Valuation of Collateral for Treasury Tax and Loan Depositaries

Riepilogo

This notice informs interested parties that the Department of the Treasury has directed its fiscal agent, the Federal Reserve, to change the method of determining the value of collateral pledged by depositaries to secure Treasury Tax and Loan (TT&L) deposits. Current regulations published in the Code of Federal Regulations provide that collateral will be accepted at values assigned by the Federal Reserve Banks (FRBs). This change in collateral valuation is being implemented concurrently and in a manner consistent with the FRBs' new valuation methodology for collateral pledged by financial institutions to secure borrowings from the Federal Reserve. The current FRB methodology for TT&L and the discount window generally values securities at par value to which margins may be applied; the new methodology will value collateral at market prices, where available, to which margins may be applied. In addition, the FRBs are currently developing a uniform methodology to value definitive collateral for which no market prices are available. These changes will assign more equitable values to collateral.