Regulation M

Regulation M

Federal Reserve Board regulation that currently requires member banks to hold reserves against theirnet borrowings from their foreign branches over a 28-day averaging period. Reg M has also required member banks to hold reserves against Eurodollars lent by their foreign branches to domestic corporations for domestic purposes.

Regulation M

1. A Federal Reserve regulation requiring member banks to maintain a certain amount in reserves against the borrowings by their foreign branches. Member banks may use the average of the reserves over a 28-day period in order to comply with the regulation.

2. An IRS regulation allowing mutual funds and other investment companies to forego capital gains taxes and other taxes on dividends and coupons if they pass down the liability to shareholders. This regulation exists to prevent double taxation.
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