Regulation D to an institution’s reservable liabilities (comprised of net transaction accounts, nonpersonal time deposits, and Eurocurrency liabilities) during the relevant computation period. The institution must satisfy its reserve requirement in the form of vault cash or balances maintained either directly with a Reserve Bank or in a pass-through account relationship with a correspondent. The portion of the reserve requirement that is not satisfied by vault cash holdings is called the reserve balance requirement.
The Reserves Maintenance Manual sets out the fundamental rules of reserve calculation and account maintenance for institutions that file FR 2900, either weekly or quarterly. The manual reflects the adoption of a single master account structure and the return to lagged reserve maintenance for weekly FR 2900 reporters.
In any given maintenance period, if an institution fails to maintain an average end-of-day balance over the reserve maintenance period adequate to meet its reserve balance requirement (after the application of carry-over), the institution may be subject to a monetary charge.
The charge for reserve deficiencies is one percentage point above the rate in effect for borrowing under the primary credit facility from the Reserve Bank on the first day of the calendar month in which the deficiency occurred. Charges are assessed on the basis of the daily average deficiency during each maintenance period. In determining whether to assess a charge for a reserve balance deficiency, the Reserve Bank will consider the circumstances of the specific deficiency and the reserve maintenance history of the institution incurring it. (See Section 204.6 of Regulation D, charges for reserve deficiencies.)