Circular
Federal Reserve Announces Changes to the Discount Window and Payment System Risk Collateral Margins Table
March 31, 2009
Circular No. 12082

In 2005, the Federal Reserve announced the implementation of separate valuation processes for loans pledged in a designated format through our Automated Loan Deposit process or "individually deposited," versus loans pledged in an alternative format or "group deposited." At that time, it was also noted that lendable values for group deposited loans would be based on assumptions regarding the average risk characteristics of the loans and subject to periodic changes.

Effective April 27, 2009, the Federal Reserve will make changes to the lendable values for group deposited loans pledged to the Federal Reserve Banks for discount window or PSR collateral purposes, to reflect recent trends in the values of some types of loans.

Published lendable values will remain unchanged for individually deposited loans. Further, as stated in our 2005 announcement, for institutions in sound financial condition, the collateral value of individually deposited loans will never be below the collateral value of group deposited loans. Note: The lendable value for any group deposited loan type acts as a floor for the lendable value of individually deposited loans of the same type. Thus, any individually deposited loans that are currently hitting the floor will receive less collateral value when reduced group deposit lendable values are implemented.

For more information on these changes, contact your Federal Reserve Bank or see the recently updated Collateral FAQs on the Federal Reserve's Discount Window and Payment System Risk website.

Discount Window and Payment System Risk Offsite
Collateral FAQs Offisite