Board statement on Payments System Risk policy. (Announcements).The Federal Reserve Board announced on August 20, 2002, that it would not, over the near term, incorporate two policy options into its longer-term Payments System Risk (PSR PSR Pulsar PSR Poster PSR Physicians for Social Responsibility PSR Psychosocial Rehabilitation PSR Pacific School of Religion PSR Policy and Survey Research PSR Project Study Report PSR Pre-Sentence Report PSR Pressure-State-Response PSR Puget Sound Region ) policy plan. The Board will, however, continue to analyze the benefits and potential drawbacks of a two-tiered pricing regime for daylight overdrafts A debit balance in the customer’s account that occurs in the course of the banking day and is expected to be repaid by a credit to the account prior to the end of the banking day. . For the foreseeable future, the Board will not pursue a policy that (1) lowers self-assessed net debit caps and eliminates two-week average caps or (2) rejects all payments with settlement-day finality fi·nal·i·ty n. pl. fi·nal·i·ties 1. The condition or fact of being final. 2. A final, conclusive, or decisive act or utterance. Noun 1. that would cause an institution to exceed its daylight overdraft capacity level. A daylight overdraft occurs when a depository The place where a deposit is placed and kept, e.g., a bank, savings and loan institution, credit union, or trust company. A place where something is deposited or stored as for safekeeping or convenience, e.g., a safety deposit box. institution's Federal Reserve account is in a negative position at any time during the business day. An institution's net debit cap refers to the maximum dollar amount of uncollateralized daylight overdrafts that it may incur in its Federal Reserve account. The Board will continue to study a two-tiered pricing regime for daylight overdrafts in which institutions that pledge collateral to the Reserve Banks would pay a lower fee on their collateralized daylight overdrafts than on their uncollateralized daylight overdrafts. The Board requested comment on these proposed modifications in June 2001 after a broad review of its PSR policy. At the conclusion of the comment period, the Board made several changes to the policy, including allowing depository institutions Depository institution A financial institution that obtains its funds mainly through deposits from the public. This includes commercial banks, savings and loan associations, savings banks and credit unions. to pledge collateral to the Federal Reserve to access additional daylight overdraft capacity above their net debit cap levels and modifying the criteria used to determine a foreign banking organization's U.S. capital equivalency equivalency the combining power of an electrolyte. See also equivalent. measure. The Board is now focusing on the potential longer-term direction for the PSR policy. |
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