Monetary Policy Improvement Act of 1979

Monetary Policy Improvement Act of 1979 - Amends the Federal Reserve Act to define the following terms: (1) "depository institution" includes any federally insured bank, mutual savings bank, credit union, or savings and loan institution: (2) "transaction account" means any deposit or account on which the deposit or account holder may make withdrawals by a negotiable or transferable instrument for the purpose of making payments to third persons; and (3) "bank" includes any insured or noninsured bank, excluding savings and mutual savings banks, as such terms are defined in the Federal Deposit Insurance Act.

Authorizes the Board of Governors of the Federal Reserve System to require any depository institution to make such reports of its liabilities and assets as the Board determines are necessary to control monetary and credit aggregates.

Imposes reserve requirements on the demand deposits and transaction accounts of banks in excess of $40,000,000 in a ratio of 13 percent. States that reserves shall be between 12 and 14 percent and that changes in the reserve ratio shall be made solely for the purpose of implementing monetary policy.

Establishes reserve requirements on time and savings deposits of banks in excess of $40,000,000. Sets the limits of such ratios which the Board may adjust solely for the purpose of implementing monetary policy. Establishes different ratios for time deposits with maturities under and over 180 days and savings deposits other than transaction accounts. Requires any bank to apply the $40,000,000 exemption in proportion to the distribution of its aggregate time and savings deposits other than transaction accounts.

Establishes reserve requirements on the transaction accounts of all other depository institutions in excess of $40,000,000 in a ratio of 13 percent. States that such reserves shall be between 12 and 14 percent and that changes in the reserve ratio shall be made solely for the purpose of implementing monetary policy.

Authorizes the Board, in extraordinary circumstances, to impose reserve requirements outside the normal requirements. Eliminates the use of different ratios for member banks not in reserve cities.

Permits nonmember banks not maintaining reserve pursuant to this Act the same discount and borrowing privileges as member banks except that a certification of solvency may be required.

Provides a four-year transition period for nonmember banks to implement the reserve requirements of this Act. Establishes a similar graduated implementation for member banks. Authorizes the Board to extend such periods if the application of reserve requirements would seriously impair the safety and soundness of a bank.

Authorizes the Board to permit a depository institution, which is a member of a Federal Reserve bank, to maintain required reserves in the form of vault cash. Requires a nonmember bank to maintain reserves in balances in a bank that maintains required reserve balances at a Federal Reserve Bank, in a Federal home loan bank, or in a central liquidity facility for credit unions.

Requires the Board to publish for public comment a set of pricing principles and a proposed schedule of fees for Federal Reserve System Services.

Requires the Board to establish a committee on reserve requirements for money substitutes, including bank and nonbank liabilities that are substitutes for demand deposits. Directs the committee to study the need for legal reserve requirements against short-term liabilities of bank and nonbank depository institutions, and other financial institutions offering short-term money substitutes, and to recommend appropriate administrative actions and legislation.