A statement showing the amount of notes outstanding to each Bank, the notes requiring collateralization, and the various assets pledged as System collateral security is published weekly in the Board's H.4.1 release. ![]() In October 2003, the Federal Reserve Act was further amended to allow all assets of the Federal Reserve Banks to be eligible as collateral for Federal Reserve notes and to specify that collateral is not required for currency held off-site on behalf of Federal Reserve Banks. ![]() In December 1999, the Federal Reserve Act was amended to broaden the range of discount window loans that may be used as collateral for Federal Reserve notes to include all loans to depository institutions. In December 1990, the Board revised procedures for collateralizing Federal Reserve notes, whereby assets denominated in foreign currencies that have been acquired under the provisions of Section 14 of the Federal Reserve Act may be pledged as collateral by the Federal Reserve Agent or Assistant Federal Reserve Agent in instances where other eligible assets are insufficient to secure Federal Reserve notes fully. The specified assets consist of the Bank's gold and SDR certificates, loans under Section 13 of the Federal Reserve Act, and assets acquired under the provisions of Section 14. The agreement, executed by each Bank and Agent, results in the pledge of specified assets that the Bank may own at any time plus whatever amount may be required out of the Bank's other eligible assets, including its participation in Treasury, Federal agency, and GSE debt securities held in the System Open Market Account. As part of the new procedure the Federal Reserve Agents designated a member of the Board of Governors' staff in Washington as Assistant Federal Reserve Agent to control the issuance of notes and to monitor the adequacy of collateral that is pledged by each Bank under a continuing agreement. The procedure was changed beginning in 1978 and the local stocks were discontinued along with the need for the Reserve Banks to apply for specific amounts or to earmark specific collateral. Until 1977 the local assistant agents held stocks of unissued notes as a source of supply for the cash departments and issued the notes to the Banks upon receipt of application for specific amounts. The Federal Reserve Act requires that Federal Reserve notes be issued to a Reserve Bank through the Federal Reserve Agent, or through an Assistant Federal Reserve Agent appointed by the Agent, upon pledge of adequate collateral security by the Bank. This chapter discusses special accounting and reporting procedures applicable to Federal Reserve notes.
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