A1a Due to Other Depository Institutions

1
A1aDue to Other Depository Institutions

2
A1a Due to Depository Institutions

• Include demand deposits by the following
  institutions
• Commercial Banks (U.S. non-U.S.)
• Bankers Banks
• Credit Unions, including Corporate Credit Unions
• Industrial Banks
• Mutual or Stock Savings Banks
• Banking Edge Agreement Corporations
• U.S. Branches Agencies of Foreign Banks

3
A1a Due to Depository Institutions

• Payment Errors
• (errors in funds transfer)
• Deposit liabilities even if
• Received accidentally
• Unable to transfer

4
A1a Due to Depository Institutions

• Types of Payment Errors
• Duplicate Payments
• Failed Payments
• Misdirected Payments
• Improper 3rd Party Transfers

5
A1a Due to Depository Institutions

• Duplicate Payment

Sending DI
Receiving DI
10 Million Transfer
10 Million Transfer
OOPS!
No Due From (B1) or CIPC (B2)
Demand Deposit until returned
6
A1a Due to Depository Institutions

• Failed Payment

Sending DI
Receiving DI
10 Million Transfer
Demand Deposit until sent
No Due From (B1 or CIPC (B2)
7
A1a Due to Depository Institutions

• Misdirected Payment

Right Bank
Sending DI

No Due From (B1)or CIPC (B2)
Wrong Bank
10 Million Transfer

Oops!
No Due From (B1) or CIPC (B2)
Demand Deposit until returned
8
A1a Due to Depository Institutions

• Improper Third Party Transfer

Receiving DI
Sending DI
Settlement Period (600 630 EST)
FEDWIRE
10 Million Transfer
OOPS!
Close of Fedwire 630 EST
No Due From (B1) or CIPC (B2)
Demand Deposit until returned
9
A1a Due to Depository Institutions

• Exclude
• Balances that are not immediately available
• Pass-through balances of respondents (reserve
  balances of another DI on deposit at the FRB)
• Deposits of non-banks
• Trust departments
• Non-deposit trust companies
• Non-depository affiliates
• Foreign official banking institutions
• U.S. Governmental agencies including FHLB, FDIC,
  NCUA, etc.
• Overdrawn accounts

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A1a Due to Depository Institutions

• Most Common Reporting Problems
• Time deposits
• Overdrawn accounts
• Non-demandable deposits
• Fed funds purchased
• Repurchase agreements

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Legitimate Differences

• FR2900 vs. FFIEC031/041
• Correspondent pass-through reserve balances
• Reciprocal balances reported gross for certain
  counterparties on the FR2900
• FR2900 includes deposits of non-U.S. affiliates
  of the reporting institution
• FR2900 includes certain deposits at non-U.S.
  branches of the reporting institution

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Legitimate Differences

• FR2900 vs. NCUA 5300
• FR2900 excludes balances at non-U.S. branches of
  the reporting institution

13
Legitimate Differences

• FR2900 vs. OTS 1313
• FR2900 excludes balances at non-U.S. branches of
  the reporting institution
• Reciprocal balances reported gross for certain
  counterparties on the FR2900

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Questions??
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B1Due From Depository Institutions

• Mike Jolly

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B1 Due From Depository Institutions

• Include balances
• Subject to immediate withdrawal on demand from
  U.S. offices of DIs
• No prior notice of withdrawal required
• As reflected on your books rather than the
  correspondents books.

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B1 Due From Depository Institutions

• Exclude balances
• Not subject to immediate withdrawal
• Due from
• Federal Reserve Banks
• Federal Home Loan Banks
• NCUA Central Liquidity Facility
• Non-U.S. offices of depository institutions
• Bank Holding Company or other non-banks
• Cash items in process of collection (B2)
• Overdrafts or negative balances
• Deferred credit cash items
• Fed funds sold or reverse repurchase agreements

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B1 Due From Depository Institutions

• Most Common Reporting Problems
• Reporting FRB, FHLB, NCUA balances
• Reporting negative numbers (negative due to)
• Reporting deferred credit cash items
• Fed funds sold

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Reciprocal Balances

• Due To
  Due From
• LBJ Bank 3,000
  LBJ Bank 1,000
• Sizemore NB 4,000
  Sizemore NB 5,000

Amount to be reported in A1a???
Amount to be reported in B1???
6,000
7,000
or
or
2,000
1,000
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Reciprocal Balances

• Must maintain due to/due from with each other
• May be reported gross or net for the following
  institutions
• Commercial Banks
• Bankers Banks
• U.S. branches and agencies of foreign banks
• Banking Edge and agreement corporations
• Industrial banks

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Reciprocal Balances

• Reciprocal balances must be reported gross for
  the following institutions
• Mutual or stock savings banks
• Credit Unions
• Savings loans
• Overdrawn accounts and negative balances cannot
  be
• Netted against positive balances
• Shifted to the other side of the balance sheet
• Must be reported as ZERO

22
Reciprocal Balances

Due From LBJ Bank 4,000 Sizemore NB
3,000 Hafner FCU 1,000 Hughes SL 1,000
Due To LBJ Bank 3,000 Sizemore NB
1,000 Hafner FCU 2,000 Hughes SL 3,000
Amount to be reported in A1a???
Amount to be reported in B1???
5,000
5,000
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Reciprocal Balances

Due From LBJ Bank 3,000 Sizemore NB
2,000 Hafner FCU 2,000 Hughes SL 5,000
Due To LBJ Bank 1,000 Sizemore NB
5,000 Hafner FCU (4,000) Hughes SL 1,000
Amount to be reported in A1a???
Amount to be reported in B1???
4,000
9,000
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Legitimate Differences

• FR2900 vs. FFIEC031/041
• Respondent pass-through reserve balances
• FR2900 only includes demand balances (immediately
  available)
• FR2900 only includes DIs in the U.S.
• Reciprocal balances reported gross for certain
  counterparties on the FR2900

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Legitimate Differences

• FR2900 vs. NCUA 5300
• FR2900 only includes demand balances immediately
  available
• FR2900 only includes DIs in the U.S.
• FR2900 excludes balances at non-U.S. branches of
  the reporting institution

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Legitimate Differences

• FR2900 vs. OTS 1313
• Reciprocal balances - reported gross for certain
  counterparties on the FR2900
• FR2900 excludes balances at non-U.S. branches of
  the reporting institution
• FR2900 excludes FHLB balances
• FR2900 only includes demand balances (immediately
  available)
• FR2900 only includes DIs in the U.S

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Questions??
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Contact Information

• Rich Nabring, Coordinator
• Federal Reserve Bank of Cleveland
• 216/579-2157
• rnabring_at_clev.frb.org