2001 Comment Letters
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November 16, 2001
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The Board requested comment on the benefits and drawbacks of various policy options that it is evaluating as part of a potential longer-term direction for its
payments system risk ("PSR") policy. In a letter written by President Moskow, the Chicago Federal Reserve Bank indicated its support for ex ante monitoring against credit limits while it
recognized and addressed universal real-time monitoring issues related to the processing of automated clearing house transfers and payments.
In addition, the Bank also expressed its belief that a multi-tier pricing structure for daylight overdrafts should be adopted, recommending
that there be no (or only a nominal) charge for daylight overdrafts to the extent that they are fully collateralized. Changes to the net debit cap levels for depository institutions that have access to Reserve Bank provided intraday credit were also supported. President Moskow's letter was accompanied by a paper authored by Eve Boboch, Richard Lamm, Jerry Nick, Ralph Schnackel, and Robert Steigerwald.
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August 1, 2001
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The Board of the Federal Reserve System recently adopted an interim policy statement permitting depository
institutions with self-assessed net debit caps to incur daylight overdrafts in excess of their net debit cap levels by pledging collateral
to the Federal Reserve. The Board has requested comment upon all aspects of the interim policy statement. The Federal Reserve Bank of Chicago chose to comment on questions regarding the benefits and drawbacks of allowing depository institutions with self-assessed net debit caps to pledge collateral for additional daylight overdraft capacity and on whether the interim policy would cause institutions to pledge additional capital to the Federal Reserve. The attached letter from Michael Moskow, President and Chief Executive Officer, incorporates research prepared by Richard Lamm and Robert Steigerwald.
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August 1, 2001
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The Board of the Federal Reserve System requested comment on its proposed Regulation W. The Regulation pertains to statutory restrictions on transactions between a bank and its affiliates. It proposes guidelines for the administration of sections 23A and 23B of the Federal Reserve Act. Sections 23A and 23B are important because they limit the risk to a bank from transactions with its affiliates. The Federal Reserve Bank of Chicago supports the Board's proposal, while at the same time recognizing that there are areas where supervisors should continue to have some
latitude to adapt rules so as to fulfill the rules' intent as circumstances evolve. The attached comment paper was authored by the following staff: Michelle Coussens, Philip Jackson, Charles Jeffrey, Catharine Lemieux, William Lloyd, John McPartland, James Moser, and Patrick Wilder.
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May 31, 2001
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The Basel Committee on Banking Supervision issued a request for comment on a more detailed capital adequacy framework to replace the 1998 Accord. The Federal Reserve Bank of Chicago responded to questions regarding credit risk, risk mitigation, and operational risk. The comment paper was authored
by Robert Bliss, Doug Evanoff, Jon Frye, Jeffrey Kvistad, Catharine Lemieux, Jim Moser, and Robert Steigerwald.
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May 7, 2001
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The IRS and Treasury Departments requested comments on the criteria that should be used to determine
whether a taxpayer is a dealer in securities futures contracts for purposes of section 1256 of the Internal Revenue Code. The Bank recognizes that said "dealer" definition is of significant consequence, as it determines which security futures traders will receive favorable tax treatment under section 1256 of the Internal
Revenue Code, and it may affect the ability of "security futures" to develop into a viable and competitive market. The Bank supports
a broad "dealer" definition, so as to allow market forces, not regulations, to determine the success or failure of the security futures market. We believe that in the long-run, such an approach would more likely promote market competition and serve the public interest. The attached letter authored by Michael Moskow, President and Chief Executive Officer, draws on research conducted by Richard Lamm, James Moser, and Richard Tsuhara.
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April 9, 2001
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The IOSCO (International Organization of Securities Commissions) has developed the Objectives and Principles of Securities Regulation, and the CPSS (Committee on Payment and Settlement Systems) of the central banks of the Group of Ten Countries
has just produced the final version of the Core Principles for Systematically Important Payment Systems. Building on this work, the CPSS and the
IOSCO are now aiming to contribute further to this process by jointly developing recommendations for securities settlement systems, to improve the safety and efficiency of these systems. The Chicago Reserve Bank supports these efforts. In addition to continued endorsement of the Bank's September 2000 comments regarding the CPSS report, this letter expresses Chicago's agreement with the approach the
Joint Task Force took in its recommendations regarding assets used to settle the cash leg of securities transactions. William Bergman,
James Moser, Richard Lamm, and Robert Steigerwald contributed to the attached response from Michael Moskow, President and Chief Executive Officer of the Federal Reserve Bank of Chicago.
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