Federal Reserve Bulletin, 1977-04
APRIL 1977 FEDERAL RESERVE RT Tt I FTTN U .S. International T ransactions in a R ecovering Econom y The Im plem entation of M onetary Policy in 1976 B ank H olding C om pany Financial D evelopm ents in 1976 C hanges in B ank L ending Practices, 1976 C hanges in Tim e and Savings D eposits, July-O ctober 1976 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
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NUM BER 4 □ VOLUME 63 □ APRIL 1977 FEDERAL RESERVE BULLETIN B oard of G overnors of the Federal R eserve System W ashington, D .C . PUBLIC ATIO NS COM M ITTEE Stephen H. Axilrod □ Joseph R. Coyne □ John M. Denkler □ Janet O. Hart John D. Hawke, Jr. □ James L. Kichline □ John E. Reynolds Richard H. Puckett, Staff Director The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. Direction for the art work is provided by Mack R. Rowe. Editorial support is furnished by the Economic Editing Unit headed by Elizabeth B. Sette. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Table of Contents 311 U.S. International Transactions in lation to the growth rates established by a Recovering Economy the Federal Reserve for the monetary aggregates in testimony before the Com The pattern of international transac mittee on the Budget, U.S. Senate, tions was reversed in 1976 as economic March 22, 1977. recovery in the United States advanced more rapidly than economic recovery 362 Henry C. Wallich, Member of the abroad. Board of Governors, discusses interna tional lending by U.S. banks before the 323 The Implementation of Monetary Subcommittee on Financial Institutions Policy in 1976 Supervision, Regulation, and Insurance of the Committee on Banking, Finance, Annual report on domestic operations and Urban Affairs of the U.S. House of of the Federal Open Market Committee. Representatives, March 23, 1977. 337 Bank Holding Company Financial 366 David M. Lilly, Member of the Board Developments in 1976 of Governors, reviews the economic im plications of Federal Government loan BHC’s experienced significant guarantees and the treatment of such growth, improved liquidity, and in guarantees in the budgetary process be creased earnings last year. fore the Subcommittee on Economic Stabilization of the Committee on Bank 341 Changes in Bank Lending Practices, ing, Finance, and Urban Affairs, U.S. 1976 House of Representatives, March 30, Evidence from the lending practices 1977. surveys indicates that demand for busi 370 J. Charles Partee, Member of the ness loans at large commercial banks Board of Governors, evaluates the im was weak through most of 1976 but plications of U.S. Treasury financing re began to pick up in the last quarter. quirements for monetary policy before the Subcommittee on Domestic Mone 347 Changes in Time and Savings Depos tary Policy of the Committee on Bank its at Commercial Banks, July-Oc ing, Finance, and Urban Affairs, U.S. tober 1976 House of Representatives, March 30, Growth in time and savings deposits 1977. at insured commercial banks proceeded 375 Philip E. Coldwell, Member of the at a moderate pace for the 3 months Board of Governors, presents a broadending October 28, 1976. based review of the expenditures and budgets of the Federal Reserve Banks Statements to Congress and the Board of Governors before the 358 Arthur F. Burns, Chairman of the Committee on Banking, Housing, and Board of Governors, reports on general Urban Affairs, U.S. Senate, April 7, economic and financial conditions in re 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
380 Record of Policy Actions of the Proposed amendment to Regulation H Federal Open Market Committee and proposed interpretation of Regula tion Z. At the meeting held on February 15, 1977, the FOMC reviewed the domestic Changes in Board staff. policy directive and decided to continue New President of the Federal Reserve to maintain about the current stance; Bank of Minneapolis. approved a statement of policy regarding the Government in the Sunshine Act; Fair Credit Billing pamphlet. amended its rules regarding availability Changes in price of two Board publi of information; and revised the guide cations. lines for System operations in Federal agency issues. Four State banks admitted to Federal Reserve membership. 395 Law Department 432 Industrial Production Amendment to Regulation Q and mis cellaneous guidelines, rulings, and Output rose 1.4 per cent in March, the orders. largest increase in 19 months. 426 Announcements Regulation Q amended to create a new Al Financial and Business Statistics class of retirement savings deposits. (See A3 Domestic Financial Statistics Law Department for text of amendment.) A46 Domestic Nonfinancial Statistics Establishment of the Consumer Com A54 International Statistics pliance and Education Program of the Board of Governors. A69 Guide to Tabular Presentation and Statistical Releases Regulation Z amended to require ad vance disclosure of any variable rate A70 Board of Governors and Staff clause in a credit contract that may result in increased cost to the consumer; and A72 Open Market Committee and to permit disclosures under the regula Staff; Federal Advisory Council tion to be made in Spanish in Puerto Rico. A73 Federal Reserve Banks and Regulation H amended to conform Branches with recent changes in the Flood Disaster Protection Act of 1973. A74 Federal Reserve Board Publications Interpretations of Regulations Z and C. A76 Index to Statistical Tables Nonadoption of proposed amendment to Regulation Q. A78 Map of Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
U.S. International Transactions in a Recovering Economy This article was prepared by John M. Under ing a more severe recession than the rest of the wood of the U.S. International Transactions developed world, U.S. imports declined rela Section of the Division of International Finance. tively more in volume than exports. The situa tion has reversed during the recovery. Economic The relative strength and timing of economic growth in the United States, as measured by recoveries in the United States and abroad led the increase in real gross national product, was to a striking reversal in the pattern of U.S. 6.1 per cent in 1976 compared with a weighted international transactions last year. From the average of nearly 5 per cent in six other major recession-induced record surplus in current-ac- industrial countries (Chart 1). Growth of indus count transactions in 1975, the United States trial production in the United States exceeded returned abruptly in 1976 to the near balance 10 per cent versus a weighted average of some in such transactions that had prevailed in both what less than 8 per cent in six other major 1973 and 1974. industrial countries. Hence, there was a strong The greatest swing occurred in the merchan pick-up in U.S. merchandise imports while ex dise trade balance, which shifted from a $9 ports rose only moderately. billion surplus in 1975 to a $9.2 billion deficit Several other factors accentuated the swing in 1976, primarily due to cyclical factors. In in the merchandise trade balance. For one, the 1974 and 1975 with the United States undergo 1974-75 recession had been accompanied by an 1. Real GNP and . . . industrial production Ql 1973=100 United States Indexes of foreign real GNP and industrial production (1973 weights are proportional to U.S. exports to these respective Ql = 100) are weighted averages for Canada, France, Germany, countries in 1973. Data are from national sources. Italy, Japan and, the United Kingdom. Foreign real GNP index U.S. real GNP is based on Dept, of Commerce data; U.S. weights are proportional to country share in 6-country total industrial production is the F.R. index. real GNP in 1973-76. Foreign industrial production index Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
312 Federal Reserve Bulletin □ April 1977 1. U.S. international transactions In billions of dollars 1976* Item 1975 1976 Ql Q2 Q3 Q4 CURRENT ACCOUNT 1. Merchandise trade balance .................................................. 9.0 -9.2 -1.3 -1.5 -2.8 -3.6 Exports ................................................................................... 107.1 114.7 27.0 28.4 29.6 29.7 Imports ................................................................................... 98.1 123.9 28.3 29.9 32.4 33.2 2. Military and service transactions, net2............................ 7.0 13.3 2.7 3.0 3.9 3.7 Investment income, net ..................................................... (6.0) (10.5) (2.3) (2.5) (2.8) (3.0) Military transactions, net2.................................................. (-1.2) (.1) (-.1) (-.2) (.3) (.1) Other services, net ............................................................ (2.2) (2.7) (.5) (.8) (.9) (.6) 3. Unilateral transfers1*2 .............................................................. -4.0 -4.1 -1.0 -.9 -1.2 -1.0 4. Balance on current account2 ............................................ 12.0 ♦ .3 .6 -.1 -.9 U.S. FUNDS (outflow/increase (—»3 5. Net change in positions of U.S. banking offices vis-a-vis banks abroad .......................................................... -10.9 7.4 -2.2 -1.1 -.8 -3.2 6. Banks’ claims on foreign nonbanks .................................. -3.2 5.1 -.2 -1.5 -.5 -2.9 7. U.S. net purchases of foreign securities ........................... -6.2 -8.7 -2.5 -1.4 -2.7 -2.1 8. U.S. direct investments abroad .......................................... -6.3 -5.0 -1.8 -.2 -1.4 -1.6 9. Other U.S. private claims on foreigners ......................... -1.5 -1.8 -.8 -1.0 .7 -.8 10. U.S. Govt, capital, net of repayments (excl. reserve assets)* ......................................................................... -3.5 -4.3 -.7 -1.0 -1.5 -1.2 11. U.S. reserve assets ................................................................ -.6 -2.5 -.8 -1.6 -.4 .2 Of which: Reserve position in the IMF .......................................... (-.5) (-2.2) (-.2) (-.8) (-.7) (-.5) Convertible currencies and other ................................... (-.1) (-.3) (-.5) (-.8) (.3) (.7) 12. Total: lines 5-11 ................................................................... -32.2 -34.8 -9.0 -7.8 -6.6 -11.6 FOREIGN FUNDS (inflow/increase (+)) 13. OPEC official assets in the U.S............................................ 7.1 9.5 3.5 3.3 1.7 1.0 14. Assets of other foreign official institutions2 ................... -.5 8.0 .4 .8 .6 6.1 15. Assets of private nonbank foreigners ................................ 9.0 6.8 .3 1.1 3.3 2.3 Of which: Direct investments in U.S.................................................. (2.4) (.6) (-.7) (.4) (.7) (.2) U.S. securities incl. Treas. issues ................................ (5.2) (4.1) (1.5) (-.5) (3.1) (*) Claims on U.S. banking offices ..................................... (1.2) (2.7) (-.5) (1.4) (-.2) (2.1) Claims on nonbanks of unaffiliated foreigners ........... (.2) (-6) (*) (-.2) (-.3) (*) 16. Total: lines 13-15 ................................................................. 15.6 24.3 4.2 5.2 5.6 9.4 17. Statistical discrepancy ............................................................ 4.6 10.5 4.3 1.9 1.2 3.1 pPreliminary. Note.—Current-account items are seasonally adjusted; sea *Less than $50 million. sonal factors are no longer calculated for capital transactions; includes U.S. Government grants and pensions, and private quarterly values of the statistical discrepancy include residuals remittances. due to incomplete seasonal adjustment. Data from U.S. Dept, 2Excludes special U.S. Government grants to Israel and of Commerce, Bureau of Economic Analysis. Details may not associated export and capital-account entries. add to totals because of rounding. 3Includes inflow from foreign banks to U.S. banks. inventory liquidation that was much greater than Furthermore, part of the swing in the trade in other recent downturns, so the rebuilding of balance may have resulted from some loss in inventories during the recovery stimulated both U.S. price competitiveness associated with the industrial production and the demand for im appreciation of the dollar by 15 per cent against ports early in 1976. In addition to increased a weighted average of the currencies of the other demand due to the recovery, higher prices for Group of Ten countries plus Switzerland be oil, reduced domestic oil production, and tween March 1975 and January 1977. (The colder-than-average weather in the fourth quar dollar exchange rate to which references are ter of 1976 led to a sharply higher bill for made throughout this article is this weighted imported oil. average. Weights are calculated as the sum of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
U.S. International Transactions 313 2. U.S. merchandise trade International accounts basis; quarterly data at seasonally adjusted annual rates 1975 1976 Item 1974 1975 1976 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Billions of dollars Export values ................ 98.3 107.1 114.7 108.1 103.4 106.2 110.6 108.0 113.5 118.4 118.9 Agricultural ..................... 22.4 22,2 23,4 24.2 19.5 22.3 23.0 21.5 23.1 25.3 23.7 Nonagricultural ............ 75.9 84.8 91.3 83.9 83.9 84.0 87.7 86.5 90.5 93.1 95.2 Import values ................ 103.7 98.1 123.9 102.3 90.3 97.9 101.7 113.3 119.7 129.5 133.2 Fuel ................................... 27.5 28.5 37.1 27.8 26.7 30.0 29.5 32.5 35.3 40.1 40.7 Nonfuel ........................... 76.2 69.5 86.8 74.5 63.6 67.9 72.2 80.8 84.4 89.5 92.5 Balance ............................ -5.4 9.0 -9.2 5.8 13.1 8.3 8.9 -5.3 -6.1 -11.1 -14.3 1974=100 Volumes Agricultural exports .. 100.0 101.5 113.5 101.5 89.5 104.7 110.0 104.7 113.1 121.6 114.4 Nonagricultural exports 100.0 96.3 97.2 95.7 94.7 94.8 97.4 94.1 97.2 99.0 98.4 Fuel imports .................. 100.0 100.2 123.1 97.3 94.2 107.1 102.8 109.2 117.6 132.8 132.5 Nonfuel imports .......... 100.0 82.5 101.9 87.6 73.6 82.3 88.0 97.5 99.6 103.8 106.6 Unit values Agricultural exports .. 100.0 97.7 92.0 106.4 97.4 94.8 93.1 91.6 91.0 92.8 92.5 Nonagricultural exports 100.0 116.1 123.8 115.4 116.7 116.7 118.6 121.0 122.7 123.9 127.4 Fuel imports .................. 100.0 103.5 109.7 104.0 103.1 102.1 104.4 108.2 109.1 109.7 111.6 Nonfuel imports .......... 100.0 110.6 111.8 111.5 113.4 108.3 107.7 108.8 111.2 113.1 114.0 Note.—Details may not add to totals because of rounding. Data from U.S. Dept, of Commerce, Bureau of Economic Analysis and Bureau of the Census. each country’s exports and imports (f.o.b.) in accounted for another 20 per cent of the in 1972 divided by total 1972 trade of the other crease. 10 countries.) While U.S. prices rose less than The large shift in the U.S. current-account those of most of its trading partners, this relative position, from a record surplus in 1975 to near price performance did not fully offset the ex balance in 1976, was by definition matched by change-rate rise. Last, the Organization of Pe a shift in capital flows from a large over-all net troleum Exporting Countries (OPEC) appears to outflow to a small net inflow. Recorded data have come to the end of its period of rapid identify only part of the adjustment; a large part growth as a market for exports. The value of appears in the statistical discrepancy entry in total OPEC imports is estimated to have in Table 1. In spite of the shift to a net capital creased by only about $10 billion in 1976 com inflow, the United States continued to be a pared with $22 billion in 1975; U.S. exports source of sizable amounts of funds to overseas to OPEC increased by just $1.8 billion in 1976, borrowers through loans from U.S. banking after increasing by $4.0 billion in 1975. offices and foreign bond issues in the United Some of the decline in the merchandise trade States. The swing from surplus to deficit in the balance was offset by a significant rise in the current account in 1976 was accomplished surplus on net military and service transactions. without a large depreciation of the dollar. In Larger inflows of net direct investment and fact, the dollar appreciated slightly on a tradeinterest income from abroad accounted for two- weighted basis although most of the rise oc thirds of the increase. The surplus on net mili curred early in the year. Factors contributing tary transactions, continuing its upward trend, to the appreciation included the slower rise in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
314 Federal Reserve Bulletin □ April 1977 prices in the United States than the average for 3. Imports and the inventory cycle foreign countries, official dollar purchases, and Billions of 1972 dollars 1972=100 a further accumulation of dollar-denominated 40 120 Change in assets by OPEC. business inventories NONFUEL IMPORTS: A quick rebound as the economy recovers The pace of the U.S. economic recovery that Imports of T nonfuel had begun in the second quarter of 1975 re industrial supplies mained rapid in the early part of 1976. Sub stantial rates of growth were recorded for both real GNP and industrial production, and import demand expanded along with economic activity. Dept. of Commerce data for imports and inventory changes, Most categories of nonfuel imports followed a with inventory changes at annual rates. F.R. industrial produc similar pattern, showing especially strong tion index. growth in the first quarter of 1976 (Chart 2). During the recession the volume of nonfuel Percentage swings in import volumes during imports showed a proportionately greater de the most recent recession were larger than in cline than either real GNP or industrial produc other recessions since 1956, in part a reflection tion. Similarly, during the recovery such im of the sensitivity of nonfuel imports to inventory ports have shown proportionately larger growth behavior. Large stocks of both materials and than either of these measures of U.S. economic products were built up during the period of activity. Real GNP grew by 6.1 per cent in 1976 rising prices preceding the recession. Just as the and industrial production by more than 10 per inventory liquidation that accompanied the cent, whereas the volume of nonfuel imports downturn had contributed to the reduction in increased by 24 per cent. Imports of industrial nonfuel imports, so too the build-up of invento supplies, autos, and other consumer goods grew ries early in 1976 not only helped to propel the the most rapidly of these groupings from their recovery but also added to the demand for recession-reduced levels in 1975. imports, especially of nonfuel industrial sup plies (Chart 3). The rate of accumulation of nonfarm business inventories, which had been negative throughout most of 1975, jumped 2. U.S. imports of sharply in the first quarter of 1976 and then major nonfuel commodity groupings remained relatively flat until late in the year. In contrast, imports of nonfuel industrial sup plies continued to grow rapidly in the second and third quarters before dropping off in the fourth quarter. The price of nonfuel imports, as measured by the unit-value index, averaged only about 1 per cent higher in 1976 than in 1975. Import unit values had declined during the second half of 1975, reflecting the rapid appreciation of the dollar and falling commodity prices, but rose at a fairly steady pace through 1976 as the trade-weighted appreciation of the dollar slowed 1973 1974 1975 1976 and commodity prices rose again. Prices of imported primary commodities increased Dept, of Commerce data. Shaded area marks the period of decline in the F.R. industrial production index. sharply during the rapid recovery of the econ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
U.S. International Transactions 315 3. U.S. imports from selected countries or regions 1974 1975 1976 Country or region Billions Per cent Billions Per cent Percentage Billions Per cent Percentage of dollars of nonfuel of dollars of nonfuel increase of dollars of nonfuel increase imports imports over 1974 imports over 1975 Canada ............................... 17.3 22.7 16.9 24.3 -2.3 21.5 24.8 27.2 Western Europe .............. 22.2 29.1 20.0 28.8 -9.9 21.6 24.9 8.0 (Germany) ................... (6.2) (8.1) (5.2) (7.5) (-16.1) (5.5) (6.3) (5.8) (Other EEC) ................ (11.6) (15.2) (10.8) (15.5) (-6.9) (11.5) (13.2) (6.5) Japan ................................... 12.3 16.1 11.2 16.1 -8.9 15.5 17.9 38.4 Non-oil exporting developing countries1 19.1 25.1 17.8 25.6 -6.8 23.5 27.1 32.0 Communist countries .. .8 1.0 .7 1.0 -12.5 .9 1.0 28.6 Nonfuel imports, total ___ 76.2 100.0 69.5 100.0 -8.8 86.8 100.0 24.9 includes a small quantity of fuel imports. Note.—Data from U.S. Dept, of Commerce, Bureau of Economic Analysis and Bureau of the Census. omy in the first half of 1976, peaked in July, the quantity of imported oil accounted for about and then fell back before advancing again late 70 per cent of the total rise in value. A higher in the year. Import unit values of coffee and average import unit value, $12.13 per barrel cocoa—two commodities in short supply—rose from $11.42 in 1975, associated with OPEC at a fairly steady rate all year, and are still far price increases, accounted for the remainder of below spot prices, mainly because of the long the rise in the value of fuel imports. lags between orders and deliveries. Nearly three-fourths of the growth in the Not all countries shared equally in the growth quantity of imported oil represented a rise in in U.S. nonfuel imports in 1976. Imports from demand that would normally be associated with developed countries—including some fuels— the increase in real GNP that occurred during were up by $11 billion over 1975, led by a $4 the year; declines in domestic production of oil billion increase in nonfuel imports from Japan and the cold weather during 1976 each contrib (Table 3). However, the value of nonfuel im uted about equally to the remaining increase in ports from the European Economic Community the U.S. demand for imported oil. The fourth (EEC) increased by only 7 per cent—less than quarter of 1976 was almost 20 per cent colder $1 billion—and was lower in 1976 than in 1974; than average, as measured in degree-days—the imports from Germany accounted for over half number of degrees per day by which the average of this decline. U.S. imports from non-oil de temperature falls short of 65 degrees. The pat veloping countries increased almost twice as fast tern of fuel imports during the year was also as imports from developed countries. Exports influenced by the working off of inventories in from these developing countries to the United the first quarter of 1976 that had been accumu States rose by $6 billion. Most of this increase lated in anticipation of the OPEC price increase was in manufactured goods from South Korea, of October 1975 and by a renewed accumulation Taiwan, and Hong Kong, countries whose ex in the second half of 1976 in anticipation of ports to the United States had dropped off another price rise at the year-end. sharply in 1975. NONAGRICULTURAL EXPORTS: FUEL IMPORTS: Increased demand Sluggish real growth and declining domestic production The value of nonagricultural exports was 7.5 U.S. imports of petroleum and its products rose per cent higher in 1976 than in 1975, but most to $34.6 billion during 1976, up about $7.6 of the change reflected price increases. In real billion from the previous year. An increase in terms, exports of nonagricultural goods grew by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
316 Federal Reserve Bulletin □ April 1977 only 0.7 per cent to an annual total still 3 per 4. Machinery export prices for the cent below the record 1974 volume. A combi United States, Germany, and Japan1 nation of factors contributed to this slug Dollar-equivalent indexes, 1970= 100 gishness: the weakening of the economic re Period U.S.2 Germany Japan coveries in our major industrial trading partners as the year progressed; the marked slowing of 1970 ............ 100.0 100.0 100.0 1971 ............ 101.0 113.0 104.4 the growth in exports to OPEC countries; and 1972 ............ 101.6 128.7 112.1 the measures taken by a number of countries— 1973 ............ 105.8 162.9 130.4 especially developing countries— to slow the 1974 ............ 119.0 184.3 150.2 1975 ............ 143.1 212.6 150.9 rate of growth of their imports in response to 19763 ........... 151.0 213.8 151.5 balance of payments financing difficulties. 1975 Exports of all the major nonagricultural com Ql ......... 139.3 220.1 153.8 Q2 ......... 142.5 221.2 153.1 modity groups shared in the pattern of slow real Q3 ......... 144.0 205.6 149.8 Q4 ......... 146.5 203.3 147.0 growth, as shown in Chart 4. The pattern of nonagricultural exports closely paralleled the 1976 Ql ......... 149.3 210.1 148.6 behavior of industrial production of the major Q2 ......... 150.8 213.8 151.1 Q3 ......... 152.8 217.4 154.8 trading partners of the United States. Q4 ......... 155.8 155.0 A second striking feature shown by the chart is that the strong rise in the volume of capital 1 Based on transactions price data, rather than export unit values. The U.S. index is constructed from Bureau of Labor goods exported during 1973 and 1974, years of Statistics data. The German and Japanese indexes are available sharply higher capital spending in most regions from national sources in local currency units, converted into dollars at current exchange rates. of the world, was only somewhat eroded in 1975 2U.S. data for 1970-74 are based on June prices, the only and 1976. The rise in U.S. exports of capital data available prior to 1974. 3January-September data. goods followed a significant improvement in the price competitiveness of the United States in dollar since 1970 and the better performance of response to both the net depreciation of the the United States, relative to its major competi tors, in holding down unit labor costs. Export prices for machinery, which in 1976 represented 82 per cent of U.S. exports of 4. US. exports of major capital goods and 27 per cent of total U.S. nonagricultural commodity groupings exports, are shown in Table 4 for the United States, Germany, and Japan. These three coun tries accounted for more than half of the value of world exports of machinery in 1973. Between 1970 and 1973, prices of machinery exported from the United States rose substantially less than those for Germany and Japan, reflecting the sharp depreciation of the dollar versus the mark and yen during that period. Since 1973, U.S. price competitiveness has held fairly steady compared with Germany but has eroded against Japan. The impact of relative price changes on U.S. machinery exports is reflected in the changing U.S. share of the export volumes of the three countries combined (Table 5). Between 1970 t i r 100 and the first three quarters of 1976 the U.S. 1973_______1974_______1975_______1976 share rose from 43 to 48 per cent, while Ger Dept, of Commerce data for exports. Foreign industrial many’s share fell from 40 to 33 per cent and production index, except for the change in base period, is as defined in the note to Chart 1. Japan’s share increased from 17 to 19 per cent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
U.S. International Transactions 317 5. Machinery export volumes for the United States, Germany, and Japan Billions of 1970 dollars1 Percentage shares Year U.S. Germany Japan Total U.S. Germany Japan 1970 .. 11.37 10.57 4.39 26.33 43.2 40.1 16.7 1971 .. 11.46 10.69 5.12 27.27 42.0 39.2 18.8 1972 .. 13.04 11.33 6.08 30.45 42.8 37.2 20.0 1973 .. 16.19 12.63 6.97 35.79 45.2 35.3 19.5 1974 .. 19.91 14.17 7.85 41.93 47.5 33.8 18.7 1975 .. 19.75 13.27 8.53 41.55 47.5 32.0 20.5 19762 20.48 14.00 8.24 42.72 47.9 32.8 19.3 Constructed by deflating export value data (from national sources) by local-currency price indexes for machinery exports (from sources noted in Table 4). 2January to September data at annual rates (January to August for Japan). The total value of German and Japanese ex as large. In 1975 each of these countries had ports of all commodities to countries other than experienced a rapid reduction in its current-acthe “big three” increased a little faster than count surplus as development spending and im U.S. exports to these areas in 1976. In terms ports grew rapidly. If they had tried to continue of these countries, West Germany increased its this pattern of high import growth, financing exports by 13 per cent, to about $95 billion; constraints would likely have arisen. So, in Japanese exports rose by 12 per cent, to about 1976 they curbed their imports somewhat. $48 billion; and U.S. nonagricultural exports Nevertheless, the low-absorbing OPEC coun rose by 8 per cent, to about $81 billion. While tries—Kuwait, Qatar, Saudi Arabia, and the the value of U.S. nonagricultural exports to all United Arab Emirates—have continued to in but the petroleum-exporting countries grew crease their imports rapidly, but their persistent slowly in 1976, German and Japanese exports surpluses on current account reflect the restric to certain areas increased rapidly, especially to tions on import growth imposed by limited other countries in Western Europe. resource bases (except for oil and gas reserves), For the last few years, OPEC has been a major source of growth in export demand for 6. U.S.,1 German, and Japanese the United States, Germany, and Japan (Table exports to OPEC 6). Exports to OPEC countries continued to increase in 1976, but the rate of increase was Item 1974 1975 1976e much slower than in 1975. Thus it appears that Billions of dollars the period of rapid growth in total OPEC im ports is over. Such imports, which had increased Germany ............................ 4.3 7.1 8.6 more than 60 per cent in 1975, grew more Japan ................................... 5.5 8.4 8.8 United States1 .................... 5.2 9.3 10.9 slowly in 1976 and for the year are estimated Total OPEC imports *36 *58 68 to have risen 17 per cent to about $68 billion. Percentage increase, Nine OPEC countries, four with intermediate year over year absorptive capacities—Iraq, Iran, Libya, and Germany .................................. 65.1 21.1 Nigeria—and five with high absorptive capaci Japan ......................................... 52.7 4.8 ties—Algeria, Ecuador, Gabon, Indonesia, and United States1 ....................... 78.8 17.2 Total OPEC imports 61.1 17.2 Venezuela, have accounted for this slowdown. These nine countries accounted for more than Nonagricultural exports. three-fourths of total OPEC imports in 1975; Estimated. Note.—Data from OECD, Statistics Division, and U.S. their share in U.S. exports to OPEC was nearly Dept, of Commerce, Bureau of the Census. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
318 Federal Reserve Bulletin □ April 1977 a shortage of manpower, and small domestic NEW MILITARY AND SERVICE markets. In addition, all of the countries with TRANSACTIONS: An offset to the low absorptive capacities, except Kuwait, face merchandise trade deficit severe port congestion, a condition that is ex Between 1975 and 1976, net receipts from mil pected to limit the growth of imports at least itary and service transactions increased by $6.3 through 1977. billion (Table 7). About two-thirds of the in crease resulted from larger net receipts on in vestments, and another $1.3 billion was in net AGRICULTURAL EXPORTS: military transactions. Amounting to $13.3 bil Sensitivity to world supply lion in 1976, the net inflow of funds from all military and service transactions more than off Both the volume and the value of U.S. agricul set the large deficit in the merchandise trade tural exports rose to record levels in 1976 even balance. though export prices fell to their lowest levels Net investment income receipts increased by since 1973. Because of a crop failure in 1975, $4.5 billion to a total of $10.5 billion in 1976; the Soviet Union bought large amounts of agri most of the rise was in receipts as payments cultural goods, mainly corn, from the United were little changed from 1975 levels. Returns States, and these purchases supported agricul on U.S. direct investments abroad—apart from tural exports in the first half of 1976. As these undistributed profits—amounted to $12.5 billion shipments dropped off in the second half of the in 1976, a one-third increase from levels of a year, agricultural exports to drought-stricken year earlier. Much of the rise resulted from West European countries increased sharply. higher returns from foreign affiliates of U.S. Record crops in the United States and in most petroleum companies as the demand for oil rose of the rest of the world led to falling agricultural and as oil prices increased. Other private income prices, especially in the last few months of receipts increased by nearly $1.5 billion, mostly 1976. Prices of wheat and corn dropped to levels returns on securities and bank loans. Payment not experienced since 1973. On the other hand, of income on foreign investments in the United soybean and cotton prices rose during the year. States declined slightly in 1976. Most of the The 1976 soybean crop was small; U.S. plant decline was in payments other than on direct ings were reduced due to fears by farmers of investments. There was a sizable addition to the increased palm oil imports and Brazilian com stock of foreign funds in the United States, but petition in export markets, while domestic and domestic interest rates fell during the year. foreign demand for soybeans for livestock feed remained strong. Cotton prices rose because of 7. Net military and service transactions increased demand and a reduction in the 1976 In billions of dollars crop as the result of bad weather, a situation Item 1975 1976 Change that was exacerbated by an already small carry over stock. Net military and service transactions 7.0 13.3 6.3 The U.S.-Soviet grain agreement that be came effective in October 1976 appears to be Net investment income ... 6.0 10.5 4.5 Direct investments, net 7.3 10.2 2.9 achieving its goal of lessening the variation in Other, net ....................... -1.3 .3 1.6 Net military ......................... -1.2 .1 1.3 the volume of Soviet grain purchases from the Sales ................................... (3.6) (4.9) (1.3) United States. Soviet purchases of U.S. grain, Expenditures .................... (4.8) (4.8) (...) Travel, net which have averaged 8.8 million metric tons (incl. passenger fares) -2.9 -2.4 .4 Transportation, net ............ .4 .2 -.1 (mmt.) over the last 5 years, have varied from Other services, net ............ 4.7 4.9 .2 a high of 14.3 mmt. in 1973 to a low of 3.4 mmt. in 1974. In spite of a record Soviet grain Memo: Total receipts .................. 41.0 49.2 8.2 crop in 1976, the U.S.S.R. has already pur Total payments .............. 34.0 35.9 1.9 chased slightly more than the 6 mmt. minimum amount called for during the first 12 months of Note.—Details may not add to totals because of rounding. Data from U.S. Dept, of Commerce, Bureau of Economic the grain agreement. Analysis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
U.S. International Transactions 319 Foreign sales of U.S. military goods and 5. Weighted-average services exceeded U.S. military expenditures exchange values of the U.S. dollar abroad for the first time in 1976; net receipts March 1973=100 were $0.1 billion in 1976 compared with net DEFLATED BY FOREIGN TO DOMESTIC expenditures of $1.2 billion in 1975. Transfers under U.S. military agency sales contracts in Consumer creased strongly in 1976, with a sharp rise in price ratio deliveries of equipment to Iran and technical Wholesale ratio assistance to Saudi Arabia. Military sales of goods and services amounted to $4.9 billion in 1976. U.S. military expenditures abroad, at $4.8 billion, were little changed from a year earlier. Other service transactions showed a small net increase in 1976, in large part because receipts from foreign travelers in the United States in creased faster than U.S. payments for foreign travel and because fees and royalty receipts from Index of weighted-average exchange value of the dollar foreign affiliates of U.S. firms continued to against currencies of other Group of Ten countries plus Swit increase steadily. zerland divided by the ratios of weighted-average foreign to domestic wholesale and consumer price indexes. F.R. index of dollar exchange value. Foreign price data from national sources. Domestic price data from the U.S. Dept, of Labor, Bureau of Labor Statistics. Nov.-Dec. WPI estimated for the Netherlands. CAPITAL TRANSACTIONS AND EXCHANGE-RATE MOVEMENTS floating has been quite consistent with move The shift in the U.S. current-account position ments in U.S. prices relative to those in other from a surplus of $12.0 billion in 1975 to near countries, though there have been substantial balance was, of course, matched by an equal short-run deviations from this relationship. and opposite shift of capital flows from a net Recorded net outflows of U.S. funds— outflow to a small inflow in 1976. Despite this including transactions between U.S. banking swing the Federal Reserve’s trade-weighted offices and banks abroad and net acquisitions measure of the exchange value of the dollar of assets abroad by U.S. residents and the U.S. against 10 leading foreign currencies appreci Government—increased by $2.6 billion in ated 4.5 per cent during the year. The dollar 1976, and recorded net inflows of foreign funds was supported by prospects for a slower rise rose by $8.7 billion. This shift in net recorded in prices in the United States compared with capital inflows of $6.1 billion was equal to half the average abroad, official intervention pur of the $12 billion swing in the current account. chases by Japan and several other countries, and Another large part of the financial adjustment— a decided preference by OPEC for dollar-de- or perhaps some error in compiling the currentnominated assets. account data—remains concealed within the On a price-adjusted basis, the dollar showed statistical discrepancy, which grew by $5.9 bil little movement in 1976 after having risen lion from 1975 to 1976. sharply in the second half of 1975 (Chart 5). It is likely that the large change in the statis The two price-adjusted dollar exchange rates tical discrepancy reflected a net increase in shown in the chart were calculated by dividing unreported capital items rather than any sub the trade-weighted average exchange value of stantial errors in recording merchandise or ser the dollar by the ratio of foreign to domestic vice transactions. One important type of capital price indexes, both consumer and wholesale. inflow that may have been underreported is an Indeed, the net change in the dollar’s exchange increase in accounts payable, particularly those value over the nearly 4 years of generalized related to petroleum imports. In addition, ex- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
320 Federal Reserve Bulletin □ April 1977 8. New foreign bond issues in the United States In billions of dollars Development European finance Community’s Developed Developing Period Total Canada institutions1 organizations2 countries countries 1974 ....................................... 2.4 1.7 . l .2 .4 1975 ....................................... 7.2 3.2 2.0 .4 1.2 .4 1976 ....................................... 9.8 5.2 1.7 .6 1.6 .7 Ql ..................................... 2.9 2.0 .3 .5 . 1 Q2 ..................................... 1.6 .9 .3 .3 . l Q3 ..................................... 3.0 1.3 .9 .4 3.4 Q4 ..................................... 2.3 1.0 .5 "3 .4 .1 1 Includes the Asian Development Bank, the Inter-American Development Bank, and the World Bank. 2Includes the European Coal and Steel Community, European Economic Community, and the European Investment Bank. 3Includes National Power Company of the Philippines issue guaranteed by the U.S. Export-Import Bank. Note.—Data from F.R. Bank of New York. pectations of sharp declines in the exchange domestic assets in order to “window-dress” values of some currencies—for example, the year-end balance sheets. The rise in private British pound, the Italian lira, the French franc, bank-reported flows in December was offset by and the Mexican peso—coupled with political additions by European central banks to their uncertainties in some countries, may have dollar holdings in the United States, accommo prompted some flight of capital to the United dating the demand for domestic liquidity on the States that was not recorded. part of the head offices of the European banks. Although reduced from the 1975 total, the The U.S. bond market was an important net outflow of bank-reported private capital in source of funds for borrowers from indus 1976 still amounted to almost $10 billion. This trialized countries and multinational develop high level of net foreign lending by U.S. bank ment institutions in 1976. New bond flotations ing offices reflected a continued strong foreign by foreigners were at a rate of $9.8 billion in demand for U.S. bank credit at a time when 1976. As in previous years, Canadians were the the domestic demand for bank credit was largest foreign borrowers in the United States. weak—owing to a combination of improved Their total new bond placements amounted to corporate cash flow, favorable access to capital $5.2 billion, an increase of $2 billion over those markets for new equity and bond financing, and of 1975. A major incentive for the increase in cautious revivals of capital spending and inven Canadian bond flotations was the unusually tory investment. A substantial part of the foreign large differential that persisted until the end of demand was in the form of official borrowings the year between Canadian and U.S. long-term for balance of payments purposes. In 1976, interest rates, a product of a relatively restrictive banking offices (including agencies and Canadian monetary policy. branches of foreign banks) supplied $7.4 bil After the Quebec provincial election in No lion, net, to foreign commercial banks (includ vember, the interest rate premium on bond ing their own overseas branches). These funds issues by Quebec in the United States increased supported lending in the Euro-currency market sharply. Nevertheless, this rise did not have and provided liquidity that facilitated the issuing much effect on Canadian borrowings in 1976 of a record volume of Euro-bonds. because no large new bond issues by Quebec The decline in U.S. interest rates provided had been scheduled for the remainder of the an incentive for the pronounced acceleration of year. The larger interest premium has, however, the outflow in the fourth quarter of 1976. Much decreased, or at least delayed, some Canadian of the outflow occurred in December, when the bond issues in the United States in 1977. demand for funds by European banks was aug Borrowers who had been subject to the inter mented by a desire to build up stocks of liquid est equalization tax (those from developed Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
U.S. International Transactions 321 countries, other than Canada, and the EC’s RECENT DEVELOPM ENTS organizations) placed $2.2 billion in the U.S. AND OUTLOOK bond market in 1976 compared with a negligible The U.S. merchandise trade deficit increased amount in 1975. Unlike borrowers from the substantially in the first 2 months of 1977. developing countries, these issuers found that, Though some of the increase can be attributed owing to their preferred credit standing, a por to the unusually cold weather, the continuation tion of their balance of payments financing of the pattern of more rapid growth in the United needs could be satisfied in the U.S. bond mar States than abroad that began in 1975 is likely ket. France, Australia, and Norway were the to result in increasing U.S. merchandise trade three largest individual country borrowers and current-account deficits throughout 1977. among the issuers of so-called Yankee bonds. However, the increase in these deficits between U.S. reserve assets increased by $2.5 billion 1976 and 1977 will probably be smaller than in 1976. The increase was mostly the counter the shifts between 1975 and 1976. Conse part of foreign countries’ drawings of dollars quently, further adjustments in the over-all U.S. from the International Monetary Fund (IMF), capital account need not be so large. which automatically result in an increase in the As U.S. imports of merchandise have risen U.S. reserve position in the IMF. The IMF with the relatively strong U.S. recovery, pro credit facilities were utilized intensively during tests that various U.S. industries are being 1976 to provide the financing of balance of damaged by competing goods from abroad have payments positions of various countries. The increased. Although individual cases should be United Kingdom was the largest drawer on the judged on their merits, it should also be recog IMF’s General Account facilities, while the nized that a rise in U.S. imports of goods liberalized Compensatory Financing Facility relative to exports over the long term might be provided funds for more than 40 developing expected on the basis of the changing structure countries that are members of the IMF. of U.S. international accounts. Part of such a The increase of $9.5 billion in OPEC official shift would reflect the gradual industrialization assets in the United States was only moderately of some developing countries, whose growth is above that of 1975, despite a larger rise in dependent on finding markets in the high-in- OPEC’s collective current-account position in come countries. In fact, imports of manufac 1976. However, as already noted, some of the tures from such countries rose from $10 billion unrecorded inflows may have been associated in 1975 to $14 billion in 1976, about 32 per with accounts due to OPEC. cent of the total rise in U.S. imports of manu Non-OPEC countries as a group increased factures. In recent years there has also been a their official assets in the United States by $8.0 very rapid rise in the net receipts in the service billion—a capital inflow—after a reduction of and military sectors of the U.S. international $0.5 billion in 1975. The net swing was partly accounts, from $2.4 billion in 1973 to $13.3 the result of a build-up by Japan of reserves billion in 1976. In addition, a move toward held in the United States. Excluding Japan, deficit in the merchandise trade balance will help developed countries reduced their reserve hold contribute to a healthier pattern of world pay ings in the United States during 1976, while ments in light of continuing OPEC current-ac the developing countries added to their reserves count surpluses. held here. Developing countries also collec Changes in U.S. international transactions in tively added to reserves held outside the United the period ahead will be part of a larger pattern States. These reserve increases included some of international adjustment. The pace of recov special cases, but they also reflected a desire ery in other industrial countries is expected to on the part of a few developing countries to be slow on average. Many of these countries tap international sources of credit under the will seek to reduce their external deficits. Con relatively favorable borrowing conditions of sequently, the aggregate deficit of this group of 1976. countries might be somewhat lower than in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
322 Federal Reserve Bulletin □ April 1977 1976, which would offset some of the increase On balance, therefore, the problems asso in the U.S. deficit. Barring a reduction in the ciated with considerable slack in the world cartel price of oil, the OPEC surplus is not likely economy, with continuing high inflation rates, to change significantly. Hence, the non-oil- and with large external deficits for many coun producing, less-developed countries, after re tries—exacerbated by the sharp rise in oil ducing their aggregate deficit substantially dur prices—are not likely to diminish quickly. In ing 1976, may have difficulty reducing it further these circumstances, it is especially important this year. This suggests that there may be a to guard against a resurgence of measures to larger role in the future for official financing restrict trade and instead to emphasize the ben of balance of payments deficits. Such financing efits of achieving adjustment through a steady may be necessary to ease the strain on private noninflationary expansion of the world econ markets. omy. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
323 The Implementation of Monetary Policy in 1976 This article is adapted from a report submitted provision of reserves. By the year-end the pace to the Federal Open Market Committee by Alan of economic advance seemed to be quickening R. Holmes, Manager of the System Open Mar once more. ket Account and Executive Vice President of the In formulating its broad policy approach, the Federal Reserve Bank of New York, and by Committee continued to focus on a 1-year time Peter D. Sternlight, Deputy Manager for Do horizon for growth of the monetary and credit mestic Operations of the System Open Market aggregates. It also adopted short-run instruc Account and Senior Vice President of the New tions that prescribed a Trading Desk response, York Bank. John S. Hill, Senior Economist, through open market operations, to indications and Christopher J. McCurdy, Economist, were of undesired strength or weakness in the mone primarily responsible for its preparation. tary aggregates. The Committee’s instructions to the Account Management were in essentially The Federal Open Market Committee (FOMC), the same format as in recent years. In imple in setting open market policy in 1976, sought menting its instructions, the Trading Desk found to foster economic expansion following the market participants in 1976 acutely sensitive to 1974-75 recession and to achieve further mod movements in the monetary aggregates as well eration in the rate of inflation. The dampening as to the conduct of open market operations. of inflationary expectations that emerged con At the same time, recent changes in the Treas tributed to a considerable decline in long-term ury’s cash management policies increased the interest rates, and over the course of the year, volatility of Treasury cash balances and thereby the credit markets financed another large Federal posed difficult operational challenges to the deficit more readily than had been generally Desk. anticipated. This report focuses on the Trading Desk’s The Committee’s decisions were heavily in implementation of the FOMC’s directives dur fluenced by its perception of the tempo of the ing the year. After presenting an overview of economic recovery, which first speeded up and the Committee’s policy decisions in 1976, it then slowed down. A surge in activity early in describes the procedures used by the Desk to the year generated expectations of continued bring reserve supplies into line with the Com strong economic expansion that might necessi mittee’s objectives. It discusses particularly in tate actions to restrain growth of the monetary teresting periods in detail in order to illustrate aggregates. When the aggregates grew strongly how the Desk carried out operations against the in the spring, the Committee began limiting the background of the sensitive financial environ extent to which it accommodated the demand ment that prevailed over much of the year. for member bank reserves. As the summer pro gressed, however, the rate of economic expan M ONETARY POLICY sion moderated and growth of the labor force AND THE FINANCIAL MARKETS began to exceed growth of employment. The Establishing Growth Ranges rate of monetary expansion also receded. Grad ually, the FOMC shifted emphasis to promote In seeking both sustainable economic expansion a step-up in the growth of the aggregates and a reduction of price inflation, the Committee through a more accommodative approach to the on balance lowered its ranges for annual growth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
324 Federal Reserve Bulletin □ April 1977 Federal Open Market Committee’s annual growth ranges for monetary aggregates and adjusted bank credit proxy Seasonally adjusted annual percentage rates Period Month established M-1 M-2 M-3 Credit proxy 1975 Q3 to 1976 Q3 October 1975 5 to IV2 IV2 to WV2 9 to 12 6 to 9 1975 Q4 to 1976 Q4 January 1976 AV2 to IY2 IV2 to 10V2 9 to 12 6 to 9 1976 Ql to 1977 Ql April 1976 4V2 to 7 IV2 to 10 9 to 12 6 to 9 1976 Q2 to 1977 Q2 July 1976 4V2 to 7 7V2 to 9V2 9 to 11 5 to 8 1976 Q3 to 1977 Q3 November 1976 4 y2 to 6^2 7*/2 to 10 9 to 11 % 5 to 8 of the major monetary aggregates (see table). The Committee, in assessing the growth of At its October 1975 meeting, the Committee had the monetary aggregates early in the year, ex set a range of 5 to IV2 per cent for growth of pected the demand for money to pick up in view M-1—demand deposits plus currency in the of projected gains in economic activity. There hands of the public—over the four-quarter pe had been an unusually rapid increase in the riod ended in the third quarter of 1976. In income velocity of M-1 in the second half of January 1976 it reduced the lower limit of this 1975. However, there was uncertainty whether longer-run range by Vi of a percentage point. innovations in the management of cash would Later it narrowed the range through two reduc continue to depress the rate at which demand tions in the upper end of V2 of a percentage balances would grow, given the expected gains point each. Thus, the range adopted for M-1 in income and prevailing interest rate levels in November 1976 for the annual period ending After a slow start, growth in M-1 strengthened in the third quarter of 1977 was 4V£ to 6V2 per markedly during the spring and reached an cent.1 The annual range for M-2—M-1 plus time average annual rate of 7 per cent, seasonally and savings deposits at commercial banks other adjusted, over the first 5 months of the year. than large negotiable certificates of deposit Its expansion moderated thereafter, and only in (CD’s)—had been set at IV2 to IOV2 per cent October did it again display significant strength. at the October 1975 FOMC meeting and the Measured from the fourth quarter of 1975 to range was reduced, on balance, through subse the fourth quarter of 1976, M-1 increased 5Vz quent modifications, to IV2 to 10 per cent for per cent. Commercial bank time and savings the annual period ending in the third quarter of deposits other than large CD’s grew rapidly 1977. At the October 1975 meeting the Com during the year, as the interest rates on passbook mittee had adopted a range of 9 to 12 per cent accounts proved attractive in comparison with for M-3—M-2 plus deposits at thrift institutions. market rates. Consequently, M-2 grew by 11 A range of 9 to IIV2 per cent was established per cent. about a year later in November 1976.2 Implementation of the JOne factor influencing the Committee’s decision to reduce the growth range in November was increasing FOM C’s Policy Objectives efficiency in the use of cash balances. The growth of transactions balances held in the form of M-1 was Efforts of the Open Market Committee to curtailed by the growing use of overdraft facilities, achieve its longer-run objectives required con negotiable orders of withdrawal accounts, savings ac tinuing judgments on the extent to which open counts that permit telephonic transfers to checking ac counts or settlement of monthly bills, and savings market operations should supply nonborrowed accounts by businesses and State and local governments. reserves in relation to the demand for them. One study by John Paul us and Stephen H. Axilrod After a brief move toward augmenting reserve (Board of Governors of the Federal Reserve System, “Recent Regulatory Changes and Financial Innovations Affecting the Growth of the Monetary Aggregates”) 2The upper ends of the ranges for M-2 and M-3 were indicated that, without these developments, the growth reduced around midyear, but they were raised slightly of M-1 in the year ended in the third quarter of 1976 in November because time and savings deposit inflows might have been roughly IV2 to 2 percentage points appeared likely to remain heavy, given that market higher than actually occurred. interest rates had declined relative to those paid by banks 2This note appears in opposite column. and thrift institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
The Implementation of Monetary Policy in 1976 325 availability and lowering the Federal funds rate interest rates had declined substantially since the during the first 2 weeks in January, the Com previous autumn, market participants generally mittee was content to see Federal funds continue anticipated a cyclical upturn in rates during the to trade around 43A per cent through the winter. year. Their expectations were based on a pre Policy directives issued following the January sumption that expanded private credit demands and February meetings instructed the Account would compete with heavy Federal borrowing Management to maintain prevailing money in a period when the Federal Reserve was likely market conditions unless the growth rates of the to be taking steps to restrain growth of the monetary aggregates appeared to be deviating money stock. significantly from the midpoints of their speci When reserve conditions did tighten briefly fied short-run ranges. Indications of strong in late February, market interest rates rose growth of the aggregates at the end of February sharply and returned to previous levels only led to a very slight shift toward a less accom gradually, even after the tightening in reserves modative stance, but this was reversed soon proved to be temporary. When the Federal funds afterward on the basis of further information. rate rose 75 basis points between mid-April and The Committee continued to hold to a steady late May, other short-term rates advanced by course until mid-April. Then, rapid growth of as much as 80 to 100 basis points; long-term the aggregates, especially in M-l, and evidence yields rose roughly 40 basis points. In the mar of a vigorous economic expansion prompted a ket for Treasury securities these rate increases shift toward a less accommodative stance that were larger than the declines that had developed had been long expected in the financial markets. earlier in the year. The System provided nonborrowed reserves less These expectations that interest rates would freely, and the Federal funds rate rose by 3A rise over the rest of the year proved wrong. of a percentage point over the next 6-week Economic growth decelerated in the second period to 5Vi per cent by the end of May. half, while the Federal deficit turned out to be During the second half of the year, as evi smaller than had been anticipated. Domestic dence developed that over-all economic growth corporations reduced their borrowings in the had slowed, the thrust of open market operations bond market in the second half as capital was toward easier money market conditions. spending recovered slowly. This environment The initial approach of the Committee was rela led investors—flush with cash and encouraged tively cautious. At the June meeting it set a by the progress being made in dampening infla narrower-than-usual range for movements in the tionary forces—to push yields significantly Federal funds rate, and at the August meeting lower over the final 7 months of the year. By it stressed the maintenance of stability in money December, rates on Treasury bills were as much market conditions. As concern about the eco as 125 basis points below the levels that had nomic outlook increased, however, at its Sep prevailed at the beginning of the year. Yields tember meeting the Committee opted for a range on long-term Treasury issues were down by for the Federal funds rate that provided more about 75 basis points, while those on corporate rdom for downward than for upward movement. and tax-exempt issues showed substantially Thereafter, the Committee acted to promote a larger declines. In some markets, long-term more accommodative financial climate. The interest rates were at their lowest levels in about trading level for Federal funds declined in three 3 years. stages from about 5lh per cent at midyear to During 1976 the Treasury raised $58 billion around 4% per cent at the year-end. of new cash, second only to the record amount raised in 1975. It also extended the average maturity of its debt for the first year since 1964. Behavior of Financial M arkets It continued to regularize its debt offerings and Expectations of market participants were greatly to reduce uncertainty about prospective financ responsible for the sharp rise in interest rates ings by keeping the market informed about its that developed during the spring. Even though borrowing plans. The Treasury filled the re Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
326 Federal Reserve Bulletin □ April 1977 maining maturities in its monthly 2-year note tial portion of their capital needs internally. As cycle and established quarterly 4- and 5-year a result, the pick-up in short-term borrowing by note cycles. New Federal legislation aided the businesses from banks and in the commercial Treasury’s debt extension program by extending paper market over the second half of the year the maximum maturity of Treasury notes from fell short of participants’ anticipations. More 7 years to 10 years and by increasing from $10 over, the entire rebound in the aggregate of billion to $17 billion the amount of long-term business loans at banks reflected acquisitions of bonds that could be issued without regard to bankers acceptances. the 4lA per cent interest rate ceiling. Commercial banks, disappointed by the slack The Treasury took advantage of this added demands of their business customers, turned to flexibility by offering an intermediate-term note buying intermediate-term Treasury coupon se and a long-term bond in each of its quarterly curities in order to take advantage of the higher refundings as well as a short-term 2- or 3-year returns available toward the longer end of the note. In the first three refundings the Treasury upwardly sloping yield curve. Thrift institutions sold one 7-year and two 10-year notes, with easily accommodated the rising demand for fixed coupons and prices, through subscription. mortgages as their deposits continued to expand All other securities were sold on an auction rapidly. In addition, they continued to rebuild basis. The subscription sales drew heavy de their liquidity, although not by so much as in mand for the attractively priced notes, enabling 1975. the Treasury to increase the total size of the Long-term tax-exempt issues posted larger subscription issues to $18.5 billion, $7.5 billion yield declines over the year than taxable securi more than the amounts initially offered. ties. Investors largely overcame the acute fears The volume of secondary market trading in that had been triggered by New York City’s U.S. Government securities expanded consid financial problems in late 1975—although New erably in 1976; flurries of speculative activity York City itself did not regain access to the contributed to periods of unusual price volatil market for its own obligations. In addition, with ity. The increase in trading activity stemmed an improved earnings position, fire and casualty partly from the large volume of Treasury fi insurance companies expanded their interest in nancing. But there was also a surge in the tax-exempt securities, and commercial banks trading activity of portfolio managers who also showed some renewed interest in such sought to outperform the rate of return provided issues as the year progressed. by more conservative investment strategies. Traders necessarily sought to anticipate the fu ture course of rates by analyzing economic and TECHNIQUES monetary data as they appeared and by project OF POLICY IMPLEMENTATION ing the data yet to be published. In this envi ronment, participants were often quick to react, The FOMC’s instructions to the Manager of the or to overreact, to new data that they thought System Open Market Account regarding the might presage shifts in monetary policy and management of bank reserves provide—to a credit conditions. considerable extent—for the accommodation of Most sectors of the economy added further the public’s demand for money in the short run, to their liquidity, continuing the rebuilding while at the same time prescribing a response process that had dominated credit markets in the when growth of money appears inconsistent previous year. Corporate borrowers flocked to with the Committee’s long-term objectives. At the bond market during the first half, reducing each meeting the Committee specifies conditions their short-term debt and seeking to secure to be achieved for bank reserve availability as long-term funds before the expected rise in measured by the Federal funds rate. It also interest rates. At the same time, favorable cash specifies a procedure for changing the Federal flows generated by the rebound in corporate funds rate within designated limits if current profits allowed businesses to finance a substan projections of growth in the monetary aggre Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
The Implementation of Monetary Policy in 1976 327 gates indicate significant weakness or strength deficiencies) carried over from the previous relative to ranges specified by the Committee week, the presence of holidays or statementfor the 2-month period covering the month of publishing dates, and interest rate movements. the latest meeting and the following month. The Manager then has in hand an estimate of In 1976, the Committee instructed the Desk the total reserves likely to be demanded by the to assign approximately equal weight to M-l banking system in the current week. and M-2 in evaluating the short-run behavior With these demand considerations in mind, of the aggregates, rather than placing primary the Manager reviews projections of the supply emphasis on M-l as it had in the past. The of nonborrowed reserves in the banking system Committee continued to include in its directive for the week. These projections estimate the an instruction that the Manager take account of impact on reserves of “market factors,” such developments in the domestic and international as Federal Reserve float, currency in circulation, financial markets. and the Treasury’s balance at the Federal Re Following each FOMC meeting, the Account serve Banks. The Manager will then have an Manager seeks to achieve the Committee’s cur estimate of nonborrowed reserve levels stretch rent objectives through operations in Treasury ing out 4 to 6 weeks into the future, based on and Federal agency securities and bankers ac the assumption that the Trading Desk takes no ceptances. Decisions about the size and type of action to affect reserves. operations and their timing are based partly on The Manager is thus able to compare the projections of reserve availability. The Manager projected level of nonborrowed reserves over also looks to the behavior of the Federal funds the week ahead with estimates of total reserves rate for additional information on factors affect demanded. He can then determine the appro ing the supply of, and demand for, bank re priate volume of reserves to be added or sub serves. But participants in the Federal funds tracted on a daily-average basis if open market market have become more reluctant to trade at operations are to maintain the existing rate on rates that they perceive to be out of line with Federal funds. In doing this, account is taken the System’s objective. Thus, the role of the of the expected addition to reserves likely to funds rate as a short-run objective for open arise from borrowings at the discount window. market operations tends to reduce its usefulness The Manager’s approach to operations each as a guide to reserve availability. Furthermore, week is shaped partly with an eye on the extent the Manager, in shaping open market opera to which nonborrowed reserves in subsequent tions, has to take into account the sensitivity weeks are expected to fall short of, or exceed, of market expectations to the behavior of the projected reserve requirements. If reserve defi funds rate. cits extend into future weeks, the Desk is more In evaluating the prospective behavior of the likely to use outright purchases of securities to Federal funds market, the Manager and his staff meet a reserve need. If the need is temporary, seek to appraise the demand for, and supply of, greater reliance on repurchase agreements is bank reserves over the statement week ending likely. Conversely, when reserve surpluses are on Wednesday. Member banks must meet their projected over several weeks, outright sales and reserve requirements on average each week, and redemptions of maturing securities may be ap in addition they hold some margin of excess propriate. If there is only a temporary need to reserves as the result of the rapid shift of bal absorb reserves, matched sale-purchase transac ances within the banking system. Required re tions are employed.3 serves are determined by deposits on the banks’ books 2 weeks earlier and are thus known by 3The System temporarily adds reserves through repurchase agreements and withdraws reserves through each bank and the Federal Reserve at the start matched sale-purchase transactions. In making repur of the statement week. The Manager estimates chase agreements, the Desk enters into a contract under the excess reserves that banks are likely to hold, which dealers sell U.S. Government securities, Federal agency issues, and bankers acceptances to the System taking into account seasonal deposit flows, the and agree to buy them back at a specified time, usually size and distribution of reserve excesses (or 1 day to a week later, at the same price plus a competi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
328 Federal Reserve Bulletin □ April 1977 The Manager also relies on the behavior of Banks have led to much greater day-to-day trading in Federal funds as a source of additional volatility in the level of nonborrowed reserves. information on the supply and demand forces Exposed to such volatility, money position affecting the money market. The Desk may managers at the banks are less likely to react defer putting its program into effect until the to the immediate ebb and flow of funds because trading level of Federal funds in the money they expect the Federal Reserve to compensate market confirms the statistical estimates of re for these massive surges. They appear to be serve availability. Care is taken to avoid actions willing to accumulate larger reserve deficits or that might lead to misinterpretation of the Sys surpluses before taking offsetting actions in the tem’s intentions by market participants. Thus, Federal funds market. Thus, the actual Federal when a need to supply reserves is anticipated, funds rate tends to remain close to the market’s the Manager may wait for the funds rate to edge perception of the System’s objective for the rate up at least to or above the operational objective until rather late in a statement week. before entering the market. When an over The primary source of the large shifts in the abundance of reserves is projected, the Manager Treasury’s balance has been the Treasury’s cash may wait for the funds rate to edge down at management policy of holding the bulk of its least to or below the objective before entering balances at the Federal Reserve Banks rather the market to absorb reserves. than in its tax and loan accounts at commercial At times, the money market may not reflect banks. The Treasury’s balance at the Federal the projected conditions of reserve abundance Reserve tends to fall early in the month as social or scarcity. In this case the Manager may merely security and other regular payments are made delay carrying out his plans to affect reserves. and then to rise later in the month when taxes However, when reserves are estimated to be and other revenues are received. The average abundant (scarce) and the funds rate threatens weekly change in the Treasury’s balance at the to rise (fall) significantly above (below) the Reserve Banks amounted to $2 billion in 1976, desired level, that situation calls into question a 45 per cent increase from 1975 and a fourfold the accuracy of the estimates of the supply of, increase from 1974. In 14 weeks in 1976 the and the demand for, reserves. The System’s change exceeded $3 billion. As a result, the absence from the market in that event could be Trading Desk undertook substantially enlarged misleading, and the Manager is likely to enter operations just to counteract short-run swings the market to counteract undesirably firm (easy) in bank reserves. conditions. Faced with shifts in reserves of this magni The value of the Federal funds rate as an tude, the Manager often needs to enter the indicator of the conditions of reserve availability market very early in the week to take offsetting probably has diminished in recent years. Large action. But the reserve estimates available at the shifts in the Treasury’s balances at the Reserve start of a week are often in error—by about $490 million on average in 1976, a 55 per cent tively determined rate of return. The Desk generally permits dealers to offer customer securities as well as increase from the year before. Since Federal the dealers’ own holdings. Repurchase agreements ei funds tend to trade close to the market’s per ther may allow dealers to buy securities back at a date ception of the Desk’s objective, it is difficult earlier than specified initially or may not allow such early withdrawals—an alternative form introduced in to get confirmation from the money market of 1976. The Manager’s decision on the amount of securi the magnitude of the reserve need or surplus ties to be purchased is partly based on the statistical before the calendar weekend. To deal with this estimates of reserve supplies. The volume and aggres situation the Manager may seek to compensate siveness of the dealers’ offerings provide additional information on the size of the reserve need. Under for a major part of the reserve swings by an matched sale-purchase transactions the System sells nouncing, on Wednesday, intentions to supply Treasury bills to the market, and at the same time or to absorb reserves on the first day of the contracts to buy them back on a certain day, usually up to a week later. The rate at which bills are sold forthcoming statement period.4 Even so, the and repurchased is set through competitive bidding by the dealers. Matched sale-purchase transactions cannot be terminated before maturity. 4This note appears on opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
The Implementation of Monetary Policy in 1976 329 scale of operations needed after the weekend gains. Although growth in the money stock was often remained quite large. expected to rebound from the slow rate that had The Account Management often has the op developed during the second half of 1975, there tion of engaging directly in transactions with were significant uncertainties in the forecast. It foreign accounts to carry out System reserve was difficult to assess the impact on growth of objectives rather than acting as agent to execute M-l likely to result from continued techno these foreign orders with dealers in the market. logical change in business and household man For example, when the Desk receives foreign agement of cash balances and from the further orders to buy securities, it may elect to meet growth of savings accounts recently authorized such orders by selling directly from the Sys for businesses. Moreover, seasonal adjustment tem’s own portfolio at prevailing market prices. of the money stock was problematical, with Similarly, when the foreign order is to sell alternative adjustment techniques producing securities, the Desk may buy for the System different results. Account. When the Desk arranges foreign Against this background, the Committee pre transactions with the System Account in this ferred not to allow modest deviations in the way, the transactions have the same effect on projected growth of the aggregates relative to bank reserves as System operations through the Committee’s short-run ranges to prompt dealers in the market. changes in the Desk’s Federal funds rate objec Foreign accounts often also have funds avail tive. The directives issued after the January and able for overnight investment. When this is the February meetings instructed the Manager to case, the Desk may arrange matched sale-pur maintain prevailing money market conditions chase transactions with the System Account to unless growth of the aggregates deviated signif drain reserves overnight rather than to act as icantly from the midpoints of their specified agent and place these funds in the market as ranges.5 Such a “money market” directive repurchase agreements with dealers. When a places primary emphasis on maintaining pre reserve abundance is projected, System matched scribed money market conditions. sale-purchase transactions made directly with At the January 1976 meeting, the Committee foreign accounts can help to reduce the excess. specified ranges for the aggregates that were Moreover, when the reserve levels are expected somewhat wider than usual. This specification to be approximately satisfactory, or in some reduced the likelihood that the Federal funds what short supply, and the Federal funds rate rate would change. The behavior of the money is below the desired level, transactions directly stock measures was divergent in the weeks that with foreign accounts can sometimes be used followed, but taken together the estimates for to encourage a firming of conditions in the the 2 months ended in Feburary did not warrant money market. a change in reserve conditions. M-l remained near the bottom of its range, while M-2 was at or above the top of its range. OPEN MARKET A money market directive was also adopted OPERATIONS IN 1976 in February. But the aggregates showed strength shortly thereafter, with estimates of both M-l January to M id-April and M-2 moving well up in their ranges. Ac- The FOMC’s view at the beginning of the year was that the economy was expanding in an to the dealers on Wednesday afternoon and executed orderly manner, as industrial production, retail on Thursday morning to allow the dealers additional time to round up securities from customers. Prean sales, and employment all displayed good-sized nouncing also diminished any significance that might be attached to the funds rate prevailing when the trans 4 Reserve operations affecting an entire week have actions were completed the next day. been employed with increasing frequency. The Manager 5 When significant weakness had developed in the arranged 6- or 7-day operations either to add or to absorb aggregates during late December and early January, the reserves during 28 weeks in 1976. Futhermore, nine Desk had lowered the Federal funds rate objective to of the week-long repurchase operations were annou need 43A per cent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
330 Federal Reserve Bulletin □ April 1977 cordingly, the Trading Desk sought to hold back At its March meeting the Committee favored slightly on supplying nonborrowed reserves rel essentially little change in conditions of reserve ative to the emerging demand by banks. On availability but expressed greater willingness at Friday, February 27, it began seeking conditions that point to resist any strengthening that might consistent with Federal funds edging up from develop in the monetary aggregates. Conse 4% per cent to a 43A to 4% per cent range. quently, the Committee voted for an “aggre That afternoon, when Federal funds were trad gates” directive, the more common form of its ing at 413/16 per cent, the Desk entered the market operational instructions. Such a directive places as agent to arrange repurchase agreements for primary emphasis on the behavior of the aggre customer accounts. This was contrary to market gates, thereby establishing a somewhat greater expectations that the Desk would enter to pro likelihood that conditions of reserve availability vide reserves on behalf of the System when will be altered between meetings. The aggre funds were trading at that level. It was inter gates, in fact, behaved about as expected over preted by participants as indicating a change in the next month, and thus the Federal funds rate the System’s previous stance. The funds rate remained around 43A per cent through midmoved swiftly to 415/16 and 5 per cent that April. afternoon, though this occurred when it was too late for the Desk to make any significant volume Mid-April through M ay of repurchase transactions for its own account for payment that day. By Monday funds were At the April and May meetings the recovery trading at 5 per cent and above, and the Desk appeared to be proceeding at a vigorous pace, provided reserves in volume. The money market with preliminary estimates indicating that real remained unduly tight until shortly before the gross national product (GNP) had expanded at end of the statement week even though the a IV2 per cent rate in the first quarter. The banking system held a substantial volume of outlook for economic growth appeared bright, excess reserves at the week’s end. with prospects of further inventory accumula The financial markets had expected interest tion and continued sizable advances in consumer rates to move higher in view of the improvement spending. Also the underlying demand for in the economy, but the late-February evidence money appeared to be strengthening. Growth in of firming by the System occurred sooner than M-1 in February and March had averaged about had been expected. Interest rates moved up 6 per cent at an annual rate, and the staff sharply: the rate on 3-month Treasury bills rose projected very rapid growth in April. Expansion by around 30 basis points over the week, while in M-2 and M-3 was also quite fast. Most long-term bond yields moved about 15 basis members preferred to restrain such strong points higher. growth of the aggregates and were willing to During the following statement week, new tolerate some firming in money market condi data suggested that the aggregates were not, in tions after both the April and the May meetings. fact, moving outside the Committee’s tolerance At the April meeting the Committee directed ranges, and the Desk returned to the 43A per the System Account Manager to seek reserve cent Federal funds rate objective. A surfeit of conditions consistent with Federal funds trading reserves was being provided by a declining around 4% per cent—within a tolerance range Treasury balance, but the surfeit had to be of 4Vi to 5lA per cent. In addition, the Commit reinforced by additional System reserve injec tee’s directive allowed the Desk to respond tions in order to put enough downward pressure further to indications of undesired strength in on the funds rate to bring it close to 43A per the money supply. Throughout the interval be cent by the week’s end. Other markets were tween the two meetings, expected growth in the somewhat slower to settle back. Participants in aggregates was high relative to the Committee’s these markets continued to view underlying ec specified ranges, prompting the Account Man onomic conditions as suggesting a rise in short agement to continue to hold back on nonbor term rates. rowed reserves in relation to demand. By the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
The Implementation of Monetary Policy in 1976 331 time of the May meeting, Federal funds were contending with volatile reserve flows and sen trading at 5XA per cent, the top of the range. sitive securities markets in the midst of a Treas The Committee called for an immediate increase ury refunding operation. Prior to the start of that in the Federal funds objective to around 53/s per statement week the System’s operations had cent, and by the end of May the Federal funds already led to a rise in the Federal funds rate objective had been raised to 5xh per cent under from about 43A per cent in mid-April to a 5 an aggregates directive. per cent level in early May. At the time of the Committee meeting in On the first day, Thursday, May 6, reserve April, interest rates on short- and long-term debt projections indicated that a fall in the Treasury’s had fallen to the lowest levels reached thus far balance at Federal Reserve Banks would release in the year. Three-month Treasury bills traded about $3 billion of reserves, on average, to the at rates as low as about 4.70 per cent in mid- banking system during the statement week be April, and long-term Government bond yields ginning that day, although there would be some were down to around 7.80 per cent. Still, parti offsetting reserve absorption by other factors. cipants in the markets were cautious about the These estimates thus pointed to an over interest rate outlook as they prepared to face abundance of about $1 billion of nonborrowed a large volume of offerings during the ap reserves that week. Federal funds were trading proaching quarterly Treasury refunding. Indica at 415/16 per cent, only slightly on the comfort tions of vigorous economic growth strengthened able side of the 5 per cent level sought at that market expectations that the System might well time. resist the rapid growth of the monetary aggre In these circumstances the Desk sought ini gates that was emerging. tially to absorb reserves unobtrusively, limiting During the 6 weeks from mid-April to late its operations to transactions directly with May, when the Desk pursued a less accommo foreign accounts. The System sold Treasury dative policy toward provision of reserves, the bills outright to these accounts and also arranged yield curve for Treasury securities moved sub overnight matched sale-purchase transactions stantially higher and flattened out a bit. Rates with them, thereby meeting overnight invest on Treasury bills due in 3 and 6 months in ment requirements of the foreign accounts. creased by about 90 basis points; yields on Since overnight customer orders were not placed coupon issues maturing in 3 to 7 years moved in the market on Thursday, participants con up by about 55 to 70 basis points; yields on cluded that the Desk was draining reserves to long-term bonds advanced about 35 basis a certain extent. By early afternoon, however, points. During this period bond quotations be the weight of the reserve excess began to tell came especially volatile, particularly on Thurs in the money market, with funds threatening to day afternoons following publication of the trade at 4% per cent. The Desk then entered weekly money stock data, as participants sought the market to drain reserves by arranging a to anticipate future System actions. About moderate amount of 4-day matched sale-purthree-quarters of the over-all increase in yields chase transactions. These efforts did not affect on long-term Treasury bonds over the period the expectations of market participants because was concentrated in market trading late on the Treasury balance typically declines near the Thursdays and during the day on Fridays. start of each month and the need to drain re One episode during this period provides an serves was widely expected. interesting setting for examining the methods Through most of Thursday, prices of U.S. that the Trading Desk uses to implement System Government securities had been edging lower policy as well as the market’s response to the in quiet activity as the market adjusted to the Desk’s actions and other influences. Operations previous rise in the Federal funds rate. There during the bank statement week running from was also some nervousness because the market Thursday, May 6, to Wednesday, May 12, was still awaiting the results of the Treasury’s posed a particularly difficult challenge: how to offering of 10-year 7% per cent notes—the effect a change in the System’s posture while centerpiece of the May refinancing—on which Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
332 Federal Reserve Bulletin □ April 1977 subscriptions had been taken on the preceding 5Vs per cent by Wednesday, the end of the day. In this atmosphere, the announcement of statement week. a large increase in the wholesale price index In view of the sensitive state of the securities added to the market’s concern about renewed markets in the midst of the Treasury’s refund inflationary pressures. Then late in the day, the ing, the Desk proceeded cautiously in seeking weekly money stock data were released, show this adjustment. Reserve projections on Friday, ing a decline of $800 million in the level of May 7, suggested adequate reserve availability M-l for the statement week ended April 28. because of the System’s operations on the pre However, this decline was smaller than some vious day and a substantial downward revision market participants had expected and did little in the estimate of reserves likely to be released to offset the substantial growth recorded in pre by a decline in the Treasury balance. Federal vious weeks. Consequently, market observers funds traded at 415/16 per cent and then at 5 per grew more concerned that the System might cent. In an effort to achieve a firmer money continue to press for a higher trading level of market by Wednesday, the Desk again drained the Federal funds rate. In this uneasy market reserves unobtrusively by selling Treasury bills atmosphere, securities prices continued to de outright and arranging over-the-weekend cline. matched sale-purchase transactions, in both Market weakness persisted on Friday morning cases with foreign accounts. Given the sensitive after the Treasury announced that it would in state of the securities markets and the Treasury’s crease the size of the 10-year note issue by $1.2 long bond auction that day, no overt action to billion to $4.7 billion because of heavy sub drain reserves was taken in the market. scriptions from investors. While dealers and By Monday, new estimates of reserve avail others subscribing for large amounts had been ability suggested the need to add about $1 allotted 15 per cent of their subscriptions, some billion to the weekly average, reflecting another of these subscribers by that time were hoping large downward revision in the estimates of to receive few, if any, of the new notes. Dealers reserves expected to be provided by the decline felt uncomfortable with their awards, and there in the Treasury balance and other factors. With was further downward pressure on prices in Federal funds opening at 5 per cent, the Desk advance of the final refunding auction that day confined its initial action to a modest purchase of an additional $750 million of 77s per cent of Treasury bills from foreign accounts. When bonds, due February 15, 2000. From the time the funds rate began to rise above 5 per cent, just prior to the release of the money stock data the Desk entered the market to fill a good portion to the close of trading on Friday, Treasury bill of the projected reserve deficit by arranging rates rose about 5 to 12 basis points, while 3-day repurchase agreements. prices of intermediate-term Treasury issues fell The securities markets remained apprehen about lA to % of a point. Prices of long-term sive. The bonds sold in Friday’s auction had bonds fell about lVs points, as the market grew an average yield of 8.19 per cent, higher than less willing to take on additional bonds in the many had anticipated. Treasury bill rates rose auction. an additional 5 basis points or so during the On Friday morning the new projections of the day, while prices of longer-maturity coupon monetary aggregates continued to show unde issues fell by nearly V2 point. The corporate sirable strength. The data suggested that growth market also reflected supply pressures, as unsold of M-l would be well above the range of 4V2 issues piled up in dealers’ inventories and a to 8V2 per cent specified by the Committee for heavy forward calendar grew even larger. the April-May interval, while M-2 was running On Tuesday, reserve estimates indicated ade well up in the 8 to 12 per cent range. This quate availability for the week, due to the information indicated that it would be appro Desk’s injection of the previous day and an priate for the Desk to seek conditions of reserve upward revision in the effect of market factors availability consistent with the Federal funds on reserves of about $350 million for the week. rate moving up from about 5 per cent to around Federal funds traded predominantly at 5 Vie P^r Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
The Implementation of Monetary Policy in 1976 333 cent during the day. The Desk took no action underwriters incurred significant losses on this in the market to affect reserve supplies but did occasion. drain reserves through matched sale-purchase transactions with foreign accounts to establish June to M id-October conditions that would promote a slightly firmer money market on the following day. In early June, with projections of the aggregates Federal funds traded at 5 Vs per cent on the showing a somewhat more moderate growth morning of Wednesday, May 12, and reserve than in late May, the Manager continued to seek projections indicated a moderate need to add a Federal funds rate of around 5xh per cent. reserves for the statement week ended that day. By the June FOMC meeting, economic With conditions in the money markets about as growth appeared to be slowing from the rapid desired, the Desk arranged temporary invest pace seen earlier in the year, and most members ment orders from foreign accounts in the market viewed this deceleration as a healthy develop and awaited further developments. Funds traded ment. In addition, monetary growth appeared steadily at 5Vs per cent until the noon hour and to be settling back to a more acceptable rate. then moved higher. The Desk entered the mar Therefore, while awaiting further information ket at this point to provide reserves through on the economic situation, the Committee fa overnight repurchase agreements. The funds vored relative stability in money market condi rate thereafter moved back to about 5 Vs per cent. tions, preferring to avoid both a significant eas The credit markets, still digesting the recent ing, which might have to be reversed shortly, Treasury offerings, remained quite sensitive to and also a significant firming. It adopted an the Desk’s toleration of higher trading levels in aggregates directive but specified a relatively Federal funds. Treasury bill rates moved up narrow Federal funds rate range of 5lA to 53A about 5 to 12 basis points, and prices of coupon per cent, thus limiting the potential response to issues generally fell by Vs to % of a point. deviations in the aggregates. As it turned out, The Desk’s caution during the week stemmed the estimates of M-1 and M-2 weakened in early from the fragile state of the securities markets. July, prompting the Manager to provide reserves Until recent years, the System typically tried more readily, and the Federal funds rate fell to avoid changes in its posture with regard to from around 5Vi per cent to about 5lA per cent reserve management while the Treasury was by mid-July. formulating its offering and while underwriters The Committee retained a steady posture with were taking on and distributing Treasury se respect to reserve availability over the rest of curities on a large scale. Such “even keel” the summer. While there were signs of hesita considerations have diminished considerably in tion in the pace of the economy, data on con the past few years. The use of the auction sumer and business spending at times suggested technique for selling coupon securities since that the deceleration could be temporary and 1970 has substantially increased the ability of similar to those observed in the recovery phases underwriters to adjust their expectations of fu of previous business cycles. At the July meet ture rate levels up to the time of the Treasury’s ing, the Committee selected a wider range for sale. The regularization of the Treasury’s debt the Federal funds rate as part of the specifi offerings has also reduced uncertainty regarding cations for an aggregates directive, though sev the size and timing of the Treasury’s borrow eral members still favored keeping the range ings. Furthermore, given the increased fre narrow in view of the uncertainties in the out quency of the Treasury’s sales of coupon issues, look. These concerns were more widespread in the System could no longer maintain an even August, and the Committee voted for a money keel if it were to retain flexibility in pursuing market directive at that time. The aggregates an open market policy consistent with its long remained well within the specified ranges after term objectives. Nonetheless, the sharp rise in both meetings, and the thrust of open market interest rates during the May 1976 period had operations was not altered. not been fully anticipated in the market, and During the summer the financial markets Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
334 Federal Reserve Bulletin □ April 1977 began a prolonged rally, which gained consid about met the week’s need, the Manager ex erable momentum in August. The short-term pected that withdrawals from the repurchase markets were buoyed by the moderation in the agreements would necessitate further reserve growth of the money supply and the over-all injections late in the week. stability of Federal funds trading. Long-term Indeed, early terminations of such contracts, markets were aided by growing confidence that which came to $1.3 billion on a daily-average inflationary pressures were waning and by a basis, substantially eroded the net reserve injec cutback in demand from corporate borrowers. tion. Furthermore, upward revisions in the esti From the beginning of June to mid-September, mates of the Treasury’s balance, amounting to 3-month Treasury bill rates fell by about 50 $1.1 billion on average, enlarged the reserve basis points and long-term bond yields declined deficit. Consequently, the money market be around 35 basis points. With commercial banks came quite firm beginning on Monday, Sep and others extending the maturities of their tember 27, and the Desk arranged five additional purchases of Treasury coupon securities, yields rounds of repurchase agreements over the rest on intermediate-term issues registered the larg of the statement week. Despite taking virtually est declines—about 65 basis points. all propositions for repurchase agreements on At the September meeting, FOMC members the two final days, the Desk still was unable noted the significant interest rate declines that to depress the Federal funds rate from around had been registered in the debt markets. While 53/s and 5Vi per cent to the 5% per cent objec growth in M-l had slowed, M-2 was expanding tive. On Wednesday night, holdings in the at a relatively rapid pace. As the pause in repurchase account, including bankers accept economic growth persisted, however, more at ances, reached a record $8.7 billion.6 The se tention was given to the possibility that future curities markets seemed to show little reaction growth would fall below expectations. Against to the tight conditions after the weekend, partly this background, the Committee in September because they could observe the Desk making voted for an aggregates directive, structuring the every effort to counteract the money market Federal funds rate range to permit greater room firmness. for easing than for firming. The range was To prevent a repetition of the money market established at 43A to 5Vi per cent with the focal strains and the uncertainties associated with point at 5lA per cent, thus allowing for the sizable early terminations of repurchase agree possibility of a 50-basis-point decline should ments, the Desk instituted an alternative form growth in the aggregates turn out lower than of repurchase contract in the week of October expected at the time of the meeting. 6, one that did not permit termination before In the statement week that followed the maturity. On the first day of the new statement meeting, the week ended September 29, the period, the Desk arranged about $1.4 billion of Federal funds objective remained at 5lA per such agreements in addition to $4.6 billion of cent. However, the Account Management ex 4-day contracts that carried the right of early perienced considerable difficulty in achieving termination. As expected, most of the securities this objective, as the Treasury’s operations involved in the nonterminable contracts came drained a larger-than-expected volume of re from the portfolios of banks and other institu serves. Initially, the Desk faced a sizable esti tions while the dealers themselves, both bank mated reserve deficit of $3% billion to $4 billion and nonbank, exhibited a preference for the (daily average), mainly due to the continuing terminable contracts. build-up in the Treasury’s accounts at the Fed In early October the projections of the mone eral Reserve Banks after the September 15 tax tary aggregates began to indicate a substantial date. On the first day of that week, the Desk weakening, in the growth of demand deposits arranged $3.8 billion of 7-day repurchase for the September-October interval, although agreements, an operation that had been an growth in M-2 remained near the middle of its nounced to the market on the previous after 6This record was eclipsed on December 29 when such noon. Whereas the reserve injections that day holdings built up to $10.7 billion. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
The Implementation of Monetary Policy in 1976 335 range. In view of this, the Desk began to seek Federal funds rate to about 47s per cent would Federal funds trading in a range of 5 Vs to 5 XA be appropriate within the first week after the per cent instead of the previous 5lA per cent meeting, followed by a further decline to around objective. When subsequent projections con 43A per cent during the second week. The Fed firmed this picture, the Desk became steadily eral funds rate range was set at 4V2 to 5lA per more accommodative, and by the time of the cent. Subsequent changes in the objective would October meeting funds were trading at around depend on the outlook for the aggregates. This 5 per cent. time the monetary growth rates remained closer to expectations, although growth in M-l was slowing. In these circumstances, the Desk held Mid-October to the Year-end to the 43A per cent objective through early Most FOMC members favored a slight easing December and then shifted to 4% per cent when in money market conditions at the October it appeared that M-l was weakening further. meeting. The economy’s lackluster performance The deliberations at the December meeting continued; the growth of real GNP had slowed struck a more optimistic chord as most members a little further in the third quarter from the rather agreed that the business situation had strength modest pace of the second quarter. Moreover, ened. Indications of strong gains in personal the risks of a shortfall from expectations had consumption and residential construction sug increased, since it appeared that the slow growth gested that, once the decline in inventory accu of personal income, the protracted sluggishness mulation had run its course, economic growth in consumer spending, and the decline in stock would soon accelerate. The Committee pre market prices could, if extended, dampen busi ferred to maintain the prevailing money market ness confidence and adversely affect investment conditions in the weeks ahead. In part, this plans. The Committee voted an aggregates direc reflected the difficulties in assessing the signifi tive and decided to seek a decline in the Federal cance of monetary growth rates over the Defunds rate from 5 to 47s per cent (the middle of cember-January period. Also, improvement in a 4Vi to 5% per cent range) during the first full the economy and substantial interest rate de statement week after the meeting. clines strengthened expectations for the future. A few days after the meeting, however, the The Committee voted a money market directive outlook for the monetary aggregates displayed and the Desk continued aiming for conditions surprising strength, with both M-l and M-2 of reserve availability consistent with Federal projected near the upper limits of their tolerance funds trading at 4% per cent through the year’s ranges. Morever, it was apparent that, unless end. later data contradicted this outlook, an easing The securities markets extended the summer move would only have to be reversed 1 week time rally through the end of the year. Over later. Accordingly, the Committee concurred in the last 3 months, interest rates fell consid the Chairman’s recommendation that the Man erably, with both short- and long-term Treasury ager should hold the System’s posture un securities posting declines of about 70 basis changed. Data received in the following week points. The economy’s sluggish advance continued to indicate unexpected strength, and through most of the fourth quarter had suggested the Manager again consulted with the Chairman that two of the markets’ major concerns—the who advised that any significant increase in the possibility of heavy demands from borrowers Federal funds rate objective would be inconsis and a rebound in inflationary pressures—would tent with the Committee’s intent. The Desk not prove troublesome for the time being. In continued to seek reserve conditions consistent addition, very sharp price gains were recorded with Federal funds trading at around 5 per cent in the markets during those intervals when the until the November meeting. System had shifted toward a more accommo At its November meeting, the Committee dative interest rate stance. In late November and concluded after its review of economic and December the markets’ perceptions of the financial developments that a decline in the Desk’s moves toward ease, in conjunction with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
336 Federal Reserve Bulletin □ April 1977 a reduction in the Federal Reserve discount rate economic data indicating a strengthening in from 5Vi per cent to 5lA per cent, and a flow business activity, the absence of further accom of news that emphasized the economy’s slow modative steps by the System, and participants’ growth generated expectations in the markets of attempts to capture profits all gave rise to heavy further accommodative steps. The markets also selling pressure. Moreover, there were anxieties reacted bullishly to the Federal Reserve’s re over the inflationary pressures that might arise duction in reserve requirements in December. out of the severe winter conditions and the new Speculative enthusiasm was widespread among administration’s proposed fiscal stimulus pro market participants, and dealers built up inven gram. By the end of January, the back-up in tories of Government securities to record levels yields on Treasury issues had eliminated a sub in December. stantial portion of the declines posted in the Against this background, the retreat in the fourth quarter of 1976; the sell-off in the cor securities markets that followed in the first few porate and tax-exempt sector was less pro weeks of 1977 was especially pronounced. New nounced. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
337 Bank Holding Company Financial Developments in 1976 The year 1976 was a period of recovery for the 1. Selected balance sheet items American banking system. Following signifi for major bank holding companies cant reversals in the two previous years, bank Amounts in billions of dollars holding companies (BHC’s) in 1976 experi enced significant growth, improved liquidity, Year-end Year-end Percentage BHC’s 1975 1976 change and increased earnings. Moreover, as the year progressed there was evidence of increasing Total assets public confidence in BHC’s as a group. This article reviews the major financial de Largest 10 ................ 322.5 354.4 9.9 25 ................ 449.9 488.5 8.6 velopments of BHC’s—both one-bank and 100 .............. 626.4 678.0 8.2 multibank—during 1976 and is based largely on data recently released by these organizations. Net loans Since financial data for all BHC’s are not yet Largest 10 ................ 183.3 197.0 7.5 available, this review is limited to the 100 25.................. 251.2 269.0 7.1 largest BHC’s. These 100 organizations, how 100 .............. 342.2 364.3 6.5 ever, have the bulk of the assets held by all Stockholders’ equity BHC’s, and their financial developments should depict developments of the entire group. Largest 10 ................ 12.2 13.6 11.5 25 ................ 18.4 20.3 10.3 100 .............. 29.1 31.5 8.2 BHC ASSET AND LOAN GROWTH during 1976 from $342.2 billion to $364.3 bil Between year-end 1975 and year-end 1976 the lion, or 6.5 per cent. This growth, which was consolidated total assets of the 100 largest slightly less than the growth of total assets, BHC’s increased from $626.4 billion to $678.0 stands in contrast to the unusual 1.3 per cent billion, or 8.2 per cent.1 This rise, in large part decline experienced the previous year. During reflecting the growth of holding company banks, 1976 consumer instalment and real estate loans far outpaced the unusually slow 2.7 per cent proved to be the major areas of loan growth. increase in 1975. However, the growth in total In contrast, business loan demand was relatively assets in 1976 was somewhat less than the weak, continuing the pattern of the previous growth of gross national product as measured year. in current dollars. During 1976 the liquidity of most major Net loans2 of the 100 largest BHC’s increased BHC’s improved significantly. This strengthen ing occurred on both sides of BHC balance sheets. On the asset side, for example, the ratio Note.—Anthony Cyrnak and Samuel Talley of the of net loans to total assets for the top 100 BHC’s Board’s Division of Research and Statistics prepared this article. fell from 54.6 per cent to 53.7 per cent. This *See Table 1 for the asset growth of the largest 10 decline was mainly offset by a continuation of and largest 25 BHC’s. the sharp rise in U.S. Government security 2 Net loans equal gross loans minus unearned income holdings that had begun in 1975. On the liability from loans and reserves for loan losses. Major BHC’s began reporting loans on a net basis in 1975. side, BHC’s experienced a shift toward more Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
338 Federal Reserve Bulletin □ April 1977 stable sources of funds with savings-type de 3. Selected performance data posits displacing relatively volatile money mar for major bank holding companies ket instruments such as negotiable certificates Amounts in millions of dollars of deposit. Percentage Item 1975 1976 change BHC CAPITAL Income before securities gains and losses (after tax) ....... 3,267 3,437 5.2 Provisions for loan losses ... 2,815 2,624 (6.8) The stockholders’ equity of the 100 largest Net loan charge-offs .............. 2,359 2,492 5.6 Reserves for loan losses ....... 3,734 3,874 3.7 BHC’s increased from $29.1 billion to $31.5 billion, or 8.2 per cent, during 1976. However, Ratio of reserves for loan losses because total assets of these organizations also to year-end net loans ....... 1.09 1.06 increased 8.2 per cent, the ratio of stockholders’ equity to total assets remained unchanged from year-end 1975 to year-end 1976 at 4.65 per cent. gate income before securities gains and losses This stability during 1976 contrasts both with increased to $3,437 million—5.2 per cent a sharp deterioration in BHC equity capital greater than the $3,267 million recorded in 1975 ratios during the early 1970’s and with a signif (Table 3). Although changes in profits at indi icant increase in 1975. vidual BHC’s varied significantly, the increase The 10 largest BHC’s recorded the greatest in over-all profitability was generally broadpercentage gain in stockholders’ equity in 1976 based with 70 of the 100 firms posting an (Table 1). However, these money center orga increase. nizations, which are heavily involved in inter The continued existence of substantial interest national banking, also experienced the largest rate spreads—the difference between the rates percentage gains in total assets. Consequently, received on interest-bearing assets and the rates this group posted only a very slight increase in paid on interest-bearing liabilities—was an im their equity capital ratio. portant factor contributing to 1976 BHC profits. Although these spreads were somewhat nar rower than the record levels during 1975, they 2. Selected balance sheet ratios for major bank holding companies combined with moderate asset growth to increase net interest revenues at many major BHC’s. In per cent Other factors that bolstered profits at many BHC’s included tight control over non-interest BHC’s Year-end Year-end Change 1975 1976 costs and an increase in revenues from both bond transactions and trust operations. Net loans to total assets A reduction in loan loss provisions also im proved BHC profits during 1976. The level of Largest 10 ................ 56.8 55.6 (1.2) 25 ................ 55.8 55.1 ( -7) loan loss provisions for the 100 largest BHC’s 100 .............. 54.6 53.7 ( -9) declined 6.8 per cent from the previous year. This decline was in large part due to the as Stockholders’ equity to total assets sumption that actual loan charge-offs during Largest 10 ................ 3.78 3.84 .06 1976 would not increase so dramatically as in 25 ................ 4.09 4.16 .07 1975. As expected, aggregate net loan charge- 100 .............. 4.65 4.65 .00 offs for the 100 largest BHC’s increased only 5.6 per cent during 1976—far below the sharp increase that had occurred in the previous year. BHC PROFITS Despite the decline in loan loss provisions, Profits for the 100 largest BHC’s rose moder loan loss reserves rose from $3,734 million in ately during 1976 after increasing very little 1975 to $3,874 million in 1976. Under current during the previous year. Consolidated aggre- BHC accounting methods, loan loss provisions Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Bank Holding Company Financial Developments in 1976 339 increase the reserve for loan losses, while net 4. Long-term debt and equity issues loan charge-offs reduce the reserve. During by bank holding companies 1976 loan loss provisions exceeded net charge- Amounts in millions of dollars offs by $132 million and were largely responsi ble for the 3.7 per cent increase in reserves. Year Lon d g e - b te t rm Co s m to m ck on Pr s e t f o e c r k red Total However, with net loans rising faster than re serves, the ratio of reserves to year-end net loans 1973 ................ 877 48 925 declined slightly during 1976 from 1.09 per cent 1974 ................ 2,314 10 10 2,334 1975 ................ 1,320 38 121 1,479 to 1.06 per cent. 1976 ................ 1,639 340 1,979 Profits at the 10 largest BHC’s during 1976 rose at roughly one-half the rate of those at the remaining 90—3.6 per cent compared with 6.8 volved common stock, unlike 1975 when more per cent. One factor contributing to the slower than three-fourths was preferred stock. profit growth for the 10 largest was that their There were several significant aspects of bond provisions for loan losses fell only 4.8 per cent financing by BHC’s during 1976. First, bond compared with 9 per cent for the remaining 90 financing was dominated by the 10 largest BHC’s.3 Another factor was a slowdown in the BHC’s, which accounted for about 53 per cent growth of earnings from foreign activities, in of the total for all BHC’s. Second, BHC’s which the 10 largest organizations are heavily resorted heavily to the private placement market engaged. Continued high volume but somewhat in 1976, with 41 per cent of total BHC bond narrower interest rate spreads on foreign loans offerings being sold through this market. This reduced the over-all contribution to profits from widespread use of private placements in 1976 this important source at a majority of the 10 compares with only 10 per cent of BHC bonds largest BHC’s. being privately placed in 1975 and 2 per cent in 1974. BHC SECURITY ISSUES BHC STOCK AND BOND TRENDS During 1976 BHC’s issued nearly $2 billion of long-term debt and equity issues. This amount Prices of BHC common stock, which were was up from almost $1.5 billion in 1975, but relatively low at the end of 1975, rose signifi trailed the $2.3 billion issued in 1974 when cantly during 1976. However, there were con BHC’s sold more than $1 billion of floating rate siderable differences in the price performance notes. About half of the financing in 1976 oc of various groups of BHC’s. For example, curred during the final quarter of the year. Standard and Poor’s stock price index for New The composition of the securities issued in York City banks rose about 13 per cent during 1976 was quite different from recent years 1976, whereas the index for banks outside New (Table 4). For example, during the 1973-75 York City rose about 37 per cent.4 This was period less than 5 per cent of BHC security the second consecutive year that so-called re financing was in the form of equity. In 1976, gional BHC stocks outpaced New York City however, equity financing amounted to 17 per BHC stocks. One likely reason for the relatively cent of the total. This increase in equity financ poor performance of the organizations in New ing was apparently due to improved BHC stock York City is that several recorded poor earnings prices and a desire by some BHC’s to boost in 1976. their equity capital ratios, which in many cases Between year-end 1975 and year-end 1976 had declined sharply during the early 1970’s. the yield to maturity of a representative group All of the equity financing done in 1976 in- of long-term BHC bonds dropped from almost 3Net loan charge-offs of the 10 largest BHC’s fell -------------------- 0.3 per cent during 1976 but rose nearly 13 per cent 4Standard and Poor’s composite 500-stock index rose for the remaining 90. about 19 per cent during 1976. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
340 Federal Reserve Bulletin □ April 1977 IOV4 per cent to about 8V2 per cent. This sharp icantly, liquidity improved, earnings rose mod decline in part reflects the general downward erately, and capital ratios remained constant. trend in bond yields during 1976. However, it Moreover, there appeared to be an increase in also seems to reflect increased investor confi public confidence in BHC’s, as suggested by dence in BHC’s as measured by the difference sharply increasing BHC stock prices and a sig between the yields on long-term BHC bonds and nificant decline in the risk premiums attached on long-term U.S. Government bonds that are to BHC bonds. free from credit risk. Between year-end 1975 While BHC’s had a satisfactory year in 1976, and year-end 1976 this risk premium dropped they still face certain problems as they enter from about 2xh percentage points to slightly less 1977. For example, some BHC’s still have a than IV2 percentage points. sizable amount of nonaccruing loans to real estate investment trusts on their books. In addi tion, some observers have become increasingly concerned over bank loans to the non-oil- CONCLUSION producing, less-developed countries. Finally, In retrospect, 1976 represented a period of con there has been evidence in recent months of tinuing recovery for BHC’s from the problems narrowing interest rate spreads in both domestic encountered during the recent recession. During and foreign markets. As 1977 unfolds, these the year BHC assets and loans increased signif factors will undoubtedly warrant attention. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
341 Changes in Bank Lending Practices, 1976 The Federal Reserve has conducted quarterly a moderate upturn in demand and somewhat surveys of changes in bank lending practices at easier lending terms at some banks. large commercial banks in February, May, Au The behavior of the terms of lending at large gust, and November of each year since 1964. commercial banks during 1976 can in part be The surveys provide information about changes explained by the same forces that weakened the in recent and anticipated demand for business demand for business loans. Businesses were loans, in price and nonprice terms of lending, reluctant to make commitments for new capital and in banks’ willingness to make various types spending, despite favorable profit and liquidity of loans other than short-term business loans. positions, in view of reduced capacity utilization This article continues the series of annual re rates and a cautious attitude toward investment views of the surveys and summarizes the re stemming from the turbulent economic environ sponses of the 121 banks included in the 1976 ment of recent years. Bankers also displayed sample. a cautious attitude throughout 1976 because of During most of 1976 the demand for business their experience during the recent years of in loans was weak, reflecting the modest recovery stability in the economy. The quarterly survey of business capital spending coupled with heavy tables show that in the face of weak business long-term financing aimed at restructuring bal loan demand, only a growing minority of large ance sheets to rebuild liquidity and reduce risk banks eased slightly some terms of lending to exposure. Despite a substantial recovery in cor nonfinancial business during the year; over all, porate profit margins during 1976, the typical banks did not substantially ease their terms. In cyclical resurgence of business spending for general, the banks’ policies toward interest rates fixed capital and inventories did not materialize. and standards of creditworthiness illustrate their With capital spending restrained and long-term careful approach to terms of lending throughout financings large, corporations continued to re 1976; their policies regarding compensating duce their indebtedness to banks for much of balance requirements and the maturity of term the year, as they had in 1975. loans illustrate the moderate easing in policy In the last quarter of the year, business loans that did occur at some banks. began to increase. Although some of the In the first survey of 1976 taken in February, strength in late 1976 represented heavy acquisi almost half of the banks reported weaker de tions of bankers acceptances, which are in mand for business loans and less than one-tenth cluded in business loans, other business loans reported stronger demand. Half of the respond still had a positive growth rate. The evidence ents reported a moderately easier policy with from the lending practices surveys suggests that regard to interest rates.1 About one-sixth of the the recent growth in business loans reflects both interpretation of these responses is complicated be cause some banks have at times considered a change in the prime rate a change in policy, while others have Note.—John T. Scott of the Board’s Division of focused on the relationship between the prime rate and Research and Statistics prepared this article. Richard open market rates. This complication is reflected in the C. Stevens of the Division of Data Processing provided February response. During the 3 months preceding the the author with cumulative totals; in a cumulative total February survey, both the prime rate and the rate on each bank is counted only once, whereas the table data 90- to 119-day commercial paper fell, but the histori include the bank each time it reported in a particular cally high spread of about 165 basis points between category for each survey period. these rates changed very little. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
342 Federal Reserve Bulletin □ April 1977 banks reported moderately easier policy on had not picked up by mid-May when the second compensating balances, but other nonprice survey of the year was taken. About one-fourth terms of lending were essentially unchanged. of the respondents reported moderately weaker Almost one-third of the respondents were more demand for business loans, while demand was willing to make consumer instalment loans and about the same as in mid-February for more than term loans to businesses, while a smaller num three-fifths of the banks. Most bankers reported ber were more disposed to make other types of that their policy on interest rates was un loans. This pattern of reported increasing will changed, and almost all of the other respondents ingness to make various types of loans persisted reported moderately easier policy. Although the throughout 1976. prime rate was unchanged at 63A per cent Demand for commercial and industrial loans throughout this survey period, the spread be- QUARTERLY SURVEY—FEBRUARY 1976 Changes in bank lending practices at selected large banks: Policy on February 15, 1976, compared with policy 3 months earlier Number of banks; figures in parentheses indicate percentage distribution of total banks reporting Item Much Moderately Essentially Moderately Much stronger stronger unchanged weaker weaker Strength of demand for commercial and in dustrial loans:1 Compared with 3 months earlier............. 121 (100.0) 9 (7.4) 56 (46.3) 53 (43.8) (2.5) Anticipated in next 3 months................... 121 (100.0) 42 (34.7) 66 (54.6) 12 (9.9) (.8) Total Much firmer Moderately Essentially Moderately Much policy firmer policy unchanged easier policy easier policy Loans to nonfinancial businesses: Terms and conditions: Interest rates charged.............................. 121 (100.0) (2.5) 58 (47.9) 60 (49.6) Compensating or supporting balances. 121 (100.0) (2.5) 99 (81.8) 19 (15.7) M Sta a n tu d r a i r t d y s o o f f t e c r r m ed i l t o w a o n r s t . h .. i . n ... e .. s . s .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 2 2 1 1 ( (1 1 0 00 0 . . 0 0 ) ) (1 (. . 8 7 ) ) (6 (. . 8 6) ) 1 1 1 08 0 ( ( 8 9 9 0. . 9 3 ) ) 10 1 (8 (. . 8 3 ) ) (.8) Practice concerning review of credit lines or loan applications: Established customers............................ 121 (100.0) (.8) 3 (2.5) 103 (85.1) 14 (11.6) New customers......................................... 121 (100.0) (.8) 6 (5.0) 94 (77.7) 20 (16.5) Local service area customers................. 121 (100.0) (.8) 3 (2.5) 107 (88.4) 10 (8.3) Nonlocal service area customers......... 121 (100.0) (.8) 12 (9.9) 95 (78.6) 13 (10.7) Factors relating to applicant:2 Value as depositor or source of collat eral business.......................................... 121 (100.0) (.8) (7.4) 104 (86.0) 7 (5.8) Intended use of the loan........................ 121 (100.0) (5.0) 105 (86.7) 10 (8.3) Loans to independent finance companies:3 Terms and conditions: Interest rates charged.............................. 121 (100.0) 3 (2.5) 98 (81.0) 20 (16.5) Compensating or supporting balances. 121 (100.0) 3 (2.5) 117 (96.7) 1 (.8) Enforcement of balance requirements. 121 (100.0) 4 (3.3) 115 (95.0) 2 (1.7) Establishing new or larger credit lines. 121 (100.0) (1.7) 11 (9.1) 101 (83.4) 7 (5.8) Total Considerably Moderately Essentially Moderately Considerably less willing less willing unchanged more willing more willing Willingness to make other types of loans: Term loans to businesses........................... 121 (100.0) 4 (3.3) 79 (65.3) 37 (30.6) 1 (.8) Consumer instalment loans....................... 120 (100.0) 3 (2.5) 81 (67.5) 34 (28.3) 2 (1.7) Single-family mortgage loans................... 120 (100.0) (.8) 1 (.8) 103 (85.9) 13 (10.8) 2 (1.7) Multifamily mortgage loans...................... 120 (100.0) (.8) 7 (5.8) 109 (90.9) 3 (2.5) All other mortgage loans........................... 120 (100.0) (.8) 3 (2.5) 109 (90.9) 7 (5.8) Participation loans with correspondent banks...................................................... 121 (100.0) 5 (4.1) 92 (76.1) 24 (19.8) Loans to brokers.......................................... 121 (100.0) 1 (.8) 98 (81.0) 21 (17.4) (.8) 1 After allowance for bank’s usual seasonal variation. 3 “Independent,” or “noncaptive,” finance companies are finance 2 For these factors, firmer means the factors were considered to be companies other than those organized by a parent company mainly more important in making decisions for approving credit requests, for the purpose of financing dealer inventory and carrying instalment and easier means they were considered to be less important. loans generated through the sale of the parent company’s products. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Changes in Bank Lending Practices, 1976 343 tween the prime rate and the rate on 90- to creased willingness to make certain types of 119-day prime commercial paper had decreased loans continued. somewhat. In May the responding bankers had reported One-fifth of the respondents reported some a relatively optimistic projection of the upcom what easier policy on compensating balances in ing strength of business loan demand. However, mid-May, bringing to more than one-fourth the the August survey showed that on balance de proportion that had indicated easier require mand was essentially unchanged at responding ments on balances on one or both of the first banks, with three-fifths of the banks reporting two surveys of 1976. There was no marked unchanged demand and the rest equally divided change of policy on other nonprice terms of between the moderately weaker and moderately lending in the May survey. The pattern of in stronger categories. Bankers reported some eas- QUARTERLY SURVEY—MAY 1976 Changes in bank lending practices at selected large banks: Policy on May 15, 1976, compared with policy 3 months earlier Number of banks; figures in parentheses indicate percentage distribution of total banks reporting Item Much Moderately Essentially Moderately Much stronger stronger unchanged weaker weaker Strength of demand for commercial and in dustrial loans:1 Compared with 3 months earlier............... 121 (100.0) 17 (14.0) 75 (62.1) 28 (23.1) 1 (-8) Anticipated in next 3 months..................... 121 (100.0) 64 (52.9) 55 (45.4) 2 (1.7) Total Much firmer Moderately Essentially Moderately Much policy firmer policy unchanged easier policy easier policy Loans to nonfinancial businesses: Terms and conditions: Interest rates charged.............................. 120 (100.0) (1.7) 101 (84.1) 17 (14.2) Compensating or supporting balances. 121 (100.0) (.8) (1.7) 95 (78.5) 23 (19.0) Standards of creditworthiness............... 121 (100.0) (1.7) (4.1) 111 (91.7) 3 (2.5) Maturity of term loans.......................... 121 (100.0) (.8) 107 (88.5) 13 (10.7) Practice concerning review of credit lines or loan applications: Established customers............................ 121 (100.0) (1.7) 111 (91.7) (6.6) New customers......................................... 121 (100.0) (2.5) 104 (85.9) 14 (H.6) Local service area customers................. 121 (100.0) (.8) 114 (94.2) 6 (5.0) Nonlocal service area customers......... 121 (100.0) (.8) (.8) 107 (88.5) 12 (9.9) Factors relating to applicant:2 Value as depositor or source of collat eral business.......................................... 121 (100.0) 9 (7.4) 103 (85.2) (7.4) Intended use of the loan........................ 121 (100.0) 3 (2.5) 115 (95.0) (2.5) Loans to independent finance companies:3 Terms and conditions: Interest rates charged.............................. 121 (100.0) 1 (.8) 117 (96.7) 3 (2.5) Compensating or supporting balances. 121 (100.0) 116 (95.9) 5 (4.1) Enforcement of balance requirements. 121 (100.0) 3 (2.5) 110 (90.9) 8 (6.6) Establishing new or larger credit lines. 121 (100.0) 6 (5.0) 102 (84.2) 11 (9.1) (1.7) Total Considerably Moderately Essentially Moderately Considerably less willing less willing unchanged more willing more willing Willingness to make other types of loans: Term loans to businesses........................... 121 (100.0) 1 (-8) (.8) 88 (72.8) 31 (25.6) Consumer instalment loans....................... 120 (100.0) 80 (66.6) 32 (26.7) 8 (6.7) Single-family mortgage loans................... 120 (100.0) 1 (.8) (2.5) 97 (80.9) 18 (15.0) 1 (.8) Multifamily mortgage loans...................... 118 (100.0) 2 (1.7) (1.7) 111 (94.1) 3 (2.5) All other mortgage loans........................... 120 (100.0) 2 (1.7) (.8) 103 (85.9) 13 (10.8) 1 (.8) Participation loans with correspondent banks...................................................... 121 (100.0) 1 (.8) 99 (81.8) 18 (14.9) 3 (2.5) Loans to brokers.......................................... 121 (100.0) 1 (-8) 101 (83.5) 17 (14.0) 2 (1.7) 1 After allowance for bank’s usual seasonal variation. 3 “Independent,” or “noncaptive,” finance companies are finance 2 For these factors, firmer means the factors were considered to be companies other than those organized by a parent company mainly more important in making decisions for approving credit requests, for the purpose of financing dealer inventory and carrying instalment and easier means they were considered to be less important. loans generated through the sale of the parent company’s products. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
344 Federal Reserve Bulletin □ April 1977 ing of interest rate policy between the May and pensating balance requirements. As in mid- August surveys; one-fifth reported moderately May, about one-fourth of the responding banks easier interest rate policy, with almost all of the reported an increased willingness to make term remainder reporting unchanged policy.2 They loans to businesses and consumer instalment also reported further easing of policy on com- loans. Despite the strong upturn in business loans during October—after allowance for usual sea 2 This further illustrates the difficulty in interpreting sonal variation, bankers by and large remained the responses about interest rate policy. The spread skeptical that business loan demand had finally between the prime rate and the 90- to 119-day commer strengthened. It should be noted that a portion cial paper rate had increased somewhat to about its February level. of the upturn in business loans in October had QUARTERLY SURVEY—AUGUST 1976 Changes in bank lending practices at selected large banks : Policy on August 15, 1976, compared with policy 3 months earlier Number of banks; figures in parentheses indicate percentage distribution of total banks reporting Item Total Much Moderately Essentially Moderately Much stronger stronger unchanged weaker weaker Strength of demand for commercial and in dustrial loans:1 Compared with 3 months earlier............. 121 (100.0) 24 (19.8) 73 (60.4) 24 (19.8) Anticipated in next 3 months................... 121 (100.0) 64 (52.9) 54 (44.6) 3 (2.5) Total Much firmer Moderately Essentially Moderately Much policy firmer policy unchanged easier policy easier policy Loans to nonfinancial businesses: Terms and conditions: Interest rates charged.............................. 121 (100.0) 3 (2.5) 93 (76.8) 25 (20.7) Compensating or supporting balances. 121 (100.0) 2 (1.7) 107 (88.4) 12 (9.9) Standards of creditworthiness............... 121 (100.0) (.8) 3 (2.5) 117 (96.7) Maturity of term loans.......................... 121 (100.0) 5 (4.1) 104 (86.0) 12 (9.9) Practice concerning review of credit lines or loan applications: Established customers............................ 121 (100.0) 2 (1.7) 112 (92.5) 7 (5.8) New customers......................................... 121 (100.0) 6 (5.0) 111 (91.7) 4 (3.3) Local service area customers................. 121 (100.0) 3 (2.5) 112 (92.5) 6 (5.0) Nonlocal service area customers......... 121 (100.0) 5 (4.1) 109 (90.1) 7 (5.8) Factors relating to applicant:2 Value as depositor or source of collat eral business.......................................... 121 (100.0) 10 (8.3) 105 (86.7) (5.0) Intended use of the loan........................ 121 (100.0) 4 (3.3) 109 (90.1) (6.6) Loans to independent finance companies:3 Terms and conditions: Interest rates charged.............................. 121 (100.0) (1.7) (5.0) 108 (89.2) (4.1) Compensating or supporting balances. 121 (100.0) (.8) (2.5) 116 (95.9) (.8) Enforcement of balance requirements. 121 (100.0) (.8) (5.0) 113 (93.4) (.8) Establishing new or larger credit lines. 121 (100.0) 0.7) (5.0) 105 (86.7) (6.6) Total Considerably Moderately Essentially Moderately Considerably less willing less willing unchanged more willing more willing Willingness to make other types of loans: Term loans to businesses........................... 121 (100.0) (4.1) 87 (71.9) 29 (24.0) Consumer instalment loans....................... 120 (100.0) (.8) 85 (70.9) 31 (25.8) (2.5) Single-family mortgage loans................... 120 (100.0) 0.7) 102 (85.0) 14 (11.7) (.8) Multifamily mortgage loans..................... 119 (100.0) 114 (95.8) 4 (3.4) All other mortgage loans........................... 120 (100.0) (.8) 108 (90.1) 10 (8.3) Participation loans with correspondent banks...................................................... 121 (100.0) (2.5) 96 (79.3) 21 (17.4) (.8) Loans to brokers.......................................... 121 (100.0) 0.7) 107 (88.4) 11 (9.1) (.8) 1 After allowance for bank’s usual seasonal variation. 3 “Independent,” or “noncaptive,” finance companies are finance 2 For these factors, firmer means the factors were considered to be companies other than those organized by a parent company mainly more important in making decisions for approving credit requests, for the purpose of financing dealer inventory and carrying instalment and easier means they were considered to be less important. loans generated through the sale of the parent company’s products. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Changes in Bank Lending Practices, 1976 345 been the result of large purchases of bankers business loan demand during the first half of acceptances included in the business loan cate the year had clearly stopped.4 gory. However, taken together, the mid-August In mid-November, half of the respondents and mid-November surveys suggest that about reported moderately easier policy on interest 30 per cent of the sample had experienced an rates, with almost all of the rest reporting an unambiguous strengthening in demand over the unchanged policy. The trend toward easing un 6-month period;3 the decline in the strength of doubtedly reflected the fact that the prime rate had fallen from 7 per cent to 6V2 per cent; but 3 Unambiguous strength means that strengthening de mands were reported in either or both periods and that 4 Subsequently the strengthening in business loan de no weakening was reported. mand has become more prevalent. QUARTERLY SURVEY—NOVEMBER 1976 Changes in bank lending practices at selected large banks: Policy on November 15, 1976, compared with policy 3 months earlier Number of banks; figures in parentheses indicate percentage distribution of total banks reporting Total Much Moderately Essentially Moderately Much stronger stronger unchanged weaker weaker Strength of demand for commercial and in dustrial loans:1 Compared with 3 months earlier............. 121 (100.0) 1 (.8) 23 (19.0) 81 (67.0) 15 (12.4) 1 (-8) Anticipated in next 3 months................... 121 (100.0) 43 (35.5) 69 (57.1) 9 (7.4) Much firmer Moderately Essentially Moderately Much policy firmer policy unchanged easier policy easier policy Loans to nonfinancial businesses: Terms and conditions: Interest rates charged.............................. 121 (100.0) 2 (1.7) 57 (47.1) 62 (51.2) Compensating or supporting balances. 121 (100.0) 1 (.8) 90 (74.4) 27 (22.3) 3 (2.5) Standards of creditworthiness............... 121 (100.0) (.8) 1 (.8) 117 (96.7) 2 (1.7) Maturity of term loans.......................... 121 (100.0) 2 (1.7) 100 (82.6) 19 (15.7) Practice concerning review of credit lines or loan applications: Established customers............................ 121 (100.0) 2 (1.7) 105 (86.7) 14 (11.6) New customers......................................... 121 (100.0) 1 (-8) 3 (2.5) 103 (85.1) 14 (11.6) Local service area customers................. 121 (100.0) 2 (1.7) 112 (92.5) 7 (5.8) Nonlocal service area customers......... 121 (100.0) 5 (4.1) 103 (85.1) 11 (9.1) Factors relating to applicant:2 Value as depositor or source of collat eral business.......................................... 121 (100.0) 10 (8.3) 98 (81.0) 13 (10.7) Intended use of the loan........................ 121 (100.0) 1 (.8) 108 (89.3) 12 (9.9) Loans to independent finance companies:3 Terms and conditions: Interest rates charged.............................. 121 (100.0) 3 (2.5) 95 (78.5) 23 (19.0) Compensating or supporting balances. 121 (100.0) 2 (1.7) 115 (95.0) 4 (3.3) Enforcement of balance requirements. 121 (100.0) 3 (2.5) 114 (94.2) 4 (3.3) Establishing new or larger credit lines. 121 (100.0) (1.7) 5 (4.1) 98 (81.0) 16 (13.2) Total Considerably Moderately Essentially Moderately Considerably less willing less willing unchanged more willing more willing Willingness to make other types of loans: Term loans to businesses............................ 121 (100.0) (2.5) 73 (60.3) 44 (36.4) 1 (-8) Consumer instalment loans....................... 120 (100.0) (.8) 90 (75.0) 26 (21.7) 3 (2.5) Single-family mortgage loans.................... 120 (100.0) (3.3) 98 (81.7) 16 (13.3) 2 (1.7) Multifamily mortgage loans ...................... 120 (100.0) (1.7) 117 (97.5) 1 (.8) All other mortgage loans........................... 119 (100.0) (1.7) 108 (90.7) 9 (7.6) Participation loans with correspondent banks....................................................... 120 (100.0) (.8) 91 (75.8) 26 (21.7) (1.7) Loans to brokers.......................................... 121 (100.0) (.8) (.8) 100 (82.7) 16 (13.2) (2.5) 1 After allowance for bank’s usual seasonal variation. 3 “Independent,” or “noncaptive,” finance companies are finance 2 For these factors, firmer means the factors were considered to be companies other than those organized by a parent company mainly more important in making decisions for approving credit requests, for the purpose of financing dealer inventory and carrying instalment and easier means they were considered to be less important. loans generated through the sale of the parent company’s products. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
346 Federal Reserve Bulletin □ April 1977 the spread between the prime rate and open term loans to businesses, and willingness to market rates had changed little. One-fourth of make most of the specific types of loans covered the respondents had eased policy on compen in the survey again increased. The cumulative sating balances, bringing to almost one-half the proportions of respondents that at some time proportion that had eased such policy at some during 1976 expressed greater willingness to time during the year. About one-sixth of the make term loans to businesses and consumer banks reported easier policy on the maturity of instalment loans were greater than one-half. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
347 Changes in Time and Savings Deposits at Commercial Banks, July-October 1976 This article describes the results of the survey savings deposits increased during the period by of time and savings deposits that was conducted $7.9 billion, or at a 6.8 per cent annual rate, in October 1976 jointly by the Federal Reserve not seasonally adjusted. With banks generally System and the Federal Deposit Insurance Cor maintaining offering rates on consumer deposits poration. In addition, it shows revisions of data at the Federally imposed maximum levels— for the survey conducted in July and originally even as Treasury yields fell below the ceilings published in the December B u lletin .1 As on savings and most maturities of time depos noted in December, the original July estimates its—savings and interest-bearing, small-denom reflected deposit relationships from the call re ination time deposits expanded by $14.7 billion, port for March. Now that such data for June or at an annual rate of nearly 18 per cent. In are available, these initial figures have been contrast, interest-bearing, large-denomination re-estimated.2 The revisions also reflect some time deposits declined $6.6 billion, or at an unusually large corrections of reported data, annual rate of almost 20 per cent, as banks again particularly among the categories of small de allowed certificates of deposit to run off in view nomination time deposits issued to govern of still modest loan growth coupled with rapid mental units. These items had not been collected inflows of other deposits. before July, and the dearth of historical data made editing difficult. For the 3 months ending October 28, 1976, SAVINGS DEPOSITS growth in time and savings deposits at insured commercial banks proceeded at a moderate Between July and October, yields on short-term pace, as the continuing absolute decline in market securities, such as Treasury bills, de large-denomination ($100,000 and over) time clined from just above the maximum rate pay deposits offset only in part the fairly strong able on savings deposits to just below the ceil growth in savings and small-denomination (less ing; therefore, savings deposits at commercial than $100,000) time deposits. Total time and banks provided an attractive temporary invest ment alternative throughout the period. In reac tion, inflows to savings accounts totaled $7.4 Note.—John R. Williams of the Board’s Division billion, or 16 per cent at an annual rate, not of Research and Statistics prepared this article. seasonally adjusted. Among ownership classes Purveys of time and savings deposits (STSD) at all member banks were conducted by the Board of Gover of savings deposits, the portion held by individ nors in late 1965, in early 1966, and quarterly in 1967. uals and nonprofit organizations grew least rap In January and July 1967 the surveys also included data idly, rising about 12 per cent on an annual basis. for all insured nonmember banks collected by the Fed eral Deposit Insurance Corporation (FDIC). Since the Higher growth rates prevailed for holdings of beginning of 1968 the Board of Governors and the FDIC governmental units and businesses, reflecting have jointly conducted quarterly surveys to provide the continued adaptation by such customers to estimates for all insured commercial banks based on a probability sample of banks. The results of all earlier the opportunity to substitute savings for demand surveys have appeared in previous Bulletins from deposits as well as portfolio adjustments in 1966 to 1976, the most recent being December 1976. duced by low market rates. Profit-making orga 2 Data for October are based on deposit relationships from the September call report. nizations, which had become eligible to own Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
348 Federal Reserve Bulletin □ April 1977 savings deposits in November 1975, increased 86 per cent. Commercial banks apparently were deposit balances at about an 85 per cent annual still reluctant to cut offering rates on consumer rate, not seasonally adjusted, while domestic deposits in view of expectations of generally governmental units, eligible since November higher interest rate levels in 1977 and stiff 1974, increased their balances at a rate of nearly deposit competition with thrift institutions. 80 per cent. At the end of October, commercial banks in general were continuing to pay maximum al SMALL-DENOMINATION lowable rates on savings accounts. The TIME DEPOSITS weighted-average rate paid on inflows to all savings deposits remained unchanged from July Strong growth in interest-bearing, small-denom at 4.91 per cent. Moreover, the proportion of ination time deposits over the August-October banks paying the ceiling rate for new deposits period was entirely concentrated in holdings of individuals and nonprofit organizations fell other than those of domestic governmental only slightly, with the decline limited to banks units. Such time deposits held by nongovern with total deposits under $100 million. Indeed, mental entities expanded by more than 20 per the share of personal savings at banks that were cent at an annual rate to a level of $148 billion. paying the maximum rate remained steady at In contrast, small-denomination time deposits 1. Types of time and savings deposits held by insured commercial banks on survey date, July 28, and October 27, 1976 Deposits Number of issuing banks Type of deposit In millions of dollars Percentage change July 28 Oct. 27 July 28 Oct. 27 July 28-Oct. 27, 1976 Total time and savings deposits................................. 14,365 14,384 469,811 477,722 1.7 Savings....................................................................... 14,332 14,384 183,946 191,388 4.0 Issued to: Individuals and nonprofit organizations........ 14,332 14,384 174,349 179,700 3.1 Partnerships and corporations operated for profit (other than commercial banks). .. 7,958 8,146 6,210 7,553 21.6 Domestic governmental units........................... 6,183 6,080 3,248 3,880 19.5 All other................................................................ 1,046 748 139 256 84.7 Interest-bearing time deposits in denominations of less than $100,000....................................... 14,058 14,080 145,173 152,414 5.0 Issued to: Domestic governmental units.............................. 10,592 10,407 4,422 4,176 -5.6 Accounts with original maturity of: 30 up to 90 days.............................................. 4,865 4,301 1,499 1,141 -23.9 90 up to 180 days............................................ 7,412 7,498 1,170 1,168 -0.2 180 days up to 1 year..................................... 4,168 4,375 756 688 -9.0 1 year and over................................................ 7,773 7,786 997 1,178 18.2 Other than domestic governmental units.......... 13,974 14,049 140,751 148,238 5.3 Accounts with original maturity of: 30 up to 90 days.............................................. 6,153 6,324 7,855 7,319 -6.8 90 up to 180 days............................................ 11,574 11,464 27,064 29,844 10.3 180 days up to 1 year..................................... 8,697 8,951 4,854 4,414 -9.1 1 up to 2l/i years............................................ 13,195 13,553 33,008 33,919 2.8 2Vi up to 4 years............................................ 12,056 12,204 18,690 18,445 -1.3 4 up to 6 years................................................. 11,762 11,773 41,372 44,921 8.6 6 years and over.............................................. 7,992 8,168 7,909 9,377 18.6 Interest-bearing time deposits in denominations of $100,000 or more........................................ 11,154 11,186 133,733 127,158 -4.9 Non-interest-bearing time deposits in denomi nations of.......................................................... 1,609 1,667 4,802 4,876 1.5 Less than $100,000.............................................. 1,315 1,415 1,556 1,588 2.0 628 683 3,246 3,288 1.3 Club accounts (Christmas savings, vacation, or similar club account)................................. 8,962 9,021 2,158 1,887 -12.6 Note.—All banks that had either discontinued offering or never had discontinued issuing certain deposit types are included in the offered certain deposit types as of the survey date are not counted as amounts outstanding. issuing banks. However, small amounts of deposits held at banks that Figures may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Changes in Time and Savings Deposits 349 2. Small-denomination time and savings deposits held by insured commercial banks on July 28, and October 27, 1976, by type of deposit, by most common rate paid on new de posits in each category, and by size of bank Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) All banks All banks Deposit group, and dis tribution of deposits by Less than 100 100 and over Less than 100 100 and over most common rate Oct. 27 July 28 Oct. 27 July 28 Oct. 27 July 28 Oct. 27 July 28 Oct. 27 July 28 Oct. 27 July 28 Number of banks, or percentage distribution Amount of deposits (in millions of dollars), or percentage distribution Savings deposits Individuals and non profit organizations Issuing banks............. 14,384 14,332 13,466 13,440 918 892 179,700 174,349 69,498 68,450 110,202 105,899 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 4.00 or less............. 4.7 3.0 4.6 2.8 6.2 5.9 4.0 3.7 3.5 3.0 4.2 4. 1 4.01-4.50................. 10.3 10.3 10.5 10.4 7.2 8.0 9.6 10.4 10.1 10.1 9.3 10.6 4.51-5.00................. 85.0 86.8 84.9 86.8 86.6 86. 1 86.5 85.9 86.4 86.9 86.5 85.3 Paying ceiling rate1... 84.8 86.6 84.7 86.6 86.5 86.0 86.3 85.8 86.1 86.7 86.4 85.2 Partnerships and cor porations Issuing banks............. 8,146 7,958 7,248 7,082 898 875 7.553 6,210 2,266 1,889 5,287 4,321 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 4.00 or less............. 1.7 1.7 1.6 i.6 2.2 2.3 1.6 1.4 2.2 1.7 1.4 1.3 4.01-4.50................. 5.7 9.0 5.7 9.2 5.2 6.8 4.3 5.3 6.2 7.7 3.5 4.3 4.51-5.00................. 92.7 89.3 92.7 89.1 92.6 91.0 94.1 93.3 91.6 90.6 95.1 94.5 Paying ceiling rate1... 92.3 89.0 92.3 88.7 92.5 90.9 93.6 92.8 91.6 90.6 94.5 93.7 Domestic governmental units Issuing banks............. 6,080 6,183 5,537 5,647 543 536 3,880 3,244 1,659 1,932 2,221 1,312 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 4.00 or less............. 2.9 .6 3.0 .5 1.9 1.4 1.2 .3 1.0 (2) 1.3 .6 4.01-4.50................. 8.4 9.5 8.8 9.9 3.9 4.9 4.2 4.1 7.6 5.2 1.6 2.5 4.51-5.00................. 88.7 90.0 88.2 89.6 94.2 93.7 94.6 95.7 91.4 94.8 97.0 96.9 Paying ceiling rate1... 86.8 88.2 86.2 87.6 93.9 93.5 94.2 95.2 91.0 94.5 96.5 96.2 All other Issuing banks............. 748 1,046 668 943 80 103 256 134 177 35 79 99 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 4.00 or less............. .3 .2 (2) (2) 3.1 2.3 .3 .7 (2) (2) .9 1.0 4.01-4.50................. .3 14.0 (2) 15.1 2.5 4.3 (2) .2 (2) (2) (2) .2 4.51-5.00................. 99.4 85.8 100.0 84.9 94.3 93.4 99.7 99.1 100.0 100.0 99.1 98.8 Paying ceiling rate1... 99.4 85.8 100.0 84.9 94.3 93.4 99.7 99.1 100.0 100.0 99.1 98.8 Time deposits in denominanations of less than $100,000 Domestic governmental units: Maturing in— 30 up to 90 days Issuing banks............. 4,301 4,865 3,686 4,258 615 608 1,141 1,498 484 804 657 695 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............. 1.7 1.3 1.7 1.3 1.6 1.4 1.2 .3 .9 .4 1.5 .3 4.51-5.00................. 73.5 69.3 72.3 70.0 80.5 64.5 63.4 50.6 75.2 54.4 54.6 46.1 5.01-5.50................. 19.9 24.5 20.6 23.5 15.5 31.1 31.7 43.1 15.2 36.1 43.8 51.1 5.51-7.75................. 5.0 4.9 5.5 5.2 2.4 3.0 3.7 6.0 8.7 9.1 .1 2.4 Paying ceiling rate1... (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) 90 up to 180 days Issuing banks............. 7,498 7,412 6,858 6,815 640 596 1,168 1,169 775 867 393 302 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............. .7 .8 .8 .8 (2) .6 .5 .5 .8 .7 (2) .1 4.51-5.00................. 8.6 8.1 8.2 7.7 13.4 12.8 10.7 2.4 10.3 1.7 11.5 4.4 5.01-5.50................. 81.1 86.7 80.8 87.2 83.7 80.9 81.8 88.3 82.5 87.0 80.4 91.7 5.51-7.75................. 9.6 4.4 10.2 4.3 2.9 5.7 7.0 8.8 6.4 10.6 8.1 3.7 Paying ceiling rate1... .4 .5 .5 .5 (2) (2) .2 .1 .3 .2 (2) (2) 180 days up to 1 year Issuing banks............. 4,375 4,168 3,871 3,692 504 476 688 756 429 410 259 346 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............. (2) .1 (2) (2) (2) 1.0 (2) .1 (2) (2) (2) .1 4.51-5.00................. 8.3 8.4 8.4 8.4 6.8 8.6 8.4 9.7 4.7 9.2 14.7 10.3 5.01-5.50................. 70.0 73.7 69.2 74.2 76.0 69.7 69.3 65.9 64.1 52.8 77.9 81.5 5.51-7.75................. 21.8 17.8 22.4 17.4 17.2 20.8 22.2 24.3 31.2 37.9 7.4 8.1 Paying ceiling rate1... .8 .8 .9 .9 (2) (2) .1 .1 .1 .1 (2) (2) 1 year and over Issuing banks............. 7,786 7,773 7,181 7,186 606 587 1,177 995 983 822 194 174 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less............. 2.8 4.4 2.6 4.2 4.3 6.0 .5 1.3 .3 1.1 1.3 2.1 5.01-5.50................. 5.5 8.3 5.0 8.4 11.1 6.3 4.3 8.6 3.9 9.8 6.1 3.0 5.51-6.00................. 65.9 61.9 66.2 61.9 62.4 62.9 63.7 63.5 60.4 61.3 80.2 74.2 6.01-7.75.......... 25.9 25.4 26.2 25.5 22.2 24.8 31.6 26.6 35.3 27.8 12.5 20.7 Paying ceiling rate1... .4 .5 .5 .5 (2) .8 .1 .2 .1 .1 (2) .3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
350 Federal Reserve Bulletin □ April 1977 TABLE 2—Continued Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) All banks All banks Deposit group, and dis tribution of deposits by Less than 100 100 and over Less than 100 100 and over most common rate Oct. 27 July 28 Oct. 27 July 28 Oct. 27 July 28 Oct. 27 July 28 Oct. 27 July 28 Oct. 27 July 28 Number of banks, or percentage distribution Amount of deposits (in millions of dollars), or percentage distribution Time deposits in denomina tions of less than $100,000 (cont.) Other than domestic governmental units: Maturing in— 30 up to 90 days Issuing banks............. 6,324 6,153 5,529 5,379 796 774 7,319 7,854 1,929 2,115 5,390 5,739 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............. .2 2.9 (2) 3.2 1.4 1.1 1.2 . 1 (2) .2 1.6 . 1 4.51-5.00................. 99.8 97.1 100.0 96.8 98.6 98.9 98.8 99.9 100.0 99.8 98.4 99.9 Paying ceiling rate1... 94.2 96.9 94.4 96.8 92.8 97.6 92.1 99.8 93.5 99.8 91.6 99.8 90 up to 180 days Issuing banks............. 11,464 11,432 10,562 10,558 902 874 29,844 26,901 12,554 11,795 17,289 15,105 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............. .5 .6 .5 .5 (2) 1.4 (2) (2) (2) (2) (2) (2) 4.51-5.00................. 12.7 10.2 13.3 10.6 5.3 5.1 6.0 5.4 7.3 8.0 5.1 3.4 5.01-5.50................. 86.8 89.2 86.1 88.9 94.7 93.6 94.0 94.6 92.7 92.0 94.9 96.6 Paying ceiling rate1... 86.1 86.3 85.6 86.0 92.0 90.8 92.8 93.0 92.6 91.5 92.9 94.2 180 days up to 1 year Issuing banks............. 8,951 8.697 8,159 7.911 792 786 4,377 4,811 2,745 2,805 1,631 2,007 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............. .4 .7 .3 .7 .4 .6 .1 . 1 (2) (2) .3 .2 4.51-5.00................. 5.3 4.2 5.4 4.4 4.5 2.6 2.2 2.7 2.6 3.5 1.5 1.5 5.01-5.50................. 94.3 95.1 94.2 94.9 95.1 96.9 97.7 97.2 97.4 96.4 98.2 98.3 Paying ceiling rate1... 91.7 92.6 91.7 92.4 91.4 94.7 91.2 95.6 94.1 96.1 86.2 95.0 1 up to 2Vi years Issuing banks............. 13,553 13,195 12,650 12,318 903 877 33,919 33,008 22,117 21,145 11,802 11,863 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less............. (2) (2) (2) (2) .2 .3 (2) .2 (2) (2) (2) .5 5.01-5.50................. 1.8 2.9 1.8 3.1 1.2 .3 1.3 3.2 1.8 5.0 .5 (2) 5.51-6.00................. 98.2 97.1 98.2 96.9 98.6 99.4 98.7 96.7 98.2 95.0 99.5 99.5 Paying ceiling rate1... 96.4 96.1 96.4 96.0 96.3 98.0 96.6 91.9 97.4 94.1 95.1 87.9 2Vi up to 4 years Issuing banks............. 12,204 12,056 11,323 11,209 881 848 18,421 18.662 11,260 11,647 7,162 7,014 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less............. 1.8 1.9 1.9 1.9 .9 1.0 1.6 1.9 1.4 2.7 1.8 .5 6.01-6.50................. 98.2 98. 1 98.1 98.1 99.1 99.0 98.4 98.1 98.6 97.3 98.2 99.5 Paying ceiling rate1... 97.1 97.6 97.0 97.6 98.4 98.2 96.6 97.2 97.0 97.0 95.8 97.7 4 up to 6 years Issuing banks............. 11,773 11,762 10,902 10,909 871 853 44,500 41,005 22,343 20,100 22,157 20,905 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 6.50 or less............. .9 .8 .8 .7 1.9 1.6 1.8 2.7 .6 .7 3.0 4.6 6.51-7.00................. 14.8 13.8 15.5 14.3 6.6 7.2 9.8 9.3 13.1 13.3 6.5 5.5 7.01-7.25................. 84.2 85.4 83.7 85.0 91.5 91.2 88.4 88.0 86.4 86.1 90.5 89.9 Paying ceiling rate 1... 84.2 85.4 83.7 85.0 91.5 91.1 88.4 87.9 86.4 86.1 90.5 89.7 6 years and over Issuing banks............. 8,168 7.992 7,413 7.273 755 719 9,243 7,696 4,017 3,247 5,226 4,449 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less............. (2) 1.9 (2) 2.0 (2) 1.7 (2) (2) (2) (2) (2) (2) 5.01-7.25................. 4.9 6.6 4.9 6.8 4.9 4.4 6.9 6.2 4.2 3.5 9.0 8.2 7.26-7.50................. 95.1 91.5 95.1 91.3 95.1 93.9 93. 1 93.7 95.8 96.5 91.0 91.8 Paying ceiling rate1... 95.1 91.5 95.1 91.3 95.1 93.8 93.1 91.5 95.8 96.5 91.0 87.9 Club accounts Issuing banks............. 9.021 8,962 8,384 8,266 637 696 1,837 1,894 911 893 926 1.001 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 0.00........................... 55.6 53.3 57.8 54.7 27.2 36.7 22.8 25.4 31.8 34.2 13.9 17.5 0.01-4.00................. 13.5 13.4 13.4 13.5 15.1 11.3 11.0 13.5 11.9 13.9 10.1 13.1 4.01-4.50................. 7.2 9.3 7.0 9.3 10.2 9.5 10.8 16.4 6.4 14.8 15.1 17.9 4.51-5.50................. 23.6 24. 1 21.8 22.5 47.5 42.5 55.5 44.7 49.9 37.1 60.9 51.4 1 See p. A-10 for maximum interest rates payable on time and held at banks that had discontinued issuing deposits are not included savings deposits at the time of each survey. The ceiling rate is included in the amounts outstanding. Therefore, the deposit amounts shown in the rate interval in the line above. in Table 1 may exceed the deposit amounts shown in this table. 2 Less than .05 per cent. The most common interest rate for each instrument refers to the stated rate per annum (before compounding) that banks paid on the Note.—All banks that either had discontinued offering or had largest dollar volume of deposit inflows during the 2-week period never offered particular deposit types as of the survey date are not immediately preceding the survey date. counted as issuing banks. Moreover, the small amounts of deposits Figures may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Changes in Time and Savings Deposits 351 held by domestic governmental units declined cent of total small-denomination time deposit $4 billion, or at about a 20 per cent annual rate growth. over the August-October period. Average de Despite relatively low market yields through posit maturities in both ownership classes out the maturity structure and the resultant large lengthened between July and October; growth deposit inflows, commercial banks seemed un in nongovernmental time deposits maturing in willing to make any significant decrease in of 4 years or more accounted for nearly 70 per fering rates between the July and October sur- 3. Average of most common interest rates paid on various categories of time and savings deposits at insured commercial banks on July 28, and October 27, 1976 Bank size (total deposits in millions of dollars) Type of deposit All size Less 20 up 50 up 100 up 500 up 1,000 groups than 20 to 50 to 100 to 500 to 1,000 and over October 27, 1976 Savings and small-denomination time deposits.................. 5.54 5.71 5.66 5.58 5.50 5.42 5.40 Savings, total............................................................................... 4.91 4.93 4.88 4.94 4.91 4.86 4.93 Individuals and nonprofit organizations.......................... 4.91 4.93 4.88 4.94 4.91 4.85 4.93 Partnerships and corporations............................................ 4.96 5.00 4.90 4.97 4.96 4.96 4.98 Domestic governmental units............................................ 4.97 4.96 4.98 4.90 4.98 5.00 4.97 All other.................................................................................. 4.99 5.00 5.00 5.00 4.88 5.00 Time deposits in denominations of less than $100,000, total 6.32 6.24 6.43 6.36 6.33 6.29 6.26 Domestic governmental units, total.................................. 5.58 5.75 5.67 5.55 5.37 5.39 5.35 Maturing in— 30 up to 90 days................................................................ 5.15 5.35 5.03 4.99 5.15 5.13 4.99 90 up to 180 days.............................................................. 5.44 5.46 5.48 5.23 5.46 5.42 5.41 180 days up to 1 year....................................................... 5.53 5.59 5.60 5.58 5.41 5.59 5.35 1 year and over.................................................................. 6.17 6.24 6.06 6.36 6.05 5.98 5.92 Other than domestic governmental units, total............... 6.34 6.27 6.45 6.38 6.36 6.30 6.28 Maturing in— 30 up to 90 days................................................................ 4.98 5.00 4.99 4.98 4.99 4.95 4.98 90 up to 180 days.............................................................. 5.47 5.47 5.48 5.44 5.49 5.47 5.45 180 days up to 1 year....................................................... 5.47 5.48 5.50 5.47 5.49 5.47 5.43 1 up to 2Vi years............................................................... 5.99 5.98 6.00 5.98 5.99 5.98 5.98 2 Vi up to 4 years............................................................... 6.49 6.48 6.50 6.48 6.49 6.45 6.49 4 up to 6 years................................................................... 7.21 7.22 7.19 7.23 7.21 7.23 7.19 Over 6 years........................................................................ 7.47 7.49 7.50 7.48 7.48 7.46 7.43 Memo: Club accounts.............................................................. 3.69 2.11 2.17 4.52 3.75 3.70 4.52 July 28, 1976 Savings and small-denomination time deposits.................. 5.52 5.66 5.64 5.56 5.49 5.41 5.39 Savings, total.............................................................................. 4.91 4.95 4.89 4.93 4.91 4.85 4.93 Individuals and nonprofit organizations.......................... 4.91 4.95 4.89 4.93 4.91 4.84 4.92 Partnerships and corporations............................................ 4.96 4.99 4.92 4.96 4.96 4.97 4.97 Domestic governmental units............................................. 4.98 5.00 4.98 4.89 4.99 5.00 4.96 All other.................................................................................. 4.98 5.00 5.00 5.00 4.88 5.00 Time deposits in denominations of less than $100,000, total 6.29 6.19 6.37 6.34 6.32 6.26 6.25 Domestic governmental units, total.................................. 5.56 5.70 5.68 5.39 5.37 5.52 5.46 Maturing in— 30 up to 90 days................................................................ 5.21 5.36 5.23 5.08 5.15 5.21 5.32 90 up to 180 days.............................................................. 5.51 5.48 5.61 5.58 5.45 5.43 5.48 180 days up to 1 year....................................................... 5.54 5.42 5.70 5.73 5.45 5.60 5.65 1 year and over.................................................................. 6.14 6.18 6.05 6.37 6.02 6.20 5.94 Other than domestic governmental units, total.............. 6.31 6.21 6.39 6.38 6.36 6.27 6.26 Maturing in— 30 up to 90 days................................................................ 5.00 5.00 5.00 5.00 5.00 5.00 5.00 90 up to 180 days.............................................................. 5.45 5.34 5.46 5.43 5.49 5.48 5.47 180 days up to 1 year....................................................... 5.48 5.49 5.50 5.46 5.50 5.47 5.49 1 up to 2l/2 years............................................................... 5.97 5.93 6.00 5.99 6.00 5.99 5.98 2 l/i up to 4 years............................................................... 6.49 6.47 6.50 6.49 6.50 6.49 6.49 4 up to 6 years................................................................... 7.20 7.21 7.19 7.23 7.22 7.24 7.16 Over 6 years........................................................................ 7.46 7.49 7.50 7.48 7.48 7.40 7.44 Memo: Club accounts.............................................................. 3.46 1.94 2.30 4.10 3.48 2.82 4.43 1 No deposits outstanding. amount of that type of deposit outstanding. All banks that had either 2 Club accounts are excluded from all of the above categories. discontinued offering or never offered particular deposit types as of the survey date were excluded from the calculations for those specific Note.—The average rates were calculated by weighting the most deposit types. common rate reported on each type of deposit at each bank by the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
352 Federal Reserve Bulletin □ April 1977 veys. On government deposits with original OTHER TIME DEPOSITS maturities shorter than 1 year, banks cut rates The remaining portion of time deposits is dis modestly, but they raised rates slightly on such tributed among three deposit categories. Inter deposits maturing in 1 year or more. Because est-bearing, large-denomination time deposits of the general lengthening of maturities, the continued the pattern begun in early 1975, fall aggregate weighted-average rate on government ing by $6.6 billion during the August-October deposits increased. Similarly, banks made no period. Since the end of 1974 such deposits have significant changes in rates paid on time deposits contracted by more than $40 billion. Non-inter issued to nongovernmental customers, but ex est-bearing deposits (other than club accounts) tremely rapid growth among deposits maturing grew to a level of about $4.9 billion in October; in over 4 years produced an increase in the most deposits in this category are believed to over-all average rate paid. Well over four-fifths consist of escrow accounts and compensating of issuing banks still paid the maximum rate balances held against loans. Deposits out allowed by Federal banking regulatory authori standing in club accounts declined seasonally ties on each nongovernmental time deposit cat to a level of about $1.9 billion in October. egory. Revised appendix tables for the July survey are available on request from Publications Services, Division of Administrative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. A PPEN D IX TABLES Al. Savings deposits issued to individuals and nonprofit organizations Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 4.00 4.01 4.51 Memo: 4.00 4.01 4.51 Memo: or to to ceiling or to to ceiling less 4.50 5.00 rate* less 4.50 5.00 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS All banks.................................................................... 14,384 675 1,481 12,227 12,198 179,700 7,122 17,199 155,379 155,063 Size of bank (total deposits in millions of dollars): Less than 20......................................................... 8,888 497 878 7,513 7,485 19,142 556 1,257 17,329 17,164 20-50...................................................................... 3,493 66 498 2,928 2,928 29,253 903 4,998 23,352 23,352 50-100.................................................................... 1,085 55 39 991 991 21,103 996 750 19,357 19,357 100-500................................................................. 731 45 41 645 645 38,488 2,095 2,488 33,905 33,905 500-1,000.............................................................. 103 8 16 79 78 18,237 1,514 2,482 14,241 14,091 1,000 and over..................................................... 84 4 9 71 71 53,477 1,057 5,224 47,195 47,195 NOTES TO APPENDIX TABLES 1-16: 1 See page A10 for maximum interest rates payable on time and held at banks that had discontinued issuing deposits are not included saving deposits at the time of each survey. The ceiling rate is included in the amounts outstanding. Therefore, the deposit amounts shown in the rate interval to the left. in Table 1 may exceed the deposit amounts shown in these tables. 2 Omitted to avoid individual bank disclosure. The most common interest rate for each instrument refers to the 3 Less than $500,000. stated rate per annum (before compounding) that banks paid on the largest dollar volume of deposit inflows during the 2 week period Note.—All banks that either had discontinued offering or had immediately preceding the survey date. never offered particular deposit types as of the survey date are not Figures may not add to totals because of rounding. counted as issuing banks. Moreover, the small amounts of deposits Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Changes in Time and Savings Deposits 353 A2. Savings deposits issued to partnerships and corporations operated for profit Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 4.00 4.01 4.51 Memo: 4.00 4.01 4.51 Memo: or to to ceiling or to to ceiling less 4.50 5.00 rate1 less 4.50 5.00 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS All banks......................................................... 8,146 135 461 7,549 7,520 7,553 121 326 7,106 7,072 Size of bank (total deposits in millions of dollars): Less than 20............................................... 3,303 3,303 3,275 448 448 446 20-50........................................................... 2,939 100 375 2,464 2,464 1,008 43 108 857 857 50-100......................................................... 1,006 16 39 951 951 810 6 33 771 771 100-500....................................................... 711 17 28 666 666 1,725 42 59 1,625 1,625 500-1,000................................................... 103 2 12 89 89 899 (2) (2) 846 846 1,000 and over.......................................... 84 1 7 76 75 2,662 (2) (2) 2,559 2,527 A3. Savings deposits issued to domestic governmental units Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 4.00 4.01 4.51 Memo: 4.00 4.01 4.51 Memo: or to to ceiling or to to ceiling less 4.50 5.00 rate 1 less 4.50 5.00 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS 6,080 175 511 5,395 5,280 3,880 46 162 3,672 3,654 Size of bank (total deposits in millions of dollars): Less than 20......................................................... 3,430 164 113 3,153 3,040 556 17 6 533 527 20-50...................................................................... 1,617 338 1,279 1,279 645 26 619 619 50-100.................................................................... 491 39 451 451 459 95 364 364 100-500.................................................................. 406 5 10 391 391 801 9 12 779 779 500-1,000.............................................................. 75 2 6 67 67 402 (2) (2) 402 402 1,000 and over..................................................... 62 3 5 54 52 1,018 (2) (2) 974 963 A4. Savings deposits issued to all others Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 4.00 4.01 4.51 Memo: 4.00 4.01 4.51 Memo: or to to ceiling or to to ceiling less 4.50 5.00 rate1 less 4.50 5.00 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS All banks......................................................... 748 744 744 256 (2) (2) 255 255 Size of bank (total deposits in millions of dollars): Less than 20............................................... 300 300 300 161 161 161 20-50........................................................... 328 328 328 (2) (2) (2) 50-100......................................................... 39 39 39 13 13 13 100-500....................................................... 64 62 62 19 (2) (2) (2) 500-1,000................................................... 2 (2) (2) (2) (2) 1,000 and over........................................... 14 14 14 60 60 60 For notes, see p. 352. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
354 Federal Reserve Bulletin □ April 1977 A5. Government time deposits in denominations of less than $100,000— Maturities of 30 up to 90 days Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 4.50 4.51 5.01 5.51 Memo: 4.50 4.51 5.01 5.51 Memo: or to to to ceiling or to to to ceiling less 5.00 5.50 7.75 rate1 less 5.00 5.50 7.75 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS All banks............................... 4,301 3,231 854 216 1,141 737 361 43 Size of bank (total deposits in millions of dollars): Less than 20..................... 2,160 1,354 638 168 251 150 60 40 20-50................................. 1,198 1,108 57 33 100 92 6 2 50-100............................... 328 265 64 134 1 127 7 100-500............................. 460 390 55 15 452 241 210 1 500-1,000.......................... 91 62 29 85 28 56 1 000 and over................. 64 53 11 120 99 21 A6. Government time deposits in denominations of less than $100,000— Maturities of 90 up to 180 days Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 4.50 4.51 5.01 5.51 Memo: 4.50 4.51 5.01 5.51 Memo: or to to to ceiling or to to to ceiling less 5.00 5.50 7.75 rate1 less 5.00 5.50 7.75 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS All banks............................. 7,498 702 6,078 718 33 1,168 131 956 81 Size of bank (total deposits in millions of dollars): Less than 20................... 4,246 359 3,394 492 500 25 435 40 20-50............................... 2,145 188 1,751 207 184 16 159 9 50-100............................. 467 70 398 91 45 46 100-500........................... 492 50 432 9 165 16 131 17 500-1,000........................ 85 18 60 7 51 (2) 35 (2) 1,000 and over............... 63 17 44 2 177 (2) 149 (2) A7. Government time deposits in denominations of less than $100,000— Maturities of 180 days up to 1 year Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 4.50 4.51 5.01 5.51 Memo: 4.50 4.51 5.01 5.51 Memo: or to to to ceiling or to to to ceiling less 5.00 5.50 7.75 rate1 less 5.00 5.50 7.75 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS All banks.............................. 4,375 361 3,062 952 33 688 58 477 153 Size of bank (total deposits in millions of dollars): Less than 20................... 2,185 304 1,518 363 195 18 132 46 20-50............................... 1,414 1,005 409 33 213 132 81 50-100............................. 272 23 155 94 21 12 7 100-500............................ 373 25 279 68 180 135 8 500-1,000........................ 74 8 53 13 22 (2) 13 (2) 1,000 and over............... 57 1 51 5 56 (2) 53 (2) For notes, see p. 352. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Changes in Time and Savings Deposits 355 A8. Government time deposits in denominations of less than $100,000— Maturities of 1 year or more Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 5.00 5.01 5.51 6.01 Memo: 5.00 5.01 5.51 6.01 Memo: or to to to ceiling or to to to ceiling less 5.50 6.00 7.75 rate1 less 5.50 6.00 7.75 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS All banks............................. 7,786 214 425 5,128 2,018 33 1,177 6 50 749 372 Size of bank (total deposits in millions of dollars): Less than 20................... 4,136 139 164 2,291 1,542 564 2 21 298 242 20-50................................ 2,459 33 155 2,124 147 293 1 3 270 19 50-100............................. 586 16 39 336 195 126 (3) 15 26 86 100-500........................... 479 20 39 305 115 111 2 6 88 16 500-1,000........................ 75 4 17 42 12 27 (2) 2 21 (2) 1,000 and over............... 51 2 11 31 7 55 (2) 3 47 (2) A9. Other time deposits in denominations of less than $100,000— Maturities of 30 up to 90 days Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 4.50 4.51 Memo: 4.50 4.51 Memo: or to ceiling or to ceiling less 5.00 rate1 less 5.00 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS All banks......................................................... 6,324 11 6,313 5,959 7,319 86 7,233 6,741 Size of bank (total deposits in millions of dollars): Less than 20............................................... 2,986 2,986 2,850 608 608 584 20-50........................................................... 1,770 1,770 1,630 360 360 348 50-100......................................................... 773 773 741 961 961 873 100-500....................................................... 621 616 595 1,502 (2) (2) 1,444 500-1,000.................................................... 98 93 80 1,402 73 1,329 1,221 1,000 and over.......................................... 77 76 64 2,486 (2) (2) 2,272 A10. Other time deposits in denominations of less than $100,000— Maturities of 90 up to 180 days Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 4.50 4.51 5.01 Memo: 4.50 4.51 5.01 Memo: or to to ceiling or to to ceiling less 5.00 5.50 rate1 less 5.00 5.50 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS All banks......................................................... 11,464 55 1,457 9,951 9,872 29,844 1,791 28,049 27,685 Size of bank (total deposits in millions of dollars): Less than 20............................................... 6,510 55 967 5,488 5,433 3,655 200 3,451 3,442 20-50........................................................... 3,037 309 2,728 2,728 5,192 238 4,954 4,954 50-100......................................................... 1,014 133 881 881 3,707 474 3,232 3,232 100-500....................................................... 719 26 693 680 7,124 146 6,977 6,929 500-1,000................................................... 99 14 85 79 2,731 153 2,578 2,518 1,000 and over.......................................... 84 8 76 71 7,434 . 579 6,855 6,610 For notes, see p. 352. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
356 Federal Reserve Bulletin □ April 1977 All. Other time deposits in denominations of less than $100,000— Maturities of 180 days up to 1 year Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 4.50 4.51 5.01 Memo: 4.50 4.51 5.01 Memo: or to to ceiling or to to ceiling less 5.00 5.50 rate1 less 5.00 5.50 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS All banks......................................................... 8,951 32 479 8,440 8,204 4,377 95 4,276 3,990 Size of bank (total deposits in millions of dollars): Less than 20............................................... 5,271 29 411 4,832 4,640 1,733 (3) 41 1,693 1,610 20-50........................................................... 2,093 2,093 2,093 373 373 373 50-100......................................................... 794 763 747 639 30 610 602 100-500....................................................... 615 589 576 560 (2) 2) 548 546 500-1,000................................................... 98 90 82 345 (2) 2) 340 329 1,000 and over.......................................... 79 74 66 726 13 714 530 A12. Other time deposits in denominations of less than $100,000— Maturities of 1 up to 2y2 years Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 5.00 5.01 5.51 Memo: 5.00 5.01 5.51 Memo: or to to ceiling or to to ceiling less 5.50 6.00 rate1 less 5.50 6.00 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS All banks......................................................... 13,553 240 13,311 13,059 33,919 (2) (2) 33,468 32,757 Size of bank (total deposits in millions of dollars): Less than 20............................................... 8,112 164 7,947 7,756 10,551 241 10,311 10,119 20-50........................................................... 3,469 33 3,436 3,413 8,021 35 7,986 7,986 50-100......................................................... 1,069 32 1,037 1,021 3,545 113 3,432 3,430 100-500....................................................... 719 8 711 696 4,848 20 4,828 4,687 500-1,000................................................... 100 1 97 95 1,839 (2) (2) (2) 1,736 1,000 and over.......................................... 84 2 82 78 5,116 (2) (2) 4,798 A13. Other time deposits in denominations of less than $100,000— Maturities of 2y2 up to 4 years Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 6.00 6.01 Memo: 6.00 6.01 Memo: or to ceiling or to ceiling less 6.50 rate1 less 6.50 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS All banks...................................................................... 12,204 224 11,980 11,856 18,421 294 18,128 17,786 Size of bank (total deposits in millions of dollars): Less than 20............................................................ 6,910 193 6,717 6,688 4,464 100 4,364 4,248 20-50........................................................................ 3,422 3,422 3,356 4,825 4,825 4,767 991 2350-100..9..6...8..................9..4..5..............1...,.9..7..1...................63 1,908 1,908 100-500.................................................................... 707 3 704 702 2,730 (2) (2) 2,665 500-1,000................................................................. 96 5 91 89 1,144 87 1,058 1,021 1,000 and over....................................................... 79 1 78 77 3,288 (2) (2) 3,178 For notes, see p. 352. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Changes in Time and Savings Deposits 357 A14. Other time deposits in denominations of less than $100,000— Maturities of 4 up to 6 years Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 6.50 6.51 7.01 Memo: 6.50 6.51 7.01 Memo: or to to ceiling or to to ceiling less 7.00 7.25 rate1 less 7.00 7.25 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS Ml banks................................................................... 11,773 107 1,748 9,918 9,918 44,500 783 4,357 39,360 39,360 Size of bank (total deposits in millions of dollars): Less than 20......................................................... 6,794 57 942 5,795 5,795 6,547 8 774 5,765 5,765 20-50...................................................................... 3,118 33 639 2,445 2,445 10,015 122 1,795 8,099 8,099 50-100.................................................................... 991 110 881 881 5,781 348 5,433 5,433 100-500................................................................. 694 8 46 641 641 9,301 161 799 8,341 8,341 500-1,000.............................................................. 98 4 6 88 88 4,086 32 259 3,796 3,796 1,000 and over..................................................... 79 5 6 68 68 8,770 461 383 7,927 7,927 A15. Other time deposits in denominations of less than $100,000— Maturities of 6 years or more Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total 5.00 5.01 7.26 Memo: 5.00 5.01 7.26 Memo: or to to ceiling or to to ceiling less 7.25 7.50 rate1 less 7.25 7.50 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS All banks......................................................... 8,168 402 7,765 7,765 9,243 638 8,606 8,606 Size of bank (total deposits in millions of dollars): Less than 20............................................... 4,244 191 4,052 4,052 699 15 684 684 20-50.......................................................... 2,287 80 2,206 2,206 1,832 25 1,806 1,806 50-100......................................................... 882 94 788 788 1,486 127 1,359 1,359 100-500....................................................... 592 20 572 572 1,940 67 1,873 1,873 500-1,000................................................... 87 9 78 78 936 121 815 815 1,000 and over.......................................... 77 8 69 69 2,351 282 2,068 2,068 A16. Club accounts—Christmas savings, vacation, or similar club accounts Most common interest rates paid by insured commercial banks on new deposits, October 27, 1976 Most common rate paid (per cent) Most common rate paid (per cent) Group Total Total .01 4.01 4.51 Memo: .01 4.01 4.51 Memo: 0.00 to to to ceiling 0.00 to to to ceiling 4.00 4.50 5.50 rate1 4.00 4.50 5.50 rate1 NUMBER OF BANKS MILLIONS OF DOLLARS All banks.............................. 9,021 5,015 1,219 654 2,133 180 1,837 418 201 198 1,019 209 Size of bank (total deposits in millions of dollars): Less than 20................... 4,921 3,286 552 359 722 237 122 37 17 60 20-50................................ 2,622 1,298 501 174 648 121 245 118 60 8 59 19 50-100.............................. 842 258 70 55 460 46 430 50 11 33 335 187 100-500............................ 504 133 80 45 246 12 371 75 52 36 208 3 500-1,000......................... 75 24 11 10 30 125 24 19 33 48 1,000 and over............... 58 16 5 10 27 431 29 22 71 308 For notes, see p. 352. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
358 Statements to Congress Statement by Arthur F. Burns, Chairman, as 1977 began, our Nation’s economy was al Board of Governors of the Federal Reserve ready emerging from its phase of slowing. That System, before the Committee on the Budget, fact would be better appreciated, I believe, were £/.S. Senate, March 22, 7977. it not for preoccupation with gross national product (GNP) numbers as such. The figure for It is a special pleasure for me, Mr. Chairman, the fourth quarter of last year was obviously to meet with this committee. The action taken disappointing, showing as it did an annual rate by the Congress in 1974 to establish a formal of gain of only 2.6 per cent in constant-dollar legislative budget is one of the great events of terms. That outcome, however, reflected the our time. In my judgment, the work of this new inventory adjustment that was in progress. committee and of your counterpart in the House When inventory changes are removed from the has already amply demonstrated the wisdom of GNP figure—in other words, when we focus on the Congressional Budget Act. final sales of goods and services—we have a In August of 1976, when I last communicated better indicator of the underlying trend of the with this committee, there was a considerable economy. This magnitude showed a decidedly concern in our country over the slowing in the stronger rate of gain in last year’s final quar pace of economic recovery. I then called atten ter—an annual rate of growth of 5.7 per cent. tion to the fact that temporary pauses were not Indeed, when one abstracts from the inventory uncommon during business-cycle expansions changes that overlay broad economic trends and went on to suggest that reacceleration of during the course of 1976, the picture of steadily economic growth would probably occur soon improving final sales is impressive. And it because improving conditions were discernible would have been even more impressive, I be in key sectors of the economy. lieve, had it not been for the distortions caused It is clear now that a quickening of the eco by strikes in the rubber and automobile indus nomic tempo did occur in the latter months of tries. It is noteworthy that the annual rate of 1976. Retail sales began to show improvement growth in final sales, measured in constant dol last autumn across a broad spectrum of mer lars, rose in successive quarters of 1976, while chandise lines, and by Christmas it was evident the corresponding figures for GNP kept declin that consumers generally were in a spending ing. mood. Brisk consumer buying during the fourth For a brief period, the unusual weather of quarter enabled business firms to work off January and February tended to obscure the excess inventories that had accumulated during reacceleration under way in the Nation’s econ previous months when retail demand was omy. January numbers, in particular, were weaker. With sales and inventories coming into badly distorted, and, of course, we still do not better balance, production and new orders began know how seriously agricultural production will to quicken and the demand for labor increased. be affected this year by the drought in parts of Employment rose strongly in the final 2 months the West. Recent data, however, preponderantly of last year and again in the first 2 months of confirm a smart snapback from the weatherthis year—with the cumulative rise over the 4 related disturbances, and we may reasonably months amounting to 1 lA million persons. expect good gains in general economic activity These developments testify to the fact that during the remainder of 1977 and on into 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 359 The economy is now relatively free of the physical output during 1977 than occurred dur kind of speculation and imbalances that devel ing 1976. For M-1, the narrowly defined money oped in the early 1970’s. Consumer purchasing stock—which includes only currency and de power—badly hurt for some years by inflation’s mand deposits—the Federal Open Market heavy toll—is exhibiting a healthier trend. So Committee (FOMC) has specified a growth too is business income. Material improvement range of 4xh per cent to 6V2 per cent for the has occurred in personal and corporate balance year ending with the fourth quarter of 1977. For sheets. Inventories in general seem to be pru M-2, a broader measure of money, which in dently related to sales trends. The housing in cludes savings and consumer-type time deposits dustry is steadily working out of the difficulties at commercial banks as well, the range is 7 to brought on by the overbuilding of the early 10 per cent. For M-3, a still broader aggregate, 1970’s. Even business investment—while lag which also includes the deposits of thrift insti ging in its recovery pace relative to earlier tutions, the range is 8V2 to IIV2 per cent. business-cycle expansions—is gradually gaining It is highly important to recognize that the strength. And, I might add, the financial envi ability of these monetary aggregates to accom ronment in our country is now conducive to modate economic growth depends not just on economic expansion, as is evidenced both by the their size but also on the intensity with which state of liquidity that generally prevails and by money balances are used—that is, on the turn the truly striking fact that the level of interest over of money. The turnover of the narrowly rates is appreciably lower than at the beginning defined money stock—or, if you prefer, its of the recovery. velocity—has been rising especially rapidly in In view of this combination of circumstances, recent years, reflecting numerous innovations in as I have indicated in other recent congressional financial technology that have enabled individ testimony, it seems doubtful that any special uals and business firms to reduce reliance on governmental efforts are now needed to assure demand deposits for handling their monetary substantial gains in our economy this year. A transactions. Our judgment is that such econo few months ago, when plans aimed at bolstering mizing in the use of cash balances will continue, aggregate demand first began to take shape, the and—of necessity—we must take that consid case for supportive action had greater plausi eration into account in setting our monetary bility. But some significant developments have expansion ranges. since then occurred—particularly, of course, the The growth ranges that the FOMC has estab demonstration that economic expansion is reac- lished for monetary growth are, of course, not celerating and that the reacceleration has ap immutable. Large uncertainties always surround parently survived the weather disturbance. economic forecasts, and the relationships that Such reservations as I or others at the Federal exist between financial and real variables are Reserve have about the immediate need for new complex and often loose. For these reasons we fiscal stimuli should not be interpreted to mean are very mindful at the Federal Reserve that that the Federal Reserve will stop short of doing constant reappraisal of the appropriateness of what it can to foster a satisfactory rate of eco our monetary growth ranges is required. Should nomic growth this year. On the contrary, as I developments in the months ahead indicate that have repeatedly stated, the President’s objec the ranges established for monetary expansion tives for 1977, with regard to both the growth are inconsistent with the achievement of satis of output and decline of unemployment, appear factory performance of our economy, the to be entirely reasonable. FOMC would alter them—either upward or The growth ranges that we at the Federal downward, depending on what signals emerge. Reserve have established for monetary expan Indeed, a formal detailed review of our longersion this year, as reported to the House Banking term monetary growth ranges occurs every 3 Committee in February, are adequate in our months, with the next such review scheduled judgment to permit a significantly faster rise in for the FOMC’s mid-April meeting. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
360 Federal Reserve Bulletin □ April 1977 The judgments that go into our process of have tended to fall—as would private holdings reassessing monetary growth rates are literally of money—and interest rates would have been continuous, and they are not made lightly. The subjected to upward pressure. For the rebate members of the Federal Open Market Commit period itself, our intent was to allow the depos tee make the final decisions, but in doing so iting of rebate checks in bank accounts to go we rely heavily on the investigations and forward without any special effort on our part knowledge of our excellent staff. We also bene to influence the impact of such deposit activity fit greatly from the knowledge and experience on money growth. We recognized, of course, of the officers and directors of the Federal Re that the money supply would accelerate signifi serve banks and branches across our country. cantly for a while, but we also anticipated that I want to assure you, moreover, that commit it would subsequently moderate as households tee meetings such as today’s are very helpful and businesses disposed of deposits that had to us in clarifying congressional intent and pur temporarily risen above accustomed levels. pose. So, too, are the oversight hearings con As events actually unfolded in May and June ducted by the banking committees of the Con of 1975, the rise that took place in the money gress. The Federal Reserve does not operate in supply was much larger than the Federal Re an ivory tower. We well understand the need serve staff had estimated would occur as a result for checking and expanding our knowledge, and of the rebate program. The inference we drew we therefore supplement interchange of the kind was that the demand for money was expanding we are having today with a great deal of infor rapidly quite apart from the rebate program. We mal contact with individual members of the therefore took mildly restrictive action toward Congress and with officials of the Treasury the end of June to reassure the Nation that the Department, the Council of Economic Advisers, Federal Reserve would not countenance mone the Office of Management and Budget, and other tary expansion on a scale that might release a agencies. Such dialogue is, in fact, continuously new wave of inflation. Differences of judgment occurring. existed then—and still do—as to the appro The subject of money and banking can at priateness of that mild tightening action. Let me times be difficult even for experts. I recall vi say only that if we erred, the mistake was vidly the questions concerning monetary policy technical in origin—that is, it grew out of the raised by some members of this committee soon difficulty in making good estimates of the taxafter the disbursal of the tax-rebate and special rebate impact on deposit growth. In any event, Social Security checks in 1975. Since pending monetary growth rates soon moderated, and we legislation before the Congress would involve lost very little time in returning to an easier another substantial rebate program this spring, monetary stance. it may be helpful to review the earlier episode Fortunately, in judging the monetary effects and at the same time share with you our plans of this year’s proposed rebate program, we have for adjusting monetary actions to this year’s a better basis for making estimates because the proposed rebates. 1975 experience is available for guidance. The objective of the Federal Reserve in 1975 Whereas our 1975 estimates of how money was to accommodate as smoothly as possible supply growth would be affected were single the sudden large flow of funds through bank point estimates, this time we will make a range accounts occasioned by the rebate program. of estimates in recognition of the uncertainties This involved action to supply bank reserves to inherent in trying to gauge how much of their the market in the period before the rebate checks rebates people will elect to hold in money form were mailed, since the Treasury was then and for what length of time. In short, I expect building up its balances at Federal Reserve that our zone of tolerance in permitting mone banks in anticipation of making the dis tary expansion to run at high rates for a while bursements. Had we not acted supportively in will be somewhat wider this time. But if we the pre-rebate period, total bank reserves would then find that monetary growth does not soon Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 361 moderate in the expected degree, we may need business cycles in our country clearly demon to take action to absorb bank reserves tempo strates that the average level of sensitive com rarily. All in all, my belief is that we learned modity prices tends to start rising at or close something in 1975 and that consequently a re to the very beginnings of a business-cycle bate program this year has a good chance of upswing and that the prices of final goods and being handled relatively smoothly. services gather substantial upward momentum A basic working premise of the Federal Re well before full utilization of resources is serve is that there is an urgent national need achieved. to create job opportunities for the millions of We are now witnessing in fact some disturb Americans who want to work but who never ing manifestations of price pressures in our theless now find themselves idle. The solution economy. The prices of basic commodities in to this problem, and especially amelioration of wholesale markets have been moving up at a the difficulties that young people have in finding rapid pace since last fall. The wholesale prices employment, is not to be found exclusively—or of industrial commodities at all stages of proc even mainly—in government programs aimed essing have increased at an annual rate of 8 per at enlarging aggregate demand. It is of crucial cent during the past half year. At the consumer importance that our citizens understand better level, even abstracting from the temporary im than they do that inflation is itself a prime source pact of weather on some food items, there has of much of our nationwide unemployment. been a tendency recently for prices of many There is no doubt in my mind, as I read the goods and services to rise at an increased rate. record of the early 1970’s, that inflationary These developments suggest the need for distortions were the principal cause of the recent great care in fashioning fiscal and monetary severe recession. Nor do I have much doubt that policies. Our official actions must not contribute the expansion of employment now in process to inflationary psychology. Not only that, but will be threatened if we fail to develop a strong we need to convince both businessmen and anti-inflation policy. consumers that a break with the past is under That is why monetary policy, while fully way—particularly, that our Nation’s finances supportive of economic growth, has diligently will henceforth be handled with greater pru sought to avoid the release of new inflationary dence than they have in the past. forces. That is also why I have been so con The task of effecting a transition to a nonincerned that the Congress recognize the powerful flationary environment is one to which the Fed momentum that has been built into Federal eral Reserve must make a major contribution. spending by the “entitlement” programs en The monetary growth ranges established during acted in the 1960’s. We need to take great care the past 2 years have been considerably higher in adding new permanent programs to the than they should be over the long run. Ideally, budget, lest they accentuate underlying budget the combination of increases in the money stock pressures that will manifest themselves later on and increases in velocity should approximate the and create financial stresses that jeopardize eco economy’s longer-term growth rate of physical nomic growth and employment. output, which is about 3l/i per cent. If we could Fortunately, we have made considerable come close to such an alignment, the trend of progress since 1974 in lowering the rate of the general price level would tend to stabilize inflation. Consumer prices rose about 5 per cent and inflation would be a thing of the past. last year, down from 12 per cent 2 years earlier. We are, of course, a long way from that But it is going to be difficult to achieve further objective and, as a practical matter, we cannot significant reductions in the immediate future. move to it in one fell swoop. The shock of Substantial amounts of idle capacity and man adjustment would be too abrupt in view of the power provide little assurance that price pres need to keep the economy moving along a sures will not mount as the economic growth satisfactory path of expansion. But the diffi rate speeds up. Indeed, the historical record of culties inherent in moving swiftly to appropriate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
362 Federal Reserve Bulletin □ April 1977 growth rates for money do not mean we should in fact been gradually lowering its projected be acquiescent. Rather, a policy of gradual growth ranges for the monetary aggregates. We reduction in monetary growth rates toward know that we must do better in order to lay levels consistent with reasonable price stability a foundation for lasting prosperity. I assure you must be adhered to. The Federal Reserve has that we will be striving in that direction. □ Statement by Henry C. Wallich, Member, tions that have increased the needs of these Board of Governors of the Federal Reserve multinational corporations for international fi System, before the Subcommittee on Financial nancial services. Institutions Supervision, Regulation, and In Superimposed on these broad trends were two surance of the Committee on Banking, Finance, further developments that have greatly added to and Urban Affairs of the U.S. House of Repre international credit demands from U.S. and sentatives, March 23, 1977. other banks. The first of these developments was the substantially increased credit demands from I appreciate the opportunity to appear before this a large number of countries, many of which had subcommittee to discuss the important and embarked on expansionary programs during the timely topic of international lending by U.S. commodity price surge and worldwide inflation banks. In my statement this morning I will of the early 1970’s and subsequently found present a brief survey of: (1) the growth in scope themselves with unsustainable rates of growth of U.S. banks’ international lending, with em of imports. Borrowers in this position—not only phasis on recent developments, (2) some prob the developing countries but also other primary lems and concerns that arise from the interna producers and some highly industrialized coun tional operations of U.S. banks, and (3) actions tries—have obtained substantial amounts of that the Board of Governors of the Federal loans from American banks and also from banks Reserve System has taken in the supervisory of other major industrial countries. area as growth in international operations has The second major development was the sharp proceeded. It seems appropriate to keep this increase in oil prices and the special financing review brief since this subcommittee, together problems that resulted from the emergence of with the House Committee on Banking, pub a current-account surplus for the Organization lished an extensive study of “U.S. Banks of Petroleum Exporting Countries (OPEC), Abroad,” only 9 months ago as part of the which has aggregated close to $150 billion in Financial Institutions and the Nation’s Economy the past 3 years. The rapid accumulation of debt (FINE) study. appeared relatively manageable so long as it seemed probable that the OPEC surplus would diminish fairly rapidly. Developments that be came apparent in the course of 1976 indicate GROWTH OF U.S. BANKS’ that the OPEC surpluses will be larger and INTERNATIONAL ACTIVITIES persist longer than had been expected several The expansion of U.S. banks’ international ac years ago. This changed outlook makes more tivities in the past decade has reflected a number difficult the situation of the borrowing countries, of developments, in addition to the central role calls for a more deliberate process of balance of the dollar in international finance. In part, of payments adjustment on their part, and may the expansion was the consequence of the also make it necessary to develop alternative growth of international trade, which has more financial arrangements. than quadrupled over this period, and the greatly Growth in international lending by U.S. expanded activities of multinational corpora banks in the late 1960’s and early 1970’s was Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 363 concentrated at foreign branches, since foreign placements with offices of major international credits extended by U.S. offices were subject banks, including foreign branches of nonaffil to the Voluntary Foreign Credit Restraint iated U.S. banks. These placements typically (VFCR) program. Subsequently, foreign lend have short maturities and frequently serve as ing from U.S. offices expanded rapidly as the secondary liquidity reserves in Euro-currency VFCR program was relaxed and terminated. By banking. These interbank placements result in the end of 1976, total claims on foreigners by some enlargement of reported U.S. bank claims both domestic offices and foreign branches of on individual countries since the placements U.S. banks amounted to $207 billion, most of between different U.S. banks are not netted out. which were held by foreign branches. Apart from interbank transactions, the claims In addition, majority-owned foreign subsidi on G-10 countries include a wide variety of aries of U.S. banks had total assets of $30 credits—longer-term credits to multinational billion at the end of 1975, the latest date for companies, short-term trade finance, and equip which comprehensive data are available. The ment leases as well as some loans to major activities of these subsidiaries, which include public-sector borrowers. both banks and other financial institutions, are It should be emphasized that these aggregate in most cases similar to those conducted through figures on loans to individual countries cannot overseas branches. A preference for subsidi be used to measure the amount of exposure of aries, where it exists, reflects mainly reasons our banks in these countries. Part of the aggre relating to corporate structure or to legal and gate represents interbank placement where the regulatory requirements in particular foreign exposure is generally regarded as small; part countries. represents local-currency lending funded lo Let me now turn to the geographic distri cally; and other portions may be externally bution of foreign claims at head offices and guaranteed or possess different characteristics foreign branches. At the end of 1976, U.S. offering protection to the lending banks. banks held $45 billion of claims on non-oil less developed countries (LDC’s). Loans to Mexico and Brazil each accounted for about one-fourth PROBLEMS AND CONCERNS of the total, and the remaining loans were mainly to a few major Latin American coun Rapid growth of international lending by U.S. tries, and to Korea, the Philippines, and banks has given rise to some problems. These Taiwan. Thus lending by U.S. banks to coun problems are a subject of legitimate concern to tries classified as LDC’s has been concentrated bank supervisors and to the banks themselves. in the upper-income LDC’s whose economies Before turning to some of these problems and have been growing rapidly in recent years. concerns, perspective requires recognition of the Many of these countries have been traditional benefits that have been derived from the expan customers of U.S. banks because of longstand sion of international lending by commercial ing economic relations with the United States. banks. U.S. bank lending to LDC’s with some of the First of all, this lending has filled a traditional more highly publicized problems has actually and important role in the financing of our foreign been relatively small. trade. It has also contributed to the efficient The largest share of the foreign assets of U.S. functioning of world credit and capital markets banks represents claims on the Group of Ten and to the financing of vital projects such as (G-10) countries and Switzerland, and claims North Sea oil development. on offshore banking centers such as the Ba Another important benefit from international hamas, Singapore, Panama, and Hong Kong. lending has been the contribution to the earnings Altogether, these claims total about $125 bil of U.S. banks. In recent years, reported inter lion. A large proportion of these claims, espe national earnings have accounted for as much cially in the case of the United Kingdom and as 60 to 70 per cent of total earnings for a few the offshore banking centers, are interbank of the largest banks, and for close to half of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
364 Federal Reserve Bulletin □ April 1977 total earnings for a number of other large banks. wise to project automatically into the future the Earnings from international operations have en low international loan losses of the past. abled the banks to add to their capital resources Besides these risks in international credits, and have helped provide a cushion to absorb the potential exposure of banks in their foreign the effects of domestic loan losses. exchange operations has been increased by the Nevertheless, the expansion of the banks’ shift in the international monetary system to international activities has necessarily been ac floating exchange rates and by the actual fluctu companied by greater risk exposure. The ations that have occurred in foreign currency principal elements of this exposure are the tra values. The contribution of improper foreign ditional credit risks in international loan portfo exchange dealings to the failure of Franklin lios, the separate risks arising out of lending National Bank is well known, as are the losses in different sovereign jurisdictions (the “country incurred by some banks overseas. While U.S. risk” problem), and the risks associated with banks appear to have adopted management pro the banks’ foreign exchange operations under cedures adequate to limit their exposure in their floating exchange rates. foreign exchange dealings, their success in con Many of the credit risks in international lend trolling that exposure must be a matter of con ing are the same as in domestic lending, even tinuing concern to regulatory authorities. though the banking practices and the legal and In addition to these concerns about the expo regulatory environments may differ. On the sure of the banks, the view has sometimes been other hand, international lending is subject to expressed that foreign lending by U.S. banks special kinds of risk, usually subsumed under is occurring at the expense of lending to credit the heading of “country risk.” This type of risk worthy domestic borrowers. On this subject, may be divided into two categories: several points should be kept in mind. The great 1. Balance of payments difficulties resulting bulk of the international lending by American from external or internal economic causes that banks is financed by foreign-source funds. This can lead to devaluation, foreign exchange con statement applies not only to the loans made trols, or some form of debt rescheduling or even by the overseas branches of American banks but default; also to loans made from offices in this country. 2. Risks arising from social or political up There is, of course, some cyclical variation in heavals. the extent to which foreign lending from U.S. Concern about the country-risk element in offices is matched by foreign sources of funds international loans has, of course, been greatly to the banking system. In periods of relatively enlarged by the effect of the oil crisis on the reduced domestic demand for bank loans, as payments positions of many countries and the occurred in 1975 and 1976, banks may rely large payments deficits and growing volume of more heavily on U.S.-source funds to finance external indebtedness that have ensued. foreign loans, while in periods of high credit Despite these special risks in international demands in our economy, U.S. banking offices lending, U.S. banks’ loan loss experience to may become net users of foreign-source funds, date has been better internationally than domes as occurred in 1974. tically. Over the 5 years from 1971 to 1975, But, more broadly, it must be stressed that the loss ratio on international loans of the seven at times such as the present, when the United largest U.S. banks was about one-third of the States has a deficit on its international transac loss ratio on the total loan portfolio. Even in tions in goods and services (current account), 1975 and 1976 when loan losses rose sharply we are a net capital importer. on all types of loans, the loan/loss ratio on If American banks lend additional amounts international loans remained substantially below abroad, and if the foreign borrowers do not buy that for domestic loans. So far, problem inter more of our goods and services but instead national loans seem to have been concentrated purchase goods and services from other coun in real estate, as has been true of problem tries, a company, bank, or official institution domestic loans. Nonetheless, it would be un abroad will acquire additional financial assets Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 365 in the United States, such as U.S. Treasury bills the banks’ international operations. In the same or securities. vein, the frequency of our overseas examina tions has been stepped up and the procedures by which examiners scrutinize bank manage ment systems and controls over their interna ACTIONS TAKEN BY tional operations are under active review. THE FEDERAL RESERVE Secondly, the banks have been encouraged This review of some of the current problems to keep their international, as well as their in international lending is necessarily abbre domestic, expansion within prudent limits viated. While care needs to be taken not to through the Board’s “go-slow” policy. The exaggerate these problems, concern about them Board has been unwilling to approve proposals is legitimate and, as I indicated earlier, is shared for new expansionary ventures or investments in the banking industry as well. One indication when in the Board’s judgment management’s of such concern is the steps that have been, and priority attention should be directed to im are being, taken within the banks to review and provement of the bank’s own condition and tighten their procedures and controls in the particularly to strengthening its capital structure. international area. The Board has also cautioned the banks about Bank supervisors have also responded to their exposure in international joint ventures. In changes in the international activities of U.S. a policy statement issued early last year, the banks. I should like therefore to turn to the Board indicated that, in considering applications measures that have been taken and are being to make investments in foreign joint ventures, taken within the Federal Reserve System in the it would take into account the possibility that exercise of its supervisory responsibilities in this the applicant might for business reasons accept area. a degree of financial responsibility for the First, however, I should emphasize that zero- foreign joint venture well beyond that indicated risk banking is not an objective of bank super by its investment. vision. Banks must make judgments and take In the area of foreign exchange the Federal reasonable risks. One way bank supervisors can Reserve conducted a survey in late 1974 of bank strengthen the banking system is by ensuring practices regarding foreign exchange exposure that adequate information is available to the and controls over their foreign exchange opera banks. An example is the current effort by the tions. That survey, the results of which were Federal Reserve System, in cooperation with the sent to the Congress in 1975, indicated that the Bank for International Settlements (BIS) and banks surveyed set conservative limits on their other central banks of the G-10 countries, to foreign exchange positions and that the meas obtain data on the total amounts, maturity dis ures followed by them in controlling that expo tribution, and guarantee status of bank credits sure through reporting practices, internal con to borrowers in individual countries other than trols, and auditing procedures were generally those developed countries participating in this adequate. However, we are continuing to work effort. The expanded coverage and the maturity with the banks and the Comptroller of the Cur information in this report will represent a rency to develop minimum standards for the marked improvement over data currently avail internal control of banks’ foreign exchange able to banks and bank supervisors. Moreover, operations. for the first time, aggregate information will be Among other efforts to improve our supervi available that includes the geographic distri sion of international lending, the Federal Re bution of credits that are covered by guarantees serve is currently conducting, through inter external to the borrowing country. views, an informal survey of commercial bank In addition, other reports received by the practices in defining, monitoring, and control System are being reviewed and in some cases ling country risk. This survey, which covers revamped to make them more useful from a about 25 large banks, reveals that U.S. banks supervisory point of view to the monitoring of engaged in international financial activities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
366 Federal Reserve Bulletin □ April 1977 typically have systems for measuring and con these international cooperative efforts will be trolling country risk, although the content of improved supervision of our banks’ operations these internal systems differs from bank to bank. overseas with the assistance of foreign banking The banks surveyed are aware of the complexity authorities and from their point of view, im of measuring country exposure and are actively proved supervision of their banks’ activities in seeking to improve their internal systems. the United States with the assistance of Ameri Finally, I should like to mention the initia can bank supervisors. tives that have been taken to improve interna One complication in development of close tional cooperation in the supervision of interna cooperation in banking supervision between na tional activities. The Federal Reserve is an ac tional authorities is the fact that supervisory tive member of the BIS Committee on Bank authority over the entry and activities of foreign Regulation and Supervisory Practices. That banks in the United States is primarily the committee was established in early 1975 as a responsibility of the State banking authorities. means of promoting exchanges of information The United States is unique in this respect. To and views about bank supervisory practices and improve this situation, and also because of the bank supervisory problems. In addition to the growing importance of foreign banks in the educational value of such exchanges, the con functioning of U.S. credit and money markets, tacts established and maintained through this the Board has been urging enactment of Federal committee have materially strengthened the legislation for the regulation of foreign banks ability of bank supervisors in the major coun in the United States. It is sincerely hoped that tries to deal with individual problems as they these proposals will be reviewed this year and emerge. that they will soon be incorporated into U.S. Over the longer run, one of the benefits of law. □ Statement by David M. Lilly, Member, Board existing guarantee programs or would involve of Governors of the Federal Reserve System, the use of the Government’s guarantee of loans before the Subcommittee on Economic Stabili for a number of new purposes, particularly in zation of the Committee on Banking, Finance, the energy field. These developments clearly and Urban Affairs, U.S. House of Repre point to the need for the Congress to make a sentatives, March 30, 1977. thorough assessment of the public policy impli cations of programs that utilize the Federal I appreciate the opportunity to appear before you Government’s credit standing and to improve this morning to discuss Federal Government procedures for evaluating and accounting for loan guarantees. I would like to say at the outset such programs. that I am not an expert on the wide range of As you noted in your letter, the character of specific guarantee programs. I intend, therefore, the Government’s loan guarantee activities has to focus my remarks on the general question been changing. Old, well-established programs of the economic implications of loan guarantees generally have involved the provision of a and the treatment of such guarantees in the guarantee on relatively small loans in the agri budgetary process. cultural, mortgage, or small business areas. The volume of guaranteed loans has been Under these programs, risk has been spread rising rapidly in recent years, reflecting growth among a large number of borrowers and over under longstanding programs as well as the a wide geographical area, and default rates have introduction of additional programs established proven to be low and fairly predictable. In the to foster a variety of new public policy objec case of Federal Housing Administration (FHA) tives. The Congress has also been deluged of Section 203b insured mortgages, as an out late with proposals that would further expand standing example, premiums charged for this Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 367 insurance have more than covered all losses to private involvement in a large percentage of date. them is likely to be modest because the Federal Most of these older programs were estab Financing Bank (FFB) probably will originate, lished to remedy imperfections thought to exist service, and hold the great bulk of these loans. in the private credit markets that resulted in a As you know, since it began operating in 1974, smaller flow of credit into certain uses than the FFB has not only made direct loans to seemed warranted by underlying economic cir Government agencies but has also acquired a cumstances. Such imperfections were attributed substantial volume of Government-guaranteed to lenders’ inability to pool large amounts of loans as well. There is, in any case, little risk, their lack of knowledge about the charac substantive difference between a direct loan and teristics of borrowers, and/or their reluctance to a guaranteed loan held by a private borrower innovate new lending terms. It was, in part, to in which risk of failure to repay is assumed by acquaint lenders with new opportunities that the U.S. Government. The FFB’s acquisition these programs were administered in ways that of guaranteed loans further blurs this distinction, involved the private sector in the origination, however, and in effect converts guaranteed servicing, and even coinsurance of loans. This loans into direct loans. strategy has often succeeded. In the home There are, however, clear advantages gained mortgage area, for example, an active and ex when the FFB acquires guaranteed loans. Such panding private sector has increasingly assumed acquisitions serve to consolidate and bring order the risk-taking functions originally performed to the process of issuing Government-guaran by the Government. teed debt instruments. Potential disruptions to Many of the loan guarantee programs estab the functioning of securities markets that could lished more recently have been quite different be caused by numerous public sales of guaran in nature. They have involved the use of the teed security issues are thus avoided. In addi Government’s guarantee of loans to underwrite tion, the FFB loans funds that it has borrowed spending that has been judged to yield desirable from the Treasury, and it is therefore able to social objectives, but which may offer only hold the interest rates it charges to levels that indifferent prospects of being financially suc are just above the rates the Treasury pays when cessful. Programs such as student loans and it borrows in the market. Guaranteed loans, assistance for low- and moderate-income home when placed in private hands, normally carry buyers, for example, would appear to involve interest rates significantly higher than rates on a sizable element of risk to the Government and Treasury securities of similar maturity because subsidy to the recipients since the full repayment such loans lack the liquidity of direct Treasury of these loans is recognized to be uncertain. issues. The savings realized by what, in effect, Other newly proposed programs would in amounts to the substitution of direct Treasury volve use of loan guarantees to aid in the fi debt for guaranteed loans can accrue either to nancing of projects, particularly in the energy the borrower through lower interest charges or area, whose exceptionally large size relative to to the taxpayer if a fee is levied on the guaran the borrowing unit virtually precludes private teed loan. lenders from providing funds on an unassisted Concerns have been expressed in some quar basis. Also, in some cases, there is considerable ters that the advantages offered by the FFB may uncertainty as to the feasibility of the technology be encouraging growth of guaranteed loans. In to be used or as to whether the economic condi my view such concerns are perhaps misdirected. tions likely to prevail in the future will justify I would prefer to attribute the growth of such the undertaking. Thus, in these instances, the loans to the way they have been treated in the Government would incur a contingent liability budgetary process. As you are well aware, the whose size, while unknown, can be presumed exclusion of loan guarantee programs from the to be quite large. regular appropriation process eases their initia Moreover, even though such programs are to tion and impedes their subsequent control. The be authorized in the form of loan guarantees, amount of guaranteed loans does not appear in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
368 Federal Reserve Bulletin □ April 1977 functional categories of the budget, and some quite likely that the reduced cost of financing individual guarantee programs extend over induces some additional outlays. many years, with little periodic zero-base re While loan guarantees generally result in a view or control other than over-all limits set by net increase in credit used to finance selected the Congress. Moreover, new loan guarantee types of expenditures, it must be stressed that programs have little or no impact on current coincidentally the volume of funds available for budgets. There is no formal mechanism in many loans to borrowers not favored by such pro programs for establishing reserves when loan grams tends to be diminished and the cost of guarantees are made in order to cover defaults these funds may be raised. As a result, the that might occur while the loans are outstanding. additional spending on projects backed by loan Instead, losses on guaranteed loans are reflected guarantees will be offset to some extent by in the budget at the time they occur. reduced expenditures for other purposes. Loan guarantee programs also impose other To sum up then, loan guarantees, as well as costs on the taxpayer. In some guarantee pro other forms of Federal credit assistance, make grams, such as guaranteed student loans, subsi funds available to finance certain types of dies are provided explicitly to those receiving spending that have been deemed through the guarantees. In addition, there are programs in legislative process to be of high social value. which the cost of processing loan applications These funds are not provided without cost, and servicing loans are borne by the Govern however. Defaults on guaranteed loans result in ment. Loan guarantees also tend to raise the a direct drain on the Treasury’s tax revenues, amount of interest that must be paid on the and there are other types of attendant costs national debt. This occurs because instruments including the higher interest rates on Treasury bearing the full faith and credit guarantee of the debt caused by enlarging the supply of securities Federal Government are viewed as close substi carrying the full faith and credit of the Federal tutes for direct Government debt by many in Government. vestors, and the competition from such instru Recognition that loan guarantees are not ments might tend to increase the cost of the costless or without side effects does not neces Treasury’s own debt financing operations. sarily lead to the conclusion that such programs Loan guarantees also have other significant should be eliminated. But it does highlight the effects on the economy that are difficult to need for careful evaluation of the relationship quantify and almost never find their way into between their benefits and costs. I do not believe budgetary discussions. These effects are the this is being done adequately at present since shifts in resource allocation patterns caused by budgetary procedures do not establish for the the operation of loan guarantees. The principal Congress a suitable framework for making such reason for loan guarantees, of course, is to assessments. redistribute credit to favored sectors so as to While there is widespread agreement that stimulate production of particular types of goods reforms in the budget treatment of credit pro or services. grams are desirable, there is little consensus on In the case of many programs, the credit what a revised budget should contain. Some provided finances activities that would not oth budget authorities have argued that all the credit erwise have been undertaken. Many of the pro activities of the Federal Government should be grams proposed for energy development, for incorporated in the unified budget. Under this example, are of this latter type. In the case of approach, outlays would include all loan con other programs, guaranteed loans may not pro tracts guaranteed by the Government and its duce an equivalent increase in spending in the agencies as well as all direct loans. The budget area because funds might be shifted by the would then measure the increase in the actual borrower from one use to another or because and potential financial liability of the Govern credits obtained under a guarantee may simply ment, thereby providing a comprehensive ac replace borrowing that would have otherwise counting of the Government’s involvement in occurred. But even in these latter cases, it seems the credit markets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 369 An all-inclusive budget would also focus at in making these estimates would be substantial, tention on the total resource allocation effects especially in the case of programs instituted or of Government activity. Congressional commit proposed more recently that involve large ele tees responsible for various functional areas of ments of unknown risk. Yet, it is clear that some the budget would be better able to consider estimates, however tenuous, would be prefera Federal credit programs in tandem with taxation ble to current practice, which in general ignores and expenditure programs. Thus, judgment on possible future costs of such programs. the advisability of adopting alternative ap The need to distinguish between Federal proaches to achieving budgetary goals would be credit programs and other expenditures was improved and a better understanding of the recognized by the 1967 Presidential Commis over-all impact of the Government on the econ sion on the Budget. Specifically, with respect omy would be obtained. to direct loans the Commission advised that An alternative approach to the budgetary while such transactions should be placed in the treatment of credit activities would be one in comprehensive budget, they should be set apart which Federal credit extensions, whether in from other outlays. Such a different treatment volving direct loans or guaranteed loans, would was advised in order to permit the calculation be excluded from the unified budget and kept of an expenditure account surplus or deficit and track of in a separate set of accounts. This to facilitate analysis of the impact of direct approach has been recommended by analysts loans. The Commission also recommended that who emphasize the difference between outlays subsidy elements in direct loans should be esti that involve the acquisition of financial assets, mated and reflected in expenditure accounts. on the one hand, and purchases of goods and With regard to the budgetary treatment of services or transfers of income on the other. In loan guarantees, the Commission offered no the former case, the Government receives a specific recommendations because it had not had claim on a borrower as an offset to its provision time to study this question sufficiently. It indi of funds; in the latter, it does not. cated, however, that coordinated surveillance of By affording similar status to direct and direct and guaranteed loans was desirable and guaranteed loans and carrying them in a separate that a summary should be prepared with the loan account, this approach would also highlight budget, setting forth amounts of guaranteed and the Federal Government’s impact on the credit insured loans outstanding and direct loans. allocation process. At the same time, the unified In adopting the Unified Budget concept in budget would conform more closely to a busi 1968, the President accepted the Commission’s ness firm’s statement of income and expense. recommendation to include direct loans in the Loan transactions under this approach would not budget. The recommendation to delineate be be reflected in the unified budget except to the tween loan disbursements and other outlays was extent that defaults and/or subsidies on these also adopted initially, but this practice has been loans give rise to outlays. In a proper accounting abandoned in recent budgets. Also, the recom scheme, of course, these types of costs should mendation for estimating subsidy elements was enter the budget on an accrual basis when the introduced in only a very few instances. Over potential liability is incurred, rather than on a the years, greater attention has been brought to cash basis at the time of default. To implement bear on loan guarantees, as they have been this procedure, the Congress would have to reviewed in some detail—along with direct estimate the potential for defaults on loans made loans—in a chapter of the Special Analysis in any year, and then appropriate sufficient funds document that accompanies the budget. This to be held in a reserve account to cover the approach, however, is obviously no substitute defaults as they occur. for one that would require consideration of Requiring current estimates of eventual costs Federal credit programs in the formal budget to taxpayers might well produce a more careful process, and it was disappointing that the Bud appraisal of various Federal credit proposals. get Control Act of 1974 did not mandate such But the difficulties that would be encountered treatment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
370 Federal Reserve Bulletin □ April 1977 The problems of budgetary management of tees exclusively with the FFB. This point clearly Federal credit programs under review by this would need detailed exploration. Committee are obviously as complex as they Second, should the decision be made to con are important. Careful study and deliberation tinue to keep privately held loan guarantees off will be required before a comprehensive budg the budget, it is imperative that steps be taken etary system can be derived that will best serve to achieve more effective congressional surveil the various needs of the Congress. I will not lance and control of these programs. At a mini attempt to offer specific recommendations for mum all such loans should be included on a a program that might best serve these objectives, separate line in the concurrent budget resolu but I would like to mention several points that tion. This highlighting of the total of Govern - I believe deserve careful consideration in your ment-loan guarantees will provide both the deliberations. Congress and the public with a more complete First, if it is decided to continue including picture of the Government’s involvement in the the direct loans of Government-owned agencies economy. in the budget, it seems clear to me that all such The Congress should also establish rules re loans should be so treated. In this regard, last quiring reconsideration of each loan guarantee year’s congressional decision to return the Ex program on a yearly basis. In carrying out this port-Import Bank to the budget was a salutary task, I would further advise the initiation of development. Similar treatment, I believe, zero-base budgeting; that is, the Congress should be considered for other agencies, in should ask whether a program continues to be cluding the FFB. There is no difference in necessary before it decides to continue and substance between a direct Federal loan and a expand it. loan that is guaranteed by a Government agency Finally, the Congress should require the for and acquired by the FFB. If one type of loan mulation of estimates of the potential defaults is included, then so should the other. on loans that have been guaranteed and should A problem that could very well arise from make provisions for these losses in the budget including the FFB in the budget, however, is by setting up reserve accounts. Such reserves that its lending and investing operations could are not needed for direct loans or guaranteed become an easy target for those wanting to make loans held by Government agencies if they are pseudo cuts in the budget. In that case, the already reflected as outlays in the budget. financing of loans guaranteed by Federal agen In concluding, I would like to say that we cies might tend to be shifted back to the piece at the Board regard the passage of the Congres meal and costly approach that prevailed prior sional Budget Act, and its implementation in to the initiation of the FFB. Accordingly, any the past 2 years, as a major advance in the changes in the budgetary status of the FFB interests of sound budget management. The would have to be accompanied by other meas reforms in the treatment of Federal credit pro ures that prevent the loss of the cost saving grams and loan guarantee programs that may benefits that are provided by the FFB. Perhaps, result from the efforts of this committee would legislation could be enacted that would require constitute an additional substantial step toward agencies to place certain types of loan guaran this important goal. □ Statement by J. Charles Partee, Member, Board I am happy to appear on behalf of the Board of Governors of the Federal Reserve System, of Governors to discuss the implications of U.S. before the Subcommittee on Domestic Monetary Treasury financing requirements for monetary Policy of the Committee on Banking, Finance, policy. Your chairman has asked me to com and Urban Affairs, U.S. House of Repre ment, in particular, on whether the increased sentatives, March 30, 1977. Federal deficit financing needs soon to be Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 371 created by the administration’s proposed fiscal To help minimize the possibility of Treasury package are likely to complicate the manage financing failures, the Federal Reserve during ment of monetary policy. the 1950’s and 1960’s followed the practice of At the outset, I should emphasize that under maintaining an “even-keel” posture in mone the institutional arrangements in the United tary policy at the time of major debt manage States, decisions on monetary policy and Treas ment operations. Basically, this commitment ury debt management are kept relatively inde meant that during the critical days of important pendent from one another. When the Treasury Treasury financings in the coupon market, the seeks to issue new debt, it generally does so Federal Reserve would not take overt monetary in the securities market, paying rates that are actions—such as a change in the Federal Re competitive with those available on debt securi serve discount rate or a significant shift in the ties of other borrowers. This market-oriented thrust of open market operations—which might approach permits the Treasury to cover its fi be construed by participants in the U.S. Gov nancing requirements without special support ernment securities market as a basic adjustment from the central bank. The Federal Reserve is in monetary policy. In more recent years there then left free to pursue its monetary policy has been a gradual relaxation in the constraints objectives, which are set with reference to what on monetary actions imposed by this “evenwe believe consistent with the emerging needs keel” commitment. This relaxation has been of the over-all economy. possible mainly because the Treasury has intro In some other countries, new public debt is duced debt management innovations that have financed initially at the central bank, often at made its financings less vulnerable to sudden rates below the cost of borrowing from market variations in market interest rates. sources. When this approach is followed, the Perhaps the most significant of these innova central bank in effect creates money to pay the tions has been the increased emphasis on the government’s bills, at least until such time as auctioning of new debt offerings. In the 1950’s it can successfully resell the securities to the and 1960’s when the Treasury sold new notes private investment community. Monetary policy and bonds, it generally announced fixed interest is thus subordinated to the immediate require rates on the new issues 5 or 6 days in advance ments of financing the public debt, and in the of taking subscriptions. Under this procedure process the central bank may sometimes lose the financing could be jeopardized by any siz control of the nation’s supplies of money and able, unexpected increase in market interest credit. Sooner or later, this lack of control is rates that developed between the announcement likely to bring escalating rates of domestic in and actual offering of the new issues. When flation, along with the economic distortions and yields on outstanding market securities rose just instabilities that rapid inflation breeds. before the offering date, the terms of the new The fact that our governmental structure sep issues naturally looked less attractive to inves arates responsibility for debt management from tors. If this erosion of investor interest went too that for monetary policy, however, does not far, the Treasury ran the risk of failing to sell mean that the Federal Reserve is not vitally enough of its new debt and thus of being tem interested in successful Treasury debt manage porarily embarrassed for lack of funds. Under ment. A failure by the Treasury to cover its the auction procedure now used this risk is financing requirements, in addition to precipi reduced because the yields and prices of new tating a crisis in public credit, would disrupt issues are determined through bidding on the financial markets and create serious problems date of the financing itself, rather than some for other borrowers as well. Such a development days before. would doubtless make it necessary for the Fed A second innovation in debt management that eral Reserve to divert open market operations has diminished the constraint of “even-keel” for a time from more fundamental objectives considerations on the conduct of monetary pol to the task of coping with the immediate finan icy has been the restructuring of much of the cial market difficulty. marketable debt into regularized cycles of debt Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
372 Federal Reserve Bulletin □ April 1977 offerings that can be handled on a rather routine ments during the next few months is a very large basis. Financings are split into moderate-sized sum, it is not likely to create a major financing auctions that occur on a definite schedule, which problem for the Treasury. Not only will the bulk encourages investors to accumulate funds for of the payments be occurring during a part of regular placement in Treasury issues. the year when regular income tax receipts would It is fortunate that the Treasury has been able otherwise be creating a seasonal surplus, but the to channel much of its recent borrowing into persistent shortfall in Federal spending below these relatively routine debt offering cycles be budget estimates thus far in the current fiscal cause the heavy Federal deficits of the past few year has held aggregate deficit financing re years have greatly expanded both the aggregate quirements somewhat below market expecta volume of Government financing and the fre tions. quency of new issues. Last year, for example, In a broader sense, the addition of another the Treasury sold in the market $93 billion in $10 billion to the Treasury’s borrowing needs new notes and bonds to refund maturing debt extends the period of exceptionally heavy deficit and to raise new cash, far above the $25 billion financing and increases the risk that adverse average annual volume that had prevailed during financial market effects could begin to accumu the decade from 1965 to 1974. Moreover, last late. The Federal deficit in the current calendar year’s financings included 30 separate issues of year—including the deficits of off-budget agen new marketable debt other than Treasury bills, cies—now seems likely to approach $80 billion, compared with an average of 12 per year from up $17 billion from last year and only moder 1965 to 1974. ately less than in calendar year 1975. If these Against this background, if a rigorous large deficit financing needs persist into the time “even-keel” approach to Treasury financings when private credit demands are rising strongly were required, the greater frequency of opera in response to continued economic recovery, tions could often delay needed Federal Reserve substantial pressures on both the cost and avail actions and to that extent reduce the flexibility ability of credit might very well develop. But of monetary policy. Of course, there is always this is a longer-run and more generalized con a free and full exchange of information on such cern. matters as financial market conditions and Fed The second aspect of the fiscal package that eral financing requirements between the Treas poses a potential problem for the Federal Re ury and the Federal Reserve. But if we are to serve is the likelihood that the rebates will be successful in maintaining effective control produce temporary—but difficult to interpret— over longer-run growth in the monetary aggre distortions in the monetary aggregates. To the gates, sufficient leeway to make timely adjust extent that these temporary rebate effects dis ments in the supply of bank reserves is an guise the more fundamental influences on mon essential prerequisite. etary growth, it will be difficult for a time to This brings me to the more immediate ques determine the near-term course in money growth tion of whether the administration’s proposed and interest rates that is most likely to be con tax rebate and social security payment package sistent with the developing financial require is likely to create any special difficulties for ments of the economy. Federal Reserve policy during the months just To help understand why the impact of the ahead. Two possible sources of difficulty have tax rebates on monetary growth is so difficult been identified. to predict, let me briefly discuss the relationship First, some analysts have speculated that the of U.S. Treasury cash balances to the money sheer weight on financial markets of Treasury supply. First, it should be noted that although borrowing to finance this package might inhibit the Treasury holds its cash balances as demand the flexibility of Federal Reserve actions. I do deposits, partly with commercial banks and not think that this is a realistic possibility. partly with Federal Reserve Banks, neither type Although the $10 billion or so expected to be of deposit is included in statistics on the money distributed as tax rebates and associated pay supply. Deposits held by other key types of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 373 spending units—households, businesses, and be especially large; they will be concentrated State and local governments—do, of course, all in timing and nonseasonal in character; and the appear in the monetary aggregates. payments will be made to families rather than The rationale for excluding Treasury deposits to business units. There will probably be some from the various measures of money has tradi delay as families deliberate on how to use the tionally been that spending decisions by the windfall, and, if so, there will be a sharp tem Federal Government are not at all influenced porary upsurge in their average cash balances by the size of its cash position. Federal spending and a resulting spurt in the growth of the mone programs are legislated by the Congress and tary aggregates. Later, as these balances are supported by tax revenues or borrowed funds. spent, there should be a reversal of the money Thus, the level of the Treasury’s bank balance bulge, and a concomitant slowing in monetary at any given point simply reflects different flow growth until the recipients have used the funds patterns of outlays and receipts. and cash balances have been reduced to normal The spending decisions of other economic working levels. This is the pattern of response units, on the other hand, do appear to be in that seemed to occur in the money growth fluenced significantly by the size of their liquid numbers during the prior tax rebate episode in balances. Since this relationship is a critical link 1975. in understanding the probable impact of mone Looking to the months ahead, it is hard to tary developments on aggregate spending in the judge with any precision how large the distor economy, it is important to have statistics on tions in money growth rates triggered by the the monetary aggregates that provide the most 1977 fiscal package may be. We have only one meaningful analytic measures of these variables. prior experience to draw upon, and today’s The exclusion of Treasury balances from the economic setting differs in important respects published money supply statistics, however, from that of 2 years ago. Hence, the Federal may occasionally present difficulties in inter Reserve is likely to have considerable difficulty preting short-run movements in these data. as the period progresses in assessing the more Whenever taxpayers or investors make net pay fundamental developments in the underlying ments to the Federal government, their deposit trend of money growth. balances tend to be drawn down and those of Most analysts clearly recognize the compli the Treasury rise. Similarly, when the Treasury cations in evaluating money growth rates during spends more than it receives, its balances are and immediately after the forthcoming rebate drawn down and those of other units in the period. But the intriguing point to me is that economy tend to rise. But most of these shifts different experts commenting on how the Fed in cash position between the public and the eral Reserve should cope with this problem are Treasury are regularly recurring events related, offering us diametrically opposing advice. for example, to the timing of tax payment dates Some argue that because the data on the and periodic Treasury financings. Therefore, monetary aggregates can be expected to behave they tend to wash out in the seasonally adjusted erratically, the Federal Reserve should disregard measures of the money supply that are used as them in the period during and immediately after guides to monetary policy. the rebate period. Instead they recommend that Even after taking out the seasonal, our statis we focus on keeping money market condi tical studies have not shown a predictable, con tions—including the Federal funds rate—from sistent relationship between variations in the tightening. Since the economy is operating at Treasury’s balance and changes in money substantially below its optimum rate, they see growth rates. This is probably because of the little risk in adopting this policy approach. myriad of transactions that go through deposit Others argue, on the other hand, that even accounts each day, and also because most large temporary abandonment of the aggregates as a depositors typically adjust their demand bal guide to policy would be risky, given the long ances promptly to desired levels. In the rebate lags with which monetary conditions affect the case, however, the Treasury disbursements will economy. If the expansion is now gaining mo Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
374 Federal Reserve Bulletin □ April 1977 mentum, which seems probable, resorting to a of the rebate effect was formulated and there stable interest rate policy might lead to a sub was no prior experience on which to base the stantial overrun in growth of the aggregates— estimate. As it turned out, that point estimate going well beyond the temporary rebate influ was on the low side. Consequently, policy ence. If this were to happen, it is feared that makers inferred that the monetary expansion the Federal Reserve would experience difficulty actually observed in the spring of 1975 was holding the longer-run growth rates of the ag greater than could be attributed to the rebate gregates within the ranges that have been speci and hence greater than would be subsequently fied, with probably adverse future consequences reversed. Looking back to that experience, both for the rate of inflation. To avoid the threat of the rebate influence and the reversal appear to excessive longer-run monetary growth, this have been underestimated. group recommends keeping a close control over This time around, I would expect greater the aggregates even during the rebate period. recognition to be given to the uncertainties sur It seems clear that any rigorous effort to hold rounding estimates of what proportions of the down monetary growth rates during the rebate rebates and other distributions will be retained period would bring substantial and potentially in money form, and for how long. It may well unsettling short-run interest rate movements— be that a range of projections will prove more first upward, and then downward—as the ad reliable than a single point estimate in order to justments in money balances are made. Such bracket the various possibilities. Thus it is fluctuations would seem to serve little purpose probable, as Chairman Burns stated at a Senate and could be misleading and disadvantageous Budget Committee hearing last week, that our to both borrowers and lenders. A total lack of zone of tolerance in permitting monetary ex attention to the aggregates, on the other hand, pansion to run at high rates for a while will could permit a sizable lasting expansion in be somewhat wider this time. But if we find money and credit to get under way, particularly that monetary growth does not subsequently if the economy continues to strengthen generally moderate in the expected degree, we may then over the period ahead. need to act to keep longer-run expansion of the In my view, there is a safer middle course monetary aggregates within our stated ranges. between these two recommended policy ap While it is clear that observed money growth proaches. This course would be to attempt to rates are likely to show sizable fluctuations in estimate, in advance, the deviations from other the period to come, Federal Reserve policy will wise expected patterns of money growth that continue to seek longer-run growth rates appro might develop due to the special Treasury pay priate to the requirements of the economy. At ments. These estimates would allow both for the same time, it is undesirable and unnecessary an initial period of temporary acceleration in to expose the economy to the uncertainties and monetary growth and a succeeding period of destabilizing effects of movements in interest temporary slowing. A need for possible Federal rates if these are likely to be reversed shortly. Reserve actions to counter unusual develop Careful monitoring of emerging economic and ments in the monetary aggregates would then financial developments during and after the re be indicated only to the extent that actual growth bate period should permit us to allow for any rates moved well beyond the parameters estab needed adjustments in money growth rates and lished by these allowances. interest rates on a reasonably timely basis. This While this was the general approach followed is so since a major virtue of monetary policy by the Federal Reserve during the tax rebate as an instrument of demand management is its period of 1975, only a single point projection operational flexibility. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 375 Statement by Philip E. Coldwell, Member, cent rate from 1974 to 1977. For comparison, Board of Governors of the Federal Reserve it should be noted that expenditures of the System, before the Committee on Banking, Federal Government have risen at an annual Housing, and Urban Affairs, (7.5. Senate, average rate of 15.9 per cent in this recent April 7, 1977. 3-year period. While maintaining this relatively good cost- My appearance before this committee today control position, the System has undertaken new represents an opportunity to present and discuss responsibilities assigned by the Congress, has the expenditures and budgets of the Federal met sharp increases in bank supervisory work Reserve Banks and Board of Governors. In this and rising volumes of operational work at the statement I shall supplement the statistical in Federal Reserve Banks, and has absorbed the formation already sent to the committee by impact of inflation upon wage, material, and providing a broad-based review of the amount service costs. and character of System expenditures and of the Among the principal changes in System re progress achieved in improving productivity, sponsibilities resulting from congressional ac cost effectiveness, and quality of service. tion have been the new supervisory activities The Federal Reserve System serves the Na required by the 1970 Amendments to the Bank tion, its Government, the banks, and the general Holding Company Act. All one-bank holding public, in a variety of ways. First, as the Na companies formerly exempt from the provisions tion’s central bank, the Federal Reserve formu of the act were brought under the System’s lates and implements national monetary and jurisdiction by those amendments. Thus, in credit policy. Second, as the banker to the 1971 the System’s regulatory responsibility was Government, the Federal Reserve issues, re increased to cover all 1,500 bank holding com deems, and exchanges Government securities, panies contrasted with the 121 multibank hold handles most of the Government cash balances, ing companies supervised by the System at the and provides processing capability for tax pay end of 1970. Since then, the number of bank ments and food stamps. Third, as a service to holding companies has increased to slightly the banking system and the general public, the more than 1,900, which control about two-thirds Federal Reserve issues and redeems currency of the bank deposits of the Nation. This increase and coin, and clears and processes personal and in the number of holding companies in con business checks. Finally, as a part of the bank junction with the new requirement to apply for regulatory structure of the Nation, the Federal permissible nonbank activities led to a Reserve examines, regulates, and supervises mushrooming application load for the System. bank holding companies, State-chartered mem From May 1956, when the Bank Holding Com ber banks, and all Edge Act Corporations. The pany Act was first implemented, through De Federal Reserve provides these various services cember 1970, the System acted on 470 bank through a network of 50 offices employing over holding company applications, an average of 32 26,000 people. per year. From 1971 through 1976, the System The System operating budget for 1977 acted on 5,079 applications, an average of 846 amounts to $753.4 million1 or 7.6 per cent over per year. 1976 expenditures. Of this current year’s bud In addition to the processing of holding com get, the Board’s assessment accounts for $48.6 pany applications, the System was assigned million or 6.5 per cent, while the Federal Re ongoing supervisory responsibilities for bank serve Bank expenses are expected to reach holding companies. The Federal Reserve has $704.8 million. System expenditures have in had to monitor the activities of these firms, and creased at an annual average growth rate of 11.5 to do this has increased its examination staff, per cent from 1970 to 1977 and at an 8.5 per expanded training for examiners, and has created an extensive financial reporting arrange ment to support a computer-based surveillance 1Net 1977 operating expenses (after reimbursements and recoveries) are expected to be $698.6 million. system. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
376 Federal Reserve Bulletin □ April 1977 Turning to another bank supervisory area, ing. The volume of wire transfers handled by there has been a dramatic growth in the interna the Reserve Banks increased 182 per cent from tional activities of U.S. banks in the past few 1970 to 1976. The wire transfer system, in years. The total assets of foreign branches of conjunction with the Federal Reserve’s book- U.S. banks increased from $52 billion in 1970 entry system, supports the trading of Govern to over $180 billion by year-end 1976. U.S. ment securities by providing a convenient banks were also expanding through foreign mechanism for transferring ownership of these subsidiaries. By year-end 1975 these subsidi securities. In addition, the wire system handles aries had total assets of $30 billion. Federal nearly 75,000 funds transfers each day, repre Reserve approval is needed for both the opening senting more than $150 billion in bank-to-bank of foreign branches and the investment in transfers. This wire system provides the means foreign subsidiaries. The Federal Reserve also by which the Nation’s financial system settles has ongoing supervisory responsibility over the its business transactions each day in Federal operations of foreign subsidiaries and the funds and facilitates better cash management, foreign branches of State member banks. thereby improving services to customers and to The Federal Reserve also has supervisory the general public. authority over State-chartered banks that are Currency processed rose 33 per cent in the members of the Federal Reserve System. In the period from 1970 to 1976. New innovative past 6 years, total assets held by State member methods are under development to meet this banks have increased sharply, and the scope and increasing volume. For example, the System is complexity of their operations have increased currently developing new high-speed currency as well. Such growth has placed a greater bur equipment that should result in further gains in den on the System’s examination resources. productivity in handling currency volumes as Another major area of responsibility assigned well as yielding improvements in the currency by the Congress is the enlarged System role in verification and destruction process. the consumer credit field. The Board is the In 1971 legislation extensively revising the principal agency charged with writing regula Food Stamp program resulted in a 44.8 per cent tions to implement Federal legislation to protect increase in the volume of food stamps processed consumers and prevent discrimination in exten and destroyed by the Federal Reserve over 1970 sions of consumer credit. The Board first be levels. The 2.0 billion food stamps processed came involved in writing consumer protection and destroyed in 1976 represent a 58.2 per cent regulations with passage of the Federal Truth increase over the 1970 level, requiring addi in Lending Act in 1968, and since 1969 there tional personnel, destruction equipment, and have been four major amendments to Truth in storage facilities. Lending, including the Fair Credit Billing Act The System presently handles about 50 mil of 1974 and the Consumer Leasing Act of 1976, lion checks per day or 85 per cent more than all of which required extensive rule writing by in 1970. While computer processing has mate the Board. In addition, the Board has the re rially improved productivity, the problems of sponsibility for drafting regulations implement handling this increased volume have required ing five other consumer protection Acts: the additional personnel and raised costs since such Equal Credit Opportunity Act of 1974, the Real operations remain labor-intensive. A concen Estate Settlement Procedures Act of 1974 trated search for new and better ways of dealing (RESPA), the Federal Trade Commission Im with this rising flood of paper has paid off in provement Act of 1975, the Home Mortgage better service to the public and a slower rate Disclosure Act of 1976, and the 1976 amend of growth in expenses over the past few years. ments to the Equal Credit Opportunity Act. To improve the payments mechanism, the Sys The System has experienced increases in vol tem has established 11 new regional checkume in all functions, but especially in wire processing facilities since 1970 and has adjusted transfers of funds, currency distribution and operating schedules and transportation arrange destruction, and food stamp and check process ments to provide for more rapid clearing of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 377 checks and a reduction of check-clearing float. the business sector for such resources, these Concurrent with these service improvements, costs have increased by approximately 50 per the System undertook an extensive operations cent since 1970, or at an average annual rate improvement program that has kept unit-cost of more than 6 per cent. increases for check processing below the rate Let me now turn your attention to our expense of inflation. categories, especially those for personnel; for The Federal Reserve has taken positive steps postage and expressage; for original cost, ship to encourage conversion from costly paper ping, and redemption of Federal Reserve notes; checks to more efficient electronic payment. for heat, light, power, water, and taxes; and Together with the U.S. Treasury, the System for rental of furniture and operating equipment. has established a program of Direct Deposit of These five categories account for about 86 per Recurring Federal Payments that allows recipi cent of the 1977 budgeted expenses of both the ents of Government payments to have their Reserve Banks and the Board. paychecks, benefit payments, and welfare pay Personnel costs represent the largest object ments deposited directly to their accounts at any of expense in the System and account for 58 financial institution through the use of the Fed per cent of Reserve Bank costs and 81 per cent eral Reserve data processing and com of Board operating expenses. Employment in munications facilities. Approximately 5.5 mil the Federal Reserve System in 1977 is budgeted lion Government payments are currently made at 25,178 persons in the Federal Reserve Banks this way each month, providing a high level of and 1,476 at the Board of Governors, for a total security, convenience, and reliability, while re staffing of 26,654—5 less than the 1976 level. ducing Government disbursement costs by ap From 1970 through 1977, the average annual proximately $7 million annually. growth rate in employment is estimated at 2.8 As an alternative to making commercial pay per cent for the System, but since 1974 em ments by check, the System in conjunction with ployment at the Federal Reserve Banks has its member banks has implemented a program declined by 1,389 persons or 5.2 per cent. In called the Automated Clearing House. This terms of the 1977 budget for the System, per program, endorsed by the National Commission sonnel costs are expected to be about 8.8 per on Electronic Fund Transfers, allows payments cent above comparable expenses for 1976. This to be made in electronic form rather than paper increase reflects both the rising costs of retire check. It is expected that substantial savings to ment funding and medical benefits, and allow the private sector as well as to the Federal ance for merit and promotional as well as cost- Reserve will result as more payments are made of-living increases. by electronic means. The postage and expressage costs of the Re Of course, a major cause of increased System serve Banks are expected to increase about 3.7 expenditures since 1970 has been the very sharp per cent from 1976 to 1977 and now represent run-up in prices that we have been forced to about one-tenth of total costs. Although the pay for our resources. Since 1970 the Consumer System has made intensive efforts to hold down Price Index has advanced at a compounded courier and carrier expenses, the impact of ris annual rate in excess of 6 per cent and in the ing postal rates and of gasoline, wages, and last 3 years the average rate has exceeded 7 per security costs to the contract courier companies cent. Advancing wage rates, which stem in large has led to some increases. part from inflationary trends, have a dramatic The third major object of expense, the cost impact on System expenditures. of Federal Reserve currency—representing Other costs for such items as machinery and about 7 per cent of the Reserve Banks’ ex equipment, office supplies, vehicles, and other penses—is one largely beyond the control of the business-related items have also increased rap System since the Bureau of Engraving and idly in this decade. According to the Gross Printing sets the price for printing. Such costs Business Product Fixed Weight Price Index, are expected to advance about 8 per cent over which is a good indicator of cost increases in 1976, with both a higher unit price from the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
378 Federal Reserve Bulletin □ April 1977 Bureau and a larger demand for currency ac jections by output service, object classification, counting for the advance. and capital outlay. Information is also provided Utilities and taxes paid by the Reserve Banks on personnel costs and budget-year and mul are also mainly beyond the control of the Sys tiyear objectives. The budgets are analyzed by tem. These expenditures have increased as a the Board staff and presented to the Board’s result of rising energy prices and sharply in Committee on Federal Reserve Bank Activities, creasing real estate taxes. Such expenses ac which is composed of three Board Members. count for nearly 4 per cent of total Bank costs The Committee meets with each Federal Re and are expected to advance about 10 per cent serve Bank President for intensive review, in 1977. analysis, and redirection when necessary. Fol Finally, rental of furniture and operating lowing the budget meetings and with the Com equipment, representing over 5 per cent of Sys mittee’s guidance in hand, the final detailed tem expenses, is expected to decline slightly budgets are prepared and submitted to the Board from 1976 to 1977. This reduction stems pri for final action in early December. marily from the conversion of rented to pur The budgets of the Federal Reserve Banks chased equipment. While such capital purchases include an assessment for the operating and are separate from the operating budgets, the construction expenses of the Board of Gover depreciation charge is reflected in the budget. nors. These expenditures, which form the basis It may be helpful to describe the budget and of the assessment, are subjected to a separate cost-control process that enables the System but similar budget process. to plan for efficient use of resources in meeting Both the Reserve Bank and Board budget its responsibilities. The Reserve Bank budget processes include an intensive screening of pro process begins with the development of the posed capital expenditures. Approval of the System-wide budget objective for the forth budgets, however, does not mean final approval coming year. This percentage rate of increase of land, buildings, computers, or large equip is set after extensive discussions between the ment purchases. Each of these must be sepa Board of Governors and Reserve Bank Presi rately justified and specifically approved by dents. Factors considered are the specific goals the Board of Governors. and objectives for the coming budget year, An added feature of the System’s control over expected inflationary impacts, the current and expenses is attributable to the sharing of the projected level of Federal Reserve operations, effort with the Federal Reserve Banks’ Boards and the estimated productivity and cost per of Directors. The Chairman of each Reserve formance. Approval of the budget objective by Bank Board tneets personally each year with the the Board of Governors occurs before mid-year. Board’s Committee on Federal Reserve Bank With the help of a highly competent group Activities to review and appraise the operating of Directors, the Reserve Banks develop their efficiency of the Bank and the performance of budgets in light of the budget objective. In its senior officers. These conferences permit recent years, a competitive atmosphere on pro frank exchanges about the strengths and weak ductivity and cost reduction has pervaded the nesses of each Bank and the relative position Reserve Banks’ budget efforts and has resulted of each against the performance of others. in major savings in operating expenses. This Efforts to improve productivity and decrease budget process culminates in a careful review costs are in the forefront in all of the budgeting by the Boards of Directors of the Reserve and planning guidelines and procedures fol Banks, who take an intense interest in the lowed by the Board and Reserve Banks, and progress and relative performance rankings of we believe that these efforts have succeeded. the Banks. As an indication of this improvement, actual Receipt of budget information from the Re output per manhour in our measurable output serve Banks begins in September with submis functions was estimated to have increased by sion of revised current-year expenses and almost 12 per cent in 1976 following an increase Budget Overviews depicting total budget pro of 6 per cent in 1975. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 379 In the conventional check-processing area, To improve the System’s performance, the which accounts for more than 20 per cent of Federal Reserve Banks have developed and im Reserve Bank employment, output per manhour plemented a new expense monitoring and re increased by 20 per cent in 1976, and unit costs porting system that will be used, in part, to for check processing declined by more than 4 assess the efficiency of the Banks. With the per cent in spite of higher prices for resources introduction of Planning and Control System and higher charges for usage of automated (PACS) in January 1977, the Federal Reserve equipment. Currency operations have also re Banks greatly expanded the number of opera flected sharp efficiency gains with unit costs in tional measurements available through their ex 1976 declining by more than 5 per cent. pense accounting system. In addition, for over Some of the gains in output per manhour, a year, we have been in the process of testing of course, result directly from substitution of and evaluating the feasibility of adopting zerocapital for labor. However, the unit costs reflect base budgeting in the Federal Reserve System. an amortization charge for the cost of capital, This budgeting approach entails a thorough re and the unit costs have been declining in many view and analysis of all spending decisions of our operating areas since 1974. regardless of prior year commitments. Although The Board’s staff has made an estimate of it is too early to predict the outcome of our two the increase in total factor productivity in the pilot tests, we believe the information and anal measurable functions since 1971. This measure ysis generated by using zero-base budgeting of productivity compares output to the sum of may develop alternatives with cost-saving im labor and capital inputs and thus weighs the plications and afford decision-makers a wider increased cost of capital against the decrease in choice of budget options. personnel costs as capital substitution takes The Board believes that its review and budget place. The System estimate of total factor pro processes have created a cost-consciousness ductivity for 1971 through 1974 matches the throughout the System and that this has resulted estimates that leading economists have calcu in better productivity, cost efficiency, and serv lated for the private sector. Since 1974, how ice to the public. Our developing technological ever, the System’s total productivity has been improvements and new budgeting programs considerably larger than that estimated for the offer the possibilities of further progress in the private sector. years ahead. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
380 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON FEBRUARY 15, 1977 1. Domestic Policy Directive Growth in real output of goods and services had slowed to an annual rate of 3.0 per cent in the fourth quarter of 1976—from 3.9 per cent in the third quarter and 4.5 per cent in the second— according to preliminary estimates of the Commerce Department. However, the pace of growth had accelerated as the quarter pro gressed. The information reviewed at this meeting suggested un derlying strength in economic activity, although activity in January and early February had been affected by the unusually severe weather. The index of industrial production had risen appreciably in November and December, to some extent in recovery from strikes. The index fell in January because of the severe winter weather and also, after midmonth, because of shortages of natural gas for industrial uses. Decreases in output were widespread among durable and nondurable manufacturing industries, and coal mining was curtailed sharply. However, electric and gas utilities expanded production to meet increased demand. Retail sales had expanded 1% per cent in November and about 4 per cent in December. In January, according to the advance report, sales declined 2 per cent, reflecting decreases for most types of stores apparently because of the weather. The number of new domestic automobiles sold in the first 20 days of January appeared to have held near the annual rate of 9% million recorded in December, when sales were stimulated to some extent by recovery from the strike that had limited output and sales earlier. However, sales fell sharply in the latter part of January, and for the month as a whole the annual rate was about 8% million. Labor market surveys completed by mid-January indicated that employment had continued to expand. In the survey of payroll employment in nonfarm establishments, gains were reported in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 381 two-thirds of the industries covered, and the total rose substantially for the third consecutive month. By the time of the survey, however, the severe weather had already induced a reduction in employment in construction and a shortening in the length of the average workweek in manufacturing. In the household survey, the unemployment rate was reported to have fallen from 7.8 per cent in December to 7.3 per cent in January. Much of the decline reflected a drop in the number of persons seeking work, which may have been caused in part by the weather. Personal income had expanded vigorously in the last 2 months of 1976; from the third quarter to the fourth it rose at an annual rate of about 11 per cent. This sizable gain reflected a rebound in manufacturing payrolls after termination of strikes, a recovery in farm income, an increase in Federal pay scales, and the dis bursement by corporations of unusually large year-end dividends. Indicators of residential construction activity had remained strong in the closing months of 1976. In December private housing starts rose sharply to an annual rate of more than 1.9 million units, the highest since the autumn of 1973. The rise was broadly based by region. For the fourth quarter as a whole starts were at an annual rate of about 1.8 million units, up 15 per cent from the third quarter. Starts of multifamily units gained more than 30 per cent from the third quarter to the fourth, reflecting not only a substantial increase in starts of units covered under Federally subsidized programs but also a large rise in units not so subsidized. Businesses were planning to spend 11.3 per cent more for plant and equipment in 1977 than in 1976, according to the Department of Commerce annual survey conducted in December. New orders for nondefense capital goods in December recovered a part of the sharp decline recorded in November. Contract awards for commer cial and industrial buildings—measured in terms of floor space— also had declined sharply in November and then in December recovered a part of the loss. The staff projections, like those of a month earlier, incorporated assumptions that rebates of Federal income taxes and one-time payments to recipients of social security would be disbursed in the second quarter; that both personal income taxes and corporate taxes would be reduced; and that Federal spending for job-creating programs would be expanded. The projections continued to suggest Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
382 Federal Reserve Bulletin □ April 1977 that real GNP would grow at a substantially higher rate in the first half of 1977 than it had in the second half of 1976. As to the first quarter, it was still anticipated that growth in domestic final purchases of goods and services in real terms would be relatively well sustained, despite the severe winter weather, but the rebound in growth in real GNP was now expected to be considerably less than had been anticipated a month earlier. The projections now suggested that the rate of business inventory accumulation would decline further in the first quarter and that imports, specifically of fuels, would rise more than had been anticipated. It was expected that the weather-induced output losses of the first quarter would soon be made up; for the second quarter, the projections suggested that real final sales would grow at a rapid rate and that business inventory investment would increase. It was anticipated that real GNP would grow at a relatively good rate in the second half of 1977. The projections still suggested that the rate of increase in the fixed-weighted price index for gross business product would change relatively little during this year. Wage increases provided for in the first year of major collective bargaining agreements negotiated during 1976 were somewhat more moderate than those negotiated in 1975. Moreover, the index of average hourly earnings for private nonfarm production workers advanced 6% per cent over the 12 months of 1976, compared with almost 8 per cent during the previous year. In January 1977 the index rose sharply; however, the sharpness of the rise reflected marked increases in the indexes for the construction and service sectors, where rates of change from month ,to month have been volatile. The wholesale price index for all commodities rose 0.5 per cent in January, almost the same as the average increase in the last 3 months of 1976. Average prices of industrial commodities rose a little more than in December but less than in the preceding 3 months. Increases were again widespread among industrial com modity groups; as in December, however, a decline was reported for the fuel and power group, reflecting some price reductions that actually had occurred a month or two earlier. Average prices of farm products and foods also rose, but the increase was relatively small. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 383 The consumer price index rose 0.4 per cent in December, resulting in an increase of 4.8 per cent over the 12 months of 1976; during 1975 the index had risen 7.0 per cent. Average retail prices of foods changed little during 1976, in contrast with a rise of 6.5 per cent over the previous year. Average prices of other commodities and of services rose about 5 and 7 per cent, respec tively, compared with increases of about 6 and 8 per cent in 1975. The average value of the dollar rose somewhat against leading foreign currencies between mid-January and mid-February, with most of the rise occurring in the early part of the period. The value of the dollar increased against most continental European currencies and against the Canadian dollar but declined against the Japanese yen. The pound sterling was subjected to strong upward pressure in reaction to the international agreements concluded in early January to provide the United Kingdom with substantial funds to finance possible future intervention in support of the sterling exchange rate. However, the pound did not rise against the dollar, mainly as a result of exchange market intervention by the Bank of England. The Mexican peso, which had been trading steadily at 5.0 U.S. cents since early December, fell abruptly on January 20 to 4.3 cents; later, it gradually recovered to 4.5 cents. The U.S. foreign trade deficit increased further in December, and the deficit on an international accounts basis was a little larger in the fourth quarter than in the third. For all of 1976 the trade balance was in deficit by almost $10 billion, whereas for 1975 it had been in surplus by $9 billion. Total credit at U.S. commercial banks increased considerably in January, following a small rise in December. Data for both months, however, were distorted by special influences—particularly a substantial increase in bank holdings of bankers acceptances late in 1976 that was largely reversed in January. Over the 2 months together, growth of total bank credit—although somewhat above the rather slow pace in the first half of 1976—was significantly below the rates in both the third quarter and the October-November period. Growth of business loans—excluding bankers accep tances—slowed sharply from the rate in the October-November period, and at the same time banks shifted from substantial acqui sition to moderate liquidation of securities other than U.S. Treasury issues. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
384 Federal Reserve Bulletin □ April 1977 In the December-January period the outstanding volume of commercial paper issued by nonfinancial corporations rose sharply, after having changed little over the preceding 2 months. Never theless, the combined total of nonfinancial commercial paper and business loans at banks (excluding bankers acceptances) grew somewhat less in the latter 2-month period than in the earlier one, when business needs for financing had apparently been augmented to some extent by involuntary accumulation of inventories. The narrowly defined money stock (M-l), which had grown at an annual rate of about 8 per cent in December, slowed to a rate of about 4% per cent in January. Although the month-to-month expansion in M-l recently had been erratic, the average annual rate of growth over the 6 months ending in January was about 5Vi per cent.1 Growth in M-2 and M-3 slowed appreciably in January from the rapid rates evident in December and in the fourth quarter. At banks and thrift institutions, inflows of the time and savings deposits included in the broader aggregates slowed somewhat, apparently because of reductions in interest rates paid on these deposits by some banks and thrift institutions and a rise in rates on competing market securities. At its January meeting, the Committee had agreed that early in the inter-meeting period the Manager of the System Open Market Account should aim for a Federal funds rate in the area of 4% to 43A per cent and that afterwards the weekly-average Federal funds rate might be expected to vary in an orderly way within a range of 4lA to 5 per cent. Throughout the inter-meeting period incoming data suggested that growth in both M-l and M-2 over the January-February period would be well within the ranges that had been specified by the Committee. Accordingly, the Manager continued to direct operations toward maintaining the Federal funds rate in the area of 4% to 43A per cent. Market interest rates—which had risen abruptly after the turn of the year—rose somewhat further in the weeks just after the Revised measures of monetary aggregates, reflecting new benchmark data for deposits at nonmember banks and revised seasonal factors, were published on February 17, 1977. On the basis of the revised figures, the annual rate of growth in M-l in January and also over the 6 months ending in January was about 5% per cent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 385 mid-January meeting of the Committee, partly in reaction to the Treasury’s announcement of the terms of its mid-February refund ing and of cash needs during the first quarter. Later, however, rates backed down to about their mid-January levels. At their levels in mid-Feburary, market interest rates in general were significantly above their December lows, but they were still a little lower than at mid-November. In the 4 weeks since the January FOMC meeting, the U.S. Treasury had raised $6.5 billion of new cash, including $3.8 billion raised in connection with the mid-February refinancing. New issues in the refinancing included $3.0 billion of 3-year notes, $2.0 billion of 7-year notes, and $750 million of 30-year bonds. The over-all size of the offerings was near the upper limit of market expectations. However, investor interest in the new issues proved to be consid erable. In the market for new corporate bonds, the volume of publicly offered new issues in January was not quite so large as had been expected because increased interest rates had prompted the post ponement or cancellation of several issues. Nevertheless, the Jan uary volume was substantially above the monthly average in the fourth quarter of 1976. Offerings of new long-term securities by State and local governments rose sharply in January to $3.4 billion—a record for the month. About $500 million of this supply was attributable to the issuance of bonds in advance refundings, and about $700 million represented financing by municipal utilities. During January yields rose in secondary mortgage markets along with those in other markets, but interest rates on new commitments for conventional home loans edged off somewhat further. At the end of December outstanding mortgage commitments at savings and loan associations had reached another new high, even though mortgage takedowns during the month had remained substantial. At its January meeting the Committee had agreed that from the fourth quarter of 1976 to the fourth quarter of 1977, average rates of growth in the monetary aggregates within the following ranges appeared to be consistent with broad economic aims: M-1, 4V6 to 6V2 per cent; M-2, 7 to 10 per cent; and M-3, 8V2 to IIV2 per cent. The associated range for growth in the bank credit proxy was 7 to 10 per cent. It was agreed that the longer-term ranges, as well as the particular aggregates for which such ranges were Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
386 Federal Reserve Bulletin □ April 1977 specified, would be subject to review and modification at subsequent meetings. It also was understood that short-run factors might cause growth rates from month to month to fall outside the ranges contemplated for annual periods. In their discussion of recent economic developments and pros pects, members of the Committee agreed that the underlying situation was strong and that the losses in output, hours of work, and income resulting from the weather would soon be made up. Most members agreed in general with the staff projections suggest ing that growth in real GNP would accelerate to a rapid pace in the second quarter—reflecting not only the recovery from the weather-induced losses but also the disbursement of tax rebates and related payments—and then would continue at a relatively good rate throughout the second half of the year. However, one or two members expressed concern that the weather disturbance and the tax rebates might cause large swings in business inventory investment and therefore in total GNP. In this connection, it was suggested that more attention should be paid to the behavior of final sales than to that of total output. Despite the broad consensus on the outlook, several members called attention to actual and possible developments that might cause real GNP to deviate from the projected path. It was observed, for example, that severe weather—while having temporary effects on output, inventories, and incomes much like those of a major strike—would also transfer purchasing power from consumers to sellers of fuels, who most likely had a lower propensity to spend. Partly because of the high fuel bills, it was suggested, the tax rebates and related payments might have less impact on consumer spending than one might have expected on the basis of the 1975 experience with rebates. Looking to the latter part of 1977 and into 1978, some questions were raised about the adequacy of industrial capacity. In this connection, attention was called to the recent revisions in the Federal Reserve estimates of the rate of capacity utilization in manufacturing in the 1971-76 period. Concern was expressed that the margin of unused plant capacity that could be drawn into production might be low in relation to the amount of unemployed labor. It was also observed that rates of capacity utilization varied considerably among industries and that during business expansions Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 387 bottlenecks begin to spread through the industrial system long before over-all measures of capacity utilization reach relatively high levels. It was suggested that the rise in prices might become more rapid as activity expanded during the period ahead. Historically, it was noted, average wholesale prices of industrial commodities had begun to rise at about the time that business activity had begun to recover, reflecting increases in prices of raw materials. In the current business expansion, that pattern had been superimposed upon the longer-run trend of inflation in the economy. With respect to the outlook for prices, it was noted also that the severe drought in the western part of the country may sharply reduce crops of fruits and vegetables. One or two members of the Committee suggested that—although economic prospects appeared to be good—businessmen seemed to have become somewhat more uneasy in recent weeks about the near-term effects of the adverse weather, about the longer-term energy problem, about the possibility of imposition of some form of price controls, about the Government’s fiscal policy, and about prospects for inflation. It was felt that this uneasy mood could inhibit decisions to make expenditures for plant and equipment. However, another member noted that some of the uncertainties that had worried businessmen only a few months ago—such as the “pause” in growth of economic activity and the size of the prospective increase in prices of imported oil—had been resolved. In his opinion, businessmen would soon take a more favorable view of the climate for capital investment. Still another member expressed concern about the possibility that business capital invest ment would rise too strongly at a late stage in the business expansion. As to policy for the period immediately ahead, Committee members in general advocated continuation of about the current stance. They differed little in their preferences for ranges of growth in the monetary aggregates over the February-March period. For M-l, the members endorsed a range of 3 to 7 per cent, although one indicated a mild preference for a range of 3V2 to IV2 per cent. For M-2, many members favored a range of 7 to 11 per cent. However, some advocated a slightly lower range—6 to 10 per cent—because M-2 had grown over recent months at a rate that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
388 Federal Reserve Bulletin □ April 1977 was high relative to the Committee’s longer-run range for that aggregate. Almost all members favored directing operations initially toward the objective of maintaining the Federal funds rate in the area of 4% to 43A per cent. However, they differed somewhat in their preferences for the upper and lower limits of the inter-meeting range. The largest number of members preferred to continue the range of 4lA to 5 per cent that had been specified at the January meeting. Some favored ranges of 4XA to 5lA per cent or AVi to 5% per cent, because they believed that additional leeway for System operations should be provided in the event that growth in the aggregates over the February-March period appeared to be significantly faster than now expected. At the conclusion of the discussion the Committee decided that growth in M-1 and M-2 over the February-March period at annual rates within ranges of 3 to 7 per cent and 6Vz to 10Vi per cent, respectively, would be appropriate. It was understood that in assessing the behavior of the aggregates, the Manager should continue to give approximately equal weight to the behavior of M-1 and M-2. In the judgment of the Committee, such growth rates of the aggregates were likely to be associated with a weekly-average Federal funds rate in the area of 4% to 43A per cent. The Committee agreed that if growth rates of the aggregates over the 2-month period appeared to be deviating significantly from the midpoints of the indicated ranges, the operational objective for the weekly-average Federal funds rate should be modified in an orderly fashion within a range of 4V* to 5 per cent. As customary, it was understood that the Chairman might call upon the Committee to consider the need for supplementary instructions before the next scheduled meeting if significant inconsistencies appeared to be developing among the Committee’s various objectives. The following domestic policy directive was issued to the Federal Reserve Bank of New York: The information reviewed at this meeting suggests underlying strength in economic activity, although industrial production and retail sales were held down in January by the effects of unusually severe weather. Housing starts rose sharply in December, and labor Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 389 market surveys completed by mid-January indicated a further rise in employment and a decline in the unemployment rate from 7.8 to 7.3 per cent. The wholesale price index for all commodities continued to rise, reflecting increases in the averages both for farm products and foods and for industrial commodities. The index of average wage rates rose sharply in January as a result of marked increases in the volatile construction and service sectors. The average value of the dollar against leading foreign currencies has risen somewhat over the past month. In December the U.S. foreign trade deficit increased further; in the fourth quarter as a whole the deficit was a little larger than in the third quarter. M-l, which had expanded appreciably in December, grew at a moderate pace in January. Growth in M-2 and M-3 also moderated. At banks and thrift institutions, inflows of time and savings deposits other than large-denomination CD’s slowed somewhat. Interest rates have changed relatively little on balance since mid-January. In light of the foregoing developments, it is the policy of the Federal Open Market Committee to foster bank reserve and other financial conditions that will encourage continued economic expan sion, while resisting inflationary pressures and contributing to a sustainable pattern of international transactions. At its meeting on January 18, 1977, the Committee agreed that growth of M-l, M-2, and M-3 within ranges of 4l/z to 6V2 per cent, 7 to 10 per cent, and 8V2 to 1 W2 per cent, respectively, from the fourth quarter of 1976 to the fourth quarter of 1977 appears to be consistent with these objectives. These ranges are subject to reconsideration at any time as conditions warrant. The Committee seeks to encourage near-term rates of growth in M-l and M-2 on a path believed to be reasonably consistent with the longer-run ranges for monetary aggregates cited in the preceding paragraph. Specifically, at present, it expects the annual growth rates over the February-March period to be within the ranges of 3 to 7 per cent for M-l and 6V2 to 10V2 per cent for M-2. In the judgment of the Committee such growth rates are likely to be associated with a weekly average Federal funds rate of about 4% to 43A per cent. If, giving approximately equal weight to M-l and M-2, it appears that growth rates over the 2-month period will deviate significantly from the midpoints of the indicated ranges, the operational objective for the Federal funds rate shall be modified in an orderly fashion within a range of 4XA to 5 per cent. If it appears during the period before the next meeting that the operating constraints specified above are proving to be significantly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
390 Federal Reserve Bulletin □ April 1977 inconsistent, the Manager is promptly to notify the Chairman who will then decide whether the situation calls for supplementary instructions from the Committee. Votes for this action: Messrs. Burns, Volcker, Balles, Black, Coldwell, Gardner, Jackson, Kim brel, Lilly, Partee, Wallich, and Winn. Votes against this action: None. 2. Statement of Policy Regarding the Government in the Sunshine Act From time to time at recent meetings the Committee had discussed the applicability of the Government in the Sunshine Act to its meetings. At this meeting the Committee concurred in an opinion of counsel that the act would not apply because the Committee did not come within the definition of “agency” contained in the act. The Committee further agreed that its present procedures and disclosure policy were already conducted in accordance with the intent and spirit of the act and that its current practices in that regard would be continued. After reaching these judgments, the Committee approved the following statement of policy: On September 13, 1976, there was enacted into law the Govern ment in the Sunshine Act, Pub. L. No. 94-409, 90 Stat. 1241 (“Sunshine Act”), established for the purpose of providing the public with the “fullest practicable information regarding the deci sionmaking processes of the Federal Government . . . while pro tecting the rights of individuals and the ability of the Government to carry out its responsibilities.”2 The Sunshine Act applies only to those Federal agencies that are defined in Section 552(e) of Title 5 of the United States Code and “headed by a collegial body composed of two or more individual members, a majority of whom are appointed to such position by the President with the advice and consent of the Senate, and any subdivision thereof authorized to act on behalf of the agency.”3 The Federal Open Market Committee (“FOMC”) is a separate 2Government in the Sunshine Act, Public Law 94-409, §2, 90 Stat. 1241 (1976). Ibid., §3(a), 1241. 3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 391 and independent statutory body within the Federal Reserve System. In no respect is it an agent or “subdivision” of the Board. It was originally established by the Banking Act of 1933 and restructured in its present form by the Banking Act of 1935 and subsequent legislation in 1942 (generally see 12 U.S.C. §263(a)). The FOMC’s membership is composed of the seven members of the Board of Governors of the Federal Reserve System (“Board of Governors”) and five representatives of the Federal Reserve Banks who are selected annually in accordance with the procedures set forth in Section 12A of the Federal Reserve Act, 12 U.S.C. §263(a). Members of the Board of Governors serve in an ex officio capacity on the FOMC by reason of their appointment as Members of the Board of Governors, not as a result of an appointment “to such position” (the FOMC) by the President. Representatives of the Reserve Banks serve on the FOMC not as a result of an appointment “to such position” by the President, but rather by virtue of their positions with the Reserve Banks and their selection pursuant to Section 12A of the Federal Reserve Act. It is clear therefore that the FOMC does not fall within the scope of an “agency” or “subdivision” as defined in the Sunshine Act and consequently is not subject to the provisions of that Act. As explained below, the Act would not require the FOMC to hold its meetings in open session even if the FOMC were covered by the Act. However, despite the conclusion reached that the Sunshine Act does not apply to the FOMC, the FOMC has deter mined that its procedures and timing of public disclosure already are conducted in accordance with the spirit of the Sunshine Act, as that Act would apply to deliberations of the nature engaged in by the FOMC. In the foregoing regard, the FOMC has noted that while the Act calls generally for open meetings of multi-member Federal agencies, 10 specific exemptions from the open meeting requirement are provided to assure the ability of the Government to carry out its responsibilities. Among the exemptions provided is that which authorizes any agency operating under the Act to conduct closed meetings where the subject of a meeting involves information “the premature disclosure of which would—in the case of an agency which regulates currencies, securities, commodities, or financial institutions, be likely to lead to significant financial speculation in currencies, securities, or commodities.”4 Ibid., 1242. 4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
392 Federal Reserve Bulletin □ April 1977 As to meetings closed under such exemption, the Act requires the maintenance of either a transcript, electronic recording or min utes and sets forth specified, detailed requirements as to the contents and timing of disclosure of certain portions or all of such minutes. The Act permits the withholding from the public of the minutes where disclosure would be likely to produce adverse consequences of the nature described in the relevant exemptions. The FOMC has reviewed the agenda of its monthly meetings for the past three years and has determined that all such meetings could have been closed pursuant to the exemption dealing with financial speculation or other exemptions set forth in the Sunshine Act. The FOMC has further determined that virtually all of its substantive deliberations could have been preserved pursuant to the Act’s minutes requirements and that such minutes could similarly have been protected against premature disclosure under the provi sions of the Act. The FOMC’s deliberations are currently reported by means of a document entitled “Record of Policy Actions” which is released to the public approximately one month after the meeting to which it relates. The Record of Policy Actions complies with the Act’s minutes requirements in that it contains a full and accurate report of all matters of policy discussed and views presented, clearly sets forth all policy actions taken by the FOMC and the reasons therefor, and includes the votes by individual members on each policy action. The timing of release of the Record of Policy Actions is fully consistent with the Act’s provisions assuring against premature release of any item of discussion in an agency’s minutes that contains information of a sensitive financial nature. In fact, by releasing the comprehensive Record of Policy Actions to the public approximately a month after each meeting, the FOMC exceeds the publication requirements that would be mandated by the letter of the Sunshine Act. Recognizing the congressional purpose underlying enactment of the Sunshine Act, the FOMC has determined to continue its current practice and timing of public disclosures in the conviction that its operations thus conducted are consistent with the intent and spirit of the Sunshine Act. Votes for this action: Messrs. Burns, Volcker, Balles, Black, Coldwell, Gardner, Jackson, Kim brel, Lilly, Partee, Wallich, and Winn. Votes against this action: None. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 393 3. Amendment to Rules Regarding Availability of Information At this meeting, the Committee approved an amendment, effective March 12, 1977, to Section 271.6(a) of its rules regarding avail ability of information to implement an amendment to the Freedom of Information Act effected by the Government in the Sunshine Act. After incorporating this amendment the Section read as fol lows: §271.6 Information not Disclosed Except as may be authorized by the Committee, information of the Committee that is not available to the public through other sources will not be published or made available for inspection, examination, or copying by any person if such information (a) is specifically exempted from disclosure by statute (other than section 552b of Title 5 United States Code), provided that such statute (A) requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or (B) establishes particular criteria for with holding or refers to particular types of matters to be withheld; or is specifically authorized under criteria established by an executive order to be kept secret in the interest of national defense or foreign policy and is in fact properly classified pursuant to such executive order. Votes for this action: Messrs. Burns, Volcker, Balles, Black, Coldwell, Gardner, Jackson, Kim brel, Lilly, Partee, Wallich, and Winn. Votes against this action: None. 4. Revision of Guidelines for Operations in Federal Agency Issues At this meeting the Committee amended number 4 of the guidelines for the conduct of System operations in Federal agency issues to take account of the operations of the Federal Financing Bank. The change, which was effective immediately, limits Federal Reserve purchases of Federal agency securities to issues of those agencies that are not eligible to borrow funds from the Federal Financing Bank, which began operations in mid-1974. Securities of the Bank itself are eligible for purchase by the System, although none is outstanding at present. Securities of Government-sponsored agen cies—such as the Federal home loan banks, the Federal National Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
394 Federal Reserve Bulletin □ April 1977 Mortgage Association, Federal land banks, Federal intermediate credit banks, and the banks for cooperatives—will continue to be eligible for System purchase under the new rules. As amended, guideline number 4 read as follows: Purchases will be limited to fully taxable issues, not eligible for purchase by the Federal Financing Bank, for which there is an active secondary market. Purchases will also be limited to issues outstand ing in amounts of $300 million or over in cases where the obligations have a maturity of five years or less at the time of issuance, and to issues outstanding in amounts of $200 million or over in cases where the securities have a maturity of more than five years at the time of issuance. Votes for this action: Messrs. Burns, Volcker, Balles, Black, Coldwell, Gardner, Jackson, Kim brel, Lilly, Partee, Wallich, and Winn. Votes against this action: None. Records of policy actions taken by the Federal Open Market Committee at each meeting, in the form in which they will appear in the Board’s Annual Report, are released about a month after the meeting and are subsequently published in the Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
395 Law Department Statutes, regulations, interpretations, and decisions INTEREST ON DEPOSITS a time deposit contract that results in an increase in the rate of interest paid or in a change on the Amendments to Regulation Q maturity of the deposit constitutes a payment of The Board of Governors of the Federal Reserve the time deposit before maturity. Provided further, System has approved two amendments to section That Investment Certificates issued in negotiable 217.4(d) of Regulation Q (12 C.F.R. 217). The form by a member bank pursuant to subpart 3 of first amendment modifies the structure of the cur § 217.7(b) may not be paid before maturity. This rent paragraph of Regulation Q that states the provision does not prevent a member bank from Board’s early withdrawal penalty rule and excep arranging the sale or purchase of such a certificate tions to that rule by providing a listing of those on behalf of the holder or prospective purchaser exceptions. This modification, which is intended of a certificate issued under that subpart. A mem to improve the clarity of the Board’s penalty rule, ber bank may not, however, repurchase such cer is a structural change only and is not intended to tificates for its own account. Provided further, alter the substance of the Board’s penalty rule. That a time deposit may be paid before maturity The second amendment provides an additional without a reduction or forfeiture of interest as exception to the Board’s early withdrawal penalty prescribed by this paragraph in the following cir rule. cumstances: Effective March 24, 1977, Regulation Q is (1) where a member bank pays all or a portion amended as follows: of a time deposit upon the death of any person whose name appears on the time deposit passbook Section 217.4—Payment of or certificate; Time Deposits Before Maturity (2) where a member bank pays all or a portion of a time deposit representing funds contributed to an Individual Retirement Account or a Keogh (d) PENALTY FOR EARLY WITHDRAWALS. (H.R. 10) plan established pursuant to 26 U.S.C. Where a time deposit, or any portion thereof, is (I.R.C. 1954) §§ 408, 401 when the individual paid before maturity, a member bank may pay for whose benefit the account is maintained attains interest on the amount withdrawn at a rate not to age 59V2 or is disabled (as defined in 26 U.S.C. exceed that currently prescribed in § 217.7 for a (I.R.C. 1954) § 72(m)(7)) or thereafter; or savings deposit: Provided, That the depositor shall (3) where a member bank pays that portion of forfeit three months of interest payable at such a time deposit on which Federal deposit insurance rate. If, however, the amount withdrawn has re has been lost as the result of the merger of two mained on deposit for three months or less, all or more Federally insured banks in which the interested shall be forfeited. Where necessary to depositor previously maintained separate time de comply with the requirements of this paragraph, posits, for a period of one year from the date of any interest already paid to or for the account of the merger. the depositor shall be deducted from the amount requested to be withdrawn.11 Any amendment of restrictions of § 217.4(d) in effect prior to July 5, 1973, which permitted payment of a time deposit before maturity only in an emergency where necessary to prevent great hardship to 11 The provisions of this paragraph apply to all time deposit the depositor, and which required the forfeiture of accrued and contracts entered into after July 5, 1973, and to all existing unpaid interest for a period of not less than 3 months on the time deposit contracts that are extended or renewed (whether amount withdrawn if an amount equal to the amount with by automatic renewal or otherwise) after such date, and to drawn had been on deposit for 3 months or longer, and the all time deposit contracts that are amended after such date so forfeiture of all accrued and unpaid interest on the amount as to increase the rate of interest paid. All contracts not sub withdrawn if an amount equal to the amount withdrawn had ject to the provisions of this paragraph shall be subject to the been on deposit less than 3 months. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
396 Federal Reserve Bulletin □ April 1977 Loan-to-Lender Programs Based upon this review, the Board has determined to continue, for an indefinite period, the suspen The Board has reviewed the question of whether sion of its August 6, 1975, determination regard funds obtained by member banks on their notes ing the deposit status of “Loan-to-Lender” funds. issued to State and municipal housing authorities (This suspension was first announced on Sep under “Loan-to-Lender” agreements should be tember 29, 1975). This action is based upon the regarded as “deposits” under the Board’s Regu Board’s belief that a determination on the deposit lation D (§ 204.1(f)) and Regulation Q (§ status of funds obtained by member banks under 217.1(f)). “Loan-to-Lender” programs should be deferred “Loan-to-Lender” programs usually involve pending the completion of broader based studies the issuance by a State or municipal housing of possible statutory and regulatory reforms per authority of tax-exempt bonds and the subsequent taining to interest on deposits and reserves held lending of the bond revenue funds to financial by member banks. The continued suspension will institutions under the requirement that these funds also provide the Board with further opportunity be used to make specified types of real estate loans to assess the potential impact of application of (generally mortgage loans to low or moderate reserve requirements and interest rate limitations income home buyers). The funds advanced to on funds obtained by member banks through par financial institutions pursuant to a “Loan-to- ticipation in “Loan-to-Lender” programs. Lender” program are evidenced by a loan agree The Board recognizes that its decision to defer ment and a promissory note issued by the financial for an indefinite period a final determination re institution to the housing authority. These pro garding the deposit status of funds obtained by grams enable State and municipal authorities to member banks under “Loan-to-Lender” agree channel funds obtained into housing programs ments may result in some uncertainty among through financial institutions possessing special member banks presently participating in such pro ized expertise in real estate lending and con grams or contemplating participation at a future struction financing. At the present time such pro date. Accordingly, in order to avoid any uncer grams are in operation in 11 States. Thirteen other tainty with respect to member bank participation State legislatures have approved legislation in “Loan-to-Lender” programs during the time authorizing such programs. On the basis of avail this suspension is in effect, the Board has deter able information, “Loan-to-Lender” programs mined that any funds obtained by member banks currently represent approximately $800 million in as the result of “Loan-to-Lender” agreements funds lent for these purposes. entered into during this suspension period will By letter of August 6, 1975, the Board requested continue to be exempt from interest rate limitations that the Federal Reserve Banks inform member and reserve requirements, regardless of any future banks in their districts that funds obtained by decision of the Board to reinstate its determination member banks on their notes issued to State or of August 6, 1975. municipal housing authorities under “Loan-to- Lender” programs are funds to be used in the banking business and, therefore, should be treated RULES REGARDING as deposits subject to Regulation D reserve re PUBLIC OBSERVATION OF MEETINGS quirements and Regulation Q interest rate limita The Board of Governors has added a new Part tions . 261b to provide for the procedures under which On September 29, 1975, the Board announced the open meeting requirements of subsections (b) that, in response to requests for such action, it through (f) of the Government in the Sunshine Act would review the deposit status of funds received will be met. by member banks on their notes issued to State Effective March 12, 1977 Part 261b is added and municipal housing authorities under “Loanto read as follows: to-Lender” type programs. In conjunction with that review, the Board suspended the effectiveness Section 261b. 1—Basis and Scope of its determination of August 6, 1975, and waived the maintenance of required reserves on “Loan- This Part is issued by the Board of Governors to-Lender ’ ’ obligations. of the Federal Reserve System (“the Board”) The Board has conducted an extensive review under section 552b of Title 5 of the United States of all known “Loan-to-Lender” type programs. Code, the Government in the Sunshine Act (“the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 397 Act”), to carry out the policy of the Act that the a member of the Board and for these proceedings public is entitled to the fullest practicable infor he shall be deemed a “member” for the purposes mation regarding the decision making processes of this Part. In the case of any subdivision of the of the Board while at the same time preserving Board, the term “member” means a member of the rights of individuals and the ability of the the Board designated to serve on that subdivision. Board to carry out its responsibilities. These regu (f) The term “public observation” means that lations fulfill the requirement of subsection (g) of the public shall have the right to listen and observe the Act that each agency subject to the provisions but not to record any of the meetings by means of the Act shall promulgate regulations to imple of cameras or electronic or other recording devices ment the open meeting requirements of subsections unless approval in advance is obtained from the (b) through (f) of the Act. Public Affairs Office of the Board and shall not have the right to participate in the meeting, unless Section 26lb.2—Definitions participation is provided for in the Board’s Rules of Procedure. For purposes of this Part, the following defini (g) The term “Federal agency” means an tions shall apply: “agency” as defined in 5 U.S.C. 551(1). (a) The term “agency” means the Board and subdivisions thereof. Section 261b.3— (b) The term “subdivision” means any group composed of two or more Board members that is Conduct of Agency Business authorized to act on behalf of the Board. Members shall not jointly conduct or dispose (c) The term “meeting” means the deliberations of official agency business other than in accordance of at least the number of individual agency mem with this Part. bers required to take action on behalf of the agency where such deliberations determine or result in the Section 26lb.4— joint conduct or disposition of official Board busi Meetings Open to Public Observation ness, but does not include (1) deliberations re quired or permitted by subsection (d) or (e) of the Except as provided in section 261b.5 of this Act, or (2) the conduct or disposition of official Part, every portion of every meeting of the agency agency business by circulating written material to shall be open to public observation. individual members. Section 26lb.5—Exemptions (d) The term “number of individual agency members required to take action on behalf of the (a) Except in a case where the agency finds that agency” means in the case of the Board, a major the public interest requires otherwise, the agency ity of its members except that (1) Board determi may close a meeting or a portion or portions of nation of the ratio of reserves against deposits a meeting under the procedures specified in section under section 19(b) of the Federal Reserve Act 26lb.7 or 26lb.8 of this Part, and withhold infor requires the vote of four members, (2) Board mation under the provisions of section 26lb.6, action with respect to advances, discounts and 261b.7, 261b.8, or 261b. 11 of this Part, where rediscounts under sections 10(a), 11(b) and 13(3) the agency properly determines that such meeting of the Federal Reserve Act requires the vote of or portion or portions of its meeting or the disclo five members and (3) Board action with respect sure of such information is likely to: to the percentage of individual member bank capi (1) disclose matters that are (A) specifically tal and surplus which may be represented by loans authorized under criteria established by an Execu secured by stock and bond collateral under section tive order to be kept secret in the interests of 1 l(m) of the Federal Reserve Act requires the vote national defense or foreign policy, and (B) in fact of six members. In the case of subdivisions of properly classified pursuant to such Executive the Board, the term means the number of members order; constituting a quorum of the designated subdivi (2) relate solely to internal personnel rules and sion. practices; (e) The term “member” means a member of (3) disclose matters specifically exempted from the Board appointed under Section 10 of the Fed disclosure by statute (other than section 552 of eral Reserve Act. In the case of certain Board Title 5 of the United States Code), provided that proceedings pursuant to 12 U.S.C. 1818(e), the such statute (A) requires that the matters be with Comptroller of the Currency is entitled to sit as held from the public in such a manner as to leave Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
398 Federal Reserve Bulletin □ April 1977 no discretion on the issue, or (B) establishes par 554 of Title 5 of the United States Code or ticular criteria for withholding or refers to particu otherwise involving a determination on the record lar types of matters to be withheld; after opportunity for a hearing. (4) disclose trade secrets and commercial or financial information obtained from a person and privileged or confidential; (5) involve accusing any person of a crime, or Section 26lb.6— Public formally censuring any person; A nnouncem ents of M eetings (6) disclose information of a personal nature where disclosure would constitute a clearly un (a) Except as otherwise provided by the Act, warranted invasion of personal privacy; public announcements of meetings open to public (7) disclose investigatory records compiled for observation and meetings to be partially or com law enforcement purposes, or information which pletely closed to public observation pursuant to if written would be contained in such records, but section 26lb.8 of this Part will be made at least only to the extent that the production of such one week in advance of the meeting. Except to records or information would (A) interfere with the extent such information is determined to be enforcement proceedings, (B) deprive a person of exempt from disclosure under section 26lb.5 of a right to a fair trial or an impartial adjudication, this Part, each such public announcement will state (C) constitute an unwarranted invasion of personal the time, place and subject matter of the meeting, privacy, (D) disclose the identity of a confidential whether it is to be open or closed to the public, source and, in the case of a record compiled by and the name and phone number of the official a criminal law enforcement authority in the course designated to respond to requests for information of a criminal investigation, or by a Federal agency about the meeting. conducting a lawful national security intelligence (b) If a majority of the members of the agency investigation, confidential information furnished determines by a recorded vote that agency business only by the confidential source, (E) disclose in requires that a meeting covered by subsection (a) vestigative techniques and procedures, or (F) en of this section be called at a date earlier than that danger the life or physical safety of law enforce specified in subsection (a), the agency will make ment personnel; a public announcement of the information speci (8) disclose information contained in or related fied in subparagraph (a) of the earliest practicable to examination, operating, or condition reports time. prepared by, on behalf of, or for the use of the (c) Changes in the subject matter of a publicly Board or other Federal agency responsible for the announced meeting, or in the determination to regulation or supervision of financial institutions; open or close a publicly announced meeting or (9) disclose information the premature disclo any portion of a publicly announced meeting to sure of which would— public observation, or in the time or place of a (A) be likely to (i) lead to significant specu publicly announced meeting made in accordance lation in currencies, securities, or commodities, with the procedures specified in section 26lb.9 of or (ii) significantly endanger the stability of any this Part will be publicly announced at the earliest financial institution; or practicable time. (B) be likely to significantly frustrate imple (d) Public announcements required by this sec mentation of a proposed action, except that sub- tion will be posted at the Board’s Public Affairs paragraph (B) shall not apply in any instance Office and Freedom of Information Office and may where the Board has already disclosed to the public be made available by other means or at other the content or nature of its proposed action, or locations as may be desirable. where the Board is required by law to make such (e) Immediately following each public an disclosure on its own initiative prior to taking final nouncement required by this section, notice of the action on such proposal; or time, place and subject matter of a meeting, (10) specifically concern the issuance of a sub whether the meeting is open or closed, any change poena, participation in a civil action or proceeding, in one of the preceding announcements, and the an action in a foreign court or international tribu name and telephone number of the official desig nal, or an arbitration, or the initiation, conduct, nated by the Board to respond to requests about or disposition of a particular case of formal agency the meeting, shall also be submitted for publication adjudication pursuant to the procedures in section in the Federal Register. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 399 Section 261b.7—Meetings corded vote of a majority of the members of the Closed to Public Observation agency when it is determined that the meeting or the portion of the meeting or the withholding of Under Expedited Procedures information qualifies for exemption under section (a) Since the Board qualifies for the use of ex 26lb.5 of this Part. Votes by proxy are not al pedited procedures under subsection (d)(4) of the lowed. Act, meetings or portions thereof exempt under (b) Except as provided in subsection (c) of this paragraph (4), (8), (9)(A) or (10) of section section, a separate vote of the members of the 26lb.5 of this Part, will be closed to public obser agency will be taken with respect to the closing vation under the expedited procedures of this sec or the withholding of information as to each meet tion. Following are examples of types of items ing or portion thereof which is proposed to be that, absent compelling contrary circumstances, closed to public observation or with respect to will qualify for these exemptions: matters relating which information is proposed to be withheld pur to a specific bank or bank holding company, such suant to this section. as bank branches or mergers, bank holding com (c) A single vote may be taken with respect to pany formations, or acquisition of an additional a series of meetings, a portion or portions of bank or acquisition or de novo undertaking of a which are proposed to be closed to public obser permissible nonbanking activity; bank regulatory vation or with respect to any information concern matters, such as applications for membership, is ing such series of meetings proposed to be with suance of capital notes and investment in bank held, so long as each meeting or portion thereof premises; foreign banking matters; bank supervi in such series involves the same particular matters sory and enforcement matters, such as cease-and- and is scheduled to be held no more than thirty desist and officer removal proceedings; monetary days after the initial meeting in such series. policy matters, such as discount rates, use of the (d) Whenever any person’s interests may be di discount window, changes in the limitations on rectly affected by a portion of a meeting for any payment of interest on time and savings accounts, of the reasons referred to in exemption (5), (6) and changes in reserve requirements or margin or (7) of section 26lb.5 of this Part, such person regulations. may request in writing to the Secretary of the (b) At the beginning of each meeting, a portion Board such portion of the meeting be closed to or portions of which is closed to public observa public observation. The Secretary, or in his or her tion under expedited procedures pursuant to this absence, the Acting Secretary of the Board, will section, a recorded vote of the members present transmit the request to the members and upon the will be taken to determine whether a majority of request of any one of them a recorded vote will the members of the agency votes to close such be taken whether to close such meeting to public meeting or portions of such meeting to public ob observation. servation. (e) Within one day of any vote taken pursuant (c) A copy of the vote, reflecting the vote of to subparagraphs (a) through (d) of this section, each member, and except to the extent such infor the agency will make publicly available at the mation is determined to be exempt from disclo Board’s Public Affairs Office and Freedom of In sure under section 26lb.5 of this Part, a public formation Office a written copy of such vote re announcement of the time, place and subject mat flecting the vote of each member on the question. ter of the meeting or each closed portion thereof, If a meeting or a portion of a meeting is to be will be made available at the earliest practicable closed to public observation, the agency, within time at the Board’s Public Affairs Office and Free one day of the vote taken pursuant to subpara dom of Information Office. graphs (a) through (d) of this section, will make publicly available at the Board’s Public Affairs Office and Freedom of Information Office a full, Section 26lb.8—Meetings written explanation of its action closing the meet Closed to Public Observation ing or portion of the meeting together with a list Under Regular Procedures of all persons expected to attend the meeting and (a) A meeting or a portion of a meeting will their affiliation, except to the extent such infor be closed to public observation under regular pro mation is determined by the agency to be exempt cedures, or information as to such meeting or por from disclosure under subsection (c) of the Act tion of a meeting will be withheld, only by re and section 261b.5 of this Part. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
400 Federal Reserve Bulletin □ April 1977 Section 261b.9—Changes With summary of any actions taken and the reasons Respect to Publicly Announced Meeting therefor, including a description of each of the views expressed on any item and the record of The subject matter of a meeting or the determi any roll call vote (reflecting the vote of each nation to open or close a meeting or a portion member on the question), for meetings or portions of a meeting to public observation may be of meetings closed to public observation pursuant changed following public announcement under to exemption (8), (9)(A) or (10) of section 26lb.5 section 26lb.6 only if a majority of the members of this Part. The minutes will identify all docu of the agency determines by a recorded vote that ments considered in connection with any action agency business so requires and that no earlier an taken. nouncement of the change was possible. Public (c) Transcripts, recordings or transcriptions announcement of such change and the vote of thereof, or minutes will promptly be made avail each member upon such change will be made pur able to the public in the Freedom of Information suant to section 26lb.6(c). Changes in time, in Office except for such item or items of such dis cluding postponement and cancellations of a pub cussion or testimony as may be determined to licly announced meeting or portion of a meeting contain information that may be withheld under or changes in the place of a publicly announced subsection (c) of the Act and section 26lb.5 of meeting will be publicly announced pursuant to this Part. section 26lb.6(c) by the Secretary of the Board (d) A complete verbatim copy of the transcript, or, in the Secretary’s absence, the Acting Secre a complete copy of the minutes, or a complete tary of the Board. electronic recording or verbatim copy of a tran scription thereof of each meeting or portion of a Section 261b. 10— meeting closed to public observation will be Certification of General Counsel maintained for a period of at least two years or one year after the conclusion of any agency pro Before every meeting or portion of a meeting ceeding with respect to which the meeting or por closed to public observation under section 26lb.7 tion thereof was held, whichever occurs later. or 26lb.8 of this Part, the General Counsel, or in the General Counsel’s absence, the Acting Section 261b. 12—Procedures General Counsel, shall publicly certify whether or for Inspection and Obtaining not in his or her opinion the meeting may be Copies of Transcriptions and Minutes closed to public observation and shall state each relevant exemptive provision. A copy of such cer (a) Any person may inspect or copy a tran tification, together with a statement from the pre script, a recording or transcription of a recording, siding officer of the meeting setting forth the time or minutes described in section 261b. 11(c) of this and place of the meeting and the persons present, Part. will be retained for the time prescribed in section (b) Requests for copies of transcripts, record 261b. 11(d). ings or transcriptions of recordings, or minutes described in section 261b. 11(c) of this Part shall Section 261b. 11— specify the meeting or the portion of meeting de Transcripts, Recordings, and Minutes sired and shall be submitted in writing to the Sec retary of the Board, Board of Governors of the (a) The agency will maintain a complete tran Federal Reserve System, Washington, D.C. script or electronic recording or transcriptions 20551. Copies of documents identified in minutes thereof adequate to record fully the proceedings may be made available to the public upon request of each meeting or portion of a meeting closed under the provision of 12 C.F.R. 261 (Rules Re to public observation pursuant to exemption (1), garding Availability of Information). (2), (3), (4), (5), (6), (7) or (9)(B) of section 261b.5 of this Part. Transcriptions of recordings Section 261b. 13—Fees will disclose the identity of each speaker. (b) The agency will maintain either such a tran (a) Copies of transcripts, recordings or tran script recording or transcription thereof, or a set scriptions of recordings, or minutes requested of minutes that will fully and clearly describe all pursuant to section 261b. 12(b) of this Part will matters discussed and provide a full and accurate be provided at a cost of 100 per standard page Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 401 for photocopying or at a cost not to exceed the (b) Documents may be furnished without actual cost of printing, typing, or otherwise charge where total charges are less than $2. preparing such copies. * * * * * BANK HOLDING COMPANY AND BANK MERGER ORDERS ISSUED BY THE BOARD OF GOVERNORS five banks involved is located in the relevant Orders Under Section 3 market and the amount of actual competition be of Bank Holding Company Act tween any of them and Bank appears slight. It does not appear probable that such competition Audubon Investment Company, would increase in the foreseeable future. Consum Audubon, Iowa mation of the proposal would neither eliminate significant existing or potential competition nor Order Approving increase the concentration of banking resources in Formation of Bank Holding Company any relevant market. Accordingly, competitive Audubon Investment Company, Audubon, considerations are consistent with approval of the Iowa, has applied for the Board’s approval under applications. § 3(a)(1) of the Bank Holding Company Act (12 The Board applies multi-bank holding company U.S.C. § 1842(a)(1)) of formation of a bank standards in assessing the managerial and financial holding company through acquisition of 97.83 per resources of an applicant seeking to become a cent (or more) of the voting shares of Audubon one-bank holding company where the principals State Bank (formerly First State Bank), Audubon, of the applicant are engaged in establishing a series Iowa (“Bank”). or chain of one-bank holding companies.3 The Notice of the application, affording opportunity three other one-bank holding companies and their for interested persons to submit comments and respective subsidiary banks with which Appli views, has been given in accordance with § 3(b) cant’s principals are associated appear to be in of the Act. The time for filing comments and views satisfactory condition, which suggests that Appli has expired, and the Board has considered the cant’s principals would conduct the operations of application and all comments received in light of the proposed holding company and of Bank in a the factors set forth in § 3(c) of the Act (12 U.S.C. satisfactory manner. In addition, Applicant has § 1842(c)). committed to inject new capital into Bank if such Applicant, a nonoperating corporation with no action becomes necessary to maintain a satis subsidiaries, was organized for the purpose of factory ratio of capital to assets. Although Appli becoming a bank holding company through the cant will incur some debt in connection with this acquisition of Bank. Bank, with deposits of $21.4 proposal, it appears that income from Bank will million,1 is the largest of three banks in the rele provide sufficient revenue to service the debt ade vant market2 and controls approximately 53 per quately without adversely affecting the financial cent of the total deposits in commercial banks in resources or condition of either Applicant or Bank. the market. Upon acquisition of Bank, Applicant Accordingly, considerations relating to the finan would control the 141st largest banking organi cial and managerial resources and future prospects zation in Iowa holding . 18 per cent of the total of Applicant and Bank are consistent with and lend deposits in commercial banks in the State. The some weight in favor of approval. proposed transaction is merely a restructuring of Although consummation of the transaction present ownership into corporate form. Applicant would have no immediate effect on area banking presently has no subsidiaries and does not engage needs, considerations relating to the convenience in any activities. Principals of Applicant are asso and needs of the community to be served are ciated with three other one-bank holding compa consistent with approval of the application. It is nies and two other banks in Iowa. None of the the Board’s judgment that consummation of the !A11 banking data are as of December 31, 1975. 3See the Board’s Order of June 14, 1976 denying the 2The relevant market is approximated by the northern nine- application of Nebraska Banco, Inc., Ord, Nebraska (62 Fed. tenths of Audubon County. Res. Bulletin 638 (1976)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
402 Federal Reserve Bulletin □ April 1977 proposed transaction would be consistent with the largest of six banks in the Helena banking market public interest and that the application should be and controls 7.6 per cent of the total deposits in approved. commercial banks in the market.2 Both of the two On the basis of the record, the application is largest banks in the relevant market are subsidi approved for the reasons summarized above. The aries of bank holding companies and hold, respec transaction shall not be made (a) before the thir tively, 38.5 and 37.6 per cent of the total deposits tieth calendar day following the effective date of in commercial banks in the market. There are no this Order or (b) later than three months after the subsidiary banks of Applicant presently competing effective date of this Order, unless such period in the relevant market, and Applicant’s subsidiary is extended for good cause by the Board, or by bank closest to Bank is located approximately 63 the Federal Reserve Bank of Chicago pursuant to miles from the Helena banking market. Thus, delegated authority. consummation of this proposal would not result By order of the Board of Governors, effective in the elimination of a significant amount of exist March 23, 1977. ing competition and, in view of the distance in volved, would not appear to foreclose the devel Voting for this action: Chairman Burns and Gover opment of a significant amount of competition in nors Gardner, Coldwell, Jackson, and Partee. Absent the future. Accordingly, competitive consid and not voting: Governors Wallich and Lilly. erations are consistent with approval of the appli (Signed) Griffith L. Garwood, cation. [seal] Deputy Secretary of the Board. The Board has indicated on previous occasions that it believes a bank holding company should Bancorporation of Montana, constitute a source of both financial and managerial Great Falls, Montana strength to its subsidiary bank(s). Accordingly, in Order Denying Acquisition of Bank acting upon any application under the Act, the Board will closely examine the financial condition, Bancorporation of Montana, Great Falls, Mon managerial resources, and future prospects of an tana, a bank holding company within the meaning applicant and its subsidiary bank(s) with these of the Bank Holding Company Act, has applied factors in mind. Based upon an evaluation of such for the Board’s approval under § 3(a)(3) of the factors with respect to this application, the Board Act (12 U.S.C. § 1842(a)(3)) to acquire 100 per has determined that denial of this application is cent of the voting shares (less directors’ qualifying warranted. shares) of Bank of Montana, Helena, Montana With respect to the financial and managerial (“Bank”). resources and future prospects associated with this Notice of the application, affording opportunity application, it appears that, while Applicant’s for interested persons to submit comments and managerial resources are regarded as satisfactory views, has been given in accordance with § 3(b) and consistent with approval of the application, of the Act. The time for filing comments and views Applicant’s overall financial condition will not has expired, and the Board has considered the permit it to serve as a source of financial strength application and all comments received in light of to Bank. Rather, based upon an examination of the factors set forth in § 3(c) of the Act (12 U.S.C. all the facts of record, the Board concludes that § 1842(c)). consummation of this proposal with the attendant Applicant, the third largest banking organization assumption of acquisition debt would increase in Montana, controls thirteen banks with aggregate Applicant’s debt to equity ratio from a level al deposits of $171 million, representing approxi ready regarded as high to a point considerably mately 5.9 per cent of the total commercial bank higher than that which the Board regards as ac deposits in Montana.1 Acquisition of Bank would ceptable for a multi-bank holding company the size increase Applicant’s share of State deposits by of Applicant. Consequently, it appears that Appli only 0.4 per cent and its ranking Statewide would cant’s proposal, if consummated, would result in remain unchanged. Bank ($11.1 million in deposits) is the fourth 2 The Helena banking market is the relevant banking market and is approximated by the southern half of Lewis and Clark *A11 banking data are as of December 31, 1975, but reflect county, the northern half of Jefferson County, and the northern structural changes through January 12, 1976. half of Broadwater County. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 403 substantial added financial burden to Applicant and Financial Network Corporation (“FNC”), a onethat for several years following consummation, it bank holding company that owns 95.4 per cent may become necessary for Applicant to draw ex of the voting shares of The Beloit State Bank cessive dividends from its subsidiary banks in (“Beloit Bank”), and to acquire all the voting order to service the debt associated with the ac shares of Community Holding Corporation quisition of Bank. Based on the above and other (“CHC”), a one-bank holding company that owns facts of record, the Board concludes that the 75.3 per cent of the voting shares of Community banking factors weigh against approval of this Bank of Beloit (“Community Bank”), all of application and that Applicant’s funds could be which are located in Beloit, Wisconsin. The pro better utilized in support of its existing subsidi posed acquisition of FNC and CHC would be aries. effected through the formation of a new holding While there is no evidence in the record to company to be named Inland Beloit Corporation, indicate that the banking needs of the Helena Milwaukee, Wisconsin, a corporation that is to be community are not being met, Applicant states that wholly owned by Inland Heritage Corporation and following consummation of this proposal, it would for which a § 3(a)(1) application has been filed make available to Bank such services as loan with the Board. The proposed acquisitions would review, automated accounting services, invest involve the merger of FNC and CHC into Inland ment consulting, and personnel advice. While Beloit Corporation, giving Inland Beloit Corpora considerations relating to the convenience and tion direct ownership of FNC and CHC. As the needs of the community to be served are consistent parent companies of Inland Beloit Corporation, with approval of the application, they are not The Jacobus Company and Inland Heritage Cor sufficient, in the Board’s judgment, to outweigh poration would thereby gain indirect ownership of the aforementioned adverse banking factors re FNC and CHC. FNC and CHC serve no purpose flected in the record. Accordingly, it is the Board’s other than to hold the stock of their respective judgment that approval of the application would banks in corporate form, and Inland Beloit Cor not be in the public interest and that the application poration serves no purpose other than to facilitate should be denied. the acquisition of FNC and CHC. Accordingly, On the basis of the record, the application is the proposed acquisition of FNC and CHC by denied for the reasons summarized above. Inland Beloit Corporation is treated herein as the By order of the Board of Governors, effective proposed acquisition of Beloit Bank and Commu March 2, 1977. nity Bank by Applicant. Notice of the applications, affording opportunity Voting for this action: Governors Wallich, Coldwell, for interested persons to submit comments and Jackson, and Lilly. Absent and not voting: Chairman views, has been given in accordance with § 3(b) Burns and Governors Gardner and Partee. of the Act. The time for filing comments and views (SDigenpeudt)y GSercifreftitahry Lo.f Gthae rBwooaordd., has expired, and the Board has considered the [seal] applications and all comments received in light of the factors set forth in § 3(c) of the Act (12 U.S.C. The Jacobus Company, Inland Heritage § 1842(c)). Corporation, and Inland Beloit Corporation, By Order dated February 7, 1977, the Board Wauwatosa, Wisconsin denied Applicant’s previous applications to ac Order Approving Formation quire Beloit Bank and Community Bank.1 Appli of a Bank Holding Company and cant’s current applications differ from its earlier Acquisition of Two Bank Holding Companies applications only with respect to their financial aspects. The Jacobus Company, Wauwatosa, Wisconsin, Applicant presently controls four banks with and its 45.4 per cent owned subsidiary, Inland aggregate deposits of $146.8 million.2 Applicant’s Heritage Corporation, Wauwatosa, Wisconsin acquisition of Beloit Bank and Community Bank (hereinafter jointly referred to as “Applicant”), (aggregate deposits of $85.6 million) would rep both of which are bank holding companies within the meaning of the Bank Holding Company Act, have applied for the Board’s approval under § 3 l42 Federal Register 9059. of the Bank Holding Company Act (12 U.S.C. 2 All banking data are as of December 31, 1975, unless § 1842) to acquire all of the voting shares of otherwise indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
404 Federal Reserve Bulletin □ April 1977 resent Applicant’s initial entry into the Janes ville- of the substantially revised financial aspects of the Beloit banking market, and would result in Appli proposal, the Board concludes that banking factors cant controlling approximately 21.9 per cent of are consistent with approval of the applications. the deposits therein.3 For reasons cited in the In its earlier Order, the Board noted that con Board’s earlier Order, the Board concludes that siderations relating to the convenience and needs consummation of the proposed acquisitions would of the community to be served were not sufficient not have any significant adverse effects on existing to outweigh the adverse financial factors involved or potential competition. with the proposal. In view of the improved finan While competitive considerations were found to cial considerations reflected herein, it now appears be consistent with approval of the proposed acqui that the proposed affiliation of the two Beloit banks sitions, the Board was concerned with the financial with Applicant would enhance their operations and aspects of Applicant’s earlier proposal and con thereby benefit the residents of the area served by cluded that the adverse financial considerations the two banks. Accordingly, convenience and involved warranted denial of those applications. needs considerations are consistent with approval In its February 7th Order, the Board noted that of the applications. It is the Board’s judgment that the proposed acquisitions would result in a sub the proposed acquisitions would be in the public stantial addition ($3.6 million) to Applicant’s al interest and that the applications should be ap ready high level of long-term debt, and stated that proved. it was concerned that Applicant would not be able On the basis of the record, the applications are to meet the increased debt servicing requirements approved for the reasons summarized above. The and also maintain and strengthen the capital of its transactions shall not be made (a) before the thir existing subsidiary banks. The Board concluded tieth calendar day following the effective date of that Applicant should direct its financial resources this Order, or (b) later than three months after the toward strengthening its existing subsidiaries be effective date of this Order, unless such period fore seeking further expansion of its banking in is extended for good cause by the Board or by terests. the Federal Reserve Bank of Chicago, pursuant In the context of Applicant’s current proposal, to delegated authority. the Board regards the financial and managerial By order of the Board of Governors, effective resources and future prospects of Applicant, its March 25, 1977. subsidiaries, and the banks to be acquired, as Voting for this action: Chairman Burns and Gover generally satisfactory and consistent with approval nors Gardner, Wallich, Coldwell, and Partee. Absent of the applications. Applicant’s current applica and not voting: Governors Jackson and Lilly. tions contain a substantially stronger financial pro posal than that previously considered, and the (Signed) Griffith L. Garwood, Board is of the view that it would enable Applicant [seal] Deputy Secretary of the Board. to meet the increased debt servicing requirements King Ranch, Inc., without placing additional funding requirements Kingsville, Texas on its existing subsidiary banks. Pursuant to its revised financial plan, Applicant intends to Order Approving promptly reduce the acquisition debt from $4.8 Retention of Shares of Bank million to $1.3 million, and to bolster the capital King Ranch, Inc., Kingsville, Texas, a bank positions of two of its existing subsidiary banks holding company within the meaning of the Bank and of Beloit Bank by amounts totaling $1.25 Holding Company Act (“Act”), has applied for million. Applicant'would also maintain approxi the Board’s approval under § 3(a)(3) of the Act mately $0.7 million as a reserve for future capital (12 U.S.C. § 1842(a)(3)) to retain 1.5 per cent contributions to subsidiary banks which would be of the outstanding voting shares of State Bank of made as the need arose.4 Accordingly, in view Kingsville, Texas (“Bank”). Notice of the application, affording opportunity 3The Janesville-Beloit banking market is approximated by for interested persons to submit comments and Rock County. 4In order to effect these actions, Applicant, in addition to views, has been given in accordance with § 3(b) using existing funds, has committed to issue and has received of the Act. The time for filing comments and views subscriptions for $2.0 million in convertible debentures, and has expired, and the Board has considered the has committed to sell $1.5 million in additional common stock of Inland Heritage Corporation. application and all comments received in light of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 405 the factors set forth in § 3(c) of the Act (12 U.S.C. would involve neither an expansion of Applicant § 1842(c)). nor an increase in the banking resources controlled Applicant,1 a one-bank holding company by by it. It is the Board’s judgment that retention of virtue of its ownership of approximately 35.6 per this stock would eliminate neither existing nor cent of the outstanding voting shares of Kleberg potential competition nor increase the concentra First National Bank of Kingsville, Kingsville, tion of banking resources in any relevant area. Texas (“Kleberg Bank”), seeks Board approval Thus, competitive considerations are consistent to retain 337 shares of Bank (1.5 per cent) acquired with approval of the application. without the Board’s prior approval as a result of The financial and managerial resources and fu Applicant’s pro rata participation as of right in ture prospects of Applicant are satisfactory, while a 1973 increase in the number of outstanding such considerations in the case of Bank are gener shares of Bank’s common stock.2 Both prior to ally satisfactory. Overall, banking factors are con the offering and after its purchase, Applicant sistent with approval. There is no indication in owned 16.02 per cent of the total outstanding the record that the convenience and needs of the voting shares of Bank. Bank ($18.9 million in community to be served are not currently being deposits) is among the smaller banks in the State met; however, such considerations are consistent of Texas, and controls less than one tenth of one with approval. Therefore, it is the Board’s judg per cent of the total deposits in commercial banks ment that the retention of the shares of Bank would in the State.3 be in the public interest and that the application Kleberg Bank and Bank are both located in should be approved. Kingsville, Texas, and rank first and second, re On the basis of the record, the application is spectively, among the three banks located in the approved for the reasons summarized above. Kleberg County banking market (the relevant By order of the Board of Governors, effective market). Applicant does not control Bank’s poli March 21, 1977. cies or activities nor does Applicant have any Voting for this action: Chairman Burns and Gover officers or directors in common with Bank. More nors Gardner, Wallich, Coldwell, and Partee. Present over, it appears that Applicant’s retention of 1.5 and Abstaining: Governor Jackson. Absent and not per cent of Bank’s outstanding voting shares will voting: Governor Lilly. not increase its ability to direct Bank’s operations (Signed) Griffith L. Garwood, as Applicant’s proportionate stock interest will [seal] Deputy Secretary of the Board. remain unchanged. Retention of Bank’s shares Lincoln National Company, Bala Cynwyd, Pennsylvania applicant is engaged in a variety of nonbanking activities Order Approving including a worldwide cattle ranching operation. Applicant also holds various oil and mineral interests on its properties. These Acquisition of Shares of Bank nonbanking activities are exempt from the prohibitions of section 4 of the Act by virtue of section 4(c)(ii) of the Act Lincoln National Company, Bala Cynwyd, (12 U.S.C. § 1843(c)(ii)). Pennsylvania, a bank holding company within the 2117050 of the Board’s Interpretations (12 C.F.R. § meaning of the Bank Holding Company Act, has 225.103), which has been effective since 1957, states in part: . . . [I]t is the Board’s opinion that receipt of bank stock applied for the Board’s approval under section by means of a stock dividend or stock split, assuming no 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to ac change in class of stock, does not require the Board’s prior approval under the Act, but that purchase of bank stock quire, indirectly, 9.9 per cent of the voting shares by a bank holding company through the exercise of rights of The Bryn Mawr Trust Company, Bryn Mawr, does require the Board’s prior approval, unless one of the Pennsylvania (“Bank”). exceptions set forth in section 3(a) is applicable. It appears from the facts of record that the acquisition of Notice of the application, affording opportunity the shares of Bank was based on a misunderstanding of the for interested persons to submit comments and applicable statutes and regulations relating to the acquisition views, has been given in accordance with section of the voting stock of banks by bank holding companies. In accord with the Board’s position with respect to violations of 3(b) of the Act. The time for filing comments and the Act, the Board has scrutinized the underlying facts sur views has expired, and the Board has considered rounding the acquisition of the shares of Bank. Upon its examination of all the facts of record, including Applicant’s the application and all comments received in light undertaking to guard against violations in the future, the Board of the factors set forth in section 3(c) of the Act is of the view that the facts surrounding the violation are not (12 U.S.C. § 1842 (c)). such as would call for denial of the application. 3All banking data are as of December 31, 1975. Applicant, a one-bank holding company, owns Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
406 Federal Reserve Bulletin □ April 1977 all of the voting shares (less directors’ qualifying same banking market, it does not appear that shares) of Lincoln Bank, Bala Cynwyd, Pennsyl consummation of this proposal would have signif vania,1 with deposits of $94.6 million, repre icant adverse effects on competition. The com senting 0.2 per cent of the total deposits in com bined market share of Lincoln Bank and Bank mercial banks in Pennsylvania.2 Applicant also has would represent only 1.1 per cent of total deposits one nonbanking subsidiary, Lincoln National in the Philadelphia-Camden market. Accordingly, Leasing Co., Bala Cynwyd, Pennsylvania, which the Board concludes that consummation of the is engaged in the leasing of personal property and proposal would not have significant adverse effects equipment on a full payout basis. Applicant’s on existing or potential competition; thus, com indirect acquisition of shares of Bank would have petitive considerations are consistent with approval no appreciable effect on the concentration of of the subject application. banking resources in Pennsylvania. The Board notes that neither Applicant nor Applicant’s subsidiary bank, Lincoln Bank, a Lincoln Bank will incur any debt in connection State-chartered insured bank that is not a member with the acquisition of shares of Bank. The finan of the Federal Reserve System, proposes to acquire cial and managerial resources and future prospects for cash 9.9 per cent of the voting shares of Bank of Applicant, Lincoln Bank, and Bank are consid pursuant to Title 7 Pennsylvania Statutes, section ered to be generally satisfactory. Accordingly, 311 (d)(ii)(B), which authorizes Pennsylvania banking factors are consistent with approval of the banks to acquire and hold up to 10 per cent of application. There is no indication that the con the shares of another Pennsylvania bank or trust venience and needs of the community to be served company.3 The instant shares of Bank were pre are not currently being met. Although there will viously held by Centennial Bank, Philadelphia, be no immediate increase in the services offered Pennsylvania, a bank that was ordered closed by by Bank, convenience and needs considerations the Commonwealth of Pennsylvania Department are consistent with approval of the application. of Banking on October 19, 1976. In subsequent This application presents the Board with a situ liquidation proceedings by the Federal Deposit ation in which rather than acquiring control, Ap Insurance Corporation, Lincoln Bank purchased plicant, through its subsidiary bank, is making a certain assets and assumed certain deposit liabili relatively small investment in Bank. This invest ties of Centennial Bank and, in addition, Lincoln ment would not appear to have any adverse effects Bank obtained an option to purchase the subject on Applicant or Lincoln Bank. An acquisition of shares of Bank from the FDIC, as receiver. less than a 25 per cent interest is not a normal Bank (deposits of $56.7 million) is the 25th acquisition for a bank holding company. However, largest banking organization in the Philadel- the Bank Holding Company Act authorizes in phia-Camden banking market4 and holds 0.4 per vestments of up to 5 per cent without Board cent of total market deposits.5 Lincoln Bank, approval, and, by requiring prior Board approval through its twelve offices, also competes in the for the acquisition of more than 5 per cent of the Philadelphia-Camden banking market and ranks as voting shares of a bank, clearly contemplates in the 18th largest banking organization therein, with vestments between 5 and 25 per cent.6 0.7 per cent of total deposits in the market. Al It is the Board’s judgment that the proposed though Lincoln Bank and Bank compete in the transaction would be in the public interest and that the application should be approved. On the basis of record, the application is approved for the reasons summarized above. The transaction shall not be made (a) before the thirtieth calendar day 1 Applicant became a bank holding company with respect to Lincoln Bank on December 31, 1970 as a result of enactment following the effective date of this Order or (b) of the 1970 Amendments to the Bank Holding Company Act. later than three months after the effective date of 2Unless otherwise noted, all banking data are as of June this Order, unless such period is extended for good 30, 1976. 3The Secretary of Banking of the Commonwealth of Penn sylvania, by letter dated February 15, 1977, has recommended approval of the subject application. 4The Philadelphia-Camden banking market is approximated by all of Philadelphia and Delaware Counties, portions of 6See the Board’s Order of May 16, 1973 approving the Chester, Montgomery and Bucks Counties in Pennsylvania, application of First Piedmont Corporation, Greenville, South plus Camden, and portions of Burlington and Gloucester Carolina, to acquire shares of First Palmetto State Bank and Counties in New Jersey. Trust Company, Columbia, South Carolina, 38 Federal Regis 5All market data are as of June 30, 1975. ter 14204 (1973), 59 Federal Reserve Bulletin 456 (1973). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 407 cause by the Board, or by the Federal Reserve the market. The proposed transaction involves the Bank of Philadelphia pursuant to delegated au transfer of ownership of Bank from individuals to thority. a corporation owned by the same individuals. By order of the Board of Governors, effective Since the subject proposal is essentially a corporate March 11, 1977. reorganization and Applicant has no subsidiaries, it appears unlikely that consummation of the pro Voting for this action: Vice Chairman Gardner and posal would have any adverse effect upon existing Governors Wallich, Jackson, Partee, and Lilly. Absent or potential competition or increase the concentra and not voting: Chairman Burns and Governor Coldwell. tion of banking resources, or have any adverse competitive effect. Thus, the Board concludes that (Signed) Griffith L. Garwood, competitive effects of the instant proposal are not [seal] Deputy Secretary of the Board. adverse. The Board had indicated on previous occasions OLD CANAL BANKSHARES, INC., that a bank holding company should constitute a Lockport, Illinois source of financial and managerial strength to its subsidiary bank(s), and that the Board will closely Order Denying Formation examine the condition of an applicant with this of Bank Holding Company consideration in mind. With respect to the subject OLD CANAL BANKSHARES, INC., Lock application, it appears that the financial and mana port, Illinois, has applied for the Board’s approval gerial resources and future prospects of Applicant under § 3(a)(1) of the Bank Holding Company Act are entirely dependent upon Bank. The managerial (12 U.S.C. § 1842(a)(1)) of formation of a bank resources of Applicant and Bank are regarded as holding company through acquisition of 80 per cent generally satisfactory. However, as part of this or more of the voting shares of Heritage First Na proposal, Applicant would assume certain debt tional Bank of Lockport, Lockport, Illinois that its principals incurred in acquiring Bank’s (“Bank”). shares. Thus, Applicant proposes to initially incur Notice of the application, affording opportunity approximately $2.1 million in acquisition debt for interested persons to submit comments and which it proposes to service over a twelve-year views, has been given in accordance with § 3(b) period through distributed earnings of Bank. The of the Act. The time for filing comments and views projected earnings for Bank, in the Board’s view, has expired, and the application and all comments would not provide Applicant with the necessary received have been considered in light of the financial resources to meet its annual debt servic factors set forth in § 3(c) of the Act (12 U.S.C. ing requirements as well as any unexpected prob § 1842(c)). lems that might arise at Bank. Under the instant Applicant is a recently chartered, nonoperating proposal, it does not appear that Bank would corporation organized under the laws of Delaware maintain an adequate level of capital throughout for the purpose of becoming a bank holding com the debt retirement period.3 pany by acquiring Bank ($50.2 million in depos It does not appear that Bank’s management its).1 Upon acquisition of Bank, Applicant would proposes any significant changes in Bank’s opera control the 186th largest commercial banking or tions that might provide the necessary Bank earn ganization in the State of Illinois and would control ings. In conclusion, the proposal would not pro approximately 0.08 per cent of total deposits in vide Applicant the necessary financial flexibility commercial banks in the State. to service its debt while maintaining adequate Bank, located in Lockport, Illinois, approxi capital in Bank, and therefore Applicant’s and mately 30 miles southwest of Chicago, is the Bank’s financial resources and future prospects fourth largest of 22 commercial banks in the rele weigh against approval of the application. vant banking market2 and holds approximately 7.9 per cent of the total commercial bank deposits in 3 Within 180 days of approval of the subject proposal Appli cant proposes to reduce the debt it would incur by $100,000. This would result from the issuance by Bank of $500,000 in deposit data as of December 31, 1975. 9 per cent preferred stock that would be funded through the 2The relevant banking market is approximated by Will sale of additional common stock in Applicant, which will be County, Illinois. purchased by its principals for $600,000. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
408 Federal Reserve Bulletin □ April 1977 No significant changes in Bank’s operations or of the Act. The time for filing comments and views in the services offered to customers of Bank are has expired, and the Board has considered the anticipated to follow from consummation of the application and all comments received in light of proposed acquisition. Consequently, convenience the factors set forth in § 3(c) of the Act (12 U.S.C. and needs factors lend no weight toward approval. § 1842(c)). On the basis of the circumstances concerning Applicant, the fourth largest banking organi the instant application to become a bank holding zation in Texas, controls eight banks with aggre company, the Board concludes that the banking gate deposits of approximately $3.1 billion, which considerations involved in this proposal present represents 6.5 per cent of total commercial bank adverse factors bearing upon the financial re deposits in Texas.1 Acquisition of Bank ($32.0 mil sources and future prospects of both Applicant and lion in deposits) would increase Applicant’s share Bank. Such adverse factors are not outweighed by of Statewide commercial bank desposits by less any procompetitive effects, the managerial re than 0.1 per cent and would have no appreciable sources of Applicant or Bank, or benefits that effect upon the concentration of banking resources would better satisfy the convenience and needs of in Texas. the community to be served. Accordingly, it is By Order dated October 25, 1973, the Board the Board’s judgment that approval of the applica approved the application of Applicant to become tion to become a bank holding company would a bank holding company through the direct acqui not be in the public interest and that the application sition of Republic National Bank of Dallas, Dallas, should be denied. Texas (“Republic Bank”), and the indirect acqui On the basis of the facts of record, the applica sition of 29.9 per cent of the voting shares of Oak tion to become a bank holding company is denied Cliff Bank & Trust Company, Dallas, Texas for the reasons summarized above. (“Oak Cliff Bank”). At that time, Republic Bank By order of the Board of Governors, effective owned indirectly between 5 and 24.9 per cent March 9, 1977. interests in twenty-one non-subsidiary banks, eighteen of which were in the Dallas banking Voting for this action: Vice Chairman Gardner and market.2 Applicant represented to the Board that Governors Wallich, Jackson, and Lilly. Absent and not it would file separate applications for prior ap voting: Chairman Burns and Governors Coldwell and Partee. proval by the Board for acquisition of additional shares in each of certain of those banks, and would (Signed) Griffith L. Garwood, divest completely its interest in others. The Board [seal] Deputy Secretary of the Board. in its Order stated that each such application filed by Applicant would be considered on its own merit Republic of Texas Corporation, in light of the statutory standards set forth in § 3 Dallas, Texas of the Act. Since that time Applicant has divested Order Approving Acquisition of Bank its interests in seven of the Dallas-area banks. This is Applicant’s second application to acquire addi Republic of Texas Corporation, Dallas, Texas, tional shares in one of the Dallas-area banks.3 a bank holding company within the meaning of Bank is the 37th largest of 132 banks in the the Bank Holding Company Act, has applied for Dallas banking market and controls 0.4 per cent the Board’s approval under § 3(a)(3) of the Act of the total deposits of commercial banks in the (12 U.S.C. § 1842(a)(3)) to acquire all of the market. Applicant presently has two subsidiary voting shares, less directors’ qualifying shares, of banks in the Dallas banking market.4 Republic the successor by merger to Dallas National Bank in Dallas, Dallas, Texas (“Bank”). The bank into which Bank is to be merged has no significance *A11 banking data are as of December 31, 1975, and reflect except as a means to facilitate the acquisition of bank holding company formations and acquisitions approved the voting shares of Bank. Accordingly, the pro through February 28, 1977. posed acquisition of shares of the successor orga 2The relevant banking market is approximated by the Dallas RMA. nization is treated herein as the proposed acquisi 3By separate action of this date, the Board approved Appli tion of the shares of Bank. cant’s acquisition of First National Bank in Garland, Garland, Notice of the application, affording opportunity Texas (“Garland Bank”). 4Upon acquiring Garland Bank, Applicant will control a for interested persons to submit comments and third subsidiary bank in the Dallas market and will thereby views, has been given in accordance with § 3(b) control an additional 0.7 per cent of market deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 409 Bank is the largest bank in that market with 25.5 public interest and that the application should be per cent of the total deposits in commercial banks approved. in the market, and Oak Cliff Bank & Trust Com On the basis of the record, the application is pany is the eighth largest bank in the market with approved for the reasons summarized above. The 1.2 per cent of market deposits. The eleven non transaction shall not be made (a) before the thir subsidiary banks in the Dallas market (including tieth calendar day following the effective date of Bank and Garland Bank) in which Applicant pres this Order or (b) later than three months after the ently holds minority interests have aggregate de effective date of this Order, unless such period posits of $505.0 million, representing 5.4 per cent is extended for good cause by the Board, or by of market deposits. the Federal Reserve Bank of Dallas pursuant to While consummation of the proposal would delegated authority. appear to eliminate some existing competition By order of the Board of Governors, effective since Applicant and Bank operate in the same March 23, 1977. market, the Board notes that Applicant, or its Voting for this action: Chairman Burns and Gover predecessor in interest, Republic Bank, has con nors Gardner, Wallich, Coldwell, Jackson, Partee, and trolled 20 per cent or more of the shares of Bank Lilly. since 1947, that officers and directors of Republic Bank were instrumental in the formation of Bank, (Signed) Griffith L. Garwood, and that the duration and nature of this relationship [seal] Deputy Secretary of the Board. is such that little, if any, meaningful competition presently exists between Bank and Applicant’s Republic of Texas Corporation, subsidiary banks in the Dallas market. Absent the Dallas, Texas history of the long established relationship be Order Approving Acquisition of Bank tween Applicant and Bank, the effects on existing competition would be regarded as more serious; Republic of Texas Corporation, Dallas, Texas, however, in light of that relationship, the effects a bank holding company within the meaning of are considered as only slight. Moreover, while the Bank Holding Company Act, has applied for Applicant is the largest organization in the banking the Board’s approval under § 3(a)(3) of the Act market, in view of all the facts of record, the Board (12 U.S.C. § 1842(a)(3)) to acquire all of the does not regard the slight increase in concentration voting shares (less directors’ qualifying shares) of of market deposits as significant. Accordingly, the the successor by merger to First National Bank Board concludes that the proposed acquisition of in Garland, Garland, Texas (“Bank”). The bank Bank by Applicant would not have significant into which Bank is to be merged has no significance adverse effects on competition. except as a means to facilitate the acquisition of the The financial and managerial resources and fu voting shares of Bank. Accordingly, the proposed ture prospects of Applicant, its subsidiaries, and acquisition of shares of the successor organization Bank are regarded as satisfactory and consistent is treated herein as the proposed acquisition of the with approval of the application. Following con shares of Bank. summation of the transaction, Applicant intends Notice of the application, affording opportunity to improve and expand the services presently of for interested persons to submit comments and fered to customers of Bank. Applicant also has views, has been given in accordance with § 3(b) indicated that it would support and encourage of the Act. The time for filing comments and views Bank’s efforts to aid the community it serves, by has expired, and the Board has considered the having Bank continue to engage in community application and all comments received in light of development activities, which include programs the factors set forth in § 3(c) of the Act (12 U.S.C. for loans to minority businesses and home-im- § 1842(c)). provement loans to low-income families. These Applicant, the fourth largest banking organi considerations relating to convenience and needs zation in the State of Texas, controls eight bank of the community to be served lend weight toward subsidiaries with aggregate deposits of $3.1 bil approval of the application and, in the Board’s lion, representing 6.5 per cent of commercial bank view, outweigh any slightly adverse competitive deposits in the State.1 Acquisition of Bank would effects that might result from consummation of the proposal. Accordingly, it is the Board’s judgment JA11 banking data are as of December 31, 1975 unless that the proposed acquisition would be in the otherwise stated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
410 Federal Reserve Bulletin □ April 1977 increase Applicant’s share of commercial bank 30 years, and that the duration and nature of this deposits in Texas by 0.14 per cent but would not relationship are such that little, if any, meaningful alter Applicant’s State-wide ranking. competition presently exists between Bank and By Order dated October 25, 1973, the Board Applicant’s subsidiary banks in the Dallas market. approved the application of Applicant to become But for the history of the long established rela a bank holding company through the direct acqui tionship between Applicant and Bank, the effects sition of Republic National Bank of Dallas on existing competition would be viewed as more (“Republic Bank”), and the indirect acquisition serious, but viewed in light of that relationship of 29.9 per cent of the voting shares of Oak Cliff the effects are only slight. Moreover, while Ap Bank and Trust Company, Dallas, Texas (“Oak plicant is the largest organization in the banking Cliff Bank”). At that time Republic Bank owned market, in view of the facts presented in the record indirectly between 5 and 24.99 per cent interest of this application, the Board does not regard the in twenty-one non-subsidiary banks, eighteen of slight increase in concentration of market deposits which were in the Dallas banking market.2 Appli as significant. Accordingly, the Board concludes cant represented to the Board that it would file that the proposed acquisition of Bank by Applicant separate applications for prior approval by the would not have significant adverse effects on Board for acquisition of additional shares in each competition. of certain of those banks, and would divest com The financial and managerial resources of Ap pletely its interests in others. The Board in its plicant, its subsidiaries, and Bank are regarded as Order stated that each such application filed by satisfactory and consistent with approval of the Applicant would be considered on its own merits application. Considerations relating to banking in light of the statutory standards set forth in § factors are also consistent with approval of the 3 of the Act. Since that time Applicant had di application. Following consummation of the vested its interests in seven of the Dallas-area transaction, Applicant intends to improve and ex banks. This is Applicant’s first application to ac pand services presently offered to customers of quire additional shares in one of the Dallas-area Bank. These considerations relating to conven banks.3 ience and needs of the community to be served Bank is the 16th largest of 132 banks in the do not appear to be substantial but they do lend Dallas banking market and holds deposits of $66.4 some weight toward approval of the application, million, representing 0.7 per cent of the total and in the Board’s view, outweigh any slightly deposits of commercial banks in the market. Ap adverse effects on competition that might result plicant presently has two subsidiary banks in the from consummation of this proposal. Accordingly, Dallas banking market. Republic Bank is the larg it is the Board’s judgment that the proposed ac est bank in that market with 25.5 per cent of the quisition would be in the public interest and that total deposits in commercial banks in the market, the application should be approved. and Oak Cliff Bank is the eighth largest bank in On the basis of the record, the application is the market with 1.2 per cent of market deposits. approved for the reasons summarized above. The The eleven non-subsidiary banks in the Dallas transaction shall not be made (a) before the thir market (including Bank) in which Applicant pres tieth calendar day following the effective date of ently holds minority interests have aggregate de this Order or (b) later than three months after the posits of $505.0 million, representing 5.4 per effective date of this Order, unless such period cent of market deposits. is extended for good cause by the Board, or by While consummation of the proposal would the Federal Reserve Bank of Dallas pursuant to appear to eliminate some existing competition in delegated authority. asmuch as Applicant and Bank operate in the same By order of the Board of Governors, effective market, the Board notes that Applicant, or its March 23, 1977. predecessor in interest, Republic Bank, has held 20 per cent or more of the shares of Bank for Voting for this action: Chairman Burns and Gover nors Gardner, Wallich, Coldwell, Jackson, Partee, and Lilly. 2The relevant banking market is approximated by the Dallas RMA. 3By separate action of this date, the Board approved Appli (Signed) Griffith L. Garwood, cant’s acquisition of Dallas National Bank (formerly Fair Park National Bank), Dallas, Texas. [seal] Deputy Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 411 The Sumitomo Bank, Limited, to be served are consistent with approval of the Osaka, Japan application. It is the Board’s judgment that the proposed transaction would be consistent with the Order Approving public interest and that the application should be Acquisition of Additional Shares of Bank approved. The Sumitomo Bank, Limited, Osaka, Japan, Under section 3(d) of the Bank Holding Com a bank holding company within the meaning of pany Act [12 U.S.C. 1842(d)] the Board may not the Bank Holding Company Act, has applied for approve an application by a bank holding company the Board’s approval under § 3(a)(3) of the Act under section 3 of the Act to acquire shares of (12 U.S.C. § 1842(a)(3)) to exercise preemptive any “additional bank” located outside of the State rights to acquire additional voting shares of Central in which the operations of the bank holding com Pacific Bank, Honolulu, Hawaii (“Bank”). As a pany’s banking subsidiaries were principally con result of the exercise of these rights, Applicant ducted as of July 1, 1966, or the date on which would continue to hold 13.7 per cent of the voting it became a bank holding company, whichever is shares of Bank. later, unless such acquisition is specifically au Notice of the application, affording opportunity thorized by the statute laws of the State in which for interested persons to submit comments and the bank whose shares are to be acquired is lo views, has been given in accordance with § 3(b) cated. Applicant became a bank holding company of the Act. The time for filing comments and views on December 31, 1970, by virtue of its ownership has expired, and the Board has considered the of a majority of the voting shares of The Sumitomo application and all comments received in light of Bank of California, San Francisco, California, and the factors set forth in § 3(c) of the Act (12 U.S.C. thus, California is the State of Applicant’s § 1842(c)). principal banking operations. The statute laws of Applicant presently owns 13.7 per cent of the the State of Hawaii do not specifically authorize voting shares of Bank. With deposits of approxi the acquisition of shares or assets of a State bank mately $240 million, Bank controls 8.5 per cent by an out-of-State bank holding company. Thus, of the total deposits held by commercial banks in the Board may only approve the subject applica Hawaii and is the third largest bank in the State.1 tion if Bank is not considered an “additional Applicant proposes to acquire 6,867 additional bank” for purposes of section 3(d). voting shares of Bank through the exercise of its Applicant’s investment in Bank originated in preemptive rights in connection with a new issue 1954, prior to the enactment of the Bank Holding of Bank’s voting shares. If all of Bank’s new Company Act. Since section 3(d) is prospective shares are purchased, Applicant’s percentage in its application, that investment was effectively ownership of shares of Bank will not increase as grandfathered at the time Applicant became a bank a result of the proposal. Consummation of the holding company in 1970. Consummation of the proposal would not have any adverse effect on proposed transaction would enable Applicant to existing or potential competition, nor would it maintain its present interest in Bank. increase the concentration of banking resources or The Board has considered the legislative history have any adverse effect on other banks in the area. of section 3(d), particuarly the intent of that sec Thus, competitive considerations are consistent tion to prevent the interstate expansion of the with approval of the application. commercial banking operations of bank holding The financial condition and managerial re companies, and has determined that, based on the sources of Applicant and Bank are considered particular facts and circumstances of this case, satisfactory and the future prospects for each ap Bank should not be considered an “additional pear favorable. Thus, the banking factors are con bank” for purposes of that section. Approval of sistent with approval of the application. Although this application would not permit Applicant either there will be no immediate change or increase in to acquire control of an additional bank or to the services offered by Bank as a result of the expand its grandfathered interest in Bank. How proposed transaction, the considerations relating ever, in keeping with the policy of section 3(d), to the convenience and needs of the community this approval is granted subject to the condition that, in the event all of Bank’s newly issued shares are not subscribed, Applicant will only acquire and hold such shares as are necessary in order to 'All banking data are as of December 31, 1975. maintain its present interest in Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
412 Federal Reserve Bulletin □ April 1977 In a letter of this date to Applicant, the Board surance and credit accident and health insurance.1 has issued a preliminary determination, based Such activities have been determined by the Board upon the rebuttable presumptions of control in to be closely related to banking (12 CFR § section 225.2(b)(1) of Regulation Y [12 CRF § 225.4(a)(1), (3), and (9)). 225.2(b)(1)], that Applicant exercises a controlling Notice of the application, affording opportunity influence over the management or policies of for interested persons to submit comments and Bank. The Board’s decision to approve the subject views on the public interest factors, has been duly application was made independent of that prelim published (41 Federal Register 50031 (1976)). inary determination of control, and does not sig The time for filing comments and views has ex nify a Board decision on any further action that pired, and the Board has considered the application may result from such preliminary determination. and all comments received in light of the public On the basis of the record, the application is interest factors set forth in § 4(c)(8) of the Act approved for the reasons summarized above. The (12 U.S.C. § 1843(c)(8)). transaction shall not be made (a) before the thir Applicant, the fourth largest banking organi tieth calendar day following the effective date of zation in Colorado, controls twelve subsidiary this Order or (b) later than three months after the banks in that State, with aggregate deposits of effective date of this Order, unless such period is $582 million, representing approximately 7.7 per extended for good cause by the Board, or by the cent of the total deposits in commercial banks in Federal Reserve Bank of San Francisco pursuant Colorado. Applicant also engages through subsid to delegated authority. iaries in a variety of nonbanking activities, in By order of the Board of Governors, effective cluding savings and loan, mortgage banking, per March 29, 1977. sonal and real property leasing, consumer finance, and insurance agency and insurance underwriting. Voting for this action: Chairman Burns and Gover Applicant also engages in the manufacture and sale nors Coldwell, Jackson, Partee, and Lilly. Absent and of musical instruments pursuant to indefinite not voting: Governors Gardner and Wallich. grandfather benefits under section 4(a)(2) of the (Signed) Griffith L. Garwood, Act.2 [seal] Deputy Secretary of the Board. Service operates a single office in Louisville, Kentucky. As of June 30, 1975, Service, with a real estate mortgage servicing portfolio of $176.0 million,3 ranked 170th among all mortgage com Orders Under Section 4(c)(8) panies in the United States. Service engages of Bank Holding Company Act principally in the origination and servicing of loans on 1-4 family residential properties in the Louis D. H. Baldwin Company, Cincinnati, Ohio Order Approving Acquisition of Louisville Mortgage Service Company 1 Applicant originally proposed to continue Service’s sale of property damage and casualty insurance. On January 10, 1977, the United States Court of Appeals for the Fifth Circuit ruled, D. H. Baldwin Company, Cincinnati, Ohio, a in Alabama Association of Insurance Agents v. Board of bank holding company within the meaning of the Governors, 544 F.2d 1245 (1977), that the sale of property Bank Holding Company Act, has applied for the damage and casualty insurance in connection with extensions of credit by a nonbank subsidiary of a bank holding company Board’s approval, under § 4(c)(8) of the Act (12 is not closely related to banking and, therefore, is not a U.S.C. § 1843(c)(8)) and § 225.4(b)(2) of the permissible activity. In a letter to the Board dated January Board’s Regulation Y (12 CFR § 225.4(b)(2)), to 20, 1977, Applicant committed itself to halt the sale of property damage and casualty insurance upon consummation acquire Louisville Mortgage Service Company, of the acquisition of Service. Louisville, Kentucky (“Service”), a company that Applicant’s nonbank activities are described in detail in a Board determination dated June 14, 1973, relating to Appli engages in the activities of mortgage banking, cant’s grandfather benefits (59 Federal Reserve Bulletin 536 including originating and servicing, for its own (1973)). account and the account of others, conventional 3American Banker of October 21, 1975. Service was not listed in the American Banker of October 25, 1976, as among and guaranteed residential mortgage loans. Service the 300 largest mortgage companies as of June 30, 1976. also acts as insurance agent for the sale of insur Applicant indicates that Service had a servicing portfolio of $181.5 million as of May 31, 1976, which would rank Service ance that is directly related to extensions of credit 176th among all mortgage banking companies as of mid-year by Service, including mortgage cancellation in 1976. 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Law Department 413 ville market,4 and in 1975 originated approxi the Board has not determined to be permissible mately only 3 per cent (in dollar value) of the for bank holding companies. Therefore, Service mortgage loans in that area. Service competes with must dispose of all the real estate holdings of at least 20 other mortgage banking companies General no later than two years from the effective (including six of the nation’s largest), six banks, date of this Order.6 and twelve savings and loan associations. Appli Based upon the foregoing and other consid cant is currently engaged in mortgage banking erations reflected in the record, the Board has through its wholly-owned subsidiary, C. C. determined that the balance of the public interest Fletcher Mortgage Company, Cincinnati, Ohio factors the Board is required to consider under § (“FMC”).5 While Service primarily originates 1-4 4(c)(8) is favorable. Accordingly, the application family residential mortgage loans, FMC’s is hereby approved subject to the conditions that principal business is originating commercial and Service dispose of the real estate holdings of industrial mortgage loans. Accordingly, it appears General no later than two years from the effective that there is no significant existing competition date of this Order and reduce its interest in Heart between Service and FMC. In addition, though to no more than 5 per cent of Heart’s outstanding Applicant’s banking and savings and loan subsidi voting shares upon consummation of this proposal. aries engage in mortgage lending, their activities This determination is subject to the conditions set are concentrated in Colorado and the western forth in § 225.4(c) of Regulation Y and to the United States. Accordingly, it appears that there Board’s authority to require such modification or is not significant competition between Service and termination of the activities of a holding company these subsidiaries. Thus approval of the proposed or any of its subsidiaries as the Board finds neces acquisition should have no adverse effect on exist sary to assure compliance with the provisions and ing competition. purposes of the Act and the Board’s regulations The facts of record indicate that Service’s mar and orders issued thereunder, or to prevent evasion ket share has declined in recent years. It is antici thereof. The transaction shall be made not later pated that Service’s affiliation with Applicant will than three months after the effective date of this provide Service with access to Applicant’s exper Order, unless such period is extended for good tise, substantial financial resources, and wide cause by the Board or by the Federal Reserve Bank spread investor relationships and thereby enable of Kansas City. Service to strengthen and revitalize itself as a By order of the Board of Governors, effective viable and aggressive competitor in the mortgage March 24, 1977. banking business. On balance, the Board con cludes that the benefits to the public that can reasonably be expected to result upon consumma tion of this proposal outweigh any possible adverse effects on the public interest that might result from Voting for this action: Chairman Burns and Gover-. the proposed acquisition. nors Gardner, Coldwell, Jackson, and Partee. Absent and not voting: Governors Wallich and Lilly. There is no evidence in the record indicating that consummation of the proposed acquisition would result in undue concentration of resources, conflicts of interests, unsound banking practices, (Signed) Griffith L. Garwood, or other adverse effects. [seal] Deputy Secretary of the Board. Service’s wholly-owned subsidiary, General Realty Corporation of Kentucky, Inc., Louisville, Kentucky (“General”), is engaged primarily in holding real property for sale, which is an acitivty 6In accomplishing a divestiture of such property, Applicant has agreed to transfer irrevocably the real estate held by General to an independent trustee who shall have the duty of divesting the property within the applicable time period. Service also holds in excess of 5 per cent of the voting 4The Louisville mortgage banking market is approximated stock of Heart of Louisville, Inc., Louisville, Kentucky by the Louisville SMSA (which includes Jefferson, Oldham, (“Heart”), which engages in real property leasing that is not and Bullitt counties in Kentucky, and Floyd and Clark counties in compliance with the requirements of § 225.4(a)(6)(b) of in Indiana), plus Fayette County, Kentucky. Regulation Y (12 CFR § 225.4(a)(6)(b)). Applicant has stated 5As of June 30, 1976, FMC had a mortgage servicing it will reduce Service’s interest in Heart to no more than 5 portfolio of $35.9 million. per cent upon consummation of the subject proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
414 Federal Reserve Bulletin □ April 1977 Republic of Texas Corporation, tion Y to include this activity among those gener Dallas, Texas ally permissible for bank holding companies. Rather, it will consider applications for permission Order Approving Retention of to engage in the activity on a case-by-case basis, Republic Commerce Company, Republic applying the public benefits test of § 4(c)(8) to Money Orders, Inc., and Republic Money the facts in each case. The Board also has deter Orders of California, Inc., all of Dallas, Texas mined that the application of Republic of Texas Corporation should be approved. Republic of Texas Corporation, Dallas, Texas, By Order dated October 25, 1973, the Board a bank holding company within the meaning of approved the application of Applicant to become the Bank Holding Company Act, has applied for a bank holding company through the acquisition the Board’s approval, under section 4(c)(8) of the of Republic National Bank of Dallas (“Republic Act [12 U.S.C. 1843(c)(8)] and § 225.4(b)(2) of Bank”) and 29.99 per cent of the voting shares the Board’s Regulation Y [12 CFR 225.4(b)(2)], of Oak Cliff Bank and Trust Company, Dallas, to retain ownership of the voting shares of Repub Texas. Applicant became a bank holding company lic Commerce Company, Dallas, Texas (“Com on May 9, 1974. At the time that Applicant pany”), and indirect ownership of the voting became a bank holding company, it also acquired, shares of Republic Money Orders, Inc. (“RMO”), from Republic Bank, direct ownership of Com and Republic Money Orders of California, Inc. pany. Republic Bank was itself a bank holding (“RMO of California”), both of Dallas, Texas. company by virtue of the 1970 Amendemnts to Company engages in no activities directly but the Act and owned various bank and nonbank merely serves as owner of record of all shares of RMO. RMO engages in the activity of issuing interests. RMO and its subsidiary, RMO of Cali money orders and travelers checks to third party fornia, were established as de novo subsidiaries of the profit sharing plan of Republic Bank. Pur agents who, in turn, sell the instruments at the suant to the provisions of § 4(a)(2) of the Act, retail level.1 RMO of California is a wholly-owned Applicant had two years, subject to the possibility subsidiary of RMO which, until 1972, also issued of three one-year extensions, from the date on money orders and travelers checks. RMO of Cali which it became a bank holding company to divest fornia is inactive and will be liquidated in 1985 its nonbank activities or, in the alternative, to when any money orders that remain unclaimed at apply to the Board for approval to retain them. that time escheat to the State of California. In this proposal Applicant has applied to retain The Board has previously invited comment on its money order activities. The Board regards the a proposal to amend its Regulation Y to add the standards under § 4(c)(8) of the Act for retention activity of issuing and selling payment instru of shares of a company to be the same as the ments, such as money orders, to the list of activi standards for a proposed acquisition. ties permissible pursuant to section 4(c)(8) of the In order to authorize a bank holding company Act [41 Federal Register 14902]. In addition, to engage in a nonbanking activity pursuant to § notice of the instant application, affording oppor 4(c)(8) of the Bank Holding Company Act tunity for interested persons to submit comments (“Act”), the Board must first determine whether and views on the public interest factors, has been the activity is closely related to banking or man duly published [40 Federal Register 44634 and aging or controlling banks. The Board finds that 41 Federal Register 14902]. The time for filing banks historically have been in the business of comments and views has expired, and the Board issuing money orders and similar payment instru has considered the entire record of this proposal, ments, such as cashier’s checks and certified including all comments received, and has deter mined that the activity of issuing and selling checks. Such instruments evolved from the need for a safe method of transmitting funds over long money order-like payment instruments is closely distances and the need for a method of assuring related to banking. However, the Board has de cided that it will leave the rulemaking proceeding payments. They are a functional equivalent of cash open and that it will not at present amend Regula when used to effect payments, and are of particular usefulness to persons of limited resources who do not or cannot practically maintain checking ac counts. The instruments that are the subject of this *By Order of June 25, 1976, the Board approved the subject proposal extend, on an economical and convenient application as it related to the issuance and sale of travelers checks [62 Federal Reserve Bulletin 630]. basis, the efficient payments mechanism of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
La w Departm ent 415 commercial banking system to persons other than order issues of approximately $1 billion.4 In view demand deposit customers of banks. Since the of the highly concentrated nature of the money proposed activity is comparable to certain func order industry and the fact that RMO was estab tions of banks, involves financial skills generally lished de novo, as a subsidiary of Applicant’s lead possessed by banks, and is a service that banks bank, the Board concludes that Applicant’s reten traditionally have performed, the Board concludes tion of RMO would not result in any adverse that the proposed activity is closely related to effects on competition in any relevant area. Fur banking. thermore, there is no evidence in the record to In order to approve the subject application, the indicate that the proposed retention of RMO by Board must also find that the performance of the Applicant would lead to an undue concentration proposed activity by an affiliate of Applicant “can of resources, unfair competition, conflicts of in reasonably be expected to produce benefits to the terests, or unsound banking practices. public, such as greater convenience, increased The Board notes that the wholesale aspect of competition, or gains in efficiency, that outweigh the money order business in the United States is possible adverse effects, such as undue concentra presently dominated by a few nonfinancial compa tion of resources, decreased or unfair competition, nies that are not subject to the Federal Reserve conflicts of interests, or unsound banking prac System’s reserve requirements. The Board be tices.” This balancing test necessitates a positive lieves that the development of new competition showing of public benefits, outweighing possible in this business on a national scale may not be adverse effects of any proposal, before an applica forthcoming under the present statutory framework tion may be approved. An applicant seeking ap unless a degree of competitive equity can be es proval to engage in a nonbanking activity under tablished between the nonfinancial institutions al this section must bear the burden of showing the ready in the business and potential bank holding public benefits that would flow from its proposal. company entrants. Such equity cannot be achieved Applicant, the fourth largest banking organi if some competitiors are subject to reserve re zation in Texas, controls eight banks with total quirements while others are not. In such unique domestic deposits of approximately $3 billion, circumstances, the Board finds that there are public representing about 6.5 per cent of the total deposits benefits associated with enabling bank holding in commercial banks in the State.2 In addition, companies to compete with the dominant organi Applicant engages indirectly through a group of zations in this business on an equal basis by corporations, referred to collectively as The How permitting what is essentially a consumer-oriented ard Corporation, in various nonbanking activities demand deposit business to be conducted by non that are described in a Board determination dated bank affiliates of member banks.5 September 10, 1973, relating to the grandfather Unlike other issuers of money orders, RMO benefits of Republic Bank [59 Federal Reserve does not set a schedule of commissions that its Bulletin 768 (1973)]. The Board has previously agents must charge. As a result, RMO’s agents ruled that Applicant would not be a successor to have greater flexibility in dealing with retail cus the grandfather privileges of Republic Bank, and Applicant has committed, and is required, to dispose of the impermissible activities within the two-year statutory period prescribed in § 4(a)(2) 4A11 of the money orders Applicant now issues have a of the Act.3 maximum face value of $200, and this limit is specified on RMO was established de novo by Republic the instrument. The Board regards Applicant’s money orders Bank in 1959. It sells money orders and travelers as being essentially a consumer-oriented type of payment instrument, and believes that in no event should the instruments checks through outlets located in all 50 States and have a face value greater than $1,000, in order to assure that some foreign countries. In 1976 it had total money they are intended primarily for use by consumers. 5It should be noted, however, that the Board’s decision with respect to money orders under the particular circumstances present in this proposal does not signify any change in the Board’s opinion that there is a need for universal reserve 2Unless otherwise noted, all banking data are as of De requirements on demand deposits of nonmember banks, as well cember 31, 1975, and reflect bank holding company formations as member banks. As the Board stated in its Order of June and acquisitions approved through December 31, 1976. 14, 1973, authorizing BankAmerica Corporation, San Fran •*The Federal Reserve Bank of Dallas, acting pursuant to cisco, California, to engage in the business of issuing traveler’s delegated authority, has extended the period within which checks [38 Federal Register 16280 (1973)], it continues to Applicant must dispose of its impermissible activities for one believe that all institutions engaged in deposit banking should year to May 9, 1977, as permitted under § 4(a)(2) of the Act. be subject to common reserve requirements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
416 Federal Reserve Bulletin □ April 1977 tomers and, in certain circumstances, may reduce Citicorp, retail prices. In addition to possible lower rates, New York, New York continued affiliation of Applicant and RMO should Order Approving increase the possibilities that RMO will expand Engaging in Nonbank Activity the number of retail outlets that handle its money orders. Money orders are of particular usefulness Citicorp, New York, New York, a bank holding to persons of limited resources who do not or company within the meaning of the Bank Holding cannot practically maintain checking accounts, and Company Act, has applied for the Board’s ap approval of this proposal will assure the continued proval, under § 4(c)(8) of the Act (12 U.S.C. § availability to such persons of these instruments, 1843(c)(8)) and § 225.4(b)(2) of the Board’s Reg which are issued by a large financial organization ulation Y (12 C.F.R. 225.4(b)(2)), to engage to and enjoy ready acceptability. Accordingly, it is de novo, through a new nonbank subsidiary, Citi the Board’s view that approval of the subject corp Services, Inc. (“Services”), in the activity application would result in continued benefits to of issuing and offering on a consignment basis the public and is, therefore, in the public interest.6 general purpose variable denominated payment Based upon the foregoing and other consid instruments. erations reflected in the record, the Board has Notice of the application, and of proposed ruledetermined, in accordance with the provisions of making to amend the Board’s Regulation Y to add § 4(c)(8) of the Act, that consummation of this the activity of issuing and selling money order-like proposal can reasonably be expected to result in payment instruments to the list of activities per benefits to the public that outweigh possible ad missible pursuant to § 4(c)(8) of the Act, was duly verse effects. Accordingly, the application is published (41 Federal Register 14902 (1976)) in hereby approved. This determination is subject to order to afford opportunity for interested persons the conditions set forth in § 225.4(c) of Regulation to submit comments and views on the public Y and to the Board’s authority to require such interest factors with respect to the application, and modification or termination of the activities of a on the question of whether the proposed activity holding company or any of its subsidiaries as the is so closely related to banking or managing or Board finds necessary to assure compliance with controlling banks as to be a proper incident the provisions and purposes of the Act and the thereto. Board’s regulations and orders issued thereunder, The Board has considered the entire record of or to prevent evasion thereof. this proposal, including all comments received, By order of the Board of Governors, effective and has determined that the activity is closely re March 11, 1977. lated to banking. However, the Board has decided that it will leave the rulemaking proceeding open Voting for this action: Vice Chairman Gardner and and that it will not at present amend Regulation Governors Wallich, Jackson, Partee, and Lilly. Absent Y to include this activity among those generally and not voting: Chairman Burns and Governor Coldwell. permissible for bank holding companies. Rather, it will consider applications for permission to (Signed) Griffith L. Garwood, engage in the activity on a case-by-case basis, [seal] Deputy Secretary of the Board. applying the public benefits test of § 4(c)(8) to the facts in each case. The Board also has deter mined that the application of Citicorp should be approved to the extent that it involves the issuance and marketing of payment instruments of a sort 6 The Board is concerned that because purchasers of money that would primarily be of use to consumers. orders may view this instrument as a close equivalent to a personal check, such persons may misapprehend their right In order to authorize a bank holding company to stop payment on such instruments. Indeed, whether such to engage in a nonbanking activity pursuant to § a right exists may turn upon technicalities in the form of such 4(c)(8) of the Bank Holding Company Act instruments. So that purchasers are not misled, the Board urges that the issuer disclose on the instruments whether or not such (“Act”), the Board must first determine whether a right exists and, if so, how it may be exercised. While the the activity is closely related to banking or man Board is not at this time requiring such a disclosure as a condition of engaging in the activity, it notes that, if experience aging or controlling banks. The Board finds that should indicate that consumers are in fact being misled in this banks historically have been in the business of regard, the subject may be an appropriate one to be dealt with issuing money orders and similar payment instru by the Federal Trade Commission or the Board under their respective jurisdictions to define unfair or deceptive practices. ments, such as cashier’s checks and certified Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 417 checks. Such instruments evolved from the need Applicant engages in a variety of permissible non for a safe method of transmitting funds over long bank activities through some 85 direct and indirect distances and the need for a method of assuring domestic nonbank subsidiaries. Applicant’s non payments. They are a functional equivalent of cash bank activities include mortgage banking,3 leas when used to effect payments, and are of particular ing, consumer and sales financing, and insurance usefulness to persons of limited resources who do agency activities for insurance which is directly not or cannot practically maintain checking ac related to extensions of credit by Applicant’s sub counts for effecting payment transactions. The sidiaries. instruments that are the subject of this proposal Applicant proposes to issue and offer on a would extend, on an economical and convenient consignment basis general purpose, variable de basis, the efficient payments mechanism of the nominated payment instruments to vendors or commercial banking system to persons other than agents who would then sell such instruments to the typical demand deposit customers of banks. the general public. The purchasers would specify Since the proposed activity is comparable to cer the denomination of the instrument. Applicant tain functions of banks, involves financial skills proposes to engage in this activity de novo through generally possessed by banks, and is a type of its wholly owned subsidiary, Citicorp Services, service that banks traditionally have performed, Inc., which will act as the distributing and mar the Board concludes that the proposed activity is keting agent in connection with offering the in closely related to banking. struments. Applicant’s payment instruments are In order to approve the subject application, the intended to serve as substitutes or replacements Board must also find that the performance of the for money orders, cashier’s checks, teller’s checks, proposed activity by a nonbank affiliate of Appli dollar drafts, certified checks, and similar types of cant “can reasonably be expected to produce ben payment instruments. The instruments that Citicorp efits to the public such as greater convenience, proposes to issue will be of two types: one will increased competition, or gains in efficiency, that have a $1,000 limit on its face value and will be outweigh possible adverse effects, such as undue similar to the traditional personal money order ; the concentration of resources, decreased or unfair second type will be unlimited in face value. competition, conflicts of interests, or unsound The facts of record on this proposal indicate that banking practices.” This balancing test necessi consumer-type payment instruments, such as tra tates a positive showing of public benefits out ditional money orders, are marketed nationally on weighing the possible adverse effects of any pro the wholesale level by a few large organizations posed acquisition before an application may be and locally on a retail level by a wide variety of approved. An applicant seeking approval to en financial and nonfinancial institutions. On the na gage in a nonbanking activity under this section tional scale, the market is highly concentrated, must bear the burden of showing the public bene being dominated by only a few large organi fits that would flow from its proposal. zations.4 Entry into this business on a national Applicant, the largest banking organization in scale involves overcoming significant barriers New York State and the second largest banking organization in the United States, controls two subsidiary banks,1 which together operate banking offices throughout New York State and control 3Applicant engages in mortgage banking activities through combined deposits of approximately $19.5 billion, Advance Mortgage Company (“Advance”), Southfield, Mich igan, a nonbank subsidiary which Applicant acquired on June representing about 14.4 per cent of the total de 15, 1970. Under the provisions of § 4(a)(2) of the Act, posits in commercial banks in New York State.2 Applicant may not retain the shares of Advance beyond De cember 31, 1980, without Board approval. By Order dated December 26, 1973, the Board denied Applicant’s application to retain Advance pursuant to § 4(c)(8) of the Act. [60 Federal Reserve Bulletin 50]. 4The Board notes that traditional money orders generally have a maximum face value printed on the instrument, that this ceiling is usually relatively low, perhaps $200 or $500, Effective January 1, 1976, four of Applicant’s up-State and that money orders are primarily used to transmit money banking subsidiaries were merged to form Citibank (New York by members of the consumer public who do not or cannot State), N.A., Buffalo, New York. The two remaining banking maintain checking accounts. The Board regards payment in subsidiaries were merged into Applicant’s lead bank, Citibank, struments of this type as being clearly “consumer-type pay N.A., New York, New York (formerly First National City ment instruments,” and believes that the imposition of a Bank). $1,000 limitation on the face value of each instrument will 2 Deposit data are as of December 31, 1975. assure that it is intended primarily for use by consumers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
418 Federal Reserve Bulletin □ April 1977 since a potential entrant must possess the capabil potential for adverse effects on the reserve base ity for managing the extensive sales and servicing that could result from such action. Reserve re operation necessary for handling a low unit price, quirements serve as an essential tool of monetary high volume product. Such capabilities frequently policy and, in the Board’s view, any action that are associated with banking organizations of sig would have the effect of diminishing the reserve nificant size. Applicant already has an established base should be taken only if there are compelling organization of this type, and is one of a limited reasons for doing so. The Board is concerned that number of companies with such a capability so approval of this proposal without any restrictions as to be regarded as a potential entrant. Appli on the size of the instruments to be issued would cant’s entry into this market would result in in result in an erosion of the reservable deposits of creased competition in this industry and may be the banking system in an unquantifiable magni expected ultimately to result in increased prospects tude. There is nothing in the record of this proposal for some deconcentration of the industry in the that would support a finding that a sufficiently future. Accordingly, the Board views Applicant’s compelling reason from a public interest stand proposal as procompetitive and in the public inter point exists to justify such action. Indeed, the est insofar as it relates to the issuance of instru public benefits that are likely to flow from Appli ments that are intended primarily for use by con cant’s proposal are directly associated with the sumers. consumer-oriented instruments that may be is The Board notes that the wholesale aspect of sued. Accordingly, in order to provide such bene the money order business in the United States is fits but at the same time to limit the adverse impact presently dominated by nonfinancial companies on the reserve base that the issuance of such that are not subject to the Federal Reserve Sys instruments by a nonbanking affiliate of a member tem’s reserve requirements. The Board believes bank may have, the Board finds that the imposition that the development of new competition in this of a $1,000 maximum face value on the proposed business on a national scale may not be forth instruments would be in the public interest. coming under the present statutory framework In addition to increased competition, Applicant unless a degree of competitive equity can be es proposes to provide a benefit to the public through tablished between the nonfinancial institutions al reduced costs and increased convenience to the ready in the business and potential bank holding purchaser.8 Toward this end, Applicant states that company entrants. Such equity cannot be achieved lost or stolen instruments will be reissued at no if some competitors are subject to reserve require charge to the customer and, in cases where a ments while others are not. In such unique cir stop-payment cannot be made because an instru cumstances, the Board finds that there are public ment has already been paid, photocopies of the benefits associated with enabling a bank holding instrument will be provided without charge. The company to compete with the dominant organi Board believes that this would benefit the pur zations in this business on an equal basis by chasers of these instruments as it appears to repre permitting the issuance of a consumer-oriented sent a cost savings when compared to the policies instrument by a nonbank affiliate of a member of other companies in the industry. bank.5 However, the Board is unconvinced at this In summary, the Board finds that consumertime that the public interest would be best served oriented payment instruments are of particular by permitting the issuance and marketing of such usefulness to persons of limited resources who do instruments without the imposition of a specific not or cannot practically maintain checking ac limitation on their denomination because of the counts; that approval of this proposal will increase the availability to such persons of these instru ments, which will be issued by a large financial organization and will enjoy ready acceptability; 5It should be noted that the Board’s decision under the and that certain of the proposed features of Appli particular circumstances present in this proposal does not signify any change in the Board’s opinion that there is a need for universal reserve requirements on demand deposits of nonmember banks, as well as member banks. As the Board stated in its Order of June 14, 1973, authorizing BankAmerica Corporation, San Francisco, California, to engage in the busi 6 Applicant proposes that one means of providing a benefit ness of issuing traveler’s checks (38 Federal Register 16280 to the public through reduced costs to the purchaser will be (1973)), it continues to believe that all institutions engaged by offering its instruments to the selling agents at a price that in deposit banking should be subject to common reserve Applicant believes to be lower than the fees charged for requirements. competing instruments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 419 cant’s instruments will offer greater convenience Trust Company of Georgia, and benefits to the public and foster increased Atlanta, Georgia competition in the industry.7 The Board further Order Approving finds that the record of this proposal does not Acquisition of Adair Mortgage Company support a conclusion that the issuance by a non bank subsidiary of a bank holding company of a Trust Company of Georgia, Atlanta, Georgia, payment instrument in a denomination in excess a bank holding company within the meaning of of $1,000 would offer sufficient public benefits to the Bank Holding Company Act, has applied for support approval. the Board’s approval, under section 4(c)(8) of the Based upon the foregoing and other consid Act [12 U.S.C. § 1843(c)(8)] and section erations reflected in the record, the Board has 225.4(b)(2) of the Board’s Regulation Y [12 CFR determined that the balance of the public interest § 225.4(b)(2) (1976)], to acquire direct ownership factors the Board is required to consider under § of 100 per cent of the voting shares of Adair 4(c)(8) is favorable with respect to the activity of Mortgage Company, Atlanta, Georgia (“Adair”), issuing consumer-oriented payment instruments from Trust Company of Georgia Associates, At having a maximum face value of $1,000. This lanta, Georgia (“Associates”), a wholly-owned determination is subject to the considerations set subsidiary of Applicant’s lead bank.1 Adair en forth in § 225.4(c) of Regulation Y and to the gages in the general activities of a mortgage bank Board’s authority to require such modification or ing company. Applicant has also applied to engage termination of the activities of a holding company de novo through Adair, in the activities of a or any of its subsidiaries as the Board finds neces mortgage banking company at an office to be sary to assure compliance with the provisions and located in College Park, Georgia, and to relocate purposes of the Act and the Board’s regulations the main office of Adair from Atlanta to Cobb and orders issued thereunder, or to prevent evasion County, Georgia.2 Each of the aforementioned thereof. activities has been determined by the Board to be The activities approved hereby shall be com closely related to banking [12 CFR § 225.4(a)(1) menced not later than three months after the ef and (3) (1976)]. fective date of this Order, unless such period is Notice of the applications, affording opportunity extended for good cause by the Board or by the for interested persons to submit comments and Federal Reserve Bank of New York. views on the public interest factors, has been duly By order of the Board of Governors, effective published [41 Federal Register 54542 (1976)]. March 11, 1977. The time for filing comments and views has ex pired, and the Board has considered the applica Voting for this action: Vice Chairman Gardner and tions and all comments received in the light of Governors Wallich, Jackson, Partee, and Lilly. Absent and not voting: Chairman Burns and Governor Cold- the public interest factors set forth in section well. 4(c)(8) of the Act [12 U.S.C. § 1843(c)(8)]. Applicant, the third largest banking organization (Signed) Griffith L. Garwood, in Georgia, directly controls Trust Company Bank, [seal] Deputy Secretary of the Board. 1 Adair, and its wholly-owned subsidiary, Adair Mortgage Company of Florida, were acquired by Associates on January 29, 1971, pursuant to section 4(c)(5) of the Act [12 U.S.C. § 1843(c)(5)]. Section 4(c)(5) of the Act generally permits a 7The Board is concerned that because purchasers of these bank holding company to acquire, without Board approval, instruments may view them as a close equivalent to a personal shares that are of the kinds and amounts explicitly eligible check, such persons may misapprehend their right to stop by statute for investment by national banking associations payment on such instruments. Indeed, whether such a right under the provisions of section 5136 of the Revised Statutes. exists may turn upon technicalities in the form of such instru Applicant’s subject proposal contemplates its acquisition of ments. So that purchasers are not misled, the Board urges that Adair from Associates pursuant to section 4(c)(8) of the Act the issuer disclose on the instruments whether or not such a as an internal corporate reorganization to simplify Applicant’s right exists and, if so, how it may be exercised. While the structure. Board is not at this time requiring such a disclosure as a 2In a related matter, the Board today approved Applicant’s condition of engaging in the activity, it notes that, if experience application filed pursuant to section 4(c)(8) of the Act and should indicate that consumers are in fact being misled in this section 225.4(b)(2) of Regulation Y, to acquire, through Adair, regard, the subject may be an appropriate one to be dealt with loan servicing contracts and certain other assets (primarily by the Federal Trade Commission or the Board under their shares of Federal National Mortgage Association) of Georgia respective jurisdictions to define unfair or deceptive practices. Loan and Trust Company, Macon, Georgia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
420 Federal Reserve Bulletin □ April 1977 Atlanta, Georgia (“Atlanta Bank”) (deposits of Atlanta banking market5 was, and remains, the $796 million), and, through Associates, indirectly principal geographic area in which both Adair and controls five other banks (aggregate deposits of Atlanta Bank originate permanent mortgages se $400 million).3 The aggregate deposits of Appli cured by one-to-four unit residential property. In cant’s six subsidiary banks represent approxi 1969, $637 million in all types of mortgages were mately 10 per cent of the total deposits in com recorded in the Atlanta area by the numerous mercial banks in the State. Through its banking competitors therein6 with Adair accounting for subsidiaries, Applicant engages in real estate mort $6.6 million and Atlanta Bank for $20.8 million. gage lending as a part of its commercial banking With respect to total originations of one-to-four business. Through Adair, Applicant also engages family residential mortgages in the market, Atlanta in mortgage banking activities including: origina Bank accounted for approximately 2 per cent and tion of permanent mortgages secured by both one- Adair for approximately 1.2 per cent of that total. to-four family and multi-unit residential proper By contrast, in 1975, the numerous organizations7 ties; origination of permanent mortgages secured competing in the Atlanta area recorded $ 1,050 by commercial properties; origination of con million in all types of mortgages in that area with struction and development loans to facilitate Adair accounting for $7.9 million and Atlanta Adair’s permanent origination business; servicing Bank for $6.4 million, both representing less than of permanent loans; and origination of second 1 per cent of the total. With respect to total mortgage loans.4 recordings of one-to-four family residential mort Applicant indirectly acquired Adair in 1971 gages in the market, Adair accounted for approxi pursuant to section 4(c)(5) of the Act and, through mately 1 per cent and Atlanta Bank for approxi this application, seeks permission to operate Adair mately two-tenths of 1 per cent of that total. pursuant to section 4(c)(8) of the Act. The Board While it appears that acquisition of Adair by regards the standards of section 4(c)(8) for the Applicant did eliminate some direct competition retention of shares in a nonbanking company, in originations of mortgage loans, it appears that previously operated by a bank holding company the effect of such elimination in the relevant mar pursuant to section 4(c)(5), to be the same as the ket was not significantly adverse due to the large standards for a proposed acquisition under section number of other competitors therein and the fact 4(c)(8). Accordingly, the Board must find that that neither Atlanta Bank nor Adair held substan neither the operation of the nonbanking company tial shares of the mortgage markets that are subject under section 4(c)(5) nor the Board’s approval of to definitive measurement prior to the time of the section 4(c)(8) application would result in an acquisition. Therefore, it appears that the amount undue concentration resources, decreased or unfair of existing competition that was eliminated was competition, conflicts of interests, or unsound not substantial nor was any significant amount of banking practices. competition foreclosed through Applicant’s acqui Prior to its acquisition of Adair in 1971, Atlanta sition of Adair. The Board concludes that inas Bank competed with Adair in a regional market much as Applicant has continuously owned Adair with respect to construction, commercial, and since 1971 with limited adverse effects upon com multi-family residential loans. Nevertheless, the petition in the relevant market, Applicant’s con tinued retention of Adair would not have any 3 All banking data are as of December 31, 1975, unless 5The Atlanta banking market is approximated by Clayton, otherwise indicated. In addition to its six subsidiary banks, Cobb, DeKalb, Douglas, Fulton, Gwinett, Henry, and Rock Applicant received the Board’s approval, on December 7, dale Counties. 1976, to acquire Security National Bank, Smyrna, Georgia 6These included 41 mortgage companies, 20 savings and (deposits of $17.4 million). [See 41 Federal Register 54541 loan associations, nine banking organizations, all with offices (1976); 1977 Federal Reserve Bulletin 77 (January).] Also, in the Atlanta Standard Metropolitan Statistical Area on January 3, 1977, Applicant received the Board’s approval (“SMSA”), as well as 42 other lenders outside the SMSA. to acquire, through merger, Central Bankshares Corporation, The nation’s fourth, eighth, and ninth largest mortgage com Jonesboro, Georgia, that firm’s sole subsidiary bank (deposits panies had offices in the market. of $13.7 million), and its two non-banking activities. [See 42 7In 1975, there were 36 mortgage companies, eight banking Federal Register 2354 (1977); 1977 Federal Reserve Bulletin organizations, 20 savings and loan associations, nine insurance 161 (February).] companies, all with offices in the market, as well as 76 other 4Adair’s wholly-owned subsidiary in Florida engages in the lenders with offices outside the market. The Nation’s first, origination of commercial loans; however, its business did not second, fourth through seventh, and ninth largest mortgage and does not overlap with Applicant or its subsidiaries. companies had offices in the market. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 421 significant adverse effects upon either actual or unless such period is extended for good cause by potential competition. To the contrary, Adair’s the Board or by the Federal Reserve Bank of affiliation with Applicant has enabled the latter to Atlanta, pursuant to authority hereby delegated. provide funds to Adair, which financial assistance By order of the Board of Governors, effective has maintained Adair’s ability to both operate as March 4, 1977. a viable competitor and make construction and development and second mortgage loans. Accord Voting for this action: Governors Wallich, Coldwell, Jackson, and Lilly. Absent and not voting: Chairman ingly, the Board regards these considerations as Burns and Governors Gardner and Partee. being in the public interest. Applicant has also proposed, in connection with (Signed) Griffith L. Garwood, this application, that it engage de novo, in the [seal] Deputy Secretary of the Board. southern portion of metropolitan Atlanta, through Trust Company of Georgia, Adair, in the following activities pursuant to sec Atlanta, Georgia tion 4(c)(8) of the Act: making permanent resi dential and commercial mortgages for resale to Order Approving Acquisition investors; making loans for acquisition and devel of Georgia Loan and Trust Company opment of real estate; making construction loans; Trust Company of Georgia, Atlanta, Georgia, servicing mortgages and acting as broker in plac a bank holding company within the meaning of ing permanent mortgages. Finally, Applicant has the Bank Holding Company Act, has applied for also proposed to relocate Adair’s main office from the Board’s approval, under section 4(c)(8) of the its current location to an area wherein it will Act [12 U.S.C. § 1843(c)(8)] and section continue to serve the northern portion of metro 225.4(b)(2) of the Board’s Regulation Y [12 CFR politan Atlanta. In that these latter two proposals § 225.4(b)(2) (1976)], to acquire through its are a part of Applicant’s internal corporate re wholly-owned subsidiary, Adair Mortgage Com structuring, it does not appear that there would be pany, Atlanta, Georgia (“Adair”),1 loan servicing any significant adverse effect upon either existing contracts and certain other assets (primarily shares or potential competition as a result of Applicant’s of Federal National Mortgage Association) of consummation of these two transactions. Georgia Loan and Trust Company, Macon, Geor It is the Board’s judgment that the benefits that gia (“GL&T”), a company that engages in the can reasonably be expected to result from each general business of mortgage banking.2 Such ac of these proposals are consistent with approval of tivity has been determined by the Board to be the applications. There is no evidence in the record indicating that consummation of the proposed closely related to banking [12 CFR § 225.4(a)(3) (1976)]. transactions would result in any undue concentra Notice of the application, affording opportunity tion of resources, unfair competition, conflicts of interests, unsound banking practices or other ad for interested persons to submit comments and verse effects upon the public interest. views on the public interest factors, has been duly Based upon the foregoing and other consid published [41 Federal Register 54542 (1976)]. erations reflected in the record, the Board has The time for filing comments and views has ex determined that the balance of the public interest pired, and the Board has considered the application factors the Board is required to consider under and all comments received in the light of the public section 4(c)(8) is favorable. Accordingly, the ap interest factors set forth in section 4(c)(8) of the plications are hereby approved. This determination Act [12 U.S.C. § 1843(c)(8)]. is subject to the conditions set forth in section Applicant, the third largest banking organization 225.4(c) of Regulation Y and to the Board’s au thority to require such modification or termination of the activities of a bank holding company or *In a related matter, the Board today approved Applicant’s any of its subsidiaries as the Board finds necessary application filed pursuant to section 4(c)(8) of the Act to acquire to assure compliance with the provisions and direct ownership of Adair from a wholly-owned subsidiary of purposes of the Act and the Board’s regulations Applicant’s lead bank; to engage de novo, through Adair in mortgage banking activities in College Park, Georgia; and to and orders issued thereunder, or to prevent evasion relocate Adair’s main office from Atlanta to Cobb County, thereof. Georgia. 2It is GL&T’s intention to sell all of its marketable assets The transactions shall be made not later than and to cease its operations as a mortgage company. However, three months after the effective date of this Order, GL&T will continue its insurance agency activities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
422 Federal Reserve Bulletin □ April 1977 in Georgia, directly controls Trust Company Bank, interests, unsound banking practices, or material Atlanta, Georgia (deposits of $796 million), and, adverse effects upon the public interest. through that bank’s wholly-owned subsidiary, Based upon the foregoing and other consid Trust Company of Georgia Associates, Atlanta, erations reflected in the record, the Board has Georgia, indirectly controls five other banks (ag determined that the balance of the public interest gregate deposits of $400 million).3 The aggregate factors the Board is required to consider under deposits of Applicant’s six subsidiary banks rep section 4(c)(8) is favorable. Accordingly, the ap resent approximately 10 per cent of the total de plication is hereby approved. The determination posits in commercial banks in the State. Through is subject to the conditions set forth in section its banking subsidiaries, Applicant engages in res 225.4(c) of Regulation Y and to the Board’s au idential mortgage lending as a part of its commer thority to require such modification or termination cial banking business. Applicant, through Adair, of the activities of a bank holding company or also engages in mortgage banking activities. any of its subsidiaries as the Board finds necessary GL&T engages in the general business of mort to assure compliance with the provisions and pur gage banking, including originating, warehousing, poses of the Act and the Board’s regulations and servicing, and selling mortgage loans.4 GL&T orders issued thereunder, or to prevent evasion currently operates in Macon from its only office5 thereof. and competes with Applicant in a regional market The transaction shall be made not later than for the servicing of mortgage loans. As of August three months after the effective date of this Order, 31, 1976, GL&T was servicing 5,025 loans with unless such period is extended for good cause by outstanding principal balances totalling approxi the Board or by the Federal Reserve Bank of mately $64 million. As of the same date, Applicant Atlanta, pursuant to authority hereby delegated. was servicing mortgage loans with outstanding By order of the Board of Governors, effective principal balances totalling approximately $281 March 4, 1977. million.6 Although GL&T and Adair compete in the regional market for mortgage servicing busi ness, Adair’s total servicing portfolio is a very small fraction of that area’s mortgage servicing Voting for this action: Governors Wallich, Coldwell, and Lilly. Voting against this action: Governor Jackson. while GL&T’s total servicing portfolio is an even Absent and not voting: Chairman Burns and Governors smaller fraction. Therefore, it does not appear that Gardner and Partee. any significant existing competition would be eliminated as a result of the consummation of this proposal. (Signed) Griffith L. Garwood, The possibility of competition developing in the [seal] Deputy Secretary of the Board. future between Adair and GL&T would be elimi nated by consummation of this proposal. How ever, such adverse competitive effects are miti gated by the large number of competitors in the relevant regional market, which includes nu merous mortgage banking companies, savings and loan associations, and commercial banking orga 3All banking data are as of December 31, 1975, unless nizations. In addition, GL&T has recently experi otherwise indicated. In addition to its six subsidiary banks, Applicant received the Board’s approval on December 7, 1976, enced financial adversities and would not be likely to acquire Security National Bank, Smyrna, Georgia (deposits to continue as a competitor in the field of mortgage of $17.4 million). [See 41 Federal Register 54541 (1976); servicing. Therefore, the Board concludes that 1977 Federal Reserve Bulletin 77 (January).] Also, on Jan uary 3, 1977, Applicant received the Board’s approval to consummation of this proposal would not have acquire, through merger, Central Bankshares Corporation, significant adverse effects upon future competition. Jonesboro, Georgia, that firm’s sole subsidiary bank (deposits of $13.7 million), and two non-banking activities. [See 42 It is the Board’s judgment that the benefits that Federal Register 2354 (1977); 1977 Federal Reserve Bulletin can reasonably be expected to result from this 161 (February).] proposal lend some weight toward approval of the 4 GL&T also operates a property and casualty insurance agency; however, GL&T intends to retain this portion of its application. There is no evidence in the record activities. indicating that consummation of the proposed 5 A second office, located in Atlanta, engaged in originations of mortgage loans; however, it has been closed because of transaction would result in any undue concentra financial considerations. tion of resources, unfair competition, conflicts of 6Adair accounted for $262 million. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 423 ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During March 1977, the Board of Governors approved the applications listed below. The orders have been published in the Federal Register, and copies are available upon request to Publications Services, Division of Administration Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Board action Federal (effective Register Applicant Bank(s) date) citation Associated Bank Cresco National 3/21/77 42 F.R. 16479 Corporation, Mason Bank, Cresco, 3/28/77 City, Iowa Iowa First City Bancorpor East Dallas Bank, 3/7/77 42 F.R. 13865 ation of Texas, Inc., Dallas, Texas 3/14/77 Houston, Texas Page Bank Holding Page State Bank, 3/2/77 42 F.R. 13155 Company, Page, Page, North Dakota 3/9/77 North Dakota Texas Commerce Banc Southern Bank and 3/31/77 42 F.R. 18450 shares, Inc., Houston, Trust Company, 4/7/77 Texas Garland, Texas Sections 3 and 4 Board Nonbanking action Federal company (effective Register Applicant Bank(s) (or activity) date) citation Kruse Insurance Mineola State Credit 3/18/77 42 F.R. 15967 Agency, Inc., Bank, Mineola, life and 3/24/77 Mineola, Iowa Iowa accident insurance By Federal Reserve Banks During February and March 1977, applications were approved by the Federal Reserve Banks as listed below. The orders were published in the Federal Register, and copies are available upon request to the Reserve Banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
424 Federal Reserve Bulletin □ April 1977 Section 3 Federal Reserve Effective Register Applicant Bank(s) Bank date citation TNB Financial First Nation Boston 2/2/71 42 F.R. 8708 Corporation, al Bank of 2/11/77 Springfield, Athol, Athol, Massachusetts Massachusetts Trust Company The First Na Atlanta 3/16/77 42 F.R. 16673 of Georgia, tional Bank 3/29/77 Atlanta, of Albany, Georgia Albany, Georgia Bancorporation West Allis Chicago 2/24/77 42 F.R. 13354 of Wisconsin, State Bank, 3/10/77 West Allis, West Allis, Wisconsin Wisconsin, and South west Bank, New Berlin, Wisconsin Marshall & Fox Heights Chicago 3/11/77 42 F.R. 15466 Ilsley Corpora State Bank, 3/22/77 tion, Milwaukee, Green Bay, Wisconsin Wisconsin Spencer Financial Spencer Nation Chicago 3/7/77 42 F.R. 14921 Corporation, al Bank, 3/17/77 Spencer, Iowa Spencer, Iowa Farmers Bancshares, The Farmers St. Louis 3/2/77 42 F.R. 14170 Inc., Hardinsburg, Bank, Hardins 3/13/77 Kentucky burg, Kentucky Fort Sam Houston Northern Hills Dallas 2/2/77 42 F.R. 8708 Bankshares, Inc., Bank of San 2/11/77 San Antonio, Antonio, San Texas Antonio, Texas PENDING CASES INVOLVING THE BOARD OF GOVERNORS* First Security Corporation v. Board of Gover First Security Corporation v. Board of Gover nors, filed March 1977, U.S.C.A. for the nors, filed August 1976, U.S.C.A. for the Tenth Circuit. Tenth Circuit. Farmers State Bank of Crosby v. Board of First State Bank of Clute, Texas, etal. v. Board Governors, filed January 1977, U.S.C.A. for of Governors, filed July 1976, U.S.C.A. for the Eighth Circuit. the Fifth Circuit. National Automobile Dealers Association, Inc. North Lawndale Economic Development Cor v. Board of Governors, filed November 1976, poration v. Board of Governors, filed June U.S.C.A. for the District of Columbia. 1976, U.S.C.A. for the Seventh Circuit. Central Wisconsin Bankshares, Inc. v. Board of Governors, filed June 1976, U.S.C.A. for the Seventh Circuit. *This list of pending cases does not include suits against National Urban League, et al. v. Office of the the Federal Reserve Banks in which the Board of Governors is not named a party. Comptroller of the Currency, et al., filed Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 425 April 1976, U.S.D.C. for the District of consolidated in U.S.C.A. for the Fifth Cir Columbia Circuit. cuit. Farmers & Merchants Bank of Las Cruces, t tDavidR. Merrill, era/, v. Federal Open Market New Mexico v. Board of Governors, filed Committee of the Federal Reserve System, April 1976, U.S.C.A. for the District of filed May 1975, U.S.D.C. for the District of Columbia Circuit. Columbia, appeal pending, U.S.D.A. for the Grandview Bank & Trust Company v. Board District of Columbia. of Governors, filed March 1976, U.S.C.A. Louis J. Roussel v. Board of Governors, filed for the Eighth Circuit. April 1975, U.S.D.C. for the Eastern District Association of Bank Travel Bureaus, Inc. v. of Louisiana. Board of Governors, filed February 1976, Georgia Association of Insurance Agents, et al. U.S.C.A. for the Seventh Circuit. v. Board of Governors, filed October 1974, Memphis Trust Company v. Board of Gover U.S.C.A. for the Fifth Circuit. nors, filed February 1976, U.S.D.C. for the Alabama Association of Insurance Agents, et Western District of Tennessee. al. v. Board of Governors, filed July 1974, First Lincolnwood Corporation v. Board of U.S.C.A. for the Fifth Circuit, Governors, filed February 1976, U.S.C.A. tConsumers Union of the United States, Inc., et for the Seventh Circuit. al. v. Board of Governors, filed September Roberts Farms, Inc. v. Comptroller of the Cur 1973, U.S.D.C. for the Distruct of Columbia. rency, et al., filed November 1975, U.S.D.C. Bankers Trust of New York Corporation v. for the Southern District of California. Board of Governors, filed May 1973, National Computer Analysts, Inc. v. Decimus U.S.C.A. for the Second Circuit. Corporation, ef a/., filed November 1975, U.S.D.C. for the District of New Jersey. Florida Association of Insurance Agents, Inc. v. Board of Governors, and National Asso tDecisions have been handed down in these cases, subject to appeals noted. ciation of Insurance Agents, Inc. v. Board $The Board of Governors is not named as a party in this of Governors, filed August 1975, actions action. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
426 Announcements REGULATION Q: Amendment Retirement savers may elect to use other types of time deposits for their IRA or Keogh plan funds, The Board of Governors of the Federal Reserve such as ordinary savings accounts or time deposits System announced on April 7, 1977, that it was with maturities of less than 3 years. In such cases, establishing a new category of time deposit ac the accounts will be subject to the existing ceiling counts to benefit individuals saving for their re rates of interest prescribed by Regulation Q. tirement. In taking its action the Board noted a congres The Board’s action amended Regulation Q (In sional report indicating that about half of all em terest on Deposits) to create a category of deposits ployees in private employment are not covered by under which member banks could pay maximum retirement plans. interest rates for consumer-type time deposits to The Board estimated that for retirement savers savers in individual retirement accounts1 and contributing the maximum yearly amount under Keogh plan2 retirement accounts. a Keogh plan at a member bank for 30 years, the The main features of the new class of retirement higher interest allowable under the new category savings deposits are as follows: could increase retirement savings by up to $50,000 1. It will become effective after 90 days (July and that the increase for participants under IRA’s 6, 1977). could be up to $10,000. At present, Regulation 2. Member banks may pay interest on IRA and Q permits thrift institutions to pay lA of a per cent Keogh plan time deposits at a rate of interest equal more interest on such deposits than commercial to the highest rate permissible under Regulation banks may pay. Q, for time deposits of any maturity or denomi “Such a penalty for choosing deposits at a nation under $100,000, by a Federally insured particular type of institution is clearly inconsistent commercial bank, mutual savings bank, or savings with the objectives of maximizing the total amount and loan association. The rate is presently 7.75 of earnings on retirement savings that the Congress per cent. sought to encourage through establishment of IRA 3. No minimum denomination will be required and Keogh programs,” according to the Board’s for this class of deposit. announcement. 4. A maturity of 3 years or more will be re The announcement noted that issues relating to quired. the creation of a new deposit category for IRA 5. However, as with other types of IRA or or Keogh funds have been the subject of substan Keogh accounts, withdrawals may be made before tial public comment for nearly 2 years. maturity without penalty for early withdrawal if In June 1975 the Board requested public com the depositor reaches age 59^, or is disabled. ment on a number of questions relating to IRA’s, 6. Member banks may modify existing IRA or including the questions whether the existing Keogh plan agreements to permit retirement savers schedule of interest rate ceilings that can be paid to take advantage of this new rule. on IRA deposits should be increased and whether member banks should be permitted to pay interest xThe Employee Retirement Income Security Act of on IRA deposits at rates equal to those that may 1974 (ERISA) permits individuals not covered by a be paid by savings and loan associations and retirement plan to deposit in individual retirement ac mutual savings banks. In July 1976 the Board counts (IRA’s) for retirement purposes, tax-deferred announced that it was of the view that IRA parti contributions up to $1,500 a year, or 15 per cent of gross income, whichever is less. cipants should be permitted to obtain the highest 2Keogh (H.R. 10) plan accounts were authorized rate of interest permissible on their retirement under the Self-Employed Individuals Tax Retirement savings regardless of where the funds are main Act of 1962. The act currently permits a self-employed tained. It was anticipated that further action by person to deposit in a Keogh plan account tax-deferred the Board to permit member banks to offer IRA’s contributions up to $7,500 a year, or 15 per cent of gross income, whichever is less. on a fully competitive basis would be appropriate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Announcements 427 in early 1977. “Accordingly,” the Board said, and Education Program of the Board of Governors “the public has had ample opportunity to comment of the Federal Reserve System” has two main on the issues relevant to the Board’s action estab parts: lishing a special category of deposit for IRA’s and 1. A program designed to educate all member Keogh’s.” banks, both State and national, in the requirements By adopting a final rule at this time, the Board of consumer credit protection laws. said, public uncertainty about IRA and Keogh 2. A companion program to conduct special accounts will be removed and retirement savers examinations of State member banks to assess may begin immediately to plan their retirement compliance with consumer laws by examiners programs. The 90-day deferral of the effective date especially trained for that purpose. gives member banks time to make operational and The following procedures will be followed at other changes and will give them opportunity to State member banks: compete for IRA and Keogh deposits on an equal Examiners who find what they regard as evi basis. dence of discrimination in credit transactions will The Board’s announcement pointed out that report all findings to the appropriate Reserve Bank. preferred tax treatment was given to IRA’s to The Reserve Bank, in consultation with the encourage savings for retirement, and not to ex Board’s Division of Consumer Affairs, will deter tend a competitive advantage for a particular class mine whether additional investigation is needed, of financial institution. and what if any corrective measures are appro A survey conducted by the Board indicated that priate . as of December 31, 1976, commercial banks had In the event of overcharges, the bank will gen obtained only 35 per cent of the IRA market while erally be required to reimburse customers for the accounting for 47 per cent of the total household amount of the overcharge. Customers will be given time and savings deposit market. an explanation of the overcharge for which resti The Board’s action was taken at this time be tution is required. cause of a number of other reasons that it found In other cases of violations, State member banks compelling, including the following: will be instructed to make prompt correction of 1. A large number of people eligible to estab their policies, practices, procedures, or forms to lish IRA or Keogh accounts still have not done avoid similar future violations. so, owing in part, the Board believes, to lack of In all cases of violations, the examiner’s find advertising of such accounts by commercial banks ings will be made known to the bank’s board of due to their noncompetitive position. directors. 2. Making retirement savings accounts of equal The special examinations will assess compliance value at all depositories early in the year may avoid with the following laws and regulations for which substantially diminishing the number of people the Board has enforcement responsibilities with who start retirement savings this year. respect to State member banks: 3. Banks and other financial institutions offer Fair Credit Reporting Act ing IRA and Keogh plan accounts will require a Fair Housing Act substantial amount of lead time to develop mar Real Estate Settlement Procedures Act Regulation B (Equal Credit Opportunity keting plans that can be put into effect sufficiently Act) in advance of year-end to be useful. Regulation C (Home Mortgage Disclosure By previous action the Board had made IRA Act) and Keogh plan deposits subject to the same rules Regulation Z (Truth in Lending, Fair Credit under Regulation Q. Billing, and Consumer Leasing acts) Regulation A A (Unfair or Deceptive Acts or Practices by banks, and handling of consumer complaints) CONSUMER COMPLIANCE Regulation H (Provisions related to national flood insurance) AND EDUCATION PROGRAM Regulation Q (Interest on Deposits) The Board of Governors on March 30, 1977, Any new consumer laws or regulations affecting announced the establishment of a Systemwide State member banks for which the Board is given program designed to improve compliance by enforcement authority will be incorporated into the member banks with consumer credit protection special consumer affairs compliance examinations. laws and regulations. The special examinations are to be uniform The program entitled “Consumer Compliance among all Federal Reserve Banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
428 Federal Reserve Bulletin □ April 1977 The Education Program 7. The compliance examiners will make use of special instructions in connection with sampling The Board has directed each Federal Reserve Bank of loan files, reporting of violations and correction to establish an educational and advisory service of violations, reimbursement of overcharges, and for all member banks (including national banks). rating of banks for compliance with the consumer To carry out this program, each Reserve Bank will credit protection laws and regulations listed above. be prepared to send a specialist to any member These instructions include directions for actions bank that requests such a service. to be taken in the various types of violations noted The purpose of the visits is to assist member above (violations involving overcharges, discrim bankers to develop appropriate policies, proce inations, and other types of violations). dures, and forms in the consumer credit protection 8. A special examination report to incorporate area, and to answer questions of bank personnel compliance examiners’ findings has been devel regarding the consumer credit protection laws and oped, including pages for each consumer law and regulations, and compliance with them. regulation covered by the compliance examination These specialists, in most cases, will receive program. A copy of this report is to be transmitted special training through attendance at consumer to the board of directors of the State member bank affairs schools at the Federal Reserve Board. examined, with a copy to the Federal Reserve Board’s Division of Consumer Affairs. A report The Special Examination Program summary form has also been developed to be sent to the Board’s Division of Consumer Affairs. Aspects of this program not already cited are as follows: 1. The program will begin with a test period REGULATION Z: Amendments running through the end of 1978, after which the results will be evaluated and any indicated changes The Board of Governors on April 12, 1977, will be made. amended its Regulation Z (Truth in Lending) to 2. Each Federal Reserve Bank will conduct a require advance disclosure of any variable rate special examination of every State member bank clause in a credit contract that may result in an in its district once within the next 12 months increase in the cost of the credit to the customer. (through the end of March 1978). Additional ex The new rule will become effective October 10, aminations will be made in the remaining 9 months 1977. of the test period if the results of the first special The amendment adopted was substantially sim examination indicate that a follow-up examination ilar to a proposal issued by the Board for public is needed. comment last October. 3. Whenever possible, compliance examiners The main requirements of the new rule include will be selected from the System’s commercial disclosure of the following: bank examination force. They will be given special 1. The fact that the annual percentage rate on training, including attendance at consumer affairs the transaction is subject to increase. (The October schools conducted at the Board to educate exam proposal would have applied to all situations in iners in consumer credit protection law require which the annual percentage rate was subject either ments. Special compliance examiners not drawn to an increase or decrease.) from the commercial examiner force will have 2. The conditions under which the rate may training also in commercial examination. increase, including identification of any index to 4. Generally, compliance examinations will be which the rate is tied, and any limitation on the conducted concurrently with commercial exami increase. nations, but the Reserve Banks may make excep 3. The manner in which an increase may be tions in certain circumstances. effected, including an increase in payment 5. Manuals explaining the laws and regulations amounts, a change in the number of scheduled cited above have been developed and will be used payments, or an increase in the amount due at by the compliance examiners. maturity. 6. Compliance examiners will be provided with 4. Numerical examples—in the case of home special checklists to help make their examinations mortgage transactions only—based on a hypo efficient and comprehensive. thetical immediate increase of lA of a percentage Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Announcements 429 point in the annual percentage rate, effected INTERPRETATIONS through a change in the number of scheduled payments, or an increase in the amount of those The Board of Governors on March 31, 1977, payments. adopted three interpretations intended to clarify The requirement for numerical examples for certain aspects of its consumer credit protection residential mortgages applies to transactions in regulations. which a security interest is taken in real property The Board adopted an interpretation of Regula used or expected to be used as the customer’s tion Z (Truth in Lending) stating that the amount dwelling and need not be made in transactions of a dealer’s participation in the finance charge primarily for agricultural purposes. on the credit purchase of an automobile or other The Board of Governors has also amended durable goods need not be disclosed as a separate Regulation Z to permit—but not require—disclo part of the finance charge. At the same time, the sures called for by the Truth in Lending Act and Board withdrew a proposal that would have re Regulation Z to be made in Spanish in Puerto quired disclosure of the fact but not the amount Rico. At the customer’s request disclosures must of a dealer’s participation. The Board took these be provided in English. actions because it did not feel that disclosure of a dealer participation in a finance charge would significantly benefit consumers in shopping for credit. REGULATION H: Amendments At the same time, the Board adopted two tech nical interpretations of its Regulation C (Home The Board of Governors on April 13, 1977, an Mortgage Disclosure). The Home Mortgage Dis nounced adoption of four technical amendments closure Act and Regulation C require depositary to the flood insurance provisions of its Regulation institutions with offices in metropolitan areas to H (Membership of State Banking Institutions in disclose publicly the geographic area where they the Federal Reserve System) to make the regula are making their residential mortgage loans. tion conform to recent changes in the Flood Dis The first technical interpretation permits a de aster Protection Act of 1973 (“Flood Act”). positary institution subject to the act that is major Regulation H now provides, pursuant to the ity owned by another depository to disclose its Flood Act, that State member banks may not mortgage loan data separately from that of the make, increase, extend, or renew loans on prop parent. erty located in areas identified by the Department The second technical interpretation of Regula of Housing and Urban Development (HUD) as a tion C clarifies the disclosures that must be made flood-hazard area, unless the property is covered by depositories that were exempt from the provi by Federally subsidized flood insurance. sions of the act, but lose their exemption. A The technical amendments to Regulation H depository is exempt if (1) it does not have an adopted by the Board exempt from the flood in office in a standard metropolitan statistical area surance requirements of the regulation the follow (SMSA), (2) it does not have assets on the last ing: day of its fiscal year of $10 million or more, or 1. Loans secured by a dwelling occupied as a (3) it is a State-chartered institution subject to a residence before March 1, 1976. State disclosure law that the Board has determined 2. Loans on an office or other building of a imposes disclosure requirements substantially small business occupied before January 1, 1976, similar to those of the Home Mortgage Disclosure up to a dollar limit to be established by the Act. The Board’s interpretation makes it clear that Secretary of HUD. The Secretary has proposed previously exempt institutions that become subject a $100,000 ceiling. to the act (by extension of an SMSA to cover one 3. Improvement or rehabilitation loans on resi or more of its offices or by growth of its assets) dences occupied before January 1, 1976, when may report on their mortgage lending during their such loans do not exceed $5,000. last full fiscal year by Postal ZIP code areas and 4. Loans to finance nonresidential additions or thereafter by Census Bureau census tracts. This improvements on a farm, up to a dollar limit to is the same treatment accorded depositories in the be established by the Secretary of HUD. The first year after Regulation C became effective (June Secretary has proposed a $25,000 ceiling. 28, 1976). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
430 Federal Reserve Bulletin □ April 1977 REGULATION Q: search Division Officer, in the Division of Re Proposed Amendment Not Adopted search and Statistics, effective March 27, 1977. Robert A. Eisenbeis has been appointed Asso The Board of Governors on April 1, 1977, an ciate Research Division Officer in the Division of nounced that it had determined not to adopt at this Research and Statistics, effective March 27, 1977. time a regulatory proposal to prohibit member Mr. Eisenbeis joined the Board’s staff first in 1967, banks from paying interest on pooled time deposits went to the Federal Deposit Insurance Corporation of $100,000 or more at a rate above Regulation in 1968, and returned to the Board in July 1976. Q ceilings. He holds an A.B. from Brown University, and In deciding not to adopt the proposed amend M.A. and Ph.D. degrees from the University of ment—issued by the Board in March 1976—the Wisconsin. Board noted that in February the Federal Deposit Joseph S. Sims, Washington Information Man Insurance Corporation limited the amount of Fed ager for the U.S. League of Savings Associations, eral deposit insurance coverage for certain pooled has been appointed Special Assistant to the Board, deposits to $40,000 in any one bank. The Board effective April 18, 1977. Prior to his association said it believed the FDIC action may minimize with the U.S. League of Savings Associations, the potential for disruptive shifts of funds among Mr. Sims served as a free-lance writer in Brazil, depositary institutions as a result of pooling. Deputy Director of Public Affairs for the Federal Home Loan Bank Board, and Manager, Public Relations, for Pan American World Airways in PROPOSED AMENDMENT AND Brazil. He holds an A.B. from Indiana University. The Board has also announced the retirement INTERPRETATION of Brenton C. Leavitt, Director of the Division The Board of Governors proposed on April 13, of Banking Supervision and Regulation, on March 1977, an amendment to Regulation H (Member 31, 1977. ship of State Banking Institutions in the Federal Reserve System) that generally would prohibit State member banks from purchasing loans on NEW BANK PRESIDENT improved real estate or mobile homes located in a flood-hazard area if the property is not covered The Federal Reserve Bank of Minneapolis has by flood insurance. The Board will receive com announced that Mark H. Willes has been appointed ment through May 20, 1977. as President of the Bank to succeed Bruce Mac- The Board of Governors also on April 13, 1977, Laury, who resigned in February. proposed an interpretation of Regulation Z (Truth Mr. Willes, formerly First Vice President of the in Lending) affecting credit-card issuers that bill Federal Reserve Bank of Philadelphia, began his customers in full on a transaction-by-transaction service at Minneapolis on April 16, 1977. basis and impose no finance charges. The Board will receive comment through May 16, 1977. NEW PAMPHLET: Fair Credit Billing CHANGES IN BOARD STAFF The Board of Governors has issued a consumer The Board of Governors has announced the fol pamphlet on Fair Credit Billing. It explains how lowing official staff actions: a billing dispute may be resolved in a way that Charles J. Siegman has been promoted from protects an individual’s credit rating. Associate International Division Officer to Senior For copies of the pamphlet, or for answers to International Division Officer, in the Division of questions about Fair Credit Billing, write to any International Finance, effective March 27, 1977. Federal Reserve Bank or to the Board of Gover James R. Wetzel has been promoted from As nors of the Federal Reserve System, Washington, sociate Research Division Officer to Senior Re D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Announcements 431 BOARD PUBLICATIONS: SYSTEM MEMBERSHIP: Two Price Changes Admission of State Banks The Board of Governors has approved distribution The following State banks were admitted to mem of the System book—The Federal Reserve System: bership in the Federal Reserve System during the Purposes and Functions—as a free publication. On period between March 16, 1977, through April 15, April 12, 1977, the Board removed the $1.00 1977: charge that has applied to the book’s sixth edition California since it was first issued in September 1974. San Rafael ......................Independent Bankers Also approved was an increase from $2.50 to Trust Company $7.50 in the charge for Published Interpretations Colorado of the Board of Governors of the Federal Reserve Colorado Springs.......Garden of the Gods Bank System, effective May 1, 1977. This, the first price South Carolina change since the compilation was originally pub Marion ......................Colonial State Bank Inc. lished in 1961, represents increases in production Wyoming and mailing costs. Edgerton ............................Citizens State Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
432 Industrial Production Released for publication April 14 steel rose sharply; among nondurable goods mate rials, large gains occurred for textiles and paper. Industrial production in March increased by an estimated 1.4 per cent to 135.1 per cent of the 1967 average, following the 1.0 per cent gain in February. In March, gains in output were wide Seasonally adjusted, ratio scale, 1967=100 spread among consumer goods, business equip ment, construction supplies, and materials; but production by utilities declined appreciably. About one-third of the advance in total output reflected a stepped-up pace of motor vehicle production. March output of factories, mines, and utilities was 20.9 per cent above the recession low 2 years earlier and about 2.5 per cent above the pre-reces sion high in June 1974. Output of durable consumer goods increased 5.7 per cent in March, with auto assemblies up 21 per cent to an annual rate of 9.9 million units. Announced schedules for auto assemblies indicate an annual rate for April of 9.4 million units. Output of nondurable consumer goods rose slightly. Production of business equipment in creased 1.5 per cent. Output of materials in March rose by 1.1 per cent. Production gains were widespread in both durable goods and nondurable goods materials. F.R. indexes, seasonally adjusted. Latest figures: March. Among durable goods materials, output of iron and *Auto sales and stocks include imports. Seasonally adjusted, 1967 = 100 Per cent changes from— Industrial production 1976 1977 Dec. Jan. Feb.p Mar. e Month ago Year ago Q4 to Ql Total .................................... 133.1 132.0 133.3 135.1 1.4 5.5 1.3 Products, total ............................ 133.8 133.0 133.7 135.7 1.5 5.9 1.8 Final products ......................... 132.1 130.8 131.5 133.7 1.7 5.8 1.7 Consumer goods ................ 142.0 140.1 140.9 143.4 1.8 5.4 1.6 Durable goods .............. 151.2 145.1 145.5 153.8 5.7 9.5 2.3 Nondurable goods ....... 138.4 138.1 139.0 139.2 .1 3.6 1.2 Business equipment ......... 143.2 142.0 142.9 145.1 1.5 8.3 2.5 Intermediate products ........... 139.8 141.3 141.9 142.8 .6 5.9 2.2 Construction supplies ....... 135.5 135.4 135.6 137.2 1.2 6.6 .7 Materials ....................................... 131.9 130.5 132.5 134.0 1.1 4.5 .4 Preliminary. ^Estimated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A 1 Financial and Business Statistics CONTENTS DOMESTIC FINANCIAL STATISTICS Weekly Reporting Commercial Banks A3 Monetary aggregates and interest rates Assets and Liabilities of— A4 Factors affecting member bank reserves A20 All reporting banks A5 Reserves and borrowings of member A21 Banks in New York City banks A22 Banks outside New York City A6 Federal funds transactions of money A23 Balance sheet memoranda market banks A24 Commercial and industrial loans Policy Instruments A25 Gross demand deposits of individuals, partnerships, and corporations A8 Federal Reserve Bank interest rates A9 Member bank reserve requirements Financial Markets A 10 Maximum interest rates payable on time and savings deposits at Federally A25 Commercial paper and bankers insured institutions acceptances outstanding A11 Federal Reserve open market A26 Prime rate charged by banks on transactions short-term business loans A26 Interest rates charged by banks on Federal Reserve Banks business loans A27 Interest rates in money and capital A12 Condition and F.R. note statements markets A13 Maturity distribution of loan and A28 Stock market—Selected statistics security holdings A29 Savings institutions—Selected assets Monetary and Credit Aggregates and liabilities A13 Demand deposit accounts—Debits and Federal Finance rate or turnover A14 Money stock measures and components A30 Federal fiscal and financing operations A15 Aggregate reserves and deposits of A31 U.S. Budget receipts and outlays member banks A32 Federal debt subject to statutory A15 Loans and investments of all limitation commercial banks A32 Gross public debt of U.S. Treasury— Types and ownership Commercial Bank Assets and Liabilities A33 U.S. Government marketable securities—Ownership, by maturity A16 Last-Wednesday-of-month series A34 U.S. Government securities dealers— A17 Call-date series Transactions, positions, and financing A18 Detailed balance sheet, June 30, 1976 A35 Federal and Federally sponsored credit agencies—Debt outstanding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A2 Federal Reserve Bulletin □ April 1977 Securities Markets and Corporate INTERNATIONAL STATISTICS Finance A54 U.S. international transactions— A36 New security issues—State and local Summary government and corporate A55 U.S. foreign trade A37 Corporate securities—Net change in A55 U.S. reserve assets amounts outstanding A56 Selected U.S. liabilities to foreigners A37 Open-end investment companies—Net and to foreign official institutions sales and asset position A3 8 Corporate profits and their distribution Reported by Banks in the United States: A3 8 Nonfinancial corporations—Assets and liabilities A57 Short-term liabilities to foreigners A39 Business expenditures on new plant A59 Long-term liabilities to foreigners and equipment A60 Short-term claims on foreigners A61 Long-term claims on foreigners Real Estate A62 Foreign branches of U.S. banks— A40 Mortgage markets Balance sheet data A41 Mortgage debt outstanding Securities Holdings and Transactions Consumer Instalment Credit A64 Marketable U.S. Treasury bonds and A42 Total outstanding and net change notes—Foreign holdings and A43 Extensions and liquidations transactions A64 Foreign official accounts A65 Foreign transactions in securities Flow of Funds A44 Funds raised in U.S. credit markets Reported by Nonbanking Concerns in A45 Direct and indirect sources of funds to the United States: credit markets A66 Short-term liabilities to and claims on DOMESTIC NONFINANCIAL STATISTICS foreigners A67 Long-term liabilities to and claims on A46 Nonfinancial business activity— foreigners Selected measures A47 Output, capacity, and capacity Interest and Exchange Rates utilization A47 Labor force, employment, and A68 Discount rates of foreign central banks unemployment A68 Foreign short-term interest rates A48 Industrial production A68 Foreign exchange rates A50 Housing and construction A51 Consumer and wholesale prices A52 Gross national product and income A69 Guide to Tabular Presentation and A53 Personal income and saving Statistical Releases Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Domestic Financial Statistics A3 1.10 MONETARY AGGREGATES AND INTEREST RATES 1976 1977 1976 1977 Item Q2 Q3 Q4 Ql Nov. Dec. Jan. Feb. Mar. Monetary and credit aggregates (annual rates of change, seasonally adjusted in per cent)1 Member bank reserves 1 Total............................................................................... 0.6 2.7 4.4 11.8 4.9 10.9 -13.1 2 Required........................................................................ 1.1 2.4 4.0 10.5 4.3 11.3 -10.9 3 Nonborrowed............................................................... 0.4 2.6 4.8 12.6 5.6 10.4 -13.3 Concepts of money 1 4 M-l................................................................................. 8.2 4.2 6.3 0.0 8.1 5.4 0.8 5 M-2................................................................................. 10.5 9.2 12.3 10.1 12.6 9.2 6.8 6 M-3................................................................................. 11.8 11.4 14.3 12.3 13.0 Ml.3 8.6 Time and savings deposits Commercial banks: 7 Total........................................................................... 5.4 7.3 11.8 15.3 16.1 10.0 10.2 8 Other than large CD’s............................................ 12.4 13.0 16.8 17.6 15.6 12.4 11.1 9 Thrift institutions 2..................................................... 13.7 14.8 17.3 15.6 M3.9 r14.0 11.4 10 Total loans and investments at commercial banks 3 5.4 6.0 8.7 Interest rates (levels, per cent per annum) Short-term rates 11 Federal funds 4................................................................... 5.19 5.28 4.88 4.66 4.95 4.65 4.61 4.68 4.69 12 Treasury bills (3-month market yield) 5........................... 5.16 5.15 4.67 4.63 4.75 4.35 4.62 4.67 4.60 13 Commercial paper (90- to 119-day) 6............................... 5.45 5.41 4.91 4.74 4.98 4.66 4.72 4.76 4.75 14 Federal Reserve discount 7................................................ 5.50 5.50 5.39 5.25 5.43 5.25 5.25 5.25 5.25 Long-term rates Bonds: 15 U.S. Govt. 8.................................................................... 8.01 7.90 7.54 7.62 7.64 7.30 7.48 7.64 7.74 16 Aaa utility (new issue) 9................................................ 8.69 8.48 8.15 8.17 8.17 7.94 8.08 8.22 8.25 17 State and local government 10...................................... 6.78 6.64 6.18 5.88 6.29 5.94 5.87 5.89 5.89 18 Conventional mortgages * *............................................... 8.98 9.03 8.95 8.95 8.90 8.80 8.80 8.85 1 M-l equals currency plus private demand deposits adjusted. 7 Rate for the Federal Reserve Bank of New York. M-2 equals M-l plus bank time and savings deposits other than large 8 Market yields adjusted to a 20-year maturity by the U.S. Treasury. CD’s. 9 Weighted averages of new publicly offered bonds rated Aaa, Aa, and M-3 equals M-2 plus deposits at mutual savings banks, savings and A by Moody’s Investors Service and adjusted to an Aaa basis. Federal loan associations, and credit union shares. Reserve compilations. 2 Savings and loan associations, mutual savings banks, and credit 10 Bond Buyer series for 20 issues of mixed quality. unions. 11 Average rates on new commitments for conventional first mortgages 3 Quarterly changes calculated from figures shown in Table 1.23. on new homes in primary markets, unweighted and rounded to nearest 4 Seven-day averages of daily effective rates (average of the rates on 5 basis points, from Dept, of Housing and Urban Development. a given date weighted by the volume of transactions at those rates). 12 Unless otherwise noted, rates of change are calculated from average 5 Quoted on a bank-discount rate basis. amounts outstanding in preceding month or quarter. 6 Most representative offering rate quoted by five dealers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A4 Domestic Financial Statistics □ April 1977 1.11 FACTORS AFFECTING MEMBER BANK RESERVES Millions of dollars Monthly averages of daily figures End-of-month figures Factor 1976 1977 1977 Sept. Oct. Nov. Dec. Jan. Feb. Mar.p Jan. Feb. Mar.P SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding.... 105,880 107,270 106,522 107,632 108,700 109,021 108,101 107,253 108,413 108,728 0 91,966 93,535 92,659 93,412 94,513 95,843 95,310 94.134 95,837 95,987 3 Bought outright......................... 89,926 91,886 91,527 91,031 92,905 94,674 94,313 94.134 94,905 95,547 4 Held under repurchase agree- 2,040 1,649 1,132 2,381 1,608 1,169 997 932 440 5 Federal agency securities,............. 6,831 6,839 6,848 6,916 6,884 6,846 6,782 6.790 6,844 6,785 6 Bought outright......................... 6,763 6,757 6,804 6,805 6,792 6,787 6,750 6.790 6,767 6,731 7 Held under repurchase agree- 68 82 44 111 92 59 32 77 54 8 447 323 326 457 413 330 289 191 322 280 9 75 66 84 62 61 79 111 47 24 270 10 2,880 2,763 3,094 3,536 3,514 2,899 2,848 2,482 2,595 2,547 11 Other Federal Reserve assets.... 3,681 3,744 3,511 3,249 3,315 3,024 2,761 3,609 2,791 2,859 12 Gold stock......................................... 11,598 11,598 11,598 11,598 11,638 11,658 11,646 11,658 11,650 11,636 13 Special Drawing Rights certificate 703 1,123 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 14 Treasury currency outstanding........ 10,737 10,778 10,826 10,865 10,897 10,930 10,966 10,865 10,884 10,990 ABSORBING RESERVE FUNDS 15 89,863 90,312 91,988 93,730 92,582 91,753 92,831 91,164 91,697 93,415 16 442 482 458 464 461 499 494 502 506 471 Deposits, other than member bank reserves with F.R. Banks: 17 8,270 9,199 6,709 6,138 7,850 10,698 8,577 11,397 12,179 7,150 18 Foreign........................................... 249 266 259 306 269 294 271 383 362 349 19 Other.............................................. 1,071 1,012 947 974 820 616 669 642 856 637 20 Other F.R. liabilities and capital.... 3,315 3,372 3,326 3,253 3,223 3,224 3,206 3,475 3,630 3,457 21 Member bank reserves with F.R. Banks............................................. 25,708 26,127 26,458 26,430 27,229 25,725 25,865 23,411 22,916 27,074 Weekly averages of daily figures for weeks ending— Wednesday figures 1977 1977 Mar. 2 Mar. 9 Mar. 16 Mar. 23*> Mar. 30*> Mar. 2 Mar. 9 Mar. 16 Mar. 23*> Mar. 30p SUPPLYING RESERVE FUNDS 22 Reserve Bank credit outstanding.... 110,353 106,909 105,067 110,049 109,386 110,136 105,929 103,964 115,106 109,068 23 U.S. Govt, securities *..................... 96,930 94.193 92.611 96,758 96,996 96,387 92.669 90.359 99,864 96,112 24 Bought outright........................ 95,124 94.193 92.611 94,865 94,976 95,455 92.669 90.359 94,855 96,112 25 Held under repurchase agree- 1,806 1,893 2,020 932 5,009 26 Federal agency securities................ 6,882 6.767 6.744 6,778 6,815 6,844 6.767 6,744 6,903 6.744 27 Bought outright......................... 6,770 6.767 6.744 6,744 6,744 6,767 6.767 6,744 6,744 6.744 28 Held under repurchase agree ment ................................. 112 34 71 77 159 29 Acceptances................................... 462 111 174 341 444 326 174 171 460 155 30 Loans............................................. 30 20 24 339 58 41 33 29 2,196 149 31 Float.............................................. 3,331 3,098 2,816 3,035 2,191 3,861 3,598 3,858 2,762 2,937 32 Other Federal Reserve assets.... 2,111 2,653 2,698 2,798 2,883 2,677 2,688 2,803 2,921 2,971 33 Gold stock........................................ 11,655 11,651 11,651 11,647 11,636 11,651 11,651 11,651 11,636 11,636 34 Special Drawing Rights certificate account ........................................ 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 35 Treasury currency outstanding........ 10,931 10,953 10,962 10,969 10,986 10,939 10,957 10,962 10,979 10,990 ABSORBING RESERVE FUNDS 36 Currency in circulation.................... 91,814 92,273 93,084 93,086 93,013 92,125 92,975 93,382 93,219 93,469 37 Treasury cash holdings..................... 505 509 504 492 470 500 508 493 491 471 Deposits, other than member bank reserves with F.R. Banks: 38 Treasury......................................... 11,588 8,696 5,803 9,800 9,182 11,614 7,082 4,274 10,764 7,769 39 Foreign.......................................... 283 256 301 251 259 277 249 243 261 288 40 Other.............................................. 833 703 676 649 592 735 707 781 525 563 41 Other F.R. liabilities and capital. .. 3,390 2,998 3,131 3,273 3,375 3,030 3,071 3,191 3,346 3,426 42 Member bank reserves with F.R. Banks............................................. 25,725 25,278 25,381 26,312 26,316 25,645 25,145 25,413 30,315 26,907 1 Includes securities loaned—fully guaranteed by U.S. Govt, securities Note.—For amounts of currency and coin held as reserves, see Table pledged with F.R. Banks—and excludes (if any) securities sold and sched- 1.12. uled to be bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Member Banks A5 1.12 RESERVES AND BORROWINGS Member Banks Millions of dollars Monthly averages of daily figures Reserve classification 1975 1976 1977 Dec. July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.? All member banks Reserves: At F.R. Banks................... 27,215 25,933 26,001 25,708 26,127 26,458 26,430 27,229 25,725 25,865 Currency and coin............ 7,773 8,064 7,989 8,113 8,025 8,180 8,548 8,913 8,326 8,138 Total held1......................... 34,989 34,146 34,141 33,979 34,305 34,797 35,136 36,290 34,199 34,149 Required......................... 34,727 34,076 33,844 33,692 34,116 34,433 34,964 35,796 34,234 33,879 Excess1........................... 262 70 297 287 189 364 172 494 -35 270 Borrowings at F.R. Banks:2 Total................................... 127 123 104 75 66 84 62 61 79 111 Seasonal............................. 13 24 28 31 32 21 12 8 12 13 Large banks in New York City 8 Reserves held.......................... 6,812 6,507 6,559 6,372 6,374 6,589 6,520 7,076 6,442 6,310 9 Required............................. 6,748 6,i48 6,501 6,308 6,346 6,485 6,602 6,948 6,537 6,259 10 Excess................................. 64 -41 58 64 28 104 -82 128 -95 51 11 Borrowings2........................... 63 37 28 22 36 15 6 47 44 Large banks in Chicago 12 Reserves held.............. 1,740 1,672 1,684 1,615 1,648 1,621 1,632 1,731 1.624 1,609 13 Required................. 1,758 1,690 1,625 1,617 1,635 1,602 1,641 1,698 1.624 1,613 14 Excess..................... -18 -18 59 -2 13 19 —9 33 -4 15 Borrowings2............... 13 6 3 3 4 2 3 Other large banks 16 Reserves held. .. 13,249 12,633 12,610 12,584 12,704 12,889 13,117 13,556 12,683 12,645 17 Required....... 13,160 12,660 12,549 12,521 12,706 12,802 13,053 13,427 12,765 12,700 18 Excess............ 89 -27 61 63 -2 87 64 129 -82 -55 19 Borrowings2___ 26 11 20 3 17 7 14 25 4 30 All other banks 20 Reserves held. 13,188 13,334 13,288 13,408 13,579 13,698 13,867 13,927 13,450 13,415 21 Required... 13,061 13,178 13,169 13,246 13,429 13,544 13,668 13,723 13,308 13,307 22 Excess........ 127 156 119 162 150 154 199 204 142 108 23 Borrowings2.. 38 62 50 47 46 41 29 28 28 34 Weekly averages of daily figures for weeks ending- 1977 Jan. 26 Feb. 2 Feb. 9 Feb. 16 Feb. 23 Mar. 2 Mar. 9 Mar. 16 Mar. 23^ Mar. 30^ All member banks Reserves: At F.R. Banks................... 27,233 26,328 25,684 25,837 26,416 25,725 25,278 25,381 26,312 26,316 Currency and coin............ 8,812 8,797 8,763 8,568 7,594 8,212 8,181 8,500 7,498 8,299 Total held1......................... 36,193 35,275 34,595 34,553 34,157 34,083 33,607 34,029 33,955 34,759 Required......................... 35,769 35,145 34,339 34,389 33,928 33,933 33,334 33,861 33,843 34,440 Excess1........................... 424 130 256 164 229 150 273 168 112 319 Borrowings at F.R. Banks:2 Total................................... 89 86 75 129 36 30 20 24 339 58 Seasonal............................. 8 11 12 13 11 12 11 11 13 14 Large banks in New York City 31 Reserves held......................... 7,010 6,623 6,621 6,706 6,439 6,326 5,993 6,385 6,164 6,501 32 Required............................. 6,915 6,663 6,596 6,714 6,391 6,362 5,988 6,380 6,234 6,401 33 Excess................................. 95 -40 25 -8 48 -36 5 5 -70 100 34 Borrowings2........................... 41 43 98 7 167 Large banks in Chicago 35 Reserves held.............. 1,632 1,662 1,632 1,670 1,596 1,628 1,621 1,643 1,552 1,669 36 Required................. 1,616 1,666 1,605 1,654 1,621 1,593 1,616 1,631 1,575 1,638 37 Excess..................... 16 -4 27 16 -25 35 5 12 -23 31 38 Borrowings2............... 14 Other large banks 39 Reserves held... 13,542 13,119 12,857 12,765 12,709 12,699 12,686 12,623 12,579 12,903 40 Required....... 13,385 13,155 12,782 12,809 12,618 12,730 12,549 12,642 12,653 12,940 41 Excess............ 157 -36 75 -44 91 -31 137 -19 -74 -37 42 Borrowings 2.... 58 19 7 3 1 1 1 117 11 All other banks 43 Reserves held. 14,009 13,871 13,485 13,412 13,413 13,430 13,307 13,378 13,463 13,566 44 Required... 13,853 13,661 13,356 13,212 13,298 13,248 13,181 13,208 13,381 13,461 45 Excess........ 156 210 129 200 115 182 126 170 82 105 46 Borrowings2.. 31 26 25 28 29 29 19 23 55 33 1 Adjusted to include waivers of penalties for reserve deficiencies in nonmember bank joins the Federal Reserve System. For weeks for which accordance with Board policy, effective Nov. 19, 1975, of permitting figures are preliminary, figures by class of bank do not add to total transitional relief on a graduated basis over a 24-month period when a because adjusted data by class are not available. nonmember bank merges into an existing member bank, or when a 2 Based on closing figures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A6 Domestic Financial Statistics □ April 1977 1.13 FEDERAL FUNDS TRANSACTIONS of Money Market Banks Millions of dollars, except as noted 1977, week ending— Type Feb. 2 Feb. 9 Feb. 16 Feb. 23 Mar. 2 Mar. 9 Mar. 16 Mar. 23 Mar. 30 Total, 46 banks Basic reserve position 1 Excess reserves1.................................... 13 73 9 95 79 124 49 19 147 Less: 2 Borrowings at F.R. Banks............ 37 46 91 7 241 14 3 Net interbank Federal funds transactions............................... 14,175 18,004 17,687 16,755 15,664 18,027 18,488 16,396 14,363 Equals : Net surplus, or deficit ( —): 4 Amount................................................ -14,199 -17,977 -17,770 -16,666 -15,585 -17,903 -18,439 -16,618 -14,231 5 Per cent of average required reserves.................................. 92.8 119.9 116.9 113.5 106.3 125.7 125.3 114.5 95.5 Interbank Federal funds transactions Gross transactions: 7 6 8 Tw P S o a u - l r w e c s a h .. y . a . . s t .. e r .. s a .. . n . . . . . . s . . . . a . . . . c . . . . t . . . i . . . o . . . . n . . . . . . s . . . 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 7 5 1 , , , 5 4 63 6 6 7 4 2 2 5 6 4 , , , 0 1 1 4 4 3 1 3 9 2 4 6 3 , , ,7 1 7 9 0 5 5 8 6 2 5 6 3 , , , 4 6 2 4 8 0 1 6 0 2 7 5 2 , , , 0 3 7 9 6 5 3 9 8 2 6 4 4 , , , 4 8 4 5 7 6 1 8 4 2 6 4 5, , , 1 6 6 4 5 2 1 3 0 2 6 4 3 , , , 8 5 2 6 6 7 8 3 4 2 5 8 2 , , , 3 4 8 3 5 1 8 7 9 Net transactions: 9 Purchases of net buying banks... 16,073 19,102 19,039 18,241 17,405 19,614 20,521 18,689 17,481 10 Sales of net selling banks.............. 1,898 1,098 1,352 1,487 1,741 1,588 2,034 2,293 3,118 Related transactions with U.S. Govt, securities dealers 11 Loans to dealers3.................................. 3,060 2,541 2,748 2,437 2,560 3,489 4,496 2,819 2,469 12 Borrowing from dealers4................... 1,864 1,513 1,380 1,775 2,008 1,829 1,671 1,892 1,895 13 Net loans................................................. 1,196 1,028 1,369 662 553 1,660 2,825 927 574 8 banks in New York City 14 Ba E si x c c r e e s s s e r r v e e se p rv os e i s t 1 io .. n .................................. -23 -11 -8 29 -7 -18 -24 51 Less: 15 Borrowings at F R Banks 37 32 89 7 153 16 Net interbank Federal funds transactions............................... 4,233 5,626 6,191 5,611 4,709 6,353 6,894 4,901 4,984 Equals : Net surplus, or deficit ( —): 17 Amount................................................ -4,293 -5,680 -6,288 -5,589 -4,716 -6,353 -6,912 -5,079 -4,933 18 Per cent of average required reserves.................................. 70.9 94.5 102.6 96.4 81.6 117.1 118.7 89.5 84.6 Interbank Federal funds transactions Gross transactions: 19 Purchases............................................. 5,557 6,623 6,932 6,604 5,807 7,275 6,503 5,936 6,172 20 Sales...................................................... 1,324 997 742 994 1,098 922 609 1,035 1,188 21 Two-way transactions2....................... 1,324 997 742 994 1,097 922 609 1,035 1,187 Net transactions: 22 Purchases of net buying banks... 4,233 5,626 6,191 5,611 4,710 6,353 6,894 4,901 4,984 23 Sales of net selling banks.............. Related transactions with U.S. Govt, securities dealers 24 Loans to dealers3.................................. 1,671 1,516 1,809 1,602 1,611 2,040 2,480 1,593 1,353 25 Borrowing from dealers4................... 765 680 621 648 795 822 788 871 804 26 Net loans................................................. 906 836 1,187 954 816 1,218 1,702 722 549 38 banks outside New York City Basic reserve position 27 Excess reserves1.................................... 36 84 17 67 85 124 67 43 75 28 Le B ss o : rrowings at F R Banks 3 3 88 14 29 Net interbank Federal funds transactions............................... 9,942 12,378 11,496 11,144 10,955 11,674 11,594 11,495 9,379 Equals : Net surplus, or deficit (—): 30 Amount............................................... -9,905 -12,297 -11,482 -11,077 -10,869 -11,550 -11,527 -11,539 -9,318 31 Per cent of average required reserves.................................. 107.1 136.9 126.5 124.7 122.4 131.0 129.7 130.5 102.5 Interbank Federal funds transactions Gross transactions: 3 33 2 P Sa u l r e c s h ... a .. s .. e .. s .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6 6 , , 1 0 3 8 8 0 1 5 7 , , 1 5 4 2 2 0 1 5 6 , , 3 8 6 6 6 2 1 5 6 , , 6 8 9 3 3 7 1 6 6 , , 0 9 0 5 1 6 1 5 7 , , 5 2 2 0 9 3 1 6 7 , , 0 6 4 38 4 1 5 7 , , 8 3 3 2 3 8 1 7 6 , , 2 6 6 4 9 8 34 Two-way transactions2....................... 4,240 4,043 4,014 4,207 4,260 3,942 4,011 3,539 4,151 Net transactions: 35 Purchases of net buying banks... 11,840 13,476 12,848 12,630 12,696 13,262 13,627 13,788 12,497 36 Sales of net selling banks.............. 1,898 1,098 1,352 1,487 1,741 1,588 2,034 2,293 3,118 Related transactions with U.S. Govt, securities dealers 3 3 7 8 L Bo o r a r n o s w t i o n g d e f a r l o e m rs 3 d . e .. a .. l .. e .. r .. s .. 4 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 , , 1 3 0 9 0 0 1,0 8 2 3 5 3 7 9 5 4 8 0 1,1 8 2 3 7 5 1,2 9 1 5 3 0 1 1, , 0 44 0 9 7 2,0 8 1 9 6 3 1 1 , , 0 2 2 26 2 1 1, , 0 1 9 1 1 7 39 Net loans.................................................. 290 192 181 -292 -264 442 1,123 205 25 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Federal Funds Al 1.13 Continued 1977, week ending— Type Feb. 2 Feb. 9 Feb. 16 Feb. 23 Mar. 2 Mar. 9 Mar. 16 Mar. 23 Mar. 30 5 banks in City of Chicago Basic reserve position 40 Excess reserves1......................... 13 26 42 24 44 17 Less: 41 Borrowings at F.R. Banks. .. 14 42 Net interbank Federal funds transactions..................... 5,506 5,994 5,972 6,182 6,105 5,617 Equals : Net surplus, or deficit (—): 43 Amount................................. -5,494 -5,968 -5,623 -5,747 -5,941 -6,158 -6,061 -6,143 -5,615 44 Per cent of average required reserves .......................... 352.6 398.3 363.2 378.7 399.3 408.0 401.6 419.1 367.4 Interbank Federal funds transactions Gross transactions: 45 Purchases.................................... 6,280 6,839 6,473 6,784 6,893 6,8 6,850 6,794 6,575 46 Sales............................................ 774 844 807 1,032 921 706 745 658 958 47 Two-way transactions2................. 743 828 807 1,035 921 707 745 658 958 Net transactions: 48 Purchases of net buying banks.. 5,537 6,011 5,665 5,749 5,972 6,182 6,105 6,136 5,617 49 Sales of net selling banks.......... 31 17 7 Related transactions with U.S. Govt, securities dealers 50 Loans to dealers 3................. 333 298 254 174 205 413 460 310 226 51 Borrowing from dealers4. . . 257 235 402 488 525 412 393 493 481 52 Net loans............................... 75 62 -148 -314 -320 1 67 -183 -255 33 other banks Basic reserve position 53 Excess reserves1......................... 58 -25 50 79 54 Le B ss o : rrowings at F.R. Banks. .. 3 3 88 55 Net interbank Federal funds transactions..................... 4,436 6,384 5,841 5,402 4,982 5,492 5,489 5,359 3,762 Equals : Net surplus, or deficit (— ): 56 Amount................................. -4,412 -6,329 -5,859 -5,330 -4,928 -5,392 -5,466 -5,396 -3,683 57 Per cent of average required reserves.......................... 57.4 84.5 77.8 72.4 66.7 73.8 74.1 73.2 48.9 Interbank Federal funds transactions Gross transactions: 58 Purchases.................................... 9,800 10,681 10,390 10,053 10,063 10,315 10,788 10,533 10,073 59 Sales............................................ 5,364 4,298 4,559 4,651 5,080 4,823 5,299 5,175 6,311 60 Two-way transactions2.................. 3,497 3,216 3,207 3,172 3,339 3,235 3,266 2,882 3,193 Net transactions: 61 Purchases of net buying banks... 6,303 7,465 7,183 6,881 6,723 7,080 7,522 7,652 6,880 52 Sales of net selling banks........... 1,868 1,082 1,352 1,480 1,741 1,588 2,034 2,293 3,118 Related transactions with U.S. Govt, securities dealers 53 Loans to dealers3................. 1,057 727 685 661 744 1,036 1,555 916 891 54 Borrowing from dealers4. . . 842 598 356 639 688 595 500 528 611 55 Net loans___________________ 215 130 329 22 57 441 1.056 388 280 1 Based on reserve balances, including adjustments to include waivers 4 Federal funds borrowed, net funds acquired from each dealer by of penalties for reserve deficiencies in accordance with changes in Board clearing banks, reverse repurchase agreements (sales of securities to policy effective Nov. 19, 1975. dealers subject to repurchase), resale agreements, and borrowings secured 2 Derived from averages for individual banks for entire week. Figure by U.S. Govt, or other securities. for each bank indicates extent to which the bank’s average purchases and sales are offsetting. Note.—Weekly averages of daily figures. For description of series, 3 Federal funds loaned, net funds supplied to each dealer by clearing see Federal Reserve Bulletin for August 1964, pp. 944-53. Back data for banks, repurchase agreements (purchases from dealers subject to resale), 46 banks appear in the Board’s Annual Statistical Digest, 1971-1975, or other lending arrangements. Table 3. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A8 Domestic Financial Statistics □ April 1977 1.14 FEDERAL RESERVE BANK INTEREST RATES Per cent per annum Current and recent levels Loans to member banks— Loans to all others Under Sec. 10(b)2 under last par. Sec. 134 Federal Reserve Under Secs. 13 and 13a1 Bank Regular rate Special rate3 Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous 3/31/77 date rate 3/31/77 date rate 3/31/77 date3 rate 3/31/77 date rate Boston.................. 5% 11/22/76 5% 5% 11/22/76 6 6lA 11/22/76 6% 81/4 11/22/76 8% New York............ 5Va 11/22/76 5% 5V4 11/22/76 6 6V4 11 /22/76 6% 8i/4 11/22/76 8% Philadelphia.......... 5V4 11/22/76 5% sy4 11/22/76 6 6 lA 11 /22/76 6% 81/4 11/22/76 8% Cleveland............. 5V4 11/22/76 5% 5V4 11/22/76 6 6V4 11/22/76 6% 8i/4 11/22/76 8% Richmond............ 5V4 11/22/76 5% 53/4 11/22/76 6 6Va 11/22/76 6% 81/4 11/22/76 8% Atlanta................. 5V4 11/22/76 5% sy4 11/22/76 6 6Va 11/22/76 6% 81/4 11/22/76 8% Chicago................ 51/4 11/22/76 5% 534 11/22/76 6 6 lA 11/22/76 6% Wa 11 /22/76 8% St. Louis............... 5V4 11/26/76 5% 534 11/26/76 6 6V4 11/26/76 6% 81/4 11/26/76 8% Minneapolis.......... 5V4 11/22/76 5% sy4 11/22/76 6 6V4 11/22/76 6% 81/4 11/22/76 8% Kansas City.......... 5V4 11/22/76 5% 534 11/22/76 6 6V4 11/22/76 6% 814 11/22/76 8% Dallas................... 51/4 11/22/76 5% 5*A 11/22/76 6 6V4 11/22/76 6% 8i/& 11/22/76 8% San Francisco.... 5lA 11/22/76 5% 534 11/22/76 6 6V4 11/22/76 6% 8 V4 11/22/76 8% Range of rates in recent years5 Range F.R. Range F.R. Range F.R. Effective date (or level)— Bank Effective date (or level)— Bank Effective date (or level)— Bank All F.R. of All F.R. of All F.R. of Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1970....... 5% 5% 1973—Jan. 15................. 5 5 1975—Jan. 6.................. 714-734 734 Feb. 26.................. 5-5% 5% 10.................. 71/4-73/4 714 1971—Jan. 8................... 514-5 % 514 Mar. 2.................. 5 % 5% 24.................. 714 714 15................... 51/4 514 Apr. 23................. 5%-5% 5% Feb. 5................. 634-714 634 19................... 5 -514 51/4 May 4.................. 5% S* 7................. 634 634 22................... 5 -514 5 11.................. 5%-6 Mar. 10................. 6V4-634 614 29................... 5 5 18.................. 6 6 14................. 614 614 Feb. 13................... 434-5 5 June 11.................. 6-6% 6% May 16................. 6-614 6 19................... 434 434 15.................. 6% 6% 23................. 6 6 July 16................... 434-5 5 July 2................. 7 7 23................... 5 5 Aug. 14................. 7-7% 7% 1976—Jan. 19................. 5%-6 5% Nov. 11................... 434-5 5 23................. 7% 7% 23.................. 5% 5%' 19................... 434 434 Dec. 13................... 4%-43/4 434 1974—Apr. 25................. 7%-8 8 Nov. 22................. 51/4-5% 514 17................... 4%-434 4% 30................. 8 8 26................. 514 514 24................... 4% 4% Dec. 9................. 7%-8 7% 16................. m m In effect Mar. 31, 1977. .. 514 5Y4 1 Discounts of eligible paper and advances secured by such paper or by 4 Advances to individuals, partnerships, or corporations other than U.S. Govt, obligations or any other obligations eligible for F.R. Bank member banks secured by direct obligations of, or obligations fully purchase. guaranteed as to principal and interest by, the U.S. Govt, or any agency 2 Advances secured to the satisfaction of the F.R. Bank. Advances thereof. secured by mortgages on 1- to 4-family residential property are made at 5 Rates under Secs. 13 and 13a (as described above). For description the Section 13 rate. and earlier data, see the following publications of the Board of Governors: 3 Applicable to special advances described in Section 201.2(e)(2) of Banking and Monetary Statistics, 1914-1941, Banking and Monetary Regulation A. Statistics, 1941-1970, and Annual Statistical Digest, 1971-75. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Policy Instruments A9 1.15 MEMBER BANK RESERVE REQUIREMENTS1 Per cent of deposits Requirements in effect Previous requirements Mar. 31, 1977 Type of deposit, and deposit interval in millions of dollars Per cent Effective date Per cent Effective date Net demand:2 7 12/30/76 m 2/13/75 9% 12/30/76 10 2/13/75 10-100............................................................................................ 11 % 12/30/76 12 2/13/75 100-400.......................................................................................... nyA 12/30/76 13 2/13/75 Over 400......................................................................................... 161/4 12/30/76 16 Vt 2/13/75 Time:2,3 Savings............................................................................................ 3 3/16/67 3% 3/2/67 Other time: 0-5, maturing in— 3 3/16/67 3% 3/2/67 180 days to 4 years................................................................ 4 2 % 1/8/76 3 3/16/67 41 10/30/75 3 3/16/67 Over 5, maturing in— 6 12/12/74 5 10/1/70 4 2% 1/8/76 3 12/12/74 41 10/30/75 3 12/12/74 Legal limits, Mar. 31, 1977 Minimum Maximum Net demand: Reserve city banks......................................................................... 10 22 Other banks................................................................................... 7 14 3 10 1 For changes in reserve requirements beginning 1963, see Board’s (c) Member banks are required under the Board’s Regulation M to Annual Statistical Digest, 1971-1975 and for prior changes, see Board’s maintain reserves against foreign branch deposits computed on the basis Annual Report for 1975, Table 13. of net balances due from domestic offices to their foreign branches and 2 (a) Requirement schedules are graduated, and each deposit interval against foreign branch loans to U.S. residents. Loans aggregating $100,000 applies to that part of the deposits of each bank. Demand deposits or less to any U.S. resident are excluded from computations, as are total subject to reserve requirements are gross demand deposits minus cash loans of a bank to U.S. residents if not exceeding $1 million. Regulation D items in process of collection and demand balances due from domestic imposes a similar reserve requirement on borrowings from foreign banks banks. by domestic offices of a member bank. A reserve of 4 per cent is required (b) The Federal Reserve Act specifies different ranges of requirements for each of these classifications. for reserve city banks and for other banks. Reserve cities are designated 3 Negotiable orders of withdrawal (NOW) accounts and time deposits under a criterion adopted effective Nov. 9, 1972, by which a bank having such as Christmas and vacation club accounts are subject to the same net demand deposits of more than $400 million is considered to have the requirements as savings deposits. character of business of a reserve city bank. The presence of the head 4 The average of reserves on savings and other time deposits must be office of such a bank constitutes designation of that place as a reserve at least 3 per cent, the minimum specified by law. city. Cities in which there are F.R. Banks or branches are also reserve cities. Any banks having net demand deposits of $400 million or less Note.—Required reserves must be held in the form of deposits with are considered to have the character of business of banks outside of F.R. Banks or vault cash. reserve cities and are permitted to maintain reserves at ratios set for banks not in reserve cities. For details, see the Board’s Regulation D. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A10 Domestic Financial Statistics □ April 1977 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions Per cent per annum Commercial banks Savings and loan associations and mutual savings banks Type and maturity of deposit In effect Mar. 31, 1977 Previous maximum In effect Mar. 31, 1977 Previous maximum Per cent Effective Per cent Effective Per cent Effective Per cent Effective date date date date 1 Savings......................................................... 5 7/1/73 41/2 1/21/70 5% (4) 5 (5) 2 Negotiable order of withdrawal (NOW) accounts1....................................... 5 1/1/74 5 1/1/74 Time (multiple- and single-maturity unless otherwise indicated):2 30-89 days: 4 3 S M in u g lt l i e p -m le- a m tu a r t i u ty ri .. t . y .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . / 5 7/1/73 / \ 4 5 1/2 9 1 / / 2 2 6 1 / / 6 7 6 0 } (6) (6) 90 days to 1 year: 5 6 M Sin u g lt l i e p -m le- a m tu a r t i u ty ri .. t . y .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . } 5Vi 7/1/73 5 { 9 7 / / 2 2 6 0 / / 6 6 6 6 } 2534 (4) 51/4 1/21/70 7 8 2 1 t t o o 2 2 Y y i e a y r e s a 3 r . s . 3 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . } 6 7/1/73 I \ 5 53 Y /4 z 1 1 / / 2 2 1 1 / / 7 7 0 0 } 6i/2 (4) / \ 6 53 /4 1 1 / / 2 2 1 1 / / 7 7 0 0 9 2 Yz to 4 years...................................... 61/2 7/1/73 53/4 1/21/70 6% (4) 6 1/21/70 10 4 to 6 years.......................................... 71/4 11/1/73 C) 71/2 11/1/73 (7) 11 6 years or more................................... 71/2 12/23/74 7Y4 11/1/73 m 12/23/74 71/2 11/1/73 12 Governmental units (all maturities). 7% 12/23/74 7Yz 11/27/74 iiA 12/23/74 71/2 11/27/74 1 For authorized States only. Federally insured commercial banks, were limited to the 6Yi per cent ceiling on time deposits maturing in 2Yi savings and loan associations, cooperative banks, and mutual savings years or more. banks were first permitted to offer NOW accounts on Jan. 1, 1974. Effective Nov. 1, 1973, the present ceilings were imposed on certificates Authorization to issue NOW accounts was extended to similar institu maturing in 4 years or more with minimum denominations of $1,000. tions throughout New England on Feb. 27, 1976. There is no limitation on the amount of these certificates that banks can 2 For exceptions with respect to certain foreign time deposits see the issue. In December 1975, the Federal regulatory agencies removed the Federal Reserve Bulletin for October 1962 (p. 1279), August 1965 (p. minimum-denomination requirement on time deposits representing funds 1094), and February 1968 (p. 167). contributed to an individual retirement account (IRA) established pursuant 3 A minimum of $1,000 is required for savings and loan associations, to the Internal Revenue Code. Similar action was taken for Keogh (H.R. except in areas where mutual savings banks permit lower minimum de 10) plans in November 1976. nominations. This restriction was removed for deposits maturing in less than 1 year, effective Nov. 1, 1973. Note—Maximum rates that can be paid by Federally insured commer 4 July 1, 1973, for mutual savings banks; July 6, 1973, for savings and cial banks, mutual savings banks, and savings and loan associations are loan associations. established by the Board of Governors of the Federal Reserve System, 5 Oct. 1, 1966, for mutual savings banks; Jan. 21, 1970, for savings and the Board of Directors of the Federal Deposit Insurance Corporation, loan associations. and the Federal Home Loan Bank Board under the provisions of 12 6 No separate account category. CFR 217, 329, and 526, respectively. The maximum rates on time de 7 Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for posits in denominations of $100,000 or more were suspended in midcertificates maturing in 4 years or more with minimum denominations 1973. For information regarding previous interest rate ceilings on all of $1,000; however, the amount of such certificates that an institution types of accounts, see earlier issues of the Federal Reserve Bulletin, could issue was limited to 5 per cent of its total time and savings deposits. the Federal Home Loan Bank Board Journal, and the Annual Report Sales in excess of that amount, as well as certificates of less than $1,000, of the Federal Deposit Insurance Corporation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Policy Instruments All 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1976 1977 Type of transaction 1974 1975 1976 Aug. Sept. Oct. Nov. Dec. Jan. Feb. U.S. GOVT. SECURITIES Outright transactions (excl. matched salepurchase transactions) Treasury bills: 1 11,660 11,562 14,343 1,100 1,125 618 346 975 2,535 110 9 5,830 5,599 8,462 171 480 1,546 313 801 4,550 26,431 2 5,017 200 600 Others within 1 year:1 4 450 3,886 472 42 129 18 59 45 107 5 6 -1,183 -4 792 -1,525 -285 66 1,047 7 252 63 7 131 3,549 1 to 5 years: 8 797 2 3,284 2 3,202 301 580 113 681 475 348 q 177 10 -697 3,854 -2,588 -79 285 -66 430 — 7 -252 -880 5 to 10 years: 11 Gross purchases....................................... 434 1,510 1,048 72 272 62 170 128 151 12 Gross sales................................................ 13 Exchange or maturity shift 1,675 -4,697 1,572 1,354 -1,167 517 Over 10 years: 14 Gross purchases....................................... 196 1,070 642 65 95 73 119 48 81 15 Gross sales................................................ 16 Exchange or maturity shift ............... 205 848 225 250 -310 300 All maturities:1 17 Gross purchases....................................... 13,537 221,313 19,707 1,579 2,202 618 612 2,004 3,229 797 18 Gross sales............................................... 5,830 5,599 8,639 171 480 1,546 313 801 19 Redemptions............................................ 4,682 29,980 25,017 200 600 Matched sale-purchase transactions 20 Gross sales.................................................... 64,229 151,205 196,078 16,389 19,828 23,289 22,675 23,193 24,595 22,674 21 Gross purchases........................................... 62,801 152,132 196,579 16,180 19,563 24,501 21,525 24,343 22,544 23,447 Repurchase agreements 22 Gross purchases........................................... 71,333 140,311 232,891 26,641 24,108 16,603 17,612 30,872 23,820 13,853 23 Gross sales.................................................... 70,947 139,538 230,355 24,655 23,477 18,821 20,173 27,119 27,573 12,921 24 Net change in U.S. Govt, securities............... 1,984 7,434 9,087 3,357 2,397 -588 -4,179 5,361 -2,887 1,702 FEDERAL AGENCY OBLIGATIONS Outright transactions: 25 Gross purchases ..................................... 3,087 1,616 891 115 26 Gross sales.................................................... 27 Redemptions................................................ 322 246 169 27 22 14 63 4 24 Repurchase agreements: 28 Gross purchases........................................... 23,204 15,179 10,520 769 1,071 705 897 1,380 930 689 29 Gross sales.................................................... 22,735 15,566 10,360 674 889 949 976 1,102 1,208 612 BANKERS ACCEPTANCES 30 Outright transactions, net............................... 511 163 -545 -68 -55 -9 -9 8 -5 -18 31 Repurchase agreements, net........................... 420 -35 410 220 85 -492 -140 795 -795 149 32 Net change in total System Account........ 6,149 8,539 9,833 3,577 2,587 -1,332 -4,307 6,379 -3,969 1,886 1 Both gross purchases and redemptions include special certificates amounting to $189 million. Acquisition of these notes is treated as a created when the Treasury borrows directly from the Federal Reserve, purchase; the run-off of bills, as a redemption. as follows (millions of dollars): 1973, 1,187; 1974, 131; and 1975, 3,549. 2 In 1975, the System obtained $421 million of 2-year Treasury notes Note.—Sales, redemptions, and negative figures reduce holdings of in exchange for maturing bills. In 1976 there was a similar transaction the System Open Market Account; all other figures increase such holdings. Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A12 Domestic Financial Statistics □ April 1977 1.18 FEDERAL RESERVE BANKS Condition and F.R. Note Statements Millions of dollars 1977 1977 Account Mar. 2 Mar. 9 Mar. 16 Mar. 23 v Mar. 30^ Jan. Feb. Mar.p Consolidated condition statement ASSETS 1 Gold certificate account................................ 11,651 11,651 11,651 11,636 11,636 11,658 11,651 11,636 2 Special Drawing Rights certificate account. 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 3 Cash................................................................ 377 374 372 370 359 395 388 Loans: 4 Member bank borrowings............... 41 33 29 2,196 149 47 24 270 5 Other.................................................. Acceptances: 6 Bought outright................................. 177 174 171 161 155 191 173 154 7 Held under repurchase agreements. 149 299 149 126 Federal agency obligations: 8 Bought outright................................ 6,767 6,767 6,744 6,744 6,744 6,790 6,767 6,731 9 Held under repurchase agreements. 77 159 77 54 U.S. Govt, securities Bought outright: 10 Bills................................................ 39,376 36,590 34,280 38,478 39,735 38,742 38,826 39,170 11 Certificates—Special................... 12 Other....................... 13 Notes............................................ 48,920 48,920 48,920 49,181 49,181 48,619 48,920 49,181 14 Bonds............................................ 7,159 7,159 7,159 7,196 7,196 6,773 7,159 7,196 15 Total i............................................... 95,455 92,669 90,359 94,855 96,112 94,134 94,905 95,547 16 Held under repurchase agreements. 932 5,009 932 440 17 Total U.S. Govt, securities. 96,387 92,669 90,359 99,864 96,112 94,134 95,837 95,987 18 Total loans and securities.. 103,598 99,643 97,303 109,423 103,160 101,162 103,027 103,322 19 Cash items in process of collection... 10,013 8,997 10,401 8,147 8,543 5,995 6,378 7,306 20 Bank premises...................................... 370 372 373 374 373 366 371 372 21 Operating equipment........................... Other assets: 22 Denominated in foreign currencies. 44 44 50 51 58 222 62 61 23 All other............................................ 2,263 2,272 2,380 2,496 2,540 3,021 2,358 2,426 24 Total assets. 129,516 124,553 123,730 133,697 127,869 124,019 125,435 126,683 LIABILITIES 25 F.R. notes.......................................... 82,063 82,900 83,285 83,101 83,310 81,198 81,709 83,257 Deposits: 26 Member bank reserves................. 25,645 25,145 25,413 30,315 26,907 23,411 22,916 27,074 27 U.S. Treasury—General account. 11,614 7,082 4,274 10,764 7,769 11,397 12,179 7,150 28 Foreign.......................................... 277 249 243 261 288 383 362 349 29 Other 2............................................ 735 707 781 525 563 642 856 637 30 Total deposits. 38,271 33,183 30,711 41,865 35,527 35,833 36,313 35,210 31 Deferred availability cash items........... 6,152 5,399 6,543 5,385 5,606 3,513 3,783 4,759 32 Other liabilities and accrued dividends. 1,019 946 953 996 998 980 1,193 1,016 33 Total liabilities................................... 127,505 122,428 121,492 131,347 125,441 121,524 122,998 124,242 CAPITAL ACCOUNTS 34 Capital paid in....................................................... 989 989 990 991 990 986 989 991 35 Surplus................................................................... 983 983 983 983 983 983 983 983 36 Other capital accounts......................................i. 39 153 265 376 455 526 465 467 37 Total liabilities and capital accounts..................... 129,516 124,553 123,730 133,697 127,869 124,019 125,435 126,683 38 Memo: Marketable U.S. Govt, securities held in custody for foreign and inti, account............. 54,290 54,987 55,922 56,190 56,409 52,271 53,991 56,623 Federal Reserve note statement 39 F.R. notes outstanding (issued to Bank)............. 88,185 88,223 88,494 88,589 88,563 88,603 88,205 88,664 Collateral held against notes outstanding: 40 Gold certificate account..................................... 11,645 11,646 11,646 11,634 11,634 11,656 11,645 11,633 41 Special Drawing Rights certificate account.... 643 643 643 643 643 643 643 643 42 Acceptances........................................................ 43 U.S. Govt, securities.......................................... 78,030 78,030 78,130 78,130 78,130 78,100 78,030 78,130 44 Total collateral. 90,318 90,319 90,419 90,407 90,407 90,399 90,318 90,406 1 Includes securities loaned—fully guaranteed by U.S. Govt, securities 2 Includes certain deposits of domestic nonmember banks and foreignpledged with F.R. Banks—and excludes (if any) securities sold and owned banking institutions voluntarily held with member banks and scheduled to be bought back under matched sale-purchase transactions. redeposited in full with F.R. Banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Reserve Banks A13 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month Type and maturity 1977 1977 Mar. 2 Mar. 9 Mar. 16 Mar. 23 Mar. 30 Jan. 31 Feb. 28 Mar. 31 1 43 34 30 2,196 149 46 24 270 ?, Within 15 days..................................................... 37 27 30 2,192 145 44 19 267 3 16 days to 90 days ....................... 6 7 4 4 2 5 3 A Ql 1 326 174 171 460 155 191 322 280 6 167 22 19 320 22 39 169 147 7 106 98 102 93 90 95 106 90 8 91 days to 1 year.................................................. 53 54 50 47 43 57 47 43 9 U.S. Govt, securities................................................ 96,387 92,669 90,359 99,864 96,112 94,134 95,837 95,987 10 5,132 1,913 2,565 9,177 5,595 3,957 3,994 3,494 11 16 days to 90 days............................................... 20,996 19,703 16,832 19,562 20,422 18,096 20,962 20,422 12 91 days to 1 year.................................................. 24,640 25,434 25,343 25,248 24,218 26,979 25,362 25,928 13 Over 1 year to 5 years......................................... 30,401 30,401 30,401 30,575 30,575 30,933 30,401 30,841 14 Over 5 years to 10 years...................................... 9,841 9,841 9,841 9,888 9,888 9,173 9,841 9,888 15 Over 10 years....................................................... 5,377 5,377 5,377 5,414 5,414 4,996 5,377 5,414 16 Federal agency obligations....................................... 6,844 6,767 6,744 6,903 6,744 6,790 6,844 6,785 17 Within 15 days1................................................... 199 122 13 200 41 40 247 82 18 16 days to 90 days............................................... 171 239 296 268 268 330 171 268 19 91 days to 1 year.................................................. 1,139 1,071 1,169 1,178 1,178 1,037 1,091 1,178 20 Over 1 year to 5 years......................................... 3,358 3,358 3,300 3,291 3,291 3,361 3,358 3,291 21 Over 5 years to 10 years...................................... 1,217 1,217 1,206 1,206 1,206 1,281 1,217 1,206 22 Over 10 years........................................................ 760 760 760 760 760 741 760 760 1 Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. 1.20 DEMAND DEPOSIT ACCOUNTS Debits and Rate of Turnover Seasonally adjusted annual rates 1976 1977 Standard metropolitan statistical area 1973 1974 1975 Oct. Nov. Dec. Jan. Feb. Debits (billions of dollars)2 1 All 233 SMSA’s....................................................... 18,641.3 22,192.2 23,565.1 27,406.2 28,061.4 28,914.6 '29,286.7 30,143.3 2 New York City........................................................ 8,097.7 9,931.8 10,970.9 13,522.0 13,495.5 13,835.0 14,411.8 14,898.0 3 232 SMSA’s............................................................. 10,543.6 12,260.6 12,594.2 13,884.2 14,565.9 15,079.7 r14,874.9 15,245.3 4 6 leading SMSA’s other than N.Y.C.1.............. 4,462.8 5,152.7 4,937.5 5,447.9 5,693.2 5,917.1 5,864.3 5,887.1 5 226 others.............................................................. 6,080.8 7,107.9 7,661.8 8,436.3 8,872.7 9,162.6 r9,010.6 9,358.1 Turnover of deposits (annual rate) 6 All 233 SMSA’s....................................................... 110.2 128.0 131.0 146.4 147.2 153.3 154.3 153.3 7 New York City........................................................ 269.8 312.8 351.8 416.2 395.1 419.8 443.5 437.3 8 232 SMSA’s.............................................................. 75.8 86.6 84.7 89.8 93.1 r96.9 r94.5 93.8 9 6 leading SMSA’s other than N.Y.C.1.............. 115.0 131.8 118.4 126.6 131.7 136.9 r133.9 129.9 10 226 others.............................................................. 60.6 69.3 71.6 75.6 78.3 r81.5 r79.4 79.8 1 Boston, Philadelphia, Chicago, Detroit, San Francisco-Oakland, and Note.—Total SMSA’s includes some cities and counties not designated Los Angeles-Long Beach. as SMSA’s. 2 Excludes interbank and U.S. Govt, demand deposit accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A14 Domestic Financial Statistics □ April 1977 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars; averages of daily figures 1976 1977 1973 1974 1975 Dec. Dec. Dec. J Item Aug. Sept. Oct. Nov. Dec. Jan. Feb. Seasonally adjusted MEASURES i 1 M-l...................................................... 270.5 283.1 294.8 306.3 306.6 310.1 310.1 312.2 313.6 313.8 2 M-2...................................................... 571.4 612.4 664.3 710.5 716.5 725.9 732.0 739.7 745.4 749.6 3 M-3...................................................... 919.6 981.5 1,092.9 1,181.4 1,194.5 1.211.2 1,223.6 1,236.9 rl,248.5 1,257.4 4 M-4...................................................... 634.4 701.4 746.5 775.5 779.5 788.2 794.3 r802.9 808.4 812.8 5 M-5...................................................... 982.5 1,070.5 1,175.1 1,246.3 1,257.6 1,273.6 1,285.8 1,300.2 1,311.5 1,320.7 COMPONENTS 6 Currency.............................................. 61.5 67.8 73.7 78.6 79.2 79.9 80.3 80.7 81.3 82.0 Commercial bank deposits: 7 Demand........................................... 209.0 215.3 221.0 227.7 221A 230.3 229.8 231.6 232.3 231.8 8 Time and savings............................. 363.9 418.3 451.7 469.1 472.9 478.1 484.2 490.7 494.8 499.0 9 Negotiable CD’s2........................ 63.0 89.0 82.1 65.0 63.1 62.3 62.2 63.3 63.1 63.3 10 Other............................................ 300.9 329.3 369.6 404.1 409.9 415.8 421.9 427.4 431.8 435.8 11 Nonbank thrift institutions3.............. 348.1 369.1 428.6 470.9 478.0 485.3 491.6 497.3 503.1 507.9 Not seasonally adjusted MEASURES i 12 M-l...................................................... 278.3 291.3 303.2 303.3 304.6 309.0 312.1 321.1 319.5 309.7 13 M-2...................................................... 576.5 617.5 669.3 707.3 712.8 723.0 729.7 744.7 750.3 746.1 14 M-3...................................................... 921.8 983.8 1,094.6 1,178.6 1,189.2 1,205.5 1,216.5 1,237.7 1,250.9 1,252.3 15 M-4...................................................... 640.5 708.0 752.8 773.6 778.1 787.1 792.6 809.0 813.4 807.4 16 M-5...................................................... 985.8 1,074.3 1,178.1 1,244.9 1,254.5 1,269.7 1,279.4 1,302.0 'I,314.0 1,313.6 COMPONENTS 17 Currency............................................. 62.7 69.0 75.1 78.9 79.0 79.7 80.8 82.2 80.7 81.0 Commercial bank deposits: 18 Demand........................................... 215.7 222.2 228.1 224.4 225.6 229.3 231.2 239.0 238.8 228.8 19 Member....................................... 156.5 159.7 162.1 158.4 159.0 161.7 162.6 168.5 168.2 161.1 20 Domestic nonmember................ 56.3 58.5 62.6 r62.6 r63.5 r64.4 r65 .4 r66.9 r67.1 64.2 21 Time and savings............................. 362.2 416.7 449.6 470.3 473.5 478.2 480.5 487.8 493.9 497.6 22 Negotiable CD’s2....................... 64.0 90.5 83.5 66.3 65.3 64.2 62.9 64.3 63.1 61.3 23 Other........................................... 298.2 326.3 366.2 404.0 408.2 414.0 417.6 423.5 430.7 436.4 24 Nonbank thrift institutions3.............. 345.3 366.3 425.3 471.3 476.4 482.6 486.8 493.1 500.6 506.2 25 U.S. Govt, deposits (all commercial banks).......................................... 6.3 4.9 4.1 3.7 4.9 3.9 4.0 4.4 3.8 4.1 1 Composition of the money stock measures is as follows: M-4: M-2 plus large negotiable CD’s. M-5: M-3 plus large negotiable CD’s. M-l: Averages of daily figures for (1) demand deposits of commercial For a description of the latest revisions in the money stock measures’ banks other than domestic interbank and U.S. Govt., less cash items in see “Money Stock Measures Revisions” on pp. 305-306 of the March process of collection and F.R. float; (2) foreign demand balances at F.R. 1977 Bulletin. Banks; and (3) currency outside the Treasury, F.R. Banks, and vaults Latest monthly and weekly figures are available from the Board’s H.6 of commercial banks. release. Back data are available from the Banking Section, Division of M-2: M-l plus savings deposits, time deposits open account, and time Research and Statistics. certificates of deposits (CD’s) other than negotiable CD’s of $100,000 or 2 Negotiable time CD’s issued in denominations of $100,000 or more more of large weekly reporting banks. by large weekly reporting commercial banks. M-3: M-2 plus the average of the beginning and end-of-month deposits 3 Average of the beginning- and end-of-month figures for deposits of of mutual savings banks, savings and loan shares, and credit union shares mutual savings banks, for savings capital at savings and loan associations, (nonbank thrift). and for credit union shares. NOTES TO TABLE 1.23: 1 Adjusted to exclude domestic commercial interbank loans. As of Oct. 31, 1974, “Total loans and investments” of all commercial 2 Loans sold are those sold outright to banks’ own foreign branches, banks were reduced by $1.5 billion in connection with the liquidation nonconsolidated nonbank affiliates of the bank, the banks’ holding of one large bank. Reductions in other items were: “Total loans,” $1.0 company (if not a bank), and nonconsolidated nonbank subsidiaries of billion (of which $0.6 billion was in “Commercial and industrial loans”), the holding company. Prior to Aug. 28, 1974, the institutions included and “Other securities,” $0.5 billion. In late November “Commercial and had been defined somewhat differently, and the reporting panel of banks industrial loans” were increased by $0.1 billion as a result of loan re was also different. On the new basis, both “Total loans” and “Com classifications at another large bank. mercial and industrial loans” were reduced by about $100 million. 5 Data revised beginning Jan. 1976 to conform with June 1976 call 3 Reclassification of loans reduced these loans by about $1.2 billion report benchmarks. Complete revisions will be published in the Annual as of Mar. 31, 1976. Statistical Digest, 1972-1976. 4 Data beginning June 30, 1974, include one large mutual savings bank that merged with a nonmember commercial bank. As of that date Note.—Data are for last Wednesday of month except for June 30 there were increases of about $500 million in loans, $100 million in and Dec. 31; data are partly or wholly estimated except when June 30 “Other securities,” and $600 million in “Total loans and investments.” and Dec. 31 are call dates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Monetary Aggregates A15 1.22 AGGREGATE RESERVES AND DEPOSITS Member Banks Billions of dollars; averages of daily figures 1976 1977 Item 1973 1974 1975 Dec. Dec. Dec. July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Seasonally adjusted 1Reserves 1................................................................... 34.94 33.60 34.73 34.34 34.51 34.34 34.51 34.85 34.95 34.78 34.40 2 Nonborrowed......................................................... 33.64 35.87 34.60 34.21 34.41 34.27 34.41 34.78 34.90 34.71 34.33 3 Required................................................................. 34.64 36.34 r34.46 34.11 34.31 34.14 34.29 34.59 34.68 34.51 34.20 4 Deposits subject to reserve requirements 2................ 442.3 486.2 505.4 514.1 514.2 515.6 520.0 524.9 529.6 532.5 532.0 5 Time and savings................................................... ''279.2 322.1 337.9 343.5 341.7 343.3 346.2 350.2 355.0 357.3 360.1 Demand: 6 Private.................................................................. 158.1 160.6 164.5 167.9 168.6 168.7 170.4 170.7 171.4 172.5 169.5 7 U.S. Govt............................................................ 5.0 3.5 3.0 2.7 3.9 3.6 3.4 4.0 3.2 2.7 2.5 8 Deposits plus nondeposit items 3............................... 448.9 495.6 513.8 *•522.8 '523.1 '523.8 '529.0 '534.0 '538.8 '540.8 539.5 Not seasonally adjusted 9 Deposits subject to reserve requirements 2................ 447.5 491.8 510.9 513.9 511.3 514.9 518.9 522.5 534.8 537.7 528.7 10 Time and savings.................................................... 278.5 321.7 337.2 343.7 342.7 344.1 346.7 347.6 353.6 357.0 358.4 Demand: 11 Private................................................................. 164.0 166.6 170.7 167.7 165.9 167.2 169.5 171.9 177.9 177.8 167.2 12 U.S. Govt............................................................ 5.0 r3.4 3.1 2.5 2.7 3.6 '2.8 '3.0 3.3 2.9 3.1 13 Deposits plus nondeposit items 3............................... 454.0 500.1 519.3 r522.7 r520.2 '523.1 '527.9 '531.5 '544.0 546.0 '536.2 1 Series reflects actual reserve requirement percentages with no adjust deposits except those due to the U.S. Govt., less cash items in process of ment to eliminate the effect of changes in Regulations D and M. There collection and demand balances due from domestic commercial banks. are breaks in series because of changes in reserve requirements effective 3 “Total member bank deposits” subject to reserve requirements, plus Dec. 12, 1974; Feb. 13, May 22, and Oct. 30, 1975; and Jan. 8, 1976. Euro-dollar borrowings, loans sold to bank-related institutions, and In addition, effective Jan. 1, 1976, statewide branching in New York certain other nondeposit items. This series for deposits is referred to as was instituted. The subsequent merger of a number of banks raised “the adjusted bank credit proxy.” required reserves because of higher reserve requirements on aggregate deposits at these banks. Note.—Back data and estimates of the impact on required reserves 2 Includes total time and savings deposits and net demand deposits as and changes in reserve requirements are shown in Table 14 of the Board’s defined by Regulation D. Private demand deposits include all demand Annual Statistical Digest, 1971-1975. 1.23 LOANS AND INVESTMENTS All Commercial Banks Billions of dollars; last Wednesday of month except for June 30 and Dec. 31 1976 5 1977 1973 1974 4 1975 Dec. 31 Dec. 31 Dec. 31 Category Sept. 29 Oct. 27 Nov. 24 Dec. 31 Jan. 26 Feb. 23 Mar. 30 p V V P p p p Seasonally adjusted 1 Loans and investments1........................................ 633.4 690.4 721.1 759.8 767.6 773.8 774.9 780.5 790.1 797.1 2 Including loans sold outright2.......................... 637.7 695.2 725.5 763.7 771.4 777.6 778.7 784.5 794.0 801.1 Loans: 3 Total.................................................................... 449.0 500.2 496.9 517.9 525.8 528.4 528.1 535.0 539.3 545.3 4 Including loans sold outright2...................... 453.3 505.0 501.3 521.8 529.6 532.2 531.9 539.0 543.2 549.3 5 Commercial and industrial3............................. 156.4 183.3 176.0 174.4 177.2 179.3 178.8 179.9 181.4 183.0 6 Including loans sold outright2,3................... 159.0 186.0 178.5 176.9 179.6 181.7 181.2 182.5 184.0 185.7 Investments: 7 U.S. Treasury..................................................... 54.5 50.4 79.4 94.4 93.8 94.7 96.9 96.1 100.7 102.7 8 Other................................................................... 129.9 139.8 144.8 147.5 148.0 150.7 149.9 149.4 150.1 149.1 Not seasonally adjusted 9 Loans and investments1......................................... 647.3 705.6 737.0 760.2 765.9 773.5 792.0 778.8 783.8 795.2 10 Including loans sold outright............................ 651.6 710.4 741.4 764.1 769.7 777.3 795.8 782.8 787.7 799.2 Loans: 11 Total1.................................................................. 458.5 510.7 507.4 519.9 524.7 527.2 539.2 530.1 532.9 542.0 12 Including loans sold outright2...................... 462.8 515.5 511.8 523.8 528.5 531.0 543.0 534.1 536.8 546.0 13 Commercial and industrial3.............................. 159.4 186.8 179.3 174.9 176.6 178.6 182.2 177.9 179.6 182.9 14 Including loans sold outright2,3................... 162.0 189.5 181.8 177.4 179.0 181.0 184.6 180.5 182.2 185.6 Investments: 15 U.S. Treasury..................................................... 58.3 54.5 84.1 93.0 93.8 97.3 102.1 100.2 101.7 103.8 16 Other................................................................... 130.6 140.5 145.5 147.3 147.4 149.1 150.7 148.5 149.2 149.4 For notes see bottom of opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A16 Domestic Financial Statistics □ April 1977 1.24 COMMERCIAL BANK ASSETS AND LIABILITIES Last-Wednesday-of-Month Series Billions of dollars, except for number of banks 1975 19763 1977 Account Dec. 31 June July? Aug.P Sept.23 Oct.** Nov.p Dec.?3 Jan.P Feb.? Mar.P All commercial 1 Loans and investments............. 775.8 789.4 780.6 790.0 798.4 804.9 813.9 834.7 819.7 827.0 836.1 2 Loans, gross......................... 546.2 552.1 544.8 551.6 558.1 563.7 567.6 583.5 571.0 576.1 582.9 Investments: 3 U.S. Treasury securities . . 84.1 91.4 89.9 92.2 93.0 93.8 97.3 101.6 100.2 101.7 103.8 4 Other................................. 145.5 146.0 146.0 146.2 147.3 147.4 149.1 149.7 148.5 149.2 149.4 5 Cash assets............................... 133.6 128.4 110.8 108.6 118.0 114.5 123.8 128.0 117.0 123.5 119.3 6 Currency and coin............... 12.3 12.0 12.2 12.0 12.3 12.6 11.8 13.9 12.6 12.3 12.8 7 Reserves with F.R. Banks.. 26.8 28.2 28.0 25.4 29.8 26.4 29.1 29.9 28.6 28.6 26.9 8 Balances with banks............ 47.3 42.7 33.7 35.5 35.3 35.9 39.5 38.7 36.3 37.9 38.7 9 Cash items in process of collection.. 47.3 45.5 36.8 35.7 40.7 39.6 43.4 45.2 39.5 44.3 40.9 10 Total assets/total liabilities and capital i................................. 964.9 963.6 939.5 945.8 965.4 967.9 988.4 1,016.2 988.6 1,003.1 1,010.1 11 Deposits.................................... 786.3 788.5 765.2 763.5 777.3 892.0 793.4 816.4 796.6 804.8 812.9 Demand: 12 Interbank.......................... 41.8 38.5 32.8 33.1 34.9 34.4 39.6 38.8 35.4 36.6 37.6 13 U.S. Govt.......................... 3.1 4.6 3.5 3.6 5.7 3.6 3.2 3.3 3.8 3.6 2.9 14 Other................................. 278.7 268.2 251.8 248.8 254.3 259.5 262.3 277.1 258.6 262.4 261.1 Time: 15 12.0 10.7 10.2 9.7 9.6 9.2 9.1 9.2 8.9 8.7 9.0 16 Other................................... 450.6 466.4 466.9 468.3 473.0 475.2 479.2 487.9 490.0 493.5 502.1 17 Borrowings................................. 60.2 67.2 66.7 72.2 77.4 75.9 83.5 87.9 81.1 86.0 83.1 18 Total capital accounts2............. 69.1 74.6 72.5 72.9 73.5 74.0 74.4 75.4 75.9 76.3 76.7 19 Memo: Number of banks......... 14,633 14,643 14,636 14,650 14,656 14,660 14,674 14,671 14,667 14,688 14,688 Member 20 Loans and investments............... 578.6 580.8 572.3 580.3 585.7 590.7 597.6 614.9 600.9 605.9 611.8 21 Loans, gross........................... 416.4 414.4 407.5 412.9 417.2 421.6 424.1 437.5 426.3 429.9 434.6 Investments: 22 U.S. Treasury securities. .. 61.5 66.0 64.5 66.7 67.0 67.7 70.8 74.3 72.6 73.7 74.9 23 Other................................... 100.7 100.3 100.3 100.7 101.5 101.4 102.7 103.1 102.0 102.3 102.3 24 Cash assets, total....................... 108.5 105.9 92.3 89.4 98.9 94.9 103.0 107.6 97.7 102.8 100.0 25 Currency and coin................. 9.2 9.0 9.2 9.0 9.2 9.5 8.9 10.5 9.5 9.3 9.6 26 Reserves with F.R. Banks. . . 26.8 28.2 28.0 25.4 29.8 26.4 29.1 29.9 28.6 28.6 26.9 27 26.9 24.8 19.6 20.5 20.6 20.9 23.3 23.5 21.5 22.2 24.0 28 Cash items in process of collection.. 45.5 43.9 35.5 34.4 39.3 38.2 41.8 43.7 38.1 42.7 39.5 29 Total assets/total liabilities and capital i................................. 733.6 728.3 706.3 710.7 726.8 727.6 744.8 769.1 744.6 755.1 759.7 30 Deposits...................................... 590.8 586.2 565.2 562.3 573.9 576.1 584.8 604.6 587.0 592.0 598.1 Demand: 31 38.6 36.2 30.7 30.9 32.7 32.2 37.2 36.4 33.1 34.1 35.3 32 U.S. Govt........................... 3.2 3.7 2.7 2.8 4.3 2.9 2.4 2.5 3.0 2.7 2.1 33 Other................................... 210.8 202.0 188.7 185.9 191.0 194.7 196.0 208.6 193.7 196.6 195.9 Time: 34 10.0 8.6 8.2 7.6 7.5 7.1 7.0 7.2 6.8 6.6 6.9 35 Other.................................. 329.1 335.6 334.9 335.1 338.4 339.2 342.1 349.9 350.3 351.9 357.9 36 Borrowings................................. 53.6 60.5 60.3 65.9 70.6 69.1 76.4 80.4 73.6 78.0 75.3 37 52.1 56.2 55.1 55.4 55.7 56.2 56.6 57.3 57.7 57.9 58.1 38 Memo: Number of banks....... 5,788 5,777 5,768 5,772 5,774 5,769 5,767 5,759 5,739 5,740 5,740 1 Includes items not shown separately. Note.—Figures include all bank-premises subsidiaries and other sig Effective Mar. 31, 1976, some of the item “reserve for loan losses” nificant majority-owned domestic subsidiaries. and all of the item “unearned income on loans” are no longer reported Commercial banks: All such banks in the United States, including as liabilities. As of that date the “valuation” portion of “reserve for member and nonmember banks, stock savings banks, nondeposit trust loan losses” and the “unearned income on loans” have been netted companies, and U.S. branches of foreign banks, but excluding one na against “other assets,” and against “total assets” as well. tional bank in Puerto Rico and one in the Virgin Islands. Total liabilities continue to include the deferred income tax portion of Member banks: The following numbers of noninsured trust companies “reserve for loan losses.” that are members of the Federal Reserve System are excluded from mem 2 Effective Mar. 31, 1976, includes “reserves for securities” and the ber banks in Tables 1.24 and 1.25 and are included with noninsured banks contingency portion (which is small) of “reserve for loan losses.” in Table 1.25: 1974—June, 2; December, 3; 1975—June and December, 3 Figures partly estimated except on call dates. 4; 1976 (beginning month shown)—July, 5, December, 7; 1977-January 8. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Commercial Banks A17 1.25 COMMERCIAL BANK ASSETS AND LIABILITIES Call-Date Series Millions of dollars except for number of banks 1974 1975 1976 1974 1975 1976 Account Dec. 31 June 30 Dec. 31 June 30 Dec. 31 June 30 Dec. 31 June 30 Total insured National (all insured) 1 Loans and investments, Gross............................... 734,516 736,164 762,400 773,696 428,433 428,167 441,135 443,955 Loans: 2 Gross............................................................... 541,111 526,272 535,170 539,017 321,466 312,229 315,738 315,624 3 Net................................................................... (2) (2) (2) 520,970 (2) (2) (2) 305,275 Investments: 4 U.S. Treasury securities................................. 54,132 67,833 83,629 87.413 29,075 37,606 46,799 47,409 5 Other............................................................... 139,272 142,060 143,602 147,266 77,892 78,331 78,598 80,922 6 Cash assets.............................................................. 125,375 125,181 128,256 124,072 76,523 75,686 78,026 75,488 7 Total assets/total liabilities1.................................. 906,325 914,781 944,654 942,511 534,207 536,836 553,285 548,698 8 Deposits.................................................................. 741,665 746,348 775,209 776,957 431,039 431,646 447,590 444,251 Demand: 9 U.S. Govt....................................................... 4,799 3,106 3,108 4,622 2,437 1,723 1,788 2,858 10 Interbank........................................................ 42,587 41,244 40,259 37,503 23,497 21,096 22,305 20,329 11 Other.............................................................. 265,444 261,903 276,384 265,670 154,397 152,576 159,840 152,382 Time: 12 Interbank........................................................ 10,693 10,252 10,733 9,407 6,750 6,804 7,302 5,532 13 Other............................................................... 418,142 429,844 444,725 459,753 243,959 249,446 256,355 263,148 14 Borrowings............................................................. 55,988 59,310 56,775 63,824 39,603 41,954 40,875 45,184 15 Total capital accounts............................................ 63,039 65,986 68,474 68,990 35,815 37,483 38,969 39,504 16 Memo: Number of banks..................................... 14,216 14,320 14,372 14,373 4,706 4,730 4,741 4,747 State member (all insured) Insured nonmember 17 Loans and investments, Gross............................... 140,373 134,759 137,620 136,915 165,709 173,238 183,645 192,825 Loans: 18 Gross............................................................... 108.346 100,968 100,823 98,889 111,300 113,074 118,609 124,503 19 Net................................................................... (2) (2) (2) 96,036 (2) (2) (2) 119,658 Investments: 20 U.S. Treasury securities................................. 9,846 12,004 14,720 15,096 15,211 18,223 22,109 24,907 21 Other............................................................... 22,181 21,787 22,077 22,929 39,199 41,942 42,927 43,414 22 Cash assets.............................................................. 30,473 31,466 30,451 30,422 18,380 18,029 19,778 18,161 23 Total assets/total liabilities.................................... 181,683 179,787 180,495 179,644 190,435 198,157 210,874 214,167 24 Deposits.................................................................. 144,799 141,995 143,409 142,061 165,827 172,707 184,210 190,644 Demand: 25 U.S. Govt....................................................... 746 443 467 869 1,616 940 853 894 26 Interbank......................................................... 17,565 18,751 16,265 15,834 1,525 1,397 1,689 1,339 27 Other............................................................... 49,807 48,621 50,984 49,658 61,240 60,706 65,560 63,629 Time: 28 Interbank........................................................ 3,301 2,771 2,712 3,074 . 642 676 719 799 29 Other............................................................... 73,380 71,409 72,981 72,624 100,804 108,989 115,389 123,980 30 Borrowings.............................................................. 13,247 14,380 12,771 15,300 3,138 2,976 3,128 3,339 31 Total capital accounts............................................. 12,425 12,773 13,105 12,790 14,799 15,730 16,400 16,696 32 Memo: Number of banks..................................... 1,074 1,064 1,046 1,029 8,436 8,526 8,585 8,597 Noninsured nonmember Total nonmember 33 Loans and investments, Gross............................... 9,981 11,725 13,674 15,905 175,690 184,963 197,319 208,730 Loans: 34 Gross............................................................... 8,461 9,559 11,283 13,209 119,761 122,633 129,892 137,712 35 Net................................................................... (2) (2) (2) 13,092 (2) (2) (2) 132,751 Investments: 36 U.S. Treasury securities................................. 319 358 490 472 15,530 18,581 22,599 25,379 37 Other................................................................ 1,201 1,808 1,902 2,223 40,400 43,750 44,829 45,637 38 Cash assets.............................................................. 2,667 3,534 5,359 4,362 21,047 21,563 25,137 22,524 39 Total assets/total liabilities..................................... 13,616 16,277 20,544 21,271 204,051 214,434 231,418 235,439 40 Deposits.................................................................. 6,627 8,314 11,323 11,735 172,454 181,021 195,533 202,380 Demand: 41 U.S. Govt........................................................ 8 11 6 4 1,624 951 859 899 42 Interbank........................................................ 897 1,338 1,552 1,006 2,422 2,735 3,241 2,346 43 2,062 2,124 2,308 2,555 63,302 62,830 67,868 66,184 Time: 44 Interbank........................................................ 803 957 1,291 1,292 1,445 1,633 2,010 2,092 45 Other................................................................ 2,857 3,883 6,167 6,876 103,661 112,872 121,556 130,857 46 Borrowings.............................................................. 2,382 3,110 3,449 3,372 5,520 6,086 6,577 6,711 47 Total capital accounts............................................ 611 570 651 663 15,410 16,300 17,051 17,359 48 Memo: Number of banks..................................... 249 253 261 270 8,685 8,779 8,846 8,867 1 Includes items not shown separately. For Note see Table 1.24. 2 Not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A18 Domestic Financial Statistics □ April 1977 1.26 COMMERCIAL BANK ASSETS AND LIABILITIES Detailed Balance Sheet, June 30, 1976 Asset and liability items are shown in millions of dollars. M<ember banksi i All Insured Non- Asset account commercialcommercial Large banks member banks banks banks 1 Total All other New York City of Other City Chicago large 1Cash bank balances, items in process..................... 128,435 124,072 105,911 26,914 4,699 41,097 33,20i 22,524 2 Currency and coin............................................... 11,984 11,972 8,987 686 184 3,054 5,063 2,997 3 28,212 28,212 28,212 4,956 2,174 11,508 9,575 4 Demand balances with banks in United States.. 30,921 28,765 17,838 6,562 286 3,351 7,639 13,083 5 Other balances with banks in United States___ 6,833 6,041 3,818 93 7 1,478 2,240 3,015 6 Balances with banks in foreign countries.......... 4r948 3,623 3,179 327 33 1,767 1,052 1,769 7 Cash items in process of collection.................... 45,537 45,459 43,877 14,290 2,016 19,939 7,633 1,660 8 Total securities held—Book value........................... 235,836 233,184 165,113 18,349 7,553 53,364 85,847 70,723 9 U.S. Treasury....................................................... 91,420 90,948 66,013 9,209 3,766 22,163 30,875 25,408 10 Other U.S. Govt, agencies.................................. 34,264 33,729 20,706 996 348 5,880 13,482 13,558 11 States and political subdivisions......................... 102,994 102,694 74,465 7,718 3,225 24,322 39,201 28,529 12 All other securities.............................................. 6,995 5,701 3,849 425 214 970 2,239 3,146 n 162 113 80 30 50 83 14 Trading-account securities.................................... 5,795 5,745 5,654 2,612 678 2,103 261 141 15 U.S. Treasury................................................... 3,535 3,535 3,507 1,950 494 970 93 28 16 Other U.S. Govt, agencies............................... 665 665 659 244 44 342 28 6 17 States and political subdivisions..................... 1,043 1,043 1,025 316 80 557 73 17 18 All other trading acct. securities..................... 391 391 383 103 60 204 17 8 19 162 113 80 30 50 83 20 Bank investment portfolios................................... 230,041 227,439 159,460 15,737 6,875 51,261 85,586 70,582 21 U.S. Treasury................................................... 87,886 87,413 62,506 7,260 3,272 21,193 30,782 25,380 22 Other U.S. Govt, agencies............................... 33,600 33,064 20,047 752 304 5,538 13,454 13,552 23 States and political subdivisions..................... 101,952 101,651 73,440 7,403 3,145 23,764 39,128 28,512 24 All other portfolio securities........................... 6,604 5,310 3,466 323 155 766 2,223 3,138 25 F.R. stock and corporate stock............................. 1,539 1,495 1,244 248 78 470 448 295 26 Federal funds sold and securities resale agreement.. 36,120 34,262 26,819 1,929 1,150 14,110 9,630 9,300 27 Commercial banks................................................ 30,954 29,471 22,170 1,094 1,016 10,937 9,124 8,784 28 Brokers and dealers............................................. 2,658 2,459 2,376 180 108 1,703 384 283 29 Others................................................................... 2,507 2,333 2,273 655 26 1,470 123 234 30 Other loans, gross.................................................... 516,107 504,755 387,695 67,105 20,802 147,088 152,699 128,412 31 Less: Unearned income on loans....................... 12,000 11,941 8,286 471 81 2,824 4,910 3,714 32 Reserves for loan loss............................... 6,163 6,105 4,916 1,112 331 1,830 1,642 1,248 33 Other loans, net.................................................... 497,944 486,709 374,493 65,522 20,390 142,434 146,148 123,451 Other loans, gross, by category 34 Real estate loans.................................................. 141,964 141,737 100,545 8,693 1,988 36,933 52,930 41,419 35 Construction and land development.............. 16,568 16,562 13,586 3,119 532 6,352 3,584 2,981 36 Secured by farmland........................................ 6,355 6,344 2,717 2 14 288 2,413 3,638 37 Secured by residential...................................... 80,203 80,062 57,630 3,976 922 21,168 31,563 22,573 38 1- to 4-family residences............................... 75,826 75,692 54,450 3,563 821 20,034 30,032 21,376 39 FHA-insured or VA-guaranteed............. 8,297 8,262 7,150 533 52 3,958 2,607 1,147 40 Conventional............................................ 67,529 67,429 47,300 3,030 769 16,076 27,425 20,229 41 Multifamily residences.................................. 4,377 4,371 3,180 413 101 1,134 1,531 1,197 42 FHA-insured............................................ 412 411 321 121 25 99 77 90 43 Conventional............................................ 3,965 3,960 2,859 293 76 1,035 1,455 1,107 44 Secured by other properties............................. 38,839 38,769 26,612 1,596 521 9,125 15,370 12,227 45 Loans to financial institutions.............................. 41,609 36,645 34,684 12,206 4,548 14,980 2,949 6,925 46 To REIT’s and mortgage companies.............. 10,556 10,510 10,172 3,753 1,457 4,193 769 384 47 To domestic commercial banks....................... 5,182 3,201 2,527 806 138 1,215 369 2,655 48 To banks in foreign countries......................... 8,625 6,076 5,907 2,297 324 2,873 413 2,718 49 To other depositary institutions..................... 1,637 1,572 1,424 185 25 1,064 151 212 50 To other financial institutions......................... 15,608 15,285 14,652 5,165 2,605 5,635 1,248 956 51 Loans to security brokers and dealers............... 7,743 7,521 7,390 4,535 987 1,734 134 353 52 Other loans to purch./carry securities................ 4,032 4,018 3,373 428 314 1,720 911 659 53 Loans to farmers—except real estate................. 22,174 22,149 12,380 77 135 2,988 9,179 9,795 54 Commercial and industrial loans....................... 174,384 169,345 140,087 33,896 10,435 55,517 40,239 34,297 55 Loans to individuals............................................ 110,393 110,031 77,597 4,680 1,627 27,854 43,435 32,796 56 Instalment loans.................................................... 87,465 87,141 61,238 3,322 916 22,383 34,617 26,227 57 Passenger automobiles................................. 36,951 36,685 24,065 510 150 7,291 16,114 12,886 58 Residential-repair/modernize....................... 6,107 6,106 4,320 263 37 1,747 2,274 1,787 59 Credit cards and related plans.................... 12,196 12,193 10,746 1,127 534 6,112 2,973 1,450 60 Charge-account credit cards.................... 9,517 9,516 8,540 817 504 4,987 2,232 977 61 Check and revolving credit plans............ 2,680 2,677 2,206 310 30 1,125 741 473 62 Other retail consumer goods....................... 15,536 15,526 10,730 203 86 3,884 6,557 4,805 63 Mobile homes........................................... 8,720 8,719 6,238 112 33 2,300 3,792 2,483 64 Other.......................................................... 6,815 6,807 4,493 91 52 1,584 2,765 2,323 65 Other instalment loans................................. 16,675 16,630 11,376 1,219 109 3,350 6,698 5,299 66 Single-payment loans to individuals............... 22,927 22,891 16,358 1,358 711 5,471 8,818 6,569 67 All other loans...................................................... 13,807 13,309 11,639 2,589 766 5,362 2,922 2,168 68 Total loans and securities, net................................. 771,439 755,650 567,670 86,047 29,171 210,378 242,074 203,769 69 Direct lease financing.............................................. 4,675 4,675 4,455 983 128 2,714 630 221 70 Fixed assets—Buildings, furniture, real estate.... 18,585 18,484 13,902 1,626 611 5,605 6,060 4,683 71 Investment in unconsolidated subsidiaries............ 2,107 2,104 2,063 827 160 1,005 70 44 72 Customer acceptances outstanding......................... 10,682 10,316 9,990 5,278 517 3,924 271 692 73 Other assets.............................................................. 27,861 27,210 24,353 9,081 1,627 9,775 3,871 3,507 74 Total assets............................................................... 963,783 942,511 728,344 130,756 36,912 274,499 286,177 235,440 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Commercial Banks A19 1.26 Continued Member banks 1 All Insured Liability or capital commercialcommercial Large banks account banks banks Non Total member New York City of Other All other banks 1 City Chicago large 75 Demand deposits...................................................... 311,363 307,796 241,932 54,110 9,807 87,697 90,318 69,431 76 Mutual savings banks.......................................... 1,299 1,113 1,014 491 2 229 291 286 77 Other individuals, partnerships, and corporations................................................ 236,614 235,547 179,037 29,740 7,268 67,579 74,449 57,577 78 U.S. Govt.............................................................. 4,627 4,623 3,728 474 154 1,604 1,496 900 79 States and political subdivisions......................... 17,336 17,216 12,278 620 155 3,732 7,770 5,058 80 Foreign governments, central banks, etc............ 1,757 1,295 1,250 981 21 230 17 507 81 Commercial banks in United States................... 30,870 30,573 29,454 13,524 1,781 10,589 3,560 1,416 82 Banks in foreign countries.................................. 6,341 5,817 5,697 4,240 148 1,192 117 644 83 Certified and officers’ checks, etc........................ 12,520 11,612 9,477 4,038 278 2,542 2,619 3,043 84 Time deposits........................................................... 293,204 285,431 212,740 32,483 13,165 77,746 89,347 80,464 85 Accumulated for personal loan payments.......... 171 171 136 13 123 35 86 Mutual savings banks......................................... 481 458 445 266 7 135 36 36 87 Other individuals, partnerships, and corporations.................................................. 227,578 222,500 163,935 22,766 9,494 58,633 73,042 63,643 88 U.S. Govt............................................................. 678 678 550 77 1 251 220 128 89 States and political subdivisions......................... 43,942 43,653 30,739 803 1,106 13,711 15,121 13,203 90 Foreign governments, central banks, etc............ 10,143 9,029 8,778 5,255 1,295 2,187 41 1,366 91 Commercial banks in United States................... 8,082 7,522 6,797 2,613 1,162 2,337 685 1,285 92 Banks in foreign countries.................................. 2,129 1,419 1,360 702 100 478 80 769 93 Savings deposits........................................................ 184,126 183,730 131,640 8,752 2,715 48,362 71,811 52,486 94 Individuals and nonprofit organizations............ 175,381 174,995 125,270 8,332 2,611 45,993 68,334 50,111 95 Corporations and other profit organizations... 6,049 6,043 4,521 262 95 1,982 2.182 1,529 96 U.S. Govt.............................................................. 2,648 2,645 1,805 130 9 376 i;290 843 97 All other................................................................ 47 47 44 28 11 4 4 98 Total deposits........................................................... 788,693 776,957 586,312 95,345 25,687 213,805 251,476 202,381 99 Federal funds purchased and securities sold under agreements to repurchase............................... 60,719 58,944 55,906 11,224 7,215 29,308 8,158 4,813 100 Commercial banks............................................. 35,182 33,936 32,667 6,445 4,883 17,374 3,965 2,514 101 Brokers and dealers........................................... 8,053 7,976 7,512 735 1,073 4,903 801 542 102 Others................................................................. 17,484 17,031 15,727 4,045 1,259 7,032 3,392 1,757 103 Other liabilities for borrowed money................... 6,478 4,881 4,579 2,243 80 1,806 450 1,899 104 Mortgage indebtedness.......................................... 789 787 577 53 16 316 192 212 105 Bank acceptances outstanding.............................. 11,287 10,917 10,591 5,854 525 3,938 274 696 106 Other liabilities...................................................... 21,262 16,198 14,148 4,736 892 5,575 2,945 7,114 107 Total liabilities........................................................ 889,228 868,684 672,114 119,456 34,415 254,749 263,495 217,114 108 Subordinated notes and debentures..................... 4,901 4,837 3,935 1,099 83 1,752 1,001 966 109 Equity capital......................................................... 69,655 68,991 52,295 10,201 2,414 17,998 21,681 17,360 110 Preferred stock................................................... 81 75 34 10 24 47 Ill Common stock................................................... 15,963 15,843 11,723 2,264 570 3,894 4,995 4,239 112 Surplus................................................................ 27,903 27,648 20,676 3,966 1,155 7,509 8,047 7,226 113 Undivided profits............................................... 23,842 23,630 18,566 3,858 645 6,154 7,909 5,276 114 Other capital reserves........................................ 1,867 1,794 1,296 114 44 431 706 571 115 Total liabilities and equity capital......................... 963,783 942,511 728,344 130,756 36,912 274,499 286,177 235,440 116 Memo: Demand deposits adjusted 2..................... 230,329 227,142 164,874 25,822 5,857 55,566 77,629 65,455 Average for last 15 or 30 days: 117 Cash and due from bank................................... 123,703 119,246 102,291 26,314 4,360 39,625 31,992 21,412 118 Federal funds sold and securities purchased under agreements to resell......................... 38,280 35,632 27,149 2,253 1,341 13,353 10,202 11,131 119 Total loans.......................................................... 502,155 490,759 377,741 66,363 20,569 143,388 147,421 124,414 120 Time deposits of $100,000 or more.................. 146,166 140,300 115,892 29,258 10,747 48,444 27,443 30,275 121 Total deposits..................................................... 775,140 763,837 574,789 89,888 25,003 209,900 249,999 200,350 122 Federal funds purchased and securities sold under agreements to repurchase................ 64,655 62,022 58,970 14,334 7,184 29,212 8,240 5,695 123 Other liabilities for borrowed money................ 6,485 4,782 4,474 2,064 87 1,957 367 2,011 124 Standby letters of credit outstanding................... 10,950 10,535 9,927 5,289 954 3,043 641 1,023 125 Time deposits of $100,000 or more...................... 146,783 141,105 117,342 28,910 11,159 49,561 27,712 29,441 126 Certificates of deposit........................................ 122,071 118,464 97,455 24,503 8,937 39,866 24,149 24,616 127 Other time deposits............................................ 24,712 22,641 19,887 4,407 2,221 9,696 3,563 4,825 128 Number of banks.................................................. 14,643 14,373 5,776 11 9 155 5,601 8,867 1 Member banks exclude and nonmember banks include 5 noninsured Note.—Data include consolidated reports, including figures for all trust companies that are members of the Federal Reserve System, and bank-premises subsidiaries and other significant majority-owned do member banks exclude 2 national banks outside the continental United mestic subsidiaries. Securities are reported on a gross basis before deduc States. tions of valuation reserves. Holdings by type of security will be reported 2 Demand deposits adjusted are demand deposits other than domestic as soon as they become available. commercial interbank and U.S. Govt., less cash items reported as in Back data in lesser detail were shown in previous Bulletins. Details process of collection. may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A20 Domestic Financial Statistics □ April 1977 1.27 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS Assets and Liabilities Millions of dollars, Wednesday figures 1977 Account Feb. 9 Feb. 16 Feb. 23 Mar. 2 Mar. 9 Mar. 16 Mar. 23 Mar. 30 1Total loans and investments..................................... 404,696 408,189 406,996 409,782 412,780 416,040 409,678 410,064 Loans: 2 Federal funds sold1.............................................. 20,082 21,317 21,281 21,703 23,990 23,769 20,589 21,648 3 To commercial banks...................................... 15,906 16,862 17,117 16,934 18,337 16,922 16,116 16,276 To brokers and dealers involving— 4 U.S. Treasury securities............................... 2,223 2,536 2,089 2,507 3,163 3,884 2,488 2,757 5 Other securities............................................ 827 911 1,076 1,080 1,170 1,036 451 662 6 1,126 1,008 999 1,182 1,320 1,927 1,534 1,953 7 Other, gross.......................................................... 284,798 285,987 285,368 287,263 286,819 289,683 287,931 288,131 8 Commercial and industrial............................. 114,851 115,035 115,451 116,198 116,325 117,060 117,099 116,774 9 4,187 4,174 4,165 4,191 4,223 4,245 4,251 4,268 For purchasing or carrying securities: To brokers and dealers: 10 U.S. Treasury securities........................... 1,417 1,257 1,283 1,317 1,596 2,520 1,125 1,362 11 Other securities......................................... 7,832 8,474 7,575 7,728 7,656 7,892 7,513 7,719 To others: 12 U.S. Treasury securities........................... 75 77 75 71 70 71 69 72 13 2,540 2,520 2,512 2,510 2,514 2,528 2,518 2,527 To nonbank financial institutions: 14 Personal and sales finance cos., etc............. 7,071 7,001 6,972 7,102 7,132 7,263 7,293 7,248 15 16,128 16,006 15,837 15,861 15,907 15,910 15,767 15,784 16 Real estate........................................................ 64,136 64,381 64,463 64,496 64,503 64,824 64,930 64,948 To commercial banks: 17 1,761 1,813 1,843 1,982 1,956 2,082 2,064 2,062 18 Foreign.......................................................... 5,591 5,845 5,828 5,894 5,668 5,684 5,492 5,450 19 Consumer instalment....................................... 39,382 39,457 39,472 39,545 39,492 39,516 39,591 39,755 20 Foreign governments, official institutions, etc.. 1,897 1,888 1,861 1,828 1,768 1,757 1,828 1,859 21 All other loans.................................................. 17,930 18,059 18,031 18,540 18,009 18,331 18,391 18,303 22 Less : Loan loss reserve and unearned income on loans............................................................... 8,613 8,674 8,687 8,685 8,734 8,773 8,783 8,679 23 Other loans, net.................................................... 276,185 277,313 276,681 278,578 278,085 280,910 279,148 279,452 Investments: 24 U.S. Treasury securities....................................... 48,147 49,238 48,752 49,645 50,651 50,691 49,872 48,890 25 Bills.................................................................... 10,993 10,534 10,189 10,216 10,750 10,859 10,442 9,790 Notes and bonds, by maturity: 26 Within 1 year................................................ 7,654 7,694 7,805 8,060 8,054 8,046 8,101 7,923 27 1 to 5 years.................................................... 25,512 26,913 26,810 27,594 28,090 27,901 27,690 27,431 28 After 5 years................................................. 3,988 4,097 3,948 3,775 3,757 3,885 3,639 3,746 29 Other securities..................................................... 60,282 60,321 60,282 59,856 60,054 60,670 60,069 60,074 Obligations of States and political subdivisions: 30 Tax warrants, short-term notes, and bills........................................................ 6,485 6,297 6,227 6,190 6,234 6,607 6,365 6,190 31 40,114 40,177 40,319 40,088 40,185 40,538 40,287 40,456 Other bonds, corporate stocks, and securities: 32 Certificates of participation2....................... 2,218 2,182 2,147 2,154 2,206 2,214 2,276 2,297 33 All other, including corporate stocks......... 11,465 11,665 11,589 11,424 11,429 11,311 11,141 11,131 34 Cash items in process of collection........................ 31,676 35,372 38,696 38,300 32,126 37,776 35,642 35,947 35 Reserves with F.R. Banks....................................... 23,029 20,987 22,129 19,670 18,934 19,418 23,786 21,399 5,265 5,447 5,656 5,343 5,283 5,582 5,735 5,863 37 Balances with domestic banks................................. 10,922 12,063 12,279 13,479 12,665 12,620 12,126 14,375 38 Investments in subsidiaries not consolidated........ 2,535 2,515 2,507 2,506 2,522 2,579 2,543 2,530 39 Other assets.............................................................. 51,819 49,773 50,534 51,375 50,421 51,181 51,485 51,878 40 Total assets/total liabilities...................................... 529,942 534,346 538,797 540,455 534,731 545,196 540,995 542,056 Deposits: 41 Demand deposits................................................... 162,147 167,657 169,719 173,207 164,326 178,073 167,195 170,095 42 Individuals, partnerships, and corporations.. 120,055 121,973 122,817 124,820 120,164 126,723 121,706 122,736 43 States and political subdivisions..................... 6,046 6,161 6,199 6,223 5,603 5,969 6,315 5,739 44 U.S. Govt.......................................................... 1,255 1,983 1,673 1,314 1,252 6,856 1,126 1,060 Domestic interbank: 45 21,229 23,787 24,854 25,902 23,813 24,610 23,552 26,193 46 Mutual savings.............................................. 796 802 789 860 821 842 722 754 Foreign: 47 Governments, official institutions, etc......... 869 793 1,116 1,302 1,160 868 1,019 1,146 48 5,624 5,773 5,925 5,847 5,684 5,721 5,484 5,848 49 Certified and officers’ checks........................... 6,273 6,385 6,346 6,939 5,829 6,484 7,271 6,619 50 Time and savings deposits3................................... 231,523 230,765 230,274 230,610 231,890 231,912 233,261 234,313 Individuals, partnerships, and corporations: 51 92,038 92,101 92,387 92,716 93,337 93,723 94,119 94,628 52 105,476 104,748 104,239 104,539 104,974 104,568 105,507 105,976 53 States and political subdivisions..................... 19,991 20,076 20,068 19,930 20,038 19,908 20,038 20,055 54 5,410 5,323 5,169 5,097 5,183 5,352 5,311 5,420 55 Foreign governments, official institutions, etc. 7,293 7,179 7,058 6,939 6,948 6,950 6,876 6,837 67,003 65,721 69,062 66,331 68,637 64,690 67,909 61,211 Borrowings from: 57 F.R. Banks........................................................... 58 705 50 10 7 5 2,081 109 58 3,995 4,093 4,177 3,696 3,693 3,804 3,945 3,925 59 Other liabilities, etc.5.............................................. 23,344 23,659 23,785 24,743 24,223 24,842 24,722 24,512 60 Total equity capital and subordinated notes/debentures6............................................. 41,782 41,746 41,730 41,858 41,955 41,870 41,882 41,825 1 Includes securities purchased under agreements to resell. 5 Includes minority interest in consolidated subsidiaries and deferred 2 Federal agencies only. tax portion of reserves for loans. 3 Includes U.S. Govt, and foreign bank deposits not shown separately. 6 Includes reserves for securities and contingency portion of reserves 4 Includes securities sold under agreements to repurchase. for loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Weekly Reporting Banks A21 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1977 Account Feb. 9 Feb. 16 Feb. 23 Mar. 2 Mar. 9 Mar. 16 Mar. 23 Mar. 30 1Total loans and investments........................................ 88,435 89,938 88,967 90,432 90,398 91,896 88,562 89,235 Loans: 2 Federal funds sold 1.............................................. 2,608 3,125 2,852 3,141 2,899 3,393 3,135 4,043 3 To commercial banks....................................... 1,664 1,925 1,694 1,637 1,478 2,026 2,000 2,221 To brokers and dealers involving— 4 U.S. Treasury securities............................... 302 568 308 615 725 717 494 641 5 Other securities............................................. 388 369 346 503 554 413 0 145 6 To others.......................................................... 254 263 504 386 142 237 641 1,036 7 Other, gross.......................................................... 67,433 68,031 67,437 68,159 67,868 69,410 66,839 67,206 8 Commercial and industrial.............................. 33,642 33,577 33,641 34,045 33,982 34,170 33,897 33,939 9 Agricultural...................................................... 122 115 113 113 115 120 121 121 For purchasing or carrying securities: To brokers and dealers: 10 U.S. Treasury securities........................... 1,192 1,071 1,097 1,145 1,427 2,158 896 1,154 11 Other securities........................................ 4,435 4,912 4,291 A,211 4,206 A,611 4,080 4,210 To others: 12 U.S. Treasury securities........................... 13 13 13 12 12 12 11 11 13 Other securities......................................... 382 378 374 374 374 373 371 372 To nonbank financial institutions: 14 Personal and sales finance cos., etc............. 2,357 2,315 2,314 2,396 2,422 2,508 2,433 2,492 15 Other.............................................................. 5,354 5,317 5,262 5,240 5,255 5,231 5,174 5,129 16 Real estate........................................................ 8,923 8,991 8,990 8,955 8,953 8,979 8,991 8,924 To commercial banks: 17 Domestic....................................................... 471 553 602 646 726 718 628 628 18 Foreign.......................................................... 2,429 2,629 2,670 2,768 2,603 2,583 2,416 2,397 19 Consumer instalment....................................... 4,034 4,037 4,040 4,045 4,045 4,018 3,998 3,977 20 Foreign governments, official institutions, etc. 470 474 459 405 374 403 366 426 21 All other loans.................................................. 3,609 3,649 3,571 3,738 3,374 3,460 3,457 3,426 22 Less : Loan loss reserve and unearned income on loans..................................................... 1,660 1,685 1,687 1,706 1,720 1,720 1,697 1,618 23 Other loans, net.................................................... 65,773 66,346 65,750 66,453 66,148 67,690 65,142 65,588 Investments: 24 U.S. Treasury securities....................................... 11,494 11,836 11,798 12,315 12,775 12,232 11,877 11,230 25 Bills................................................................... 3,128 2,917 2,985 3,081 3,549 3,279 3,064 2,602 Notes and bonds, by maturity: 26 Within 1 year................................................ 742 639 657 817 831 868 889 868 27 1 to 5 years................................................... 6,783 7,273 7,309 7,622 7,677 7,266 7,227 7,078 28 After 5 years................................................. 841 1,007 847 795 718 819 697 682 29 Other securities..................................................... 8,560 8,631 8,567 8,523 8,576 8,581 8,408 8,374 Obligations of States and political subdivisions: 30 Tax warrants, short-term notes, and bills.. 926 929 909 893 869 939 995 843 31 All other........................................................ 5,967 6,019 6,040 5,954 5,974 6,063 5,936 5,975 Other bonds, corporate stocks, and securities: 32 Certificates of participation2....................... 235 221 222 220 220 220 220 220 33 All other, including corporate stocks......... 1,432 1,462 1,396 1,456 1,513 1,359 1,257 1,336 34 Cash items in process of collection........................ 11,210 11,725 12,475 11,854 10,316 12,355 13,398 13,596 35 Reserves with F.R. Banks....................................... 7,556 6,373 6,080 5,353 6,081 5,128 6,048 5,386 36 Currency and coin................................................... 775 784 803 763 815 892 913 921 37 Balances with domestic banks................................. 4,760 5,528 5,267 6,603 5,869 5,473 5,739 6,757 38 Investments in subsidiaries not consolidated........ 1,166 1,167 1,173 1,184 1,157 1,190 1,191 1,165 39 Other assets.................................................................... 19,019 17,450 17,262 17,820 17,012 17,424 17,901 17,545 40 Total assets/total liabilities.......................................... 132,921 132,965 132,027 134,009 131,648 134,358 133,752 134,605 Deposits: 41 Demand deposits................................................... 46,228 47,074 47,879 49,478 46,048 51,125 48,958 49,793 42 Individuals, partnerships, and corporations.. 27,566 26,960 27,325 27,903 26,011 28,880 27,671 21,621 43 States and political subdivisions..................... 676 629 620 543 511 657 733 500 44 U.S. Govt.......................................................... 131 294 180 106 81 1,994 158 102 Domestic interbank: 45 Commercial.................................................. 9,450 10,636 10,866 11,743 11,069 11,102 10,841 12,494 46 Mutual savings............................................. 426 406 401 419 419 436 347 381 Foreign: 47 Governments, official institutions, etc......... 635 579 870 1,057 925 657 800 912 48 Commercial banks....................................... 4,231 4,517 4,599 4,498 4,385 4,337 4,192 4,510 49 Certified and officers’ checks........................... 3,113 3,053 3,018 3,209 2,647 3,062 4,216 3,267 50 Time and savings deposits3................................... 42,844 42,371 41,955 41,881 41,875 41,609 41,748 42,163 Individuals, partnerships, and corporations: 51 Savings.......................................................... 10,548 10,602 10,609 10,701 10,739 10,767 10,773 10,920 52 Other............................................................. 23,877 23,410 23,090 23,143 23,065 22,753 23,083 23,190 53 States and political subdivisions..................... 1,127 1,208 1,220 1,176 1,193 1,219 1,219 1,333 54 Domestic interbank.......................................... 2,390 2,306 2,227 2,096 2,091 2,109 2,003 2,099 55 Foreign governments, official institutions, etc. 4,153 4,105 4,065 4,003 4,025 3,997 3,910 3,861 56 Federal funds purchased, etc.4............................... 19,373 18,070 17,502 18,121 19,619 16,978 17,275 18,018 Borrowings from: 57 F.R. Banks............................................................ 0 685 50 0 0 0 1,107 0 58 Others.................................................................. 2,125 2,184 2,178 1,846 1,791 1,650 1,729 1,861 59 Other liabilities, etc.5.............................................. 10,472 10,683 10,559 10,778 10,401 11,087 11,015 10,841 60 Total equity capital and subordinated notes/debentures 6............................................. 11,879 11,898 11,904 11,905 11,914 11,909 11,920 11,929 1 Includes securities purchased under agreements to resell. 5 Includes minority interest in consolidated subsidiaries and deferred 2 Federal agencies only. tax portion of reserves for loans. 3 Includes U.S. Govt, and foreign bank deposits not shown sepa- 6 Includes reserves for securities and contingency portion of reserves ately. for loans. 4 Includes securities sold under agreements to repurchase. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A22 Domestic Financial Statistics □ April 1977 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS OUTSIDE NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1977 Account Feb. 9 Feb. 16 Feb. 23 Mar. 2 Mar. 9 Mar. 16 Mar. 23 Mar. 30 1Total loans and investments..................................... 316,261 318,251 318,029 319,350 322,382 324,144 321,116 320,829 Loans: 2 17,474 18,192 18,429 18,562 21,091 20,376 17,454 17,605 3 To commercial banks....................................... 14,242 14,937 15,423 15,297 16,859 14,896 14,116 14,055 To brokers and dealers involving— 4 U.S. Treasury securities............................... 1,921 1,968 1,781 1,892 2,438 3,167 1,994 2,116 5 Other securities............................................. 439 542 730 577 616 623 451 517 6 To others.......................................................... 872 745 495 796 1,178 1,690 893 917 7 Other, gross.......................................................... 217,365 217,956 217,931 219,104 218,951 220,273 221,092 220,925 8 Commercial and industrial.............................. 81,209 81,458 81,810 82,153 82,343 82,890 83,202 82,835 9 Agricultural...................................................... 4,065 4,059 4,052 4,078 4,108 4,125 4,130 4,147 For purchasing or carrying securities: To brokers and dealers: 10 U.S. Treasury securities........................... 225 186 186 172 169 362 229 208 11 Other securities......................................... 3,397 3,562 3,284 3,451 3,450 3,215 3,433 3,509 To others: 12 U.S. Treasury securities........................... 62 64 62 59 58 59 58 61 13 Other securities......................................... 2,158 2,142 2,138 2,136 2,140 2,155 2,147 2,155 To nonbank financial institutions: 14 Personal and sales finance cos., etc............. 4,714 4,686 4,658 4,706 4,710 4,755 4,860 4,756 15 Other............................................................. 10,774 10,689 10,575 10,621 10,652 10,679 10,593 10,655 16 Real estate........................................................ 55,213 55,390 55,473 55,541 55,550 55,845 55,939 56,024 To commercial banks: 17 Domestic....................................................... 1,290 1,260 1,241 1,336 1,230 1,364 1,436 1,434 18 3,162 3,216 3,158 3,126 3,065 3,101 3,076 3,053 19 Consumer instalment....................................... 35,348 35,420 35,432 35,500 35,447 35,498 35,593 35,778 20 Foreign governments, official institutions, etc. 1,427 1,414 1,402 1,423 1,394 1,354 1,462 1,433 21 All other loans.................................................. 14,321 14,410 14,460 14,802 14,635 14,871 14,934 14,877 22 Less : Loan reserve and unearned income on loans.................................................... 6,953 6,989 7,000 6,979 7,014 7,053 7,086 7,061 23 210,412 210,967 210,931 212,125 211,937 213,220 214,006 213,864 Investments: 24 U.S. Treasury securities........................................ 36,653 37,402 36,954 37,330 37,876 38,459 37,995 37,660 25 Bills.................................................................... 7,865 7,617 7,204 7,135 7,201 7,580 7,378 7,188 Notes and bonds, by maturity: 26 Within 1 year................................................ 6,912 7,055 7,148 7,243 7,223 7,178 7,212 7,055 27 1 to 5 years.................................................... 18,729 19,640 19,501 19,972 20,413 20,635 20,463 20,353 28 After 5 years................................................. 3,147 3,090 3,101 2,980 3,039 3,066 2,942 3,064 29 Other securities..................................................... 51,722 51,690 51,715 51,333 51,478 52,089 51,661 51,700 Obligations of States and political subdivisions: 30 Tax warrants, short-term notes, and bills.. 5,559 5,368 5,318 5,297 5,365 5,668 5,370 5,347 31 All other........................................................ 34,147 34,158 34,279 34,134 34,211 34,475 34,351 34,481 Other bonds, corporate stocks, and securities: 32 Certificates of participation2....................... 1,983 1,961 1,925 1,934 1,986 1,994 2,056 2,077 33 All other, including corporate stocks......... 10,033 10,203 10,193 9,968 9,916 9,952 9,884 9,795 34 Cash items in process of collection......................... 20,466 23,647 26,221 26,446 21,810 25,421 22,244 22,351 35 Reserves with F. R. Banks...................................... 15,473 14,614 16,049 14,317 12,853 14,290 17,738 16,013 36 Currency and coin.................................................... 4,490 4,663 4,853 4,580 4,468 4,690 4,822 4,942 37 Balances with domestic banks................................. 6,162 6,535 7,012 6,876 6,796 7,147 6,387 7,618 38 Investments in subsidiaries not consolidated........ 1,369 1,348 1,334 1,322 1,365 1,389 1,352 1,365 39 Other assets.............................................................. 32,800 32,323 33,272 33,555 33,409 33,757 33,584 34,333 40 Total assets/total liabilities....................................... 397,021 401,381 406,770 406,446 403,083 410,838 407,243 407,451 Deposits: 41 Demand deposits.................................................... 115,919 120,583 121,840 123,729 118,278 126,948 118,237 120,302 42 Individuals, partnerships, and corporations.. 92,489 95,013 95,492 96,917 94,153 97,843 94,035 95,109 43 States and political subdivisions..................... 5,370 5,532 5,579 5,680 5,092 5,312 5,582 5,239 44 U.S. Govt.......................................................... 1,124 1,689 1,493 1,208 1,171 4,862 968 958 Domestic interbank: 45 Commercial.................................................. 11,779 13,151 13,988 14,159 12,744 13,508 12,711 13,699 46 Mutual savings............................................. 370 396 388 441 402 406 375 373 Foreign: 47 Governments, official institutions, etc......... 234 214 246 245 235 211 219 234 48 Commercial banks....................................... 1,393 1,256 1,326 1,349 1,299 1,384 1,292 1,338 49 Certified and officers’ checks........................... 3,160 3,332 3,328 3,730 3,182 3,422 3,055 3,352 50 188,679 188,394 188,319 188,729 190,015 190,303 191,513 192,150 Individuals, partnerships, and corporations: 51 Savings.......................................................... 81,490 81,499 81,778 82,015 82,598 82,956 83,346 83,708 52 81,599 81,338 81,149 81,396 81,909 81,815 82,424 82,786 53 States and political subdivisions..................... 18,864 18,868 18,848 18,754 18,845 18,689 18,819 18,722 54 Domestic interbank.......................................... 3,020 3,017 2,942 3,001 3,092 3,243 3,308 3,321 55 Foreign governments, official institutions, etc. 3,140 3,074 2,993 2,936 2,923 2,923 2,966 2,976 56 Federal funds purchased, etc.4............................... 47,630 47,651 51,560 48,210 49,018 47,712 50,634 49,259 Borrowings from: 57 F. R. Banks.......................................................... 58 20 0 10 7 5 974 109 58 Others.................................................................... 1,870 1,909 1,999 1,850 1,902 2,154 2,216 2,064 59 Other liabilities, etc. 5.............................................. 12,872 12,976 13,226 13,965 13,822 13,755 13,707 13,671 60 Total equity capital and subordinated notes/debentures 6............................................. 29,993 29,848 29,826 29,953 30,041 29,961 29,962 29,896 1 Includes securities purchased under agreements to resell. 5 Includes minority interest in consolidated subsidiaries and deferred 2 Federal agencies only. tax portion of reserves for loans. 3 Includes U.S. Govt, and foreign bank deposits not shown sepa 6 Includes reserves for securities and contingency portion of reserves rately. for loans. 4 Includes securities sold under agreements to repurchase. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Weekly Reporting Banks A23 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions of dollars, Wednesday figures 1977 Account and bank group Feb. 9 Feb. 16 Feb. 23 Mar. 2 Mar. 9 Mar. 16 Mar. 23 Mar. 30 Total loans (gross) and investments, adjusted1 1 Large banks...................................................... 395,642 398,188 396,723 399,551 401,221 405,809 400,281 400,405 2 New York City banks................................. 87,960 89,145 88,358 89,855 89,914 90,872 87,631 88,004 3 Banks outside New York City.................... 307,682 309,043 308,365 309,696 311,307 314,937 312,650 312,401 Total loans (gross), adjusted A Large banks...................................................... 287,213 288,629 287,689 290,050 290,516 294,448 290,340 291,441 5 New York City banks................................. 67,906 68,678 67,993 69,017 68,563 70,059 67,346 68,400 6 Banks outside New York City.................... 219,307 219,951 219,696 221,033 221,953 224,389 222,994 223,041 Demand deposits, adjusted2 7 Large banks...................................................... 107,987 106,515 104,496 107,691 107,135 108,831 106,875 106,895 8 New York City banks................................. 25,437 24,419 24,358 25,775 24,582 25,674 24,561 23,601 9 Banks outside New York City.................... 82,550 82,096 80,138 81,916 82,553 83,157 82,314 83,294 Large negotiable time CD’s included in time and savings deposits3 Total: 10 Large banks.......................................................... 62,148 61,225 60,374 60,206 60,774 60,277 61,253 61,768 11 New York City............................................ 22,155 21,639 21,184 20,916 20,941 20,472 20,642 20,858 12 Banks outside New York City.................... 39,993 39,586 39,190 39,290 39,833 39,805 40,611 40,910 Issued to IPC’s: 13 Large banks...................................................... 40,737 39,912 39,350 39,375 39, 733 39,141 40,113 40,473 14 New York City Banks................................. 15,170 14,706 14,384 14,282 14,265 13,829 14,205 14,251 15 Banks outside New York City.................... 25,567 25,206 24,966 25,093 25,468 25,312 25,908 26,222 Issued to others: 16 Large banks...................................................... 21,411 21,313 21,024 20,831 21,041 21,136 21,140 21,295 17 New York City banks................................. 6,985 6,933 6,800 6,634 6,676 6,643 6,437 6,607 18 Banks outside New York City.................... 14,426 14,380 14,224 14,197 14,365 14,493 14,703 14,688 All other large time deposits4 Total: 19 Large banks......................................................... 26,101 26,076 26,141 26,091 25,990 25,928 25,778 25,723 20 New York City banks................................. 5,289 5,247 5,287 5,303 5,200 5,303 5,247 5,252 21 Banks outside New York City.................... 20,812 20,829 20,854 20,788 20,790 20,625 20,531 20,471 Issued to IPC’s: 22 Large banks...................................................... 14,239 14,224 14,253 14,303 14,221 14,224 14,065 14,113 23 New York City banks................................. 3,898 3,876 3,888 3,951 3,862 3,902 3,842 3,861 24 Banks outside New York City.................... 10,341 10,348 10,365 10,352 10,359 10,322 10,223 10,252 Issued to others: 25 Large banks...................................................... 11,862 11,852 11,888 11,788 11,769 11,704 11,713 11,610 26 New York City banks................................. 1,391 1,371 1,399 1,352 1,338 1,401 1,405 1,391 27 Banks outside New York City.................... 10,471 10,481 10,489 10,436 10,431 10,303 10,308 10,219 Savings deposits, by ownership category Individuals and nonprofit organizations: 28 Large banks...................................................... 84,600 84,656 84,891 85,209 85,728 86,195 86,572 87,031 29 New York City banks................................. 9,511 9,567 9,587 9,628 9,675 9,716 9,745 9,816 30 Banks outside New York City.................... 75,089 75,089 75,304 75,581 76,053 76,479 76,827 77,215 Partnerships and corporations for profit:5 31 Large banks...................................................... 4,737 4,733 4,800 4,810 4,906 4,866 4,931 4,978 32 New York City banks................................. 509 515 524 528 531 533 533 544 33 Banks outside New York City.................... 4,228 4,218 4,276 4,282 4,375 4,333 4,398 4,434 Domestic governmental units: 34 Large banks...................................................... 2,565 2,607 2,613 2,601 2,600 2,570 2,521 2,510 35 New York City banks................................. 418 442 439 471 452 446 422 All 36 Banks outside New York City.................... 2,147 2,165 2,174 2,130 2,148 2,124 2,099 2,038 All other:6 37 Large banks........................................................ 136 105 83 96 103 92 95 109 38 New York City banks................................... 110 78 59 74 81 72 73 88 39 Banks outside New York City..................... 26 27 24 22 22 20 22 21 Gross liabilities of banks to their foreign branches 40 Large banks........................................................ 2,671 3,036 3,831 3,515 3,158 4,785 3,682 3,789 41 New York City banks................................... 1,722 2,009 2,930 2,486 2,359 3,827 2,643 3,027 42 Banks outside New York City..................... 949 1,027 901 1,029 799 958 1,039 762 Loans sold outright to selected institutions by all large banks7 43 Commercial and industrial............................... 2,545 2,553 2,612 2,644 2,667 2,674 2,718 2,721 44 Real estate......................................................... 212 211 212 205 211 173 213 216 45 All other............................................................. 1,137 1,096 1,118 1,106 1,073 1,078 1,067 1,105 1 Exclusive of loans and Federal funds transactions with domestic 5 Other than commercial banks. commercial banks. . 6 Domestic and foreign commercial banks, and official international 2 All demand deposits except U.S. Govt, and domestic commercial organizations. banks, less cash items in process of collection. 7 To bank’s own foreign branches, nonconsolidated nonbank af 3 Certificates of deposit (CD’s) issued in denominations of $100,000 or filiates of the bank, the bank’s holding company (if not a bank), and more. nonconsolidated nonbank subsidiaries of the holding company. 4 All other time deposits issued in denominations of $100,000 or more (not included in large negotiable CD’s). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A24 Domestic Financial Statistics □ April 1977 1.31 LARGE WEEKLY REPORTING COMMERCIAL BANKS Commercial and Industrial Loans Millions of dollars Outstanding Net change during— Industry group 1977 1976 1977 Mar. 2 Mar. 9 Mar. 16 Mar. 23 Mar. 30 Q4 Ql Jan. Feb. | Mar. Total loans classified2 1 Total.................................................... 95,735 95,739 96,240 96,148 95,946 4,037 -760 -2,196 664 Ill Durable goods manufacturing: 2 Primary metals............................... 2,579 2,621 2,626 2,619 2,577 138 377 189 148 40 3 Machinery....................................... 4,704 4,711 4,866 4,790 4,762 41 104 -72 44 132 4 Transportation equipment............. 2,190 2,171 2,296 2,310 2.294 -180 64 -20 -13 97 5 Other fabricated metal products... 1,778 1,829 1,889 1,888 1,886 22 176 -12 77 111 6 Other durable goods...................... 3,231 3,275 3,365 3,350 3,358 -249 104 -147 81 170 Nondurable goods manufacturing: 7 Food, liquor, and tobacco............. 3,310 3,345 3,377 3,378 3,366 128 -134 -88 -43 -3 8 Textiles, apparel, and leather........ 3,318 3,397 3,414 3.408 3,375 -504 379 121 128 130 9 Petroleum refining.......................... 2,489 2,446 2,352 2,340 2,348 120 -293 -2 -117 -174 10 Chemicals and rubber.................... 2,616 2,661 2,714 2,726 2,690 18 132 -13 31 114 11 Other nondurable goods................ 1,972 1,995 2,020 2,018 2,037 14 140 2 61 77 12 Mining, including crude petroleum and natural gas........................... 7,422 7,451 7,477 7,443 7,436 361 115 84 12 19 Trade: 13 Commodity dealers......................... 2,158 2,142 2,187 2,134 2,140 377 207 -21 197 31 14 Other wholesale.............................. 6,488 6,610 6,693 6,695 6,730 211 470 -52 165 357 15 Retail............................................... 6,374 6,405 6,452 6,546 6,532 -268 434 3 100 331 16 Transportation.................................... 5,216 5,174 5,203 5,196 5,178 81 -127 -263 135 1 17 Communication.................................. 1,588 1,475 1,512 1,443 1,349 -131 -9 53 183 -245 18 Other public utilities........................... 5,648 5,604 5,619 5,591 5,556 -101 -45 12 92 -149 19 Construction....................................... 3,935 3,932 3,903 3,968 3,974 -203 65 -48 67 46 20 Services................................................ 10,854 10,909 10,913 10,919 10,965 129 410 243 62 105 21 All other domestic loans................... 7,542 7,451 7,512 7,679 7,656 576 -263 -415 -106 258 22 Bankers acceptances........................... 4,378 4,201 3,972 3,870 3,903 3,285 -2,970 -1,811 -631 -528 23 Foreign commercial and industrial loans............................................ 5,945 5,934 5,878 5,837 5,834 172 -96 61 -9 -148 Memo: 24 Commercial paper included in total classified loans1................. 320 241 -248 -192 -42 -14 25 Total commercial and industrial loans of all large weekly reporting banks........................... 116,198 116,325 117,060 117,099 116,774 4,264 191 -2,145 1,013 1,323 1976 1977 1976 1977 1977 Nov. 24 Dec. 29 Jan. 26 Feb. 23 Mar. 30 Q4 Ql Jan. Feb. Mar. “Term” loans classified3 26 Total.................................................... r44,812 45,211 45,291 45,735 45,838 r450 627 80 444 103 Durable goods manufacturing: 27 Primary metals................................ 1,253 1,317 1,449 1,481 1,521 103 204 132 32 40 28 Machinery....................................... 2,637 2,585 2,587 2,551 2,552 -90 -33 2 -36 1 29 Transportation equipment............. 1,303 1,352 1,365 1,298 1,339 -29 -13 13 -67 41 30 Other fabricated metal products... 777 776 767 815 820 20 44 -9 48 5 31 Other durable goods....................... 1,655 1,625 1,549 1,585 1,625 r-lll -75 36 40 Nondurable goods manufacturing: 32 Food, liquor, and tobacco............. 1,392 1,398 1,449 1,447 1,412 -37 14 51 -2 -35 33 Textiles, apparel, and leather........ 1,118 1,098 1,033 1,036 1,071 -46 -27 -65 3 35 34 Petroleum refining.......................... 1,864 1,972 1,925 1,901 1,770 r64 -202 -46 -24 -131 35 Chemicals and rubber.................... 1,449 1,444 1,456 1,522 1,547 -20 103 12 66 25 36 Other nondurable goods................ 950 954 975 987 1,032 r19 78 20 12 45 37 Mining, including crude petroleum and natural gas........................... 5,517 5,683 5,793 5,761 5,856 341 173 110 -32 95 Trade: 38 Commodity dealers......................... r219 200 227 219 199 -9 -1 27 -8 -20 39 Other wholesale.............................. 1,474 1,463 1,483 1,478 1,478 69 15 20 -5 40 Retail............................................... 2,249 2,045 2,085 '2,212 2,273 -89 228 40 m i 61 41 Transportation................................... 3,809 3,937 3,720 r3,830 3,773 r3 -164 -218 '110 -57 42 Communication.................................. 913 847 810 829 779 -56 -68 -37 19 -50 43 Other public utilities........................... 3,549 3,664 3,762 3,869 3,907 60 243 98 107 38 44 Construction....................................... rl,665 1,629 1,638 1,683 1,661 r —62 32 9 45 -22 45 Services................................................ 5,151 4,998 5,212 5,216 5,111 31 113 214 4 -105 46 All other domestic loans................... 2,567 2,600 2,383 2,352 2,426 181 -174 -217 40 74 47 Foreign commercial and industrial loans............................................ r3,301 3,624 3,623 3,663 3,686 '108 62 -1 -31 23 1 Reported for the last Wednesday of each month. all outstanding loans granted under a formal agreement—revolving credit 2 Includes “term” loans, shown below. or standby—on which the original maturity of the commitment was in 3 Outstanding loans with an original maturity of more than 1 year and excess of 1 year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Deposits and Commercial Paper A25 1.32 GROSS DEMAND DEPOSITS of Individuals, Partnerships, and Corporations Billions of dollars; estimated daily-average balances All commercial banks Type of holder 1975 1976 1972 1973 1974 Dec. Dec. Dec. June Sept. Dec. Mar. June Sept. Dec. 1 All holders, IPC..................................................... 208.0 220.1 225.0 222.2 227.0 236.9 227.9 234.2 236.1 250.1 2 Financial business.................................................. 18.9 19.1 19..0 19.4 19.0 20.1 19.9 20.3 19.7 22.3 3 Nonfinancial business............................................ 109.9 116.2 118.8 115.1 118.7 125.1 116.9 121.2 122.6 130.2 65.4 70.1 73.3 74.8 76.5 78.0 77.2 78.8 80.0 82.6 5 Foreign.................................................................... 1.5 2.4 2.3 2.3 2.2 2.4 2.4 2.5 2.3 2.7 6 Other....................................................................... 12.3 12.4 11.7 10.6 10.6 11.3 11.4 11.4 11.5 12.4 All weekly reporting banks 1976 1977 1973 1974 1975 Dec. Dec. Dec. Aug. Sept. Oct. Nov. Dec. Jan. Feb. 7 All holders, IPC..................................................... 118.1 119.7 124.4 112.9 121.4 123.8 124.3 128.5 127.4 123.0 8 Financial business.................................................. 14.9 14.8 15.6 15.0 15.4 16.8 16.2 17.5 16.7 15.6 9 Nonfinancial business............................................ 66.2 66.9 69.9 61.4 66.6 68.4 68.7 69.7 69.5 67.4 28.0 29.0 29.9 29.2 30.7 29.6 30.4 31.7 32.0 31.1 11 Foreign.................................................................... 2.2 2.2 2.3 1.8 2.2 2.4 2.5 2.6 2.2 2.4 12 Other....................................................................... 6.8 6.8 6.6 5.6 6.6 6.6 6.6 7.1 7.1 6.5 Note.—Figures include cash items in process of collection. Estimates of banks. Types of depositors in each category are described in the June 1971 gross deposits are based on reports supplied by a sample of commercial Bulletin, p. 466. 1.33 COMMERCIAL PAPER AND BANKERS ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1976 1977 1974 1975 1976 Instrument Dec. Dec. Dec. Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 Commercial paper, all issuers............................... 49,144 47,690 r52,041 r50,100 r49,852 r51,370 r53,116 r52,041 r53,905 54,216 Financial companies:1 Dealer-placed paper:2 2 Total................................................................ 4,611 6,239 7,294 6,243 6,347 6,674 7,113 7,294 7,347 7,291 3 Bank-related.................................................... 1,814 1,762 ’•1,900 rl,612 *•1,644 rl,703 *•1,825 *■1,900 *•1,895 1,929 Directly-placed paper:3 4 Total................................................................ 31,839 31,276 *•32,416 r31.537 r31,476 r31,880 *•32,691 *32,416 *■32,753 32,176 5 Bank-related.................................................... 6,518 6,892 r5,959 r5,916 r6,250 *•5,864 *•5,944 *•5,959 *•5,637 5,502 6 Nonfinancial companies4...................................... 12,694 10,175 12,331 12,320 12,029 12,816 13,312 12,331 13,805 14,749 18,484 18,727 22,523 19,383 19,599 20,312 20,678 22,523 22,362 22,187 Held by: 8 Accepting banks.................................................. 4,226 7,333 10,442 6,107 6,798 7,959 9,031 10,442 8,183 7,991 9 3,685 5,899 8,769 5,449 5,865 6,789 7,706 8,769 7,011 6,654 10 542 1,435 1,673 658 933 1,170 1,325 1,673 1,172 1,337 F.R. Banks: 11 999 1,126 991 808 838 337 188 991 191 322 12 Foreign correspondents................................. 1,109 293 375 442 417 387 349 375 374 440 13 Others.................................................................. 12,150 9,975 13,447 r12,026 *•11,545 11,629 *•11,111 *•10,715 *•13,615 13,434 Based on: 14 Imports into United States............................... 4,023 3,726 4,992 4,530 4,498 4,737 4,667 4,992 4,992 5,138 15 4,067 4,001 4,818 4,355 4,420 4,715 4,628 4,818 5,137 5,074 16 All other.............................................................. 10,394 11,000 12,713 10,498 10,680 10,860 11,383 12,713 12,233 11,974 1 Institutions engaged primarily in activities such as, but not limited to, 3 As reported by financial companies that place their paper directly commercial, savings, and mortgage banking; sales, personal, and mortgage with investors. financing; factoring, finance leasing, and other business lending; insurance 4 Includes public utilities and firms engaged primarily in activities such underwriting; and other investment activities. as communications, construction, manufacturing, mining, wholesale and 2 Includes all financial company paper sold by dealers in the open retail trade, transportation, and services, market. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A26 Domestic Financial Statistics □ April 1977 1.34 PRIME RATE CHARGED BY BANKS on Short-term Business Loans Per cent per annum Effective date Rate Effective date Month Average rate 1975—Jan. 9 1014 1975—Aug. 12 7% 1975—Aug. 7.66 15 10 Sept. 7.88 20 9V4 Sept. 15 8 Oct.. 7.96 28 9% Nov. 7.53 Oct. 27 m Dec. 7.26 Feb. 3 9Va 10 9 Nov. 5 m 1976—Jan.. 7.00 18 83/4 Feb. 6.75 24 81/2 Dec. 2 iva Mar. 6.75 Apr. 6.75 Mar. 5 m 1976—Jan. 12 7 May 6.75 10 8 21 6V4 June 7.20 18 m July. 7.25 24 m June 1 7 Aug. 7.01 7 7V4 Sept. 7.00 May 20 m Oct., 6.78 Aug. 2 7 Nov. 6.50 June 9 7 Dec. 6.35 Oct. 4 6V4 July 18 7% 1977—Jan.. 6.25 28 m Nov. 1 6V2 Feb. 6.25 Mar. 6.25 Dec. 13 6V4 1.35 INTEREST RATES CHARGED BY BANKS on Business Loans Per cent per annum Size of loan (in thousands of dollars) All sizes Center 1--9 10-99 100-499 500-999 1,000 and over 1976 1976 1976 1976 1976 1976 1976 1976 1976 1976 1976 1976 Nov. Aug. Nov. Aug. Nov. Aug. Nov. Aug. Nov. Aug. Nov. Aug. Short-term rates 1 7.28 7.80 8.83 9.06 8.18 8.58 7.66 7.99 7.31 7.84 7.02 7.61 2 New York City................. 6.88 7.48 8.56 8.85 7.94 8.40 7.43 7.91 7.24 7.77 6.74 7.36 3 7 Other Northeast............ 7.62 8.18 9.22 9.41 8.34 8.84 7.88 8.25 7.49 8.16 7.34 7.98 4 8 North Central................ 7.28 7.70 8.45 8.65 8.12 8.50 7.69 7.85 7.36 7.71 7.03 7.55 5 7.51 7.95 9.13 9.33 8.48 8.76 7.71 8.00 7.04 7.85 7.07 7.54 6 8 Southwest....................... 7.33 7.75 8.51 8.83 7.82 8.24 7.39 7.80 7.21 7.61 7.12 7.55 7 4 West Coast..................... 7.52 8.15 8.69 9.26 8.46 8.79 7.88 8.28 7.44 8.06 7.34 8.05 Revolving credit rates 8 All 35 centers........................ 7.19 7.87 8.37 8.70 8.14 8.33 7.60 8.02 7.41 7.80 7.12 7.88 9 New York City................. 7.18 8.14 7.23 7.25 7.86 8.26 7.21 7.70 6.97 7.56 7.19 8.19 10 7 Other Northeast............ 6.92 7.59 8.15 8.00 8.20 8.22 7.26 7.67 7.75 8.36 6.75 7.47 11 8 North Central................ 7.54 7.96 8.52 8.94 8.95 9.03 8.05 8.50 7.88 7.74 7.39 7.90 12 7 Southeast........................ 7.05 7.48 8.31 8.75 8.09 8.40 7.56 8.16 6.77 6.83 7.13 13 7.45 7.81 8.19 8.74 7.96 8.09 7.74 8.20 7.24 "'7A7 7.39 7.80 14 4 West Coast..................... 7.11 7.73 8.77 9.10 7.85 8.08 7.58 7.95 7.45 7.91 7.01 7.68 Long-term rates 15 All 35 centers........................ 7.48 8.45 9.39 9.61 8.88 9.02 8.14 8.55 8.13 8.60 7.24 8.40 16 New York City................. 7.36 8.52 7.19 8.55 8.27 7.93 8.05 8.06 8.44 7.26 8.56 17 7 Other Northeast............. 6.64 8.62 9.22 9.40 8.84 9.43 7.95 8.93 7.92 7.50 5.73 8.70 18 8 North Central................ 7.66 8.05 9.20 8.83 9.03 9.07 8.35 8.26 8.99 8.36 7.32 7.92 19 7 Southeast........................ 7.59 8.88 9.87 9.60 9.35 9.08 7.93 9.88 4.00 8.18 7.79 8.06 20 8 Southwest....................... 7.73 8.42 10.54 10.85 9.05 9.04 8.28 8.23 8.44 8.69 7.20 8.30 21 4 West Coast..................... 8.04 8.67 8.70 9.28 8.54 8.58 8.31 8.81 7.78 10.00 8.03 8.46 Note.—Weighted-average rates based on sample of loans made during first 7 days of the survey month. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Securities Markets A27 1.36 INTEREST RATES Money and Capital Markets Averages, per cent per annum 1976 1977 1977, week ending— Instrument 1974 1975 1976 Dec. Jan. Feb. Mar. Mar. 5 Mar. 12Mar. 19Mar. 26 Apr. 2 Money market rates Prime commercial paper 1 1 90- to 119-day............... 10.05 6.26 5.24 4.66 4.72 4.76 4.75 4.75 4.75 4.75 4.75 4.75 2 4- to 6-month................ 9.87 6.33 5.35 4.70 4.74 4.82 4.87 4.85 4.85 4.88 4.88 4.88 3 Finance company paper, directly placed, 3- to 6- month 2................................. 8.62 6.16 5.22 4.56 4.64 4.75 4.77 4.75 4.75 4.75 4.85 4.85 4 Prime bankers acceptances, 90-day 3. 9.92 6.30 5.19 4.62 4.81 4.83 4.80 4.83 4.84 4.81 4.79 4.76 5 Federal funds 4................................... 10.51 5.82 5.05 4.65 4.61 4.68 4.69 4.68 4.63 4.62 4.77 4.74 Large negotiable certificates of deposit 6 3-month, secondary market 5............ 10.27 6.43 5.26 4.67 4.82 4.65 4.83 4.88 4.87 4.83 4.80 4.81 7 3-month, primary market ............... 5.15 4.44 4.68 4.69 4.74 4.75 4.75 4.75 4.71 4.75 8 Euro-dollar deposits, 3-month ?. 10.96 6.97 5.57 5.01 5.14 5.08 5.13 5.15 5.09 5.10 5.24 U.S. Govt, securities Bills: 8 Market yields: 9 3-month................ 7.84 5.80 4.98 4.35 4.62 4.67 4.60 4.66 4.63 4.59 4.57 4.57 10 6-month................ 7.95 6.11 5.26 4.51 4.83 4.90 4.88 4.93 4.92 4.87 4.85 4.81 11 1-year............. 7.71 6.30 5.52 4.64 5.00 5.16 5.19 5.23 5.22 5.18 5.17 5.15 Rates on new issue: 12 3-month................ 7.886 5.838 4.989 4.354 4.597 4.662 4.613 4.708 4.652 4.545 4.553 4.609 13 6-month................ 7.926 6.122 5.266 4.513 4.783 4.896 4.883 4.943 4.965 4.813 4.826 4.870 Notes and bonds maturing in—9 14 9 to 12 months......................... 8.25 6.70 5.84 4.92 5.34 5.50 5.50 5.55 5.54 5.50 5.46 5.45 15 3 to 5 years............................... 7.81 7.55 6.94 5.96 6.49 6.69 6.73 6.76 6.77 6.71 6.68 6.70 Constant maturities:10 16 1-yea r 8.18 6.76 5.88 4.89 5.29 5.47 5.50 5.55 5.52 5.49 5.49 5.45 17 2-yea r 6.31 5.38 5.90 6.09 6.09 6.11 6.12 6.08 6.06 6.05 18 3-yea r 7.82 7.49 6.77 5.68 6.22 6.44 6.47 6.49 6.50 6.46 6.44 6.45 19 5-year......................... 7.80 7.77 7.18 6.10 6.58 6.83 6.93 6.96 6.96 6.90 6.89 6.94 Capital market rates Government notes and bonds U.S. Treasury: Constant maturities:10 20 7-year................................................ 7.71 7.90 7.42 6.37 6.92 7.16 7.20 7.22 7.23 7.17 7.18 7.22 21 10-year............................................. 7.56 7.99 7.61 6.87 7.21 7.39 7.46 7.46 7.49 7.45 7.45 7.45 22 20-year.............................................. 8.05 8.19 7.86 7.30 7.48 7.64 7.73 7.75 7.76 7.72 7.71 7.73 23 30-year.............................................. 7.80 7.81 7.82 7.78 7.77 7.79 24 Long-term 9.......................................... 6.99 6.98 6.78 6.39 6.68 7.15 7.20 7.21 7.22 7.20 7.18 7.19 State and local:11 Moody’s series: 25 Aaa.................................................... 5.89 6.42 5.66 5.07 5.10 5.17 5.21 5.20 5.23 5.20 5.20 5.20 26 Baa.................................................... 6.53 7.62 7.49 6.73 6.58 6.50 6.41 6.47 6.43 6.40 6.40 6.35 27 Bond Buyer series 12............................ 6.17 7.05 6.64 5.94 5.87 5.89 5.89 5.92 5.92 5.90 5.88 5.85 Corporate bonds Seasoned issues 13 28 All industries........................................ 9.03 9.57 9.01 8.47 8.41 8.48 8.51 8.51 8.52 8.50 8.51 8.53 By rating groups: 29 Aaa.................................................... 8.57 8.83 8.43 7.98 7.96 8.04 8.10 8.10 8.12 8.09 8.09 8.10 30 Aa...................................................... 8.84 9.17 8.75 8.24 8.16 8.26 8.28 8.27 8.26 8.28 8.29 8.31 31 A........................................................ 9.20 9.65 9.09 8.53 8.45 8.49 8.55 8.52 8.53 8.54 8.56 8.59 32 Baa.................................................... 9.50 10.61 9.75 9.12 9.08 9.12 9.12 9.16 9.15 9.10 9.09 9.11 Aaa utility bonds:14 33 New issue.............................................. 9.33 9.40 8.48 7.94 8.08 8.22 8.25 8.30 8.23 8.22 8.25 34 Recently offered issues......................... 9.34 9.41 8.49 7.93 8.09 8.19 8.29 8.27 8.32 8.27 8.29 8.26 Common stocks Dividend/price ratio: 35 Preferred stocks.................................... 8.23 8.38 7.97 7.70 7.54 7.55 7.56 4.35 4.37 4.29 4.38 4.47 36 Common stocks................................... 4.47 4.31 3.77 3.99 3.99 4.21 4.37 7.51 7.61 7.51 7.56 7.60 1 Averages of the most representative daily offering rate quoted by 8 Except for new bill issues, yields are computed from daily closing dealers. bid prices. Yields for all bills are quoted on a bank-discount basis. 2 Averages of the most representative daily offering rates published by 9 Unweighted averages for all outstanding notes and bonds in maturity finance companies for varying maturities in this range. ranges shown, based on daily closing bid prices. “Long-term” includes 3 Beginning Aug. 15, 1974, the rate is the average of the midpoint of all bonds neither due nor callable in less than 10 years. the range of daily dealer closing rates offered for domestic issues; prior Yields on the more actively traded issues adjusted to constant data are averages of the most representative daily offering rate quoted by maturities by the U.S. Treasury, based on daily closing bid prices. dealers. 11 General obligations only, based on figures for Thursday, from 4 Weekly figures are 7-day averages of daily effective rates for the week Moody’s Investors Service. ending Wednesday; the daily effective rate is an average of the rates on 12 Twenty issues of mixed quality. a given day weighted by the volume of transactions at these rates. 13 Averages of daily figures from Moody’s Investors Service. 5 Averages of the daily midpoints as determined from the range of 14 Compilation of the Board of Governors of the Federal Reserve offering rates in the secondary market. System. 6 Posted rates, which are the annual interest rates most often quoted Issues included are long-term (20 years or more). New-issue yields are on new offerings of negotiable CD’s in denominations of $100,000 or based on quotations on date of offering; those on recently offered issues more. Rates prior to 1976 not available. Weekly figures are for Wednes (included only for first 4 weeks after termination of underwriter price day dates. restrictions), on Friday close-of-business quotations. Digitized for F7 RAAveSraEgRes of daily quotations for the week ending Wednesday. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A28 Domestic Financial Statistics □ April 1977 1.37 STOCK MARKET Selected Statistics 1976 1977 Indicator 1974 1975 1976 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31,1965 == 50). 43.84 45.73 54.45 56.30 54.43 54.17 56.34 56.28 54.93 54.67 2 Industrial................................................ 48.08 51.88 60.44 62.34 60.07 59.45 61.54 61.26 59.65 59.56 3 Transportation....................................... 31.89 30.73 39.57 40.36 38.37 39.28 41.77 41.93 40.59 40.52 4 Utility...................................................... 29.82 31.45 36.97 38.77 38.33 38.85 40.61 41.13 40.86 40.18 5 Finance.................................................... 49.67 46.62 52.94 54.51 52.74 53.25 57.45 57.86 55.65 54.84 6 Standard and Poor’s Corporation (1941-43= 10)1 82.85 85.17 102.01 105.45 101.89 101.19 104.66 103.81 100.96 100.57 7 American Stock Exchange (Aug. 31,1973 = 100). 79.97 83.15 101.63 102.92 98.99 99.20 104.06 111.04 112.17 111.77 Volume of trading (thousands of shares)2 8 New York Stock Exchange................... 13,883 18,568 21,189 18,892 17,397 19,370 23,621 23,562 19,310 17,814 9 American Stock Exchange.................... 1,908 2,150 2,565 1,902 1,700 2,211 3,095 3,268 2,830 2,580 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers/dealers and banks3............................................ 4,836 6,500 r8,995 r8,788 8,772 '8,640 8,995 9,289 11 Brokers, total..................................................... 3,980 5,540 8,166 7,707 7,704 7,790 8,166 8,469 8,679 12 Margin stock4.......................................... 3,840 5,390 7,960 7,530 7,530 7,610 7,960 8,270 8,480 13 Convertible bonds.................................... 137 147 204 174 168 178 204 196 197 14 Subscription issues................................... 3 3 2 3 6 2 2 3 2 15 Banks, total....................................................... 856 960 r829 r1,081 1,068 r850 829 820 16 Margin stocks........................................... 815 909 r786 '1,032 1,019 '801 '786 lie 17 Convertible bonds.................................... 30 36 r29 f34 34 35 '29 27 18 Subscription issues................................... 11 15 r14 r15 15 14 14 17 19 Unregulated nonmargin stock credit at banks3 2,064 2,281 "3,684 '2,651 2,774 '3,737 '3,684 3,693 Memo: Free credit balances at brokers6 20 Margin-account............................................ 410 475 585 555 611 615 585 645 605 21 Cash-account................................................ 1,425 1,525 1,855 1,710 1,580 1,740 1,855 1,930 1,815 Margin-account debt at brokers (percentage distribution, end of period) 22 Total...................................... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 By equity class (in per cent): 23 Under 40............................ 45.4 25.0 13.0 12.2 15.0 14.0 13.0 15.0 24 40-49.................................. 23.0 28.8 22.0 29.9 34.0 32.0 22.0 23.0 25 50-59.................................. 13.9 22.3 35.0 29.6 25.6 27.0 35.0 35.0 26 60-69.................................. 8.8 11.6 15.0 14.1 12.7 13.0 15.0 13.0 27 70-79.................................. 4.6 6.9 8.7 8.0 7.2 8.0 8.7 8.0 28 80 or more................................ 4.3 5.3 6.0 6.3 5.7 6.0 6.0 6.0 Margin requirements® (per cent of market value) effective— Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 29 Margin stocks........................................................ 70 80 65 55 65 50 30 Convertible bonds.................................................. 50 60 50 50 50 50 31 Short sales.............................................................. 70 80 65 55 65 50 1 Effective July 1976 includes a new financial group, banks and in counter margin stocks. At banks, loans to purchase or carry nonmargin surance companies. With this change the index includes 400 industrial stocks are unregulated; at brokers, such stocks have no loan value. stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public 6 Free credit balances are in accounts with no unfulfilled commitments utility (formerly 60), and 40 financial. to the brokers and are subject to withdrawal by customers on demand. 2 Based on trading for a 5 Vi-hour day. 7 Each customer’s equity in his collateral (market value of collateral 3 Margin credit includes all credit extended to purchase or carry less net debit balance) is expressed as a percentage of current collateral stocks or related equity instruments and secured at least in part by stock. values. Credit extended by brokers is end-of-month data for member firms of 8 Regulations G, T, and U, prescribed in accordance with the Securities the New York Stock Exchange; June data for banks are universe totals; Exchange Act of 1934, limit the amount of credit to purchase and carry all other data for banks are estimates for all commercial banks based on margin stocks that may be extended on securities as collateral by pre data from a sample of reporting banks. scribing a maximum loan value, which is a specified percentage of the In addition to assigning a current loan value to margin stock generally, market value of the collateral at the time the credit is extended. Margin Regulations T and U permit special loan values for convertible bonds requirements are the difference between the market value (100 per cent) and stock acquired through exercise of subscription rights. and the maximum loan value. The term “margin stocks” is defined in 4 A distribution of this total by equity class is shown below. the corresponding regulation. 5 Nonmargin stocks are those not listed on a national securities ex Regulation G and special margin requirements for bonds convertible change and not included on the Federal Reserve System’s list of over-the- into stocks were adopted by the Board of Governors effective Mar. 11, 1968. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Thrift Institutions A29 1.38 SAVINGS INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1976 1977 1974 1975 1976 Account June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Savings and loan associations 1 Assets..................................... 295,545 338,233 391,999 366,425 371,770 376,188 379,747 385,013 389,173 391,999 398,299 403,597 2 Mortgages............................. 249,301 278,590 323,130 299,296 303,527 307,766 311,847 315,742 319,273 323,130 326,056 329,104 3 Cash and investment 23,251 30,853 35,660 35,258 35,968 35,815 35,209 36,442 36,605 35,660 38,252 39,503 4 Other...................................... 22,993 28,790 33,209 31,871 32,275 32,607 32,691 32,829 33,295 33,209 33,991 34,990 5 Liabilities and net worth........ 295,545 338,233 391,999 366,425371,770 376,188 379,747 385,013 389,173 391,999 398,299 403,597 242,974 285,743 336,030 312,904 316,072 318,227 323,800 327,252 329,833 336,030 341,211 344,603 7 Borrowed money.................... 24,780 20,634 19,087 18,173 18,360 18,856 19,083 18,810 18,715 19,087 18,455 18,271 8 FHLBB............................... 21,508 17,524 15,708 15,016 15,139 15,495 15,832 15,636 15,571 15,708 15,029 14,661 3,272 3,110 3,379 3,157 3,221 3,361 3,251 3,174 3,144 3,379 3,426 3,610 10 Loans in process................... 3,244 5,128 6,836 6,397 6,572 6,628 6,688 6,735 6,753 6,836 6,718 6,785 11 Other...................................... 6,105 6,949 8,015 8,176 9,756 11,197 8,779 10,531 11,918 8,015 9,667 11,418 12 Net worth2............................. 18,442 19,779 22,031 20,775 21,010 21,280 21,398 21,685 21,954 22,031 22,248 22,520 Memo: 13 Mortgage loan commitments outstanding 3................. 7,454 10,673 14,828 16,610 16,301 15,773 15,449 15,319 15,467 14,828 15,079 16,914 Mutual savings banks 14 Assets..................................... 109,550 121,056 134,702 128,436 129,826 130,571 131,413 132,455 133,361 134,702 135,827 Loans: 15 Mortgage........................... 74,891 77,221 81,554 78,803 79,398 79,781 80,145 80,543 80,884 81,554 81,771 16 Other.................................. 3,812 4,023 5,192 5,137 5,341 5,210 5,478 5,549 5,801 5,192 5,964 Securities: 17 U.S. Govt........................... 2,555 4,740 5,911 5,635 5,640 5,733 5,851 5,796 5,836 5,911 5,991 18 State and local government. 930 1,545 2.420 2,337 2,376 2,339 2,359 2,429 2,466 2,420 2,298 19 Corporate and other4....... 22,550 27,992 33;676 31,493 32,028 32,319 32,432 32,793 33,074 33,676 34,359 20 Cash....................................... 2,167 2,330 2,374 1,558 1,538 1,552 1,581 1,695 1,668 2,374 1,814 21 Other assets........................... 2,645 3,205 3,574 3,470 3,505 3,576 3,567 3,649 3,632 3,574 3,629 109,550 121,056 134,702 128,436 129,826 130,571 131,413 132,455 133,361 134,702 135,827 23 Deposits................................. 98,701 109,873 122,802 116,876 117,883 118,225 119,590 120,360 120,971 122,802 123,773 24 Regular:5........................... 98,221 109,291 121,874 115,985 116,895 117,203 118,510 119,346 120,125 121,874 122,815 25 Ordinary savings............ 64,286 69,653 74,483 72,763 73,223 72,872 73,484 73,610 73,857 74,483 74,591 26 Time and other.............. 33,935 39,639 47,391 43,223 43,662 44,331 45,027 45,736 46,268 47,391 48,224 27 Other.................................. 480 582 928 890 988 1,022 1,080 1,014 846 928 958 28 Other liabilities..................... 2,888 2,755 2,853 2,841 3,161 3,490 2,898 3,140 3,376 2,853 2,952 29 General reserve accounts.... 7,961 8,428 9,047 8,719 8,781 8,855 8,925 8,955 9,015 9,047 9,101 Memo: 30 Mortgage loan commitments outstanding 6................. 2,040 1,803 2,439 2,402 2,433 2,459 2,671 2,548 2,553 2,439 2,584 Life insurance companies 31 Assets..................... 263,349 289,304 320,555 304,728 307,005 309,295 312,044 313,960 316,505 320,555 322,489 Securities: 32 Government........ 10,900 13,758 17,270 15,947 16,672 16,902 16,862 17,329 17,565 17,270 17.549 33 United States7, 3,372 4,736 5,156 4,863 5,150 5,922 5,150 5,448 5,606 5,156 5,291 34 State and local 3,667 4,508 5,551 5,196 5,263 5,324 5,364 5,446 5,467 5,551 5,614 35 Foreign 8.......... 3,861 4,514 6,563 5,888 6,259 6,286 6,348 6,435 6,492 6,563 6,644 36 Business.............. 119,637 135,317 157,625 147,193 148,617 150,303 152,125 153,298 154,502 157,625 159,464 37 Bonds.............. 97,717 107,256 123,149 114,583 116,101 117,806 118,706 120,358 121,659 123,149 125,892 38 Stocks.............. 21,920 28,061 34,476 32,610 32,516 32,497 33,419 32,940 32,843 34,476 33,572 39 Mortgages.............. 86,234 89,167 91,581 89,691 89,753 89,891 90,217 90,323 90,808 91,581 91,615 40 Real estate.............. 8,331 9,621 10,526 10,004 10,050 10,146 10,175 10,285 10,310 10,526 10.550 41 Policy loans............ 22,862 24,467 25,849 25,142 25,257 25,383 25,505 25,607 25,710 25,849 25,921 42 Other assets............ 15,385 16,971 17,704 16,751 16,656 16,670 17,160 17,118 17,610 17,704 17,390 Credit unions 43 Total assets/liabilities and capital............................. 31,948 38,037 44,897 41,884 41,729 42,266 43,079 43,415 44,089 44,835 44,906 45,798 44 Federal............................... 16,715 20,209 24,164 22,520 22,385 22,698 23,198 23,283 23,668 24,164 24,188 24,756 45 State................................... 15,233 17,828 20,733 19,364 19,344 19,658 19,881 20,132 20,421 20,671 20,718 21,042 46 Loans outstanding................. 24,432 28,169 34,033 31,089 31,555 32,300 33,093 33,275 33,732 34,293 34,188 34,549 12,730 14,869 18,022 16,421 16,614 17,065 17,458 17,522 17,786 18,202 18,081 18,275 48 State................................... 11,702 13,300 16,011 14,668 14,941 15,235 15,635 15,753 15,946 16,091 16,107 16,274 49 Savings................................... 27,518 33,013 39,264 36,675 36,615 36,752 37,436 37,854 38,281 38,968 39,344 39,981 50 Federal (shares)................. 14,370 17,530 21,149 19,696 19,663 19,783 20,167 20,358 20,597 20,980 21,165 21,559 51 State (shares and deposits). 13,148 15,483 18,115 16,979 16,952 16,969 17,269 17,496 17,684 17,988 18,179 18,422 For notes see bottom of page A30. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A30 Domestic Financial Statistics □ April 1977 1.39 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Fiscal year Calendar year Transition quarter Type of account or operation (July- 1975 1976 1977 1975 1976 Sept. 1976) H2 HI H2 Jan. U.S. Budget 1 Receipts........................................ 280,997 300,005 81,773 139,455 160,552 157,961 29,472 29,977 24,327 2 Outlays 1,2................................... 326,105 366,466 94,746 185,097 181,369 193,719 31,891 32,640 30,880 3 Surplus, or deficit (—).............. -45,108 -66,461 -12,973 -45,642 -20,816 -35,758 -2,419 -2,664 -6,554 4 Trust funds............................... 7,419 2,409 -1,952 -3,125 5,503 -4,621 1,737 -2,344 1,099 5 Federal funds 3......................... -52,526 -68,870 -11,021 -42,517 -26,320 -31,137 -4,156 -321 -7,654 Off-budget entities surplus, or deficit (—) 6 Federal Financing Bank outlays. -6,389 -5,915 -2,575 -2,693 -3,222 -5,176 -1,598 -1,009 -460 7 Other 1/ ....................................... -1,652 -1,355 793 -236 -1,119 3,809 48 -1,881 9 U.S. Budget plus off-budget, in cluding Federal Financing Bank 8 Surplus, or deficit ( —)................... -53,149 -73,731 -14,755 -48,571 -25,158 -37,125 -3,969 -5,554 -7,005 Financed by: 9 Borrowing from the public 2. . . 50,867 82,922 18,027 49,361 33,561 35,457 6,306 3,157 9,118 10 Cash and monetary assets (de crease, or increase ( — ))___ -320 -7,796 -2,899 -2,046 -7,909 2,153 -3,527 -1,583 -1,194 11 Others........................................ 2,602 -1,396 -373 1,256 -495 -485 1,189 3,980 -920 Memo: 12 Treasury operating balance (level, end of period).................................... 7,591 14,836 17,418 8,452 14,836 11,670 11,670 12,688 14,599 13 F.R. Banks..................................... 5,773 11,975 13,299 7,286 11,975 10,393 10,393 11,397 12,179 14 Tax and loan accounts.................. 1,475 2,854 4,119 1,159 2,854 1,277 1,277 1,292 2,420 15 Other demand accounts 6.............. 343 7 7 7 1 Outlay totals reflect the reclassification of the Export-Import Bank funds; miscellaneous liability (including checks outstanding) and asset from off-budget status to unified budget status. accounts; seignorage; increment on gold; net gain/loss for U.S. currency 2 Export-Import Bank certificates of beneficial interest (effective July valuation adjustment; net gain/loss for IMF valuation adjustment. 1, 1975) and loans to Pefco are treated as debt rather than asset sales. 6 Excludes the gold balance but includes deposits in certain commercial 3 Half years calculated as a residual of total surplus/deficit and trust depositories that have been converted from a time deposit to a demand fund surplus/deficit. deposit basis to permit greater flexibility in Treasury cash management. 4 Includes Pension Benefit Guaranty Corp., Postal Service Fund, Rural Electrification and Telephone Revolving Fund, Rural Telephone Bank, Source.—“Monthly Treasury Statement of Receipts and Outlays of and Housing for the Elderly or Handicapped Fund. the U.S. Government”, Treasury Bulletin, and U.S. Budget, Fiscal Year 5 Includes: Public debt accrued interest payable to the public; deposit 1978. NOTES TO TABLE 1.38 1 Stock of the Federal Home Loan Bank Board (FHLBB) is included Even when revised, data for current and preceding year are subject to in “other assets.” further revision. 2 Includes net undistributed income, which is accrued by most, but not Mutual savings banks: Estimates of National Association of Mutual all, associations. Savings Banks for all savings banks in the United States. Data are re 3 Excludes figures for loans in process, which are shown as a liability. ported on a gross-of-valuation-reserves basis. 4 Includes securities of foreign governments and international organiza Life insurance companies: Estimates of the Institute of Life Insurance tions and nonguaranteed issues of U.S. Govt, agencies. for all life insurance companies in the United States. Annual figures are 5 Excludes checking, club, and school accounts. annual-statement asset values, with bonds carried on an amortized basis 6 Commitments outstanding (including loans in process) of banks in and stocks at year-end market value. Adjustments for interest due and New York State as reported to the Savings Banks Assn. of the State of accrued and for differences between market and book values are not New York. made on each item separately but are included, in total, in “other assets.” 7 Direct and guaranteed obligations. Excludes Federal agency issues Credit unions: Estimates by the National Credit Union Administration not guaranteed, which are shown in this table under “business” securities. for a group of Federal and State-chartered credit unions that account for 8 Issues of foreign governments and their subdivisions and bonds of the about 30 per cent of credit union assets. Figures are preliminary and International Bank for Reconstruction and Development. revised annually to incorporate recent benchmark data. Note.—Savings and loan associations: Estimates by the FHLBB for all associations in the United States. Data are based on monthly reports of Federally insured associations and annual reports of other associations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Federal Finance A31 1.40 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Fiscal year Calendar year Transition quarter Source or type (July- 1975 1976 1977 1975 1976 Sept. 1976) H2 HI H2 Dec. Jan. Feb. Receipts 1 All sources........................................... 280,997 300,005 81,773 139,455 160,552 157,961 29,472 29,977 24,327 2 Individual income taxes, net.............. 122,386 131,603 38,801 65,835 65,767 75,094 12,663 18,108 8,515 3 Withheld......................................... 122,071 123,408 32,949 59,549 63,859 68,023 12,179 11,979 11,398 4 Presidential Election Campaign 32 34 1 33 1 1 8 5 Non withheld................................... 34,296 35,528 6,809 7,649 27,879 8,426 678 6,141 1,154 6 Refunds.......................................... 34,013 27,367 958 1,362 26,004 1,356 194 13 4,045 7 Corporation income taxes: 8 Gross receipts................................. 45,747 46,783 9,808 18,810 27,973 20,706 7,838 2,007 1,311 9 Refunds.......................................... 5,125 5,374 1,348 2,735 2,639 2,886 205 313 363 10 Social insurance taxes and contribu tions, net..................................... 86,441 92,714 25,760 40,886 51,828 47,596 6,207 7,320 10,764 11 Payroll employment taxes and contributions 1....................... 71,789 76,391 21,534 35,443 40,947 40,427 5,809 6,271 9,110 12 Self-employment taxes and contributions 1....................... 3,417 3,518 269 268 3,250 286 17 240 247 13 Unemployment insurance.............. 6,771 8,054 2,698 2,861 5,193 4,379 -26 347 997 14 Other net receipts 2....................... 4,466 A,152 1,259 2,314 2,438 2,504 407 462 410 15 Excise taxes........................................ 16,551 16,963 4,473 8,761 8,204 8,910 1,513 1,447 1,294 16 Customs.............................................. 3,676 4,074 1,212 1,927 2,147 2,361 412 381 347 17 Estate and gift................................... 4,611 5,216 1,455 2,573 2,643 2,943 502 504 1,890 18 Miscellaneous receipts 3.................... 6,711 8,026 1,612 3,397 4,630 3,236 542 521 568 Outlays 19 AH types 4.......................................... 326,105 366,466 94,746 185,097 181,369 193,719 31,891 32,640 30,880 20 National defense................................ 86,585 89,996 22,518 46,214 44,052 45,002 7,575 7,082 8,131 21 International affairs 4....................... 5,862 5,067 1,997 2,574 2,668 3,028 472 349 381 22 General science, space, and technology................................... 3,989 4,370 1,161 2,415 1,708 2,377 418 304 333 23 Natural resources, environment, and energy.................................. 9,537 11,282 3,324 5,018 6,900 7,206 1,217 1,042 895 24 Agriculture......................................... 1,660 2,502 584 1,489 417 2,019 507 582 350 25 Commerce and transportation.......... 16,010 17,248 4,700 11,496 5,766 9,643 995 681 -323 26 Community and regional development............................... 4,431 5,300 1,530 2,548 2,411 3,192 506 397 480 27 Education, training, employment, and social services...................... 15,248 18,167 5,013 8,423 9,116 9,083 1,563 1,541 1,585 28 Health................................................. 27,647 33,448 8,720 16,681 17,008 19,329 4,071 2,961 3,064 29 Income security................................. 108,605 127,406 32,796 61,655 65,336 65,456 10,533 11,652 11,719 30 Veterans benefits and services.......... 16,597 18,432 3,962 9,010 9,450 8,542' 1,467 1,630 1,606 31 Law enforcement and justice............ 2,942 3,320 859 1,589 1,784 1,839 297 340 244 32 General government.......................... 3,089 2,927 878 1,929 870 1,734 326 93 285 33 Revenue sharing and general purpose fiscal assistance............ 7,005 7,119 2,024 3,528 3,664 4,729 127 2,062 44 34 Interest5.............................................. 30,974 34,589 7,246 15,180 18,560 18,409 6,025 2,382 2,674 35 Undistributed offsetting receipts 5,6 -14,075 -14,704 -2,567 -4,652 -8,340 -7,869 -4,207 -460 -588 1 1 Old-age, disability and hospital insurance, and Railroad Retirement 5 Effective September 1976, “Interest” and “Undistributed Offsetting accounts. Receipts” reflect the accounting conversion for the interest on special 2 Supplementary medical insurance premiums, Federal employee re issues for U.S. Govt, accounts from an accrual basis to a cash basis. tirement contributions and Civil Service retirement 'and disability fund. 6 Consists of interest received by trust funds, rents and royalties on 3 Deposits of earnings by F.R. Banks and other miscellaneous receipts. the Outer Continental Shelf, anc} U.S. Govt, contributions for em 4 Outlay totals reflect the reclassification of the Export-Import Bank ployee retirement. from off-budget status to unified budget status. Export-Import Bank certificates of beneficial interest (effective July 1, 1975) and loans to Pefco are treated as debt rather than asset sales. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A32 Domestic Financial Statistics □ April 1977 1.41 FEDERAL DEBT SUBJECT TO STATUTORY LIMIT Billions of dollars 1973 1974 1975 1976 Item June 30 Dec. 31 June 30 Dec. 31 June 30 Dec. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstanding..................... 468.4 480.7 486.2 504.0 544.1 587.6 631.9 2646.4 665.5 2 Public debt securities........................... 457.3 469.1 474.2 492.7 533.7 576.6 620.4 634.7 653.5 3 Held by public................................. 333.9 339.4 336.0 351.5 387.9 437.3 470.8 488.6 506.4 4 Held by agencies............................. 123.4 129.6 138.2 141.2 145.3 139.3 149.6 146.1 147.1 5 Agency securities.................................. 11.1 11.6 12.0 11.3 10.9 10.9 11.5 11.6 12.0 6 Held by public................................. 9.1 9.6 10.0 9.3 9.0 8.9 9.5 29.7 10.0 7 Held by agencies............................. 2.0 2.0 2.0 2.0 1.9 2.0 2.0 1.9 1.9 8 Debt subject to statutory limit............ 459.1 470.8 476.0 493.0 534.2 577.8 621.6 635.8 654.7 9 Public debt securities........................... 456.7 468.4 473.6 490.5 532.6 576.0 619.8 634.1 652.9 10 Other debt i.......................................... 2.4 2.4 2.4 2.4 1.6 1.7 1.7 1.7 1.7 11 Memo: Statutory debt limit............... 465.0 475.7 495.0 495.0 577.0 595.0 636.0 636.0 682.0 1 Includes guaranteed debt of Govt, agencies, specified participation $0.5 billion due to a retroactive reclassification of the Export-Import Bank certificates, notes to international lending organizations, and District of certificates of beneficial interest from loan asset sales to debt, effective Columbia stadium bonds. July 1, 1975. 2 Gross Federal debt and Agency debt held by the public increased Source.—U.S. Treasury Bulletin. 1.42 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1976 1977 Type and holder 1973 1974 1975 Oct. Nov. Dec. Jan. Feb. Mar. 1 Total gross public debt1...................... 469.9 492.7 576.6 637.6 644.6 653.5 653.9 663.3 669.2 By type: 2 Interest-bearing debt............................ '467.8 '491.6 '575.7 '635.1 '643.6 '652.5 '653.0 662.3 668.2 3 Marketable....................................... 270.2 282.9 363.2 408.6 415.4 421.3 424.0 431.6 435.4 4 Bills............................................... 107.8 119.7 157.5 161.5 161.7 164.0 164.0 164.2 164.3 5 Notes............................................ 124.6 129.8 167.1 207.3 213.0 216.7 219.5 225.9 229.6 6 Bonds............................................ 37.8 33.4 38.6 39.8 40.7 40.6 40.5 41.6 41.5 7 Nonmarketable2............................... 197.6 208.7 212.5 226.5 228.2 231.2 229.0 230.7 232.8 8 Convertible bonds3..................... 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.2 9 Foreign issues4............................. 26.0 22.8 21.6 22.3 22.5 22.3 22.2 '22.1 22.1 10 Savings bonds and notes............. 60.8 63.8 67.9 71.5 71.9 72.3 72.6 73.0 73.4 11 Govt, account series5.................. 108.0 119.1 119.4 127.2 127.4 129.7 126.8 127.8 128.2 By holder:6 12 U.S. Govt, agencies and trust funds 129.6 141.2 139.3 144.6 144.9 147.1 144.0 13 F.R. Banks....................................... 78.5 80.5 87.9 95.7 91.7 97.0 94.1 14 Private investors............................... 261.7 271.0 349.4 397.3 408.1 409.5 415.8 15 Commercial banks....................... 60.3 55.6 85.1 94.8 99.8 102.5 101.0 16 Mutual savings banks................. 2.9 2.5 4.5 5.3 5.3 5.5 5.6 17 Insurance companies................... 6.4 6.1 9.3 12.1 12.2 12.3 12.2 18 Other corporations...................... 10.9 11.0 20.2 24.7 24.2 25.5 27.8 19 State and local governments.... 29.2 29.2 33.8 41.5 42.1 41.6 44.4 Individuals: 20 Savings bonds........................... 60.3 63.4 67.3 71.3 71.6 72.0 72.4 21 Other securities......................... 16.9 21.5 24.0 28.8 29.0 28.8 28.6 22 Foreign and international7.......... 55.5 58.4 66.5 75.2 76.0 78.1 80.3 23 Other miscellaneous investors8. . 19.3 23.2 38.6 43.6 47.7 43.2 43.4 1 Includes $1.0 billion of non-interest-bearing debt (of which $612 6 Data for F.R. Banks and U.S. Govt, agencies and trust funds are million on Mar. 31, 1977, was not subject to statutory debt limitations). actual holdings; data for other groups are Treasury estimates. 2 Includes (not shown separately): Securities issued to the Rural 7 Consists of the investments of foreign balances and international Electrification Administration and to State and local governments, de accounts in the United States. Beginning with 1974, the figures exclude positary bonds, retirement plan bonds, and individual retirement bonds. non-interest-bearing notes issued to the International Monetary Fund. 3 These nonmarketable bonds, also known as Investment Series B 8 Includes savings and loan associations, nonprofit institutions, cor Bonds, may be exchanged (or converted) at the owner’s option for 1 % porate pension trust funds, dealers and brokers, certain Govt, deposit per cent, 5-year marketable Treasury notes. Convertible bonds that have accounts, and Govt.-sponsored agencies. been so exchanged are removed from this category and recorded in the notes category above. Note.—Gross public debt excludes guaranteed agency securities and, 4 Nonmarketable certificates of indebtedness, notes, and bonds in the beginning in July 1974, includes Federal Financing Bank security issues. Treasury foreign series and foreign-currency series. Source.—For data by type of security, Monthly Statement of the Public 5 Held only by U.S. Govt, agencies and trust funds. Debt of the United States, U.S. Treasury Department; for data by holder, Treasury Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Federal Finance A33 1.43 U.S. GOVERNMENT MARKETABLE SECURITIES Ownership, by maturity Par value; millions of dollars; end of period 1977 1977 Type of holder 1975 1976 1975 1976 Jan. Feb. Jan. Feb. All maturities 1 to 5 years 1All holders................................................................................ 363,191 421,276 423,995 431,607 112,270 141,132 138,727 143,927 2 U.S. Govt, agencies and trust funds..................................... 19,347 16,485 16,214 15,788 7,058 6,141 6,143 6,167 3 87,934 96,971 94,134 95,837 30,518 31,249 30,933 31,076 4 Private investors....................................................................... 255,860 307,820 313,647 319,982 74,694 103,742 101,651 106,684 5 Commercial banks.............................................................. 64,398 78,262 78,077 79,706 29,629 40,005 40,110 42,533 6 Mutual savings banks......................................................... 3,300 4,072 4,169 4,304 1,524 2,010 1,941 2,114 7 Insurance companies........................................................... 7,565 10,284 10,070 10,121 2,359 3,885 3,706 3,765 8 Nonfinancial corporations.................................................. 9,365 14,193 15,330 16,367 1,967 2,618 2,981 3,884 9 Savings and loan associations............................................ 2,793 4,576 4,808 5,138 1,558 2,360 2,310 2,475 10 9,285 12,252 14,836 12,883 1,761 2,543 2,620 2,746 11 All others............................................................................. 159,154 184,182 186,357 191,463 35,894 50,321 47,984 49,168 Total, within 1 year 5 to 10 years 12 All holders................................................................................ 199,692 211,035 213,558 217,404 26,436 43,045 45,731 43,223 13 U.S. Govt, agencies and trust funds..................................... 2,769 2,012 1,767 1,934 3,283 2,879 2,870 2,163 14 F. R. Banks.............................................................................. 46,845 51,569 49,033 49,528 6,463 9,148 9,173 9,856 15 Private investors....................................................................... 150,078 157,454 162,758 165,942 16,690 31,018 33,688 31,204 16 Commercial banks.............................................................. 29,875 31,213 29,805 30,035 4,071 6,278 7,466 6,367 17 Mutual savings banks......................................................... 983 1,214 1,238 1,262 448 567 716 649 18 Insurance companies........................................................... 2,024 2,191 2,173 1,998 1,592 2,546 2,589 2,500 19 Nonfinancial corporations.................................................. 7,105 11,009 11,751 11,942 175 370 359 295 20 Savings and loan associations........................................... 914 1,984 2,115 2,404 216 155 313 188 21 State and local governments.............................................. 5,288 6,622 9,083 6,997 782 1,465 1,488 1,466 22 All others............................................................................. 103,889 103,220 106,592 111,305 9,405 19,637 20,756 19,740 Bills, within 1 year 10 to 20 years 23 All holders................................................................................ 157,483 163,992 164,005 164,175 14,264 11,865 11,814 11,764 24 U.S. Govt, agencies and trust funds..................................... 207 449 239 269 4,233 3,102 3,102 3,102 25 F. R. Banks........................................................................... 38,018 41,279 38,743 38,865 1,507 1,363 1,370 1,371 26 Private investors....................................................................... 119,258 122,264 125,023 125,041 8,524 7,400 7,342 7,291 27 Commercial banks.............................................................. 17,481 17,303 15,136 14,314 552 339 343 322 28 Mutual savings banks......................................................... 554 454 429 426 232 139 132 136 29 Insurance companies........................................................... 1,513 1,463 1,416 1,128 1,154 1,114 1,074 1,339 30 Nonfinancial corporations.................................................. 5,829 9,939 10,504 10,628 61 142 181 169 31 Savings and loan associations............................................ 518 1,266 1,341 1,445 82 64 55 58 32 4,566 5,556 8,057 5,689 896 718 713 700 33 All others............................................................................. 88,797 86,282 88,137 91,410 5,546 4,884 4,842 4,567 Other, within 1 year Over 20 years 42,209 47,043 49,553 53,229 10,530 14,200 14,165 15,288 35 U.S. Govt, agencies and trust funds..................................... 2,562 1,563 1,528 1,665 2,053 2,350 2,331 2,421 36 F. R. Banks............................................................................. 8,827 10,290 10,290 10,663 2,601 3,642 3,626 4,006 37 Private investors....................................................................... 30,820 35,190 37,735 40,901 5,876 8,208 8,208 8,861 38 Commercial banks. ............................................................ 12,394 13,910 14,669 15,721 271 427 353 449 39 Mutual savings banks......................................................... 429 760 809 836 112 143 141 143 40 Insurance companies........................................................... 511 728 757 870 436 548 527 519 41 1,276 1,070 1,247 1,314 57 55 58 77 42 396 718 774 959 22 13 14 14 43 State and local governments.............................................. 722 1,066 1,026 1,308 558 904 931 975 44 15,092 16,938 18,455 19,895 4,420 6,120 6,184 6,684 Note.—Direct public issues only. Based on Treasury Survey of Owner banks, 468 mutual savings banks, and 727 insurance companies, each ship from Treasury Bulletin (U.S. Treasury Dept.). about 90 per cent; (2) 447 nonfinancial corporations and 486 savings Data complete for U.S. Govt, agencies and trust funds and F.R. Banks, and loan assns., each about 50 per cent; and (3) 500 State and local but data for other groups include only holdings of those institutions govts., about 40 per cent. that report. The following figures show, for each category, the number “All others,” a residual, includes holdings of all those not reporting and proportion reporting as of February 28, 1977; (1) 5,499 commercial in the Treasury Survey, including investor groups not listed separately. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A34 Domestic Financial Statistics □ April 1977 1.44 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1976 1977 1977 Item 1974 1975 Week ending Wednesday Dec. Jan. Feb. Feb. 23 Mar. 2 Mar. 9 Mar. 16 Mar. 23 Mar. 30 1 U.S. Govt, securities............................. 3,579 6,027 13,059 12,502 12,871 '10,933 13,334 11,340 10,049 10,517 10,738 By maturity: 2 Bills.................................................... 2,550 3,889 7,511 7,630 7,593 '6,355 7,842 7,564 7,003 7,048 7,094 3 Other within 1 year........................... 250 223 172 156 283 192 333 221 263 235 245 4 1-5 years............................................ 465 1,414 3,355 2,805 3,262 '2,899 3,946 2,527 2,025 2,351 2,088 5 5-10 years.......................................... 256 363 1,653 1,604 1,388 '1,184 941 803 588 697 1,122 6 Over 10 years..................................... 58 138 368 307 346 '303 272 224 140 187 189 By type of customer: 7 U.S. Govt, securities dealers............ 652 885 1,650 1,641 1,537 '1,475 1,652 1,399 1,433 1,553 1,456 8 U.S. Govt, securities brokers........... 965 1,750 4,444 4,586 4,428 '3,613 4,241 3,411 2,661 2,869 3,441 9 Commercial banks............................. 998 1,451 2.999 2,884 3,013 '2,486 3,337 2,679 2,271 2,503 2,194 10 All others i......................................... 964 1,941 3,966 3,392 3,893 '3,359 4,105 3,851 3,683 3,592 3,647 11 Federal agency securities...................... 965 1,043 2,025 1,764 1,579 '1,648 1,623 1,299 1,366 1,984 1,586 1 Includes—among others—all other dealers and brokers in commodi Transactions are market purchases and sales of U.S. Govt, securities ties and securities, foreign banking agencies, and the F.R. System. dealers reporting to the F.R. Bank of New York. The figures exclude allotments of, and exchanges for, new U.S. Govt, securities, redemptions Note.—Averages for transactions are based on number of trading days of called or matured securities, or purchases or sales of securities under in the period. repurchase, reverse repurchase (resale), or similar contracts. 1.45 U.S. GOVERNMENT SECURITIES DEALERS Positions and Sources of Financing Par value; averages of daily figures, in millions of dollars 1976 1977 1977 Item 1974 1975 Week ending Wednesday Dec. Jan. Feb. Jan. 26 Feb. 2 Feb. 9 Feb. 16 Feb. 23 Mar. 2 Positions2 1 U.S. Govt, securities.............................. 2,580 5,884 10,840 8,914 6,251 8,426 5,582 6,937 6,365 6,295 5,431 2 Bills.................................................... 1,932 4,297 8,394 6,596 4,646 6,181 3.888 4,552 4,751 5,325 4,511 3 Other within 1 year........................... -6 265 155 138 193 151 196 209 137 211 221 4 1-5 years........................................... 265 886 1,336 1,270 587 1,348 857 923 460 247 347 5 5-10 years.......................................... 302 300 596 532 417 436 348 745 501 178 126 6 Over 10 years..................................... 88 136 359 379 407 310 292 508 516 334 226 7 Federal agency securities...................... 1,212 943 1,435 923 466 891 423 501 491 482 421 Sources of financing3 3,977 6,666 14,032 11,938 9,017 11,371 8,922 8,108 8,903 10,049 9,433 Commercial banks: 9 New York City................................. 1,032 1,621 2,567 2,362 1,360 1,904 1,430 1,372 1,314 1,383 1,451 10 Outside New York City................... 1,064 1,466 2,839 2,353 1,727 1,872 1,666 1,574 1.780 1,832 1,771 11 Corporations1....................................... 459 842 2,437 2,141 2,038 2,213 2,068 1,847 2; 044 2,187 2,173 12 Allother................................................ 1,423 2,738 6,188 5,082 3,892 5,381 3,759 3,315 3,764 4,648 4,038 1A11 business corporations except commercial banks and insurance firms and dealer departments of commercial banks against U.S. Govt, companies. and Federal agency securities (through both collateral loans and sales 2 Net amounts (in terms of par values) of securities owned by nonbank under agreements to repurchase), plus internal funds used by bank dealer dealer firms and dealer departments of commercial banks on a commit departments to finance positions in such securities. Borrowings against ment, that is, trade-date basis, including any such securities that have been securities held under agreement to resell are excluded where the borrowing sold under agreements to repurchase. The maturities of some repurchase contract and the agreement to resell are equal in amount and maturity, agreements are sufficiently long, however, to suggest that the securities that is, a matched agreement. involved are not available for trading purposes. Securities owned, and hence dealer positions, do not include securities purchased under agree Note.—Averages for positions are based on number of trading days ments to resell. in the period; those for financing, on the number of calendar days in the 3 Total amounts outstanding of funds borrowed by nonbank dealer period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Federal Finance A35 1.46 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars; end of period 1976 1977 Agency 1973 1974 1975 Aug. Sept. Oct. Nov. Dec. Jan. 1 Federal and Federally sponsored agencies........... 71,594 89,381 97,680 101,724 102,456 103,865 103,415 103,308 103,487 2 Federal agencies.................................................... 11,554 12,719 19,046 21,453 21,895 22,676 22,645 22,419 22,168 3 Defense Department1....................................... 1,439 1,312 1,220 1,152 1,136 1,128 1,117 1,113 1,095 4 Export-Import Bank2,3.................................... 2,625 2,893 7,188 7,945 7,728 8,353 8,336 8,574 8,557 5 Federal Housing Administration4................... 415 440 564 582 578 589 585 575 579 6 Government National Mortgage Association Participation Certificates5......................... 4,390 4,280 4,200 4,145 4,145 4,145 4,145 4,120 3,845 7 Postal Service6.................................................. 250 721 1,750 2,998 3,498 3,498 3,498 2,998 2,998 8 Tennessee Valley Authority............................. 2,435 3,070 3,915 4,535 4,713 4,865 4,865 4,935 4,985 9 United States Railway Association6............... 3 209 96 97 98 99 104 109 10 Federally sponsored agencies................................. 60,040 76,662 78,634 80,271 80,561 81,189 80,770 80,889 81,321 11 Federal home loan banks................................. 15,362 21,890 18,900 17,113 17,061 17,122 16,807 16,811 16,805 12 Federal Home Loan Mortgage Corporation.. 1,784 1,551 1,550 1,150 1,150 1,150 1,150 1,150 1,350 13 Federal National Mortgage Association........ 23,002 28,167 29,963 30,429 30,685 30,656 30,413 30,565 30,394 14 Federal land banks........................................... 10,062 12,653 15,000 16,566 16,566 17,124 17,127 17,127 17,304 15 Federal intermediate credit banks................... 6,932 8,589 9,254 10,687 10,791 10,712 10,669 10,494 10,631 16 Banks for cooperatives..................................... 2,695 3,589 3,655 3,919 3,901 4,023 4,207 4,330 4,425 17 Student Loan Marketing Association7............ 200 220 310 405 405 400 r395 410 410 18 Other.................................................................. 3 3 2 2 2 2 2 2 2 Memo: 19 Federal Financing Bank debt6,8........................... 4,474 17,154 25,052 25,888 26,636 27,028 28,711 29,848 Lending to Federal and Federally sponsored agencies: 20 Export-Import Bank3....................................... 4,595 4,985 4,768 4,768 4,768 5,208 5,208 21 Postal Service6.................................................. 500 1,500 2,748 3,248 3,248 3,248 2,748 2,748 22 Student Loan Marketing Association7........... 220 310 405 405 400 395 410 410 23 Tennessee Valley Authority............................. 895 1,840 2,560 2,738 2,810 2,890 3,110 3,160 24 United States Railway Association6............... 3 209 96 97 98 99 104 109 Other lending:9 25 Farmers Home Administration....................... 2,500 7,000 9,650 9,650 10,250 10,250 10,750 11,450 26 Rural Electrification Administration.............. 566 1,215 1,514 1,573 1,674 1,768 1,509 27 Others................................................................ 356 1,134 3,393 3,468 3,489 3,704 4,613 5,254 1 Consists of mortgages assumed by the Defense Department between 7 Unlike other Federally sponsored agencies, the Student Loan 1957 and 1963 under family housing and homeowners assistance programs. Marketing Association may borrow from the Federal Financing Bank 2 Includes participation certificates reclassified as debt beginning (FFB) since its obligations are guaranteed by the Department of Health, Oct. 1, 1976. Education, and Welfare. 3 Off-budget Aug. 17,1974 through Sept. 30,1976 on-budget thereafter. 8 The FFB, which began operations in 1974, is authorized to purchase 4 Consists of debentures issued in payment of Federal Housing Ad or sell obligations issued, sold, or guaranteed by other Federal agencies. ministration insurance claims. Once issued, these securities may be sold Since FFB incurs debt solely for the purpose of lending to other agencies, privately on the securities market. its debt is not included in the main portion of the table in order to avoid 5 Certificates of participation issued prior to fiscal 1969 by the Govern double counting. ment National Mortgage Association acting as trustee for the Farmers 9 Includes FFB purchases of agency assets and guaranteed loans; Home Administration; Department of Health, Education, and Welfare; the latter contain loans guaranteed by numerous agencies with the Department of Housing and Urban Development; Small Business Ad guarantees of any particular agency being generally small. The Farmers ministration; and the Veterans Administration. Home Administration item consists exclusively of agency assets, while the 6 Off-budget. Rural Electrification Administration entry contains both agency assets and guaranteed loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A36 Domestic Financial Statistics □ April 1977 1.47 NEW SECURITY ISSUES State and Local Government and Corporate Millions of dollars 1976 Type of issue or issuer, 1974 1975 1976 or use July Aug. Sept.r Oct. Nov. Dec. State and local government 1 All issues, new and refunding 1...................................... 24,315 30,607 2,691 2,765 2,808 By type of issue: 2 General obligation...................................................... 13,563 16,020 1,186 1,269 1,265 3 Revenue....................................................................... 10,212 14,511 1,496 1,488 1,538 4 Housing Assistance Administration 2....................... 461 5 U.S. Govt, loans........................................................ 79 76 9 8 5 By type of issuer: 6 State............................................................................. 4,784 7,438 308 669 470 7 Special district and statutory authority.................... 8.638 12,441 1,261 1,162 1,229 8 Municipalities, counties, townships, school districts 10^17 10,660 1,118 930 1,104 9 Issues for new capital, total........................................... 23,508 29,495 2,470 2,504 2,590 By use of proceeds: 10 Education................................................................... 4,730 4,689 309 373 356 11 Transportation........................................................... 1,712 2,208 36 166 251 12 Utilities and conservation.......................................... 5,634 7,209 1,000 784 747 13 Social welfare............................................................. 3,820 4,392 488 694 767 14 Industrial aid.............................................................. 494 445 66 24 30 15 Other purposes........................................................... 7,118 10,552 571 463 439 Corporate 16 All issues 3.................................... '38,313 '53,619 53,608 3,216 3,365 4,832 4,427 3,458 6,334 17 Bonds............................................ 32,066 42,756 42,515 2,587 2,687 4,278 3,479 2,768 5,414 By type of offering: 18 Public........................................ 25,903 32.583 26,853 1,239 1,565 2,100 2,729 1,656 2,568 19 Private placement..................... 6,160 10,172 15,662 1,348 1,122 2,178 750 1,112 2,846 By industry group: 20 Manufacturing......................... 9,867 16,980 13,161 1,090 749 687 1,261 512 2,196 21 Commercial and miscellaneous 1,845 2,750 4,321 171 319 543 75 376 661 22 Transportation......................... 1,550 3,439 4,350 118 48 1,205 240 193 564 23 Public utility............................. 8,873 9,658 8,287 621 663 1,118 803 795 550 24 Communication....................... 3,710 3,464 2,801 20 218 147 155 163 194 25 Real estate and financial......... 6,218 6,469 9,601 568 692 577 946 728 1,250 26 Stocks........................................... 6,247 10,863 11,093 629 678 554 948 690 920 By type: 27 Preferred................................... 2,253 3,458 2,788 89 214 136 275 282 308 28 Common................................... 3,994 7,405 8,305 540 464 418 673 408 612 By industry group: 29 Manufacturing. ....................... 544 1,670 2,236 108 282 83 87 9 110 30 Commercial and miscellaneous 940 1,470 1,183 164 69 33 73 34 198 31 T ransportation......................... 22 1 24 13 7 32 Public utility............................. 3,964 6,235 6,101 311 257 347 611 532 596 33 Communication....................... 217 1,002 776 6 3 27 34 Real estate and financial......... 562 488 771 40 54 84 177 88 15 1 Par amounts of long-term issues based on date of sale. than $100,000, secondary offerings, undefined or exempted issues as 2 Only bonds sold pursuant to the 1949 Housing Act, which are secured defined in the Securities Act of 1933, employee stock plans, investment by contract requiring the Housing Assistance Administration to make companies other than closed-end, intracorporate transactions, and sales to annual contributions to the local authority. foreigners. tha 3 n F i 1 g u y r e e a s r , , w so h l i d c h f o re r p c r a e s s h e n i t n g th ro e s s U n p i r t o e c d e e S d ta s te o s f , i a s r s e u e p s r i m nc a ip tu a r l i n a g m i o n u n m t o o re r As S s o o u ci r a c ti e o s n .— ; c S o ta rp te o r a a n te d s l e o c c u a r l i ti g es o , v S er e n c m ur e it n i t e s s e a c n u d r it E ie x s c , ha S n e g c e u ri C tie o s m I m n i d s u si s o tr n y . number of units multiplied by offering price. Excludes offerings of less Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Corporate Finance A37 1.48 CORPORATE SECURITIES Net Change in Amounts Outstanding Millions of dollars 1975 1976 Source of change, or industry 1973 1974 1975 Ql Q2 Q3 Q4 Ql Q2 Q3 All issues1 33,559 39,344 53,255 15,211 15,602 9,079 13,363 13,671 14,229 11,385 2 Retirements............................................................ 11,804 9,935 10,991 2,088 3,211 2,576 3,116 2,315 3,668 2,478 3 Net change.............................................................. 21,754 29,399 42,263 13,123 12,390 6,503 10,247 11,356 10,561 8,907 Bonds and notes 4 New issues.............................................................. 21,501 31,354 40,468 12,759 11,460 6,654 9,595 9,404 10,244 8,701 5 Retirements............................................................ 8,810 6,255 8,583 1,587 2,336 2,111 2,549 1,403 3,159 1,826 6 Net change: Total.................................................. 12,691 25,098 31,886 11,172 9,124 4,543 7,047 8,001 7,084 6,875 By industry: 7 Manufacturing................................................ 801 7,404 13,219 5,134 4,574 1,442 2,069 2,966 1,529 1,551 8 Commercial and other2................................. -109 1,116 1,605 373 483 221 528 203 726 610 9 Transportation, including railroad............... 1,044 341 2,165 1 429 147 1,588 985 488 1,092 10 Public utility................................................... 4,265 7,308 7,236 2,653 1,977 1,395 1,211 1,820 1,260 2,109 11 Communication.............................................. 3,165 3,499 2,980 1,269 810 472 429 498 953 335 12 Real estate and financial............................... 3,523 5,428 4,682 1,742 852 866 1,222 1,530 2,128 1,178 Common and preferred stock 13 New issues............................................................. 12,057 7,980 12,787 2,452 4,142 2,425 3,768 4,267 3,985 2,684 14 Retirements............................................................ 2,993 3,678 2,408 501 875 465 567 912 509 652 15 Net change: Total.................................................. 9,064 4,302 10,377 1,951 3,266 1,960 3,200 3,355 3,477 2,032 By industry: 16 Manufacturing................................................ 658 17 1,607 262 500 412 433 838 1,120 744 17 Commercial and other2................................. 1,411 -135 1,137 77 490 108 462 88 318 117 18 Transportation, including railroad............... -93 -20 65 1 7 53 4 5 25 17 19 Public utility................................................... 4,509 3,834 6,015 1,569 1,866 1,043 1,537 2,174 1,300 932 1,399 398 1,084 24 359 97 604 47 735 19 21 Real estate and financial............................... 1,181 207 468 18 43 247 160 203 -21 203 1 Excludes issues of investment companies. New issues and retirements exclude foreign sales and include sales of 2 Extractive and commercial and miscellaneous companies. securities held by affiliated companies, special offerings to employees, new stock issues and cash proceeds connected with conversions of bonds Note.—Securities and Exchange Commission estimates of cash trans into stocks. Retirements, defined in the same way, include securities actions only, as published in the Commission’s Statistical Bulletin. retired with internal funds or with proceeds of issues for that purpose. 1.49 OPEN-END INVESTMENT COMPANIES Net Sales and Asset Position Millions of dollars 1976 1977 Item 1975 1976 Aug. Sept. Oct. Nov. Dec. Jan. Feb. INVESTMENT COMPANIES Excluding money market funds: 1 3,302 4,226 256 338 378 446 661 655 423 2 Redemptions of own shares2.......................... 3,686 6,802 536 573 450 419 628 628 463 3 Net sales............................................................ -384 2,496 -280 -235 -72 27 33 141 -40 4 Assets3.............................................................. 42,179 47,537 45,457 46,138 44,858 45,369 47,537 45,760 44,948 5 3,748 2,747 2,561 2,507 2,434 2,635 2,747 2,958' 3,276 6 Other............................................................. 38,431 44,790 42,896 43,631 42,424 42,734 44,790 42,802' 41,672 1 Includes reinvestment of investment income dividends. Excludes 4 Also includes all U.S. Govt, securities and other short-term debt reinvestment of capital gains distributions and share issue of conversions securities. from one fund to another in the same group. 2 Excludes share redemption resulting from conversions from one fund Note.—Investment Company Institute data based on reports of mem to another in the same group. bers, which comprise substantially all open-end investment companies 3 Market value at end of period, less current liabilities. registered with the Securities and Exchange Commission. Data reflect newly formed companies after their initial offering of securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A38 Domestic Financial Statistics □ April 1977 1.50 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1975 1976 Account 1974 1975 1976 Q2 Q3 Q4 Ql Q2 Q3 Q4 1 Profits before tax..................................................... 127.6 114.5 148.0 105.8 126.9 131.3 141.1 146.2 150.2 154.5 2 Profits tax liability................................................... 52.4 49.2 64.4 44.8 54.8 57.2 61.4 63.5 65.1 67.5 3 Profits after tax........................................................ 75.2 65.3 83.6 61.0 72.1 74.2 79.7 82.7 85.1 86.9 4 Dividends................................................................. 30.8 32.1 35.2 31.9 32.6 32.2 33.1 34.4 35.4 37.7 5 Undistributed profits.............................................. 44.4 33.2 48.4 29.1 39.5 42.0 46.6 48.3 49.7 49.2 6 Capital consumption allowances with capital con sumption adjustment....................................... 81.6 89.4 97.3 87.9 90.5 92.9 94.3 96.2 98.2 100.5 7 Net cash flow........................................................... 126.0 122.6 145.7 117.0 130.0 134,9 140.9 144.5 147.9 149.7 Source.—U.S. Dept, of Commerce, Survey of Current Business, 1.51 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, end of period 1975 1976 Account 1971 1972 1973 1974 Q2 Q3 Q4 Ql Q2 Q3 1Current assets......................................................... 529.4 574.4 643.2 712.2 703.2 716.5 731.6 753.5 775.4 791.8 2 Cash.................................................................... 53.3 57.5 61.6 62.7 63.7 65.6 68.1 68.4 70.8 71.1 3 U.S. Govt, securities......................................... 11.0 10.2 11.0 11.7 12.7 14.3 19.4 21.7 23.3 23.9 4 Notes and accounts receivable........................... 221.1 243.4 269.6 293.2 288.1 298.0 298.2 310.9 321.8 328.5 5 U.S. Govt.1.................................................... 3.5 3.4 3.5 3.5 3.3 3.3 3.6 3.6 3.7 4.3 6 Other............................................................... 217.6 240.0 266.1 289.7 284.8 294.7 294.6 307.3 318.1 324.2 7 Inventories.......................................................... 200.4 215.2 246.7 288.0 281.4 279.6 285.8 288.8 295.6 302.1 8 Other................................................................... 43.8 48.1 54.4 56.6 57.3 59.0 60.0 63.6 63.9 66.3 9 Current liabilities.................................................... 326.0 352.2 401.0 450.6 434.2 444.7 457.5 465.9 475.9 484.1 10 Notes and accounts payable............................... 220.5 234.4 265.9 292.7 275.9 279.6 288.0 286.9 293.8 291.7 11 U.S. Govt.1.................................................... 4.9 4.0 4.3 5.2 5.8 6.2 6.4 6.4 6.8 7.0 12 Other............................................................... 215.6 230.4 261.6 287.5 270.1 273.4 281.6 280.5 287.0 284.7 13 Accrued Federal income taxes......................... 13.1 15.1 18.1 23.2 17.7 19.4 20.7 23.9 22.0 24.9 14 Other.................................................................. 92.4 102.6 117.0 134.8 140.6 145.6 148.8 155.0 160.1 167.5 15 Net working capital............................................... 203.6 221.3 242.3 261.5 269.0 271.8 274.1 287.6 299.5 307.7 1 Receivables from, and payables to, the U.S. Govt, exclude amounts Source.—Securities and Exchange Commission estimates published offset against each other on corporations’ books. in the Commission’s Statistical Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Corporate Finance A39 1.52 BUSINESS EXPENDITURES on New Plant and Equipment Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1975 1976 1977 Industry 1975 1976 Q3 Q4 Ql Q2 Q3 Q4 Ql 2 r Q22 1 All industries.......................................................... 112.75 120.82 112.16 111.80 114.72 118.12 122.55 125.22 129.19 132.71 Manufacturing 2 Durable goods industries................................... 21.88 23.50 21.01 21.07 21.63 22.54 24.59 25.50 25.33 26.77 3 Nondurable goods industries............................ 26.13 29.22 26.38 25.75 27.58 28.09 30.20 28.93 30.84 31.13 Nonmanufacturing 4 Mining................................................................ 3.80 3.98 3.82 3.82 3.83 3.83 4.21 4.13 4.26 4.16 Transportation: 5 Railroad.......................................................... 2.56 2.35 2.75 2.39 2.08 2.64 2.69 2.63 2.37 2.68 6 Air................................................................... 1.87 1.31 2.12 1.65 1.18 1.44 1.12 1.41 1.76 1.45 7 Other............................................................... 3.03 3,56 2.99 3.56 3.29 4.16 3.44 3.49 2.87 2.45 Public utilities: 8 Electric............................................................ 16.99 18.90 16.58 17.92 18.56 18.82 18.22 19.49 20.44 21.96 9 Gas and other................................................ 3.14 3.47 3.21 3.00 3.36 3.03 3.45 3.96 4.08 4.24 10 Communication................................................. 12.76 12.93 12.95 12.22 12.54 12.62 13.64 14.30 11 Commercial and other1..................................... 20.61 20.87 20.34 20.44 20.68 20.94 20.99 21.36 | J/•/j dI^oI 1 Includes trade, service, construction, finance, and insurance. Note.—Estimates for corporate and noncorporate business, excluding 2 Anticipated by business. agriculture; real estate operators; medical, legal, educational, and cultural service; and nonprofit organizations. Source.—U.S. Dept, of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A40 Domestic Financial Statistics □ April 1977 1.53 MORTGAGE MARKETS Millions of dollars, except as noted 1976 1977 Item 1974 1975 1976 Sept. Oct. Nov. Dec. Jan. Feb. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms:1 1 Purchase price (thous. dollars)..................... 40.1 44.6 48.4 50.6 49.0 48.6 51.0 '52.5 51.8 2 Amount of loan (thous. dollars)................. 29.8 33.3 35.9 37.4 36.2 36.0 37.1 '39.0 38.6 3 Loan/price ratio (per cent)........................... 74.3 74.7 74.2 75.6 75.3 75.6 74.7 '76.3 76.1 4 Maturity (years)............................................ 26.3 26.8 27.2 27.7 28.0 27.0 27.7 28.2 27.7 5 Fees and charges (per cent of loan amount)2. 1.30 1.54 1.44 1.42 1.38 1.36 1.38 '1.38 1.29 6 Contract rate (per cent per annum)............ 8.71 8.75 8.76 8.85 8.85 8.83 8.87 '8.82 8.77 Yield (per cent per annum): 7 FHLBB series 3.............................................. 8.92 9.01 8.99 9.08 9.07 9.05 9.10 9.05 8.98 8 HUD series4.................................................. 9.22 9.10 8.99 9.00 9.00 8.95 8.90 8.80 8.80 SECONDARY MARKETS Yields (per cent per annum) on— 9 FHA mortgages (HUD series)5................... 9.55 9.19 8.82 8.82 8.55 8.45 8.25 8.40 8.50 10 GNMA securities6........................................ 8.72 8.52 8.17 8.10 7.98 7.93 7.59 7.85 7.98 FNMA auctions:7 11 Government-underwritten loans.............. 9.53 9.31 8.92 8.88 8.75 8.66 8.45 8.48 8.55 12 Conventional loans................................... 9.70 9.36 9.12 9.11 9.05 9.00 8.84 8.82 8.86 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings at end of period: 13 Total................................................................... 29,578 31,824 32,904 32,062 32,019 32,929 32,904 32,848 32,792 14 FHA-insured.................................................. 19,189 19,732 18,916 19,133 19,077 18,986 18,916 18,854 18,771 15 VA-guaranteed.............................................. 8,310 9,573 9,212 9,366 9,314 9,264 9,212 9,162 9,115 16 Conventional................................................. 2,080 2,519 4,776 3,563 3,628 4,679 4,776 4,833 4,906 Mortgage transactions during period: 17 Purchases........................................................... 6,953 4,263 3,606 199 162 1,131 191 141 150 18 Sales............................................................... 4 2 86 8 Mortgage commitments:8 19 Contracted during period................................ 10,765 6,106 6,247 463 480 615 290 1,180 968 20 Outstanding at end of period........................... 7,960 4,126 3,398 3,983 3,672 3,649 3,398 4,142 4,707 Auction of 4-month commitments to buy— Government-underwritten loans: 21 Offered9......................................................... 5,492.7 7,042.8 4,929.8 221.0 235.5 494.1 56.9 747.4 868.4 22 Accepted........................................................ 2,371.4 3,848.3 2,787.2 117.9 107.1 221.1 41.5 549.1 484.7 Conventional loans: 23 Offered9......................................................... 1,206.8 1,401.1 2,595.7 321.7 297.5 353.3 150.2 326.8 300.0 24 Accepted........................................................ 656.4 765.2 1,879.3 225.4 215.8 296.9 135.4 238.3 235.8 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings at end of period:1 o 25 Total.................................................................. 4,586 4,987 4,269 4,269 4,190 4,162 4,269 3,896 3,672 26 FHA/VA........................................................ 1,904 1,824 1,618 1,679 1,660 1,638 1,618 1,594 1,580 2,682 3,163 2,651 2,590 2,530 2,523 2,651 2,302 2,092 Mortgage transactions during period: 28 Purchases........................................................... 2,191 1,716 1,175 88 78 101 208 16 98 29 Sales................................................................... 52 1,020 1,396 93 116 91 60 51 290 Mortgage commitments:11 30 Contracted during period. ......................... 4,553 982 1,477 163 171 245 105 250 31 Outstanding at end of period........................... 2,390 111 333 243 326 452 333 462 1 Weighted averages based on sample surveys of mortgages originated securities, assuming prepayment in 12 years on pools of 30-year FHA/VA by major institutional lender groups. Compiled by the Federal Home Loan mortgages carrying the prevailing ceiling rate. Monthly figures are Bank Board in cooperation with the Federal Deposit Insurance Cor unweighted averages of Monday quotations for the month. poration. 7 Average gross yields (before deduction of 38 basis points for mortgage 2 Includes all fees, commissions, discounts, and “points” paid (by servicing) on accepted bids in Federal National Mortgage Association’s the borrower or the seller) in order to obtain a loan. auctions of 4-month commitments to purchase home mortgages, assuming 3 Average effective interest rates on loans closed, assuming prepayment prepayment in 12 years for 30-year mortgages. No adjustments are made at the end of 10 years. for FNMA commitment fees or stock related requirements. Monthly 4 Average contract rates on new commitments for conventional first figures are unweighted averages for auctions conducted within the month. mortgages, rounded to the nearest 5 basis points; from Dept, of Housing 8 Includes some multifamily and nonprofit hospital loan commitments and Urban Development. in addition to 1- to 4-family loan commitments accepted in FNMA’s 5 Average gross yields on 30-year, minimum-downpayment, Federal free market auction system, and through the FNMA-GNMA Tandem Housing Administration-insured first mortgages for immediate delivery plans. in the private secondary market. Any gaps in data are due to periods of 9 Mortgage amounts offered by bidders are total bids received. adjustment to changes in maximum permissible contract rates. 10 Includes participations as well as whole loans. 6 Average net yields to investors on Government National Mortgage 11 Includes conventional and Government-underwritten loans. Association-guaranteed, mortgage-backed, fully-modified pass-through Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Real Estate Debt A41 1.54 MORTGAGE DEBT OUTSTANDING Millions of dollars End of year End of quarter Type of holder, and type of property 1976 1972 1973 1974 1975 Ql Q2 Q3 Q4 1All holders.................................................. 603,417 682,321 742,504 801,546 817,278 '838,761 '862,229 '883,843 7 1- to 4-family........................................ 372,793 416,883 449,937 491,678 503,402 519,437 '537,321 '552,994 3 Multifamily............................................ 82,572 92,877 99,851 100,348 100,487 '100,548 '100,755 '101,131 4 Commercial........................................... 112,294 131,308 146,428 158,644 161,024 164,527 168,144 171,978 5 Farm...................................................... 35,758 41,253 46,288 50,876 52,365 54,249 56,009 57,740 6 Maior financial institutions....................... 450,000 505,400 542,552 581,296 592,061 609,086 626,487 642,851 7 Commercial banks1............................... 99,314 119,068 132,105 136,186 137,986 141,086 143,986 146,586 8 1- to 4-family..................................... 57,004 67,998 74,758 77,018 78,218 80,218 81,928 83,402 9 Multifamily........................................ 5,778 6,932 7,619 5,915 5,515 5,115 5,040 5,072 10 Commercial....................................... 31,751 38,696 43,679 46,882 47,812 49,112 50,251 51,233 11 Farm.................................................. 4,781 5,442 6,049 6,371 6,441 6,641 6,767 6,879 12 Mutual savings banks............................ 67,556 73,230 74,920 77,249 77, 738 78,735 80,145 81,554 13 1- to 4-family..................................... 46,229 48,811 49,213 50,025 50,344 50,989 51,902 52,814 14 Multifamily........................................ 10,910 12,343 12,923 13,792 13,876 14,030 14,282 14,534 15 Commercial....................................... 10,355 12,012 12,722 13,373 13,456 13,653 13,897 14,141 16 Farm.................................................. 62 64 62 59 62 63 64 65 17 Savings and loan associations................ 206,182 231,733 249,293 278,693 286,556 299,574 312,139 323,130 18 1- to 4-family..................................... 167,049 187,750 201,553 224,710 231 ,337 241,996 252,521 261,732 19 Multifamily........................................ 20,783 22,524 23,683 25,417 25,847 26,722 27,468 28,116 20 Commercial....................................... 18,350 21,459 24,057 28,566 29,372 30,856 32,150 33,282 21 Life insurance companies...................... 76,948 81,369 86,234 89,168 89,781 89,691 90,217 91,581 22 1- to 4-family.................................... 22,315 20,426 19,026 17,590 17,321 16,861 16,458 16,058 23 Multifamily........................................ 17,347 18,451 19,625 19,629 19,726 19,374 19,256 19,276 24 Commercial....................................... 31,608 36,496 41,256 45,196 45,907 46,456 47,322 48,766 25 Farm.................................................. 5,678 5,996 6,327 6,753 6,827 7,000 7,181 7,481 26 Federal and related agencies.................... 40,157 46,721 58,320 66,891 67,350 '66,033 '67,314 '66,755 27 Government National Mortgage Assn.. 5,113 4,029 4,846 7,438 7,619 5,557 5,068 4,241 28 1- to 4-family..................................... 2,513 1,455 2,248 4,728 4,886 3,165 2,486 1,970 29 Multifamily........................................ 2,600 2,574 2,598 2,710 2,733 2,392 2,582 2,271 30 Farmers Home Admin........................... 1,019 1,366 1,432 1,109 650 830 1,355 1,064 31 1- to 4-family.................................... 279 743 759 208 97 228 754 454 32 Multifamily........................................ 29 29 167 215 23 46 143 218 33 Commercial....................................... 320 218 156 190 96 151 133 72 34 Farm.................................................. 391 376 350 496 434 405 325 320 35 Federal Housing and Veterans Admin... 3,338 3,476 4,015 4,970 5,033 '5,777 r5,092 '5,750 36 1- to 4-family..................................... 2,199 2,013 2,009 1,990 1 ,908 1,781 '1,716 '1,676 37 Multifamily........................................ 1,139 1,463 2,006 2,980 3,125 '3,330 '3,376 '3,474 38 Federal National Mortgage Assn.......... 19,791 24,175 29,578 31,824 32,182 32,028 32,962 32,904 39 1- to 4-family..................................... 17,697 20,370 23,778 25,813 26,262 26,112 27,030 26,934 40 Multifamily........................................ 2,094 3,805 5,800 6,011 5,920 5,916 5,932 5,970 41 Federal land banks................................. 9,107 11,071 13,863 16,563 17,264 17,978 18,568 19,127 42 1- to 4-family..................................... 13 123 406 549 563 575 586 603 43 Farm.................................................. 9,094 10,948 13,457 16,014 16,701 17,403 17,982 18,524 44 Federal Home Loan Mortgage Corp.... 1,789 2,604 4,586 4,987 4,602 4,529 4,269 4,269 45 1- to 4-family..................................... 1,754 2,446 4,217 4,588 4,247 4,166 3,917 3,889 46 Multifamily........................................ 35 158 369 399 355 363 352 380 47 Mortgage pools or trusts2......................... 14,404 18,040 23,799 34,138 37,684 41,225 44,960 49,801 48 Government National Mortgage Assn... 5,504 7,890 11,769 18,257 20,479 23,634 26,725 30,572 49 1- to 4-family..................................... 5,353 7,561 11,249 17,538 19,693 22,821 25,841 29,583 50 Multifamily........................................ 151 329 520 719 786 813 884 989 51 Federal Home Loan Mortgage Corp... 441 766 757 1,598 1,999 2,153 2,506 2,671 52 1- to 4-family..................................... 331 617 608 1,349 1,698 1,831 2,141 2,282 53 Multifamily........................................ 110 149 149 249 301 322 365 389 54 Farmers Home Admin........................... 8,459 9,384 11,273 14,283 15,206 15,438 15,729 16,558 55 1- to 4-family..................................... 5,017 5,458 6,782 9,194 9,516 9,670 9,587 10,219 56 Multifamily........................................ 131 138 116 295 542 541 535 532 57 Commercial....................................... 867 1,124 1,473 1,948 2,122 2,104 2,291 2,440 58 Farm.................................................. 2,444 2,664 2,902 2,846 3,026 3,123 3,316 3,367 59 Individuals and others3............................. 98,856 112,160 117,833 119,221 120,183 c122,417 123,468 124,436 60 1- to 4-family..................................... 45,040 51 ,112 53,331 56,378 57,312 59,024 60,454 61,378 61 Multifamily........................................ 21,465 23,982 24,276 22,017 21,738 c21,584 20,540 19,910 62 Commercial....................................... 19,043 21,303 23,085 22,489 22,259 22,195 22,100 22,044 63 Farm.................................................. 13,308 15,763 17,141 18,337 18,874 19,614 20,374 21,104 1 Includes loans held by nondeposit trust companies but not bank trust Note.—Based on data from various institutional and Govt, sources, departments. with some quarters estimated in part by Federal Reserve in conjunction 2 Outstanding principal balances of mortgages backing securities in with the Federal Home Loan Bank Board and the Dept, of Commerce. sured or guaranteed by the agency indicated. Separation of nonfarm mortgage debt by type of property, if not re 3 Other holders include mortgage companies, real estate investment ported directly, and interpolations and extrapolations where required, are trusts, State and local credit agencies, State and local retirement funds, estimated mainly by Federal Reserve. Multifamily debt refers to loans on noninsured pension funds, credit unions, and U.S. agencies for which structures of 5 or more units. amounts are small or separate data are not readily available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A42 Domestic Financial Statistics □ April 1977 1.55 CONSUMER INSTALMENT CREDIT Total Outstanding, and Net Change Millions of dollars 1976 1977 Holder, and type of credit 1974 1975 1976 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Amounts outstanding (end of period) 1Total.................................................... 155,384 162,237 178,775 171,160 172,918 173,930 175,333 178,775 177,975 178,252 By holder: 2 Commercial banks.......................... 75,846 78,703 85,379 82,961 83,714 84,152 84,278 85,379 85,051 85,005 3 Finance companies......................... 36,208 36,695 39,642 38,398 38,575 38,809 39,129 39,642 39,665 39,831 4 Credit unions................................... 22,116 25,354 30,546 28,956 29,600 29,711 30,053 30,546 30,410 30,701 5 Retailers1......................................... 17,933 18,002 19,178 16,911 17,012 17,205 17,726 19,178 18,693 18,322 6 Others2............................................. 3,281 3,483 4,030 3,934 4,017 4,053 4,147 4,030 4,156 4,393 By type of credit: 7 Automobile....................................... 50,392 53,028 60,498 58,665 59,270 59,717 60,002 60,498 60,349 60,774 8 Commercial banks...................... 30,994 31,534 35,313 34,414 34,701 35,009 35,095 35,313 35,284 35,492 9 Indirect.................................... 18,687 18,353 19,642 19,404 19,495 19,611 19,575 19,642 19,566 19,640 10 Direct....................................... 12,306 13,181 15,671 15,010 15,206 15,398 15,520 15,671 15,719 15,852 11 Finance companies..................... 10,618 11,439 13,059 12,748 12,808 12,901 12,957 13,059 12,973 13,042 12 Credit unions............................... 8,414 9,653 11,633 11,024 11,270 11,311 11,442 11,633 11,579 11,690 13 Others........................................... 366 402 493 479 491 496 508 493 513 550 Mobile homes: 14 Commercial banks...................... 8,972 8,704 8,233 8,379 8,340 8,294 8,254 8,233 8,146 8,094 15 Finance companies..................... 3,524 3,451 3,277 3,323 3,319 3,309 3,295 3,277 3,248 3,207 16 Home improvement......................... 7,754 8,004 8,773 8,562 8,665 8,726 8,790 8,773 8,736 8,750 17 Commercial banks...................... 4,694 4,965 5,381 5,263 5,318 5,359 5,388 5,381 5,340 5,307 Revolving credit: 18 Bank credit cards........................ 8,281 9,501 11,075 9,924 10,153 10,232 10,329 11,075 10,996 10,820 19 Bank check credit....................... 2,797 2,810 3,010 2,870 2,922 2,933 2,935 3,010 3,031 3,039 20 All other........................................... 73,664 76,738 83,910 79,438 80,249 80,719 81,728 83,910 83,469 83,568 21 Commercial banks, total............ 20,108 21,188 22,368 22,112 22,280 22,325 22,277 22,368 22,254 22,253 22 Personal loans......................... 13,771 14,629 15,606 15,308 15,450 15,534 15,517 15,606 15,569 15,590 23 Finance companies, total............ 21,717 21,655 23,178 22,192 22,316 22,469 22,748 23,178 23,319 23,454 24 Personal loans......................... 16,961 17,681 19,043 18,275 18,371 18,509 18,773 19,043 19,002 18,998 25 Credit unions............................... 13,037 14,937 17.993 17,060 17,438 17,505 17,706 17,993 17,915 18,086 26 Retailers....................................... 17,933 18,002 19,178 16,911 17,012 17,205 17,726 19,178 18,693 18,322 27 Others........................................... 869 956 1,193 1,163 '1,203 1,215 1,271 1,193 1,288 1,453 Net change (during period)3 28 Total.................................................... 8,952 6,843 16,539 1,403 1,481 1,564 1,243 1,823 1,918 2,022 By holder: 29 Commercial banks.......................... 3,975 2,851 6,678 518 697 671 381 913 565 829 30 Finance companies......................... 806 483 2,946 169 233 317 245 364 481 442 31 Credit unions................................... 2,507 3,238 5,192 386 483 280 395 537 416 540 32 Retailers.......................................... 1,538 69 1,176 183 24 263 98 64 249 118 33 Others.............................................. 126 202 547 148 45 33 124 -55 207 93 By type of credit: 34 Automobile....................................... 327 2,631 7,470 621 605 528 477 1,013 758 884 35 Commercial banks...................... -508 535 3,779 377 376 350 221 652 418 504 36 Indirect..................................... -310 -340 1,289 159 125 117 70 330 160 239 37 Direct....................................... -198 875 2,490 218 251 233 151 322 258 265 38 Finance companies..................... -100 821 1,620 62 28 77 98 146 99 161 39 Credit unions............................... 958 1,239 1,980 136 172 105 144 207 174 213 40 Other............................................ -23 36 91 46 28 -4 14 8 66 6 Mobile homes: 41 Commercial banks...................... 632 -268 -471 -35 -53 -56 -43 32 -43 -26 42 Finance companies..................... 168 -73 -174 -16 -16 -16 -16 -16 -18 -43 43 Home improvement......................... 804 248 768 39 65 73 103 73 130 73 44 Commercial banks...................... 611 271 416 25 43 44 55 54 36 14 Revolving credit: 45 Bank credit cards........................ 1,443 1,220 1,576 86 166 123 71 -33 28 170 46 Bank check credit....................... 543 14 199 -6 17 27 6 7 41 32 47 All other........................................... 5,036 3,072 7,172 714 698 884 645 747 1,023 931 48 Commercial banks, total............ 1,255 1,080 1,180 71 148 183 72 199 85 134 49 Personal loans......................... 898 858 977 46 108 161 47 148 101 114 50 Finance companies, total........... 803 -64 1,523 126 223 258 163 236 401 320 51 Personal loans......................... 479 717 1,362 106 198 237 161 113 178 129 52 Credit unions............................... 1,473 1,900 3,056 240 297 166 239 313 227 312 53 Retailers....................................... 1,538 69 1,176 183 24 263 98 64 249 118 54 Others........................................... -33 87 237 96 5 15 73 -66 60 48 1 Excludes 30-day charge credit held by retailers, oil and gas companies, Note.—Total consumer noninstalment credit outstanding—credit and travel and entertainment companies. scheduled to be repaid in a lump sum, including single-payment loans, 2 Mutual savings banks, savings and loan associations, and auto dealers. charge accounts, and service credit—amounted to $39.0 billion at the 3 Net change equals extensions minus liquidations (repayments, charge- end of 1976, $35.0 billion at the end of 1975, and $33.4 billion at the end offs, and other credits); figures for all months are seasonally adjusted. of 1974. Comparable data for Dec. 31, 1977, will be published in the Bulletin for February 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Consumer Debt A43 1.56 CONSUMER INSTALMENT CREDIT Extensions and Liquidations Millions of dollars 1976 1977 Holder, and type of credit 1974 1975 1976 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Extensions1 1Total.................................................... 160,008 163,483 186,221 15,685 15,775 16,055 15,763 16,702 16,870 17,186 By holder: 2 Commercial banks......................... 72,605 77,131 88,666 7,487 7,546 7,618 7,486 8,182 7,546 8,055 3 Finance companies......................... 35,644 32,582 35,956 2,965 3,072 3,148 3,059 3,157 3,431 3,437 4 Credit unions.................................. 22,403 24,151 28,829 2,313 2,424 2,350 2,395 2,688 2,683 2,743 5 27,034 27,049 29,569 2,548 2,463 2,673 2,467 2,480 2,775 2,603 6 Others3............................................ 2,322 2,570 3,201 372 271 266 356 194 436 347 By type of credit: 7 Automobile..................................... 43,209 48,103 55,807 4,712 4,769 4,587 4,632 5,263 4,940 5,205 8 Commercial banks...................... 26,406 28,333 32,687 2,762 2,846 2,770 2,691 3,170 2,892 3,075 9 Indirect..................................... 15,576 15,761 17,600 1,480 1,511 1,479 1,426 1,723 1,544 1,641 10 Direct....................................... 10,830 12,572 15,087 1,282 1,335 1,291 1,265 1,446 1,349 1,435 11 Finance companies..................... 8,630 9,598 11,210 937 891 904 927 992 964 999 12 Credit unions.............................. 7,788 9,702 11,336 928 963 875 957 1,051 974 1,075 13 Others.......................................... 385 470 574 84 69 37 57 51 110 55 Mobile homes: 14 Commercial banks...................... 3,486 2,681 2,449 186 200 178 207 267 195 207 15 Finance companies..................... 1,413 771 690 54 53 59 54 53 50 52 16 Home improvement......................... 4,571 4,398 5,034 400 434 463 464 461 494 457 17 Commercial banks...................... 2,789 2,722 3,036 242 266 282 276 288 262 251 Revolving credit: 18 Bank credit cards........................ 17,098 20,428 25,481 2,183 2,165 2,198 2,181 2,217 2,117 2,332 19 Bank check credit....................... 4,227 4,024 4,832 413 375 413 410 426 462 448 20 86,004 83,079 91,928 7,737 7,779 8,158 7,815 8,015 8,612 8,484 21 Commercial banks, total............ 18,599 18,944 20,182 1,702 1,693 1,777 1,721 1,815 1,618 1,742 22 Personal loans........................ 13,176 13,386 14,463 1,197 1,193 1,286 1,238 1,317 1,213 1,281 23 Finance companies, total............ 25,316 22,135 24,014 1,970 2,125 2,182 2,072 2,108 2,413 2,379 24 Personal loans......................... 16,691 17,333 19,610 1,607 1,745 1,776 1,696 1,688 1,787 1,843 25 Credit unions............................... 14,228 13,992 16,911 1,338 1,410 1,426 1,389 1,582 1,656 1,612 26 Retailers....................................... 27,034 27,049 29,569 2,548 2,463 2,673 2,467 2,480 2,775 2,603 27 Others........................................... 827 959 1,253 180 87 100 166 30 151 149 Liquidations1 28 Total.................................................... 151,056 156,640 169,682 14,282 14,294 14,491 14,520 14,879 14,952 15,164 By holder: 29 Commercial banks.......................... 68,630 74,280 81,988 6,970 6,849 6,947 7,105 7,269 6,981 7,227 3Q Finance companies......................... 34,838 32,099 33,010 2,796 2,839 2,831 2,814 2,793 2,949 2,995 31 Credit unions................................... 19,896 20,913 23,637 1,927 1,941 2,070 2,000 2,151 2,267 2,203 32 Retailers2........................................ 25,496 26,980 28,393 2,365 2,439 2,410 2,369 2,416 2,526 2,485 33 Others3............................................ 2,196 2,368 2,654 224 226 233 232 249 228 254 By type of credit: 34 Automobile....................................... 42,883 45,472 48,337 4,090 4,165 4,059 4,155 4,250 4,183 4,320 35 Commercial banks...................... 26,915 27,798 28,908 2,385 2,470 2,420 2,470 2,517 2,474 2,571 36 Indirect..................................... 15,886 16,101 16,311 1,321 1,386 1,363 1,356 1,393 1,384 1,402 37 Direct....................................... 11,029 11,697 12,597 1,064 1,084 1,058 1,114 1,124 1,090 1,169 38 Finance companies..................... 8,730 8,777 9,590 874 862 827 829 846 866 838 39 Credit unions............................... 6,830 8,463 9,356 792 791 770 813 843 800 862 40 Others........................................... 408 434 483 39 42 42 43 43 43 49 Mobile homes: 41 Commercial banks...................... 2,854 2,949 2,921 222 253 233 250 234 238 233 42 Finance companies..................... 1,245 844 864 70 69 74 70 70 67 96 43 3,767 4,150 4,266 361 369 390 360 388 364 385 44 Commercial banks...................... 2,178 2,451 2,620 216 223 239 221 234 227 237 Revolving credit: 45 Bank credit cards........................ 15,655 19,208 23,905 2,097 2,000 2,074 2,110 2,250 2,089 2,161 46 Bank check credit....................... 3,684 4,010 4,632 419 358 386 404 419 421 416 47 All other........................................... 80,969 80,007 84,757 7,023 7,081 7,274 7,170 7,268 7,590 7,553 48 Commercial banks, total............ 17,345 17,864 19,002 1,631 1,545 1,594 1,649 1,615 1,533 1,608 49 Personal loans......................... 12,278 12,528 13,486 1,151 1,085 1,125 1,191 1,169 1,111 1,167 50 Finance companies, total........... 24,513 22,199 22,491 1,844 1,902 1,924 1,909 1,872 2,012 2,059 51 Personal loans......................... 16,212 16,616 18,248 1,501 1,547 1,539 1,535 1,575 1,608 1,714 52 Credit unions............................... 12,755 12,092 13,855 1,098 1,113 1,260 1,150 1,268 1,429 1,300 53 Retailers....................................... 25,496 26,980 28,393 2,365 2,439 2,410 2,369 2,416 2,526 2,485 54 Others........................................... 860 872 1,016 85 82 86 93 96 90 101 1 Monthly figures are seasonally adjusted. 3 Mutual savings banks, savings and loan associations, and auto dealers. 2 Excludes 30-day charge credit held by retailers, oil and gas companies, and travel and entertainment companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A44 Domestic Financial Statistics □ April 1977 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-year data are at seasonally adjusted annual rates. i 1975 1976 Transaction category, or sector 1971 1972 1973 1974 1975 1976 HI H2 HI H2 1NONFINANCIAL SECTORS......................... 151.0 176.9 197.6 188.8 210.4 257.7 184.2 236.5 238.3 277.2 1 2 Excluding equities........................................... 139.6 166.4 190.0 185.0 200.3 247.3 173.8 226.9 224.7 269.9 2 By sector and instrument: 3 U.S. Govt........................................................ 24.7 15.2 8.3 12.0 85.2 68.9 80.8 89.6 71.7 66.2 3 4 Public debt securities................................. 26.0 14.3 7.9 12.0 85.8 69.1 82.0 89.7 71.8 66.5 4 5 Agency issues and mortgages................... -1.3 1.0 .4 * -.6 -.2 -1.2 -.1 -.1 -.4 5 6 All other nonfinancial sectors......................... 126.3 161.7 189.4 176.8 125.2 188.8 103.4 146.9 166.6 211.0 6 7 Corporate equities..................................... 11.5 10.5 7.7 3.8 10.0 10.5 10.5 9.6 13.6 7.3 7 8 Debt instruments....................................... 114.8 151.2 181.7 173.0 115.1 178.3 93.0 137.3 153.0 203.7 8 9 Private domestic nonfinancial sectors........ 121.1 157.7 183.1 161.6 112.2 168.5 94.9 129.4 151.1 185.8 9 10 Corporate equities.................................. 11.4 10.9 7.9 4.1 9.9 10.1 10.3 9.5 13.3 6.9 10 11 Debt instruments..................................... 109.7 146.8 175.3 157.5 102.3 158.4 84.6 119.9 137.8 178.9 11 12 Debt capital instruments..................... 86.8 102.8 106.7 101.2 101.3 122.0 97.5 105.1 110.6 133.4 12 13 State and local obligations............ 17.5 15.4 16.3 19.6 17.3 18.2 16.2 18.4 17.9 18.6 13 14 Corporate bonds............................. 18.8 12.2 9.2 19.7 27.2 23.7 33.4 21.0 20.7 26.7 14 Mortgages: 15 Home........................................... 28.6 42.6 46.4 34.6 40.8 59.1 33.5 48.1 53.5 64.8 15 16 Multifamily residential............... 9.7 12.7 10.4 7.0 -.1 1.3 * -.2 .7 1.9 16 17 Commercial................................. 9.8 16.4 18.9 15.1 10.9 12.8 8.7 13.1 11.9 13.7 17 18 Farm............................................ 2.4 3.6 5.5 5.1 5.2 6.9 5.6 4.8 6.0 7.8 18 19 Other debt instruments....................... 22.8 44.0 68.6 56.3 1.0 36.4 -12.8 14.8 27.2 45.5 19 20 Consumer credit............................. 11.6 18.6 21.7 9.8 8.5 20.5 1.1 16.0 19.4 21.6 20 21 Bank loans n.e.c.............................. 6.5 18.1 34.8 26.2 -14.5 -2.2 -23.5 -5.5 -12.9 8.6 21 22 Open market paper......................... -.4 .8 2.5 6.8 -2.2 3.5 -.2 -4.2 8.2 -1.3 22 23 Other............................................... 5.1 6.5 9.6 13.5 9.1 14.6 9.7 8.5 12.6 16.5 23 24 By borrowing sector................................... 121.1 157.7 183.1 161.6 112.2 168.5 94.9 129.4 151.1 185.8 24 25 State and local governments............. 17.8 15.2 14.8 18.6 14.9 17.7 13.9 15.9 16.2 19.3 25 26 Households......................................... 42.1 64.8 73.5 45.2 49.7 80.2 39.0 60.4 71.9 88.5 26 27 Farm.................................................... 4.5 5.8 9.7 7.9 9.4 12.7 9.4 9.4 11.9 13.5 27 28 Nonfarm noncorporate...................... 10.3 13.1 12.3 6.7 1.2 4.7 -.8 3.2 3.8 5.7 28 29 Corporate............................................ 46.4 58.8 72.9 83.1 37.1 53.1 33.5 40.6 47.3 58.8 29 30 Foreign........................................................ 5.2 4.0 6.2 15.3 13.0 20.3 8.5 17.4 15.4 25.2 30 31 Corporate equities................................. * -.4 -.2 -.2 .1 .4 .1 .1 .3 .4 31 32 Debt instruments..................................... 5.2 4.4 6.4 15.5 12.8 20.0 8.4 17.3 15.1 24.8 32 33 Bonds.................................................. .9 1.0 1.0 2.1 6.2 8.8 5.7 6.7 7.3 10.3 33 34 Bank loans n.e.c.................................. 2.1 3.0 2.8 4.7 4.0 5.0 .6 7.4 3.8 6.1 23 35 Open market paper............................ .3 -1.0 .9 7.1 -.1 2.5 -1.2 1.0 .8 4.2 35 36 U.S. Govt, loans................................. 1.8 1.5 1.7 1.6 2.8 3.7 3.3 2.2 3.2 4.2 36 37 Memo: U.S. Govt, cash balance..................... 3.2 -.3 -1.7 -4.6 2.9 2.8 .5 5.2 11.1 -5.4 37 Totals net of changes in U.S. Govt, cash balance: 38 Total funds raised.......................................... 147.8 177.2 199.3 193.4 207.5 254.9 183.7 231.3 227.2 282.6 38 39 By U.S. Govt.............................................. 21.6 15.5 9.9 16.6 82.3 66.1 80.3 84.4 60.6 71.6 39 40 FINANCIAL SECTORS................................. 17.0 29.1 56.7 43.0 14.8 29.4 14.4 15.3 30.5 28.3 40 By instrument: 41 U.S. Govt, related........................................... 5.9 8.4 19.9 23.1 13.5 17.4 14.0 13.1 18.0 16.9 41 42 Sponsored credit agencies......................... 1.1 3.5 16.3 16.6 2.3 2.4 1.4 3.3 3.9 .9 42 43 Mortgage pool securities........................... 4.8 4.9 3.6 5.8 10.3 15.2 11.5 9.2 14.2 16.2 43 44 Loans from U.S. Govt............................... .7 .9 -.2 1.1 .6 * — .3 44 45 Private financial sectors................................. 11.1 20.7 36.8 19.9 1.3 11.9 .4 2.1 12.4 11.4 45 46 Corporate equities..................................... 3.5 2.8 1.5 1.0 1.2 .1 1.2 1.2 .3 1.1 46 47 Debt instruments......................................... 7.6 18.0 35.3 18.9 .1 11.2 -.8 1.0 12.1 10.3 47 48 Corporate bonds..................................... 3.8 5.1 3.5 2.1 2.9 5.7 2.5 3.3 1.2 4.3 48 49 Mortgages............................................... 2.1 1.7 -1.2 -1.3 2.3 2.0 1.2 3.4 1.2 2.8 49 50 Bank loans n.e.c...................................... 3.5 6.8 14.0 7.5 -3.9 -3.9 -4.1 -3.2 -2.8 -4.9 50 51 Open market paper and Rp’s............... .9 4.4 11.8 3.9 2.8 9.3 1.6 -1.9 8.7 9.9 51 52 Loans from FHLB’s............................... -2.7 * 7.2 6.7 -4.0 -2.0 -7.3 -.6 -2.3 -1.7 52 By sector: 53 Sponsored credit agencies............................. 1.1 3.5 16.3 17.3 3.2 2.2 2.5 4.0 3.9 .7 53 54 Mortgage pools.............................................. 4.8 4.9 3.6 5.8 10.3 15.2 11.5 9.2 14.2 16.2 54 55 Private financial sectors................................. 11.1 20.7 36.8 19.9 1.3 11.9 .4 2.1 12.4 11.4 55 56 Commercial banks..................................... 2.4 4.8 8.1 -1.1 1.1 9.3 5.1 -2.3 11.9 6.8 56 57 Bank affiliates............................................. -.4 .1 2.2 3.5 .3 -.8 .9 -.3 -1.3 -.3 57 58 Foreign banking agencies.......................... 1.6 .8 5.1 2.9 -.3 -.5 -.9 .2 -1.5 .5 58 59 Savings and loan associations................... -.1 2.0 6.0 6.3 -2.1 * -7.8 3.6 -.7 .8 59 60 Other insurance companies....................... .6 .5 .5 .9 .9 1.0 .9 1.0 1.0 1.0 60 61 Finance companies..................................... 2.7 6.2 9.4 4.5 .7 5.4 -.8 2.1 6.6 4.3 61 62 REIT’s........................................................ 2.9 6.3 6.5 1.1 -1.9 -1.4 -1.6 -2.2 -1.7 -1.0 62 63 Open-end investment companies.............. 1.3 -.5 -1.2 -.5 .8 -.9 1.5 .1 -1.1 -.7 63 64 Money market funds................................. 2.4 1.3 -.3 2.6 * -.7 .2 64 65 ALL SECTORS, by instrument....................... 168.1 206.0 254.3 231.8 225.2 287.1 198.6 251.8 268.7 305.5 65 66 Investment company shares.......................... 1.3 -.5 -1.2 -.5 .8 -.9 1.5 .1 -1.1 -.7 66 67 Other corporate equities............................... 13.7 n.s 10.4 5.4 10.4 12.1 10.2 10.7 15.1 9.1 67 68 Debt instruments............................................ 153.1 192.8 245.2 227.0 214.0 275.9 187.0 241.0 254.8 297.1 68 69 U.S. Govt, securities................................. 30.7 23.7 28.3 34.5 98.0 86.6 93.6 102.4 89.9 83.4 69 70 State and local obligations....................... 17.5 15.4 16.3 19.6 17.3 18.2 16.2 18.4 17.9 18.6 70 71 Corporate and foreign bonds................... 23.5 18.4 13.6 23.9 36.3 38.2 41.6 31.0 35.2 41.3 71 72 Mortgages................................................... 52.5 76.8 79.9 60.5 59.0 82.0 49.1 69.0 73.2 90.8 72 73 Consumer credit......................................... 11.6 18.6 21.7 9.8 8.5 20.5 1.1 16.0 19.4 21.6 73 74 Bank loans n.e.c......................................... 12.1 27.8 51.6 38.4 -14.4 -1.1 -27.6 -1.2 -11.9 9.8 74 75 Open market paper and Rp’s................... .9 4.1 15.2 17.8 .5 15.3 6.2 -5.1 17.7 12.8 75 76 Other loans................................................. 4.2 8.0 18.5 22.5 8.7 16.1 6.8 10.7 13.5 18.8 76 Note.—Full statements for sectors and transaction types quarterly, and Flow of Funds Section, Division of Research and Statistics, Board of annually for flows and for amounts outstanding, may be obtained from Governors of the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Flow of Funds A45 1.58 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS Billions of dollars, except as noted; half-year data are at seasonally adjusted annual rates. 1975 1976 Transaction category or sector 1971 1972 1973 1974 1975 1976 HI H2 HI H2 1 Total funds advanced in credit markets to nonfinancial sectors.................................... 139.6 166.4 190.0 185.0 200.3 247.3 173.8 226.9 224.7 269.9 1 By public agencies and foreign: 2 Total net advances.............................................. 43.4 19.8 34.2 52.7 44.2 54.5 51.9 36.6 50.8 58.3 2 3 U.S. Govt, securities........................................ 34.4 7.6 9.6 11.9 22.5 25.6 32.6 12.4 26.6 24.7 3 4 Residential mortgages................................... 7.0 7.0 8.2 14.7 16.2 12.7 15.9 16.5 11.1 14.4 4 5 FHLB advances to S&L’s............................. -2.7 * 7.2 6.7 -4.0 -2.0 -7.3 -.6 -2.3 -1.7 5 6 Other loans and securities............................. 4.6 5.1 9.2 19.5 9.5 18.1 10.6 8.3 15.4 20.9 6 Totals advanced, by sector 7 U.S. Govt........................................................ 2.8 1.8 2.8 9.8 15.1 10.7 14.9 15.2 5.9 15.5 7 8 Sponsored credit agencies............................. 5.2 9.2 21.4 25.6 14.5 20.3 15.9 13.2 20.0 20.6 8 9 Monetary authorities..................................... 8.9 .3 9.2 6.2 8.5 9.8 7.0 10.1 13.6 6.1 9 10 Foreign............................................................ 26.4 8.4 .7 11.2 6.1 13.8 14.2 -2.0 11.4 16.1 10 11 Agency borrowing not included in line 1........ 5.9 8.4 19.9 23.1 13.5 17.4 14.0 13.1 18.0 16.9 11 Private domestic funds advanced 12 Total net advances.............................................. 102.1 155.0 175.7 155.3 169.6 210.2 135.9 203.4 191.9 228.4 12 13 U.S. Govt, securities..................................... -3.7 16.1 18.7 22.6 75.5 61.0 61.0 90.0 63.3 58.8 13 14 State and local obligations........................... 17.5 15.4 16.3 19.6 17.3 18.2 16.2 18.4 17.9 18.6 14 15 Corporate and foreign bonds....................... 19.5 13.1 10.0 20.9 32.8 31.5 38.9 26.7 27.0 35.9 15 16 Residential mortgages................................... 31.2 48.1 48.5 26.9 24.4 47.6 17.7 31.1 43.1 52.1 16 17 Other mortgages and loans........................... 35.0 62.3 89.3 71.9 15.7 49.9 -5.2 36.5 38.4 61.4 17 18 Less: FHLB advances................................... -2.7 * 7.2 6.7 -4.0 -2.0 -7.3 -.6 -2.3 -1.7 18 Private financial intermediation 19 Credit market funds advanced by private financial institutions.................................... 109.7 149.4 163.8 126.2 116.0 168.2 97.7 134.3 141.3 195.1 19 20 Commercial banks......................................... 50.6 70.5 86.5 64.6 27.6 42.6 13.5 41.7 20.8 64.5 20 21 Savings institutions.................................... 39.1 47.2 36.0 27.0 51.0 72.3 49.8 52.2 71.1 73.5 21 22 Insurance and pension funds.................... 14.2 17.8 23.8 30.1 39.3 46.5 36.4 42.3 44.3 48.8 22 23 Other finance................................................ 5.9 13.8 17.4 4.5 -1.8 6.7 -1.9 -1.8 5.1 8.3 23 24 Sources of funds................................................. 109.7 149.4 163.8 126.2 116.0 168.2 97.7 134.3 141.3 195.1 24 25 Private domestic deposits............................. 89.4 100.9 86.4 69.4 90.5 108.1 90.3 90.6 88.8 127.3 25 26 Credit market borrowing.............................. 7.6 18.0 35.3 18.9 .1 11.2 -.8 1.0 12.1 10.3 26 27 Other sources.................................................. 12.6 30.5 42.1 37.8 25.4 48.9 8.2 42.7 40.4 57.5 27 28 Foreign funds............................................. -3.9 5.3 6.9 14.5 -.4 4.9 -5.7 5.0 2.1 7.6 28 29 Treasury balances...................................... 2.2 .7 -1.0 -5.1 -1.7 -.2 -3.5 .1 3.8 -4.1 29 30 Insurance and pension reserves................ 8.6 11.6 18.4 26.0 29.9 35.6 27 A 32.5 33.6 37.6 30 31 Other, net.................................................... 5.7 12.8 17.8 2.4 -2.4 8.6 -10.1 5.2 .9 16.4 31 Private domestic nonfinancial investors 32 Direct lending in credit markets........................ * 23.6 47.2 40.8 53.7 53.1 37.4 70.1 62.7 43.7 32 33 U.S. Govt, securities..................................... -10.8 4.2 19.4 17.9 23.0 22.4 5.0 41.0 28.3 16.5 33 34 State and local obligations........................... .5 3.1 7.5 12.2 9.9 6.5 10.3 9.6 7.1 5.9 34 35 Corporate and foreign bonds....................... 8.3 4.2 .9 5.3 10.4 5.9 12.9 7.9 6.4 5.4 35 36 Commercial paper......................................... -1.1 3.0 12.5 4.6 3.1 6.3 3.5 2.7 9.4 3.2 36 37 Other.............................................................. 3.2 9.1 6.9 8.1 7.3 12.0 5.6 8.9 11.6 12.6 37 38 Deposits and currency........................................ 92.8 105.3 90.3 75.7 96.7 115.8 95.7 97.7 93.0 138.5 38 39 Time and saving accounts............................... 79.1 83.7 76.2 67.4 84.8 105.6 75.0 94.7 85.1 126.0 39 40 Large negotiable CD’s............................... 7.7 8.7 18.4 23.6 -9.7 -15.1 -22.3 2.9 -23.0 -7.4 40 41 Other at commercial banks....................... 31.8 29.7 29.4 21.4 35.4 51.5 34.4 36.4 42.1 60.9 41 42 At savings institutions............................... 39.6 45.4 28.4 22.4 59.2 69.2 63.0 55.4 66.0 72.4 42 43 Money.............................................................. 13.7 21.6 14.1 8.3 11.9 10.2 20.7 3.0 7.9 12.5 43 44 Demand deposits....................................... 10.4 17.2 10.2 2.0 5.7 2.5 15.3 -4.0 3.7 1.3 44 45 Currency..................................................... 3.4 4.4 3.9 6.3 6.2 7.7 5.4 7.1 4.1 11.2 45 46 Total of credit market instruments, deposits and currency................................................ 92.9 129.0 137.5 123.7 150.4 168.9 133.1 167.8 155.7 182.1 46 47 Public support rate (in per cent)................... 31.1 11.9 18.0 28.5 22.1 22.0 29.9 16.1 22.6 21.6 47 48 Private financial intermediation (in per cent) 107.4 96.4 93.2 81.2 68.4 80.0 71.9 66.0 73.6 85.4 48 49 Total foreign funds........................................ 22.5 13.7 7.6 25.7 5.7 18.6 8.5 3.0 13.5 23.8 49 Memo : Corporate equities not included above 50 Total net issues................................................... 15.0 13.3 9.2 4.9 11.2 11.2 11.7 10.8 14.0 8.4 50 51 Mutual fund shares....................................... 1.3 -.5 -1.2 -.5 .8 -.9 1.5 .1 -1.1 -.7 51 52 Other equities................................................. 13.7 13.8 10.4 5.4 10.4 12.1 10.2 10.7 15.1 9.1 52 53 Acquisitions by financial institutions............... 17.8 15.3 13.3 5.5 8.3 10.4 9.2 7.4 11.8 9.1 53 54 Other net purchases........................................... -2.9 -2.1 -4.1 -.7 2.9 .8 2.4 3.4 2.2 -.6 54 Notes by line no. 29. Demand deposits at commercial banks. 1. Line 2 of p. A-44. 30. Excludes net investment of these reserves in corporate equities. 2. Sum of lines 3-6 or 7-10. 31. Mainly retained earnings and net miscellaneous liabilities. 6. Includes farm and commercial mortgages. 32. Line 12 less line 19 plus line 26. 11. Credit market funds raised by Federally sponsored credit agencies. 33-37. Lines 13-17 less amounts acquired by private finance. Line 37 Included below in lines 13 and 33. Includes all GNMA-guaranteed includes mortgages. security issues backed by mortgage pools. 45. Mainly an offset to line 9. 12. Line 1 less line 2 plus line 11. Also line 19 less line 26 plus line 32. 46. Lines 32 plus 38 or line 12 less line 27 plus line 45. Also sum of lines 27, 32, 39, and 44. 47. Line 2/line 1. 17. Includes farm and commercial mortgages. 48. Line 19/line 12. 25. Lines 39 plus 44. 49. Lines 10 plus 28. 26. Excludes equity issues and investment company shares. Includes 50. 52. Includes issues by financial institutions. line 18. 28. Foreign deposits at commercial banks, bank borrowings from foreign branches, and liabilities of foreign banking agencies to foreign af filiates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A46 Domestic Nonfinancial Statistics □ April 1977 2.10 SELECTED MEASURES OF NONFINANCIAL BUSINESS ACTIVITY 1967 = 100 except as noted; monthly and quarterly data are seasonally adjusted 1976 1977 Measure 1974 1975 1976 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 Industrial production.................................................. 129.3 117.8 129.8 131.3 130.8 130.4 131.8 133.1 132.0 133.3 135.1 Market groupings: 2 Products, total.................................................... 129.3 119.3 129.3 130.3 129.7 129.6 131.7 133.8 133.0 133.7 135.7 3 Final, total...................................................... 125.1 118.2 127.3 128.3 127.4 127.4 129.8 132.1 130.8 131.5 133.7 4 Consumer goods......................................... 128.9 124.0 136.8 137.5 136.2 136.9 139.1 142.0 140.1 140.9 143.4 5 Equipment.................................................. 120.0 110.2 114.3 115.7 115.2 114.4 116.9 118.6 117.9 118.7 120.5 6 Intermediate.................................................... 135.3 123.1 136.8 137.8 138.7 138.3 138.8 139.8 141.3 141.9 142.8 7 Materials............................................................. 132.4 115.5 130.5 133.0 132.5 131.6 131.9 131.9 130.5 132.5 134.0 Industry groupings: 8 Manufacturing.................................................... 129.4 116.3 129.4 131.6 130.7 129.9 131.9 132.8 131.1 132.6 135.0 Capacity utilization (per cent)1 in: 9 Manufacturing........................................................ 84.2 73.6 80.1 81.1 80.4 79.7 80.8 81.2 80.0 80.7 82.0 10 Industrial materials industries............................... 87.7 73.6 80.3 81.6 81.0 80.3 80.3 80.1 79.0 80.1 80.8 11 Construction contracts2............................................ 173.9 162.3 190.2 186.0 182.0 237.0 186.0 183.0 203.0 207.0 12 Nonagricultural employment, total3.......................... 119.1 116.9 120.6 120.9 121.4 121.2 121.6 122.0 122.3 122.7 *■123.5 13 Goods-producing, total.......................................... 106.2 96.9 100.3 100.2 100.8 100.2 100.9 101.0 101.3 '101.8 *103.0 14 Manufacturing, total.......................................... 103.1 94.3 97.5 97.6 98.2 97.4 98.0 98.2 98.8 98.8 *99.7 15 Manufacturing, production-worker.................. 102.1 91.3 95.2 95.2 96.1 94.9 95.6 95.7 96.5 '96.4 *97.8 16 Service-producing................................................... 126.1 127.8 131.7 132.2 132.6 132.7 132.9 133.5 133.8 134.2 *134.7 17 Personal income, total4.............................................. 184.1 199.4 219.1 221.1 222.1 224.9 226.8 229.7 '230.0 '233.2 *237.1 18 Wages and salary disbursements........................... 178.9 188.7 208.3 208.8 209.9 211.3 213.2 217.6 '218.4 '221.5 *224.4 19 Manufacturing........................................................ 157.6 157.9 176.7 178.1 178.9 179.1 182.4 184.1 '185.0 '187.8 P191.5 20 Disnosahle nersonal income...................................... 180.5 198.5 217.0 217.0 218.1 234.1 21 Retail sales5................................................................ 171.2 186.0 206.6 208.8 206.7 208.8 212.3 221.2 216.5 222.2 227.6 Prices:6 22 Consumer............................................................... 147.7 161.2 170.5 171.9 172.6 173.3 173.8 174.3 175.3 177.1 23 Wholesale................................................................ 160.1 174.1 182.9 183.7 184.7 185.2 185.6 187.1 188.0 190.0 191.9 1 Ratios of indexes of production to indexes of capacity. Based on data 5 Based on Bureau of Census data published in Survey of Current trom Federal Reserve, McGraw-Hill Economics Department, and De Business (U.S. Dept, of Commerce). partment of Commerce. 6 Data without seasonal adjustment, as published in Monthly Labor 2 Index of dollar value of total construction contracts, including Review (U.S. Dept, of Labor). Seasonally adjusted data for changes in residential, nonresidential, and heavy engineering, from McGraw-Hill the price indexes may be obtained from the Bureau of Labor Statistics, Informations Systems Company, F. W. Dodge Division. U.S. Dept, of Labor. 3 Based on data in Employment and Earnings (U.S. Dept, of Labor). Series covers employees only, excluding personnel in the Armed Forces. Note.—Basic data (not index numbers) for series mentioned in notes 4 Based on data in Survey of Current Business (U.S. Dept, of Com 3, 4, and 5, and indexes for series mentioned in notes 2 and 6 may also be merce). Series for disposable income is quarterly. found in the Survey of Current Business (U.S. Dept, of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Capacity and Manpower A47 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1976 1977 1976 1977 1976 1977 Series Q2 Q3 Q4 Ql* Q2 Q3 Q4 Ql* Q2 Q3 Q4 Ql* Output (1967 = 100) Capacity (per cent of 1967 output) Utilization rate (per cent) 1 Manufacturing.............................................. 129.4 131.1 131.5 132.9 161.3 162.3 163.2 164.3 80.2 80.8 80.6 80.9 2 Primary processing................................... 136.6 139.3 138.9 138.7 167.5 168.8 170.1 171.4 81.5 82.5 81.7 80.9 3 Advanced processing............................... 125.2 126.3 127.5 129.9 158.0 158.8 159.6 160.6 79.3 79.6 79.9 80.9 4 Materials...................................................... 130.3 132.6 131.8 132.3 161.7 163.1 164.3 165.5 80.6 81.3 80.2 80.0 5 Durable goods.......................................... 126.1 130.7 128.4 128.5 165.5 166.7 167.8 169.0 76.2 78.4 76.5 76.0 6 Basic metal........................................... 110.8 117.1 107.7 105.8 143.1 143.7 144.4 144.8 77.4 81.5 74.6 7 Nondurable goods................................... 146.9 146.6 147.0 147.5 171.0 172.5 174.1 175.6 85.9 85.0 84.4 84.0 8 Textile, paper, and chemical............... 151.6 151.2 151.5 152.2 178.3 180.1 182.0 183.6 85.0 84.0 83.2 82.9 9 Textile............................................... 115.5 114.4 111.7 112.0 139.0 139.8 140.6 141.4 83.1 81.8 79.4 10 Paper................................................. 132.5 131.9 130.2 131.7 145.7 146.7 147.9 148.9 90.9 89.9 88. 1 11 Chemical........................................... 175.3 175.1 177.6 178.3 208.7 211.2 213.7 216.2 84.0 82.9 83.1 12 Energy...................................................... 120.0 119.9 121.5 122. 8 141.5 142.7 143.9 144.3 84.8 84.0 84.4 85.1 2.12 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted; except as noted. 1976 1977 Category 1974 1975 1976 1 Sept. Oct. Nov. | Dec. Jan. Feb. Mar.* Household survey data 1 Noninstitutional population1.............. 150,827 153,449 156,048 156,595 156,788 157,006 157,176 157,381 157,584 157,782 2 Labor force (including Armed Forces)1....................................... 93,240 94,793 96,917 97,387 97,449 98,020 98,106 97,649 98,282 98,677 3 Civilian labor force............................. 91,011 92,613 94,773 95,242 95,302 95,871 95,960 95,516 96,145 96,539 Employment: 4 Nonagricultural industries2........ 82,443 81,403 84,188 84,516 84,428 84,972 85,184 85,468 85,872 86,359 5 Agriculture................................... 3,492 3,380 3,297 3,278 3,310 3,248 3,257 3,090 3,090 3,116 Unemployment: 6 Number....................................... 5,076 7,830 7,288 7,448 7,564 7,651 7,517 6,958 7,183 7,064 7 Rate (,per cent of civilian labor force).................................... 5.6 8.5 7.7 7.8 7.9 8.0 7.8 7.3 7.5 7.3 8 Not in labor force............................... 57,587 58,655 59,130 59,208 59,339 58,986 59,071 59,732 59,302 59,104 Establishment survey data 9 Nonagricultural payroll employment3 78,413 77,050 79,443 79,918 79,819 80,106 80,344 '80,561 '80,816 81,304 10 Manufacturing................................ 20,046 18,347 18,958 19,100 18,941 19,065 19,095 '19,211 '19,217 19,383 11 Mining............................................. 694 745 783 798 800 805 808 '817 '827 841 12 Contract construction..................... 3,957 3,515 3,593 3,565 3,582 3,619 3,605 '3,561 '3,636 3,731 13 Transportation and public utilities. 4,696 4,499 4,508 4,528 4,506 4,519 4,553 '4,549 '4,555 4,579 14 Trade................................................ 17,017 16,997 17,694 17,839 17,824 17,808 17,898 '17,981 '18,086 18,177 15 Finance............................................ 4,208 4,222 4,315 4,338 4,359 4,381 4,403 '4,423 '4,438 4,458 16 Service.............................................. 13,617 14,008 14,645 14,798 14,819 14,873 14,936 '15,010 '15,068 15,124 17 Government.................................... 14,177 14,773 14,947 14,952 14,988 15,036 15,046 '15,009 '14,989 15,011 1 Persons 16 years of age and over. Monthly figures, which are based 3 Data include all full- and part-time employees who worked during, on sample data, relate to the calendar week that contains the 12th day; or received pay for, the pay period that includes the 12th day of the annual data are averages of monthly figures. By definition, seasonality month, and exclude proprietors, self-employed persons, domestic servants, does not exist in population figures. Based on data from Employment unpaid family workers, and members of the Armed Forces. Data are and Earnings (U.S. Dept, of Labor). adjusted to the February 1977 benchmark. Based on data from Employ 2 Includes self-employed, unpaid family, and domestic service workers. ment and Earnings (U.S. Dept, of Labor). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A48 Domestic Nonfinancial Statistics o April 1977 2.13 INDUSTRIAL PRODUCTION Unless otherwise noted, figures are indexes (1967 = 100) except as noted; monthly data are seasonally adjusted. 1967 1975 1976 1976 1977 Grouping pro 1976p por aver tion age Dec. Jan. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Major market groupings 1 Total index......................................... 100.00 129.8 124.4 125.7 130.8 130.4 131.8 133.1 132.0 133.3 135.1 2 Products............................................. 60.71 129.3 124.9 126.0 129.7 129.6 131.7 133.8 133.0 133.7 135.7 3 Final products................................. 47.82 127.3 123.5 123.9 127.4 127.4 129.8 132.1 130.8 131.5 133.7 4 Consumer goods....................... 27.68 136.8 132.3 133.1 136.2 136.9 139.1 142.0 140.1 140.9 143.4 5 Equipment.................................. 20.14 114.3 111.5 111.2 115.2 114.4 116.9 118.6 117.9 118.7 120.5 6 Intermediate products................... 12.89 136.8 129.9 133.6 138.7 138.3 138.8 139.8 141.3 141.9 142.8 7 Materials............................................ 39.29 130.5 123.3 125.3 132.5 131.6 131.9 131.9 130.5 132.5 134.0 Consumer goods 8 Durable consumer goods................ 7.89 141.5 134.0 134.7 138.4 139.4 143.7 151.2 145.1 145.5 153.8 9 Automotive products................ 2.83 154.8 147.7 142.8 147.4 148.8 161.6 180.4 163.4 160.5 181.9 10 Autos and utility vehicles___ 2.03 149.9 140.0 133.4 139.1 137.9 154.6 180.1 156.6 154.3 182.6 11 Autos.................................. 1.90 132.0 122.8 118.9 120.9 121.5 139.1 159.8 136.9 132.8 159.8 12 Auto parts and allied goods... .80 167.2 167.0 167.4 168.6 176.6 179.3 181.7 180.7 176.3 179.8 13 Home goods............................... 5.06 134.1 126.4 130.3 133.3 134.1 133.8 134.9 135.0 137.0 137.9 14 Appliances, A/C, and TV.... 1.40 115.8 101.1 107.8 111.4 115.8 115.3 111.7 113.4 117.4 119.0 15 Appliances and TV............ 1.33 118.6 104.4 110.6 115.1 118.6 117.6 113.8 116.0 120.0 16 Carpeting and furniture........ 1.07 144.1 142.0 144.8 146.3 147.0 143.6 144.7 141.3 144.5 17 Misc. home goods................. 2.59 139.9 133.6 136.6 139.8 138.6 139.9 143.6 144.1 144.4 145.0 18 Nondurable consumer goods.......... 19.79 134.9 131.5 132.5 135.3 135.8 137.1 138.4 138.1 139.0 139.2 19 Clothing...................................... 4.29 126.9 123.9 127.4 123.0 125.9 126.4 126.4 124.2 20 Consumer staples....................... 15.50 137.2 133.6 133.9 138.7 138.5 140.0 141.7 141.9 143.0 142.7 21 Consumer foods and tobacco 8.33 130.8 127.2 128.5 133.0 133.2 132.5 132.8 132.4 133.3 22 Nonfood staples......................... 7.17 144.6 141.0 140.2 145.4 144.8 149.0 151.8 152.9 154.3 152.8 23 Consumer chemical products. 2.63 166.6 159.7 157.3 169.2 168.3 174.4 177.9 177.8 178.6 24 Consumer paper products.. . 1.92 113.3 113.4 113.3 111.9 109.9 113.8 117.7 117.0 117.8 25 Consumer energy products. . 2.62 145.4 142.8 142.4 145.9 146.9 149.0 150.9 154.5 156.4 26 Residential utilities............ 1.45 152.0 154.5 154.3 154.4 Equipment 27 Business equipment......................... 12.63 136.1 131.6 131.0 137.5 135.9 140.2 143.2 142.0 142.9 145.1 28 Industrial equipment................. 6.77 127.9 124.5 123.5 129.8 129.9 131.3 133.5 131.5 132.8 135.3 29 Building and mining equip... 1.44 177.4 172.9 171.4 180.4 180.9 181.5 187.4 187.9 189.3 194.9 30 Manufacturing equipment. .. 3.85 106.4 101.3 101.2 108.6 107.9 109.9 110.7 107.9 109.0 110.5 31 Power equipment................... 1.47 135.3 137.6 134.6 135.6 137.8 138.0 140.0 137.7 139.7 142.3 32 Commercial transit, farm equip, 5.86 145.5 139.7 139.7 146.1 142.7 150.5 154.4 153.9 154.5 156.4 33 Commercial equipment......... 3.26 173.2 164.4 165.0 176.8 177.5 179.7 185.3 185.2 185.7 187.0 34 Transit equipment................. 1.93 103.8 102.9 100.2 99.3 98.3 107.6 109.1 107.0 107.3 110.7 35 Farm equipment.................... .67 130.6 125.6 131.5 131.4 102.0 132.2 134.8 137.0 138.4 36 Defense and space equipment........ 7.51 77.9 77.7 78.0 77.7 78.5 77.9 77.4 77.4 78.1 79.1 Intermediate products 37 Construction supplies................... 6.42 132.0 124.1 126.8 134.3 134.0 135.7 135.5 135.4 135.6 137.2 38 Business supplies........................... 6.47 141.5 135.9 140.3 143.0 142.5 141.7 144.2 147.2 148.3 39 Commercial energy products... 1.14 156.5 147.9 158.1 156.4 154.0 155.4 156.7 162.0 162.1 Materials 40 Durable goods materials................ 20.35 126.6 115.5 118.3 130.0 128.5 128.5 128.3 126.6 128.5 130.3 41 Durable consumer parts............ 4.58 121.6 111.6 111.7 123.5 119.4 126.2 124.7 120.6 123.0 127.6 42 Equipment parts........................ 5.44 133.9 123.9 125.7 138.3 138.0 137.2 138.8 135.1 138.8 139.6 43 Durable materials n.e.c............. 10.34 125.0 112.9 117.4 128.4 127.5 124.9 124.2 124.6 125.3 126.7 44 Basic metal materials............ 5.57 109.8 96.1 101.9 113.9 112.0 106.3 104.7 104.7 105.6 45 Nondurable goods materials.......... 10.47 146.4 142.6 142.9 147.8 147.5 147.2 146.2 144.2 148.5 149.9 46 Textile, paper, and chem. mat.. 7.62 151.2 147.9 147.5 152.6 152.5 151.3 150.6 148.9 153.1 154.7 47 Textile materials.................... 1.85 114.4 118.9 117.8 113.6 112.6 108.8 113.6 110.6 111.5 48 Paper materials...................... 1.62 131.1 125.9 126.5 131.0 132.1 131.0 127.6 127.6 132.4 49 Chemical materials................ 4.15 175.5 169.5 168.9 178.2 178.2 178.3 176.3 174.4 177.9 50 Containers, nondurable............ 1.70 142.6 136.1 139.0 143.5 141.7 145.9 143.8 137.6 146.9 51 Nondurable materials n.e.c....... 1.14 120.0 116.7 118.3 122.8 122.4 122.2 119.7 122.5 120.6 52 Energy materials........................... 8.48 120.3 118.7 120.6 119.6 119.6 121.7 123.1 122.7 122.2 123.5 53 Primary energy........................... 4.65 107.0 107.3 107.7 108.4 109.0 107.1 106.6 104.2 102.4 54 Converted fuel materials.......... 3.82 136.4 132.3 136.3 133.2 132.7 139.5 143.2 145.2 146.4 Supplementary groups 55 Home goods and clothing............ 9.35 130.8 125.2 129.9 128.7 130.3 130.4 131.0 130.1 131.0 132.6 56 Energy, total.................................. 12.23 129.0 126.6 128.8 128.6 128.6 130.7 132.2 133.1 133.2 132.9 57 Products..................................... 3.76 148.8 144.5 147.2 149.1 149.1 150.9 152.7 156.7 158.1 58 Materials.................................... 8.48 120.3 118.7 120.6 119.6 119.6 121.7 123.1 122.7 122.2 For Note see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Output A49 2.13 Continued 1967 1975 1976 1976 1977 Grouping SIC pro 1976 code por aver tion age Sept. Nov. Jan. Feb. Mar. Gross value of products in market structure (annual rates, in billions of 1972 dollars) 21 Pro-d uc-ts, total. . 1286.3 550.6 528.4 531.9 548.8 549.4 558.3 570.6 563.4 569.1 580.0 Final products........ ^221.4 426.2 410.6 410.9 422.2 423.6 432.2 443.9 435.8 440.0 450.2 3 Consumer goods. 1156.3 302.9 292.0 292.3 300.7 302.2 307.4 315.7 308.9 312.5 319.1 4 Equipment.......... 165.3 123.5 118.9 119.1 121.7 121.4 125.0 128.2 126.9 127.6 131.1 5 Intermediate products. 164.9 124.3 117.9 120.8 126.6 126.0 126.2 126.5 127.3 129.0 129.9 Major industry groupings 6 Mining and utilities. 12.05 131.9 129.2 131.8 131.9 133.1 134.1 134.8 136.0 136.5 136.9 7 Mining................ 6.36 114.1 112.9 113.6 115.7 116.7 116.2 116.2 114.3 115.2 119.5 8 Utilities................ 5.69 151.7 147.2 152.0 150.1 151.2 154.0 155.5 160.2 160.5 156.3 9 Electric............. 3.88 162.3 167.4 167.8 168.8 10 Manufacturing. 87.95 129.4 123.6 125.2 130.7 129.9 131.9 132.8 131.1 132.6 135.0 11 Nondurable. 35.97 141.0 136.9 138.4 142.6 142.2 143.5 143.7 143.1 145.1 146.3 12 Durable.... 51.98 121.4 114.4 115.8 122.4 121.5 123.8 125.2 122.9 124.0 127.3 Mining 13 Metal mining................... 10 .51 122.8 117.9 122.2 123.6 127.4 128.1 130.4 136.6 136.3 14 Coal................................... 11, 12 .69 116.9 109.9 111.2 121.3 132.3 125.1 125.9 95.3 100.8 123.9 15 Oil and gas extraction 13 4.40 112.0 113.1 112.5 113.3 112.5 112.4 112.8 113.5 114.1 117.0 16 Stone and earth minerals. 14 .75 118.3 111.5 117.1 119.2 120.0 121.4 117.9 121.6 120.2 Nondurable manufactures 17 Foods........................... 20 8.75 132.0 128.5 129.2 135.7 134.7 134.7 134.3 134.6 136.0 18 Tobacco products........ 21 .67 117.2 116.0 117.3 115.4 118.3 119.7 119.1 115.0 19 Textile mill products. . 22 2.68 135.9 139.0 137.6 135.7 134.2 132.2 133.3 131.8 133.7 20 Apparel products........ 23 3.31 126.1 121.2 123.8 122.5 126.4 125.9 128.0 123.6 21 Paper and products. .. 26 3.21 133.1 129.5 130.3 132.1 132.3 132.5 131.8 130.6 134.9 135.9 22 Printing and publishing.... 27 4.72 120.7 118.4 120.0 120.6 119.2 119.3 123.1 124.7 124.5 125.1 23 Chemicals and products.... 28 7.74 169.4 163.3 162.9 170.5 170.6 174.2 173.5 172.0 174.6 24 Petroleum products............ 29 1.79 132.7 126.3 125.7 134.1 130.2 135.8 138.9 141.3 145.1 145.6 25 Rubber & plastic products. 30 2.24 199.8 185.3 188.4 212.4 211.1 215.7 212.3 211.9 214.7 26 Leather and products.......... 31 .86 82.0 83.2 86.0 77.9 77.2 75.8 73.4 74.8 75.2 Durable manufactures 27 Ordnance, pvt. & govt.. 19,91 3.64 71.7 70.1 69.9 73.2 73.3 72.2 71.8 71.4 71.0 72.2 28 Lumber and products.. 24 1.64 125.1 116.4 123.5 128.7 130.7 129.0 127.5 132.7 132.2 29 Furniture and fixtures.. 25 1.37 132.8 130.3 132.7 133.0 134.5 134.0 135.7 134.1 134.8 30 Clay, glass, stone prod. 32 2.74 135.8 129.4 128.6 138.4 138.4 142.2 142.0 137.2 140.1 31 Primary metals................ 33 6.57 108.0 92.6 98.1 114.1 109.9 107.3 102.7 99.2 100.4 102.8 32 Iron and steel.............. 4.21 104.4 89.1 92.9 110.3 105.1 103.1 95.6 89.8 91.7 95.0 33 Fabricated metal prod... 24 5.93 123.3 117.3 116.6 126.6 123.5 126.7 128.2 125.3 125.5 127.9 34 Nonelectrical machinery. 35 9.15 134.7 128.6 129.0 136.8 134.1 137.5 141.2 139.6 139.5 140.9 35 Electrical machinery........ 36 8.05 131.7 122.7 124.7 133.7 135.0 135.8 135.6 134.0 138.6 140.2 36 Transportation equip.......... 37 9.27 110.6 106.7 105.8 104.4 104.7 112.7 118.2 113.5 113.7 124.1 37 Motor vehicles & pts___ 4.50 140.7 130.1 126.7 130.2 129.3 145.8 156.4 145.4 144.8 164.5 38 Aerospace & misc. tr. eq., 4.77 82.2 84.7 86.1 80.1 81.4 81.6 82.4 83.4 84.6 85.9 39 Instrument........................... 2.11 148.2 140.9 142.0 148.7 150.3 150.3 155.7 153.7 156.8 156.8 40 Miscellaneous mfrs........ 1.51 143.5 137.3 139.5 143.8 142.2 143.7 146.8 146.4 149.6 149.8 i 1972 dollars. Note.—Published groupings include some series and subtotals not shown separately. For summary description and historical data, see Bulletin for June 1976, pp. 470-79. Availability of detailed descriptive and historical data will be announced in a forthcoming Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A50 Domestic Nonfinancial Statistics □ April 1977 2.14 HOUSING AND CONSTRUCTION Monthly figures at annual rates except as noted 1 1976 1977 Item 1974 1975 1976' Aug.' Sept.' Oct.' Nov.' Dec.' Jan.' Feb.' Private residential real estate activity (thousands of units; monthly figures, seasonally adjusted; exceptions noted) NEW UNITS 1 Permits authorized.............................. 1,074 927 1,281 1,296 1,504 1,492 1,590 1,514 1,307 1,514 2 1-family............................................ 644 669 895 874 926 998 1,072 1,053 '927 1,075 3 2-or-more-family............................. 431 278 386 422 578 494 518 461 '380 439 1,338 1,160 1,540 1,530 1,768 1,715 1,706 1,889 1,386 888 892 1,163 1,172 1,254 1,269 1,236 1,324 1,010 6 2-or-more-family............................. 450 268 377 358 514 446 470 565 376 7 Under construction, end of period 1,189 1,003 1,157 1,074 1,107 1,140 1,168 1,192 1,214 8 1-family........................................... 516 531 662 622 641 662 671 687 701 9 2-or-more-family............................. 673 All 495 452 466 478 497 506 514 10 Completed............................................ 1,692 1,297 1,354 1,401 1,387 1,326 1,399 1,435 1,373 11 1-family........................................... 931 866 1,021 1,094 1,017 989 1,068 1,074 1,060 12 2-or-more-family............................ 760 430 333 307 370 337 331 361 313 13 Mobile homes shipped....................... 329 213 250 252 255 111 251 252 258 Merchant builder activity in 1-family units: 14 Number sold....................................... 501 544 635 656 714 728 688 785 765 15 Number for sale end of period.......... 407 383 410 415 420 430 433 436 Price (thous. of dollars)1 Median: 16 Units sold.................................... 35.9 39.3 44.2 44.2 44.7 45.3 45.7 46.1 45.2 17 Units for sale............................... 36.2 38.9 41.6 40.8 41.0 41.0 41.2 41.6 41.9 Average: 18 Units sold.................................... 38.9 '42.5 48.1 48.5 48.2 50.4 50.0 50.9 51.0 53.1 EXISTING UNITS (1-family) 19 Number sold....................................... 2,272 2,452 3,002 3,070 3,250 3,230 3,300 3,470 3,190 3,080 Price of units sold (thous. of dollars):1 20 Median................................................ 32.0 35.3 38.1 39.4 38.7 38.5 38.8 39.0 39.6 40.7 21 Average............................................... 35.8 39.0 42.2 43.4 AU 42.4 42.9 43.3 44.0 45.1 Value of new construction 2 (millions of dollars; monthly figures, seasonally adjusted) CONSTRUCTION 22 Total put in place............................... 138,526 132,043 144,821 141,887 146,631 148,475 152,819 152,185 137,076 150,511 23 Private................................................. 100,179 93,034 108,424 104,538 109,000 114,503 118,752 118,918 107,153 117,714 24 Residential...................................... 50,378 46,476 59,948 55,245 59,130 65,405 69,181 69,951 63,404 69,465 25 Nonresidential, total...................... 49,801 46,558 48,476 49,293 49,870 49,098 49,571 48,967 43,749 48,249 Buildings: 26 Industrial................................. 7,902 8,017 6,910 6,902 6,894 6,407 6,461 6,453 6,088 6,613 27 Commercial............................. 15,945 12,804 12,586 12,984 12,786 12,560 12,522 12,859 12,178 12,813 28 Other........................................ 5,797 5,585 6,252 6,689 6,669 6,489 6,677 6,497 5,978 6,190 29 Public utilities and other............ 20,157 20,152 22,728 22,718 23,521 23,642 23,911 23,158 19,505 22,633 30 Public.................................................. 38,347 39,009 36,397 37,349 37,631 33,972 34,067 33,267 29,923 32,797 31 Military............................................ 1,188 1,391 1,479 1,450 1,352 1,467 1,622 1,567 1,509 1,597 32 Highway.......................................... 12,069 10,345 9,112 9,596 8,856 8,738 7,843 7,508 6,112 33 Conservation and development. . . 2,741 3,227 3,659 3,618 4,281 2,949 A,011 3,856 3,435 34 Other................................................ 22,349 24,046 22,147 22,685 23,142 20,818 20,525 20,336 18,867 1 Not seasonally adjusted. Note.—Census Bureau estimates for all series except (a) mobile 2 Value of new construction data in recent periods may not be strictly homes, which are private, domestic shipments as reported by the Manu comparable with data in prior periods due to changes by the Bureau of factured Housing Institute and seasonally adjusted by the Census Bureau the Census in its estimating techniques. For a description of these changes and (b) sales and prices of existing units, which are published by the see Construction Reports (C-30-76-5), issued by the Bureau in July 1976. National Association of Realtors. All back and current figures are avail able from originating agency. Permit authorizations are for 14,000 jurisdictions reporting to the Census Bureau. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Prices A51 2.15 CONSUMER AND WHOLESALE PRICES Percentage changes based on seasonally adjusted data, except as noted. 12 months to— 3 months (at annual rate) to— 1 month to— Index level 1976 1976 1977 Feb. 1976 1977 1977 Feb. Feb. (1967 Mar. June Sept. Dec. Oct. Nov. Dec. Jan. Feb. = 100)1 Consumer prices 1 All items........................................................ 6.3 6.0 3.9 6.1 5.3 4.2 .3 .3 .4 .8 1.0 177.1 5.1 5.3 .2 6.0 3.9 3.4 .3 .2 .4 .8 1.2 170.9 3 Food.......................................................... 4.9 4.3 -5.4 6.2 1.6 0.0 .2 -.3 .1 .9 2.0 187.7 4 Commodities less food....................... 5.4 5.8 4.0 5.6 5.5 5.7 .4 .4 .6 .7 .1 161.6 5 Durable................................................. 6.4 7.0 7.2 6.5 5.0 6.0 .3 .4 .7 .9 .9 159.7 6 Nondurable........................................... 4.8 4.7 1.8 5.0 6.0 5.4 .4 .4 .4 .5 1.5 175.0 8.3 7.2 10.6 6.5 7.5 5.1 .4 .4 .4 .9 .6 188.7 8 Rent.......................................................... 5.2 5.7 6.1 5.4 5.4 5.3 .4 .4 .5 r.8 .3 150.2 9 Services less rent....................................... 8.8 7.4 11.2 6.7 7.7 5.4 .5 .4 .4 .9 .7 195.6 Other groupings: 10 All items less food1................................. 6.8 6.5 5.3 7.0 7.4 5.3 .5 .5 .3 .4 .6 174.0 11 All items less shelter1.............................. 6.4 6.1 3.0 6.9 5.6 4.3 .4 .4 .3 .5 1.1 173.1 12 Homeownership1...................................... 6.4 5.0 1.9 4.3 8.0 1.2 .2 0.0 .1 .9 .7 196.7 Wholesale prices 13 All commodities............................................ 4.7 4.7 1.6 6.4 3.3 .7 .5 .6 .6 .5 .9 190.0 14 Farm products, and processed foods and 1.4 3.5 —9.5 12 J -12.2 .3 -.6 .1 2.1 .5 2.0 188.4 15 Farm products......................................... 9.4 4.2 -12.2 16.5 -12.1 1.0 -.5 -.5 2.6 1.1 2.2 199.0 16 Processed foods and feeds....................... -3.4 3.1 -7.7 10.3 -12.2 -.1 -.6 .5 1.8 -.2 1.8 181.9 5.7 6.7 5.1 4.5 8.2 .8 .9 .7 .3 .5 .6 189.9 Materials, supplies, and components of which: 18 Crude materials2.................................. 4.9 18.1 5.2 16.8 10.8 -.5 3.7 3.5 -2.2 -1.2 4.0 273.7 19 Intermediate materials 3....................... 5.1 6.3 5.8 3.5 8.1 .9 .8 .5 .5 .5 .6 196.6 Finished goods, excluding foods: 6.4 5.5 3.1 3.0 8.2 .9 .5 .4 .3 1.0 .3 168.1 21 Durable............................................. 4.8 4.4 4.0 2.8 5.1 .6 .5 .2 .1 .7 .5 149.2 22 Nondurable....................................... 7.2 6.2 2.4 3.1 9.9 .9 .6 .7 .3 1.1 .2 180.7 23 Producer............................................ 7.3 6.1 7.1 4.5 5.0 .6 1.1 .4 .7 .4 .5 180.2 Memo : 24 Consumer foods.......................................... 2.7 2.7 -13.7 13.2 — 13.8 0.0 -.5 -.3 2.8 -.1 2.0 180.5 1 Not seasonally adjusted. 3 Excludes intermediate materials for food manufacturing and manu- 2 Excludes crude foodstuffs and feedstuffs, plant and animal fibers, factured animal feeds. oilseeds, and leaf tobacco. Source.—Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A52 Domestic Nonfinancial Statistics □ April 1977 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1975 1976 Account 1974 1975 1976 Q3 Q4 Ql Q2 Q3 Q4 Gross national product 1 1,413.2 1,516.3 '1,691.6 1,548.7 1,588.2 1,636.2 1,675.2 1,708.9 '1,745.1 By source: 2 Personal consumption expenditures................... 887.5 973.2 1,079.7 987.3 1,012.0 1,043.6 1,064.7 1,088.5 1,122.0 3 Durable goods.. ......................................... 121.6 131.7 156.5 136.0 141.8 151.4 155.0 157.6 162.0 4 Nondurable goods........................................ 376.2 409.1 440.4 414.6 421.6 429.1 434.8 441.8 456.0 5 Services.......................................................... 389.6 432.4 482.8 436.7 448.6 463.2 474.9 489.1 504.0 6 Gross private domestic investment.................... 215.0 183.7 239.6 197.7 201.4 229.6 239.2 247.0 242.8 7 Fixed investment........................................... 204.3 198.3 227.7 198.6 205.7 214.7 223.2 231.9 241.0 8 Nonresiden tial............................................ 149.2 147.1 160.0 146.1 148.7 153.4 157.9 163.0 165.6 9 Structures............................................... 54.1 52.0 55.3 51.8 52.1 53.2 54.9 56.0 57.0 10 Producers’ durable equipment.............. 95.1 95.1 104.7 94.2 96.6 100.2 103.0 107.0 108.6 11 Residential structures............................... 55.1 51.2 67.7 52.6 57.0 61.3 65.3 68.9 75.5 12 Nonfarm................................................ 52.7 49.0 65.1 50.2 54.2 58.6 62.9 66.3 72.7 13 Change in business inventories.................... 10.7 -14.6 11.9 -2.0 -4.3 14.8 16.0 15.1 1.7 14 Nonfarm.................................................... 12.2 -17.6 11.9 -4.2 -9.5 12.7 17.3 15.6 2.2 15 Net exports of goods and services..................... 7.5 20.5 r6.6 21.4 21.0 8.4 9.3 4.7 r4.2 16 Exports.......................................................... 144.4 148.1 162.7 148.2 153.7 154.1 160.3 167.7 '168.5 17 Imports.......................................................... 136.9 127.6 '156.0 126.8 132.7 145.7 151.0 163.0 '164.3 18 Govt, purchases of goods and services.............. 303.3 339.0 365.6 343.2 353.8 354.7 362.0 369.6 376.2 19 Federal........................................................... 111.6 124.4 133.4 124.6 130.4 129.2 131.2 134.5 138.9 20 State and local.............................................. 191.6 214.5 232.2 218.6 223.4 225.5 230.9 235.0 237.4 By major type of product: 21 Final sales, total................................................ 1,402.5 1,531.0 '1,679.7 1,550.6 1,592.5 1,621.4 1,659.2 1,694.7 '1,743.4 22 Goods.............................................................. 639.7 681.7 760.2 703.5 719.7 742.3 758.4 766.1 774.3 23 Durable goods........................................... 247.2 254.4 300.5 265.0 270.0 282.7 301.2 308.2 309.8 24 Nondurable................................................ 392.4 427.3 459.8 438.4 449.7 459.6 457.1 457.9 464.5 25 Services.......................................................... 626.6 692.5 '772.0 700.2 719.5 742.6 759.6 781.5 '804.4 26 Structures...................................................... 146.9 142.1 159.3 145.0 149.1 151.3 157.3 162.2 166.5 27 Change in business inventories........................ 10.7 -14.6 11.9 -2.0 -4.3 14.8 16.0 15.1 1.7 28 Durable goods............................................... 7.1 -12.1 2.7 -7.0 -10.6 -3.6 5.4 6.8 2.0 29 Nondurable goods........................................ 3.6 -2.6 9.2 5.0 6.3 18.5 10.6 8.3 -.3 Memo : 30 Total GNP in 1972 dollars................................. 1,214.0 1,191.7 '1,264.7 1,209.3 1,219.2 1,246.3 1,260.0 1,272.2 '1,280.4 National income 31 1,135.7 1,207.6 '1,348.5 1,233.4 1,264.6 1,304.7 1,337.4 1,362.5 1,389.5 32 Compensation of employees................................ 875.8 928.8 1,028.4 935.2 963.1 994.4 1,017.2 1,037.5 1,064.5 33 Wages and salaries............................................ 764.5 806.7 890.4 811.7 836.4 861.5 881.1 897.8 921.0 34 Government and Government enterprises.. 160.4 175.8 190.7 111.3 182.2 185.4 188.7 191.7 197.0 35 Other............................................................ 604.1 630.8 699.7 634.4 654.1 676.1 692.4 706.1 '723.9 36 Supplement to wages and salaries..................... 111.3 122.1 138.0 123.5 126.7 132.9 136.2 139.6 143.5 37 Employer contributions for social insurance................................................ 55.8 59.7 67.9 60.2 61.6 65.9 67.1 68.6 70.2 38 Other labor income....................................... 55.5 62.5 70.1 63.3 65.2 67.1 69.0 71.1 73.3 39 Proprietors' income1.............................................. 86.9 90.2 96.7 95.5 97.2 93.2 100.3 96.1 97.1 40 Business and professional1............................... 61.1 65.3 73.8 66.3 69.0 71.4 72.8 74.4 76.8 41 Farm1................................................................ 25.8 24.9 22.8 29.2 28.3 21.9 27.5 21.7 20.3 42 Rental income of persons2................................... 21.0 22.4 23.5 22.1 22.9 23.3 23.1 23.4 24.3 43 Corporate profits1................................................ 84.8 91.6 '117.9 105.3 105.6 115.1 116.4 122.0 118.1 44 Profits before tax3............................................ 127.6 114.5 '148.0 126.9 131.3 141.1 146.2 150.2 154.5 45 Inventory valuation adjustment....................... -39.8 -11.4 -14.6 -9.0 -12.3 -11.5 -14.4 -12.6 -20.0 46 Capital consumption adjustment..................... -3.0 -11.5 -15.5 -12.6 -13.5 -14.5 -15.4 -15.7 -16.4 47 Net interest............................................................ 67.1 74.6 82.0 74.9 75.8 78.6 80.3 83.5 85.6 1 With inventory valuation and capital consumption adjustments. 3 For after-tax profits, dividends, etc., see Table 1.50. 2 With capital consumption adjustments. Source.—Survey of Current Business (U.S. Dept, of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
National Income Accounts A53 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1975 1976 1974 1975 1976 Account Q3 Q4 Ql Q2 Q3 Q4 Personal income and saving 1 Total personal income........................................... 1,153.3 1,249 7 1,375.3 1,265.5 1,299.7 1,331.3 1,362.0 1,386.0 1,421.7 2 Wage and salary disbursements............................. 765.0 806.7 890.4 811.7 836.4 961.5 881.1 897.8 921.0 3 Commodity-producing industries.................... 273.9 275.3 304.8 272.2 285.8 295.3 302.9 307.0 314.0 4 Manufacturing.............................................. 211.4 211.7 237.0 212.5 220.3 229.6 235.6 238.9 r243.9 5 Distributive industries...................................... 184.4 195.6 214.9 196.8 202.3 208.3 212.8 216.5 221.9 6 Service industries.............................................. 145.9 159.9 180.0 161.3 166.1 172.4 176.7 182.7 188.1 7 Government and government enterprises....... 160.9 175.8 190.7 177.3 182.2 185.4 188.7 191.7 197.0 8 Other labor income.............................................. 55.5 62.5 70.1 63.3 65.2 67.1 69.0 71.1 73.3 9 Proprietors’ income1.............................................. 86.9 90.2 96.7 95.5 97.2 93.2 100.3 96.1 97.1 10 Business and professional1............................... 61.1 65.3 73.8 66.3 69.0 71.4 72.8 74.4 76.8 11 Farm1................................................................ 25.8 24.9 22.8 29.2 28.3 21.9 27.5 21.7 20.3 12 Rental income of persons2................................... 21.0 22.4 23.5 22.4 22.9 23.3 23.1 23.4 24.3 13 Dividends.............................................................. 30.8 32.1 35.1 32.6 32.2 33.1 34.4 35.4 37.7 14 Personal interest income....................................... 101.4 110.7 123.0 111.0 114.4 118.0 120.7 125.0 128.4 15 Transfer payments................................................ 140.3 175.2 191.3 179.1 182.5 188.6 187.6 192.4 196.6 16 Old-age survivors, disability, and health insurance benefits...................................... 70.1 81.4 93.0 84.7 86.3 88.1 89.5 95.8 98.5 17 Less: Personal contributions for social insurance.................................................... 47.6 50.0 54.9 50.1 51.0 53.4 54.3 55.2 56.6 18 Equals: Personal income................................... 1,153.3 1,249.7 1,375.3 1,265.5 1,299.7 1,331.3 1,362.0 1,386.0 1,421.7 19 Less : Personal tax and nontax payments.... 170.4 168.8 193.6 174.0 197.8 183.8 189.5 195.8 205.3 20 Equals : Disposable personal income................ 982.9 1,080.9 1,181.7 1,091.5 1,119.9 1,147.6 1,172.5 1,190.2 1,216.5 21 Less: Personal outlays..................................... 910.7 996.9 1,105.2 1,011.1 1,036.2 1,068.0 1,089.6 1,114.3 1,148.6 22 Equals: Personal saving..................................... 72.2 84.0 r76.5 80.5 83.7 79.5 82.9 75.8 67.8 Memo: Per capita (1972 dollars): 23 Gross national product..................................... 3,968.0 4,007.0 4,140.0 4,009.0 4,049.0 4,103.0 4,143.0 4,142.0 4,168.0 24 Personal consumption expenditures................ 887.5 973.2 1,079.7 987.3 1,012.0 1,043.6 1,064.7 1,088.5 1,122.0 25 Disposable personal income............................. 840.8 855.5 890.5 857.1 867.5 880.4 890.5 892.0 899.6 26 Saving rate (per cent)........................................... 7.3 7.8 6.5 7.4 7.5 6.9 7.1 6.4 5.6 Gross saving 27 Gross private saving.............................................. 211.6 255.6 r274.7 262.7 269.4 273.8 279.1 278.9 266.8 28 Personal saving.................................................. 72.2 84.0 76.5 80.5 83.7 79.5 82.9 75.8 67.8 29 Undistributed corporate profits1..................... 1.7 10.3 r 18.4 17.9 16.2 20.6 18.5 21.5 12.8 30 Corporate inventory valuation adjustment__ -39.8 -11.4 —14.6 -9.0 -12.3 -11.5 -14.4 -12.6 -20.0 Capital consumption allowances: 31 Corporate...................................................... 84.6 100.9 112.8 103.1 106.4 108.8 111.6 113.9 116.9 32 Noncorporate................................................ 53.1 60.4 67.0 61.3 63.2 64.8 66.1 67.7 69.3 33 Waee accruals less disbursements................... 34 Government surplus, or deficit (—), national income and product accounts......................... —4.2 -64.4 *-44.6 -58.1 -61.5 -51.6 —44.9 -44.7 -37.3 35 Federal.............................................................. -11.5 -71.2 r—58.6 -66.0 -69.4 -63.8 -54.1 -57.4 -59.2 36 State and local.................................................. 7.3 6.9 14.0 7.9 7.9 12.2 9.2 12.7 21.9 37 Capital grants received by the United States, net.................................................................. -2.0 38 Investment.............................................................. 211.9 195.6 *237.7 209.8 214.0 229.4 240.0 242.9 r238.4 39 Gross private domestic.................................... 215.0 183.7 239.6 196.7 201.4 229.6 239.2 247.0 242.8 40 Net foreign........................................................ -3.0 11.9 r —2.0 13.1 12.6 -.2 .8 -4.1 r —4.3 41 Statistical discrepancy.......................................... 6.8 4.4 n.i 5.1 6.1 7.2 5.8 8.7 8.9 1 With inventory valuation and capital consumption adjustments. Source.—Survey of Current Business (U.S. Dept, of Commerce). 2 With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A54 International Statistics □ April 1977 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1975 1976 Item credits or debits 1974 1975 1976 Q4 Ql Q2 Q3 Q4 1 Merchandise exports............................................................... 98,310 107,088 114,692 27,657 26,997 28,378 29,600 29,717 2 Merchandise imports.............................................................. 103,679 98,058 123,916 25,437 28,324 29,914 32,387 33,291 3 Merchandise trade balance2............................................... -5,369 9,030 -9,224 2,220 -1,327 -1,536 -2,787 -3,574 -2,083 -883 391 12 -15 -155 339 223 10,227 6,007 10,538 1,670 2,286 2,468 2,784 3,000 812 2,163 2,696 455 475 781 860 578 7 Balance on goods and services3.............................................. 3,586 16,316 4,401 4,357 1,419 1,558 1,196 227 8 Remittances, pensions, and other transfers....................... -1,710 -1,727 -1,866 -433 -483 -452 -446 -487 9 U.S. Govt, grants (excluding military).............................. -5,475 -2,893 -3,139 -818 -635 -468 -1,479 -557 10 Balance on current account...................................................... -3,598 11,697 -604 3,106 301 638 -729 -817 11 Not seasonally adjusted........................................................ 4,305 1,449 742 -3,677 883 12 Change in U.S. Govt, assets, other than official reserve assets, net (increase, —).................................................. 365 -3,463 -4,295 -952 -684 -1,009 -1,450 -1,153 13 Change in U.S. official reserve assets (increase, —).............. -1,434 -607 -2,530 89 — 773 -1,578 -407 228 14 Gold..................................................................................... 15 SDR’s................................................................................... —172 -66 -78 -21 -45 14 -18 -29 -1,265 -466 -2,212 -57 -237 -798 -716 -461 17 Foreign currencies............................................................... 3 -75 -240 167 -491 -794 327 718 18 Change in U.S. private assets abroad (increase, — )............... -32,323 -27,523 -36,195 -10,375 -8,550 -7,288 -6,824 -13,534 19 Bank-reported claims............................................................ -19,494 -13,487 -20,742 -5,348 -3,582 -4,767 -3,355 -9,038 20 Long-term......................................................................... -1,183 -2,373 -2,098 -943 -250 -385 -993 -470 -18,311 -11,114 -18,644 -4,405 -3,332 -4,382 -2,362 -8,568 22 Nonbank-reported claims..................................................... -3,221 -1,522 -1,772 -972 -751 -962 721 -780 -474 -441 -14 -379 —187 146 53 -26 -2,747 -1,081 -1,758 -593 -564 -1,108 668 -754 25 U.S. purchase of foreign securities, net............................. -1,854 -6,206 -8,682 -2,361 -2,460 -1,357 -2,743 -2,123 26 U.S. direct investments abroad, net................................... -7,753 -6,307 -5,000 -1,694 -1,757 -202 -1,447 -1,593 27 Change in foreign official assets in the United States (in crease, +)......................................................................... 10,981 6,899 18,107 2,771 3,942 4,105 2,999 7,061 28 U.S. Treasury securities...................................................... 3,282 4,338 9,301 1,069 1,998 2,166 1,261 3,876 29 Other U.S. Govt, obligations............................................. 902 891 566 307 68 316 66 116 724 1,732 5,013 499 1,482 797 1,746 988 31 Other U.S. liabilities reported by U.S. banks................... 5,818 -2,158 1,012 134 -275 135 -598 1,750 32 Other foreign official assets5.............................................. 254 2,095 2,215 762 669 691 524 331 33 Change in foreign private assets in the United States (in 21,452 8,427 15,022 3,103 1,454 3,225 5,248 5,095 34 U.S. bank-reported liabilities............................................... 16,017 647 10,974 691 675 3,518 1,766 5,015 9 -300 172 146 -91 -25 67 221 36 Short-term........................................................................ 16,008 947 10,802 545 766 3,543 1,699 4,794 37 U.S. nonbank-reported liabilities......................................... 1,615 171 -588 -68 24 -248 -324 -40 38 Long-term....................................................................... -212 345 -1,017 10 -332 -188 -285 -212 39 Short-term........................................................................ 1,827 -174 429 -78 356 -60 -39 172 40 Foreign private purchases of U.S. Treasury securities, net. 697 2,667 2,825 213 453 -598 3,026 -56 41 Foreign purchases of other U.S. securities, net................ 378 2,505 1,250 1,038 1,030 131 68 21 42 Foreign direct investments in the United States, net........ 2,745 2,437 561 1,229 -728 422 712 155 43 Allocations of SDR’s.............................................................. 44 Discrepancy.............................................................................. 4,557 4,570 10,495 2,258 4,310 1,907 1,163 3,120 45 Owing to seasonal adjustments.......................................... 1,275 958 73 -2,800 1,773 46 Statistical discrepancy in recorded data before seasonal adjustment.................................................................... 4,557 4,570 10,495 983 3,352 1,834 3,963 1,347 Memo: Changes in official assets: 47 U.S. official reserve assets (increase,—)............................. -1,434 -607 -2,530 89 -773 -1,578 -407 228 48 Foreign official assets in the U.S. (increase,+)................. 10,257 5,166 13,094 2,272 2,460 3,308 1,253 6,073 49 Changes in OPEC official assets in the U.S. (part of line 27 above)............................................................................... 10,841 7,108 9,517 1,996 3,491 3,339 1,687 1,000 50 Transfers under military grant programs (excluded from lines 1, 4, and 9 above)................................................... 1,817 2,232 400 177 50 99 156 95 1 Seasonal factors are no longer calculated for capital transactions— excludes certain military sales to Israel from exports and excludes U.S. lines 13 through 50. Government interest payments from imports. 2 Data are on an international accounts (IA) basis. Differs from the 4 Primarily associated with military sales contracts and other transac Census basis primarily because the IA basis includes imports into the tions arranged with or through foreign official agencies. U.S. Virgin Islands, and it excludes military exports, which are part of 5 Consists of investments in U.S. corporate stocks and in debt securi Line 4. ties of private corporations and state and local governments. 3 Differs from the definition of “net exports of goods and services” in the national income and product (GNP) account. The GNP definition Note.—Data are from Bureau of Economic Analysis, Survey of Cur rent Business (U.S. Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Trade and Reserve Assets A55 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1976 1977 Item 1974 1975 1976 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments.................*..................... 97,908 107,130 114,807 9,737 9,788 9,699 9,589 10,410 9,599 9,808 2 GENERAL IMPORTS including merchandise for immediate con sumption plus entries into bonded warehouses...................................... 100,252 96,115 120,677 10,477 10,651 10,555 10,623 11,020 11,269 11,674 -2,344 +11,014 -5,870 -740 -863 — 857 -1,034 -610 — 1,670 -1,866 Note.—Bureau of Census data reported on a free-alongside-ship exports (which are combined with other military transactions and are (f.a.s.) value basis. Before 1974 imports were reported on a customs reported separately in the “service account”). On the import side, the import value basis. For calendar year 1974 the f.a.s. import value was largest single adjustment is the addition of imports into the Virgin Islands $100.3 billion, about 0.7 per cent less than the corresponding customs (largely oil for a refinery on St. Croix), which are not included in Census import value. The international-accounts-basis data shown in Table 3.10 statistics. adjust the Census basis data for reasons of coverage and timing. On the Source.—U.S. Dept, of Commerce, Bureau of the Census, Summary export side, the largest adjustments are: (a) the addition of exports to of U.S. Export and Import Merchandise Trade (FT 900). Canada not covered in Census statistics, and (b) the exclusion of military 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1976 1977 Type 1973 1974 1975 Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 Total.................................................... 314,378 15,883 16,226 18,945 19,013 19,416 18,747 19,087 19,122 419,120 2 Gold stock, including Exchange Stabilization Fund1 „...................... 311,652 11,652 11,599 11,598 11,598 11,598 11,598 11,658 11,658 11,658 3 Special Drawing Rights2................... 32,166 2,374 2,335 2,357 2,352 2,365 2,395 2,375 2,383 42,389 4 Reserve position in International Monetary Fund............................... 3 552 1,852 2,212 3,952 3,997 4,307 4,434 4,682 4,819 4 4,812 5 Convertible foreign currencies.......... 8 5 80 1,038 1,066 1,146 320 372 262 261 1 Gold held under earmark at F.R. Banks for foreign and international 4 Beginning July 1974, the IMF adopted a technique for valuing the accounts is not included in the gold stock of the United States; see Table SDR based on a weighted average of exchange rates for the currencies 3.24. of 16 member countries. The U.S. SDR holdings and reserve position in 2 Includes allocations by the International Monetary Fund of SDR’s the IMF also are valued on this basis beginning July 1974. At valuation as follows: $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; used prior to July 1974 (SDR1 ** $1.20635) total U.S. reserve assets and $710 million on Jan. 1, 1972; plus net transactions in SDR’s. at end of March amounted to $19,304; SDR holdings, $2,487; and 3 Change in par value of U.S. dollar on Oct. 18, 1973 increased total reserve position in IMF, $4,898. reserve assets by $1,436 million, gold stock by $1,165 million, SDR’s by $217 million, and reserve position in IMF by $54 million. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A56 International Statistics □ April 1977 3.13 SELECTED U.S. LIABILITIES TO FOREIGNERS Millions of dollars, end of period 1974 1976 1977 Holder, and type of liability 1973 1975 Dec. 9 Sept. Oct. Nov. Dec. Jan. Feb. 1 Total.................................................... 92,490 119,240 119,164 126,552 140,834 143,728 144,643 151,329 147,775 149,253 2 Foreign countries................................. 90,487 115,918 115,842 120,929 133,072 136,093 136,411 142,846 139,831 157,276 3 Official institutions1............................ 66,861 76,801 76,823 80,695 86,085 86,827 87,745 91,850 92,996 93,835 4 Short-term, reported by banks in the United States.2................. 43,923 53,057 53,079 49,513 49,654 49,017 49,273 53,478 54,465 54,784 U.S. Treasury bonds and notes: 5 Marketable3................................ 5,701 5,059 5,059 6,671 10,800 11,027 11,367 11,788 2,017 12,725 6 Nonmarketable4......................... 15,564 16,339 16,339 19,976 19,803 20,876 21,131 20,648 20,622 20,496 7 Other readily marketable liabilities5............................. 1,673 2,346 2,346 4,535 5,828 5,907 5,974 5,936 5,892 5,830 Commercial banks abroad: 8 Short-term reported by banks in the United States2,6............... 17,694 30,314 30,106 29,516 34,641 36,940 35,384 37,429 33,359 33,283 9 Other foreigners.................................. 5,932 8,803 8,913 10,718 12,346 12,326 13,282 13,567 13,476 14,112 10 Short-term, reported by banks in the United States2.................. 5,502 8,305 8,415 10,017 11,475 11,399 12,312 12,591 12,479 13,092 11 Marketable U.S. Treasury bonds 430 498 498 701 871 927 970 976 997 1,020 12 Nonmonetary international and re gional organization8.................... 2,003 3,322 3,322 5,623 7,762 7,635 8,232 8,483 7,944 8,023 13 Short-term, reported by banks in the United States2.......... 1,955 3,171 3,171 5,292 5,966 5,102 5,506 5,450 4,650 3,956 14 Marketable U.S. Treasury bonds and notes3................ 48 151 151 331 1,796 2,533 2,726 3,033 3,294 4,067 1 Includes Bank for International Settlements. 9 Data in the two columns shown for this date differ because of changes 2 Includes Treasury bills as shown in Table 3.15. in reporting coverage. Figures in the first column are comparable in cover 3 Derived by applying reported transactions to benchmark data. age with those for the preceding date; figures in the second column are 4 Excludes notes issued to foreign official nonreserve agencies. comparable with those shown for the following date. 5 Includes long-term liabilities reported by banks in the United States and debt securities of U.S. Federally sponsored agencies and U.S. cor Note.—Based on Treasury Dept, data and on data reported to the porations. Treasury Dept, by banks (including Federal Reserve banks) and brokers 6 Includes short-term liabilities payable in foreign currencies to com in the United States. Data exclude the holdings of dollars of the Inter mercial banks abroad and to other foreigners. national Monetary Fund derived from payments of the U.S. subscription, 7 Includes marketable U.S. Treasury bonds and notes held by com and from the exchange transactions and other operations of the IMF. mercial banks abroad and other foreigners. Data also exclude U.S. Treasury letters of credit and nonnegotiable, non- 8 Principally the International Bank for Reconstruction and Develop interest-bearing special U.S. notes held by nonmonetary international ment and the Inter-American and Asian Development Banks. and regional organizations. 3.14 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1974 1976 1977 Area 1973 1976 Dec.3 Sept. Oct. Nov. Dec. Jan. Feb. 1 Total.................................................... 66,861 76,801 76,823 80,695 86,085 86,827 87,745 91,850 92,996 93,835 45,764 44,328 44,328 45,685 41,565 41,933 44,075 45,855 45,927 46,114 3 Canada............................................ 3,853 3,662 3,662 3,132 3,417 3,389 2,406 3,406 3,197 2,844 4 Latin American republics.............. 2,544 4,419 4,419 4,450 4,287 4,086 4,087 4,853 4,541 4,546 5 Asia.................................................. 10,887 18,604 18,626 22,550 32,434 33,438 33,906 34,112 35,561 36,458 788 3,161 3,161 2,984 2,759 2,415 1,925 1,843 1,707 1,721 7 Other countries 2............................ 3,025 2,627 2,627 1,894 1,623 1,566 1,346 1,781 2,603 2,152 1 Includes Bank for International Settlements. 3 See Note 9 to Table 3.13. 2 Includes countries in Oceania and Eastern Europe, and Western European dependencies in Latin America. Note.—Data represent breakdown by area of line 3, Table 3.13. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Bank-reported Data A57 3.15 SHORT-TERM LIABILITIES TO FOREIGNERS Reported by Banks in the United States By Holder and by Type of Liability Millions of dollars, end of period 1974 1976 1977 Holder, and type of liability 1973 1975 Dec. 8 Sept. Oct. Nov. Dec. Jan.p Feb.p 1 All foreigners, excluding the International Monetary Fund............................................... 69,074 94,847 94,771 94,338 101,736 102,458 102,474 108,949 104,953 105,115 2 Payable in dollars............................................... 68,477 94,081 94,004 93,780 101,034 101,692 101,693 108,225 104,227 104,316 Deposits: 3 Demand...................................................... 11,310 14,068 14,051 13,564 14,793 14,658 15,811 16,803 15,314 16,098 4 Time1.......................................................... 6,882 10,106 9,932 10,348 10,644 10,546 10,757 11,546 11,430 11,236 5 U.S. Treasury bills and certificates2............. 31,886 35,662 35,662 37,414 40,119 38,934 38,643 40,744 41,275 42,760 6 Other short-term liabilities 3.......................... 18,399 34,246 34,359 32,466 35,478 37,552 36,484 39,133 36,207 34,222 7 Payable in foreign currencies............................. 597 766 766 558 702 766 781 724 726 799 8 Nonmonetary international and regional organizations4................................................. 1,955 3,171 3,171 5,293 5,966 5,102 5,506 5,450 4,650 3,957 9 Payable in dollars............................................... 1,955 3,171 3,171 5,284 5,692 5,098 5,502 5,445 4,646 3,951 Deposits: 10 Demand...................................................... 101 139 139 139 331 256 287 290 166 209 11 Time1.......................................................... 83 111 111 148 151 164 199 208 230 239 12 U.S. Treasury bills and certificates.............. 296 497 497 2,554 4,031 3,196 3,604 2,701 2,890 2,824 13 Other short-term liabilities5.......................... 1,474 2,424 2,424 2,443 1,449 1,482 1,412 2,247 1,360 678 14 Payable in foreign currencies............................. 8 4 4 4 5 4 6 15 Official institutions, banks, and other foreigners.. 67,119 91,676 91,600 89,046 95,770 97,356 96,969 103,499 100,303 101,159 16 Payable in dollars............................................... 66,522 90,910 90,834 88,497 95,073 96,594 96,193 102,780 99,581 100,365 Deposits: 17 Demand...................................................... 11,209 13,928 13,912 13,426 14,462 14,402 15,524 16,513 15,148 15,888 18 Time1.......................................................... 6,799 9,995 9,821 10,200 10,493 10,383 10,558 11,338 11,201 10,997 19 U.S. Treasury bills and certificates2............ 31,590 35,165 35,165 34,860 36,086 35,736 35,039 38,042 38,386 39,935 20 Other short-term liabilities 3.......................... 16,925 31,822 31,935 30,023 34,029 36,070 35,072 36,886 34,847 33,544 21 Payable in foreign currencies............................. 597 766 766 549 697 762 776 719 722 794 22 Official institutions6............................................... 43,923 53,057 53,079 49,513 49,654 49,017 49,273 53,478 54,465 54,784 23 Payable in dollars............................................. 43,795 52,930 52,952 49,513 49,654 49,017 49,273 53,478 54,465 54,784 Deposits: 24 Demand...................................................... 2,125 2,951 2,951 2,644 2,544 2,706 2,685 3,394 2,931 2,411 25 Time1.......................................................... 3,911 4,257 4,167 3,423 2,144 2,127 2,149 2,335 2,456 2,376 26 U.S. Treasury bills and certificates2............. 31,511 34,656 34,656 34,182 35,651 35,241 34,656 37,675 38.031 39,555 27 Other short-term liabilities 5.......................... 6,248 11,066 11,178 9,264 9,314 8,943 9,783 10,075 11,047 10,443 28 Pnvnhle in fnrpicm rurrenripc 127 127 127 29 Banks and other foreigners.................................... 23,196 38,619 38,520 39,533 46,115 48,339 47,696 50,021 45,838 46,374 30 Payable in dollars............................................... 22,727 37,980 37,881 38,984 45,418 47,577 46,920 49,302 45,116 45,580 31 Banks7............................................................ 17,224 29,676 29,467 28,966 33,944 36,178 34,608 36,710 32,637 32,489 Deposits: 32 Demand.................................................. 6,941 8,248 8,231 7,534 8,233 8,361 8,897 9,104 8.474 9,387 33 Time1...................................................... 529 1,942 1,910 1,942 2,578 2,291 1,949 2,479 2;071 1,773 34 U.S. Treasury bills and certificates........... 11 232 232 335 176 223 174 169 172 152 35 Other short-term liabilities3...................... 9,743 19,254 19,094 19,155 22,956 25,303 23,589 24,957 21,920 21,177 36 Other foreigners............................................. 5,502 8,304 8,414 10,017 11,475 11,399 12,312 12,592 12,479 13,091 Deposits: 37 Demand.................................................. 2,143 2,729 2,730 3,248 3,686 3,335 3,943 4,015 3,743 4,091 38 Time1...................................................... 2,359 3,796 3,744 4,823 5,771 5,965 6,461 6,524 6,673 6,848 39 U.S. Treasury bills and certificates........... 68 277 277 342 259 274 209 198 183 229 40 Other short-term liabilities 5...................... 933 1,502 1,664 1,605 1,759 1,824 1,700 1,854 1,880 1,924 41 Payable in foreign currencies............................. 469 639 639 549 697 762 776 719 722 794 1 Excludes negotiable time certificates of deposit, which are included 6 Foreign central banks and foreign central governments and their in “Other short-term liabilities.” agencies, and Bank for International Settlements. 2 Includes nonmarketable certificates of indebtedness and Treasury 7 Excludes central banks, which are included in “Official institutions.” bills issued to official institutions of foreign countries. 8 Data in the two columns shown for this date differ because of changes 3 Includes liabilities of U.S. banks to their foreign branches, liabilities in reporting coverage. Figures in the first column are comparable with of U.S. agencies and branches of foreign banks to their head offices and those for the preceding date; figures in the second column are comparable foreign branches of their head offices, bankers acceptances, commercial with those shown for the following date. paper, and negotiable time certificates of deposit. 4 Principally the International Bank for Reconstruction and Develop Note.—“Short-term obligations” are those payable on demand, or ment, and the Inter-American and Asian Development Banks. having an original maturity of 1 year or less. 5 Principally bankers acceptances, commercial paper, and negotiable time certificates of deposit. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A58 International Statistics □ April 1977 3.16 SHORT-TERM LIABILITIES TO FOREIGNERS Reported by Banks in the United States By Country Millions of dollars, end of period 1974 1976 1977 Area and country 1973 1975 Dec. 7 Sept. Oct. Nov. Dec. Jan.p Feb.p 1 69,074 94,847 94,771 94,338 101,736 102,458 102,475 108,949 104,953 105,115 2 Foreign countries......................................................... 67,119 91,676 91,600 89,046 95,770 97,356 96,969 103,499 100,303 101,159 3 40,742 48,667 48,813 43,988 40,177 39,967 42,480 46,925 43,614 43,581 4 Austria.................................................................. 161 607 607 754 335 334 332 348 373 401 5 Belgium-Luxembourg........................................ 1,483 2,506 2,506 2,898 1,946 1,879 2,085 2,268 2,376 2,411 6 Denmark.............................................................. 659 369 369 332 317 372 416 363 419 419 7 Finland................................................................. 165 266 266 391 415 407 378 419 389 367 8 France.................................................................. 3,483 4,287 4,287 7,733 4,363 4,409 4,642 4,875 4,701 4,596 9 Germany............................................................... 13,227 9,420 9,429 4,357 5,964 6,532 5,418 5,965 5,304 5,487 10 Greece................................................................... 389 248 248 284 336 405 378 403 421 346 11 Italy....................................................................... 1,404 2,617 2.577 1,072 1,574 1,583 2,884 3,206 2,858 2,703 12 Netherlands......................................................... 2,886 3,234 3,234 3,411 2,566 2,534 2,694 3,007 2,832 2,786 13 Norway................................................................ 965 1,040 1,040 996 789 690 740 785 566 823 14 Portugal................................................................ 534 310 310 195 193 177 206 239 172 228 15 Spain..................................................................... 305 382 382 426 540 506 478 565 492 546 16 Sweden................................................................. 1,885 1,138 1,138 2,286 1,979 1,295 1,420 1,693 1,613 1,593 17 Switzerland.......................................................... 3.377 9,986 10,139 8,514 9,016 8,331 8,846 9,453 9,571 9,661 18 Turkey.................................................................. 98 152 152 118 65 74 88 166 85 82 19 United Kingdom................................................ 6,148 7,559 7,584 6,886 7,296 7,953 8,401 10,001 8.844 8,711 20 Yugoslavia........................................................... 86 183 183 126 128 131 147 188 113 121 21 Other Western Europe1.................................... 3,352 4,073 4,073 2,970 2,103 2,089 2,639 2,672 2,263 2,092 22 U.S.S.R................................................................. 22 82 82 40 70 80 84 51 47 45 23 Other Eastern Europe....................................... 110 206 206 200 182 184 203 255 172 162 24 Canada................................................................ 3,627 3,517 3,520 3,076 4,796 4,033 3,944 4,784 4,519 4,900 25 Latin America.................................................... 7,664 12,038 11,754 14,942 17,490 19,065 17,684 19,010 17,836 18,665 26 Argentina............................................................. 924 886 886 1,147 1,437 1,374 1,293 1,538 1,648 1,820 27 Bahamas............................................................... 852 1,448 1,054 1,827 2,628 4,817 2,654 2,789 1,979 2,553 28 Brazil.................................................................... 860 1,034 1,034 1,227 1,132 1,323 1,168 1,432 1,292 1,272 29 Chile...................................................................... 158 276 276 317 325 298 315 335 325 302 30 Colombia............................................................. 247 305 305 417 767 804 922 1,017 1,090 1,152 31 Cuba...................................................................... 7 7 7 6 6 6 6 6 6 6 32 Mexico.................................................................. 1,296 1,770 1,770 2,066 2,348 2,475 2,860 2,848 2,710 2,782 33 Panama................................................................. 282 488 510 1,099 912 866 1,188 1,140 909 1,002 34 Peru....................................................................... 135 272 272 244 236 247 243 257 244 228 35 Uruguay............................................................... 120 147 165 172 244 233 238 245 250 239 36 Venezuela............................................................. 1,468 3,413 3,413 3,289 3,208 2,644 3,009 3,060 2,986 2,921 37 Other Latin American republics..................... 884 1.316 1,316 1,494 1,750 1,676 1,740 2,064 2,033 2,235 38 Netherlands Antilles2........................................ 71 158 158 129 147 160 157 140 151 157 39 Other Latin America......................................... 359 519 589 1,507 2,348 2,142 1,890 2,139 2,212 1,995 40 Asia..................................................................... 10,839 21,073 21,130 21,539 28,406 29,745 28,982 28,461 29, 789 29,258 41 China, People’s Republic of (Mainland)___ 38 50 50 123 45 48 59 47 47 47 42 China, Republic of (Taiwan).......................... 757 818 818 1,025 1,122 1,182 1,092 985 1,058 1,158 43 Hong Kong.................................................... 372 530 530 623 874 887 859 892 941 1,039 44 India...................................................................... 85 261 261 126 985 1,048 910 648 510 559 45 Indonesia............................................................. 133 1,221 1,221 369 995 1,154 314 340 695 546 46 Israel...................................................................... 327 386 389 386 300 310 325 385 430 547 47 Japan.................................................................... 6,967 10,897 10,931 10,218 14,424 14,663 14,736 14,380 14,481 13,358 48 Korea.................................................................... 195 384 384 390 350 366 324 437 448 483 49 Philippines........................................................... 515 747 747 698 622 582 606 627 602 554 50 Thailand............................................................... 247 333 333 252 215 223 244 275 301 313 51 Middle East oil-exporting countries3............ 4,633 4,623 6,461 7,198 7,741 8,124 8,073 9,029 9,276 52 Other4................................................................... i ,202 813 844 867 1,276 1,539 1,388 1,373 1,245 1,378 53 Africa.................................................................. 1,056 3,551 3,551 3,373 3,076 2,782 2,281 2,300 2,207 2,406 54 Egypt.................................................................... 35 103 103 343 186 213 171 333 209 244 55 Morocco............................................................... 11 38 38 68 80 85 72 88 97 105 56 South Africa........................................................ 114 130 130 169 165 183 132 143 211 155 57 Zaire..................................................................... 87 84 84 63 37 45 64 35 48 41 58 Oil-exporting countries5................................... 2,814 2,814 2,239 2,075 1,732 1,321 1,116 1,033 1,125 59 Other4................................................................... 808 383 383 491 532 524 521 585 609 735 60 Other countries................................................... 3,190 2,831 2,831 2,128 1,824 1,763 1,598 2,019 2,339 2,348 61 Australia.............................................................. 3,131 2,742 2,742 2,014 1,711 1,645 1,486 1,911 2,224 2,231 62 All other............................................................... 59 89 89 114 114 119 112 108 116 118 63 Nonmonetary international and regional organizations............................................................ 1,955 3,171 3,171 5,293 5,966 5,102 5,506 5,450 4,650 3,957 64 International............................................................ 1,627 2,900 2,900 5,064 5,613 4,717 5,109 5,091 4,300 3,599 65 Latin American regional...................................... 272 202 202 187 154 182 160 136 160 177 66 Other regional6....................................................... 57 69 69 42 199 203 237 223 189 181 For notes see bottom of p. A59. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Bank-reported Data A59 3.17 SHORT-TERM LIABILITIES TO FOREIGNERS Reported by Banks in the United States Supplemental “Other” Countries 1 Millions of dollars, end of period 1974 1974 1975 1976 Area and country Area and country Dec. Apr. Dec. Apr. Dec. Dec. Apr. Dec. Apr. Dec. Other Western Europe: Other Asia: Cyprus........................ 7 6 38 69 25 Afghanistan................ 18 19 41 54 57 Iceland....................... 21 33 43 40 26 Bangladesh.................. 21 50 54 41 Ireland, Republic of.. 29 75 39 27 Burma.......................... 65 49 31 34 13 28 Cambodia.................... 4 4 4 3 4 Other Eastern Europe: 29 Jordan.......................... 22 30 39 20 37 Bulgaria................................... 36 13 19 13 34 30 Laos............................. 3 5 2 2 1 Czechoslovakia....................... 34 11 32 10 21 31 Lebanon....................... 126 180 117 132 140 German Democratic Republic 36 18 17 3 32 Malaysia...................... 63 92 77 105 396 Hungary................................... 14 11 13 10 19 33 Nepal........................... 25 22 28 34 33 Poland..................................... 55 42 66 65 77 34 Pakistan....................... 91 118 74 89 189 Rumania................................. 25 14 44 28 19 35 Singapore..................... 245 215 256 34 280 36 Sri Lanka (Ceylon).... 14 13 13 9 23 Other Latin American republics: 37 Vietnam....................... 126 70 62 33 66 Bolivia................................... 96 93 110 104 133 Costa Rica............................. 118 120 124 69 141 Other Africa: Dominican Republic............ 128 214 169 149 275 38 Ethiopia (incl. Eritrea) 95 76 60 70 41 Ecuador................................. 122 157 120 150 319 39 Ghana.......................... 18 13 23 45 27 El Salvador............................ 129 144 171 128 178 40 Ivory Coast................. 7 11 62 76 10 Guatemala............................. 219 255 260 177 397 41 Kenya........................... 31 32 19 37 46 Haiti....................................... 35 34 38 33 47 42 Liberia......................... 39 33 53 63 77 Honduras............................... 88 92 99 69 137 43 Southern Rhodesia.... 2 3 1 1 1 Jamaica.................................. 69 62 41 49 35 44 Sudan........................... 4 14 12 17 22 Nicaragua.............................. 127 125 133 89 119 45 Tanzania...................... 11 21 30 18 Paraguay............................... 46 38 43 43 49 46 Tunisia......................... 19 23 29 33 20 Surinam2............................... 12 47 Uganda........................ 13 38 22 50 43 Trinidad and Tobago........... 107 31 131 44 167 48 Zambia......................... 22 18 78 14 Other Latin America: All Other: 23 Bermuda.................. 116 100 170 197 177 49 New Zealand............... 47 36 42 29 45 24 British West Indies.. 449 627 1,311 2,284 1,874 1 Represents a partial breakdown of the amounts shown in the “Other” 2 Surinam included with Netherlands Antilles until January 1976. categories on Table 3.16. 3.18 LONG-TERM LIABILITIES TO FOREIGNERS Reported by Banks in the United States Millions of dollars, end of period 1976 1977 Holder, and area or country 1973 1974 1975 Aug. Sept. Oct. Nov. Dec. Jan.* Feb.* 1 Total....................................................................... 1,462 1,285 1,812 2,242 2,206 2,315 2,310 2,393 2,353 2,245 2 Nonmonetary international and regional 761 822 415 246 214 333 308 261 264 259 3 Foreign countries.................................................... 700 464 1,397 1,996 1,991 1,983 2,003 2,132 2,090 1,987 4 Official institutions, including central banks. .. 310 124 931 1,402 1,386 1,314 1,313 1,352 1,262 1,180 5 Banks, excluding central banks........................ 291 261 364 445 446 499 524 585 604 577 6 Other foreigners................................................. 100 79 100 149 159 170 165 194 224 230 Area or country: 7 Europe................................................................ 470 226 330 457 458 489 507 525 555 529 159 146 214 311 312 310 309 313 313 245 66 59 66 88 87 99 125 132 144 131 10 Canada................................................................ 8 19 23 26 26 26 26 29 31 29 11 Latin America................................................ 132 115 140 122 125 151 152 230 244 255 12 Middle East oil-exporting countries1............... 94 894 1,369 1,340 1,286 1,239 1,251 1,186 1,104 13 Other Asia2.................................................... 82 7 8 19 41 27 77 96 68 67 14 African oil-exporting countries3....................... * * * * * * * * * 15 Other Africa4...................................................... 1 1 1 1 1 1 1 1 2 1 16 All other countries............................................ 7 * * 1 1 1 1 1 4 1 1 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, 4 Includes African oil-exporting countries until December 1974. and United Arab Emirates (Trucial States). 2 Includes Middle East oil-exporting countries until December 1974. Note.—Long-term obligations are those having an original maturity 3 Comprises Algeria, Gabon, Libya, and Nigeria. of more than 1 year. NOTES TO TABLE 3.16: 1 Includes Bank for International Settlements. 6 Asian, African, and European regional organizations, except BIS, 2 Surinam included with Netherlands Antilles until January 1976. which is included in “Other Western Europe.” 3 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, 7 Data in the two columns shown for this date differ because of changes and United Arab Emirates (Trucial States). in reporting coverage. Figures in the first column are comparable with 4 Includes oil-exporting countries until December 1974. those shown for the preceding date; figures in the second column are 5 Comprises Algeria, Gabon, Libya, and Nigeria. comparable with those shown for the following date. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A60 International Statistics □ April 1977 3.19 SHORT-TERM CLAIMS ON FOREIGNERS Reported by Banks in the United States By Country Millions of dollars, end of period 1976 1977 Area and country 1973 1974 1975 Aug. Sept. Oct. Nov. Dec. Jan.p Feb.* 1 20,723 39,056 50,231 58,014 60,317 60,986 63,890 69,011 63,650 63,289 2 Foreign countries.................................................... 20,723 39,055 50,229 58,002 60,305 60,981 63,884 69,005 63,643 63,284 3 Europe................................................................. 3,970 6,255 8,987 9,479 9,436 10,435 10,797 12,072 10,415 10,642 4 Austria............................................................ 11 21 15 24 47 42 54 44 41 42 5 Belgium-Luxembourg.................................... 147 384 352 465 437 504 501 662 554 609 6 Denmark........................................................ 48 46 49 50 57 64 129 85 72 64 7 Finland............................................................ 108 122 128 176 129 137 136 141 137 133 8 France............................................................. 621 673 1,471 929 1,169 1,096 1,098 1,448 1,246 1,371 9 Germany......................................................... 311 589 436 412 498 585 577 562 511 666 10 Greece............................................................. 35 64 49 68 117 88 76 79 81 85 11 Italy................................................................ 316 345 370 617 648 733 877 929 875 805 12 Netherlands.................................................... 133 348 300 268 256 399 240 304 246 510 13 Norway........................................................... 72 119 71 78 68 79 85 98 124 127 14 Portugal.......................................................... 23 20 16 57 55 46 53 65 80 90 15 Spain............................................................... 222 196 249 239 265 264 304 429 362 385 16 Sweden ............................................................ 153 180 167 143 106 101 93 177 112 85 17 Switzerland..................................................... 176 335 237 442 417 499 511 472 539 530 18 Turkey............................................................ 10 15 86 77 80 125 140 183 199 207 19 United Kingdom............................................ 1,459 2,580 4,718 5,167 4,844 5,376 5,591 6,068 4,864 4,538 20 Yugoslavia...................................................... 10 22 38 40 28 37 38 45 60 64 21 Other Western Europe.................................. 25 22 27 50 56 54 58 52 53 60 22 U.S.S.R........................................................... 46 46 103 53 52 83 103 99 82 95 23 Other Eastern Europe.................................... 44 131 108 125 107 123 134 130 177 175 24 Canada................................................................ 1,955 2,776 2,817 3,050 3,169 3,129 3,136 3,100 2,944 3,510 25 Latin America.................................................... 5,900 12,377 20,532 27,607 30,042 29,275 31,580 34,034 31,476 31,418 26 Argentina........................................................ 499 720 1,203 1,149 961 902 858 962 937 867 27 Bahamas......................................................... 883 3,405 7,570 11,519 14,192 12,587 14,594 15,340 13,899 14,079 28 Brazil............................................................... 900 1,418 2,221 2,772 2,891 3,125 3,259 3,383 3,456 3,149 29 Chile............................................................... 151 290 360 352 343 350 358 396 370 379 30 Colombia........................................................ 397 713 689 501 459 517 523 575 593 598 31 Cuba............................................................... 12 14 13 13 13 13 14 13 13 13 32 Mexico............................................................ 1,373 1,972 2,802 3,559 3,457 3,211 3,285 3,414 3,356 3,332 33 Panama........................................................... 274 505 1,052 778 809 1,119 781 1,021 770 862 34 Peru................................................................. 178 518 583 666 694 638 629 690 737 748 35 Uruguay.......................................................... 55 63 51 31 28 28 35 38 41 39 36 Venezuela........................................................ 518 704 1,086 1,503 1,305 1,338 1,512 1,553 1,296 1,261 37 Other Latin American republics................... 493 852 967 978 1,112 1,037 1,068 1,140 1,127 1,120 38 Netherlands Antilles1.................................... 13 62 49 29 42 41 43 40 45 41 39 Other Latin America..................................... 154 1,142 1,885 3,759 3,737 4,369 4,620 5,469 4,838 4,932 40 8,224 16,226 16,057 15,832 15,695 16,099 16,365 17,765 16,672 15,466 41 China, People’s Republic of (Mainland). . . 31 4 22 4 4 5 3 3 4 30 42 China, Republic of (Taiwan)........................ 140 500 736 939 981 991 1,099 987 1,028 1,089 43 Hong Kong.................................................... 147 223 258 251 252 208 267 361 229 265 44 India............................................................... 16 14 21 36 33 64 48 41 28 23 45 Indonesia........................................................ 88 157 102 108 119 117 120 76 54 55 46 Israel............................................................... 155 255 491 257 313 320 330 554 352 337 47 Japan............................................................... 6,398 12,518 10,776 10,116 10,220 10,534 10,428 10,992 10,581 9,474 48 Korea.............................................................. 403 955 1,561 1,551 1,594 1,555 1,577 1,722 1,710 1,576 49 Philippines...................................................... 181 372 384 459 472 478 495 559 592 479 50 Thailand.......................................................... 273 458 499 437 434 415 414 422 421 446 51 Middle East oil-exporting countries2........... 330 524 836 721 765 1,082 1,312 981 1,036 52 Other3............................................................. 392 441 684 838 553 647 503 735 690 658 53 Africa.................................................................. 388 855 1,228 1,395 1,332 1,382 1,394 1,486 1,519 1,518 54 Egypt............................................................... 35 111 101 115 114 106 109 132 151 126 55 Morocco......................................................... 5 18 9 15 17 8 14 13 19 13 56 South Africa................................................... 129 329 545 695 691 772 748 763 798 838 57 Zaire............................................................... 61 98 34 24 23 14 25 29 16 U 58 Oil-exporting countries4............................... 115 231 268 176 215 213 257 238 249 59 Other3............................................................. 158 185 308 278 312 267 284 292 298 282 60 Other countries................................................... 286 565 609 638 631 661 612 549 618 729 61 Australia......................................................... 243 466 535 553 521 558 502 450 512 605 62 All other......................................................... 43 99 73 85 110 103 110 99 105 125 63 Nonmonetary international and regional organizations...................................................... 1 * 1 12 12 5 6 5 7 5 1 Includes Surinam until January 1976. 3 Includes oil-exporting countries until December 1974. 2 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, 4 Comprises Algeria, Gabon, Libya, and Nigeria, and United Arab Emirates (Trucial States). 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Bank-reported Data A61 3.20 SHORT-TERM CLAIMS ON FOREIGNERS Reported by Banks in the United States By Type of Claim Millions of dollars, end of period 1976 1977 Type 1973 1974 1975 Aug. Sept. Oct. Nov. Dec. Jan.* Feb.* 1Total....................................................................... 20,723 39,056 50,231 58,014 60,317 60,986 63,890 69,011 63,650 63,289 2 Payable in dollars.................................................. 20,061 37,859 48,902 59,556 58,661 59,330 62,085 67,365 61,907 61,258 3 Loans, total........................................................ 7,660 11,291 13,205 15,270 14,914 16,221 16,191 18,347 16,094 16,350 4 Official institutions, including central banks. 284 381 613 1,009 781 1,055 1,269 1,452 1,250 935 5 Banks, excluding central banks..................... 4,538 7,332 7,665 9,060 9,003 10,015 9,639 11,081 9,341 9,839 6 All other, including nonmonetary interna tional and regional organizations............. 2,838 3,579 4,926 5,202 5,130 5,151 5,282 5,815 5,503 5,576 7 Collections oustanding...................................... 4,307 5,637 5,467 5,495 5,746 5,586 5,628 5,846 5,834 5,866 8 Acceptances made for accounts of foreigners... 4,160 11,237 11,147 11,144 11,213 11,461 11,422 12,367 12,018 11,963 9 Other claims1..................................................... 3,935 9,689 19,082 24,562 26,789 26,015 28,843 30,805 27,962 27,078 10 Payable in foreign currencies................................. 662 1,196 1,329 1,542 1,656 1,704 1,805 1,645 1,743 2,031 11 Deposits with foreigners.................................... 428 669 656 903 1,029 1,052 1,084 1,063 1,137 1,089 12 Foreign government securities, commercial and finance paper.......................................... 119 289 301 143 120 102 85 84 145 272 13 Other claims....................................................... 115 238 372 496 507 550 635 498 460 671 1 Includes claims of U.S. banks on their foreign branches and claims made to, and acceptances made for, foreigners; drafts drawn against of U.S. agencies and branches of foreign banks on their head offices and foreigners, where collection is being made by banks and bankers for foreign branches of their head offices. their own account or for account of their customers in the United States; and foreign currency balances held abroad by banks and bankers and Note.—Short-term claims are principally the following items payable their customers in the United States. Excludes foreign currencies held on demand or with a contractual maturity of not more than 1 year: loans by U.S. monetary authorities. 3.21 LONG-TERM CLAIMS ON FOREIGNERS Reported by Banks in the United States Millions of dollars, end of period 1976 1977 Type, and area or country 1973 1974 1975 Aug. Sept. Oct. Nov. Dec. Jan.* Feb.* 1 5,996 7,179 9,540 10,955 11,205 11,345 11,612 11,687 11,711 11,870 By type: 2 Payable in dollars................................................... 5,924 7,099 9,423 10,822 11,063 11,206 11,465 11,539 11,561 11,693 3 Loans, total........................................................ 5,446 6,490 8,316 9,357 9,551 9,670 9,837 9,933 9,950 10,128 4 Official institutions, including central banks 1,156 1,324 1,350 1,338 1,312 1,323 1,364 1,420 1,404 1,532 5 Banks, excluding central banks..................... 591 929 1,567 1,979 2,039 2,115 2,164 2,212 2,202 2,220 6 All other, including nonmonetary interna tional and regional organizations............. 3,698 4,237 5,399 6,040 6,201 6,232 6,308 6,298 6,344 6,376 7 Other long-term claims................................. 478 609 1,107 1,465 1,512 1,536 1,628 1,606 1,611 1,564 8 Payable in foreign currencies................................. 72 80 116 133 142 139 147 148 150 177 By area or country: 9 Europe................................................................ 1,271 1,908 2,708 3,093 3,133 3,191 3,285 3,246 3,325 3,377 10 Canada................................................................ 490 501 555 592 623 570 590 586 520 538 11 Latin America.................................................... 2,116 2,614 3,468 4,382 4,519 4,565 4,694 4,806 4,878 4,948 12 Asia..................................................................... 1,582 1,619 1,795 1,835 1,856 1,901 1,885 1,886 1,839 1,846 13 Japan............................................................... 251 258 296 355 370 381 368 391 387 367 14 Middle East oil-exporting countries1........... 384 220 187 171 171 141 146 117 123 15 Other Asia2.................................................... 1,331 977 1,279 1,667 1,315 1,349 1,376 1,349 1,335 1,357 16 Africa.................................................................. 355 366 747 771 800 839 888 883 852 876 17 Oil-exporting countries 3................................ 62 151 226 236 259 269 264 201 201 18 Other4............................................................. 355 305 596 545 564 580 619 619 651 675 19 All other countries5........................................... 181 171 267 282 274 281 270 280 296 284 1 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, 3 Comprises Algeria, Gabon, Libya, and Nigeria. and United Arab Emirates (Trucial States). 4 Includes oil-exporting countries until December 1974. 2 Includes Middle East oil-exporting countries until December 1974. 5 Includes nonmonetary international and regional organizations. 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A62 International Statistics □ April 1977 3.22 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars; end of period 1976 1977 Asset account 1973 1974 1975 July Aug. Sept. Oct. Nov. Dec. Jan.* All foreign countries 1 Total, all currencies............................ 121,866 151,905 176,493 196,865 196,174 199,843 206,383 207,372 219,811 213,030 ?, 5,091 6,900 6,743 8,709 6,980 6,628 9,939 7,557 7,909 6,514 3 Parent bank................................. 1,886 4,464 3,665 5,575 3,934 3,248 6,834 4,280 4,390 2,935 4 Other............................................ 3,205 2,435 3,078 3,134 3,046 3,381 3,105 3,276 3,519 3,579 5 Claims on foreigners....................... 111,974 138,712 163,391 181,323 182,499 186,192 189,317 192,609 204,861 198,908 6 Other branches of parent bank 19,177 27,559 34,508 41,738 41,000 41,174 41,812 42,729 46,582 47,135 7 Other banks................................. 56,368 60,283 69,206 71,762 71,802 74,796 76,152 77,179 83,546 77,094 8 Official institutions..................... 2,693 4,077 5,792 8,444 8,766 9,208 9,205 9,540 10,598 10,825 9 Nonbank foreigners................... 33,736 46,793 53,886 59,379 60,932 61,015 62,148 63,162 64,135 63,855 10 Other assets..................................... 4,802 6,294 6,359 6,834 6,695 7,022 7,128 7,206 7,041 7,608 79,445 105,969 132,901 149,124 147,245 150,434 156,031 156,364 168,222 163,791 12 Claims on United States................. 4,599 6,603 6,408 8,440 6,666 6,269 9,595 7,214 7,615 6,235 13 Parent bank................................. 1,848 4,428 3,628 5,530 3,895 3,184 6,790 4,218 4,330 2,896 14 Other............................................ 2,751 2,175 2,780 2,910 2,111 3,085 2,805 2,996 3,285 3,338 15 73,018 96,209 123,496 137,293 137,374 140,919 143,083 145,837 157,405 153,646 16 Other branches of parent bank.. 12,799 19,688 28,478 33,843 33,009 33,358 34,051 34,382 38,537 39,412 17 Other banks................................. 39,527 45,067 55,319 56,597 56,422 58,877 59,316 60,246 66,227 60,618 18 Official institutions..................... 1,777 3,289 4,864 7,148 7,606 7,906 7,885 8,289 9,007 9,457 19 Nonbank foreigners................... 18,915 28,164 34,835 39,705 40,337 A0,119 41,831 42,920 43,634 44,159 20 Other assets..................................... 1,828 3,157 2,997 3,392 3,206 3,246 3,353 3,314 3,202 3,910 United Kingdom 21 Total, all currencies............................ 61,732 69,804 74,883 73,494 73,229 73,589 76,854 77,249 81,466 76,482 22 Claims on United States................. 1,789 3,248 2,392 1,862 1,758 2,036 3,256 3,426 3,354 2,262 23 Parent bank................................. 738 2, All 1,449 1,002 938 1,081 2,413 2,538 2,376 1,357 24 Other............................................ 1,051 lie 943 860 821 955 843 888 978 905 25 Claims of foreigners........................ 57,761 64,111 70,331 69,359 69,298 69,217 71,162 71,477 75,859 71,995 26 Other branches of parent bank.. 8,773 12,724 17,557 18,843 18,044 17,745 18,358 17,949 19,753 19,483 27 Other banks................................. 34,442 32,701 35,904 33,589 34,135 34,405 35,336 35,846 38,089 34,827 28 Official institutions..................... 735 788 881 909 1,007 1,138 1,211 1,168 1,274 1,377 29 Nonbank foreigners................... 13,811 17,898 15,990 16,018 16,112 15,929 16,257 16,514 16,743 16,309 30 Other assets.................................... 2,183 2,445 2,159 2,273 2,173 2,335 2,436 2,345 2,253 2,225 31 Total payable in U.S. dollars............. 40,323 49,211 57,361 54,871 54,522 54,547 57,161 57,699 61,587 57,758 32 Claims on United States................. 1,642 3,146 2,273 1,780 1,658 1,902 3,124 3,313 3,275 2,185 33 Parent bank................................. 730 2,468 1,445 997 934 1,064 2,406 2,523 2,374 1,352 34 Other............................................ 912 678 828 783 724 838 719 789 902 833 35 Claims on foreigners....................... 37,817 44,694 54,121 52,250 52,006 51,782 53,112 53,541 57,488 54,735 36 Other branches of parent bank.. 6,509 10,265 15,645 16,204 15,401 15,195 15,829 15,405 17,249 17,183 37 Other banks................................. 23,389 23,716 28,224 25,370 25,826 25,866 26,421 27,008 28,983 26,184 38 Official institutions..................... 510 610 648 659 799 862 912 817 846 1,110 39 Nonbank foreigners................... 7,409 10,102 9,604 10,018 9,980 9,859 9,950 10,311 10,410 10,258 40 Other assets.................................... 865 1,372 967 841 858 863 925 845 824 838 Bahamas and Caymans 41 Total, all currencies............................ 23,771 31,733 45,203 59,913 57,677 60,753 63,508 61,758 67,398 67,393 42 Claims on United States................. 2,210 2,464 3,229 5,835 3,554 3,330 5,464 2,892 3,420 3,148 43 Parent bank................................. 317 1,081 1,477 3,864 1,641 1,257 3,490 766 1,095 767 44 Other............................................ 1,893 1,383 1,752 1,971 1,913 2,072 1,973 2,126 2,325 2,381 45 Claims on foreigners........................ 21,041 28,453 41,040 52,898 52,933 56,255 56,806 57,634 62,760 62,498 46 Other branches of parent bank.. 1,928 3,478 5,411 7,149 6,791 7,250 7,296 7,389 8,853 9,521 47 Other banks................................. 9,895 11,354 16,298 20,669 20,217 22,447 22,136 22,438 25,324 23,748 48 Official institutions..................... 1,151 2,022 3,576 5,699 5,929 6,059 6,040 6,485 7,101 7,004 49 Nonbank foreigners................... 8,068 11,599 15,756 19,381 19,995 20,498 21,334 21,322 21,483 22,225 50 Other assets.................................... 520 815 933 1,180 1,190 1,169 1,239 1,232 1,217 1,747 51 21,937 28,726 41,887 56,076 53,520 56,600 59,219 57,672 63,329 63,180 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Overseas Branches A63 3.22 Continued 1976 1977 Liability account 1973 1974 1975 July Aug. Sept. Oct. Nov. Dec. Jan.p All foreign countries 52 Total, all currencies......................... 121,866 151,905 176,493 196,865 196,174 199,843 206,383 207,372 219,811 213,030 53 To United States......................... 5,610 11,982 20,221 28,616 27,118 29,978 29,457 30,757 31,559 30,343 54 Parent bank............................. 1,642 5,809 12,165 15,947 16,495 18,957 17,869 19,058 18,192 18,673 55 Other........................................ 3,968 6,173 8,057 12,669 10,623 11,020 11,588 11,699 13,367 11,670 56 To foreigners............................... 111,615 132,990 149,815 161,637 162,711 163,318 170,083 169,862 181,421 175,816 57 Other branches of parent bank 18,213 26,941 34,111 41,064 40,071 40,119 41,044 41,650 46,458 45,444 58 Other banks............................. 65,389 65,675 72,259 74,211 74,367 75,054 78,912 77,810 83,410 79,439 59 Official institutions................. 10,330 20,185 22,773 22,279 23,428 23,731 25,019 23,967 25,828 25,480 60 Nonbank foreigners................ 17,683 20,189 20,672 24,084 24,844 24,414 25,107 26,436 25,725 25,453 61 Other liabilities............................ 4,641 6,933 6,456 6,612 6,346 6,547 6,844 6,753 6,831 6,871 62 Total payable in U.S. dollars........... 80,374 107,890 135,907 153,221 151,788 155,149 160,440 160,824 173,594 168,330 63 To United States.......................... 5,027 11,437 19,503 27,848 26,348 29,088 28,683 29,866 30,771 29,402 64 Parent bank.............................. 1,477 5,641 11,939 15,691 16,254 18,624 17,633 18,821 17,979 18,419 65 Other......................................... 3,550 5,795 7,564 12,157 10,094 10,464 11,049 11,046 12,793 10,982 66 To foreigners................................ 73,189 92,503 112,879 121,997 122,187 122,677 128,358 127,535 139,208 135,171 67 Other branches of parent bank, 12,554 19,330 28,217 33,852 32,690 32,921 33,850 33,951 39,189 38,836 68 Other banks.............................. 43,641 43,656 51,583 53,573 53,298 53,505 56,302 55,464 60,270 56,867 69 Official institutions.................. 7,491 17,444 19,982 19,625 20,620 20,787 21,910 20,924 22,877 22,747 70 Nonbank foreigners................. 9,502 12,072 13,097 14,947 15,579 15,465 16,296 17,196 16,872 16,720 71 Other liabilities............................. 2,158 3,951 3,526 3,377 3,252 3,383 3,400 3,422 3,614 3,758 United Kingdom 72 Total, all currencies........................ 61,732 69,804 74,883 73,494 73,229 73,589 76,854 77,249 81,466 76,482 73 To United States......................... 2,431 3,978 5,646 5,628 5,266 5,379 5,310 5,520 5,997 5,101 74 Parent bank............................. 136 510 2,122 1,727 1,520 1,442 1,468 1,459 1,198 1,211 75 Other...................................... 2,295 3,468 3,523 3,901 3,746 3,938 3,842 4,061 4,798 3,889 76 To foreigners............................... 57,311 63,409 67,240 65,594 65,883 66,026 69,151 69,368 73,228 69,202 77 Other branches of parent bank, 3,944 4,762 6,494 6,927 6,668 6,788 6,826 6,783 7,092 7,663 78 Other banks............................. 34,979 32,040 32,964 31,487 30,834 31,015 32,488 33,690 36,259 32,627 79 Official institutions.................. 8,140 15,258 16,553 15,462 16,147 16,389 17,567 16,181 17,273 16,684 80 Nonbank foreigners................. 10,248 11,349 11,229 11,718 12,234 11,834 12,270 12,713 12,605 12,228 81 Other liabilities............................ 1,990 2,418 1,997 2,272 2,080 2,184 2,394 2,360 2,241 2,179 82 Total payable in U.S. dollars........... 39,689 49,666 57,820 55,978 55,701 55,625 58,031 58,757 63,174 59,009 83 To United States........................... 2,173 3,744 5,415 5,443 5,093 5,183 5,152 5,330 5,849 4,876 84 Parent bank............................... 113 484 2,083 1,703 1,498 1,404 1,448 1,447 1,182 1,195 85 Other.......................................... 2,060 3,261 3,332 3,740 3,595 3,779 3,704 3,883 4,666 3,681 86 To foreigners................................. 36,646 44,594 51,447 49,691 49,746 49,579 52,017 52,503 56,372 53,230 87 Other branches of parent bank. 2,519 3,256 5,442 5,878 5,604 5,790 5,742 5,520 5,874 6,573 88 Other banks............................... 22,051 20,526 23,330 21,765 20,910 20,526 21,493 23,040 25,527 22,428 89 Official institutions................... 5,923 13,225 14,498 13,604 14,296 14,418 15,550 14,283 15,423 14,893 90 Nonbank foreigners................. 6,152 7,587 8,176 8,444 8,936 8,846 9,233 9,660 9,547 9,336 91 Other liabilities............................. 870 1,328 959 844 862 862 862 924 953 903 EBahamas and Caymans 92 Total, all currencies........................ 23,771 31,733 45,203 59,913 57,677 60,753 63,508 61,758 67,398 67,392 93 To United States......................... 1,573 4,815 11,147 19,370 18,237 21,218 20,640 21,144 21,446 21,617 94 Parent bank............................. 307 2,636 7,628 11,611 12,311 15,243 14,000 14,797 14,462 15,136 95 Other........................................ 1,266 2,180 3,520 7,759 5,927 5,975 6,640 6,347 6,984 6,481 96 To foreigners............................... 21,747 26,140 32,949 39,411 38,380 38,411 41,815 39,515 44,798 44,363 97 Other branches of parent bank, 5,508 7,702 10,569 13,317 12,416 11,854 13,381 12,931 16,085 14,665 98 Other banks............................. 14,071 14,050 16,825 20,350 20,125 20,621 22,240 19,525 21,515 22,236 99 Official institutions................. 492 2,377 3,308 2,811 2,857 2,712 2,784 3,198 3,573 3,607 100 Nonbank foreigners................ 1,676 2,011 2,248 2,933 2,982 3,224 3,409 3,861 3,626 3,856 101 Other liabilities........................... 451 778 1,106 1,131 1,059 1,125 1,053 1,099 1,154 1,412 102 Total payable in U.S. dollars......... 22,328 28,840 42,197 56,636 54,154 57,232 59,972 58,244 64,046 63,770 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A64 International Statistics □ April 1977 3.23 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars 1976 1977 Country or area 1974 1975 1976 Aug. Sept. Oct. Nov. Dec. Jan.* Feb.* Holdings, end of period 4 1 Estimated total... 5,708 7,703 12,153 13,467 14,487 15,063 15,798 16,307 17,813 2 Foreign countries. 5,557 7,372 10,746 11,671 11,954 12,337 12,765 13,014 13,746 3 Europe.............................. 885 1,085 1,733 2,024 2,064 2,293 2,330 2,300 2,504 4 Belgium-Luxembourg.. 10 13 9 9 13 14 14 14 14 5 Germany....................... 9 215 324 518 535 746 764 764 789 6 Netherlands................. 6 16 283 282 283 288 288 287 367 7 Sweden......................... 251 276 275 240 242 192 191 191 188 8 Switzerland................... 30 55 171 268 267 291 261 271 324 9 United Kingdom......... 493 363 383 396 403 433 485 476 529 10 Other Western Europe. 81 143 284 307 317 325 323 293 289 11 Eastern Europe............ 5 4 4 4 4 4 4 4 4 12 Canada. 713 395 337 386 390 250 256 256 261 13 Latin America............................... 100 200 271 178 160 302 312 314 293 14 Venezuela................................... 4 4 4 4 4 149 149 149 149 15 Other Latin America republics. 3 29 38 26 32 28 35 31 31 16 Netherlands Antilles 1.............. 83 161 222 138 113 115 118 125 121 17 Asia....... 3,709 5,370 7,883 8,552 8,808 8,950 9,323 9,637 10,330 18 Japan. 3,498 3,271 2,952 3,052 3,093 2,587 2,687 2,682 2,806 19 Africa........ 151 321 521 531 531 543 543 506 356 20 All other. * * * * * * * * * 21 Nonmonetary international and regional organizations..................................... 151 331 1,406 1,796 2,533 2,726 3,033 3,294 4,068 22 International.................... 97 322 1,388 1,768 2*504 2,655 2,905 3,180 3,948 23 Latin American regional. 53 9 18 28 28 71 128 114 119 Transactions, net purchases, or sales (—), during period 24 Total..................... -472 1,994 8,095 729 1,315 1,019 577 735 510 1,505 25 Foreign countries. -573 1,814 5,393 396 925 283 383 428 254 731 26 Official institutions. -642 1,612 5,116 316 964 227 340 421 229 709 27 Other foreign.......... 69 202 276 80 -39 56 43 6 21 23 28 Nonmonetary international and regional organizations..................................... 101 180 2,702 333 390 736 193 307 261 773 Memo: Oil-exporting countries 29 Middle East 2.......................... 1,797 3,886 228 315 98 630 140 254 505 30 Africa 3.................................... 170 221 20 10 11 -37 150 1 Includes Surinam until January 1976. 4 Estimated official and private holdings of marketable U.S. Treasury 2 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, securities with an original maturity of more than 1 year. Data are based and United Arab Emirates (Trucial States). Data not available until 1975. on a benchmark survey of holdings as of Jan. 31, 1971, and monthly 3 Comprises Algeria, Gabon, Libya, and Nigeria. Data not available transactions reports. Excludes nonmarketable U.S. Treasury bonds and until 1975. notes held by official institutions of foreign countries. 3.24 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS Millions of dollars, end of period 1976 1977 Assets 1973 1974 1975 Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 Deposits.................................................................. 251 418 352 393 362 305 352 383 361 349 Assets held in custody: 2 U.S. Treasury securities1................................... 52,070 55,600 60,019 64,215 64,942 63,962 66,532 66,992 68,653 71,435 3 Earmarked gold2............................................... 17,068 16,838 16,745 16,590 16,505 16,457 16,414 16,343 16,304 16,271 1 Marketable U.S. Treasury bills, certificates of indebtedness, notes, Note.—Excludes deposits and U.S. Treasury securities held for inter and bonds; and nonmarketable U.S. Treasury securities payable in dollars national and regional organizations. Earmarked gold is gold held for and in foreign currencies. foreign and international accounts and is not included in the gold stock 2 The value of earmarked gold increased because of the changes in of the United States. par value of the U.S. dollar in May 1972 and in October 1973. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Investment transactions A65 3.25 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1977 1976 1977 Transactions, and area or country 1975 1976 Jan.- Aug. Sept. Oct. Nov. Dec. Jan.* Feb.* Feb.* U.S. corporate securities Stocks 1 Foreign purchases.............................................. 15,347 18,227 2,587 1,062 1,124 1,226 977 1,562 1,425 1,162 2 Foreign sales...................................................... 10,678 15,474 2,172 971 1,116 1,321 1,025 1,287 1,137 1,035 3 Net purchases, or sales (—)............................... 4,669 2,752 415 91 9 -95 -49 274 288 127 4 Foreign countries................................................ 4,651 2,740 415 87 7 -98 -50 281 290 125 5 Europe............................................................ 2,491 336 177 -15 -60 -251 -118 111 130 47 6 France.......................................................... 262 256 17 28 23 -12 -25 37 27 -10 7 Germany..................................................... 251 68 -6 -13 -6 -16 -13 24 1 -7 8 Netherlands................................................ 359 -199 19 -21 -26 -37 -29 -35 24 -5 9 Switzerland.................................................. 899 -100 62 6 -55 -95 -44 -7 39 23 10 United Kingdom........................................ 594 340 75 13 29 -72 -5 84 39 36 11 Canada............................................................ 361 325 38 35 5 18 1 60 8 30 12 Latin America................................................ -7 155 18 -26 10 -17 25 1 4 14 13 Middle East1.................................................. 1,640 1,803 150 92 60 126 64 115 100 50 14 Other Asia2.................................................... 142 117 29 -2 -4 28 -23 9 46 -17 15 Africa.............................................................. 10 7 1 -3 -4 -3 1 2 * 1 16 Other countries.............................................. 15 -4 3 2 * 1 * -17 2 1 17 Nonmonetary international and regional organizations............................................... 18 12 -1 3 2 4 2 -6 -2 1 Bonds3 18 Foreign purchases.............................................. 5,408 5,529 934 411 361 625 355 533 400 534 19 Foreign sales...................................................... 4,642 4,322 536 237 375 386 364 524 322 214 20 Net purchases, or sales (—)............................... 766 1,207 398 174 -14 239 -9 9 78 320 21 Foreign countries................................................ 1,795 1,248 402 173 -9 203 110 6 73 329 22 Europe............................................................ 113 92 289 29 -16 -10 24 53 8 281 23 France.......................................................... 82 49 -8 4 -1 -1 5 7 -5 -3 24 Germany..................................................... -6 -50 * -3 * 5 4 1 -4 4 25 Netherlands................................................ -8 -29 * -3 * -5 3 -20 2 -2 26 Switzerland................................................. 117 158 47 16 -7 -2 -3 13 15 32 27 United Kingdom........................................ -52 23 233 23 7 * 15 54 8 225 28 Canada............................................................ 128 96 66 9 18 -1 16 7 11 55 29 Latin America................................................ 31 94 3 9 5 29 6 27 -5 8 30 Middle East1.................................................. 1,553 1,179 52 121 18 156 74 -21 59 -7 31 Other Asia?.................................................... -35 -165 -7 5 -15 3 -8 -43 1 -8 32 Africa.............................................................. 5 -25 * * -19 -2 -2 -14 * * 33 Other countries.............................................. 1 -21 * * * * * -2 * * 34 Nonmonetary international and regional organizations............................................... -1,030 -41 -5 * -4 64 -119 3 4 -9 Foreign securities 35 Stocks, net purchases, or sales (—)...................... -189 -322 -127 -11 -27 -1 -1 4 -18 -109 36 Foreign purchases.............................................. 1,541 1,937 311 123 126 132 167 217 181 130 37 Foreign sales...................................................... 1,730 2,259 438 134 153 133 168 213 199 239 38 Bonds, net purchases, or sales (—)....................... -6,324 -8,547 -389 -478 -427 -367 -400 -1,298 -30 -359 39 Foreign purchases.............................................. 2,383 4,932 1,406 333 363 452 455 670 818 588 40 Foreign sales...................................................... 8,707 13,479 1,795 811 790 819 855 1,968 848 947 41 Net purchases, or sales ( —) of stocks and bonds. . -6,514 -8,870 -518 -489 -454 -369 -402 -1,294 -49 -469 42 Foreign countries.................................................... -4,323 -6,972 -812 -423 -471 -282 -270 -765 -338 -474 43 Europe................................................................ -53 -836 -213 -60 -145 -37 -10 -140 -21 -192 44 Canada................................................................ -3,202 -5,129 -563 -98 -331 -301 -26 -643 -298 -265 45 Latin America.................................................... -306 1 67 47 20 13 -28 37 25 42 46 Asia..................................................................... -622 -640 -114 -317 -16 34 -10 -24 -53 -61 47 Africa.................................................................. 15 48 1 * 1 * 2 -1 1 48 Other countries.................................................. -155 -416 10 3 2 9 -197 3 9 1 49 Nonmonetary international and regional organizations................................................... -2,192 -1,898 295 -66 17 -87 -132 -529 290 5 1 Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, 3 Includes State and local government securities, and securities of U.S. Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial Govt, agencies and corporations. Also includes issues of new debt securities States). sold abroad by U.S. corporations organized to finance direct investment 2 Includes Middle East oil-exporting countries until 1975. abroad. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A66 International Statistics □ April 1977 3.26 SHORT-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Nonbanking Concerns in the United States Millions of dollars; end of period 1974 1975 1976 1974 1975 1976 Type, and area or country Dec. Dec. Mar. June Sept.* Dec. Dec. Mar. June Sept.* Liabilities to foreigners Claims on foreigners 1 5,927 6,010 6,326 6,301 6,335 11,266 12,172 12,733 13,889 13,220 By type: 2 Payable in dollars............................................... 5,017 5,393 5,659 5,663 5,696 10,241 11,025 11,688 12,895 12,173 3 Payable in foreign currencies............................. 910 617 667 638 639 1,024 1,146 1,045 994 1,048 4 Deposits with banks abroad in reporter’s 473 565 483 501 505 5 551 581 562 493 543 By area or country: 6 Foreign countries.................................................... 5,769 5,734 6,108 6,056 6,149 11,265 12,171 12,732 13,888 13,220 7 Europe................................................................. 3,016 2,338 2,342 2,284 2,282 4,450 4,504 4,946 5,344 5,162 8 20 14 6 13 16 26 16 17 17 21 9 Belgium-Luxembourg.................................... 524 299 296 233 181 128 133 116 193 195 10 Denmark........................................................ 24 9 12 12 13 42 39 35 30 26 11 Finland............................................................ 16 14 10 7 21 120 91 36 138 139 12 France............................................................. 202 149 205 159 185 428 293 358 365 418 13 Germany......................................................... 313 149 152 228 256 335 355 305 360 489 14 Greece............................................................. 39 19 25 29 28 65 33 41 47 56 15 Italy................................................................. 124 172 124 115 126 395 380 406 335 357 16 Netherlands.................................................... 117 114 162 170 141 143 167 176 147 141 17 9 20 22 22 24 36 41 58 52 43 18 Portugal.......................................................... 19 4 3 3 5 81 44 45 22 28 19 56 81 68 51 36 367 407 516 432 335 20 Sweden............................................................ 41 29 25 24 35 89 62 80 84 62 21 138 130 159 213 239 136 242 207 270 254 22 8 25 14 20 16 26 27 26 31 23 23 1,256 996 928 845 806 1,847 1,905 2,289 2,609 2,370 24 40 76 91 108 113 22 36 30 28 30 25 Other Western Europe................................... 5 8 6 7 8 21 14 18 14 17 26 U.S.S.R........................................................... 48 20 23 10 19 91 150 106 96 81 27 Other Eastern Europe................................... 16 11 10 !6 14 50 70 80 75 79 28 Canada................................................................ 307 295 316 373 332 1,613 2,109 2,244 2,211 2,224 29 Latin America.................................................... 929 914 1,177 1,073 1,007 2,336 2,369 2,564 3,055 2,814 30 Argentina........................................................ 38 36 41 42 41 67 58 48 43 39 31 374 277 376 330 251 594 667 883 1,150 924 32 Brazil.............................................................. 118 96 91 90 53 468 409 475 462 417 33 Chile............................................................... 22 14 11 15 16 106 36 27 46 26 34 Colombia........................................................ 14 17 16 19 11 54 49 47 57 66 35 Cuba............................................................... * * * * * 1 1 1 1 1 36 60 82 92 72 74 308 362 331 332 352 37 Panama........................................................... 28 24 17 14 11 132 92 86 103 84 38 Peru................................................................. 14 23 24 26 28 44 41 37 39 35 39 Uruguay.......................................................... 2 3 2 3 3 5 4 4 4 22 40 49 100 163 184 222 193 178 156 186 215 41 Other Latin American republics................... 83 71 71 95 100 199 160 171 185 180 42 Netherlands Antilles 1................................... 26 35 58 54 68 20 12 7 10 9 43 Other Latin America..................................... 101 138 214 130 129 147 301 292 437 445 44 1,237 1,719 1,699 1,749 2,024 2,326 2,634 2,493 2,729 2,418 45 China, People’s Republic of (Mainland)---- 17 6 5 8 7 17 65 35 23 11 46 China, Republic of (Taiwan)........................ 92 97 110 124 129 138 164 100 215 136 47 Hong Kong.................................................... 19 17 23 28 33 62 110 66 104 83 48 India............................................................... 7 7 9 10 11 37 39 60 51 53 49 Indonesia........................................................ 60 137 137 133 146 92 143 158 166 196 50 Israel............................................................... 50 29 23 28 26 44 54 42 53 48 51 Japan.............................................................. 348 295 307 290 275 1,230 1,130 1,161 1.169 1,008 52 Korea............................................................. 75 69 53 62 83 201 263 105 127 143 53 25 14 18 18 28 97 96 106 114 93 54 Thailand.......................................................... 10 18 18 11 23 24 22 20 19 22 55 Other Asia...................................................... 536 1,031 995 1,038 1,263 384 549 640 691 625 56 Africa.................................................................. 193 395 508 532 437 374 414 351 391 422 57 Egypt.............................................................. 3 37 30 22 25 15 22 22 28 36 58 14 8 7 32 42 7 10 10 12 9 59 South Africa................................................... 43 100 113 88 65 101 93 78 86 79 60 18 6 7 12 24 24 28 28 30 33 61 Other Africa................................................... 115 245 351 377 281 227 261 213 235 267 62 Other countries................................................... 86 73 65 43 67 165 141 133 157 180 63 Australia......................................................... 56 55 47 32 50 116 102 97 101 113 64 All other......................................................... 30 17 18 12 18 49 39 36 56 67 65 Nonmonetary international and regional organizations.................................................. 158 276 219 246 186 * 1 1 1 1 1 Includes Surinam until 1976. mercial concerns and other nonbanking institutions in the United States. Data exclude claims held through U.S. banks and intercompany accounts Note.—Reported by exporters, importers, and industrial and com- between U.S. companies and their affiliates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Nonbank-reported Data A67 3.27 SHORT-TERM CLAIMS ON FOREIGNERS Reported by Large Nonbanking Concerns in the United States Millions of dollars, end of period 1976 1977 Type and country 1973 1974 1975 July Aug. Sept. Oct. Nov. Dec. Jan.P 1 Total....................................................................... 3,164 3,357 3,791 5,185 5,142 4,750 4,869 5,133 5,402 5,358 By type: 2 Payable in dollars............................................... 2,625 2,660 3,035 4,552 4,538 4,075 4,284 4,597 4,774 4,742 3 Deposits.......................................................... 2,588 2,591 2,703 4,192 4,119 3,705 3,893 4,210 4,401 4,375 4 Short-term investments 1............................... 37 69 332 360 419 370 391 387 373 367 5 Payable in foreign currencies............................. 540 697 756 634 604 675 586 535 628 616 6 Deposits.......................................................... 435 429 510 431 377 447 344 308 328 308 7 Short-term investments 1............................... 105 268 246 203 227 228 242 227 300 308 By country: 1,118 1,350 1,304 2,068 2,082 1,712 1,641 1,691 1,891 1,762 765 967 1,153 1,415 1,397 1,356 1,400 1,563 1,551 1,290 10 Bahamas............................................................. 589 390 546 918 823 810 1,059 1,059 1,228 1.312 11 Japan................................................................... 306 398 343 139 137 146 116 135 128 127 12 All other............................................................. 386 252 445 645 703 726 653 685 676 867 i Negotiable and other readily transferable foreign obligations payable Note.—Data represent the assets abroad of large nonbanking conon demand or having a contractural maturity of not more than 1 year cerns in the United States. They are a portion of the total claims on from the date On which the obligation was incurred by the foreigner. foreigners reported by nonbanking concerns in the United States and are included in the figures shown in Table 3.26. 3.28 LONG-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Nonbanking Concerns in the United States Millions of dollars, end of period 1974 1975 1976 1974 1975 1976 Area and country Dec. Dec* Mar. Junep Sept p Dec. Dec. Mar. JuneP Sept.* Liabilities to foreigners Claims on foreigners 1 Total....................................................................... 3,889 4,277 4,092 3,960 3,705 4,544 4,959 5,152 5,008 4,958 2 Europe.................................................................... 3,033 3,280 3,128 3,007 2,790 1,007 1,002 949 959 925 3 Germany............................................................ 474 506 446 425 406 23 41 38 39 77 4 Netherlands....................................................... 218 202 214 214 270 280 217 219 211 211 5 Switzerland......................................................... 572 505 466 448 308 44 55 52 52 50 1,256 1,629 1,601 1,520 1,441 364 396 349 365 290 7 Canada................................................................... 110 164 153 175 121 1,290 1,426 1,473 1,516 1,510 8 Latin America........................................................ 216 269 248 222 230 1,384 1,633 1,770 1,602 1,547 9 Bahamas............................................................. 177 210 184 157 132 19 8 7 37 37 3 4 5 5 5 187 171 182 164 171 11 Chile................................................................... 1 1 1 1 1 435 315 312 306 244 12 Mexico................................................................ 3 3 6 6 7 153 216 209 187 219 460 496 496 489 498 681 669 685 709 736 14 Japan.................................................................. 367 397 394 388 402 112 90 91 85 80 15 Africa..................................................................... 6 2 2 2 2 127 168 214 163 181 16 All other 1.............................................................. 65 66 65 64 64 54 60 62 59 58 1 Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A68 International Statistics □ April 1977 3.29 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Per cent per annum Rate on Mar. 31, 1977 Rate on Mar. 31, 1977 Rate on Mar. 31, 1977 Country Country Country Per Month Per Month Per Month cent effective cent effective cent effective Argentina........................ 18.0 Feb. 1972 10.5 Sept. 1976 6.0 Sept. 1976 Austria............................. 4.0 June 1976 Germany, Fed. Rep. of. 3.5 Sept. 1975 8.0 Oct. 1976 Belgium........................... 7.0 Feb. 1977 15.0 Oct. 1976 2.0 June 1976 Brazil............................... 28.0 May 1976 6.0 Mar. 1977 United Kingdom.......... 9.5 Mar. 1977 Canada............................ 8.0 Feb. 1977 4.5 June 1942 5.0 Oct. 1970 Denmark......................... 9.0 Mar. 1977 Netherlands.................. 5.0 Jan. 1977 Note.—Rates shown are mainly those at which the central bank either more than one rate applicable to such discounts or advances, the rate discounts or makes advances against eligible commercial paper and/or shown is the one at which it is understood the central bank transacts the government securities for commercial banks or brokers. For countries with largest proportion of its credit operations. 3.30 FOREIGN SHORT-TERM INTEREST RATES Per cent per annum; averages of daily figures 1976 1977 Country, or type | 1974 1975 1976 Oct. Nov. Dec. Jan. Feb. Mar. 1 Euro-dollars.......................................................... 11.01 7.02 5.58 5.46 5.29 5.01 5.14 5.08 5.13 2 United Kingdom.................................................. 13.34 10.63 11.35 14.57 14.75 14.27 13.53 11.56 10.31 3 Canada.................................................................. 10.47 8.00 9.39 9.34 9.08 8.51 8.24 7.78 7.63 4 Germany............................................................... 9.80 4.87 4.19 4.76 4.61 4.82 4.70 4.64 4.70 5 Switzerland............................................................ 3.01 1.45 1.80 2.12 1.98 1.24 1.68 2.88 6 Netherlands........................................................... 5. 17 7.02 10.23 8.22 6.51 6.18 6.04 5.73 7 France................................................................... 7.91 8.65 10.39 10.41 10.55 10.02 9.81 9.87 8 Italy....................................................................... 10.37 16.32 18.61 17.76 17.13 15.68 15.86 16.57 9 Belgium................................................................. 6.63 10.25 13.94 12.48 10.73 8.49 7.59 7.07 10 Japan..................................................................... 11.64 7.70 7.50 8.00 8.00 7.50 7.50 7.20 Note.—Rates are for 3-month interbank loans except for—Canada, over; and Japan, loans and discounts that can be called after being held finance company paper; Belgium, time deposits of 20 million francs and over a minimum of two month-ends. 3.31 FOREIGN EXCHANGE RATES Cents per unit of foreign currency 1976 1977 Country/currency 1974 1975 1976 Oct. Nov. Dec. Jan. Feb. Mar. 1 Australia/dollar.................. 143.89 130.77 122.15 123.40 120.66 105.29 108.53 109.04 109.94 2 Austria/shilling................... 5.3564 5.7467 5.5744 5.7960 5.8332 5.9061 5.8852 5.8453 5.8822 3 Belgium/franc..................... 2.5713 2.7253 2.5921 2.6822 2.7047 2.7483 2.7249 2.7114 2.7258 4 Canada/dollar..................... 102.26 98.30 101.41 102.81 101.46 98.204 98.985 97.295 95.125 5 Denmark/krone................. 16.442 17.437 16.546 16.968 16.934 17.145 16.967 16.891 17.038 6 Finland/markka................. 26.565 27.285 25.938 25.938 26.073 26.315 26.313 26.169 26.296 7 France/franc....................... 20.805 23.354 20.942 20.072 20.042 20.055 20.108 20.083 20.075 8 Germany/deutsche mark... 38.723 40.729 39.737 41.165 41.443 41.965 41.792 41.582 41.812 9 India/rupee......................... 12.460 11.926 11.148 11.243 11.155 11.296 11.231 11.285 11.313 10 Ireland/pound..................... 234.03 222.16 180.48 163.77 163.81 167.84 171.24 171.03 171.74 11 Italy/lira.............................. .15372 .15328 .12044 .11684 .11554 .11521 .11372 .11327 .11276 12 Japan/yen........................... .34302 .33705 .33741 .34344 .33879 .33933 .34359 .35087 .35687 13 Malaysia/ringgit................. 41.682 41.753 39.340 39.575 39.513 39.550 39.718 40.011 40.152 14 Mexico/peso....................... 8.0000 8.0000 6.9161 4.8535 4.0200 4.8626 4.8114 4.4084 4.3978 15 Netherlands/guilder............ 37.267 39.632 37.846 39.265 39.678 40.240 39.953 39.813 40.079 16 New Zealand/dollar........... 140.02 121.16 99.115 98.484 95.392 92.179 94.839 95.192 95.689 17 Norway/krone.................... 18.119 19.180 18.327 18.812 18.954 19.193 18.946 18.904 19.035 18 Portugal/escudo................. 3.9506 3.9286 3.3159 3.1920 3.1742 3.1674 3.1276 3.0717 2.5778 19 South Africa/rand.............. 146.98 136.47 114.85 114.85 114.88 114.95 114.94 115.00 115.00 20 Spain/peseta....................... 1.7337 1.7424 1.4958 1.4675 1.4626 1.4634 1.4577 1.4475 1.4530 21 Sri Lanka/rupee................. 14.978 14.385 11.908 11.453 11.479 11.246 11.421 11.442 12.820 22 Sweden/krona..................... 22.563 24.141 22.957 23.511 23.699 24.051 23.734 23.543 23.726 23 Switzerland/franc............... 33.688 38.743 40.013 40.876 40.958 40.823 40.127 39.669 39.209 24 United Kingdom/pound.. . 234.03 222.16 180.48 163.77 163.81 167.84 171.24 171.03 171.74 Memo: 25 United States/dollar 1........ 84. 11 82.20 89.68 90.88 91.06 90.55 90.35 90.55 90.45 1 Index of weighted-average exchange value of U.S. dollar against cur- Note.—Averages of certified noon buying rates in New York for cable rencies of other G-10 countries plus Switzerland. May 1970 parities = 100. transfers. Weights are 1972 global trade of each of the 10 countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A69 G uide to Tabular P resentation and S tatistical Releases GUIDE TO TABULAR PRESENTATION Symbols and Abbreviations p Preliminary SMSA’s Standard metropolitan statistical areas r Revised REIT’s Real estate investment trusts rp Revised preliminary * Amounts insignificant in terms of the partic e Estimated ular unit (e.g., less than 500,000 when c Corrected the unit is millions) n.e.c. Not elsewhere classified (1) Zero, (2) no figure to be expected, or Rp’s Repurchase agreements (3) figure delayed or, (4) no change (when IPC’s Individuals, partnerships, and corporations figures are expected in percentages). General Information Minus signs are used to indicate (1) a decrease, (2) obligations of the Treasury. “State and local govt.” a negative figure, or (3) an outflow. also includes municipalities, special districts, and other “U.S. Govt, securities” may include guaranteed political subdivisions. issues of U.S. Govt, agencies (the flow of funds figures In some of the tables details do not add to totals also include not fully guaranteed issues) as well as direct because of rounding. STATISTICAL RELEASES List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for individual releases ............................... Dec. 1976 A-82 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
B oard o f G overnors o f the Federal Reserve System A rthur F. B urns, Chairman Stephen S. G ardner, Vice Chairman Henry C. W allich Philip E. Coldwell Philip C. Jackson, Jr. J. Charles Partee David M. Lilly OFFICE OF OFFICE OF BOARD MEMBERS OFFICE OF STAFF DIRECTOR FOR MONETARY POLICY STAFF DIRECTOR FOR MANAGEMENT Thomas J. O’C onnell, Counsel to the John M. D enkler, Staff Director Chairman Stephen H. A xilrod, Staff Director R obert J. Law rence, Deputy Staff M ilton W. Hudson, Assistant to the A rthur L. Broida, Deputy Staff Director Director Chairman M urray A ltm ann, Assistant to the Board G ordon B. Grimwood, Assistant Director Joseph R. Coyne, Assistant to the Board Peter M. Keir, Assistant to the Board and Program Director for K enneth A. G uenther, Assistant to the Board Stanley J. Sigel, Assistant to the Board Contingency Planning Jay Paul Brennem an, Special Assistant to the Norm and R. V. B ernard, Special Assistant to W illiam W. L ayton, Director of Equal Board the Board Employment Opportunity Frank O’Brien, Jr., Special Assistant to the Board DIVISION OF RESEARCH AND STATISTICS Joseph S. Sims, Special Assistant to the Board D onald J. W inn, Special Assistant to the James L. K ichline, Director Board Joseph S. Zeisel, Deputy Director Edw ard C. E ttin, Associate Director John H. K alchbrenner, Associate Director James B. E ckert, Senior Research Division Officer LEGAL DIVISION E leanor J. Stockw ell, Senior Research John D. Hawke, Jr., General Counsel Division Officer Baldw in B. T u ttle, Deputy General James R. W etzel, Senior Research Division DIVISION OF FEDERAL RESERVE BANK EXAMINATIONS AND BUDGETS Counsel Officer R obert E. M annion, Assistant General R obert A. Eisenbeis, Associate Research W illiam H. W allace, Director Counsel Division Officer A lbert R. H am ilton, Associate Director A llen L. Raiken, Assistant General Counsel tJoHN J. M ingo, Associate Research Division C lyde H. Farnsw orth, Jr., Assistant Director G ary M. W elsh, Assistant General Counsel Officer John F. H oover, Assistant Director C harles R. M cN eill, Assistant to the J. C ortland G. Peret, Associate Research P. D. Ring, Assistant Director General Counsel Division Officer A70 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
DIVISION OF DIVISION OF CONSUMER AFFAIRS H elm ut F. W endel, Associate Research FEDERAL RESERVE BANK OPERATIONS Division Officer Janet O. H art, Director James M. Brundy, Assistant Research James R. K udlinski, Director N athaniel E. B utler, Associate Director Division Officer W alter A. A lthausen, Assistant Director Jerauld C. K luckm an, Associate Director Jared J. E nzler, Assistant Research Division Brian M. C arey, Assistant Director Officer H arry A. G uinter, Assistant Director R obert M. Fisher, Assistant Research OFFICE OF THE SECRETARY Division Officer DIVISION OF DATA PROCESSING R ichard H. Puckett, Assistant Research Theoemdre E. A llison, Secretary Division Officer C harles L. Ham pton, Director G riffith L. G arw ood, Deputy Secretary Stephen P. T aylor, Assistant Research B ruce M. B eardsley, Associate Director *R uth A. R eister, Assistant Secretary Division Officer Uyless D. B lack, Assistant Director Levon H. G arabedian, Assistant Director G lenn L. Cummins, Assistant Director R obert J. Zem el, Assistant Director DIVISION OF BANKING SUPERVISION AND REGULATION DIVISION OF INTERNATIONAL FINANCE DIVISION OF PERSONNEL John E. Ryan, Acting Director John E. Reynolds, Acting Director David L. Shannon, Director W illiam W. W iles, Associate Director Edwin M. Trum an, Associate Director Peter E. B arna, Assistant Director R obert F. Gemmill, Senior International C harles W. W ood, Assistant Director Frederick R. D ahl, Assistant Director Division Officer Jack M. Egertson, Assistant Director George B. H enry, Senior International OFFICE OF THE CONTROLLER John T. M cC lintock, Assistant Director Division Officer Thomas E. M ead, Assistant Director Reed J. Irvine, Senior International John K akalec, Controller R obert S. Plotkin, Assistant Director Division Officer T yler E. W illiam s, Jr., Assistant Controller Thomas A. Sidman, Assistant Director Sam uel Pizer, Senior International Division Officer DIVISION OF ADMINISTRATIVE SERVICES C harles J. Siegman, Senior International Division Officer W alter W. K reim ann, Director D onald E. A nderson, Assistant Director *On loan from the Federal Reserve Bank of Minneapolis. John D. Sm ith, Assistant Director tOn leave of absence. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A72 Federal O pen M arket C om m ittee A rth u r F. B urns, Chairman P au l A. V olcker, Vice Chairman Philip E. Coldwell Philip C. Jackson, Jr. J. Charles Partee Stephen S. Gardner David M. Lilly Lawrence K. Roos Roger Guffey Robert P. M ayo Henry C. W allich Frank E. M orris A rthur L. Broida, Secretary A natol B albach, Associate Economist M urray A ltm ann, Deputy Secretary Richard G. Davis, Associate Economist Norm and R. V. B ernard, Assistant Thomas Davis, Associate Economist Secretary R obert Eisenm enger, Associate Economist Thomas J. O’C onnell, General Counsel Edw ard C. E ttin, Associate Economist Edw ard G. Guy, Deputy General Counsel James L. K ichline, Associate Economist Baldw in B. T u ttle, Assistant General John E. Reynolds, Associate Economist Counsel K arl Scheld, Associate Economist Stephen H. A xilrod, Economist Edwin M. Trum an, Associate Economist Joseph S. Zeisel, Associate Economist A lan R. Holmes, M anager, System Open M arket Account Peter D. S ternlight, Deputy Manager for Domestic Operations Scott E. Pardee, Deputy M anager for Foreign Operations Federal A dvisory C ouncil R ichard D. H ill, first federal reserve district, President G ilbert F. B radley, tw elfth federal reserve district, Vice President W alter B. Wriston, second federal Edward Byron Smith, seventh federal reserve district reserve district Roger S. Hill as, third federal Donald E. Lasater, eighth federal reserve district reserve district M. Brock Weir, fourth federal Richard H. Vaughan, ninth federal reserve district reserve district John H. Lumpkin, fifth federal J. W. McLean, tenth federal reserve district reserve district Frank A. Plummer, sixth federal Ben F. Love, eleventh federal reserve district reserve district H erbert V. Prochnow , Secretary W illiam J. Korsvik, Associate Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A73 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK, Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* .................. 02106 Louis W. Cabot Frank E. Morris Robert M. Solow James A. McIntosh NEW YORK* ............. 10045 Frank R. Milliken Paul A. Volcker Robert H. Knight Thomas M. Timlen Buffalo ..................... 14240 Paul A. Miller John T. Keane PHILADELPHIA 19105 John W. Eckman David P. Eastburn Werner C. Brown Vacant CLEVELAND* 44101 Horace A. Shepard Willis J. Winn Robert E. Kirby Walter H. MacDonald Cincinnati ................ 45201 Lawrence H. Rogers, II Robert E. Showalter Pittsburgh ................ 15230 G. Jackson Tankersley Robert D. Duggan RICHMOND* ..............23261 E. Angus Powell Robert P. Black E. Craig Wall, Sr. George C. Rankin Baltimore ....................21203 James G. Harlow Jimmie R. Monhollon Charlotte ....................28230 Robert C. Edwards Stuart P. Fishburne Culpeper Communications and Records Center.. 22701 Albert D. Tinkelenberg ATLANTA .................. 30303 H. G. Pattillo Monroe Kimbrel Clifford M. Kirtland, Jr. Kyle K. Fossum Birmingham ............. 35202 William H. Martin, III Hiram J. Honea Jacksonville ............ 32203 Gert H. W. Schmidt Edward C. Rainey Miami ....................... 33152 David G. Robinson W. M. Davis Nashville .................. 37203 John C. Bolinger Jeffrey J. Wells New Orleans ........... 70161 George C. Cortright, Jr. George C. Guynn CHICAGO* ................ 60690 Peter B. Clark Robert P. Mayo Robert H. Strotz Daniel M. Doyle Detroit ....................... 48231 Jordan B. Tatter William C. Conrad ST. LOUIS .................. 63166 Edward J. Schnuck Lawrence K. Roos William B. Walton Eugene A. Leonard Little Rock .............. 72203 Ronald W. Bailey John F. Breen Louisville ................ 40201 James C. Hendershot Donald L. Henry Memphis .................. 38101 Frank A. Jones, Jr. L. Terry Britt MINNEAPOLIS 55480 James P. McFarland Mark H. Willes Stephen F. Keating Clement A. Van Nice Helena ....................... 59601 Patricia P. Douglas John D. Johnson KANSAS CITY 64198 Harold W. Andersen Roger Guffey Joseph H. Williams Henry R. Czerwinski Denver ..................... 80217 A. L. Feldman Wayne W. Martin Oklahoma City ....... 73125 James G. Harlow, Jr. William G. Evans Omaha ..................... 68102 Durward B. Varner Robert D. Hamilton DALLAS ..................... 75222 Irving A. Mathews Ernest T. Baughman Charles T. Beaird Robert H. Boykin El Paso ..................... 79999 Gage Holland Fredric W. Reed Houston .................... 77001 Alvin I. Thomas J. Z. Rowe San Antonio ............ 78295 Marshall Boykin, III Carl H. Moore SAN FRANCISCO ....94120 Joseph F. Alibrandi John J. Balles Cornell C. Maier John B. Williams Los Angeles ............. 90051 Joseph R. Vaughan Richard C. Dunn Portland .................... 97208 Loran L. Stewart Angelo S. Carella Salt Lake City ....... 84110 Sam Bennion A. Grant Holman Seattle ....................... 98124 Lloyd E. Cooney James J. Curran * Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016; Jericho, New York 11753; Columbus, Ohio 43216; Columbia, South Carolina 29210; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A 74 Federal Reserve Board Publications Available from Publications Services, Division of Ad request and be made payable to the order of the Board ministrative Services, Board of Governors of the Fed of Governors of the Federal Reserve System in a form eral Reserve System, Washington, D.C. 20551. Where collectible at par in U.S. currency. (Stamps and a charge is indicated, remittance should accompany coupons are not accepted.) The Federal Reserve System—Purposes and The Performance of Bank Holding Companies. Functions. 1974. 125 pp. 1967. 29 pp. $.25 each; 10 or more to one address, $.20 each. Bank Credit-Card and Check-Credit Plans. 1968. Annual Report 102 pp. $1.00 each; 10 or more to one address, Federal Reserve Bulletin. Monthly. $20.00 per $.85 each. year or $2.00 each in the United States, its posses Survey of Financial Characteristics of Con sions, Canada, and Mexico; 10 or more of same sumers. 1966. 166 pp. $1.00 each; 10 or more issue to one address, $18.00 per year or $1.75 to one address, $.85 each. each. Elsewhere, $24.00 per year or $2.50 each. Survey of Changes in Family Finances. 1968. 321 Banking and Monetary Statistics, 1914-1941. pp. $1.00 each; 10 or more to one address, $.85 (Reprint of Part 1 only) 1976. 682 pp. $5.00. each. Banking and Monetary Statistics, 1941-1970. Report of the Joint Treasury-Federal Reserve 1976. 1,168 pp. $15.00. Study of the U.S. Government Securities Annual Statistical Digest, 1970-75. 1976. 339 pp. Market. 1969. 48 pp. $.25 each; 10 or more to $4.00 per copy for each paid subscription to Fed one address, $.20 each. eral Reserve Bulletin. All others, $5.00 each. Joint Treasury-Federal Reserve Study of the Federal Reserve M onthly Chart Book. Subscrip Government Securities Market: Staff Stud tion includes one issue of Historical Chart Book. ies—Part 1. 1970. 86 pp. $.50 each; 10 or more $12.00 per year or $1.25 each in the United States, to one address, $.40 each. Part 2. 1971. 153 pp. its possessions, Canada, and Mexico; 10 or more and Part 3. 1973. 131 pp. Each volume $1.00; of same issue to one address, $1.00 each. Else 10 or more to one address, $.85 each. where, $15.00 per year or $1.50 each. Open Market Policies and Operating Proce Historical Chart Book. Issued annually in Sept. dures—Staff Studies. 1971. 218 pp. $2.00 Subscription to Monthly Chart Book includes one each; 10 or more to one address, $1.75 each. issue. $1.25 each in the United States, its posses Reappraisal of the Federal Reserve Discount sions, Canada, and Mexico; 10 or more to one Mechanism. Vol. 1. 1971. 276 pp. Vol. 2. 1971. address, $1.00 each. Elsewhere, $1.50 each. 173 pp. Vol. 3. 1972. 220 pp. Each volume $3.00; Capital M arket Developments. Weekly. $15.00 per 10 or more to one address, $2.50 each. year or $.40 each in the United States, its posses The Econometrics of Price Determination Con sions, Canada, and Mexico; 10 or more of same ference, October 30-31, 1970, Washington, D.C. issue to one address, $13.50 per year or $.35 each. 1972. 397 pp. Cloth ed. $5.00 each; 10 or more Elsewhere, $20.00 per year or $.50 each. to one address, $4.50 each. Paper ed. $4.00 each; Selected Interest and Exchange Rates—Weekly 10 or more to one address, $3.60 each. Series of Charts. Weekly. $15.00 per year or Federal Reserve Staff Study: Ways to Moderate $.40 each in the United States, its possessions, Fluctuations in Housing Construction. 1972. Canada, and Mexico; 10 or more of same issue 487 pp. $4.00 each; 10 or more to one address, to one address, $13.50 per year or $.35 each. $3.60 each. Elsewhere, $20.00 per year or $.50 each. Lending Functions of the Federal Reserve The Federal Reserve Act, as amended through De Banks. 1973. 271 pp. $3.50 each; 10 or more cember 1971, with an appendix containing provi to one address, $3.00 each. sions of certain other statutes affecting the Federal Introduction to Flow of Funds. 1975. 64 pp. $.50 Reserve System. 252 pp. $1.25. each; 10 or more to one address, $.40 each. Regulations of the Board of Governors of the Improving the Monetary Aggregates (Report of the Federal Reserve System Advisory Committee on Monetary Statistics). Published Interpretations of the Board of Gov 1976. 43 pp. $1.00 each; 10 or more to one ernors, as of June 30, 1976. $7.50. address, $.85 each. Trading in Federal Funds. 1965. 116 pp. $1.00 Annual Percentage Rate Tables (Truth in Lend each; 10 or more to one address, $.85 each. ing—Regulation Z) Vol. I (Regular Transactions). Industrial Production— 1971 Edition. 1972. 383 1969. 100 pp. Vol. II (Irregular Transactions). pp. $4.00 each; 10 or more to one address, $3.50 1969. 116 pp. Each volume $1.00. 10 or more each. of same volume to one address, $.85 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Federal Reserve Board Publications A 75 CONSUMER EDUCATION PAMPHLETS Revision of Bank Credit Series. 12/71. Assets and Liabilities of Foreign Branches of (Short pamphlets suitable for classroom use. Multiple U.S. Banks. 2/72. copies available without charge.) Bank Debits, Deposits, and Deposit Turnover— Revised Series. 7/72. Fair Credit Billing Yields on Newly Issued Corporate Bonds. 9/72. If You Borrow To Buy Stock Recent Activities of Foreign Branches of U.S. U.S. Currency Banks. 10/72. What Truth in Lending Means to You Revision of Consumer Credit Statistics. 10/72. One-Bank Holding Companies Before the 1970 STAFF ECONOMIC STUDIES Amendments. 12/72. Yields on Recently Offered Corporate Bonds. Studies and papers on economic and financial subjects 5/73. that are of general interest in the field of economic Credit-Card and Check-Credit Plans at Commer research. cial Banks. 9/73. Rates on Consumer Instalment Loans. 9/73. Summaries Only Printed in the Bulletin New Series for Large Manufacturing Corpora (Limited supply of mimeographed copies of full text tions. 10/73. available upon request for single copies.) U.S. Energy Supplies and Uses, Staff Economic Study by Clayton Gehman. 12/73. The Growth of M ultibank Holding Companies: Inflation and Stagnation in Major Foreign In 1956-73, by Gregory E. Boczar. Apr. 1976. 27 dustrial Countries. 10/74. pp. The Structure of Margin Credit. 4/75. Extending Merger Analysis Beyond the Single- New Statistical Series on Loan Commitments at Market Framework, by Stephen A. Rhoades. Selected Large Commercial Banks. 4/75. May 1976. 25 pp. Recent Trends in Federal Budget Policy. 7/75. Seasonal Adjustment of Mi—Currently Pub Recent Developments in International Financial lished and Alternative Methods, by Edward Markets. 10/75. R. Fry. May 1976. 22 pp. M INNIE: A Small Version of the Effects of NOW Accounts on Costs and Earnings MIT-PENN-SSRC Econometric Model, Staff of Commercial Banks in 1974-75, by John D. Economic Study by Douglas Battenberg, Jared J. Paulus. Sept. 1976. 49 pp. Enzler, and Arthur M. Havenner. 11/75. An Assessment of Bank Holding Companies, Staff Printed in Full in the Bulletin Economic Study by Robert J. Lawrence and Staff Economic Studies shown in list below. Samuel H. Talley, 1/76. Industrial Electric Power Use. 1/76. REPRINTS Revision of Money Stock Measures. 2/76. (Except for Staff Papers, Staff Economic Studies, and Survey of Finance Companies, 1975. 3/76. some leading articles, most of the articles reprinted do Revised Series for Member Bank Deposits and not exceed 12 pages.) Aggregate Reserves. 4/76. Industrial Production— 1976 Revision. 6/76. Seasonal Factors Affecting Bank Reserves. 2/58. Federal Reserve Operations in Payment Mecha Measures of Member Bank Reserves. 7/63. nisms: A Summary. 6/76. Research on Banking Structure and Perform Recent Growth in Activities of U.S. Offices of ance, Staff Economic Study by Tynan Smith. Foreign Banks. 10/76. 4/66. New Estimates of Capacity Utilization: Manu A Revised Index of Manufacturing Capacity, facturing and Materials. 11/76. Staff Economic Study by Frank de Leeuw with U.S. International Transactions in a Recovering Frank E. Hopkins and Michael D. Sherman. 11/66. Economy. 4/77. U.S. International Transactions: Trends in Bank Holding Company Financial Developments 1960-67. 4/68. in 1976. 4/77. Measures of Security Credit. 12/70. Changes in Bank Lending Practices, 1976. 4/77. Revised Measures of Manufacturing Capacity Changes in Time and Savings Deposits at Com Utilization. 10/71. mercial Banks, July-Oct. 1976. 4/77. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A76 Federal Reserve Bulletin □ April 1977 Index to S tatistical Tables References are to pages A-3 through A-68 although the prefix “A” is omitted in this index ACCEPTANCES, bankers, 11, 25, 27 Demand deposits—Continued Agricultural loans of commercial banks, 18, 20-22 Banks, by classes, 16, 17, 19, 20-23 Assets and liabilities (See also Foreigners): Ownership by individuals, partnerships, and Banks, by classes, 16, 17, 18, 20-23, 29 corporations, 25 Federal Reserve Banks, 12 Subject to reserve requirements, 15 Nonfinancial corporations, current, 38 Turnover, 13 Automobiles: Deposits (See also specific types of deposits): Consumer instalment credit, 42, 43 Banks, by classes, 3, 16, 17, 19, 20-23, 29 Production, 48, 49 Federal Reserve Banks, 4, 12 Subject to reserve requirements, 15 BANK credit proxy, 15 Discount rates at F.R. Banks (See Interest rates) Bankers balances, 16, 18, 20, 21, 22 Discounts and advances by F.R. Banks (See Loans) {See also Foreigners) Dividends, corporate, 38 Banks for cooperatives, 35 Bonds (See also U.S. Govt, securities): EMPLOYMENT, 46, 47 New issues, 36, 37 Euro-dollars, 15, 27 Yields, 3 Branch banks: FARM mortgage loans, 41 Assets and liabilities of foreign branches of U.S. Farmers Home Administration, 41 banks, 62 Federal agency obligations, 4, 11, 12, 13, 34 Liabilities of U.S. banks to their foreign Federal and Federally sponsored credit agencies, 35 branches, 23 Federal finance: Business activity, 46 Debt subject to statutory limitation and Business expenditures on new plant and equipment, types and ownership of gross debt, 32 39 Receipts and outlays, 30, 31 Business loans (See Commercial and industrial loans) Treasury operating balance, 30 Federal Financing Bank, 35 CAPACITY utilization, 46, 47 Federal funds, 3, 6, 18, 20, 21, 22, 27, 30 Capital accounts: Federal home loan banks, 35 Banks, by classes, 16, 17, 19, 20 Federal Home Loan Mortgage Corp., 35, 40, 41 Federal Reserve Banks, 12 Federal Housing Administration, 35, 40, 41 Central banks, 68 Federal intermediate credit banks, 35 Certificates of deposit, 23, 27 Federal land banks, 35, 41 Commercial and industrial loans: Federal National Mortgage Assn., 35, 40, 41 Commercial banks, 15, 18, 23, 26 Federal Reserve Banks: Weekly reporting banks, 20, 21, 22, 23, 24 Condition statement, 12 Commercial banks: Discount rates (See Interest rates) Assets and liabilities, 3, 15-18, 20-23 U.S. Govt, securities held, 4, 12, 13, 32, 33 Business loans, 26 Federal Reserve credit, 4, 5, 12, 13 Commercial and industrial loans, 24 Federal Reserve notes, 12 Consumer loans held, by type, 42, 43 Federally sponsored credit agencies, 35 Loans sold outright, 23 Finance companies: Number, by classes, 16, 17 Loans, 20, 21, 22, 42, 43 Real estate mortgages held, by type of holder and Paper, 25, 27 property, 41 Financial institutions, loans to, 18, 20, 21, 22, 23 Commercial paper, 3, 24, 25, 27 Float, 4 Condition statements (See Assets and liabilities) Flow of funds, 44, 45 Construction, 46, 50 Foreign: Consumer instalment credit, 42, 43 Currency operations, 12 Consumer prices, 46, 51 Deposits in U.S. banks, 4, 12, 19, 20, 21, 22 Consumption expenditures, 52, 53 Exchange rates, 68 Corporations : Trade, 55 Profits, taxes, and dividends, 38 Foreigners: Security issues, 36, 37, 65 Claims on, 60, 61, 66, 67 Cost of living (See Consumer prices) Liabilities to, 23, 56-59, 64-67 Credit unions, 29, 42, 43 Currency and coin, 5, 16, 18 GOLD. Currency in circulation, 4, 14 Certificates, 12 Customer credit, stock market, 28 Stock, 4, 55 DEBITS to deposit accounts, 13 Government National Mortgage Assn., 35, 40, 41 Debt (See specific types of debt or securities) Gross national product, 52, 53 Demand deposits: Adjusted, commercial banks, 13, 15, 19 HOUSING, new and existing units, 50 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A ll INCOME, personal and national, 46, 52, 53 REAL estate loans: Industrial production, 46, 48 Banks, by classes, 18, 20-23, 29, 41 Instalment loans, 42, 43 Life insurance companies, 29 Insurance companies, 29, 32, 33, 41 Mortgage terms, yields, and activity, 3, 40 Insured commercial banks, 17, 18 Type of holder and property mortgaged, 41 Interbank deposits, 16, 17, 20, 21, 22 Reserve position, basic, member banks, 6 Interest rates: Reserve requirements, member banks, 9 Bonds, 3 Reserves: Business loans of banks, 26 Commercial banks, 16, 17, 20, 21, 22 Federal Reserve Banks, 3, 8 Federal Reserve Banks, 12 Foreign countries, 68 Member banks, 3, 4, 5, 15, 16 Money and capital market rates, 3, 27 U.S. reserve assets, 55 Mortgages, 3, 40 Residential mortgage loans, 40 Prime rate, commercial banks, 26 Retail credit and retail sales, 42, 43, 46 Time and savings deposits, maximum rates, 10 International capital transactions of the SAVING: United States, 56-67 Flow of funds, 44, 45 International organizations, 56-61, 65-67 National income accounts, 53 Inventories, 52 Savings and loan assns., 3, 10, 29, 33, 41, 44 Investment companies, issues and assets, 37 Savings deposits (See Time deposits) Investments (See also specific types of investments): Savings institutions, selected assets, 29 Banks, by classes, 16, 17, 18, 20, 21, 22, 29 Securities (See also U.S. Govt, securities): Commercial banks, 3, 15, 16, 17 Federal and Federally sponsored agencies, 35 Federal Reserve Banks, 12, 13 Foreign transactions, 65 Life insurance companies, 29 New issues, 36, 37 Savings and loan assns., 29 Prices, 28 Special Drawing Rights, 4, 12, 54, 55 LABOR force, 47 State and local govts.: Life insurance companies (See Insurance companies) Deposits, 19, 20, 21, 22 Loans (See also specific types of loans): Holdings of U.S. Govt, securities, 32, 33 Banks, by classes, 16, 17, 18, 20-23, 29 New security issues, 36 Commercial banks, 3, 15-18, 2Q-23, 24, 26 Ownership of securities of, 18, 20, 21, 22, 29 Federal Reserve Banks, 3, 4, 5, 8, 12, 13 Yields of securities, 3 Insurance companies, 29, 41 State member banks, 17 Insured or guaranteed by U.S., 40, 41 Stock market , 28 Savings and loan assns., 29 Stocks (See also Securities): New issues, 36, 37 MANUFACTURERS: Prices, 28 Capacity utilization, 46, 47 Production, 46, 49 TAX receipts, Federal, 31 Margin requirements, 28 Time deposits, 3, 10, 15, 16, 17, 19, 20, 21, 22, 23 Member banks: Trade, foreign, 55 Assets and liabilities, by classes, 16, 17, 18 Treasury currency, Treasury cash, 4 Borrowings at Federal Reserve Banks, 5, 12 Treasury deposits, 4, 12, 30 Number, by classes, 16, 17 Treasury operating balance, 30 Reserve position, basic, 6 Reserve requirements, 9 UNEMPLOYMENT, 47 Reserves and related items, 3, 4, 5, 15 U.S. balance of payments, 54 Mining production, 49 U.S. Govt, balances: Mobile home shipments, 50 Commercial bank holdings, 19, 20, 21, 22 Monetary aggregates, 3, 15 Member bank holdings, 15 Money and capital market rates (See Interest rates) Treasury deposits at Reserve Banks, 4, 12, 30 Money stock measures and components, 3, 14 U.S. Govt, securities: Mortgages (See Real estate loans) Bank holdings, 16, 17, 18, 20, 21, 22, 29, 32, 33 Mutual funds (See Investment companies) Dealer transactions, positions, and financing, 34 Mutual savings banks, 3, 10, 20-22, 29, 32, 33, 41 Federal Reserve Bank holdings, 4, 12, 13, 32, 33 Foreign and international holdings and NATIONAL banks, 17 transactions, 12, 32, 64 National defense outlays, 31 Open market transactions, 11 National income, 52 Outstanding, by type of security, 32, 33 Nonmember banks, 17, 18 Ownership, 32, 33 Rates in money and capital markets, 27 OPEN market transactions, 11 Yields, 3 Utilities, production, 49 PERSONAL income, 53 Prices: VETERANS Administration, 40, 41 Consumer and wholesale, 46, 51 Stock market, 28 WEEKLY reporting banks, 20-24 Prime rate, commercial banks, 26 Wholesale prices, 46 Production, 46, 48 Profits, corporate, 38 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A78 T h e Federal Reserve System B o u n d aries o f F ed eral R eserv e D istricts an d T h eir B ran ch T errito ries LEGEND — Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities ------- Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Cite this document
Federal Reserve (1977, March 31). Federal Reserve Bulletin, 1977-04. Bulletin, Federal Reserve. https://whenthefedspeaks.com/doc/bulletin_197704
@misc{wtfs_bulletin_197704,
author = {Federal Reserve},
title = {Federal Reserve Bulletin, 1977-04},
year = {1977},
month = {Mar},
howpublished = {Bulletin, Federal Reserve},
url = {https://whenthefedspeaks.com/doc/bulletin_197704},
note = {Retrieved via When the Fed Speaks corpus}
}