Capital Briefs: Fed Eases Policy on Cash Processing

The Federal Reserve Board is making it easier for banks to use its cash processing systems.

In a revised policy statement issued Friday, the Fed said banks may designate up to 10 locations anywhere in the country where they may receive free access to the cash processing system. Previously, the Fed required banks to access the cash processing system from sites within their home Federal Reserve Bank district.

"The revised policy provides flexibility to depository institutions to make the most cost-effective arrangements for obtaining cash services from reserve bank offices," the Fed said.

The change takes effect May 4.

Separately, the Fed on Monday released a revised examination manual for capital markets activities. The manual, last updated in March 1994, details sound management practices and highlights parts of the business examiners are likely to scrutinize the most.

It also includes a section on risk-management, including discussions of market risk, counterparty credit risk, and legal risk. The Fed also included profiles of the 35 most commonly traded financial instruments. Each profile describes the risks involved with the instrument and how a bank should account for the security on its books.

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