NY A02881

Adds Banking Law Section 12-b to allow state-chartered banking institutions holding state or municipal funds to pledge investment-grade corporate bonds as collateral for federal reserve discount window borrowing.

Permits municipal bonds with five or more years of maturity to be pledged to secure state and municipal deposits.

Amends General Municipal Law Section 10(1)(f)(viii) to expand eligible corporate bond investments from those rated in the two highest categories to any bonds meeting "investment grade" minimum standards from nationally recognized rating organizations.

Requires use of the most conservative (lowest) credit rating when a security has multiple ratings assigned.

Takes effect January 1st following enactment.