Federal Reserve Bank Services Private Sector Adjustment Factor — 2009-04-06 [E9-7473]

The Board requests comment on proposed modifications to its method for calculating the private-sector adjustment factor (PSAF). The PSAF is part of the Board's calculation, as required by the Monetary Control Act of 1980 (MCA), to establish the fees that Federal Reserve Banks (Reserve Banks) charge for certain financial services provided to depository institutions (DIs). Consideration of a new PSAF methodology was prompted by the reduction in clearing balances held by DIs at Reserve Banks following the Board's recent implementation of the payment of interest on required reserve balances and excess balances held at Reserve Banks, as well as by long-term changes in the structure of the market for providing payment services to DIs. The existing PSAF calculation model, which is built upon a correspondent bank framework, is driven primarily by the level of clearing balances held by DIs at Reserve Banks.