Federal Reserve Bulletin, 1980-01

VOLUME 66 • NUMBER 1 • JANUARY 1980 FEDERAL RESERVE BULLETIN Board of Governors of the Federal Reserve System Washington, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • Stephen H. Axilrod • John M. Denkler Janet O. Hart • James L. Kichline • Neal L. Petersen • Edwin M. Truman Michael J. Prell, 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 Mendelle T. Berenson. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents L THE COMPETITIVE EFFECTS OF above the Federal Reserve discount rate in INTERSTATE BANKING addition to permitting any state to reimpose its state usury limits by enacting overriding Discussion of the theory and evidence on legislation, before the Senate Committee on the question of interstate banking. Banking, Housing, and Urban Affairs, December 17, 1979. 9 INDUSTRIAL PRODUCTION 20 Governor Teeters reports on the Board's Output increased about 0.3 percent in Deenforcement activities relating to the Equal cember. Credit Opportunity Act and the Fair Housing Act and gives the background of the ex- 10 STATEMENTS TO CONGRESS amination procedures for enforcing the Governor Nancy H. Teeters offers the acts, before the Senate Committee on Board's comments on S. 2002, a bill that Banking, Housing, and Urban Affairs, Dewould require use of the actuarial method cember 21, 1979. in computing rebates of unearned finance charges on transactions scheduled to be 29 ANNOUNCEMENTS paid in more than 36 installments; the actuarial method, as required by the bill, is basi- Adjustment of interest rate ceilings to help cally fair, but the Board believes a more the small saver. comprehensive approach to the regulation Issuance of information statement for the of consumer credit is preferable to further guidance of those affected by the Commupiecemeal legislation, before the Subnity Reinvestment Act. committee on Consumer Affairs of the Senate Committee on Banking, Housing, and The Federal Reserve Banks had gross cur- Urban Affairs, December 11, 1979. rent earnings of about $10 billion in 1979. 12 Governor Henry C. Wallich comments on a Issuance of policy statement on divestiture wide range of issues concerning inter- of nonbanking activities by bank holding national financial conditions including (1) companies. the functioning of foreign exchange mar- Results of semiannual country exposure kets, (2) the Federal Reserve's role in enlending survey, which show little increase couraging U.S. exports, (3) developments in international lending by U.S. banks. affecting the international financial system, and (4) the financial implications of higher Adoption of policy statements calling for oil prices, before the Subcommittee on In- coordinated action among federal bank suternational Finance of the Senate Com- pervisors as to examination, supervision, mittee on Banking, Housing, and Urban Af- and corrective actions of bank holding comfairs, December 14, 1979. panies and commercial banks. 18 Vice Chairman Frederick H. Schultz pre- Adoption of amendments to Regulation H sents the views of the Board on S. 1988, a establishing uniform standards for bank bill to grant additional lender groups the au- recordkeeping, confirmation, and other polthority, now limited to national banks, to icies and procedures. (See Legal Developset loan rates up to 1 percentage point ments.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Adoption of a report of condition required quarter of 1978 to the fourth quarter of 1979 quarterly by U.S. branches and agencies of within the Committee's ranges for that periforeign and Puerto Rican banks. od; it was recognized that persistence of recent relationships might result in growth of Public availability of quarterly reports of M-2 at about the upper limit of its range. the financial condition of Edge corpora- Specifically, the Committee instructed the tions. Manager to restrain expansion of bank re- Publication of Annual Statistical Digest, serves to a pace thought to be consistent 1974-1978; Flow of Funds Accounts, 1949- with growth on the average in November 1978; and "Federal Reserve Glossary." and December at an annual rate of about 5 percent in M-l and 8V2 percent in M-2, pro- Proposed amendment of criteria applied in vided that in the period before the next regconsidering applications for formation of ular meeting the federal funds rate reone-bank holding companies; proposed mained generally within a range of IIV2 to clarification and simplification of the regu- 15V2 percent. lation dealing with check collection and wire transfers; proposed policy statement 49 LEGAL DEVELOPMENTS that would prohibit insiders in state member banks from profiting personally from Amendments to Regulations H, Q, and Z; sales of life insurance in connection with bank holding company and bank merger orcredit transactions; recommended policy ders; and pending cases. statement concerning disclosure of enforcement actions against financial institutions; Ai FINANCIAL AND BUSINESS STATISTICS and proposed revisions of Regulation F to A3 Domestic Financial Statistics conform with recent rulings of the Secu- A46 Domestic Nonfinancial Statistics rities and Exchange Commission. A54 International Statistics Changes in Board staff. A69 GUIDE TO TABULAR PRESENTATION Admission of five banks to membership in AND STATISTICAL RELEASES the Federal Reserve System. A70 BOARD OF GOVERNORS AND STAFF RECORD OF POLICY ACTIONS OF THE FEDERAL OPEN MARKET COMMITTEE AH FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISOR Y COUNCILS At the meeting on November 20, 1979, the Committee agreed that in the conduct of A73 FEDERAL RESERVE BANKS, BRANCHES, open market operations over the remainder AND OFFICES of 1979, the Manager for Domestic Operations should continue to restrain expansion A74 FEDERAL RESERVE BOARD of bank reserves in pursuit of the Com- PUBLICATIONS mittee's objective of decelerating growth of M-l, M-2, and M-3 over the fourth quarter A76 INDEX TO STATISTICAL TABLES of 1979 to rates that would hold growth of these monetary aggregates from the fourth A78 MAP OF FEDERAL RESERVE SYSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Competitive Effects of Interstate Banking Stephen A. Rhoades of the Board's Division of the fast-food industry. Finally, unimpeded merg- Research and Statistics prepared this article. er activity like that prevalent in the steel, tobacco, petroleum, and automobile industries in Interstate banking is a development now emerg- the late nineteenth and early twentieth centuries ing in the U.S. banking system that could have can rapidly reduce the number of firms in an profound implications for all facets of the sys- industry. A primary reason for concern with intem's structure. Elements of interstate banking dustry structure is that theory indicates that already exist, and they are likely to become more structure influences the degree of competition significant. Interstate banking is of special inter- and performance of an industry. Moreover, a est now because the International Banking Act of large body of empirical evidence demonstrates 1978 directed the President, in consultation with that structure affects price and profit performthe regulatory agencies, to evaluate the appropri- ance. ateness of the restriction on interstate banking in This article reviews the major influences on the McFadden Act of 1927. The President prob- the banking structure during the 1960s and 1970s ably will send recommendations to the Congress and argues that interstate banking is likely to during 1980. have an even more important effect. It then sug- Traditional economic theory suggests that the gests that while simple microeconomic theory removal or even the reduction of the restrictions supports the reduction in restrictions on interon interstate banking would foster competition. state banking, the experience of individual states The extent to which this reduction in barriers to in reducing restrictions on bank expansion has entry results in a more competitive market struc- not had a procompetitive effect on banking structure will depend heavily on the extent to which ture. It concludes that this seemingly perverse entry is de novo. According to the empirical evi- result can probably be attributed to the fact that dence, on the other hand, when states have much of the bank expansion takes place by mergeased restrictions on expansion, market entry er and acquisition rather than de novo. has tended to occur primarily by acquisition; this process has had an adverse effect on market structure. Because of the potential for interstate LEGISLATION AND THE COURTS banking to change the U.S. banking structure significantly and the generally low probability of Beginning with the passage of the Bank Merger reversing structural changes in an industry, an Act of 1960, legislative and judicial actions in the examination of the experiences with intrastate 1960s had considerable influence on banking banking under existing merger policy is useful. structure. That act became law after a decade of In this context, structural changes mean debate over whether to apply the existing antichanges in the competitive environment that trust laws explicitly to banking or to incorporate directly or ultimately affect the number and size similar competitive standards into the existing distribution of competitors. For example, tech- banking laws. Taking the latter approach, the law nological changes may increase the scale of oper- required the bank regulatory agencies, for the ations required to operate efficiently so that first time, to weigh the possible* competitive smaller firms cannot survive and the number of effects of proposed mergers and acquisitions in firms in the industry will decline—the recent ex- deliberating on applications. This legislative perience of the brewing industry. Or the demand mandate was reinforced by amendments to the for a product may, for some reason, grow rapidly Bank Merger and Bank Holding Company Acts and induce new firms to enter the industry, as in in 1966. Strong judicial support for the emphasis Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • January 1980 on competition in banking was provided by the BANK HOLDING COMPANIES Supreme Court's 1963 decision in the Philadelphia National Bank case.1 In addition to em- The second significant influence on banking phasizing the importance of competition, the structure in recent years has been the evolution Court also indicated that the antitrust laws apply of the bank holding company in the 1970s. This to banking and took a hard line against horizontal influence stems from the mechanism that bank mergers. The Court said that section 7 of the holding companies have provided for geographic Clayton Act expansion of banking organizations that otherwise would not have been possible, especially in . . . does require that the forces of competition states with restrictive branching laws. Thus, be allowed to operate within the broad frame- Florida, Texas, and Missouri, which are among work of governmental regulation of the industry. those states that have either unit-banking or lim- The fact that banking is a highly regulated inited-branching laws, have experienced the greatdustry critical to the nation's welfare makes the est expansion by bank holding companies. The play of competition not less important but more so . . . growing importance of the multibank holding company is illustrated in table 1. Between 1968 The Court found a horizontal merger to be illegal and 1977, the number of multibank holding comif it panies increased from 71 to 306, while the number of banks they controlled increased from 629 . . . produces a firm controlling an undue per- to 2,301. centage share of the relevant market, and results The bank holding company has been an imporin a significant increase in the concentration of firms in that market, [because it] is so inherently tant vehicle for bank expansion, at least through likely to lessen competition substantially . . . merger and acquisition, during the past decade. Table 2 shows that acquisitions by bank holding The effect of the 1960 legislation and sub- companies increased dramatically, from 25 in sequent court decision was to bar banks from 1967 to 341 in 1973. Similarly, the percentage of making significant horizontal mergers that would all bank mergers and acquisitions accounted for have directly changed market structure. Instead, by bank holding companies rose from 16 percent banks have engaged in market-extension merg- to 74 percent. While multibank holding comers—that is, mergers with firms that operate in panies accounted for 27.0 percent of the nation's other geographic markets. banking offices and 34.6 percent of total U.S. 1. Offices and deposits of banks affiliated with all registered multibank holding companies, selected years, 1956-77 Banking offices Deposits MMuullttiibbaannkk hhoollddiinngg BBaannkk aaffffiilliiaatteess YYeeaarr--eenndd ccoommppaanniieess ((nnuummbbeerr))11 ((nnuummbbeerr)) Number2 P o e f r U ce .S n . t ( A m m ill o i u on n s t P of e r U ce .S n . t banking offices of dollars) banking deposits 1956 47 428 1,211 5.8 14,843 7.5 1960 42 426 1,463 6.2 18,274 8.0 1965 . . 48 468 1,954 6.7 27,560 8.3 1966 58 561 2,363 7.8 41,081 11.6 1967 65 603 2,688 8.6 29,827 12.6 1968 71 629 2,891 8.9 57,634 13.2 1969 86 723 3,397 10.1 62,574 14.3 1970 111 895 4,155 11.8 78,064 16.2 1971 , , , 1383 1,106 5,665 15.4 129,492 24.0 1972 . , , 1813 1,401 7,536 19.7 192,448 31.2 1973 251 1,815 9,328 23.1 239,148 35.1 1974 276 2,122 11,009 25.8 287,381 38.4 1975 289 2,264 12,160 27.2 297,472 37.8 1976 298 2,296 12,040 26.2 286,533 34.2 1977 306 2,301 12,863 27.0 324,626 34.6 1. Separate bank groups only. When a subsidiary bank is also a registered bank holding company, only one is included in the total. 2. Banking offices equal the sum of banks plus branches plus facilities. 3. Statistics for 1971 and 1972 are taken from Gregory E. Boczar, The Growth of Multibank Holding Companies, Staff Economic Studies 85 (Board of Governors of the Federal Reserve System, 1976). This is the only available source for those years of a breakout of multibank holding companies from all registered bank holding companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Competitive Effects of Interstate Banking 3 2. Acquisitions by bank holding companies corporations. Moreover, the offices of foreign and bank mergers, 1967-77 banks form a de facto interstate network. Bank acquisitions by bank holding The nonbanking activities of bank holding companies companies probably constitute the most exten- BBaannkk mmeerrggeerrss YYeeaarr ((nnuummbbeerr)) Percent of all sive interstate presence of large banking organi- Number mergers and acquisitions zations. The 1970 amendments to the Bank 1967 130 25 16.1 Holding Company Act, which brought one-bank 1968 127 33 20.6 1969 145 102 41.3 holding companies under the same regulations as 1970 143 146 50.5 1971 104 154 59.7 multibank holding companies, significantly limit- 1972 115 229 66.6 ed the ability of bank holding companies to 1973 120 341 74.0 1974 123 200 62.0 expand in nonbanking areas. The amendments 1975 56 98 63.6 1976 83 78 48.4 required the Board of Governors of the Federal 1977 74 88 54.3 Reserve System to rule on the permissibility of SOURCE. Bank merger approvals by the Comptroller of the Cur- entry by bank holding companies into nonrency and the Federal Deposit Insurance Corporation are reported anbanking activities; since then the Board has nually in their respective Annual Reports. Bank mergers and bank holding company acquisitions approved by the Federal Reserve Board approved 19 such activities by regulation or orare reported monthly in the FEDERAL RESERVE BULLETIN. der. As tables 3 and 4 show, bank holding combanking deposits in 1977 (table 1), they account- panies have expanded rapidly into these pered for a disproportionately large 54.3 percent of missible activities during the 1970s, through all approved bank mergers and acquisitions. This either de novo entry or acquisition of existing expansion activity has affected state banking firms. The most extensive acquisition activity structure. Over the period 1968-73, acquisitions has been directed toward local-market, conby bank holding companies increased statewide sumer-oriented industries; thus bank holding concentration—as measured by the percentage companies have acquired many of the largest of deposits accounted for by the five largest mortgage banking firms in the country and a sigbanking organizations—in 24 states. Nationally, nificant number of sizable consumer finance acquisitions by bank holding companies from companies (table 3). The extensive national cov- 1968 through 1973 resulted in a concentration erage achieved in this manner is illustrated by the level (defined as the percentage of all U.S. bank fact that Citicorp has 229 consumer finance ofdeposits accounted for by the 100 largest banking fices and mortgage outlets in 55 cities. Moreover, organizations) that was 2.3 percentage points including loan production offices and Edge Act higher than it otherwise would have been. corporations, Citicorp now has about 400 offices in 38 states and the District of Columbia; Bank of America has 350 offices in 41 states; and Manufacturers Hanover Trust Company has 190 of- INTERSTATE BANKING fices in 18 states. While legislation, court decisions, and the bank Another facet of interstate expansion involves holding company movement continued to shape the rapid growth of U.S. activities of foreign banking structure, interstate banking emerged in banks, recently discussed in the BULLETIN.2 the 1970s as a potentially more important influ- Standard banking assets (total assets minus ence. claims on related institutions and assets arising in Although the McFadden Act of 1927 expressly the process of clearing payments) of U.S. offices prohibits interstate banking, major banking or- of foreign banks increased from $22 billion in ganizations have established a significant nation- May 1973 to $110 billion in October 1979. About wide presence during the past decade. They have half of the 150 foreign banks that now operate done so through institutions that do not perform U.S. offices have offices in more than one state. the basic banking function of accepting deposits While the expansion of foreign banks in the and so do not violate the law. Domestic banks United States has not matched the broad geohave expanded nonbank activities by bank hold- graphic spread of domestic multibank holding ing companies, expanded loan production of- companies through their nonbank subsidiaries, fices, and broadened the activity of Edge Act the foreign bank activity appears to have brought Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

4 Federal Reserve Bulletin • January 1980 3. Number of approved acquisitions of nonbank firms by bank holding companies, by activity, 1971-77 Activity 1971 1972 1973 1974 1975 1976 1977 Total Mortgage banking 2 11 34 33 13 3 12 108 Consumer finance1 2 26 231 160 8 58 14 499 Factoring 0 4 3 2 0 2 2 13 Insurance agencies 0 13 25 34 33 26 10 141 Insurance underwriting 0 0 13 13 13 17 8 64 Trust activities 1 1 4 1 3 3 1 14 Leasing 1 1 8 4 3 14 5 36 Community development 0 0 0 0 0 0 2 2 Financial advice 0 0 5 11 1 1 9 27 Data processing 0 1 6 6 4 4 16 37 Others 0 2 3 0 4 10 16 35 Total 6 59 332 264 82 138 95 976 1. Includes commercial finance. the interstate banking issue into focus. A major more likely in the near future. Should this tendreason was the lack of equity in the treatment of ency be ratified or halted? Simple theory sug- U.S. and foreign banks with respect to interstate gests that lowering barriers to entry will be proexpansion of banking offices that existed until the competitive. The experience in banking, in passage of the International Banking Act of 1978. which entry frequently occurs by merger and ac- This act limited the interstate expansion of do- quisition, a factor that theory does not take into mestic deposit-taking by foreign banks, and it account, indicates that lowered barriers to entry "grandfathered" offices existing or applied for generally will not result in procompetitive before July 27, 1978. It also directed the adminis- changes in structure. tration to study the McFadden Act. The issue of interstate banking has also been highlighted by the increasing provision of banking services by THEORY nonbank financial institutions and retailers, which are not subject to geographic constraints. By prohibiting banks in one state from establishing banking operations in another state, the 4. De novo entry of bank holding companies McFadden Act created major barriers to entry in into nonbank activities, 1971-771 banking. The concept of barriers to entry has a Year Number of entries solid foundation in microeconomic theory. Indeed, the simple model of pure competition, 1971 71 1972 251 which offers the most efficient possible allocation 1973 495 1974 542 of an economy's resources, rests on the assump- 1975 297 1976 309 tion, among others, of no barriers to the entry 1977 471 and exit of resources. When this condition is vio- Total 2,436 lated, the pricing and output solution of a market 1. The figures do not necessarily reflect the initial entry of a holding company into a nonbank activity through formation of a new compa- no longer reflects optimum allocative efficiency ny. Many of these entries involve simply setting up an additional but instead approximates the solution suggested office of a nonbank subsidiary—for instance, a consumer finance or by an oligopoly model. mortgage banking concern—that the bank holding company already owns. The simple models of microeconomic theory imply that when barriers to entry into a market exist, firms in that market will earn relatively A CONFLICT high profits. These profits reflect the monopoly accorded the established firms by the protection The indirect effects on banking structure of bank from the threat of entry or actual entry that holding company expansion, foreign bank opera- would alter the structure of their market to a tions in the United States, and loan production more competitive configuration—that is, one offices are probably more significant than their with more competitors and lower concentration. direct effects because all have contributed, in Starting with the theoretical models and their imone way or another, to a set of conditions that plications, students of industrial organization make political ratification of interstate banking have developed an analytical framework to test Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Competitive Effects of Interstate Banking 5 for the effect of barriers to entry in real-world 1962 respectively.5 The study focused on markets. These studies are almost unanimously changes in the number of banking organizations consistent with theory in concluding that barriers and in concentration between June 1961 and June to entry are an important element of market 1969 in six metropolitan areas in New York and structure. That is, such barriers along with other five in Virginia. The data revealed that both the elements of market structure have a significant number of organizations and the market conceneffect on prices and profits. Thus, in a classic tration increased in about the same number of study of 20 manufacturing industries, rates of re- markets as they decreased. These findings do not turn were found to be significantly greater in in- confirm the procompetitive structural effect that dustries with very high barriers to entry than in is generally anticipated from a liberalization of other industries.3 Even in connection with the branching laws and the increased geographic exbanking industry, for which the studies have pansion permitted by a reduction in barriers to been fewer and narrower in scope, the evidence, entry. although not so consistent, suggests that higher A study of the number of firms and concentrabarriers to entry result in less competition. In a tion in 213 standard metropolitan statistical area recent study, unit banks operating in states that markets and 233 county markets between 1966 permit branch banking were found to earn lower and 1975 found that more markets experienced profits and to pay higher interest on time and sav- structural changes that enhanced competition ings deposits than unit banks in unit-banking than changes that reduced it.6 Procompetitive states.4 This finding suggests that branching, changes occurred most frequently in markets which is characterized by lower barriers to entry, that were relatively highly concentrated in 1966, results in relatively desirable competitive per- probably in reflection of a simple statistical pheformance. nomenon. Of particular interest, procompetitive structural changes tended to be somewhat greater in markets in unit-banking and statewide- EVIDENCE ON THE DESIRABILITY OF branching states than in limited-branching states. INTERSTATE BANKING: MARKET LEVEL To examine the effects of actual geographic expansion of banks in a state on its local-market Unfortunately, the case for unrestricted inter- structure over the period 1960-76, an index of state banking is not so clear-cut as theory and that expansion was used as an indicator of which supporting evidence make it appear. Specifical- states have experienced geographic expansion ly, there is enough relevant, though scattered, by banking organizations, rather than the evidence to cause skepticism regarding the com- branching laws, because states with similar petitive and other structural effects of interstate branching laws may have very different experibanking. Although the studies outlined below do ences.7 This difference is most notable in unitnot focus on the issue of interstate banking, they banking states: some (Texas, for example) perraise some doubts about the competitive ef- mit multibank holding companies while others fects—indeed, they have been selected for that (Illinois, for example) do not. Statistical tests reason. were used to determine whether observed A major argument for interstate banking is that changes in market structure were statistically eliminating barriers to entry between states will significant and to hold constant other factors that permit the geographic expansion of banks might affect market structure. The analysis fobeyond their state borders. This policy is ex- cused on 154 SMS A markets and 129 county pected to bring new entrants into local banking markets. Like the earlier study, the data revealed markets, and thus has the potential for increasing that the majority of local markets experienced the number of competitors and for spurring de- decreases in concentration. The test results do concentration of local markets. not, however, indicate that geographic expan- An early study to test this proposition within sion lowers local-market concentration. In other states investigated changes in the structure of words, markets in states with a substantial level of geographic expansion by banks do not tend to local banking markets in New York and Virginia, have greater decreases in concentration than do which liberalized their banking laws in 1960 and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

6 Federal Reserve Bulletin • January 1980 markets in states with little or no geographic ex- bility of an adverse effect: an increase in nationpansion. Because, quite naturally, states experi- wide concentration (defined as the share of all encing the greatest geographic expansion during bank deposits accounted for by the 100 or 200 the period 1960-76 are those with statewide- largest banks). While its implications cannot be branching and those that permit multibank hold- analyzed with the traditional models of economic ing companies, the results of the study do not theory because it does not involve specific marsupport the notion that branching or other forms kets, increasing aggregate concentration raises of expansion will yield more competitive market broad and important questions. Experience with structure. changes in concentration at the state level may An attempt was made to determine whether be indicative of the kind of change that could be mergers and branching laws affected changes in expected at the national level. the structure of local banking markets between Subsequent to the liberalization of branching 1966 and 1972.8 A multivariate regression analy- laws in New York and Virginia, between 1961 sis, which accounted for factors other than merg- and 1969, statewide concentration increased.9 ers and laws, focused on 228 SMS A markets. For example, the share of total deposits account- Test results indicated that markets in unit-bank- ed for by the three largest banks in the state ining states experienced smaller increases or larger creased 2.4 percentage points in New York and decreases in concentration than did markets in 14.2 percentage points in Virginia. Thus the statewide-branching states. Furthermore, the anticipated adverse effect of liberalization did study revealed that markets in states that permit materialize. multibank holding companies experienced a In an attempt to determine the effect of acquigreater increase in concentration than markets in sitions by bank holding companies on nationwide other states. Both findings are contrary to the concentration, it was found that over the period view that broader powers of branching or of other 1968-73 the share of deposits accounted for by geographic expansion for banks will result in the 100 largest banking organizations declined markets that are more competitively structured. 2.0 percentage points, from 49.0 to 47.0 percent. These four studies, taken together, suggest However, it was estimated that the decline that the pieces of evidence that cast doubt on the would have been 2.3 percentage points greater in procompetitive effects of various forms of expan- the absence of these acquisitions. Results at the sion are not isolated exceptions. While these state level are also useful. During the period studies focused on the structural effects of ex- 1957-68, statewide concentration increased in pansion, a large body of evidence supports a only 3 of 15 unit-banking states, 7 of 16 limitedrelationship between market structure and pric- branching states, and 13 of 20 statewide-branching performance. Thus one can infer from the ing states. During the period 1968-73, concentrafindings that price and profit performance in mar- tion was found to have risen in 8 of 15 unit-bankkets will not improve and may worsen in the ing states, 8 of 16 limited-branching states, and wake of bank expansion in its present form. This 12 of 20 statewide-branching states. The tendenreview is not exhaustive, and there is probably cy for statewide concentration to increase more other, similar evidence that is indirect but rele- often in statewide-branching states than in other vant to the issue of the competitive effects of in- states is all the more impressive because these terstate banking. In any event, skepticism re- states started the period with generally higher garding the procompetitive effects of interstate levels of concentration.10 banking under existing bank merger laws is clear- The data in the study of changes in statewide ly warranted. (three-bank) and local-market concentration reveal that during the period 1960-77, 14 out of 20 states experiencing geographic expansion had in- EVIDENCE: STATE AND NATIONAL LEVELS creases in statewide concentration.11 In contrast, only 12 of 28 nonexpansion states experienced While part of the case for interstate banking is such increases. Moreover, many of the states the public benefit that could be derived from in- with a high level of geographic expansion expericreased market competition, there is the possi- enced dramatic declines in the number of bank- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Competitive Effects of Interstate Banking 7 ing organizations in the state between 1960 and statewide concentration. To the extent that 1977—for example, declines from 181 to 86 linked oligopoly is important, the expansion may (North Carolina), 374 to 176 (New York), and result in a reduction in rivalry at the local-market 690 to 379 (Pennsylvania). level as well. From this experience, one might Another study tested the linked-oligopoly reasonably expect that at least one adverse effect hypothesis, which suggests that competition in a of interstate banking will be an increase in the market is adversely affected when the leading concentration of ownership of U.S. banking refirms meet in other markets.12 The results of the sources. analysis support the hypothesis that the greater the extent to which leading firms in a market meet each other in other markets, the lower will SUMMARY AND CONCLUSION be competition. That is, changes in rank (mobility and turnover) of leading banks in a market— At present, serious discussion is heard in policy the measure of rivalry—were relatively low in circles about easing the restrictions on interstate markets when the leading firms met in a relative- banking embodied in the McFadden Act of 1927 ly large number of other markets. Since such in- that pose an artificial barrier to the entry of firms. termarket linkages are established through Economic theory generally supports a reduction branching and bank holding company systems, of barriers to entry of any kind (for example, the loss of competition due to these linkages may quotas and tariffs) because that reduction should be one of the costs associated with extensive foster more competitive market structure and geographic operations by individual banks. Data performance. However, some evidence based on indicate that the extent of these intermarket link- the experience of individual states with widely ages increased substantially between 1968 and varying laws on bank entry and branching sug- 1974. For example, in 1968 at least two of the top gests that lowered barriers to entry for banks five banks in 26 percent of the SMSA markets have an adverse effect on both local-market and met in at least one other SMSA market; by 1974 state structure. This result probably is attributthat proportion was 59 percent. Or from another able not to lower barriers per se, but rather to perspective, in 1968 there were 1,161 meeting policy in connection with market-extension points in SMSAs between two firms that were mergers. Thus under existing merger laws a reamong the top five in a given SMSA; by 1974 duction in restrictions on interstate banking is there were 2,025 such meeting points. unlikely to have a favorable effect on local- The findings of all of these studies are con- market banking structure, and it is almost certain sistent with commonsense expectations: inter- to increase the concentration of U.S. banking remarket expansion of banks will result in higher sources. • Footnotes appear on page 8. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

8 Federal Reserve Bulletin • January 1980 FOOTNOTES 1. United States vs. Philadelphia National Bank, 374 U.S. 6. Samuel H. Talley, Recent Trends in Local Banking Mar- (1963). The quotes below appear on pp. 372, 363. ket Structure, Staff Economic Studies 89 (Board of Gov- 2. Sydney J. Key and James M. Brundy, "Implementation ernors of the Federal Reserve System, 1977). of the International Banking Act," Federal Reserve Bul- 7. Stephen A. Rhoades, Geographic Expansion of Banks letin, vol 65 (October 1979), pp. 785-96. and Changes in Banking Structure, Staff Studies 102 3. Joe S. Bain, Barriers to New Competition (Harvard Uni- (Board of Governors of the Federal Reserve System, versity Press, 1956). 1979). 4. Donald T. Savage and Stephen A. Rhoades, "The Effect 8. Arnold A. Heggestad and Stephen A. Rhoades, "An of Branch Banking on Pricing, Profits, and Efficiency of Analysis of Changes in Bank Market Structure," At- Unit Banks," paper presented at the Conference on Bank lantic Economic Journal, vol. 4 (Fall 1976), pp. 64-69. Structure and Competition, Federal Reserve Bank of 9. Shull, "Multiple Office Banking." Chicago, May 1979. 10. Talley, Recent Trends. 5. Bernard Shull, "Multiple Office Banking and the Struc- 11. Rhoades, Geographic Expansion. ture of Banking Markets: The New York and Virginia 12. Arnold A. Heggestad and Stephen A. Rhoades, "Multi- Experience," in Federal Reserve Bank of Chicago, Pro- Market Interdependence and Local Market Competition ceedings of a Conference on Bank Structure and Com- in Banking," Review of Economics and Statistics, vol. petition (1972), pp. 30-40. 60 (November 1978), pp. 523-32. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

9 Industrial Production Released for publication January 16 again in December and is now almost 2 percent below the level of a year earlier. Industrial production increased in December by Production of nondurable goods materials rose an estimated 0.3 percent, after declines of 0.3 0.8 percent in December, reflecting gains in the percent in November and 0.1 percent in October. production of textiles, paper, and chemicals. The production of autos, trucks, and related Output of durable goods materials was about unproducts continued to drop in December, while changed in December, after a decline of 1.2 perthe output of equipment, consumer nondurable cent in November, and production of energy goods, and materials for nondurable goods materials edged off. increased. Total industrial production, at 152.2 percent of the 1967 average, was 0.3 percent higher than Seasonally adjusted, ratio scale, 1967 = 100 in December 1978. Industrial production had ad- TOTAL INDEX 160 MATERIALS OUTPUT . vanced during the first quarter of 1979 and then PRODUCTS OUTPUT had fallen somewhat, mainly as a result of strikes and shortages of motor vehicle fuel. After a par- MATERIALS: tial recovery, total production fluctuated slightly BUSINESS EQUIPMENT Nondurable below the March high for the balance of the year. This lack of further growth in total output was CONSUMER GOODS due in large part to a decrease of more than 20 percent in the output of motor vehicles and parts. Output of consumer goods was about un- CONSUMER GOODS: Durable , / changed in December. Auto assemblies, at an an- Nondurable nual rate of 6.8 million units, were about 6 per- /CONSTRUCTION SUPPLIES cent below the 7.2-million-unit rate in Novem- llOO ber. A further substantial decline in assemblies is Annual rate, millions of units 1967=100 180 MANUFACTURING: scheduled for January. Production of consumer Nondurable 160 nondurable goods, such as food and clothing, in- 140 creased 0.6 percent in December. Output of busi- 120 ness equipment rose 1.0 percent, and production 100 of defense and space equipment continued to ad- 1980 Federal Reserve indexes, seasonally adjusted. Latest figures Decernvance. Output of construction supplies declined ber. Auto sales and stocks include imports. 1967 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee IIInnnddduuussstttrrriiiaaalll ppprrroooddduuuccctttiiiooonnn 1979 1979 111222///777888 tttooo Nov.p Dec.e July Aug. Sept. Oct. Nov. Dec. 111222///777999 Total 151.8 152.2 .1 -.8 .5 -.1 -.3 .3 .3 Products, total 149.4 149.9 -.3 -.7 .8 -.3 -.1 .3 .6 Final products 146.6 147.3 -.3 -1.0 1.1 -.3 -.1 .5 .8 Consumer goods 148.9 149.1 -.7 -1.7 1.0 -.1 -.5 .1 -1.6 Durable 149.3 147.7 -.9 -6.2 2.9 .4 -2.0 -1.1 -8.7 Nondurable 148.8 149.7 -.6 .2 .3 -.3 .3 .6 1.6 Business equipment 172.1 173.8 -.1 .1 1.2 -1.1 .2 1.0 4.2 Intermediate products 159.6 159.5 -.1 .8 -.5 — .1 .0 -.1 -.3 Construction supplies 156.3 155.6 .1 .6 -.6 .1 -.1 -.4 -1.7 Materials 155.6 155.8 .7 -1.0 .2 .1 -.5 .1 -.3 p Preliminary. e Estimated. NOTE. Indexes are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

10 Statements to Congress Statement by Nancy H. Teeters, Member, Board than would have been the case if the actuarial of Governors of the Federal Reserve System, be- method were used. Although with respect to fore the Subcommittee on Consumer Affairs of early prepayments there is some justification for the Committee on Banking, Housing, and Urban a creditor's receiving a greater yield than the ac- Affairs, U.S. Senate, December 11, 1979. tuarial method produces when a note is prepaid, on longer-term transactions the disparity be- Mr. Chairman, I am glad to appear before your comes abusive. subcommittee today to offer the Board's com- Disclosure is often recommended as an alterments on S. 2002, a bill that would require the native to regulation, but regulating rebate methuse of the actuarial method in computing rebates ods through disclosure is ineffective. There is no of unearned finance charges in transactions indication that consumers shop for rebate methscheduled to be paid in more than 36 install- ods. All the methods are mathematically comments. plicated, and it is hard to imagine that most con- The Board supports the principle of curing sumers could distinguish between the actuarial abuses that arise from the application of the Rule method and the Rule of 78s. You may recall that of 78s in long-term transactions. The Board, the Truth in Lending Simplification and Reform however, has serious reservations about whether Act recognizes this and requires only disclosure this problem should be addressed on a piecemeal of whether a rebate will be made without further basis or by a more comprehensive approach. distinctions. Further, the Board questions whether this prob- One of the Board's reservations about the bill lem is an appropriate area for federal preemption is whether 36 installments is the proper demarcaor is better left to the states under a revised Uni- tion between long- and short-term transactions. form Consumer Credit Code or other compre- The Board recommends that a more natural dehensive model act. We hope that these hearings marcation along industry lines be used. For exwill shed enough light on the problems associat- ample, if all auto credit requires fewer than a cered with the Rule of 78s that it will be taken care tain number of installments and mobile home of at the state level so that the Congress need not credit is generally granted on longer terms, a natact. ural demarcation exists. Compliance costs are The actuarial method of computing rebates re- cut because neither segment of the industry has quired by the bill is basically fair to both the to learn both methods. creditor and the consumer. It is based upon the At a more significant level, since replacing the same actuarial principles that are used to com- Rule of 78s with the actuarial method reduces the pute the annual percentage rate for Truth in creditor's effective yield on notes prepaid before Lending purposes, and its application in comput- maturity, the question arises whether the appliing a rebate to the consumer of unearned finance cable rate ceiling should be adjusted to reflect the charges upon early prepayment will yield the an- changed rebate method. Historically, consumer nual percentage rate disclosed. Under the alter- credit rate ceilings as well as methods of rebate native sum-of-the-digits method commonly used have been set by state law. Adjusting the rate for computing rebates, the so-called Rule of 78s, ceiling to keep from cutting creditor yield would, the finance charge is earned sooner than under however, involve preempting not only the rebate the actuarial method. As a result, when a note is methods specified by state law but also the state repaid in full before maturity, a creditor has rate ceilings. earned more finance charge under the Rule of 78s The Board has considered alternative methods Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

11 of achieving the result sought by S. 2002. Instead 5. The Massachusetts Open-End Credit Interof prohibiting the Rule of 78s, a possible alterna- est Rate Provisions—M.G.L.A.c. 140 Section tive would be requiring that contracts that ex- 114B. ceed a specified maturity be written on an inter- 6. The Massachusetts Second Mortgage Actest-bearing basis, that is, creditors could charge M.G.L.A.c. 140 Sections 90A-90E. the annual percentage rate on the balance out- 7. The Massachusetts Truth In Lending Actstanding. This is the method of computing M.G.L.A.c. HOC. charges used by most credit unions, and it does 8. The Massachusetts Uniform Commercial away with any need for rebates. The problem Code—M.G.L.A.c. 106. with this approach is that many state laws are 9. Provisions found in Chapter 255 of the Genconstructed around an "add-on" or "discount" eral Laws (a chapter entitled "Mortgages, Conmethod of computing rates. Under many of these ditional Sales and Pledges of Personal Property statutes the contract between the creditor and and Liens Thereon"), including: Section 12C— debtor provides for repayment of a total sum Consumer Note Requirements; Section 12E—Licomprising principal and interest to be repaid. If ability of Credit Cardholders; Section 12F— a note is paid off early, some rebate of unearned Holder in Due Course Provisions; Section 12G— finance charges is needed, and so state laws Limitations on the Charges for Credit Life Insurspecify rebate methods. Therefore, any federal ance; and Sections 13I-13J—Repossession Proaction in this area involves a significant preemp- visions. tion of state law as well as difficult technical 10. The Massachusetts Fair Credit Reporting problems. Interest-bearing contracts have one Act-M.G.L.A.c. 93 Section 49; and the new distinct advantage, however. While consumers Debt Collection Regulations of the Massachumay not be able to distinguish between actuarial setts Attorney General (CMR citation not yet asrebates and rebates under the Rule of 78s, the signed). growing number of creditors switching to inter- 11. The Massachusetts Provisions Regarding est-bearing contracts and away from pre- Cancellation of Home Solicitation Sales— computed contracts suggests that consumers M.G.L.A.c. 93 Section 48. prefer the interest-bearing approach. It is fairer, 12. The Massachusetts Act Regarding the and easier for the consumer to understand. Regulation of Business Practices for Consumer A discussion of the technical problems of the Protection—M.G.L.A.c. 93A. bill and the alternatives as they relate to existing 13. The Regulations of the Massachusetts Atstate law illustrates the Board's serious concern torney General relating to Unfair and Deceptive with any piecemeal legislation. With some ex- Practices—940 CMR 3.00. ceptions, state law tends to be anachronistic and 14. The Regulations of the Massachusetts disorderly. Each segment of the industry tends to Commission Against Discrimination relating to have its own law regulating rates and practices. Discrimination in Credit—804 CMR 7.00. For example, a bank engaged in extending a full In addition, the following federal statutes and range of consumer credit services in Massachu- regulations would apply: setts would have to take into account and comply 1. Regulation Z (Truth in Lending, Fair Credwith the following state laws: it Billing, and Consumer Leasing Acts). Massa- 1. The Massachusetts Retail Instalment Sales chusetts has been determined by the Board to of Motor Vehicles Act-M.G.L.A.c. 225B. be exempt from the federal Truth in Lending 2. The Massachusetts Insurance Premium Fi- law because it has a substantially similar law nance Agency Act-M.G.L.A.c. 255C. that has adequate provisions for enforcement. 3. The Massachusetts Retail Instalment Sales 2. Regulation B (Equal Credit Opportunity and Services Act-M.G.L.A.c. 255D. Act). 4. The Massachusetts Small Loan Rate Provi- 3. Fair Housing Act. sions—M.G.L. A.c. 140 Sections 96-114A; and 4. Fair Credit Reporting Act. the Small Loan Rate Order issued under these 5. Fair Debt Collection Practices Act. provisions. 6. Real Estate Settlement Procedures Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

12 Federal Reserve Bulletin • January 1980 7. Regulation C (Home Mortgage Disclosure comprehensive approach to the regulation of Act). consumer credit. The Board makes no firm rec- 8. Regulation E (Electronic Fund Transfer ommendation on whether federal or state law or Act). a cooperative venture is the better approach at 9. Federal Trade Commission Holder in Due this time, but suggests that further piecemeal legislation will spawn additional regulatory burdens Course Rule. that will add to creditor costs, will tend to raise Given the surfeit of legislation and regulation, the amounts charged debtors, and in the end will the Board feels that it is time to consider a more be a disservice to debtors as a group. • Statement by Henry C. Wallich, Member, Board 1. The daily data for the two-month period of Governors of the Federal Reserve System, be- present a picture of bank position-taking that is fore the Subcommittee on International Finance consistent with that presented by the regular of the Committee on Banking, Housing, and Ur- Treasury Foreign Currency Reports on bank poban Affairs, U.S. Senate, December 14, 1979. sitions as of the close of business each Wednesday. I am pleased to be able to testify before this sub- 2. Banks' net positions and daily changes in committee on international financial conditions. those net positions were generally small when The wide range of issues on which you asked me compared with their gross foreign currency posito comment can be grouped under four headings: tions, with their outstanding exchange contracts, (1) the functioning of foreign exchange markets, and with their overall volume of exchange-mar- (2) the Federal Reserve's role in encouraging ket transactions. U.S. exports, (3) developments affecting the in- 3. Statistical tests show essentially no correlaternational financial system, and (4) the financial tion between banks' positions and dollar eximplications of higher oil prices. I have organized change rates during the period. my testimony accordingly. 4. The volume of exchange-market transactions by this group of banks, both with banks and with nonbanks, was fairly stable over the period. FOREIGN EXCHANGE MARKETS No statistical evidence exists of a relationship between the volume of transactions and de- On behalf of the Senate Committee on Banking, creases in the value of the dollar. Housing, and Urban Affairs, in the spring of this 5. A significant positive correlation is apparyear, the Federal Reserve conducted a survey of ent between the variability of dollar exchange major U.S. banks' foreign exchange activity dur- rates and the volume of trading. However, statising the period of exchange market turbulence tical tests were generally unable to provide evifrom September 15 to November 15, 1978. The dence that higher volume "caused" greater exsurvey sought information on banks' daily posi- change-rate variability. tions, daily trading volume, and profits, and on 6. About half of the respondent banks reportbanks' internal monitoring of their traders' posi- ed that they had no formal limits on positions tions. The survey covered, on a consolidated taken during the day (so-called daylight limits). basis, the 15 U.S. banks that do the largest Of those banks that did have daylight limits, amount of foreign currency business. It also cov- none reported a change in those limits during the ered the U.S. agencies and branches of five lead- period. ing foreign banks. 7. Quarterly foreign exchange trading profits The staff of the Federal Reserve Board ana- of the banks generally rose over the period 1976lyzed the results of the survey, and I am sub- 78. This appears to have been related to the inmitting the staff report for the record. I will brief- crease in variability of exchange rates over that ly summarize its main conclusions: period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 13 The reason why banks appear to be able to forward position in the home currency against all make greater foreign exchange profits when mar- foreign currencies taken together (France); othkets are volatile than when markets are calm ers require spot and forward positions to be reseems to lie in the nature of these banks' role in ported separately, and identification currency by the exchange markets. currency (Belgium, Germany, Switzerland, the These banks are all active dealers. As dealers, United Kingdom, Japan, Canada, and the United their role is to stand ready to take short-term po- States). In countries with strict exchange consitions or "make a market" in foreign currencies trols, banks may be required to identify whether in order to accommodate quickly temporary im- forward foreign exchange sales are with resibalances between supply and demand by other dents or nonresidents (Belgium). market participants—exporters, importers, inter- The U.S. information on banks' foreign exnational investors. To make a profit from taking a change positions is as comprehensive as that of position, a dealer has to buy at a price lower than any country. Weekly data are collected from all that at which he sells. The better a dealer can U.S. banks that have more than $10 million in anticipate future price movements, the more fa- outstanding foreign exchange contracts, as well vorably can he position himself to take advan- as from U.S. agencies and branches of foreign tage of those movements. And the more rapidly banks. Assets and liabilities, as well as exchange he can turn over a position of given profitability, contracts bought and sold, in eight foreign curthe greater his total profits. rencies are covered by the survey, and both Bank dealers in the foreign exchange market home offices and foreign branches of U.S. banks make profits by taking small positions and turn- must report. The United States is the only couning them over frequently. Since volume, or turn- try with extensive and timely reporting on overover, seems to be positively correlated with ex- seas branch activity. In addition, on a monthly change-rate volatility, and since dealers are bet- basis, U.S. banks must provide data on the matuter able to anticipate short-run price movements rity structure of their foreign exchange positions. than are other market participants, it is perhaps Switzerland and the United Kingdom are the not surprising that greater profits tend to be asso- only major countries that regularly collect inforciated with periods of greater exchange-rate vol- mation on the volume of individual bank transacatility. tions. The Federal Reserve has conducted peri- The subcommittee has asked about foreign ex- odic surveys of turnover (1966, 1969, 1977) in the change reporting requirements abroad. The U.S. market and will conduct another survey in banking authorities of all major countries require March 1980. These surveys provide concrete incommercial banks in their countries to report at formation on the magnitude of the market and some regular interval on their foreign currency the importance of various types of transactions. positions. Many countries impose some formal All major central banks, however, have reasonlimits on banks' foreign currency positions, ei- ably good current impressions of the "condition ther for prudential (bank safety) reasons or for of the market" and the relative volume of trading exchange control or balance of payments rea- based on frequent discussions between comsons. The United States and Canada have no mercial banks and the operating desks of the resuch limits, and in October of this year the spective central banks. The New York Trading United Kingdom abolished its remaining ex- Desk, for example, has direct phone links with change controls, including limits on bank posi- more than 40 banks in the United States, and it tions. In most countries, commercial banks are talks with traders in a number of other banks. required to report their positions at least on a The subcommittee has asked about the impact monthly basis; in a few countries, reports are on exchange markets of Rule no. 8 of the Finanfiled weekly, and in Switzerland any transaction cial Accounting Standards Board (FASB). This in Swiss francs that exceeds $5 million equiva- rule requires U.S. corporations to value, for publent must be reported daily. Details in the re- lic reporting purposes, their net monetary assets quired reports vary considerably: some countries or liabilities denominated in foreign currencies at require data on each bank's combined spot and current market rates and to identify so-called Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

14 Federal Reserve Bulletin • January 1980 translation gains or losses as a separate part of abroad. Federal Reserve policy is designed to net income. promote financial stability externally and inter- When first promulgated, FASB-8 was the nally. Such policies can help to avoid the wide source of considerable controversy—it was al- gyrations in exchange rates that may disrupt inleged to have caused corporations to engage in ternational trade and finance and can provide an forward exchange market contracts to cover lia- environment for sound long-term financial planbilities denominated in certain currencies, partic- ning by all U.S. companies, including exporters. ularly Swiss francs, which had appreciated sub- With respect to measures to facilitate bank fistantially against the dollar. It was alleged that nancing of U.S. trade, the Federal Reserve in corporations engaged heavily in such transac- June revised its regulations for Edge Corporations, resulting in downward pressure on the dol- tions to increase the ability of these corporations lar, in order to avoid large foreign exchange to provide international banking services more translation losses, even if the covering transac- effectively, in accordance with the congressional tions did not make sense from an economic view. mandate of the International Banking Act. Whatever the merits of the rule—it has some, in One change permits Edge corporations to fimy view, upon which I will be glad to elaborate— nance the production of goods for export, whereit remains controversial and is currently being as previously Edges were restricted to financing restudied by the FASB. However, the rule is no only the transportation, storage, and actual exlonger a major source of concern in the exchange porting of goods sold abroad. market, in part, apparently because the market A second change permits Edge corporations has become accustomed to it and, in part, be- to establish domestic branches. By providing an cause many corporations appear to be less con- alternative organizational form through which cerned about reporting translation losses. There- banks can conduct multistate Edge Act business, fore, corporations reportedly are undertaking the Board sought to increase the flexibility of fewer foreign exchange transactions solely to banks—especially regional banks and smaller cover their "accounting exposure." banks that might have limited amounts of capital to invest in Edge corporations—to provide international banking services. Only recently have THE FEDERAL RESERVE AND U.S. EXPORTS banks begun to apply for Board approval of domestic branches of Edge corporations, so that it U.S. exports have increased at a rapid pace this will be some time before the impact of this year, reflecting, in part, the improved U.S. com- change can be properly assessed. petitive position arising from the depreciation The Board is still studying a third change that of the dollar in 1977 and 1978 and from the ex- was proposed for public comment: the estabpansion of economic activity abroad. From the lishment of a special class of customers (Qualifourth quarter of 1978 to the fourth quarter of this fied Business Entities) all of whose transactions year we expect an increase of 25 percent in ex- could be presumed to be international, or inports of manufactures and other nonagricultural cidental to their international activities, and theregoods. The increase has in part reflected higher fore not subject to the transaction-by-transaction prices for exports, but volume has increased at screening that has been applied to operations of least 10 percent. Agricultural exports have also Edge corporations. Most of the concerns about risen. The strength of our export industries this this concept have centered on the possibility that past year, and the prospect of further growth it would unduly expand the domestic banking next year, do not suggest that these industries activities of Edge corporations. Data are needed have been at a disadvantage in their access to on the number and characteristics of companies credit from U.S. financial institutions. that might be qualified under various types of Federal Reserve policies are not designed to guidelines, and judgments will be required on channel funds to the financing of U.S. export in- the operational problems that might be encoundustries or other particular sectors of the econo- tered under various definitions. The Federal Remy—a philosophy that is not universally held serve is currently studying this concept in light Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 15 of the substantial number of comments received States. On the other hand, it is likely that growth on the proposal. in the nondollar portions of the Eurocurrency There is, frankly, very little the Federal Re- markets could stimulate spending in the United serve can do to promote the establishment of States, at least marginally. Other monetary au- Edge corporations. The procedures are relatively thorities, in Germany in particular, face similar simple. Nevertheless, there are statutory stand- uncertainties. ards to be met, and, as in all chartering functions Perhaps an even more serious problem in carof a banking nature, the Board must satisfy itself rying out a monetary policy that takes explicit about the reputation, expertise, and integrity of account of the Eurocurrency markets would arise the organizers and owners. As of now, all Edge because of the uneven effects of a restrictive corporations are owned by banks. There are no policy on the domestic and the Eurocurrency legal impediments to their ownership by non- markets. Those smaller domestic banks and their banking interests. Nor has much interest been customers that have less access to the Euexpressed by such groups in the past. Of course, rocurrency markets than have the large interownership of an Edge corporation by a non- national banks and their U.S. and foreign cusbanking firm would raise some of the same kinds tomers would absorb a disproportionate share of of policy issues present when such firms own the burden of a restrictive policy. This inequity, commercial banks. in turn, could undermine support for an appropriate counterinflationary monetary policy. This was one of the reasons why in its October 6 ac- INTERNATIONAL FINANCIAL tions the Board included Eurodollar borrowings SYSTEM DEVELOPMENTS as subject to the 8 percent marginal reserve requirement on increases in managed liabilities. One aspect of the international financial system Moreover, if monetary authorities focus excluthat has received increased attention from pol- sively on the growth of domestic monetary agicymakers over the past year has been the Eu- gregates, ignoring the effects of the more rapid rocurrency or Xenocurrency markets. While the growth of liabilities to nonbanks that is occuring Eurocurrency markets are linked to domestic fi- in the Eurocurrency markets, they may facilitate nancial markets and are subject to the influences more expansionary and more inflationary condiof monetary policy through the impact of policy tions than they intend, or may be aware of. Inon interest rates, they do pose some problems for deed, there is a risk that, over time, as the Eumonetary policy. My judgment is that these rocurrency markets expand relative to domestic problems have been of only moderate signifi- markets, control over the aggregate volume of cance to date, but their significance is increasing. money may increasingly slip from the hands of Let me identify some of the ways in which the central banks. Consequently, the Federal Re- Eurocurrency markets complicate the execution serve in its examination of redefinition of the of monetary policy. The existence of the Eu- U.S. monetary aggregates has considered the rocurrency markets lessens the precision of do- possibility of including some portion of Eumestic monetary control. Monetary authorities rocurrency liabilities to nonbanks. It would also could, in principle, act in such a way as to pro- be prudent to have available additional instruvide for the desired growth of bank liquidity, tak- ments for controlling the Eurocurrency markets ing account of both the domestic and the Eu- such as we have for controlling domestic monerocurrency markets. One problem that the tary aggregates—one of the principal reasons for Federal Reserve would encounter in following seriously considering the need for reserve resuch an approach is that we cannot gauge well quirements against Eurocurrency deposits on an the extent to which growth in the Eurocurrency international basis. markets affects spending in the United States. With regard to international discussions of the Dollars held or borrowed by nonbanks (U.S. or Eurocurrency markets and what might be done foreign) in the Eurodollar market could be spent to control their growth, I believe that there has anywhere in the world, not just in the United been some progress. It is now more generally Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

16 Federal Reserve Bulletin • January 1980 recognized that these markets potentially present in 1980 will depend to a large extent on OPEC not only prudential problems but also monetary pricing decisions. policy problems. Countries have been studying As the OPEC surplus rises to new heights, it is different techniques for coping with the markets appropriate to ask oil producers whether they but are not yet agreed on the need for, or the fully realize the impacts on developing countries nature of, effective measures. of their pricing decisions. Some non-oil devel- Another aspect of the international financial oping countries will be able to increase their insystem that has received increased attention ternational borrowings or their exports and thus over the past year has been the phenomenon of sustain a continuing flow of both oil and non-oil diversification of official reserves. We do not be- imports, but many countries will be forced to lieve that such a process has accelerated during curtail imports in order to make ends meet. 1979. However, some tendency toward a multi- Lower-income developing countries, in general, currency reserve system is obvious. Against this must rely on official sources of finance—multibackground, attention is being given to the pos- lateral and bilateral—and may obtain bank credit sible role of an International Monetary Fund only as part of cofinancing arrangements. How- (IMF) Substitution Account in encouraging the ever, it is the developing countries with higher evolution of a system based on special drawing income levels that will account for the bulk of the rights. enlarged deficits. As a general principle, I believe that many countries will have to place greater emphasis FINANCIAL IMPLICATIONS than in the past on adjustment of their economies OF HIGHER OIL PRICES to the higher oil bills rather than on financing enlarged deficits. It will probably be necessary, and The average price of imported oil is now more also highly desirable, to have the IMF play a than 70 percent higher than it was at the end of greater role in assisting countries to make the last year. It appears likely that the price of Or- necessary policy adjustments. It would be desirganization of Petroleum Exporting Countries' oil able if banks encouraged countries to turn to the will increase further in 1980. Recent events in IMF and if countries went to the IMF before the Iran and other Middle Eastern oil-producing deterioration in their external financial condition countries have underscored once again the vul- became extreme. nerability not only of the U.S. economy but also If the IMF is to play this role, it must have of the economies of other oil-importing countries adequate financial resources. The Congress now to supply disruptions and to the adverse econom- has before it legislation that would lead to an inic effects of higher oil prices. crease in the size of the U.S. quota in the IMF by The higher oil prices already experienced in 50 percent; quotas of most other members would 1979 are causing great difficulties. They have increase by a similar percentage. These increases contributed to the global acceleration of inflation were negotiated before the 1979 increases in oil this year and to the slowdown of real economic prices. Although the IMF now is in a fairly comgrowth of the economies of the developed coun- fortable position to increase the scale of its lendtries now expected in 1980. They are under- ing, it would be highly desirable for the Congress mining the current-account positions of oil-im- to act promptly to increase the U.S. quota so that porting countries and forcing some of these the IMF can play the more active role that will be countries to incur rapidly rising debts. required over the next several years. Additional price increases in 1980 would com- There will, of course, be a major role for the pound the pressures on developing countries and commercial banks in financing the increased curindustrial countries alike. The combined current- rent-account deficits of oil-importing countries, account deficit for the non-OPEC developing but it is not clear just what the size of that role countries in 1979 is likely to be about $10 billion will be nor how lending will be shared among larger than in 1978 and could increase sub- banks. In recent years some developing counstantially further in 1980. The size of the increase tries have been able to add to their reserve asset Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 17 holdings, and it may be that they will draw on higher than those of many of their European and these assets to help pay for needed imports. Al- Japanese competitors. U.S. banks, therefore, reternatively, if bank credits are readily available, quire a higher return on assets in order to obtain oil-importing countries may step up their borrow- the same return on capital. In this light, the lessing from banks. ened participation by U.S. banks in Euro- In the year and a half ending last June, a great currency lending in an era of very narrow marsurge occurred in international lending by non- gins appears to me to have been sensible and U.S. banks, which increased their outstanding prudent. loans to non-oil developing countries by $30 bil- A further essential element of prudent banking lion, while U.S. banks were adding only $5 bil- practice is the diversification of loan and investlion of such loans to their portfolios. U.S. banks' ment portfolios. This principle of diversification share of the total loans outstanding to these underlies the system of country risk evaluation countries fell from about one-half of the total to now in use by U.S. bank supervisors. That sysless than 40 percent. This shift in the composi- tem has already been described in other testimotion of international lending is clear evidence that ny before this subcommittee, and I shall not relarge foreign banks have become increasingly view it here. competitive with the major American banks in You have asked whether there is some critical the provision of international financial services. percentage that in my view should serve as a Whereas in the early 1970s it was unusual to see maximum exposure for a U.S. bank in any fora major syndicated Eurodollar bank credit that eign country. There are, I believe, sound reasons did not have a U.S. bank participating in the for not establishing a single maximum figure. Pomanagement group, today it is not uncommon for sitions and capabilities of individual commercial syndicated credits to be arranged without any banks differ widely. Moreover, risk has many di- U.S. bank participation. mensions that cannot be captured in a single fig- The strong competition from European and ure. Risk exposure may be quite different for Japanese banks has resulted in borrowers paying long-term and for short-term credits; exposure reduced interest margins (or spreads) over will vary depending on the type of security or LIBOR (the London Interbank Offer Rate). It collateral; and it will be greatly dependent on the has been argued that the reduction in spreads in economic and political conditions of the country. Eurobanking has reflected a change from the un- Moreover, too often a maximum may in practice certainties of the post-Herstatt era in the per- tend to become a minimum as well. ception of risk as well as increased competition. Statutory limits on the volume of credit that a If this is the case, it might now be reasonable to bank may extend to a single borrower vary. The expect a widening of those spreads once again. limit for national banks is 10 percent of capital. Risks today are higher because of pressures For other banks it depends on the laws of individstemming from rapidly rising oil prices and high- ual states; it is 25 percent for loans to foreign er debt burdens of some countries. In addition, governments by banks chartered in New York there is an increased awareness of political risks State. These limits apply to credit risk rather in international lending. than to country risk and do not limit the total In fact, it would be desirable to see a widening credit that a bank might extend to a single counof interest margins on Euroloans not only to al- try. The decision on exposure in a country is one low for increased recognition of risk but also to that must be made by the management of a bank permit banks to earn a suitable return on capital. in light of the full range of factors affecting its The low spreads on Eurocurrency loans in recent banking business. As relative exposure rises, a years have tended to lower the return on capital bank should review its position carefully and to U.S. banks, even though to some extent the continually. In my judgment, exposures as high reduced spreads may have been offset by larger as 25 percent or more of capital to a foreign counincome from fees or from collateral business. try would warrant continual review by bank man- The impact of low spreads has been particularly agement, and for many countries the percentage strong on U.S. banks, whose capital ratios are should be much lower. Indeed, it is inherent in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

18 Federal Reserve Bulletin • January 1980 the new system for country risk evaluation that to their exposure to individual countries as such individual banks are to direct increased attention exposure rises. • Statement by Frederick H. Schultz, Vice Chair- ly recommends against tying ceiling rates to the man, Board of Governors of the Federal Reserve Federal Reserve discount rate. The Board be- System, before the Committee on Banking, lieves that a more effective long-range solution to Housing, and Urban Affairs, U.S. Senate, De- rate ceilings should continue to be sought—for cember 17, 1979. national as well as state banks and other institutions. While a majority of the Board feels that S. I am pleased to appear before the Senate Bank- 1988 can be supported as a stopgap measure, we ing Committee today to present the views of the urge that a more appropriate reference rate than Federal Reserve Board on S. 1988. This bill the Federal Reserve discount rate be selected, would grant additional lender groups the author- and that a sufficient differential above that rate be ity, now limited to national banks, to set loan specified to allow more adequate flexibility in rates up to one percentage point above the Fed- various credit markets. eral Reserve discount rate regardless of any state Many members of the Congress are underlaw stipulating a lower ceiling. In addition, it standably reluctant to preempt state laws or conwould permit any state to reimpose its state usu- stitutional provisions. The Board also feels that ry limits by enacting overriding legislation. An- corrective action at the state level would be the other provision of the bill, also subject to state most desirable way to redress the counterprooverride, specifies that rates paid on deposits ductive effects of state usury laws. Quite a few would be exempt from state usury regulation. states, in fact, have already revised their usury The Board has long been concerned about the or other lending statutes since the beginning adverse impact that usury ceilings can have on of this year, although some revisions have been the availability of funds in local credit markets, outdated by subsequent market developments. and has frequently stated its opposition to such Further state action would await the next legislaartificial constraints. In general, regulatory limits tive sessions or, as in Arkansas, the process of on loan charges tend either to have little or no constitutional amendment. effect (when market-determined rates are at or S. 1988 would immediately address the market below the ceiling) or to be counterproductive dislocations due to rate ceilings in any state. As (when market-determined rates are above the noted earlier, it also would honor state preceiling). When nominal market interest rates are rogatives by enabling legislatures to reject the high, as at present, usury ceilings typically dis- rate flexibility provisions of this bill through pastort credit flows by inducing lenders to channel sage of a new state law reaffirming existing regufunds into assets or geographic areas less af- lations. In the view of the majority of the Board, fected by ceilings. Nonprice lending terms in re- this approach would provide adequate preservastrained markets may be tightened severely to tion of state authority to regulate lending praccompensate for the relatively low nominal inter- tices. But some members of the Board have est rates that can be charged, and credit may be- strong reservations about endorsing legislation come totally unavailable except to the most high- that would further encroach upon state powers. ly qualified borrowers. The proposed bill would peg the maximum Because of the Board's view that credit mar- permissible lending rate at one percentage point kets function most effectively when allowed to above the discount rate on 90-day commercial operate as freely as possible, we support in prin- paper prevailing in the Federal Reserve district ciple the removal of impediments posed by usury in which a lending institution is located. The laws. Nevertheless, serious concern has been ex- Board recognizes that this formulation has appressed by some Board members about federal plied to national banks since 1933. Nevertheless, preemption of state law. Also, the Board strong- we have strong reservations about it, and I would Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 19 like to invite your further reflection upon the ad- pegging function in a fully satisfactory manner. visability of indexing loan rate ceilings to the dis- Illinois, for instance, had employed a ceiling for count rate. residential mortgage loans that was 2lh percent- The Federal Reserve discount rate is a short- age points above an index of long-term U.S. govterm rate; by comparison, many of the target ernment securities yields. However, yields recredit markets of the proposed bill involve long- quired by lenders on home mortgage loans in term lending, such as home mortgage loans, as unconstrained markets subsequently rose above well as shorter-term credit. It is unusual for inter- this floating ceiling, and the volume of home est rates across maturity categories to be pat- mortgage lending in Illinois was curtailed. Conterned in such a way that a one-percentage-point sequently, in November of this year, the Illinois markup over the discount rate would provide legislature suspended any ceilings on home mortmuch practical relief from usury ceilings in all gage rates through the end of 1981. markets. Even now, with the discount rate at a I would also note that the sponsors of S. 1988 historically high 12 percent, a one-percentage- have emphasized the goal of equalizing compoint markup would leave the ceiling lending rate petition among national banks and other deposbelow average home mortgage rates in many itary institutions. The Board shares the view areas. Moreover, the discount rate is an adminis- that, in principle, similarly situated lenders should tered rate, not a market rate, and may not always operate in similar regulatory environments. The closely reflect levels or movements even of bill would achieve partial competitive equality, short-term market rates. In general, we feel it un- inasmuch as the provisions now applicable to wise to single out a tool of monetary policy for a national banks would be extended to all federalpurpose, such as indexing, that is not directly ly insured state-chartered commercial and mutual policy related. savings banks, all federally insured savings and As you know, other bills enacted or now under loan associations, certain federally insured credit consideration by the Congress deal with restric- unions, and all small business investment compative state usury ceilings in somewhat different nies. However, various lenders not covered by ways than S. 1988. The recently enacted Public the proposal would remain without relief, includ- Law 96-104, which in effect applies only to Ar- ing all life insurance companies, all mortgage kansas, pegs permissible rates for business and bankers, and some credit unions. agriculture loans of $25,000 or more to the dis- In summary, because of the distortions in locount rate but allows for a five-percentage-point cal credit markets that result from unreasonably differential. A provision in the proposed Finan- low interest rate limitations, the Board strongly cial Institutions Deregulation Act would remove endorses efforts to remove the restraints of usury usury ceilings on home mortgage loans altogeth- ceilings altogether. We would urge the states to er for a broad spectrum of lenders. In contrast to reevaluate their usury laws in light of recent exthese approaches, the indexing formulation of S. perience with historically high market rates and 1988 provides relatively little relief from state are pleased to note that many states have been usury ceilings. We suggest as an alternative that and are doing so. In view of the pressing need for outright removal of ceilings be considered, or if a some relaxation of usury ceilings and the time ceiling is to be maintained, that a market rate of lapse before the scheduled opening of legislative medium or long maturity be used as a reference sessions in several states, the majority of Board rate, and that a markup be established to allow members supports S. 1988—subject to modificamore rate flexibility in the target credit markets. tion in order to incorporate a more appropriate In this connection, I would observe that expe- reference rate than the Federal Reserve discount rience with floating-rate usury ceilings in several rate—as an interim measure until the states themstates has shown that even a market rate of ap- selves or the Congress can provide a more satispropriate maturity may not always perform the factory solution. • Additional statement follows. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

20 Federal Reserve Bulletin • January 1980 Statement by Nancy H. Teeters, Member, Board It was given the responsibility for developing of Governors of the Federal Reserve System, regulations that prohibit unlawful discrimination before the Committee on Banking, Housing, and in the credit-granting process. Regulation B, Urban Affairs, U.S. Senate, December 21, 1979. which implements ECOA, is applicable to all extenders of business and consumer credit, includ- I am pleased to appear before this committee to ing banks, credit unions, finance companies, savreport on the Board's enforcement activities re- ings and loan associations, and retailers. Since it lating to the Equal Credit Opportunity Act has been necessary to amend and interpret Regu- (ECOA) and the Fair Housing Act. In order to lation B from time to time, the Board's ingive the committee a more complete understand- volvement in rulemaking is a continuing one. ing of the Board's current posture with respect to Before establishing the separate consumer afthe enforcement of fair lending laws, a brief dis- fairs and civil rights enforcement program in cussion of the background of the Board's activi- 1977, the Board had Fair Housing and ECOA enties in this area may be useful. forcement procedures in place, although these In March 1977 the Board adopted an enhanced procedures were not as comprehensive or forcespecialized program for enforcing all of the con- ful as they are today. sumer and civil rights laws applicable to state Although your request for testimony focuses member banks. This program ran for a two-year on the Board's enforcement of fair mortgage experimental period. In February 1979 the Board lending laws, it is necessary, in order to put the made this program, with some enhancing modifi- Board's activities in a more complete context, to cations, permanent. In adopting the program, the understand the scope of the consumer and civil Board issued the following statement to indicate rights enforcement program. This program covits commitment to the enforcement of the anti- ers the following laws and regulations: discrimination laws: 1. The Fair Credit Reporting Act. 2. The Fair Debt Collection Practices Act. The Board believes that any type of discrimina- 3. The Fair Housing Act (Title VIII of the tion prohibited by the civil rights laws is detri- Civil Rights Act). mental to the nation and to society. The Board is 4. The Real Estate Settlement Procedures convinced that such discriminatory practices by Act. banks not only are illegal but are not in the best interests of the banks, the communities they 5. Regulation B (the Equal Credit Opportuserve, or the individuals residing in those com- nity Act). munities. The Board will investigate thoroughly 6. Regulation C (the Home Mortgage Diseach complaint of discrimination it receives reclosure Act). garding a state member bank as well as any in- 7. Regulation E (the Electronic Fund Transdication of noncompliance revealed during an examination of a state member bank. In any in- fer Act). stance of unlawful discrimination, the bank will 8. Regulation H (national flood insurance be accountable for appropriate remedies and provisions). penalties as provided for in the applicable laws 9. Regulation Q (Interest on Deposits). and will be required to take prompt action to 10. Regulation Z (the Truth in Lending, Fair correct the violation. Credit Billing, and Consumer Leasing Acts). 11. Regulation A A (Unfair or Deceptive Acts BACKGROUND OF THE BOARD S or Practices by Banks and Consumer Com- ENFORCEMENT PROGRAM plaints). 12. Regulation BB (the Community Reinvest- The Board has been involved in the implementa- ment Act). tion of fair lending laws through the examination 13. Right to Financial Privacy (the Financial process since enactment of the Fair Housing Act Institutions Regulatory and Interest Rate Control in 1968. The Board was also involved in the Act). earliest stages of implementation of ECOA be- As can be seen, several in this list relate directcause of its rulemaking authority under that act. ly to fair mortgage lending, that is, the Fair Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 21 Housing Act and Regulation B, while others, part of the package, the Board approved a comsuch as Regulations C and BB, have a less direct, prehensive proposal that included the following: but growing, relationship. 1. A Compliance Handbook detailing exami- With the growth in this area of its responsibili- nation and investigation procedures. ty, the Board decided in March 1977 that a spe- 2. A mandatory examination frequency schedcialized enforcement program was necessary. ule that requires more frequent monitoring of The framework that was established at that time poorly performing banks. provided for consumer affairs and civil rights ex- 3. Strengthened complaint investigation proaminations that resulted in an examination report cedures that require on-site investigations in cerseparate from the usual commercial examination tain circumstances. report. The program also established the educa- 4. Appointment of civil rights specialists in tional-advisory service to aid member banks in each of the Reserve Banks. understanding the regulations' requirements, as 5. Designation of three attorneys on the well as more formalized complaint investigation Board's staff as civil rights specialists. procedures. To aid the examiners, special train- 6. Development of career ladders for coning schools were conducted. sumer affairs examiners that are comparable to After a year's experience, the Board con- those of commercial examiners. ducted a preliminary review of the consumer af- An important aspect of the program is the edufairs enforcement program. This review showed cational-advisory service, which is available to that, although examinations frequently revealed all member banks, including national banks. On procedural violations, they had not been so suc- request, a representative from the Reserve Bank cessful in uncovering evidence of banks engaging will visit the bank and explain any aspect of the in violations of Regulation B and the Fair Hous- consumer and civil rights laws and regulations ing Act that involved actual discrimination. It with which the bank needs assistance. The visit was felt that revisions of the existing procedures is therefore tailored to the bank's need and is were warranted. The examination process was particularly useful when new legislation is analyzed in order to isolate aspects that could be passed. improved and to develop ways to strengthen the The complaint investigation procedures have program. been revised to require prompt, thorough re- To supplement research on this question, the sponses to complaints, particularly those that al- Board engaged an outside expert to study the lege credit discrimination. When a complaint al- Board's procedures and materials for enforcing leging discrimination is received, the Reserve the ECOA and Fair Housing Act and to make Banks are instructed to designate an individual to recommendations for changes. The consultant's respond to the complainant or acknowledge the report, which was delivered in May 1978, sug- complaint within 15 days of receipt. The Reserve gested a redirection of emphasis in the System's Bank requests a specific response to the comenforcement efforts with respect to the detection plaint from the state member bank within 10 of credit discrimination. days. The Reserve Bank also contacts the com- A System task force was convened for the pur- plainant to obtain any information or clarification pose of revising and redrafting the examination considered useful to the investigation. Based on procedures based on these suggestions as well as the preliminary information, the Reserve Bank suggestions made by representatives of interested determines whether an on-site investigation is civil rights groups who participated in the re- necessary. When the investigation is concluded, view. The recommendations and changes result- the complainant is again contacted and informed ing from this exhaustive study were substantial of the findings. and were incorporated in the final compliance An on-site investigation occurs when any of program approved by the Board in February the following appear to be present: 1979. The examination procedures and work pa- 1. Discrimination on a prohibited basis. pers were revised to reflect the more substantive 2. Inconsistent treatment of applicants. approach to consumer affairs examinations. As 3. Examination reports, correspondence, or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

22 Federal Reserve Bulletin • January 1980 other information that indicates a history of dis- The survey showed that 116 of the 138 budgeted crimination. examiner positions had been filled, and all of the 4. A review of the bank's internal policies, budgeted 22 civil rights specialist positions had procedures, and rules concerning the complaint been filled. that reveals evidence of discrimination. The Compliance Handbook was distributed to Briefly, the additions to the examination pro- the examination staff and to state member banks cedures that were made when the program be- as a form of educational assistance. The Comcame final include: pliance Handbook includes a plain-English ex- 1. The authority to interview people who are planation of the regulations' requirements. It not affiliated with the bank. also specifies examination and investigation pro- 2. Analysis of the demographics of a bank's cedures and includes extensive checklists. community to determine the impact of lending Bankers may find the Handbook useful guidpolicies on that community. ance in establishing their own programs for com- 3. Comparing borrower characteristics and pliance. loan terms for disparate treatment. 4. Geocoding loans to determine if unwarranted disparities in geographic distribution of TRAINING loans exist. Examiners are to perform whatever analysis is The Board emphasized specialized examiner necessary to reach a conclusion regarding wheth- training as part of the 1977 compliance program. er prohibited discrimination is taking place. Un- For example, in 1979 the Board conducted two der the revised program, the examination or in- schools for consumer affairs examiners at which vestigation will continue until a conclusion is 58 examiners were trained. Training aids includreached on every aspect of a bank's compliance ed case studies, which incorporate actual bankposture, including discrimination. type documentation, work papers, and fact situa- The establishment of a career path for con- tions. Instructors for the schools are examiners sumer affairs examiners was an important step from the Reserve Banks, review examiners and helping to fulfill the objectives of the enforce- attorneys from the Board staff, and attorneys ment program. In order to attract and retain a from other agencies, such as the Justice Departqualified corps of examiners, it was necessary to ment. The attorneys provide a thorough backeliminate the disparity in pay and status that ex- ground of the history of civil rights laws. This isted in some Reserve Banks between consumer background includes an analysis of pertinent isexaminers and commercial bank examiners large- sues in specific court cases and their effect on ly because of the newness of the separate con- civil rights legislation. sumer compliance program. The program ap- Upon adoption of the new enforcement proproved by the Board mandated that each Reserve gram, the Board's staff conducted a series of Bank develop a career ladder for the consumer three regional seminars at the Reserve Banks to affairs examiners that parallels the opportunities apprise the field staff of the new procedures. available for commercial examiners. Attorneys from the Justice Department have In order to implement the approved package it addressed groups of Board and Reserve Bank was necessary to provide the resources needed staff, both at the regular examiner's school and at to complete the additional examination steps. special seminars, on such matters as the history Based on information received from nine field of civil rights litigation. The lectures were comtests, it was determined that the field staff should prehensive and discussed various aspects of disbe increased from approximately 70 examiners to crimination, including the effects test analysis. 138 examiners and 22 civil rights specialists in or- These presentations were instrumental in develder to complete successfully the objectives of the oping the expertise of Board and Reserve Bank proposed program, which now includes the Com- staff members and contributed to the training of munity Reinvestment Act. the Board's civil rights specialists. A survey was conducted in June 1979 to deter- The Board also rotates examiners from the Remine the staffing levels at each Reserve Bank. serve Banks to work with Board staff as an aid to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 23 their development. In addition, the Board's staff tical data is not an easy process. A determination communicates frequently with System examin- regarding a justifiable business necessity is an ers to inform them of current developments. even more troublesome task because it involves I have just described the background of the de- complex, judgmental issues. velopment of the Board's compliance program. I The Supreme Court had no difficulty deciding will now describe the Board's role in utilizing the that the requirement of a high school education effects test as a tool for enforcing the fair lending for promotion from laborer to coal handler at an laws in those banks for which it has responsibi- electric power plant in North Carolina dislity. qualified blacks at a "substantially higher rate" than whites, that the requirement was not "significantly related to successful job perform- THE EFFECTS TEST ance," and that, consequently, it was impermissible. But that was a clear-cut case. Title VII of the Civil Rights Act of 1964 prohibits One example of the difficulty of determining the use of employment practices that discrimi- whether a business need is supportable is the nate against job applicants or current employees question of whether consideration of income as a on the basis of race, color, religion, sex, or na- standard of creditworthiness is justifiable. On the tional origin. In interpreting the act, the Supreme average, whites have greater income than blacks, Court has determined that an employment prac- men have larger incomes than women, married tice that is applied evenhandedly and without in- persons have more income than singles, middletent to discriminate nevertheless may be illegal if aged persons have more than those of other ages, it has a disproportionately adverse effect upon a persons of Northern European descent have so-called protected class. The technique of iden- more than those with ancestors from Asia, and tifying discrimination by looking at disparate im- wage earners have more than welfare recipients. pact rather than improper intention is commonly Thus, consideration of income—which is a basic known as the effects test. part of judging creditworthiness for many credi- The generally accepted understanding of the tors—probably disqualifies members of most of effects test, as it evolved in the courts, consists the ECOA "protected" classes at a "subof a three-stage analysis. The first stage is obtain- stantially higher rate" than middle-aged, white, ing evidence that a policy has a disproportionate Anglo Saxon males who are married. According impact on a protected class. Once this has been to this line of reasoning, consideration of inestablished, a determination must be made as to come, when subjected to an effects test analysis, whether a business need exists, which justifies could be suspect under the ECOA. the utilization of the questionable policy. Finally, A small, but nevertheless significant, number a determination must be made as to whether of creditors (particularly among those using comsome alternative policy might serve the same puterized credit-scoring systems) do not considbusiness need and have less impact on the pro- er the amount of an applicant's income in detertected class. mining creditworthiness. They either do not find The Compliance Handbook includes an exten- income to be predictive of ability or of willingsive discussion of the effects test. The Handbook ness to repay or find other factors to be more preaddresses discrimination in marketing practices, dictive. Based on this evidence, the experience explicitly addresses neighborhood discrimina- of those creditors indicates that income, in certion, and provides guidance on the effects test by tain instances, may not be "significantly related" setting forth the general principle of the effects to creditworthiness. A bank examiner, however, test and providing a number of specific examples would have a difficult time determining whether, of practices that may have discriminatory ef- for a particular bank, there is a justifiable busifects. ness necessity to consider income, or whether Even though we have enhanced training and consideration of income is "significantly rehave provided guidance on the effects test, mak- lated" to creditworthiness. ing an effects test determination can be extreme- In 1976 when the Congress expanded the ly difficult because the development of the statis- Equal Credit Opportunity Act's coverage, brief Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

24 Federal Reserve Bulletin • January 1980 statements in the Senate and House reports ex- a regulation because of its flexibility. It commupressed the congressional intent that the effects nicates in what we believe to be plain English; it test be used to detect credit discrimination. The provides a narrative explanation of the nature Senate report accompanying the 1976 ECOA and background of certain requirements; it may amendments merely states: "In determining the be amended more easily than a regulation; and, existence of discrimination . . . courts or agencies most important, it could ultimately be backed are free to look at the effects of a creditor's by the Board's enforcement authority just as a practices as well as the creditor's motives or regulation would be. For these reasons, we fail to conduct in individual transactions." The House see a compelling argument for adopting regulareport says essentially the same thing. tory changes to achieve objectives that are al- The effects test was developed in the context ready being met. of contested litigation, with each side presenting The effects test still remains a useful tool for witnesses and offering evidence. Preparing for detecting the more subtle forms of credit discrimand conducting each trial take months, some- ination despite the difficulties in analyzing it. We times years. It would be difficult to imagine the will continue to use the effects test as a tool resources needed for examiners to conduct such for identifying potentially discriminatory pracsearching investigations for each of the approxi- tices. But in the credit arena as in the area of mately 12,000 federal credit unions, 14,000 com- employment practices, the effects test will remercial banks, 4,000 savings and loan associa- main largely a matter for the courts to apply. tions, and 475 mutual savings banks in this country that are subject to the ECOA. I am not suggesting that the agencies are un- EXAMINA TION P ROC ED URES able to make any effects test determinations. We can and have. For example, we have said in Reg- Analysis of the implications of a bank's lending ulation B that a creditor may not discount an ap- policies and practices requires a complex evaluaplicant's alimony or pension income because of tion of information from a great variety of the adverse effect that such a policy would have sources. This information comes from court casupon women and the elderly. es that establish precedent on particular issues; it When a bank chooses, for example, to ration comes from the Census Bureau or local governcredit by extending credit only to its current cus- ment bodies, which provide data about the resitomers, we can only warn the bank of a potential dents of a bank's community; it comes from the effects test problem. Such a problem might exist, bank in the form of written lending policies or in for example, in a bank whose depositors con- interviews; it comes from residents in the comsisted primarily of white customers in a relatively munity; and finally, it comes from observations integrated market area. We do not have the time made by the examiner. A discussion of the more or resources to perform an effects test analysis as salient aspects of the examination procedures for comprehensively as that undertaken during liti- discrimination may be useful. gation. Nor are we in a position to judge in all The initial focus is the bank's articulated lendcases whether the policy is justified by business ing policy. It is essential to establish the "articunecessity. lated standards" of a bank's lending policy for The Board does not presently contemplate two reasons. First, to make the determination amending Regulation B to provide guidelines re- that the bank's standards are nondiscriminatory, garding the effects test. The Compliance Hand- the examiner has to know what standards the book explains the effects test in some detail and bank says it uses. Next, the examiners must deprovides specific examples of practices that have termine whether the standards are applied in a a discriminatory impact. Copies of the Hand- nondiscriminatory fashion. book have been distributed to all state member The standards are first reviewed to determine banks. The Board views the Handbook as an ef- if they are either overly subjective or so vague fective means of providing guidance regarding that they cannot accurately predict risk. For exprohibited, illegal practices. ample, a factor that gives more weight to profes- Frequently, the Handbook is more useful than sional employment status might have a dis- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 25 proportionate adverse impact on women or the potential impact a bank's lending standards minorities and, at the same time, bear little rela- may have on its community. tionship to willingness or ability to repay. Since 1970 census data may, in many cases, When examining real estate loans, the examin- give an outdated and incomplete picture of a er is particularly alert to underwriting criteria, bank's current community, the examiners have which, while not demonstrably related to mort- been instructed to conduct interviews outside the gage risk, can severely limit the amount and type bank, when necessary, to get a better idea of curof credit available in older, integrated areas. rent neighborhood composition. These inter- Such restrictive criteria might include arbitrary views are to be undertaken with community cutoff points for age of property and structural groups, neighborhood housing groups, local micriteria such as minimum number of square feet, nority leaders, and city officials. The interviews type of heating, and minimum setback. Census outside the bank become particularly crucial for data regarding housing characteristics reveal that banks in rural areas where no census data are inner city housing is typically older, has fewer available. square feet, and is more likely to be affected by Interviews outside the bank are useful for purrestrictive underwriting criteria than housing in poses other than obtaining current demographic the suburbs. An age cutoff of 20 years, for ex- information. Interviews provide an opportunity ample, will have the effect of automatically for examiners to ascertain how the community denying a loan to many applicants who seek to perceives the bank is performing its lending funcbuy property in the inner city. tion. In addition, interviews with persons outside The examiners have been instructed to consid- the bank are likely to be a useful source of inforer the implications of such lending policies as the mation regarding such practices as "pre-screenuse of the remaining economic life of real estate ing" or "steering" of customers to or away from as an underwriting criterion. An estimate of the certain financial institutions. remaining economic life of a piece of property The bank's loan application activity is then ancan be a highly arbitrary number that might be alyzed to determine the proportional representaused in an improper fashion. We have always in- tion of the various segments of the community in terpreted economic life as a carefully considered the bank's accepted and rejected loan application value that should accurately reflect the condition files. By utilizing monitoring data, when availof a parcel of real estate. When used properly, able, to identify applicants who are members of remaining economic life can be a more precise protected classes, the examiner reaches a prelimindicator of value than an adjective describing inary conclusion as to whether the bank's lendthe condition of property. ing policies have a disproportionate impact on Alternative approaches, such as an adjective protected classes in the bank's community. describing the condition of a piece of property, If the examiner reaches a preliminary conmay also be used in a subjective fashion and may clusion that discrimination is present, the examlead to abuse. For these reasons, we caution ex- iner then tests the validity of that conclusion by aminers to be very precise in analyzing loan un- analyzing the treatment of individual applicants. derwriting criteria. We also identify for the ex- A determination is made whether exceptions to aminers those criteria, such as age of property, the loan policy are justified and if there appears that are clearly impermissible. to be any pattern to the exceptions that might fa- For this and other reasons, it is important for vor one class at the expense of another. the examiner to become familiar with the housing Once the examiner has arrived at a final conand demographic characteristics of a bank's clusion regarding the existence of discrimination, community. Earlier this year, the System's ex- the findings are reviewed with management of aminers were provided with census data for each the bank being examined. The results are then standard metropolitan statistical area that was summarized and placed in the examination retracted as of the 1970 census. Using the bank's port. The examiners are instructed to put all sigcommunity delineation contained in its Commu- nificant findings in the open section of the examinity Reinvestment Act statement, the examiner nation report. Consequently, findings regarding is then able to develop a better understanding of effects test issues are placed in the open section Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

26 Federal Reserve Bulletin • January 1980 of the report regardless of whether they are sub- deal of information by interviewing people outstantiated or potential problems. side the bank. Every attempt is made to correct violations One method of determining the existence of during the examination process, or in subsequent prescreening that has been suggested is that of correspondence or follow-up examinations. The "testing." Briefly, testing is a procedure that incease-and-desist order is the final enforcement volves sending two financially comparable credit vehicle the Board can utilize. This year, the applicants, one of which is a member of a pro- Board issued two cease-and-desist orders that tected class, to the same institution. The treatdealt with consumer matters, both of which in- ment given one applicant is compared with the volved ECOA violations. One of these orders re- experience of the other to determine if the memquired the bank to conduct a file search and to ber of the protected class was wrongfully denied release from liability any applicant whose signa- or discouraged from applying for credit. ture had been illegally required on a mortgage in- A task force of the Examination Council is strument. presently reviewing the feasibility and desirability of testing. Because the issue affects all the agencies whose supervised institutions make GEOGRAPHIC DISTRIBUTION OF LOANS mortgage loans, the Examination Council provides a logical forum in which to explore this In those institutions that are subject to the Home matter. Mortgage Disclosure Act, the examiners analyze information contained in the HMDA statement. By reviewing the bank's annual record of mort- ADOPTION OF DATA COLLECTION S YSTEMS gage lending by census tract, the examiner can gain some impressions regarding the geographic A question has been raised as to whether Reguladistribution of mortgage and home improvement tion B should be amended to require more comloans and the impact that might have on pro- prehensive data notation. In the event that a tected classes within the community. This infor- change in the existing monitoring requirements mation is useful for assessments under the Com- of Regulation B is deemed advisable, it would be munity Reinvestment Act as well as the Fair inappropriate to make the additional require- Housing Act and ECOA. ments a part of Regulation B. This is because the When necessary to arrive at a final assessment regulation currently covers all creditors, many of of a bank's lending performance, the geographic which, such as mortgage bankers, are not subject distribution of loans that are not covered by the to routine examinations. It would be unnecessarrequirements of the HMDA is also considered by ily burdensome to subject those creditors to adthe examiner. These loans include all types of ditional recordkeeping requirements when the innon-real-estate credit and all loans made by formation may never be used. Under Regulation banks that are not subject to the HMDA report- B the Board has authority to institute an ening requirements. The analysis is quite time con- hanced data collection system, applicable to state suming but can be made by manually geocoding member banks, under a separate regulation should loans on a map. The focus is essentially the that prove to be the proper action. same; to determine if credit is being wrongfully Some other agencies have developed their own denied in low income or in racially integrated data notation packages. The Board is currently areas. studying the experiences of those agencies in their respective supervised institutions to evaluate the effectiveness and feasibility of the PRESCREENING agencies' systems. The methodologies of the three agencies appear to be variations of the Examiners determine if prescreening exists by same central theme. The data collection is mananalyzing a bank's procedures for interviewing datory and identifies not only the personal charapplicants and observing some of these inter- acteristics of the applicant but certain characterviews taking place. Examiners also gain a great istics of the property and the credit extension as Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 27 well. The examiners then use these "data logs" adoption of mandatory recordkeeping requireto generate a profile of the bank's lending policy ments, the Board will consider doing so. and compare the treatment of applicants generally with that afforded members of protected classes. MONITORING FIELD EXPERIENCES The quality and quantity of data available to the examiners of other agencies, because of en- We have been asked whether the Board would hanced data collection, may prove to be better consider maintaining data on patterns of violathan that available to ours. That is why we are tions, on effects test situations, on narratives to closely monitoring their experiences. The differ- accompany the citation of violations, and on the ence between the types of comparisons made frequency and effectiveness of making contacts possible under these mandatory recordkeeping outside the banks. requirements and those made by the System's The Board currently analyzes this kind of inexaminers, however, appears to be more one of formation on a case-by-case basis. In addition, form than of substance. When the monitoring data our system is designed to accumulate data on the presently called for are available, the Federal Re- numbers of violations. While the accumulation of serve examiners are able to identify loans to data on additional categories might be very usemembers of protected classes. The examiners ful, our experience indicates that an automated are also instructed to determine the bank's ar- system does not have the capacity to summarize ticulated lending standards by sampling and in- meaningfully any narrative information. An alterviewing techniques. Examiners look for dispar- ternative would be to collect this information ate treatment of protected classes by analyzing manually from each of the 1,000 examination reloan applications and making comparisons with ports prepared every year, but our experience the bank's articulated lending standards. The suggests that doing so would be unduly cumbertype of comparisons made and the type of data some. analyzed by examiners from the different agen- We are nearing the completion of a revision of cies therefore appear to be the same. our data system. We have attempted to accom- One major difference appears to be the format modate the need for more qualitative information in which these data are organized. When manda- in the data system and will consider broadening tory recordkeeping exists, the burden is on the the categories. However, because the data sysloan officer to collect and organize the data for tem compiles only numerical information, the inthe examiners. Under the Board's procedures clusion of narrative information in the computthe burden is placed on the examiner to collect erized data system would not be workable. and organize the data. Our experience has suggested that the magnitude of the problem may not justify the ex- REGULATION B ENFORCEMENT GUIDELINES pense associated with additional recordkeeping requirements. Only a very small proportion of the A question has also been raised as to the status residential mortgages outstanding are held by of the interagency Regulation B Enforcement state member banks. In fact, in dismissing the Guidelines. New draft Guidelines have been presuit brought by the Urban League against the pared based upon the public comments. The new Board, the Court noted that the mortgage loans draft has been field tested by each of the agencies held by state member banks "account even in participating in its development. The results of the aggregate for only a miniscule percentage of the field tests are being compiled. A task force home mortgage loans." Procedures adopted by will reconvene shortly to determine if additional the other agencies may not be cost effective revisions will be necessary to accommodate any when applied to state member banks. problems in implementation that were identified. The Board will continue to evaluate the meth- There is no fixed timetable for completion of the odology and results of the data collection efforts Guidelines. However, we anticipate that they of other agencies. To the extent that the current will be considered by the Examination Council procedures can be materially enhanced by the and the agencies early next year. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

29 Announcements ADJUSTMENT OF INTEREST RATE CEILINGS ning of each month. Recently, the yield on Treasury securities that mature in two and one-half Regulatory moves designed to help the small sav- years has averaged approximately 11.20 percent. er—including a new two-and-one-half-year cer- Thus, the comparable ceiling for thrift institutificate tied to the yield on Treasury securities- tions, were the new certificate available, would were announced on December 14, 1979, by the be 10.70 percent and for banks, 10.45 percent. Federal Home Loan Bank Board, the Federal After compounding, the effective yield on this in- Deposit Insurance Corporation, the Federal Re- strument would be 11.46 percent and 11.18 perserve Board, and the National Credit Union Ad- cent for thrift institutions and banks respectiveministration. ly. The ceiling rate that is established monthly The changes, which went into effect January 1, will apply to all new deposits issued throughout will also increase the ability of federally insured the month. The ceiling on outstanding deposits of depositary institutions to compete for funds with this type will not change during the life of the market instruments that are not subject to inter- deposit. est rate ceilings. The new certificate replaces the four-year vari- The announcement represents a further adjust- able-rate deposit that was established effective ment of interest rate ceilings that began earlier last July 1. All fixed-rate ceilings remain in efthis year. When announcing small-saver actions fect, however. effective last July 1, the agencies said they 2. To increase by lU of a percentage point the planned to consult near the end of the year to ceiling on deposits maturing in 90 days to 1 year. determine whether further changes in ceilings The new nominal ceiling for commercial banks is would be appropriate. 53/ percent, while thrift institutions may pay up 4 The new measures are as follows. to 6 percent. 1. To replace the existing four-year floating- 3. To permit banks to pay the same rate as rate time deposit with a new floating-rate certifi- thrift institutions when individual retirement accate with a maturity of two and one-half years or count/Keogh and governmental unit funds are more tied to the yield on Treasury securities ma- deposited in the new two-and-one-half-year or turing in two and one-half years. For thrift insti- more certificates. Banks also may pay the same tutions (savings and loan associations and mutual as thrift institutions on IRA/Keogh and governsavings banks), the ceiling rate will be 50 basis mental unit deposits of $10,000 or more placed in points below the two-and-one-half-year Treasury 26-week money market certificates regardless of rate, while for banks the ceiling rate will be 75 the level of the Treasury bill rate. However, the basis points below the Treasury rate. Federal thrift institutions' differential on such certificates credit unions may offer the same variable ceiling when the Treasury bill rate is below 9 percent rate as do thrift institutions on share certificates continues to apply for other depositors of 26of 90 days or more. There are no minimum de- week money market certificates. posit requirements, and compounding of interest The new actions were taken by the individual will be permitted. agencies after consultations required by law. The The ceiling will be established monthly for new agencies also indicated that they plan to monitor deposits based on the rate announced by the future deposit flows among depositary institu- Treasury three business days before the begin- tions on a continuing basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

30 Federal Reserve Bulletin • January 1980 INFORMATION STATEMENT RE part of a bank's efforts to ascertain the community's COMMUNITY REINVESTMENT ACT credit needs. The Board noted that it has received protests The Federal Reserve Board on January 3, 1980, suggesting that a lending institution has a poor issued an information statement for the guidance lending record because it is not returning as of those affected by the Community Reinvest- much in the form of loans to community memment Act (CRA). bers as it receives in deposits from that The CRA requires the Board and other federal community. In this connection, the Board stated supervisors of financial institutions to encourage the following: banks and other lenders to meet the credit needs of the local communities where they are char- Although CRA is directed at the problem of tered, within the bounds of safe and sound meeting sound community credit needs, it was banking. The federal regulators are required by not intended to establish a regulatory influence the act to assess the records of institutions that on the allocation of credit. In implementing the Act the Board has acted on the belief that banks they supervise in meeting the credit needs of the are in the best position to assess the credit needs communities and to take the records of the instituof their own local communities and the Board tions into account when they are acting on appli- believes that meetings with community groups cations from lenders to expand their activities. can be an integral part of the process. . . . The Board believes that there are many rea- The CRA is aimed particularly at encouraging sons why a particular neighborhood may financial institutions to give special attention to generate more deposits than loan requests, or the needs of low- and moderate-income areas in more requests than deposits, and that disparity meeting the credit needs of the communities in in a particular local area between credit granted which they operate. In October 1978 the Federal and deposit totals is not prima facie evidence of Reserve, together with other federal supervisors discrimination. . . . However the Board views as a serious matter of financial institutions, issued regulations to imdisparities in lending to different areas that do plement the CRA. not appear to be fully attributable to safety and The Board's statement, which is directed to soundness considerations or to factors beyond a state-chartered commercial banks that are mem- bank's control. bers of the Federal Reserve System and to bank holding companies, has been forwarded to the The Board's statement included these other Federal Financial Institutions Examination principal points: Council for its consideration. 1. When faced with evidence of such dis- The Board said it is working to simplify its pro- parities, the Board will inquire closely into the cedures for handling applications that are bank's efforts to ascertain credit needs and to protested by community groups, or others, on make the community aware of its credit services CRA grounds. The Board said that it and also into any policies or practices that may discourage credit applications from, or discriminate . . . expects to develop a procedural guide for against, parts of the bank's community. members of the public participating in CRA mat- 2. The Board expects banks to offer throughters. The procedures are, of necessity, subject to out their communities the types of loans they say change as more experience is acquired, and all in their CRA statement that they offer. procedures will be coordinated as far as possible 3. The Board will give weight to concerted efwith those adopted by other federal agencies charged with supervision of financial institu- forts by lenders to improve low- and moderatetions. income areas of communities. 4. In some cases the Board may give weight to Meanwhile, the Board said it has adopted a commitments for future action, as it has long policy of encouraging meetings between appli- done in considering what effect the approval or cants and protesting parties to help solve disapproval of an application would have on the problems by facilitating communication, in con- banking convenience and needs of a community. nection with the Board's view that communica- 5. When this is done, the Board, in considtion with community members is an important ering future applications, will review a bank's Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 31 record closely to determine if the bank is meeting on the allocation of credit. In implementing the its commitments. act, the Board has acted on the belief that banks are in the best position to assess the credit needs 6. Just as the Board expects that a bank will of their own local communities and the Board communicate responsibly with all segments of its believes that meetings with community groups community, it also expects that community or- can be an integral part of the process. The first ganizations filing protests will investigate assessment factor in the Board's CRA regulation complaints and document them. stresses a bank's activities to ascertain the credit needs of its community, including communica- 7. With respect to the Federal Reserve's poltion with community members. More recently icy of trying to improve communication between the Board has adopted, as a regular procedure lending institutions and their communities by for applications that are protested on subbringing them together to consider protests: First, stantive CRA grounds, a policy of encouraging even if a protest is withdrawn, the Board has an meetings between applicants and protestants, one purpose of which is to facilitate communicaobligation to consider the applicant's CRA rection between the parties. ord; second, any decision to negotiate is up to the Several community organizations have subparties involved; and third, the Board will not mitted materials to the Board suggesting that necessarily approve an agreement between the particular lending institutions have poor lending parties. records because they do not return to particular neighborhoods in loans as much as they accept The Board does not endorse agreements to alfrom those neighborhoods in deposits. The locate credit. Board believes that there are many reasons why The Board said it welcomes suggestions for the a particular neighborhood may generate more improvement of its processes for handling CRA deposits than loan requests, or more requests protests and other matters. than deposits, and that disparity in a particular local area between credit granted and deposit The Board's statement follows: totals is not prima facie evidence of discrimination. The Board is more concerned with the The Board of Governors of the Federal Re- lender sensitivity to the needs of each area. serve System is issuing this statement for the Banks may sometimes fail to recognize the guidance of applicants, community groups, and credit needs of creditworthy borrowers in the other persons interested in the Community Rein- banks' communities. For example, in its investivestment Act of 1977 (CRA or the Act). On the gations to date, the Board has found some basis of its experience during the first year of op- evidence of disparity in banks' housing-related eration under CRA, the Board is working to lending to low- and moderate-income neighborsimplify its procedures for protested appli- hoods compared with higher income areas. cations, and it expects to develop a procedural Factors affecting housing demand and considguide for members of the public participating in erations of safety and soundness do not appear CRA matters. The procedures are, of necessity, to account fully for the extent of these dissubject to change as more experience is ac- parities. quired, and all procedures will be coordinated as The Board expects banks to offer types of far as possible with those adopted by the other credit listed on their CRA statements throughout federal agencies charged with supervision of fi- their communities. In assessing banks' records, nancial institutions. the Board views favorably the record of a bank CRA was enacted against a background of that has defined its community reasonably and concern for unfair treatment of prospective bor- that offers credit that appears to help meet credit rowers and unwarranted geographic differences needs in its entire community. The Board will in the pattern of lending. The act requires the also give favorable weight to bank leadership in Board to encourage banks to meet the credit concerted efforts to improve low- and moderateneeds of the local communities in which they are income areas in their communities. However, chartered consistent with the safe and sound op- the Board views as a serious matter disparities in eration of those banks, to assess the banks' lending to different areas that do not appear to records of meeting those credit needs, and to be fully attributable to safety and soundness take their records into account in the Board's considerations or to factors beyond a bank's evaluation of various applications to expand the control. When faced with evidence of such disbanks' activities or those of their parent holding parities, the Board will inquire closely, both into companies. the bank's efforts to ascertain credit needs and Although CRA is directed at the problem of to make the community aware of its credit servmeeting sound community credit needs, it was ices and into any policies or practices of the not intended to establish a regulatory influence bank that may discourage credit applications Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

32 Federal Reserve Bulletin • January 1980 from, or discriminate against, parts of the bank's tion. First, the withdrawal of a protest does not community. alter the Board's obligation to assess the CRA In acting upon applications covered by CRA, record of an applicant carefully. Second, while the Board considers a bank's CRA record as a the Board reasonably expects all parties to use part of the convenience and needs aspect to be these meetings to explain and clarify their posievaluated along with other relevant factors. Fol- tions, any decision to negotiate is entirely within lowing its longstanding policy, the Board may in the parties' discretion. Finally, even if parties some circumstances give weight to com- agree, the Board need not approve their agreemitments for future actions as part of its ment. consideration of convenience and needs. Such In particular, the Board does not endorse commitments are not viewed as part of the CRA agreements to allocate credit. The Board is record but may be weighed with it, and they are aware that many banks have on their own initiaconsidered an important aspect of the Board's tive adopted special-purpose credit programs, or role in encouraging improved performance. pilot programs to test new credit offerings. The When such commitments are offered by an ap- Board does not wish to discourage these efforts. plicant to outweigh adverse aspects in a CRA However, the Board will closely scrutinize any record, the Board will consider the likelihood agreements to ascertain that they are not inconthat they will be accomplished and in future ap- sistent with the safety and soundness of the bank plications and examinations will review closely involved, and do not establish a preference for an applicant's performance on previous CRA credit extensions inconsistent with evenhanded commitments. treatment of borrowers throughout the community. The Board has been working to simplify and streamline its procedures for protested appli- In designing procedures to accomplish the cations and expects to produce a guide for act's objectives, the Board appreciates the usecommunity organizations that are interested in ful comments it has received from banking CRA matters. In the meantime System staff is organizations and community groups, and it welavailable to advise parties on procedural re- comes additional suggestions. The Board quirements. Just as the Board expects banks to believes that the applications process can encommunicate responsibly with all segments of courage communication between banks and their community, it expects community organi- their communities and help insure that sound zations to investigate and document their credit needs are met within the capacity of decomplaints, and to bring those complaints to the positary lending institutions. attention of the banks involved before protesting an application. The Board further expects all parties to an application to observe the Board's FEDERAL RESERVE BANK EARNINGS procedural rules, and cautions all parties against ex parte communications—private communications to Board Members without other parties Preliminary figures indicate that gross current present. Direct communication on protested ca- earnings of the Federal Reserve Banks amounted ses with Members of the Federal Reserve Board to $10,312 billion during 1979, an increase of 22.0 must be in writing and will be part of the record. percent from a year earlier. Current expenses for As a part of its revised procedure when a prothe 12 Reserve Banks and their branches totaled test is considered substantive, the Board now $694 million—6.3 percent above 1978. asks that applicants and protestants meet together with Reserve Bank staff to attempt to clarify Assessment for expenditures of the Board of the issues between them. These meetings have Governors amounted to $50 million, and net debeen useful in helping the staff to plan the direc- ductions in the profit-and-loss account amounted tion of its investigation and to identify areas or to $153 million, primarily because of a net loss of questions meriting special attention. In addition, $154 million on sales of U.S. government secuwhen particular differences among the parties have arisen from misunderstanding of the facts rities. or of another party's position, these meetings Net earnings before payments to the Treasury have helped resolve those differences. totaled $9,415 billion. Payments to the Treasury Of five protested applications that the System as interest on Federal Reserve notes amounted has acted upon, three protests have been reto $9,279 billion; statutory dividends to member solved by negotiation, and agreements reached banks, $67 million; and additions to Reserve in negotiations played a role in the Board's deci- Bank surplus, $69 million. sion on a fourth. There are, however, several aspects of this process that merit special atten- Under the policy adopted by the Board of Gov- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 33 ernors at the end of 1964, all net earnings after banking subsidiaries or activities for which the the statutory dividend to member banks and ad- company has not received approval by the Fedditions to surplus to bring the surplus to the level eral Reserve beyond December 31, 1980, will be of paid-in capital were paid to the U.S. Treasury a violation of the act. as interest on Federal Reserve notes. The Board's statement continued: Compared with 1978, gross earnings were up $1,857 billion mainly because of an increase of The Board will regard any violation of section $1,705 billion on U.S. government securities. 4 of the BHCA resulting from failure to divest or obtain approval for retention prior to December Earnings of the Federal Reserve System are de- 31, 1980, as an extremely serious matter. . . . rived primarily from interest paid on U.S. The Board intends to enforce the provisions of government securities that the Federal Reserve the BHCA by taking appropriate actions, includhas acquired through open market operations, ing initiation of cease-and-desist proceedings, one of the tools of monetary policy. . . . assessment of civil money penalties, or referral for criminal prosecution . . . against the bank holding company, as well as its officers and directors. Generally, the severity of a violation DIVESTITURE DEADLINE FOR will not be mitigated because a bank holding NONBANKING A CTIVITIES company has an application for retention . . . pending at the Board December 31, 1980, or has appealed the Board's action on an application. The Federal Reserve Board on December 13, 1979, emphasized that it will regard as an "extremely serious matter"—possibly resulting in The Board said that it would act as expedicivil penalties or referral for prosecution—any tiously as possible on all applications and reviolation of the Bank Holding Company Act re- quests concerning the 1980 deadline, but it resulting from failure by affected bank holding minded companies that applications to keep subcompanies to comply with a December 31, 1980, sidiaries might be denied, and that companies deadline for divestiture of nonbanking activities. should therefore allow sufficient time for divesti- The Board's message was contained in a pol- ture if denial occurs. icy statement directed to certain companies that became bank holding companies by virtue of the 1970 amendments to the Bank Holding Company COUNTR YEXPOSURELENDING SURVEY Act. These are one-bank holding companies that acquired nonbank activities between June 30, International lending by U.S. banks with sizable 1968, and December 30, 1970. The 1970 amend- foreign banking operations, as of June 30, 1979, ments generally require that unless these com- increased little in the first half of 1979, according panies drop their bank holdings they must either to a report on December 14, 1979, by the Office divest such nonbank subsidiaries, or get Board of the Comptroller of the Currency, the Federal approval to keep them, by December 31, 1980. Deposit Insurance Corporation, and the Federal The policy statement concerns companies that Reserve Board. The report was based on a semihave not yet complied fully with the 1980 re- annual survey covering foreign offices of 128 quirements of the act. U.S. banking organizations with significant for- In earlier statements, the Board advised these eign banking operations. companies to submit their plans for complying The results concerned lending by the U.S. with the law. The Board is concerned about the banks across borders and lending in a currency companies that have failed to respond or have other than that of the borrower. If increased acresponded only partially and stressed that it has tivity of U.S. banks with the foreign offices of no authority to extend the 1980 deadline or to other U.S. banks is deducted, the figures show make exceptions. virtually no net growth. Thus, the Board noted, for companies subject Cross-border and nonlocal currency lending to to the 1980 divestiture provisions of the act, re- less-developed countries that are not members of tention by a bank holding company of any non- the Organization of Petroleum Exporting Coun- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

34 Federal Reserve Bulletin • January 1980 tries increased slightly, from $52.2 billion to Such placements of deposits are usually for very $54.4 billion. However, this increase was offset short periods. by a decline in such business with developed For most other groups of countries, short-term countries. In addition, the survey indicated that claims accounted for slightly less than half of the local currency lending to local borrowers by for- total claims, although the proportion varied eign offices of U.S. banks increased $3 billion in among countries. the first six months of 1979, to a total of $61 billion. Type of Borrower Types of Loans Businesses with other banks accounted for the largest amount, equaling $120 billion. Most of the The survey concentrated on data involving lend- claims on banks were on those located in the ing from a bank's offices in one country to resi- G-10 countries and the offshore banking centers. dents of another country and lending in a cur- Lending to the private nonbank sector totaled rency other than that of the borrowers. These are $62 billion, and loans to the public sector known as cross-border and cross-currency loans. amounted to $39 billion. This last category in- Cross-border and cross-currency loans are cluded foreign central banks and commercial those most closely associated with country risk; nonbank enterprises owned by government. The such claims totaled $221 billion in June 1979. distribution by type of borrower varied signifi- Claims on residents of Switzerland and the Group cantly from country to country. of Ten (G-10) developed countries represent 41 percent of this total. Another 22 percent represents claims on residents of "other developed Guarantees countries" and "offshore banking centers."1 Claims on residents of developing countries that The cross-border and cross-currency claims that are not members of OPEC constitute 25 percent are guaranteed by residents of another country of total claims. are reallocated from the country of residence of In addition, the banks reported $61 billion in the borrower to another country in two major local currency claims that were held by their for- ways. First, claims on a bank branch located in eign offices on residents of the country in which one country when the head office is located in the office was located. An example would be another country are allocated to the country of mark claims on German residents held by the the head office. Since a branch is legally a part of German branch of the reporting U.S. bank. To a the parent, claims on a branch are treated as large extent, these local currency claims were being guaranteed by the head office. Second, matched by $51 billion in local currency liabili- claims on a borrower in one country that are forties due local residents. mally guaranteed by a resident of another country are allocated to the latter country. These reallocations are thought to provide a better approxi- Maturities mation of country exposure in the banks' portfolios than the unadjusted figures. More than two-thirds of the reported cross-bor- Most of the shifts are accounted for by the der and cross-country claims had a maturity of transfer of claims on branches (and, when guarone year or less. Only $17 billion in claims had a anteed, subsidiaries) of banks to their head ofmaturity in excess of five years. Short-term fices ($44 billion of $57 billion). In general, the claims are especially prominent in the G-10 coun- reallocations primarily affect the offshore banktries and the offshore banking centers where a ing centers and some of the developed countries. large volume of interbank lending takes place. For example, claims on the offshore banking centers decreased from $31 billion to $8 billion and claims on the United Kingdom decreased from 1. Countries in which multinationa lbanks conduct a large international money market business. $36 billion to $19 billion. For most less-devel- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 35 oped countries, a relatively small portion of The second policy statement approved by the claims is externally guaranteed. The total for Board deals with corrective actions by the claims on foreigners by country of guarantor is agencies. It calls for the following procedures. about $196 billion, or $25 billion less than the to- 1. A federal bank regulatory agency initiating tal for claims by country of borrower. This re- a formal enforcement action against a bank holdsults from U.S. residents guaranteeing about $29 ing company or a commercial bank will notify the billion in claims on foreign residents and foreign- other two agencies. ers guaranteeing about $5 billion in claims on 2. Review by a committee composed of the di- U.S. residents. rectors of bank supervision of the three agencies of any differences of view among the agencies on actions to be taken. Unresolved differences will Commitments to be referred to the Examination Council members Provide Funds for Foreigners of the bank supervisory agencies. 3. Arrangements for notification, by the Fed- The survey also provides information on contin- eral Reserve and Federal Deposit Insurance Corgent claims on foreigners. The banks were asked poration, to the appropriate state supervisory auto report only those contingent claims when the thority of intent to institute a formal corrective bank had a legal obligation to provide funds. The action against a bank holding company or stateamounts total $68 billion, 77 percent of that total chartered bank. being on the private sector, including banks. REGULATION H: AMENDMENTS POLICY STATEMENTS FOR BANK SUPERVISORS The Federal Reserve Board has adopted amendments to rules announced in July establishing The Federal Reserve Board has adopted two pol- uniform standards for bank recordkeeping, conicy statements calling for coordinated action among firmation, and other procedures in making secufederal bank supervisors with respect to certain rities transactions for trust departments and othexamination, supervision, and corrective actions er bank customers. affecting bank holding companies and commercial The Board's revised Regulation H (Memberbanks. The statements were recommended to the ship of State Banking Institutions in the Federal Board and to the other federal bank supervisors Reserve System), effective January 1, 1980, inby the Federal Financial Institutions Examination cludes the following provisions: Council. 1. Recordkeeping. The following records of One policy statement, concerning inspection securities transactions must be kept by banks for of bank holding companies and examination of three years, in a manner forming an adequate subsidiary banks, would require coordinated in- record for audit: itemized daily records of purspections and examinations of at least the bank chases and sales; account records for customers; holding company and its lead bank in the case of and a separate record of each order to purchase (1) any bank holding company with consolidated or sell securities. assets of more than $10 billion; (2) any bank 2. Alternative confirmation requirements. holding company or lead bank of a bank holding When the bank uses a broker, the bank may send company in the two least favorable rating cate- customers the bank's confirmation or a copy of gories of the five-category uniform rating sys- the broker's confirmation within five days from tems for bank and bank holding companies used the time the bank executes the transaction or reby the agencies; and (3) any bank holding compa- ceives confirmation from the broker. Conny or lead bank of a bank holding company in the firmation may not be required in certain cases third, or middle, category of these rating sys- when the customer and the bank agree to a diftems if the institution's financial condition ap- ferent arrangement. pears to have worsened significantly since it was When the bank exercises investment discreinspected or examined. tion as agent for the customer, the bank must Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

36 Federal Reserve Bulletin • January 1980 provide quarterly reports to the customer. In Act, federal supervisory responsibility for forsuch cases the bank must identify separately its eign bank branches and agencies in the United fees in transactions in government securities for States. customers. Dealer markups need not be dis- All reports will be sent to the Federal Reserve, closed. which will collect them and act as processing 3. Policies and procedures. Banks making se- agent on behalf of the three federal supervisory curities transactions for customers must estab- agencies. lish written policies and procedures, including: The new uniform report of condition for for- Policies and procedures relating to supervision of eign bank branches and agencies will replace reofficers and employees, the equitable allocation ports of condition now being submitted to the of securities, and the equitable matching of buy- federal supervisory agencies and is patterned afand-sell orders; and requirements for bank em- ter the condition report required quarterly of all ployees involved in securities transactions for U.S. banks. customers to report their own securities transactions quarterly, with the exception of their transactions in U.S. government securities. EDGE CORPORATION 4. Exemptions. A bank that is in compliance REPORTS OF CONDITION with the rules of the Municipal Securities Rulemaking Board with respect to transactions in mu- The Federal Reserve Board on December 20, nicipal securities is deemed to be in compliance 1979, announced that beginning with reports for with the Board's recordkeeping and confirmation the end of 1979 most details of the quarterly rerequirements. In addition, the Board's rules ex- port of the financial condition of Edge corporaempt the securities activities of foreign branches tions with banking functions will be made public. of banks, and exempt banks that normally make Edge corporations are companies engaged in 200 or fewer securities transactions a year for international banking and financial operations. customers, not counting transactions in U.S. gov- They are required to file quarterly reports of their ernment securities, from certain recordkeeping condition with the Federal Reserve. The Board's requirements. decision to make their condition reports public places these reports on the same footing in this respect as a recently adopted report of condition UNIFORM REPORT OF CONDITION for U.S. branches and agencies of foreign banks. The Federal Financial Institutions Examination The Federal Financial Institutions Examination Council has adopted a new quarterly condition Council on December 27, 1979, announced adop- report for the foreign branches and agencies that tion of a report of condition to be required quar- will be made available to the public, in most deterly from U.S. branches and agencies of foreign tails on an individual office basis, on implementaand Puerto Rican banks. tion in mid-1980. The Council will shortly an- The quarterly reports of condition will be nounce details of the new condition report for made to the federal bank supervisory agencies to foreign branches and agencies. (See item above.) implement a part of the International Banking The quarterly condition reports of Edge corpo- Act of 1978. rations filed with the Federal Reserve will simi- The first reports will be filed for the quarter larly be made available, on an individual office that ends June 30, 1980, and must be submitted basis, on request. Previously, condition reports within one month of that date. Further reports of Edge corporations with banking functions will be filed 30 days after the end of each calen- have been made available in aggregate form but dar quarter. not for individual Edge corporations. The reports will serve supervisory and infor- The annual reports of income that Edge corpomational needs of the Comptroller of the Cur- rations must also file with the Federal Reserve rency, the Federal Deposit Insurance Corpora- will not be made available to the public. tion, and the Federal Reserve Board. These The Board's decision with respect to the conagencies share, under the International Banking dition reports of banking Edge corporations does Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 37 not affect the confidential treatment of similar A new "Federal Reserve Glossary" defines data concerning nonbanking Edge companies terms commonly used in banking, finance, and (which are essentially holding companies for for- Federal Reserve System operations. Copies may eign investments). be obtained without charge from Publications The condition reports of Edge corporations for Services, Room MP-510, Board of Governors of periods earlier than the last quarter of 1979 will the Federal Reserve System, Washington, D.C. continue to be held confidential. 20551. NEW PUBLICATIONS PROPOSED A CTIONS The Annual Statistical Digest, 1974-1978 is designed as a compact source of economic—and The Federal Reserve Board on December 13, especially financial—data. The object is to light- 1979, proposed for public comment a policy en the burden of assembling time series by pro- statement designed to help maintain the safety viding a single source of historical continuations and soundness of the banking system—particuof the statistics carried regularly in the FEDERAL larly of small community banks—and to facilitate RESERVE BULLETIN. The Digest also offers, at the change of ownership of such banks by least once a year, a continuation of series that amending the criteria applied in considering apformerly appeared regularly in the BULLETIN, as plications for formations of one-bank holding well as certain special, irregular tables, which the companies. The Board asked for comment through BULLETIN also once carried. The domestic non- January 31, 1980. financial series included are those for which the The Federal Reserve Board on December 14, Board of Governors is the primary source. 1979, proposed for comment a clarification and This issue of the Digest covers, in general, the simplification of the portions of its Regulation J years 1974 through 1978. It serves to maintain (Collection of Checks and Other Items and the historical series first published in Banking Transfer of Funds) dealing with check collection and Monetary Statistics, 1941-70, and continued and wire transfers. The Board asked for comwith the earlier issues of the Digest—for 1971- ment by February 15, 1980. 75, 1972-76, and 1973-77. The Federal Reserve Board published for com- Copies of the Digest are available from Pub- ment on December 18, 1979, a policy statement lications Services, Board of Governors of the that would prohibit insiders in state member Federal Reserve System, Washington, D.C. banks from profiting personally from sales of life 20551. The price is $10.00 per copy. insurance in connection with credit transactions. The Board asked for comment through March Flow of Funds Accounts, 1949-1978 is a statisti- 31, 1980. cal publication that presents the complete set of The Federal Financial Institutions Examinaflow of funds accounts in annual form: year-total tion Council recommended on December 14, flows and year-end outstanding amounts of as- 1979, adoption of a policy statement concerning sets and liabilities. It complements the current disclosure of enforcement actions against finanquarterly releases as an historical basebook and cial institutions supervised by the agencies on summarizes the full quarterly history that is pub- the council. The council requested action by the lished as a whole only in computer data tape agencies by January 11, 1980. form. The publication replaces the last preceding The Federal Reserve Board on December 20, annual volume, Flow of Funds Accounts, 1946- 1979, proposed for public comment revisions to 1975 (December 1976). bring the Board's Regulation F (Securities of Copies are available from Publications Services, Member State Banks) into conformity with re- Board of Governors of the Federal Reserve Sys- cent rule revisions by the Securities and Extem, Washington, D.C. 20551. The cost for single change Commission and also proposed simcopies is $1.75 or for 10 or more sent to one ad- plification of Regulation F. The Board asked for dress, $1.50 each. comment by March 1, 1980. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

38 Federal Reserve Bulletin • January 1980 CHANGES IN BOARD STAFF Board, and Anne Geary, Assistant Director, Division of Consumer and Community Affairs. The Federal Reserve Board has announced the following staff changes. George E. Livingston, Acting Assistant Con- S YSTEM MEMBERSHIP: troller has been appointed Assistant Controller, ADMISSION OF STATE BANKS effective December 16, 1979. Mr. Livingston, who joined the staff of the Board in 1969, holds a The following banks were admitted to member- B.A. from Syracuse University and an M.B.A. ship in the Federal Reserve System during the from American University. period December 11, 1979, through January 10, Michael J. Prell, Deputy Associate Director, 1980: Division of Research and Statistics, has been named Associate Director, effective December Florida 16, 1979. Tampa Exchange Bank and Robert A. Eisenbeis, Deputy Associate Direc- Trust Company of Florida tor, Division of Research and Statistics, has been Oregon promoted to Senior Deputy Associate Director, Aumsville Santiam Valley Bank effective December 16, 1979. Florence . . Oregon Pacific Banking Company John D. Smith, Assistant Director, Division of Utah Support Services, retired on December 31, 1979. Bountiful . . .. Rocky Mountain State Bank The Board also has announced the resigna- of Bountiful tions of Kenneth A. Guenther, Assistant to the Tremonton Golden Spike State Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

39 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON NOVEMBER 20, 1979 1. Domestic Policy Directive The information reviewed at this meeting suggested that real output of goods and services was falling in the current quarter following a stronger rebound in the third quarter than had been anticipated at the time of the Committee's meeting on October 6. Average prices, as measured by the fixed-weight price index for gross domestic business product, appeared to be rising at a pace close to the annual rate of 10 percent in the first three quarters of the year. Staff projections suggested a further contraction in economic activity during the first half of 1980 and an upturn later in the year. The rise in average prices was projected to moderate slightly as the year progressed, and the rate of unemployment was expected to increase substantially. Retail sales fell considerably in October, after having expanded rapidly during the third quarter in both constant and current dollars. Sales of new automobiles fell sharply in October and weakened further in early November. The index of industrial production changed little in October and remained near its midyear level. Nonfarm payroll employment rose substantially after three months of limited gains, but the rate of unemployment edged up to 6.0 percent. Private housing starts declined in October to an annual rate of 1.76 million units, compared with an average rate of 1.83 million units in both the second and third quarters, and building permits for new housing units fell appreciably. Sales of new and existing single-family homes were at a relatively high level in September, but available information suggested lower combined sales in October. Producer prices continued to rise at a rapid rate in October, reflecting further sharp advances in energy items and the spreading impact on costs of earlier increases in energy prices. In September consumer prices also continued to move up rapidly, with the most Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

40 Federal Reserve Bulletin • January 1980 pronounced increases concentrated in the energy, food, homeownership, and apparel components. In October the rise in the index of average hourly earnings of private nonfarm production workers moderated to an annual rate of about Vh percent, but over the first 10 months of the year the advance was close to the rapid pace of 1978. Labor cost pressures in the nonfarm business sector had remained intense in the third quarter, reflecting a sharp increase in total hourly compensation and virtually no improvement in productivity. On October 6 the Federal Reserve announced a series of complementary actions directed toward assuring better control over the expansion of money and bank credit and toward curbing speculative excesses in commodity and financial markets, including foreign exchange markets. The actions included an increase in Federal Reserve Bank discount rates from 11 percent to 12 percent; establishment of a marginal reserve requirement of 8 percent on increases in certain managed liabilities of member banks, Edge corporations, and U.S. agencies and branches of foreign banks; and a shift in the conduct of open market operations to an approach placing greater emphasis in day-to-day operations on the supply of bank reserves and less emphasis on confining short-term fluctuations in the federal funds rate. At its meeting on October 6, the Committee had decided that over the remainder of 1979 the Manager for Domestic Operations should place primary emphasis on restraining expansion of bank reserves in pursuit of the objective of decelerating growth of M-l, M-2, and M-3 to rates that would hold growth of these monetary aggregates from the fourth quarter of 1978 to the fourth quarter of 1979 within the Committee's ranges for that period. Specifically, the Committee instructed the Manager to restrain expansion of bank reserves to a pace consistent with growth from September to December at an annual rate on the order of Alh percent in M-l and ll12 percent in M-2 and M-3, provided that in the period before the next regular meeting the weekly average federal funds rate remained generally within a range of IIV2 to 15V2 percent. Because such rates of expansion would result in growth of the monetary aggregates in the upper part of their ranges for the year, the Committee also had agreed that over the three-month period somewhat slower growth would be acceptable. The Committee had anticipated that the shift to an operating Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 41 approach that placed primary emphasis on the volume of reserves would result in both a prompt increase and greater fluctuations in the federal funds rate. Over the first half of October, measures of bank reserves in general grew faster than had been anticipated at the time of the meeting on October 6, both because demands for reserves were unexpectedly strong and because System operations provided more reserves than had been expected. Subsequently, System operations were directed more firmly at restraining growth of reserves. As such operations limited growth of nonborrowed reserves while demands for reserves remained strong, member bank borrowings rose to a daily average of about $3 billion in the last two statement weeks of October and the federal funds rate rose to an average a little above \5lh percent in the final week. In the first half of November, demands for reserves eased, and member bank borrowings subsided to a daily average of about $2 billion and the federal funds rate declined to an average of about 13V2 percent. From September to the first half of November, total member bank reserves expanded at an annual rate of about IIV2 percent, slightly faster than over the three months from June to September. However, expansion of the monetary base and of nonborrowed reserves slowed sharply over the period from September to the first half of November, to annual rates of about 8 percent and 2lU percent respectively. Growth of M-l, which had accelerated in September and had been exceptionally rapid in the third quarter as a whole, slowed to an annual rate of 2xh percent in October. Growth of M-2 slowed less than that of M-l, to a rate of about 8V2 percent in October, as overall expansion in the interest-bearing components remained strong. A marked rise of net flows into money market certificates and other time deposits at commercial banks, fostered by substantially higher deposit yields, offset a sharp reduction in savings deposits. At nonbank thrift institutions, inflows into money market certificates and large-denomination time deposits also accelerated in October, but total net inflows slowed somewhat. High interest returns attracted near-record inflows into shares of money market mutual funds. Growth in loans and investments at commercial banks moderated appreciably in October. With demand deposits and savings deposits Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

42 Federal Reserve Bulletin • January 1980 weak or declining, however, banks increased their reliance on money market certificates and on the managed liabilities that became subject to marginal reserve requirements in the statement week beginning October 11. Since early October interest rates had risen sharply in both shortand long-term markets and had been unusually volatile. In this period, banks had raised their loan rate to prime business borrowers from 13V2 percent to a new high of 153/4 percent. Since the latter part of October, however, short-term market rates had declined from their peaks in apparent reaction to evidence of reduced monetary growth and to some easing of pressure in the federal funds market as bank demands for reserves moderated. In foreign exchange markets the downward pressure on the dollar that had developed in September was reversed in early October, and by the end of the month, the trade-weighted value of the dollar against major foreign currencies had risen about Vh percent. Around mid-November, however, the dollar came under renewed downward pressure and lost a portion of its October gain, in part reflecting developments relating to Iran. The U.S. trade deficit increased in September, as the cost of oil imports rose considerably further. For the third quarter as a whole the deficit was somewhat lower than that for the second quarter, however, as strong gains in agricultural and other exports more than offset the large rise in the value of petroleum imports. In the Committee's discussion of the economic situation and outlook, the members in general agreed with the staff appraisal that the unexpectedly strong rebound in real gross national product in the third quarter would be followed by some contraction in activity and by a rise in unemployment, although uncertainty was expressed about the depth and duration of the anticipated downturn as well as about its precise timing. Some members cited the onset of the heating season with energy prices so much higher than a year earlier, the overall rate of inflation, the recent sharp rise in interest rates, and the developing stringency in some financial markets as influences that might cause the contraction to be relatively severe. Continuation of the rapid rise in prices of goods and services remained a major concern of Committee members, some of whom thought that the risks were on the side of a rise greater than that currently anticipated. The prospects for supplies and prices of oil, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 43 which would have a substantial effect on the economy, were regarded as especially uncertain, in view of the political situation in Iran and of the meeting of petroleum-exporting countries scheduled to begin on December 17. At its meeting on July 11, 1979, the Committee reaffirmed the ranges for monetary growth in 1979 that it had established in February. Thus the Committee agreed that from the fourth quarter of 1978 to the fourth quarter of 1979, average rates of growth in the monetary aggregates within the following ranges appeared to be consistent with broad economic aims: M-l, IV2 to 4V2 percent; M-2, 5 to 8 percent; and M-3, 6 to 9 percent. Having established the range for M-l in February on the assumption that expansion of ATS and NOW accounts would dampen growth by about 3 percentage points over the year, the Committee also agreed that actual growth of M-l might vary in relation to its range to the extent of any deviation from that estimate. More recently, it appeared that expansion of such accounts would reduce measured growth of M-l over the year by about IV2 percentage points. After allowance for the deviation from the earlier estimate, the equivalent range for M-l was 3 to 6 percent. In contemplating policy for the period immediately ahead, the Committee took note of a staff analysis indicating that the behavior of the monetary aggregates since September had been reasonably consistent with the policy adopted on October 6, when the Committee had instructed the Manager to restrain expansion of bank reserves to a pace consistent with annual rates of growth from September to December on the order of 4V2 percent in M-l and lxh percent in M-2 and M-3 but had also stated that somewhat slower growth over the three-month period would be acceptable. The staff analysis noted that growth in M-l at an average annual rate of 5xh percent in November and December would be consistent with growth at an annual rate of 4V2 percent from September to December, although the pattern of change in recent weeks suggested that growth would be below the two-month average in November and above it in December. Growth of M-l at those rates or even somewhat slower ones would probably be associated with more rapid growth of M-2 over the September-December period than the lxli percent rate specified in October, because time deposits at banks were continuing to grow faster in relation to demand deposits than had been expected. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

44 Federal Reserve Bulletin • January 1980 In the Committee's discussion of policy for the period immediately ahead, the members indicated that in the present circumstances pursuit of the goal of restraining growth of the monetary aggregates from the fourth quarter of 1978 to the fourth quarter of 1979 within the ranges previously established for that period remained feasible and desirable; they agreed that in pursuit of that underlying goal, the broad objectives for monetary growth during the current quarter adopted at the meeting on October 6 were still appropriate. In contemplating objectives for rates of monetary growth over the weeks through the end of 1979 and into January 1980, the members differed somewhat in their views concerning the extent to which operations should be directed toward promoting acceleration in growth of M-l from the recently reduced rates. A few members favored operations consistent with the October 6 decision to seek a Axh percent annual rate of growth in M-l over the September-December period. A few members favored acceptance of a significantly slower rate of growth for the quarter. Most members, however, advocated a compromise between those two prescriptions. It was recognized that, while the decision affecting such a short period would have quite minor implications for monetary growth over the year ending in the fourth quarter of 1979, it would affect credit and money market conditions in the weeks ahead and the path of monetary growth entering the new year. Views with respect to an acceptable range of fluctuation for the federal funds rate did not vary greatly. It was agreed that the range should continue to be relatively wide, and most members indicated a preference for retaining the range of 11 lh to \5l12 percent adopted at the October 6 meeting. Some sentiment was also expressed for reducing the lower limit and some for both reducing the lower limit and raising the upper limit. At the conclusion of the discussion, the Committee agreed that in the conduct of open market operations over the remainder of 1979, the Manager for Domestic Operations should continue to restrain expansion of bank reserves in pursuit of the Committee's objective of decelerating growth of M-l, M-2, and M-3 over the fourth quarter of 1979 to rates that would hold growth of these monetary aggregates from the fourth quarter of 1978 to the fourth quarter of 1979 within the Committee's ranges for that period; it was recognized that persistence of recent relationships might result in growth of M-2 at Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 45 about the upper limit of its range. Specifically, the Committee instructed the Manager to restrain expansion of bank reserves to a pace thought to be consistent with growth on the average in November and December at an annual rate of about 5 percent in M-l and 8V2 percent in M-2, provided that in the period before the next regular meeting the federal funds rate remained generally within a range of IIV2 to 15V2 percent. The following domestic policy directive was issued to the Federal Reserve Bank of New York: The information reviewed at this meeting suggests that real output of goods and services is declining in the current quarter, after the third-quarter rebound, and that prices on the average are continuing to rise rapidly. Retail sales, which had expanded sharply during the third quarter in both constant and current dollars, dropped in October. Industrial production remained near its midyear level. Nonfarm payroll employment rose considerably, after three months of little growth, but the unemployment rate increased from 5.8 to 6.0 percent. Producer prices of finished goods continued to rise rapidly in October, in part because of further sharp increases in energy costs. The rise in the index of average hourly earnings during the first 10 months of the year was close to the rapid pace during 1978. On October 6 the Federal Reserve announced a series of complementary actions directed toward assuring control over the expansion of money and bank credit and toward curbing speculative excesses in commodity and financial markets, including foreign exchange markets. The actions included an increase in Federal Reserve Bank discount rates from 11 percent to 12 percent; establishment of a marginal reserve requirement on increases in the total of managed liabilities of member banks, Edge corporations, and U.S. agencies and branches of foreign banks; and a shift in the conduct of open market operations to an approach placing greater emphasis in day-to-day operations on the supply of bank reserves and less emphasis on confining short-term fluctuations in the federal funds rate. Following the announcement on October 6, the downward pressure on the dollar in the exchange markets that had developed in September was reversed, and by the end of October the trade-weighted value of the dollar against major foreign currencies had risen about Vh percent. In mid-November, however, the value of the dollar declined, reflecting in part developments concerning Iran. The U.S. foreign trade deficit increased in September as the cost of oil imports rose, but the deficit was somewhat lower for the third quarter as a whole than for the second quarter. Growth of M-l, which had accelerated in September and was exceptionally rapid in the third quarter as a whole, slowed sharply in October to an annual rate of 2V2 percent. Expansion of interest-bearing deposits included in M-2 remained strong, as a rise in net flows into time deposits at commercial banks in response to increased yields offset a contraction in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

46 Federal Reserve Bulletin • January 1980 savings deposits. Inflows of deposits at nonbank thrift institutions slowed somewhat. Flows into money market mutual funds accelerated. Growth of commercial bank credit moderated in October; nevertheless, banks increased their reliance on the negotiable, large-denomination CD's and other managed liabilities that became subject to the marginal reserve requirement in the statement week beginning October 11. Both short- and long-term market interest rates have risen sharply on balance since the early October announcement of the System's policy actions, although most recently rates have declined; mortgage interest rates have increased substantially further. Taking account of past and prospective developments in employment, unemployment, production, investment, real income, productivity, international trade and payments, and prices, the Federal Open Market Committee seeks to foster monetary and financial conditions that will resist inflationary pressures while encouraging moderate economic expansion and contributing to a sustainable pattern of international transactions. At its meeting on July 11, 1979, the Committee agreed that these objectives would be furthered by growth of M-l, M-2, and M-3 from the fourth quarter of 1978 to the fourth quarter of 1979 within ranges of IV2 to 4V2 percent, 5 to 8 percent, and 6 to 9 percent respectively, the same ranges that had been established in February. The range for M-l had been established originally on the basis of an assumption that expansion of ATS and NOW accounts would dampen growth by about 3 percentage points over the year. It now appears that expansion of such accounts will dampen growth by about IV2 percentage points over the year; thus after allowance for the deviation from the earlier estimate, the equivalent range for M-l is now 3 to 6 percent. The associated range for bank credit is lxh to IOV2 percent. The Committee anticipates that for the period from the fourth quarter of 1979 to the fourth quarter of 1980, growth may be within the same ranges, depending upon emerging economic conditions and appropriate adjustments that may be required by legislation or judicial developments affecting interest-bearing transactions accounts. These ranges will be reconsidered at any time as conditions warrant. In the short run, the Committee seeks to restrain expansion of reserve aggregates to a pace consistent with deceleration in growth of M-l, M-2, and M-3 in the fourth quarter of 1979 to rates that would hold growth of these monetary aggregates over the whole period from the fourth quarter of 1978 to the fourth quarter of 1979 within the Committee's longer-run ranges, provided that in the period before the next regular meeting the weekly average federal funds rate remains within a range of IIV2 to 1572 percent. If it appears during the period before the next meeting that the constraint on the federal funds rate is inconsistent with the objective for the expansion of reserves, the Manager for Domestic Operations 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. Volcker, Balles, Black, Coldwell, Kimbrel, Mayo, Partee, Rice, Schultz, Mrs. Teeters, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 47 Messrs. Wallich, and Timlen. Votes against this action: None. (Mr. Timlen voted as an alternate member.) 2. Authorization for Domestic Open Market Operations On December 20, 1979, the Committee voted to increase from $3 billion to $4 billion the limit on changes between Committee meetings in System Account holdings of U.S. government and federal agency securities specified in paragraph 1(a) of the authorization for domestic open market operations, effective immediately, for the period ending with the close of business on January 9, 1980. Votes for this action: Messrs. Balles, Black, Coldwell, Kimbrel, Mayo, Partee, Rice, Schultz, Mrs. Teeters, Messrs. Wallich, and Timlen. Votes against this action: None. Absent and not voting: Mr. Volcker. (Mr. Timlen voted as an alternate member.) This action was taken on recommendation of the Manager for Domestic Operations, System Open Market Account. The Manager had advised that since the November meeting large-scale purchases of securities primarily to counter the effects of seasonal increases in currency in circulation had reduced the leeway for further purchases to about $500 million. It appeared likely that additional purchases would be required because projections indicated a need for further reserve-providing operations over the coming weeks. 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 made available a few days after the next regularly scheduled meeting and are subsequently published in the BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

49 Legal Developments AMENDMENTS TO REGULATION H bank shall mail or otherwise furnish to each such customer within a reasonable time the written notification The Board of Governors has adopted amendments to described in subparagraph (3). The bank may charge a its Regulation H to require that State member banks reasonable fee for providing the information described that effect certain securities transactions for customers in subparagraph (3). provide confirmation of and maintain records with respect to such transactions. (5) Securities Trading Policies and Procedures: Effective January 1, 1980 section 208.8 of Regula- Every State member bank effecting securities transaction H is amended as follows: tions for customers shall establish written policies and procedures providing: Section 208.8—Banking Practices (iv) that bank officers and employees who make investment recommendations or decisions for the ac- (k) Recordkeeping and confirmation of certain counts of customers, who participate in the determinasecurities transactions effected by State member tion of such recommendations or decisions, or who, in banks. connection with their duties, obtain information concerning which securities are being purchased or sold or recommended for such action, must report to the bank, within ten days after the end of the calendar (4) Time of Notification: The time for mailing or quarter, all transactions in securities made by them or otherwise furnishing the written notification described on their behalf, either at the bank or elsewhere in in subparagraph (3) shall be 5 business days from the which they have a beneficial interest. The report shall date of the transaction, or if a broker/dealer is utilized, identify the securities purchased or sold and indicate within 5 business days from the receipt by the bank of the dates of the transactions and whether the transacthe broker/dealer's confirmation, but the bank may tions were purchases or sales. Excluded from this reelect to use the following alternative procedures if the quirement are transactions for the benefit of the officer transaction is effected for: or employee over which the officer or employee has no (i) accounts (except periodic plans) where the bank direct or indirect influence or control, transactions in does not exercise investment discretion and the bank mutual fund shares, and all transactions involving in and the customer agree in writing to a different ar- the aggregate $10,000 or less during the calendar quarrangement as to the time and content of the notifica- ter. For purposes of this subparagraph (k)(iv), the term tion; provided, however, that such agreement makes "securities" does not include U.S. government or fedclear the customer's right to receive the written notifi- eral agency obligations. cation within the above prescribed time period at no additional cost to the customer; (6) Exceptions: The following exceptions to subparagraph (k) shall apply: * * * * (i) the requirements of subparagraph (k)(2)(ii) through (k)(2)(iv) and subparagraph (k)(5)(i) through (iii) accounts, where the bank exercises investment (k)(5)(iii) shall not apply to banks having an average of discretion in an agency capacity, in which instance (a) less than 200 securities transactions per year for custhe bank shall mail or otherwise furnish to each cus- tomers over the prior three calendar year period, extomer not less frequently than once every three clusive of transactions in U.S. government and federal months an itemized statement which shall specify the agency obligations; funds and securities in the custody or possession of the bank at the end of such period and all debits, credits and transactions in the customer's accounts during such period, and (b) if requested by the customer, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

50 Federal Reserve Bulletin • January 1980 AMENDMENTS TO REGULATION Q terest during the term of this deposit. A member bank may offer this category of time deposit to all depos- The Board of Governors has adopted three amend- itors. However, a member bank may pay interest on ments to Regulation Q, Interest on Deposits. The first any nonnegotiable time deposit of $10,000 or more amendment creates a new time deposit category with a with a maturity of 26 weeks which consists of funds maturity oil112 years or more. The second amendment deposited to the credit of, or in which the entire benefiincreases the ceiling rate of interest payable by mem- cial interest is held by: ber banks on time deposits with maturities of 90 days or more, but less than one year from 5V2 per cent to (1) the United States, any State of the United States, 53/4 per cent. The third amendment permits members or any county, municipality or political subdivision to pay interest on Individual Retirement Account/ thereof, the District of Columbia, the Commonwealth Keogh (H.R. 10) Plan and governmental unit funds at of Puerto Rico, the Virgin Islands, American Samoa, the same rate permitted mutual savings banks and sav- Guam, or political subdivision thereof; or ings and loan associations when such funds are invest- (2) an individual pursuant to an Individual Retireed in 26-week $10,000 money market time deposits or ment Account agreement or Keogh (H.R. 10) Plan esthe new 2xli year time deposit. tablished pursuant to 26 U.S.C. (I.R.C. 1954) §§ 408, Effective January 1, 1980, sections 217.7(b), (f), and 401, at a rate not to exceed the ceiling rate payable on (g) of Regulation Q are amended as follows: the same category of deposit by any Federally insured savings and loan association or mutual savings bank. Section 217.7— Maximum Rates of Interest Payable by (g) Time deposits of less than $100,000 with maturi- Member Banks On Time and Savings Deposits ties of2lh years or more. Except as provided in paragraphs (a), (b), (d), and (e), a member bank may pay interest on any nonnegotiable time deposit with a (b) Fixed ceiling time deposits of less than $100,000. maturity of 2V2 years or more that is issued on or after Except as provided in paragraphs (a), (d), (e), (f), and the first day of each month at a rate not to exceed three (g), no member bank shall pay interest on any time quarters of one per cent below the average 2V2 year deposit at a rate in excess of the applicable rate under yield for United States Treasury securities as deterthe following schedule: mined and announced by the United States Department of the Treasury three business days prior to the Maturity Maximum per cent first day of such month. The average 2lh year yield 30 days or more but less than 5V4 will be rounded by the United States Department of 90 days the Treasury to the nearest 5 basis points. A member 90 days or more but less than 5 3/4 bank may offer this category of time deposit to all de- 1 year positors. However, a member bank may pay interest 1 year or more but less than 6 on any nonnegotiable time deposit with a maturity of 2V2 years 2lh years or more which consists of funds deposited to 2V2 years or more but less 6V2 the credit of, or in which the entire beneficial interest than 4 years is held by: 4 years or more but less than TU 6 years (1) the United States, any State of the United States, 6 years or more but less than Vh or any county, municipality or political subdivision 8 years thereof, the District of Columbia, the Commonwealth 8 years or more vu of Puerto Rico, the Virgin Islands, American Samoa, Guam, or political subsivision thereof; or (2) an individual pursuant to an Individual Retire- (f) 26-week money market time deposits of less than ment Account agreement or Keogh (H.R. 10) Plan es- $100,000. Except as provided in paragraphs (a), (b), tablished pursuant to 26 U.S.C. (I.R.C. 1954) §§ 408, and (d), a member bank may pay interest on any non- 401, at a rate not to exceed the ceiling rate payable on negotiable time deposit of $10,000 or more, with a the same category of deposit by any Federally insured maturity of 26 weeks, at a rate not to exceed the rate savings and loan association or mutual savings bank. established (auction average on a discount basis) for United States Treasury bills with maturities of 26 weeks issued on or immediately prior to the date of AMENDMENTS TO REGULATION Z deposit. Rounding such rate to the next higher rate is not permitted. A member bank may not compound in- The Board of Governors has adopted revisions in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 51 requirements of Regulation Z, Truth in Lending, with with the instructions contained therein will comply regard to the calculation and disclosure of the annual with the requirements of this section. Volume I of the percentage rate and other credit terms. The most im- tables applies to single advance transactions involving portant changes are: (1) adoption of a tolerance of 1/8 up to 480 monthly payments or 104 weekly payments. of 1 percentage point in either direction from the exact It may be used for regular transactions, and for transannual percentage rate, in place of the existing round- actions with any of the following irregularities: an odd ing rule; (2) adoption of simplified rules for treating mi- first period, an odd first payment, and an odd final paynor payment schedule variations; and (3) expansion of ment. Volume II applies to transactions involving multhe protection available to creditors who have relied in tiple advances and any type of payment or period irgood faith on faulty calculation tools. The amend- regularity. ments to Regulation Z are set forth below. (ii) Creditors may use any other computation tool in 1. Effective October 1, 1980, existing § 226.5(a) is determining the annual percentage rate so long as the amended by deleting both the title "General rule— annual percentage rate so determined equals the annuopen end credit accounts" and the first sentence be- al percentage rate determined in accordance with Supginning "The annual percentage rates for open end plement I, within the degree of accuracy set forth in credit" and ending "nearest quarter of 1 percent."; paragraph (b)(1) of this section. §§ 226.5(b) through (e), Interpretations §§ 226.502, (iii) Supplement I and Volumes I and II may be ob- 226.503, and 226.505, and Supplement I to Regulation tained from any Federal Reserve Bank or from the Z are rescinded. Board in Washington, D.C. 20551. 2. Effective January 10, 1980, § 226.5(a) is amended and new §§ 226.5(b) and (c), 226.8(r) and (s) and Sup- (3) Single add-on rate transactions. If a single addplement I to Regulation Z are added, to read as fol- on rate is applied to all transactions with maturities up lows: to 60 months and if all payments are equal in amount and period, a single annual percentage rate may be disclosed for all such transactions, provided that it is the Section 226.5— highest annual percentage rate for any such transac- Determination of Annual Percentage Rate tion. (a) Open end credit—general rule. The annual per- (4) Certain transactions involving ranges of balcentage rate is a measure of the cost of credit, ex- ances. For purposes of disclosing the annual percentpressed as a yearly rate. An annual percentage rate age rate referred to in §§ 226.8(g)(1) and (2) (Orders by shall be considered accurate if it is not more than 1/8 of mail or telephone) and 226.8(h)(1) (Series of sales), if 1 percentage point above or below the annual percent- the same finance charge is imposed on all balances age rate determined in accordance with this section. within a specified range of balances, the annual percentage rate computed for the median balance may be disclosed for all of the balances. However, if the annu- ;}: ^ al percentage rate computed for the median balance (b) Credit other than open end. (1) General rule. The understates the annual percentage rate computed for annual percentage rate is a measure of the cost of cred- the lowest balance by more than 8 per cent of the latter it, expressed as a yearly rate, which relates the amount rate, the annual percentage rate shall be computed on and timing of value received by the consumer to the whatever lower balance will produce an annual peramount and timing of payments made. The annual per- centage rate which does not result in an undercentage rate shall be determined in accordance with statement of more than 8% of the rate determined on either the actuarial method or the United States Rule the lowest balance. method and shall be considered accurate if it is not more than 1/8 of 1 percentage point above or below the (5) Payment schedule irregularities. In determining annual percentage rate determined in accordance with and disclosing the annual percentage rate, a creditor whichever method is used. Explanations, equations, may disregard an irregularity in the first period 5b that and instructions for determining the annual percentage falls within the limits described below and any payrate in accordance with the actuarial method are set ment schedule irregularity that results from the irreguforth in Supplement I. lar first period: (i) For transactions in which the term 5b is less than (2) Computation tools, (i) The Regulation Z Annual Percentage Rate Tables produced by the Board may be 5b. For purposes of this paragraph, the "first period" is the period used to determine the annual percentage rate, and any from the date on which the finance charge begins to be earned to the such rate determined from these tables in accordance date of the first payment, and the "term" is the period from the date Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

52 Federal Reserve Bulletin • January 1980 1 year: a first period not more than 6 days shorter or 13 years: a first period shorter than or not more than 32 days longer than a regular period; days longer than a regular period. (ii) For transactions in which the term is at least 1 year and less than 10 years: a first period not more (s) Disregarding certain practices. In making calcuthan 11 days shorter or 21 days longer than a regular lations and disclosures, a creditor need not take into period; or account the effects of the following: (iii) For transactions in which the term is at least 10 (1) The fact that payments are collected in whole years: a first period shorter than or not more than 32 cents; days longer than a regular period. (2) The fact that the dates of payments and advances are changed because the scheduled date falls on a Sat- (c) Errors in calculation tools. An error in disclosure urday, Sunday, or holiday; and of the annual percentage rate or finance charge shall (3) The fact that months have different numbers of not, in itself, be considered a violation of this Part if: days. (1) The error resulted from a corresponding error in any calculation tool, such as a chart, table, calculator or computer, used in good faith by the creditor, and (2) Upon discovery of the error, the creditor SUPPLEMENT I TO REGULATION Z promptly (i) Discontinues use of that calculation tool for dis- Rules for Determining the Annual Percentage closure purposes, and Rate for Other than Open End Credit Transac- (ii) Notifies the Board in writing of the error in the tions Pursuant to § 226.5(b) of Regulation Z calculation tool. The notification shall include an identification of the tool and a description of the error, and I. Introduction shall be addressed to the Division of Consumer and Community Affairs, Board of Governors of the Fed- Section 226.5(b) of Regulation Z provides that the eral Reserve System, Washington, D.C. 20551. annual percentage rate for other than open end credit transactions shall be determined in accordance with either the actuarial method or the United States Rule method. This supplement contains an explanation of Section 226.8—Credit Other Than Open End- the actuarial method as well as equations, instructions, Specific Disclosures and examples of how this method applies to single advance and multiple advance transactions and transac- ^ ^ ^ ^ * tions involving required deposit balances (as defined in § 226.8(e) of the regulation). (r) Payment schedule irregularities. In determining Under the actuarial method, at the end of each unitand disclosing the finance charge and the payment period (or fractional unit-period) the unpaid balance of schedule under paragraph (b)(3) of this section, a cred- the amount financed is increased by the finance charge itor may disregard an irregular final payment or por- earned during that period and is decreased by the total tion of a final payment that results from an irregular payment (if any) made at the end of that period. The first period 13f within the limits described below and determination of unit-periods and fractional unit-perimay treat the irregular first period as if it were regular: ods shall be consistent with the definitions and rules in (1.) For transactions in which the term 13f is less than Sections II (C), (D), and (E) and the general equation 1 year: a first period not more than 6 days shorter or 13 in Section II (H). days longer than a regular period; In contrast, under the United States Rule method, at (2.) For transactions in which the term is at least 1 the end of each payment period, the unpaid balance of year and less than 10 years: a first period not more the amount financed is increased by the finance charge than 11 days shorter or 21 days longer than a regular earned during that payment period and is decreased by period; or the payment made at the end of that payment period. If (3.) For transactions in which the term is at least 10 the payment is less than the finance charge earned, the adjustment of the unpaid balance of the amount financed is postponed until the end of the next payment on which the finance charge begins to be earned to the date of the final period. If at that time the sum of the two payments is payment. 13f. For purposes of this paragraph, the "first period" is the period still less than the total accrued finance charge for the from the date on which the finance charge begins to be earned to the two payment periods, the adjustment of the unpaid date of the first payment, and the "term" is the period from the date balance of the amount financed is postponed still anon which the finance charge begins to be earned to the date of the final payment. other payment period, and so forth. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 53 II. Instructions and Equations for the (2) In a single advance, single payment transaction, Actuarial Method the unit-period shall be the term of the transaction, but shall not exceed 1 year. (A) General rule. The annual percentage rate shall be the nominal annual percentage rate determined by (E) Number of unit-periods between 2 given dates. multiplying the unit-period rate by the number of unit- (1) The number of days between 2 dates shall be the periods in a year. number of 24-hour intervals between any point in time on the first date to the same point in time on the second date. (B) Term of the transaction. The term of the transac- (2) If the unit-period is a month, the number of full tion begins on the date of its consummation, except unit-periods between 2 dates shall be the number of that if the finance charge or any portion of it is earned months measured back from the later date. The rebeginning on some other date, the term begins on that maining fraction of a unit-period shall be the number of other date. The term ends on the date the last payment days measured forward from the earlier date to the beis due, except that if an advance is scheduled after that ginning of the first full unit-period, divided by 30. If the date, the term ends on the later date. For computation unit-period is a month, there are 12 unit-periods per purposes, the length of the term shall be equal to the year. time interval between any point in time on the begin- (3) If the unit-period is a semimonth or a multiple of ning date to the same point in time on the ending date. a month not exceeding 11 months, the number of days between 2 dates shall be 30 times the number of full (C) Definitions of time intervals. months measured back from the later date, plus the (1) A period is the interval of time between advances number of remaining days. The number of full unitor between payments and includes the interval of time periods and the remaining fraction of a unit-period between the date the finance charge begins to be shall be determined by dividing such number of days earned and the date of the first advance thereafter or by 15 in the case of a semimonthly unit-period or by the date of the first payment thereafter, as applicable. the appropriate multiple of 30 in the case of a multi- (2) A common period is any period that occurs more monthly unit-period. If the unit-period is a semimonth, than once in a transaction. the number of unit-periods per year shall be 24. If the (3) A standard interval of time is a day, week, semi- number of unit-periods is a multiple of a month, the month, month, or a multiple of a week or a month up number of unit-periods per year shall be 12 divided by to, but not exceeding, 1 year. the number of months per unit-period. (4) All months shall be considered equal. Full (4) If the unit-period is a day, a week, or a multiple months shall be measured from any point in time on a of a week, the number of full unit-periods and the regiven date of a given month to the same point in time maining fraction of a unit-period shall be determined on the same date of another month. If a series of payby dividing the number of days between the 2 given ments (or advances) is scheduled for the last day of dates by the number of days per unit-period. If the each month, months shall be measured from the last unit-period is a day, the number of unit-periods per day of the given month to the last day of another year shall be 365. If the unit-period is a week or a mulmonth. If payments (or advances) are scheduled for tiple of a week, the number of unit-periods per year the 29th or 30th of each month, the last day of Febru- shall be 52 divided by the number of weeks per unitary shall be used when applicable. period. (5) If the unit-period is a year, the number of full (D) Unit-period. unit-periods between 2 dates shall be the number of (1) In all transactions other than a single advance, full years (each equal to 12 months) measured back single payment transaction, the unit-period shall be from the later date. The remaining fraction of a unitthat common period, not to exceed 1 year, that occurs period shall be most frequently in the transaction, except that (a) The remaining number of months divided by 12 if (a) If 2 or more common periods occur with equal the remaining interval is equal to a whole number of frequency, the smaller of such common periods shall months, or be the unit-period; or (b) The remaining number of days divided by 365 if (b) If there is no common period in the transaction, the remaining interval is not equal to a whole number the unit-period shall be that period which is the aver- of months. age of all periods rounded to the nearest whole stan- (6) In a single advance, single payment transaction dard interval of time. If the average is equally near 2 in which the term is less than a year and is equal to a standard intervals of time, the lower shall be the unit- whole number of months, the number of unit-periods period. in the term shall be 1, and the number of unit-periods Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

54 Federal Reserve Bulletin • January 1980 per year shall be 12 divided by the number of months (H) General equation. The following equation sets in the term. forth the relationship among the terms of a transac- (7) In a single advance, single payment transaction tion: in which the term is less than a year and is not equal to a whole number of months, the number of unit-periods AI ^ AA (1 + i)(l + i)Qi (1 + e i)(l + i)q2 in the term shall be 1, and the number of unit-periods ei 2 per year shall be 365 divided by the number of days in Atr the term. (1 + e i)(l + i)qm m (F) Percentage rate for a fraction of a unit-period. Pi P 2 The percentage rate of finance charge for a fraction (1 + fii)(l 4- i)ll (1 + f i)(l + i)'2 2 (less than 1) of a unit-period shall be equal to such fraction multiplied by the percentage rate of finance charge Pn per unit-period. (1 + f n i)(l + i)*n (I) Solution of general equation by iteration pro- (G) Symbols. The symbols used to express the terms cess. The general equation in Section II (H), when apof a transaction in the equation set forth in Section II plied to a simple transaction in which a loan of $1000 is (H) are defined as follows: repaid by 36 monthly payments of $33.61 each, takes the special form: A = The amount of the kth advance. k q k = T be h g e i n n n u in m g b o er f t o h f e f t u e l r l m u n o i f t - t p h e e r i t o ra d n s s a fr c o ti m on t h to e A = 33.61 a 36 (1 +0 the kth advance. e = The fraction of a unit-period in the time Step 1: Let = estimated annual k interval from the beginning of the term of percentage rate = 12.50% the transaction to the kth advance, Evaluate expression for A, m = The number of advances. letting i = I /(100w) = .010416667 1 Pj = The amount of the jth payment. Result (referred to as A') = 1004.674391 tj = The number of full unit-periods from the begin- Step 2: Let I = Ii + . 1 = 12.60% 2 ning of the term of the transaction to the jth Evaluate expression for A, payment. letting i = Ig/OOOw) = .010500000 Result (referred to as A") = 1003.235366 fj = The fraction of a unit-period in the time interval from the beginning of the term of the transac- Step 3: Interpolate for I (annual percentage rate): tion to the jth payment. (A- AT I = I + .1 n = The number of payments. t L(A" - A')J (1000.000000 - 1004.674391) i = The percentage rate of finance charge per unit- = 12.50 + .1 L(1003.235366 - 1004.674391) period, expressed as a decimal equivalent. = 12.82483042% Symbols used in the examples shown in this supplement are defined as follows: Step 4: First iteration, let i! = 12.82483042% and repeat a x = The present value of 1 per unit-period for x Steps 1,2, and 3 obtaining a new I = 12.82557859% unit-periods, first payment due immediately. Second iteration, let i! = 12.82557859% and repeat 1 1 = 1 + (1 + 0 (1 + 02 Steps 1,2, and 3 obtaining a new I = 12.82557529% 1 (1 +i)x"1 In this case, no further iterations are required to obtain the annual percentage rate correct to two decimal w = The number of unit-periods per year. places, 12.83%. I = wi x 100 = The nominal annual percentage When the iteration approach is used, it is expected rate. that calculators or computers will be programmed to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 55 carry all available decimals throughout the calculation Example (A)(4): Quarterly payments (long first period) and that enough iterations will be performed to make virtually certain that the annual percentage rate ob- Amount advanced (A) = $10,000. Payment (P) = tained, when rounded to two decimals, is correct. $385. Annual percentage rates in the examples below were Number of payments (n) = 40. obtained by using a 10 digit programmable calculator Unit-period = 3 months. Unit-periods per year and the iteration procedure described above. (w) = 4. Advance, 5-23-78. First payment, 10-1-78. III. Examples for the Actuarial Method From 7-1-78 through 10-1-78 = 1 unit-period, (t = 1) (A) Single advance transaction, with or without an From 6-1-78 through 7-1-78 = 1 month = 30 days. odd first period, and otherwise regular. The general From 5-23-78 through 6-1-78 = 9 days, (f = 39/90) equation in Section II (H) can be put in the following Annual percentage rate (I) = wi = .0897 = 8.97% special form for this type of transaction: 1 Example (A)(5): Weekly payments (long first period) A = (Pa„) (i + fi)d + i y Amount advanced (A) = $500. Payment (P) = Example (A)(1): Monthly payments (regular first peri- $17.60. od) Number of payments (n) = 30. Unit-period = 1 week. Unit-periods per year (w) = Amount advanced (A) = $5000. Payment (P) = 52. $230. Advance, 3-20-78. First payment, 4-21-78. Number of payments (n) = 24. From 3-24-78 through 4-21-78 = 4 unit-periods, (t = Unit-period = 1 month. Unit-periods per year (w) = 4) 12. From 3-20-78 through 3-24-78 = 4 days, (f = 4/7) Advance, 1-10-78. First payment, 2-10-78. Annual percentage rate (I) = wi = . 1496 = 14.96% From 1-10-78 through 2-10-78 = 1 unit-period, (t = 1; f = 0) (B) Single advance transaction, with an odd first Annual percentage rate (I) = wi = .0969 = 9.69% payment, with or without an odd first period, and otherwise regular. The general equation in Section II (H) Example (A)(2): Monthly payments (long first period) can be put in the following special form for this type of transaction: Amount advanced (A) = $6000. Payment (P) = $200. A = 1 Pi + Pa n -i Number of payments (n) = 36. (l + 10(1 + if (1 +i) Unit-period = 1 month. Unit-periods per year (w) = Example (B)(1): Monthly payments (regular first peri- 12. od and irregular first payment) Advance, 2-10-78. First payment, 4-1-78. From 3-1-78 through 4-1-78 = 1 unit-period (t = 1) Amount advanced (A) = $5000. First payment (P ) From 2-10-78 through 3-1-78 = 19 days, (f = 19/30) x = $250. Annual percentage rate (I) = wi = .1182 = 11.82% Regular payment (P) = $230. Number of payments (n) = 24. Unit-period = 1 month. Unit-periods per year (w) = Example (A)(3): Semimonthly payments (short first pe- 12. riod) Advance, 1-10-78. First payment, 2-10-78. From 1-10-78 through 2-10-78 = 1 unit-period, (t = Amount advanced (A) = $5000. Payment (P) = l;f = 0) $219.17. Annual percentage rate (I) = wi = .1008 = 10.08% Number of payments (n) = 24. Unit-period = 1/2 month. Unit-periods per year Example (B)(2): Payments every 4 weeks (long first pe- (w) = 24. riod and irregular first payment) Advance, 2-23-78. First payment, 3-1-78. Payments made on 1st and 16th of each month. Amount advanced (A) = $400. First payment (Pi) = From 2-23-78 through 3-1-78 = 6 days, (t = 0; f = $39.50 6/15) Regular payment (P) = $38.31. Number of payments Annual percentage rate (I) = wi = .1034 = 10.34% (n) = 12. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

56 Federal Reserve Bulletin • January 1980 Unit-period = 4 weeks. Unit-periods per year (2) = Amount advanced (A) = $5000. First payment (Pi) 52/4 = 13. = $250. Advance, 3-18-78. First payment, 4-20-78. Regular payment (P) = $230. Final payment (P ) = n From 3-23-78 through 4-20-78 = 1 unit-period, (t = $280. 1) Number of payments (n) = 24. Unit-period = 1 From 3-18-78 through 3-23-78 = 5 days, (f = 5/28) month. Annual percentage rate (I) = wi = .2850 = 28.50% Unit-periods per year (w) = 12. Advance, 1-10-78. First payment, 2-10-78. (C) Single advance transaction, with an odd final From 1-10-78 through 2-10-78 = 1 unit-period, (t = payment, with or without an odd first period, and oth- l;f =0) erwise regular. The general equation in Section II (H) Annual percentage rate (I) = wi = .1090 = 10.90% can be put in the following special form for this type of Example (D)(2): Payments every two months (short transaction: first period, irregular first payment, and irregular fi- 1 Pn nal payment) A = Pa„.,+ (i + fi)d + i y (1 + i)n" Amount advanced (A) = $8000. First payment (Pi) Example (C)(1): Monthly payments (regular first peri- = $449.36. od and irregular final payment). Regular payment (P) = $465. Final payment (P ) = n $200. Amount advanced (A) = $5000. Regular payment Number of payments (n) = 20. Unit-period = 2 (P) = $230. months. Final payment (P„) = $280. Number of payments (n) Unit-periods per year (w) = 12/2 = 6. = 24. Advance, 1-10-78. First payment, 3-1-78. Unit-period = 1 month. Unit-periods per year (w) = From 2-1-78 through 3-1-78 = 1 month. From 1-10- 12. 78 through 2-1-78 = 22 days, (t = 0; f = 52/60) Advance, 1-10-78. First payment, 2-10-78. Annual percentage rate (I) = wi = .0730 = 7.30% From 1-10-78 through 2-10-78 = 1 unit-period, (t = (E) Single advance, single payment transaction. 1; f = 0) The general equation in Section II (H) can be put in the Annual percentage rate (I) = wi = .1050 = 10.50% special forms below for single advance, single payment transactions. Forms 1 through 3 are for the direct Example (C)(2): Payments every 2 weeks (short first determination of the annual percentage rate under speperiod and irregular final payment) cial conditions. Form 4 requires the use of the iteration procedure of Section II (I) and can be used for all Amount advanced (A) = $200. Regular payment (P) single advance, single payment transactions regardless = $9.50. of term. Final payment (P ) = $30. Number of payment (n) = n 20. _ Form I—Term less than 1 year: Unit-period = 2 weeks. Unit-periods per year (w) = 52/2 = 26. CM I = lOOw I ~ Advance, 4-3-78. First payment, 4-11-78. From 4-3-78 through 4-11-78 = 8 days, (t = 0; f = 8/ 14) Form 2—Term more than 1 year but less than 2 years: Annual percentage rate (I) = wi = .1222 = 12.22% 1/2 (i + 02 + 4f(x~1 " (1 + f) (D) Single advance transaction, with an odd first payment, odd final payment, with or without an odd Form 3—Term equal to exactly a year or exact mulfirst period, and otherwise regular. The general equa- tiple of a year: tion in Section II (H) can be put in the following special form for this type of transaction: I = 100 (If - 1 Pa„. Pn A = Pi + (i + fi)d + i y (1 +i) (1 +i)n- Form 4—Special form for iteration procedure (no restriction on term): Example (D)(1): Monthly payments (regular first perip od, irregular first payment, and irregular final pay- A = ment) (i + fi)d + i y Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 57 Example (E)(1): Single advance, single payment (term A loan of $2135 is advanced on 1-25-78. It is to be of less than 1 year, measured in days) repaid by 24 payments of $100 each. Payments are due every 4 weeks beginning 2-20-78. However, in Amount advanced (A) = $1000. Payment (P) = those months in which 2 payments would be due, $1080. only the first of the two payments is made and the Unit-period = 255 days. Unit-period per year (w) = following payment is delayed by 2 weeks to place it 365/255. in the next month. Advance, 1-3-78. Payment, 9-15-78. From 1-3-78 through 9-15-78 = 255 days, (t = 1; f = Unit-period = 4 weeks. Unit periods per year (w) = 0) 52/4 = 13. Annual percentage rate (I) = wi = .1145 = 11.45%. (Use Form 1 or 4.) First series of payments begins 26 days after 1-25-78. (U = 0; fj = 26/28) Example (E)(2): Single advance, single payment (term of less than 1 year, measured in exact calendar Second series of payments begins 9 unit-periods months) plus 2 weeks after 2-20-78. (t = 10; f = 12/28) 2 2 Amount advanced (A) = $1000. Payment (P) = Third series of payments begins 6 unit-periods plus 2 $1044. weeks after start of second series. (t 3 = 16; f 3 = 26/ Unit-period = 6 months. Unit-periods per year (w) 28) = 2. Advance, 7-15-78. Payment, 1-15-79. Last series of payments begins 6 unit-periods plus 2 From 7-15-78 through 1-15-79 = 6 mos. (t = 1; f = 0) weeks after start of third series. (t4 = 23; U = 12/28) Annual percentage rate (I) = wi = .0880 = 8.80%. (Use Form 1 or 4.) The general equation in Section II (H) can be written in the special form: Example (E)(3): Single advance, single payment (term 100 ike of more than 1 year but less than 2 years, fraction = „ + 2135 (1 + (26/28)i) (1 + (12/28)i)(l + i)10 measured in exact months) 100 ae ^ 100 a 3 Amount advanced (A) = $1000. Payment (P) = (1 + (26/28)i)(l + i)16 (1 + (12/28)0(1 + i)23 $1135.19. Unit-period = 1 year. Unit-periods per year (w) = 1. Annual percentage rate (I) = wi = .1200 = 12.00% Advance, 7-17-78. Payment, 1-17-80. From 1-17-79 through 1-17-80 = 1 unit period, (t = 1) From 7-17-78 through 1-17-79 = 6 mos. (f = 6/12) Example (F)(2): Skipped payment loan plus single pay- Annual percentage rate (I) = wi = .0876 = 8.76%. ments (Use Form 2 or 4.) A loan of $7350 on 3-3-78 is to be repaid by 3 monthly payments of $1000 each beginning 9-15-78, Example (E)(4): Single advance, single payment (term plus a single payment of $2000 on 3-15-79, plus 3 of exactly 2 years) more monthly payments of $750 each beginning 9- 15-79, plus a final payment of $1000 on 2-1-80. Amount advanced (A) = $1000. Payment (P) = $1240. Unit-period = 1 month. Unit-periods per year (w) = Unit-period = 1 year. Unit-periods per year (w) = 1. 12. Advance, 1-3-78. Payment, 1-3-80. From 1-3-78 through 1-3-79 = 1 unit-period, (t = 2; f First series of payments begins 6 unit-periods plus = 0) 12 days after 3-3-78. (U = 6; f, = 12/30) Annual percentage rate (I) = wi = .1136 = 11.36%. (Use Form 3 or 4.) Second series of payments (single payment) occurs 12 unit-periods plus 12 days after 3-3-78. (t = 12; (F) Complex single advance transaction. 2 f = 12/30) 2 Example (F)(l): Skipped payment loan (payments Third series of payments begins 18 unit-periods plus every 4 weeks) 12 days after 3-3-78 (t = 18; f = 12/30) 3 3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

58 Federal Reserve Bulletin • January 1980 Final payment occurs 22 unit-periods plus 29 days af- Example (G)(1): Construction loan ter 3-3-78. (t4 = 22; f = 29/30) 4 Three advances of $20,000 each are made on 4-10- The general equation in Section II (H) can be written 79, 6-12-79, and 9-18-79. Repayment is by 240 in the special form: monthly payments of $612.36 each beginning 12-10- 79. 1000 a 7350 = 3 (1 + (12/30)i)(l + i)6 Unit-period = 1 month. Unit-periods per year (w) = 12. 2000 (1 + (12/30)i)(l + i)12 From 4-10-79 through 6-12-79 = (2 + 2/30) unit-periods. 750 a 1000 From 4-10-79 through 9-18-79 = (5 + 8/30) unit-peri- 3 (1 + (12/30)i)(l + i)18 (1 + (29/30)i)(l + i)22 ods. From 4-10-79 through 12-10-79 = (8) unit-periods. Annual percentage rate (I) = wi = .1022 = 10.22% The general equation in Section II (H) is changed to Example (F)(3): Mortgage with varying payments the single advance mode by treating the 2nd and 3rd advances as negative payments: A loan of $39,688.56 (net) on 4-10-78 is to be repaid by 360 monthly payments beginning 6-1-78. Pay- 20,000 = 612.36 a 2 4o ments are the same for 12 months at a time as fol- (1 + i)8 lows: 20,000 Monthly Monthly Monthly (1 + (2/30)0(1 + 02 Year payment Year payment Year payment 20,000 1 $291.81 11 $385.76 21 $380.43 (1 + (8/30)0(1 + 05 2 300.18 12 385.42 22 379.60 3 308.78 13 385.03 23 378.68 Annual percentage rate (I) = wi = .1025 = 10.25% 4 317.61 14 384.62 24 377.69 5 326.65 15 384.17 25 376.60 Example (G)(2): Student loan 6 335.92 16 383.67 26 375.42 7 345.42 17 383.13 27 374.13 A student loan consists of 8 advances: $1800 on 9-5- 8 355.15 18 382.54 28 372.72 78, 9-5-79, 9-5-80, and 9-5-81; plus $1000 on 1-5-79, 9 365.12 19 381.90 29 371.18 1-5-80, 1-5-81, and 1-5-82. The borrower is to make 10 375.33 20 381.20 30 369.50 50 monthly payments of $240 each beginning 7-1-78 (prior to first advance). Unit-period = 1 month. Unit-periods per year (w) = Unit-period = 1 month. Unit-periods per year (w) = 12. 12. From 5-1-78 through 6-1-78 = 1 unit-period, (t = 1) From 4-10-78 through 5-1-78 = 21 days, (f = 21/30) Zero point is date of first payment since it precedes The general equation in Section II (H) can be written first advance. in the special form: From 7-1-78 to 9-5-78 (2 + 4/30) unit-periods. a From 7-1-78 to 9-5-79 (14 4- 4/30) unit-periods. 39,688.56 = i2 (1 + (21/30)0(1 + i) From 7-1-78 to 9-5-80 (26 + 4/30) unit-periods. From 7-1-78 to 9-5-81 (38 + 4/30) unit-periods. _ _ 300.18 308.78 ^ From 7-1-78 to 1-5-79 (6 + 4/30) unit-periods. From 7-1-78 to 1-5-80 (18 + 4/30) unit-periods. 369.50 From 7-1-78 to 1-5-81 (30 + 4/30) unit-periods. (1 + i)348 From 7-1-78 to 1-5-82 (42 + 4/30) unit-periods. Annual percentage rate (I) = wi = .0980 = 9.80%. Since the zero point is date of first payment, the general equation in Section II (H) is written in the single (G) Multiple advance transactions. advance form below by treating the first payment as Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 59 a negative advance and the 8 advances as negative 240 110 a 1000 + 12 payments: (1 + i)12 (1 + i) 240 349 _ 1800 1 - 240 = or for iteration solution as: (1 + i) (1 + (4/30)i) (1 + i)2 1 11000000 = ( 1 1 10 + i) - (1 2 + 4 0 i)12 (1 + i)14 + (1 + i)26 + (1 + i)31 Annual percentage rate (I) = wi = .1779 = 17.79% 1000 (1 + (4/30)1) 1 1 1 1 BANK HOLDING COMPANY L (1 + i)6 (1 + 018 (1 + 030 (1 + 042J AND BANK MERGER ORDERS ISSUED BY THE BOARD OF GOVERNORS Annual percentage rate (I) = wi = .3204 = 32.04% Orders Under Section 3 (H) Transaction involving required deposit bal- of Bank Holding Company Act ance. Example (H)(1): Required constant deposit balance Aspen Bancorp, Inc., Aspen, Colorado Creditor advances $1000 on 4-12-79 and requires borrower to maintain a deposit balance of $200 Order Approving throughout the 12 month loan. The loan is to be re- Formation of Bank Holding Company paid by 12 equal monthly payments of $90 each beginning 5-12-79. The deposit balance will be released Aspen Bancorp, Inc., Aspen, Colorado, has applied on 4-12-80. for the Board's approval under section 3(a)(1) of the Unit-period = 1 month. Unit-periods per year (w) = Bank Holding Company Act (12 U.S.C. § 1842(a)(1)), 12. to form a bank holding company by acquiring 100 per- From 4-12-79 through 5-12-79 = 1 unit-period. cent (less directors' qualifying shares) of the voting From 4-12-79 through 4-12-80 = 12 unit-periods. shares of The Bank of Aspen ("Bank"), Aspen, Colorado. The general equation in Section II (H) can be written Notice of the application, affording opportunity for as: interested persons to submit comments and views, has been given in accordance with section 3(b) of the Act. 800 + 200 90 a 12 The time for filing comments and views has expired (1 + i)12 (1 + i) and the Board has considered the application and all or for iteration solution as: comments received in light of the factors set forth in section 3(c) of the Act (12 U.S.C. § 1842(c)). o _ 90a 200 nn 12 800 -(TTo (1 + i)12 Applicant is a nonoperating corporation organized for the purpose of becoming a bank holding company Annual percentage rate (I) = wi = .2223 = 22.23% through the acquisition of Bank. Bank is the 55th largest of 299 banks in Colorado, holding approximately Example (H)(2): Required periodic deposits into a re- .36 percent of the total commercial bank deposits in stricted account the state.1 Upon acquisition of Bank, Applicant would control Creditor advances $1000 on 6-15-79. Borrower is re- the largest of four banks operating in the relevant marquired to make 12 monthly payments of $110 each ket,2 which holds deposits of $39.9 million, representbeginning 7-15-79, of which $20 is to be deposited ing 46.4 percent of the total deposits in commercial into an account. The account will be released to the banks in the market. The proposed acquisition of Bank borrower at time of final payment on 6-15-80. represents a reorganization of Bank's ownership into corporate form. Since none of applicant's principals is Unit-period = 1 month. Unit-periods per year (2) = associated with other banking organizations within the 12. From 6-15-79 through 7-15-79 = 1 unit-period. 1. All banking data are as of December 31, 1978. 2. The relevant market is the Upper Roaring Fork River Valley banking market, which is defined as Pitkin County and the portion of The general equation in Section II (H) can be written Eagle County immediately adjacent thereto, including the town of Baas: salt, Colorado. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

60 Federal Reserve Bulletin • January 1980 market, and in view of Bank's size, it appears that con- holding company within the meaning of the Bank summation of the proposal would not have any signifi- Holding Company Act, has applied for the Board's apcant adverse effects on competition or increase the proval under section 3(a)(3) of the Act (12 U.S.C. § concentration of banking resources in any relevant 1842(a)(3)) to acquire 90 percent or more of the voting area. Accordingly, the Board concludes that com- shares of City Bank and Trust Company ("Bank"), petitive considerations are consistent with approval of Moberly, Missouri. the application. Notice of the application, affording opportunity for The financial and managerial resources of Applicant interested persons to submit comments and views, has and Bank are considered to be satisfactory, and their been given in accordance with section 3(b) of the Act future prospects appear favorable. While Applicant (12 U.S.C. § 1842(b)). The time for filing comments and will incur debt in connection with the proposal, it ap- views has expired, and the application and all compears that Applicant will be able to service the debt ments received have been considered in light of the without adversely affecting the financial condition of factors set forth in section 3(c) of the Act (12 U.S.C. § Bank, particularly in light of commitments made by 1842(c)). Applicant and its principals to ensure that an adequate Applicant, the eighth largest banking organization in level of capital is maintained in Bank. Notwithstanding Missouri, controls five banks with aggregate deposits that Bank's capital is and will remain at an adequate of approximately $445.9 million, representing 1.9 perlevel, the Board notes a large dividend will be immedi- cent of total deposits in commercial banks in the ately extracted from Bank to reduce the acquisition state.1 Acquisition of Bank, with deposits of $52.6 mildebt. Despite its approval of this application, the lion, would increase Applicant's share of commercial Board does not intend to encourage dividends of this bank deposits in Missouri by approximately 0.2 perkind. On balance, banking factors are consistent with cent and would not result in a significant increase in approval of the application. the concentration of banking resources in Missouri. Although consummation of the proposed transac- Bank is the largest of five banking organizations in tion would effect no changes in the services offered by the Moberly banking market, controlling 47.8 percent Bank, considerations relating to the convenience and of the total commercial bank deposits in the market.2 needs of the community to be served are consistent Although none of the banks in the Moberly banking with approval. Accordingly, it is the Board's judgment market is a subsidiary of Applicant, a senior officer of that consummation of the proposal would be consist- Applicant is the majority stockholder of Bank of Cairo ent with the public interest and that the application ("Cairo"), Cairo, Missouri, the fourth largest bank in should be approved. the market.3 Cairo holds total deposits of $7.7 million, On the basis of the record, the application is ap- representing 7.0 percent of the total deposits in the proved for the reasons summarized above. The trans- market. Bank and Cairo would together control 54.8 action shall not be made before the thirtieth calendar percent of the market deposits. In view of this associaday following the effective date of this Order or later tion with Cairo, Applicant's acquisition of Bank would than three months after the effective date of this Or- entail the elimination of significant competition. Howder, unless such period is extended for good cause by ever, Cairo is not a subsidiary of Applicant and there is the Board, or by the Federal Reserve Bank of Kansas no evidence in the record to show that Applicant's of- City pursuant to delegated authority. ficer in the past has acted on Applicant's behalf in his By order of the Board of Governors, effective De- management of Cairo. Moreover, Applicant has incember 21, 1979. dicated its willingness to sever its relationship with Cairo and in the meantime to insulate the senior officer Voting for this action: Vice Chairman Schultz and Goverassociated with Cairo from any management decisions nors Wallich, Coldwell, Partee, Teeters, and Rice. Absent and not voting: Chairman Volcker. affecting the Moberly market. Under the circumstances the Board is satisfied that this acquisition will (Signed) GRIFFITH L. GARWOOD, eliminate no significant existing competition, provided the separation from Cairo is accomplished promptly. [SEAL] Deputy Secretary of the Board. In addition, the proposal would not eliminate significant probable future competition because the market Central Bancompany, does not appear especially attractive to de novo entry. Jefferson City, Missouri Thus, in light of the above and other facts of record, it Order Approving 1. All banking data are as of December 30, 1978. Acquisition of Bank 2. The Moberly banking market is approximated by Randolf County, Missouri. 3. Cairo is approximately six road miles north of Bank, but it has Central Bancompany, Jefferson City, Missouri, a bank recently received permission to relocate its main office to Moberly. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 61 is the Board's judgment that the overall competitive for the Board's approval under section 3(a)(3) of the effects of the proposal are consistent with approval on Act (12 U.S.C. § 1842(a)(3)) to acquire all the voting the condition that the relationship between Applicant shares of the successor by merger to The Schenectady and Cairo will be completely terminated as soon as Trust Company ("Bank"), Schenectady, New York.1 practicable but in no event later than one year after The bank into which Bank is to be merged has no sig- Applicant acquires Bank and that until that has been nificance except as a means to facilitate the acquisition accomplished and the Board's General Counsel is sat- of the voting shares of Bank.2 Accordingly, the proisfied that the separation is complete and effective, Ap- posed acquisition of shares of the successor organizaplicant will fully insulate Cairo's principal from any tion is treated herein as the proposed acquisition of the management decisions, considerations, planning, ac- shares of Bank. tivities, operations, and functions of Applicant and its Notice of the application, affording opportunity for subsidiaries in the Moberly banking market. interested persons to submit comments and views, has The financial and managerial resources and future been given in accordance with section 3(b) of the Act. prospects of Applicant, its subsidiary banks and Bank The time for filing comments and views has expired, are regarded as generally satisfactory. Thus, consid- and the Board has considered the application and all erations relating to banking factors are consistent with comments received, including those of the Department approval of the application. Affiliation with Applicant of Justice, in light of the factors set forth in section 3(c) will enable Bank to draw upon Applicant's expertise of the Act (12 U.S.C. § 1842(c)). and to introduce new and improved services to its cus- Applicant is the sixteenth largest banking organizatomers, including expanded banking hours and auto- tion in the State of New York, controlling four subsidimated teller machines. Thus, considerations relating ary banks with aggregate deposits of $1.5 billion, repto the convenience and needs of the community to be resenting 1.1 percent of total commercial bank served lend weight toward approval. Accordingly, it is deposits in the state.3 Acquisition of Bank, which the Board's judgment that the proposed acquisition holds deposits of $173 million, would increase Appliwould be consistent with the public interest and that cant's share of statewide commercial bank deposits by application should be approved subject to the condi- approximately 0.1 percent and would not alter Applitions recited in this Order. cant's ranking among other commercial banking or- On the basis of the record, the application is ap- ganizations in New York. Accordingly, consummation proved for the reasons summarized and subject to the of this proposal would not significantly increase the conditions specified above. The transaction shall not concentration of commercial banking resources in the be made before the thirtieth calendar day following the state. effective date of this Order, or later than three months Bank, the third largest banking organization in the after the effective date of this Order unless such period Albany banking market, the relevant market for comis extended for good cause by the Board, or by the petitive analysis, holds approximately $163 million in Federal Reserve Bank of St. Louis pursuant to dele- deposits,4 representating 11.5 percent of market degated authority. posits.5 Applicant, through its lead bank, State Bank By order of the Board of Governors, effective De- of Albany ("SBA"), Albany, New York, is the second cember 4, 1979. largest banking organization in the market with $659 million in total deposits and $222 million in market IPC Voting for this action: Chairman Volcker and Governors deposits, and controls 15.7 percent of commercial Schultz, Coldwell, Partee, Teeters, and Rice. Absent and not bank deposits in the market. Acquisition of Bank voting: Governor Wallich. would cause Applicant to become the largest banking (Signed) WILLIAM N. MCDONOUGH, 1. By order dated October 3, 1978, the Board denied a previous [SEAL] Assistant Secretary of the Board. application by Applicant to acquire Bank (64 FEDERAL RESERVE BUL- LETIN 894 (1978)). Applicant has filed this application based on data not previously submitted to the Board. 2. In conjunction with this application, Applicant has requested pri- United Bank Corporation of New York, or approval to merge 320 State Street Bank, Schenectady, New York, Albany, New York with The Schenectady Trust Company, Schenectady, New York, under the charter of the former and with the title of The Schenectady Trust Company, pursuant to section 18(c) of the Federal Deposit In- Order Denying surance Act, 12 U.S.C. § 1828(c). Acquisition of Bank 3. All banking data are as of June 30, 1978. 4. Market deposit data refer only to deposits of individuals, partnerships and corporations ("IPC deposits"). United Bank Corporation of New York, Albany, New 5. The Albany banking market is composed of Albany, Schenectady, and Rensselaer Counties and the towns of Clifton Park, Half- York, a bank holding company within the meaning of moon, Waterford, Malta, Stillwater, Mechanicville, Ballston, Charlthe Bank Holding Company Act ("Act"), has applied ton, Galway, and Milton in Saratoga County. Applicant disputes this Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 62 Federal Reserve Bulletin • January 1980 organization in the market, and would increase its the future between SBA and Bank. Consummation of share of market deposits to 27.2 percent. This affilia- the transaction would also remove Bank as a potential tion of the second and third largest organizations entry vehicle for bank holding companies not currently would increase the percentage of IPC deposits held by represented in the market. For these reasons and the three largest banking organizations in the market based on other facts of record, the Board concludes from 50.3 percent to 59.1 percent, and would increase that consummation of this proposal would have subthe four-firm concentration ratio from 59.1 percent to stantially adverse effects on competition. approximately 66.8 percent. The Board views such In its review of the entire record on this matter the substantial increases in the concentration of banking Board considered the comments submitted by the resources in this market as having a seriously adverse United States Department of Justice, in which the Juseffect on competition. Applicant, as noted above, al- tice Department concludes that the proposed acquisiready has a significant presence in the Albany banking tion would have significantly adverse effects on commarket through its lead bank which is a large and well- petition. In reaching this conclusion, the Justice managed organization, capable of marketing its serv- Department found that consummation of the proposal ices throughout the entire geographic market. The would increase the concentration of banking resources facts of record indicate that acquisition of Bank by Ap- in the market, eliminate the potential for increased plicant would eliminate substantial existing com- competition in the future between SBA and Bank, and petition between SBA and Bank. Moreover, it appears would foreclose the acquisition of Bank by a bank that consummation of the proposal would eliminate holding company not now in the market. The Justice the prospects for an intensification of competition in Department also finds that although New York thrift institutions do have somewhat expanded powers, commercial banking remains the appropriate line of commerce for analyzing the competitive effects of the market definition and contends that there exists a separate Schnenecproposal. In addition, the Department does not believe tady banking market distinct from the Albany banking market thereby that the relatively small presence in the Albany market mitigating significantly the anticompetitive effects of the subject proof large New York City based holding companies sigposal. In support of this contention, Applicant has submitted new nificantly reduces the anticompetitive effects of the data, including survey data on commuting, shopping, and advertising proposal. patterns, banking practices, and data on other economic factors in Applicant, as it did in its previous application to ac- Albany and Schenectady Counties. However, after reviewing Appliquire Bank, contends that the competition afforded by cant's submissions and all the facts of record, the Board believes that thrift institutions in New York must be considered in the data do not support a finding that Albany and Schenectady are analyzing the competitive effects of this proposal. Aplocated in different banking markets. Data for individual census tracts in the Albany-Schenectady-Troy plicant believes that thrift institutions in New York, in SMSA show that in 1970 commutation into Schenectady County ac- light of their powers and the services they may offer, counted for 30 percent of the County's work force, which is twice the should now be considered in the same product line average commutation into the 52 counties in upstate New York. In addition, 24 percent of the employed residents of Schenectady County with commercial banks. In support of this contention worked outside Schenectady County, with 19 percent commuting to Applicant points to such factors as recent legislative Albany County alone. Even considering only those portions of Albany and Schenectady Counties which are within the service area of Bank, changes, including the granting to New York deposi- 15.3 percent of the employed residents commuted into the City of Al- tory institutions the power to offer NOW accounts and bany. Hence, Schenectady County appeared as of 1970 not to be an the prohibition of management official interlocks beisolated community. Data based upon a survey conductd for Applicant in December 1978 tween most depository institutions in a locality. Appliindicate that these commuting patterns have become even more pro- cant states that such legislation demonstrates Connounced since 1970. Seventy-three percent of full-time workers in regress' recognition that competition exists among many sponding Schenectady County households were found to work in that County, while 21 percent commuted to Albany County. However, the types of financial institutions. Alternatively, Applicant data show that most residents of Schenectady County tend to bank suggests that the share of market deposits held by Apand shop within the County and read Schenectady newspapers. A sample of 38 Schenectady businesses also shows that 34 of the 38 pa- plicant and Bank should be "shaded" downward to tronized only Schenectady County banks. account for the direct competition between thrift insti- The Board is of the opinion that these data do not present a comtutions and commercial banks in certain product lines, pelling case for defining separate Albany and Schenectady banking markets. First, the commutation data indicate that a substantial body and for competition from large out-of-market-based of Schenectady residents can practicably turn for supplies of banking organizations whose small market shares do not adeservices to firms in either Albany or Schenectady Counties, and hence transmit competitive developments in one part of the market to anoth- quately reflect their competitive influence in the releer. Second, the banking data show that these consumers take advan- vant banking market. tage of their options since 7 percent of Schenectady residents primarily use a banking office in Albany County and 12 percent do some As noted in its previous Order, the Board has recogbanking in Albany. Of the 38 Schenectady County businesses sur- nized that the presence in a market of large thrift instiveyed, 34 banked exclusively with Schenectady banks but this figure tutions with expanded powers can be taken into conincludes Schenectady offices of banks headquartered in Albany or elsewhere. After review of the entire record in this matter, the Board sideration in analyzing the competitive effects of a is of the view that the proper geographic market in which to examine Digitized for FRthAe ScoEmRp etitive effects of the proposal is the Albany banking market http://fraser.stlaosu diseffeinde.do ragb/o ve. Federal Reserve Bank of St. Louis

Legal Developments 63 particular proposal.6 The Board notes that thrift insti- With regard to the "shading" approach to market tutions in New York have been granted expanded shares proposed by Applicant, the Board considers powers, including the ability to offer demand deposit this a useful approach in evaluating various comaccounts with credit lines in amounts up to $1,000, and petitive influences within the market. However, the that thrift institutions and commercial banks do com- Board does not believe that it is appropriate to take pete in the marketing of individual products and serv- such an approach where, as in this proposal, there are ices, such as mortgage lending and demand deposit involved two institutions of the size of SBA and Bank, services. However, the Board continues to be of the each with a significant share of market deposits. This view that thrift institutions in New York do not yet approach is more appropriately used in cases where offer the broad range of products and services that, the elimination of competition is not as substantial as taken together, constitute commercial banking as a in this proposal. With respect to this application, even distinct line of commerce. if the market shares were "shaded" to account for the The Supreme Court has consistently rejected the ar- presence of thrift institutions and large out-Of-marketgument that thrift institutions compete with com- based banking organizations, the Board is of the opinmercial banks in the same line of commerce. The Su- ion that the proposal would still result in substantial preme Court has held that it is the unique cluster of elimination of existing competition. Thus, having conproducts and services that commercial banks offer that sidered all of the facts of record in this application, the distinguishes them from all other types of financial in- Board concludes that consummation of the proposed stitutions.7 As the Supreme Court has recognized, and transaction would have substantially adverse effects as the Board is aware, this is a situation subject to on competition in the Albany market. change. In the future, as the differences between com- The financial and managerial resources and future mercial banks and thrift institutions become less dis- prospects of Applicant, its subsidiaries, and Bank are tinct, the clustering of products and services that com- regarded as satisfactory and consistent with approval mercial banks alone now offer may no longer of the application. Accordingly, banking factors are distinguish commercial banking as a separate line of consistent with approval of the subject application. commerce. However, the Board is of the opinion that As noted in the Board's Order on the previous applithe point has yet been reached in New York whereby cation, Applicant proposes to expand the range of commercial banks and thrift institutions may be services presently offered by Bank. While certain bengrouped together for purposes of competitive analysis. efits to the convenience and needs of the communities The view that commercial banking is a separate line of to be served might result from Applicant's acquisition commerce retains economic validity for a significant of Bank, similar benefits could also result from entry number of customers, especially smaller commercial by less anticompetitive means. Therefore, although enterprises, particularly since commercial banks alone considerations relating to the convenience and needs may offer a business enterprise a full range of financial of the community to be served lend some weight toservices. With respect to the subject proposal, the ward approval, they do not clearly outweigh the sub- Board believes that New York thrift institutions do not stantially anticompetitive effects that would result compete with commercial banks over a broad range of from approval of the subject proposal. commercial financial services,8 and that commercial On the basis of all relevant facts of record, it is the banking is the appropriate product line in which to an- Board's judgment that consummation of the proposed alyze the competitive effects of the subject acquisi- transaction would not be in the public interest, and the tion.9 application should be and hereby is denied.10 By order of the Board of Governors, effective December 3, 1979. 6. See, e.g., Northeast Bancorp., 60 FEDERAL RESERVE BULLETIN Voting for this action: Governors Coldwell, Partee, Tee- 375 (1974), and First Bancorp of N.H., Inc., 64 FEDERAL RESERVE ters, and Rice. Voting against this action: Governors Schultz BULLETIN 967 (1978). 7. See United States v. Connecticut National Bank, 418 U.S. 656 and Wallich. Present and not voting: Chairman Volcker. (1974); United States v. Phillipsburg National Bank & Trust Company, 399 U.S. 350 (1970); and United States v. Philadelphia National (Signed) THEODORE E. ALLISON, Bank, 374 U.S. 321 (1963); [SEAL] Secretary of the Board. 8. The Board notes that the powers of New York thrift institutions today do not differ significantly from the powers of Connecticut thrift institutions at the time the Supreme Court last considered this issue, in Under this analysis, the proposal represents a combination of the 1974. It is the opinion of the Board that New York thrift institutions eighth and eleventh largest organizations to become the third largest are not yet "significant participants in the marketing of bank services organization in the market, while the market shares held by these two to commercial enterprises." United States v. Connecticut National organizations approach the standards in the Justice Department's Bank, 418 U.S. 656, 666 (1974). guidelines for challenging mergers between firms. 9. The Board notes that even if thrift institutions in the Albany mar- 10. In view of the Board's action in this case, Applicant's proposals ket were included with commercial banks in the same line of com- to merge 320 State Street Bank with The Schenectady Trust Company merce for competitive analysis purposes, consummation of the pro- and for membership in the Federal Reserve System of 320 State Street posal would result in a serious elimination of existing competition. Bank are rendered moot. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 64 Federal Reserve Bulletin • January 1980 Dissenting Statement of analysis applied by the majority of the Board in this Governors Schultz and Wallich case. Moreover, the presence within the market of several of the nation's largest banking organizations We do not agree with the majority that the acquisition indicates that the competitive effects of consummation of The Schenectady Trust Company by United Bank of the proposal are not as severe as the majority be- Corporation of New York would result in a substantial lieves, since the competitive power of these organizaelimination of existing competition and we would ap- tions cannot be measured by their market shares prove the application for the reasons stated below and alone. Finally, it seems to us that the argument put in the Dissenting Statement to the previous Board Or- forward by Applicant that the Albany banking market der.1 should be viewed separately from the Schenectady We believe that the competition between com- market, while it cannot be altogether accepted, is not mercial banks and thrift institutions in New York is entirely without merit. In light of the above, we are of such that it significantly reduces the adverse com- the view that consummation of the proposal would petitive effects of the transaction. We are of the view have only slightly adverse effects on competition, and that the method of analysis adopted by the majority that such effects are outweighed by the convenience discounts the intensity of the competition between and needs considerations associated with this procommercial banks and thrifts over a significant array posal. of banking products and services and overstates the Therefore, we would approve this application. anticompetitive effects of the acquisition. Further- December 3, 1979 more, it is our opinion that the Board has explicitly or implicitly acknowledged in other contexts the blurring of the distinctions between mutual savings banks and Orders Under Section 4 of commercial banks. Bank Holding Company Act The share of nonbusiness demand deposits held by thrift institutions in the Albany market has continued Barnett Banks of Florida, Inc., to increase, growing to 14.8 percent by December Jacksonville, Florida 1978. In terms of number of accounts, the share of Albany market thrift institutions has risen from 7.4 per- Order Approving cent in 1976 to 27.6 percent at year end 1978. The Acquisition of Telecheck Atlanta, Inc. shares of Bank and of Applicant's lead bank in the growth of OPC deposits at commercial banks and mu- Barnett Banks of Florida, Inc., Jacksonville, Florida, tual savings banks in the market was only 2.1 percent a bank holding company within the meaning of the for the period 1976-1977, 8.7 percent between 1977 Bank Holding Company Act ("Act"), has applied for and 1978, and 5.4 percent from 1976 to 1978, compared the Board's approval pursuant to section 4(c)(8) of the to mutual savings banks' shares of 74.8 percent, 65.1 Act (12 U.S.C. § 1843 (c)(8)) and section 225.4(b)(2) of percent and 70.6 percent, respectively. These figures the Board's Regulation Y (12 C.F.R. § 225.4(b)(2)), to reflect a continuing trend and the increasing strength acquire, through its wholly-owned subsidiary, Veriof thrift institutions in competing in a service tradition- fications, Inc., Jacksonville, Florida ("Verificaally offered only by commercial banks. Moreover, mu- tions"), substantially all the assets of Telecheck tual savings banks control 42 percent of total IPC de- Atlanta, Inc., Bethesda, Maryland ("Telecheck Atposits in commercial banks and mutual savings banks lanta"), and thereby engage in the activity of check in New York State. These institutions have an even verification, i.e., for a fee, authorizing acceptance by more significant presence within the Albany banking subscribing merchants of certain personal checks market with approximately 68 percent of total IPC de- tendered by the merchant's customers in payment of posits. Inclusion of savings bank deposits in the com- goods and services. In addition, Verifications will purpetitive analysis would reduce the combined market chase a validly authorized check from the merchant in shares of Applicant and Bank from 27.2 percent to 8.7 the event it is subsequently dishonored. In considering percent and we do not agree with the majority that this a previous application the Board determined that the combined market share represents a serious elimina- activity of providing check verification services as protion of competition. posed by Applicant is closely related to banking and a For the reasons set out in detail in the previous Dis- proper incident thereto. However, the Board stated in senting Statement, we believe that thrift institutions that Order that proposals to engage in this activity must be included in the competitive analysis to a much would be considered on a case-by-case basis.1 greater extent than in the traditional product market 1. Barnett/Verifications, 65 FEDERAL RESERVE BULLETIN 263 1. 64 FEDERAL RESERVE BULLETIN 896 (1978). (1979). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 65 Notice of the application, affording opportunity for losses, reducing mail-order sales operation losses, ininterested persons to submit comments and views on creasing acceptance of consumer checks, especially the public interest factors, has been duly published (44 out-of-state checks, and adding a new competitor to Federal Register 33482 (1979)). The time for filing the check authorization systems already in place. Incomments and views has expired, and the Board has asmuch as the instant proposal merely represents the considered the application and all comments received expansion of Verifications into a new service area by in the light of the public interest factors set forth in acquiring a relatively weak competitor in that service section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)). area, the Board believes that consummation of the in- Applicant, the second largest banking organization stant proposal, which is virtually identical to Appliin Florida, controls 30 banks and eight nonbank sub- cant's previous application, is likely to produce similar sidiaries with assets aggregating approximately $3.4 benefits to the public in the new service area. Morebillion.2 Applicant engages in a variety of nonbank ac- over, the Board believes that no significant adverse eftivities through its nonbank subsidiaries, including fects, such as undue concentration of resources, unfair trust functions, consumer and sales financing, insur- competition, or conflicts of interest will result from ance agency activities directly related to extensions of Applicant's performance of the Activity in this new credit made by Applicant's subsidiaries, and mortgage service area. banking activities. Based upon the foregoing and upon other consid- Verifications proposes to purchase substantially all erations reflected in the record, the Board has deterthe assets of Telecheck Atlanta, including that compa- mined that the balance of the public interest factors ny's franchise agreement with Telecheck Services, that section 4(c)(8) of the Act requires the Board to Inc., Honolulu, Hawaii ("Telecheck"), to provide consider is favorable, and that the application should personal check verification services within certain be approved.3 Accordingly, the application is hereby geographic areas. These activities would be performed approved. Applicant shall cause Verifications to comfrom an office of Verifications to be located in Tucker, mence the proposed activity not later than three Dekalb County, Georgia. The geographic areas to be months after the effective date of this Order, unless served are Chambers County, Alabama; Aiken and such period is extended for good cause by the Federal Edgefield Counties, South Carolina; and most of the Reserve Bank of Atlanta pursuant to delegated authornorthern and central counties of the State of Georgia. ity. This determination is subject to the considerations Verifications already performs check verification ac- set forth in section 225.4(c) of the Board's Regulation tivities in Florida and in the Georgia and Alabama Y and to the Board's authority to require such modificounties that border Florida under a similar franchise cation or termination of the activities of a holding comagreement with Telecheck. pany or any of its subsidiaries as the Board finds nec- In order to approve the subject application, the essary to assure compliance with, or to prevent Board must also find that Applicant's performance of evasion of, the provisions and purposes of the Act and the activity through Verifications "can reasonably be the regulations and orders issued thereunder by the expected to produce benefits to the public, such as Board. greater convenience, increased competition, or gains By the order of the Board of Governors, effective in efficiency, that outweigh possible adverse effects, December 4, 1979. such as undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound Voting for this action: Chairman Volcker and Governors banking practices." In its previous decision the Board Coldwell, Partee, Teeters, and Rice. Present and not voting: also recognized that permitting a bank holding compa- Governor Schultz. Absent and not voting: Governor Wallich. ny to engage in the activity could have some potentially unfair competitive effects or conflicts of interest. (Signed) WILLIAM N. MCDONOUGH, However, the Board relied on Applicant's com- [SEAL] Assistant Secretary of the Board. mitment that Verifications will verify checks drawn on all banks and will comply with section 106 of the 1970 Amendments to the Act that prohibit certain tie-in arrangements. Moreover, in its previous decision the Board concluded that performance of the activity as 3. After reviewing Applicant's description of the activity and its performance of the activity, the Board has determined in this particular proposed by Applicant was likely to produce signifi- case that applications by Applicant to expand de novo the activity as cant benefits to the public, such as providing mer- described and performed through the establishment of additional offices of Verifications, in service areas in which no Telecheck franchise chants with a convenient means of reducing bad check has operated, may be processed in the same manner as other de novo applications under the provisions of section 225.4(b)(1) of Regulation Y (12 C.F.R. § 225.4(b)(1)), provided that the activity as described and performed by Applicant is not altered in any significant respect from 2. All banking data are as of June 30, 1979. that considered by the Board in this and in the previous application. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 66 Federal Reserve Bulletin • January 1980 Appendix A viduals, as well as loans secured by real estate or other collateral. Hawaii Finance does not presently issue 1. American Trust Co. of Hawaii, Inc. certificates of deposit, although Hawaiian industrial Honolulu, Hawaii loan companies are authorized to do so.1 The industri- 2. American Security Bank al loan, trust company, and data processing activities Honolulu, Hawaii of Hawaii Finance and Bishop Trust have been deter- 3. Hawaiian Trust Company Limited mined by the Board to be closely related to banking (12 Honolulu, Hawaii C.F.R. §§ 225.4(a)(2), (4), (8)).2 Bishop Trust also of- 4. First Hawaiian Bank fers property management services and makes short Honolulu, Hawaii term loans to its trust customers pending receipt of in- 5. Hawaii Bancorporation, Inc. vestment income. With the exception of properties Honolulu, Hawaii managed in a fiduciary capacity, the property manage- 6. Hawaii Consumer Finance Association, Inc. ment activities offered by Bishop Trust have been de- Honolulu, Hawaii termined by the Board to be impermissible for bank 7. Hawaii National Bank holding companies. Moreover, under section Honolulu, Hawaii 225.4(a)(4), trust company subsidiaries of bank holding 8. Liberty Bank companies generally may not make loans. Honolulu, Hawaii Notice of the application, affording opportunity for 9. City Bank interested persons to submit comments on the public Honolulu, Hawaii interest factors, has been duly published (44 Federal 10. Central Pacific Bank Register 15538). The time for filing comments has ex- Honolulu, Hawaii pired, and the Board has considered the application and all comments received, including those of the Director of the Hawaii Department of Regulatory Crocker National Corporation, Agencies and the organizations named in the Appen- San Francisco, California dix to this Order ("Protestants").3 Applicant, the fourth largest banking organization in Order Approving California and the fourteenth largest in the United Acquisition of Bishop Investment Corporation States, has total assets of $13.9 billion.4 Its subsidiary, Crocker National Bank ("Bank"), with total deposits Crocker National Corporation, San Francisco, California ("Applicant"), a bank holding company within the meaning of the Bank Holding Company Act ("Act"), 1. In this regard, the Board notes that Hawaiian industrial loan companies are examined at least once annually by the State Bank Exhas applied for the Board's approval, under section aminer, and must file semiannual financial reports. In addition, mini- 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and section mum capital requirements are fixed by state law. The State Bank ex- 225.4(b)(2) of the Board's Regulation Y (12 C.F.R. aminer is empowered to order the discontinuance of any illegal or unsafe practices or to place the company in receivership in appropri- §225.4(b)(2)), to acquire all of the outstanding shares ate circumstances. of Bishop Investment Corporation, Honolulu, Hawaii 2. Applicant also proposes to acquire Bishop Building Company, a wholly-owned subsidiary of Bishop Trust, which owns the Bishop ("Bishop Investment"), and thereby to acquire con- Trust Building, an office building in downtown Honolulu, 30 percent trol of certain of its subsidiaries, including Bishop of which is presently occupied by Bishop Trust. Bishop Investment Trust Company, Ltd., Honolulu, Hawaii ("Bishop erected this building in 1969 for use by Bishop Trust, and its basement contains substantial vault space and safe deposit box facilities that are Trust"), and Hawaii Finance Company, Ltd., Hilo, necessary for Bishop Trust's operations. The street-level office facili- Hawaii ("Hawaii Finance"). Bishop Investment also ties in downtown Honolulu that are furnished by this building also appear reasonably necessary to Bishop Trust's business. Furtherholds certain assets that are impermissible investmore, Applicant expects that Bishop Trust and Hawaii Finance will ments for a bank holding company, including several occupy 50 percent of this building by 1983. Finally, the Board notes parcels of real estate, as well as voting shares of vari- that in 1978 Bishop Building Company represented approximately 2.9 percent of Bishop Investment's total assets. Based on the foregoing, ous corporations. the Board concludes that ownership of the Bishop Trust Building may Bishop Trust engages in the activities of a trust com- properly be regarded as incidental to the activities of Bishop Trust and pany as authorized under Hawaii State law and the Hawaii Finance under 12 C.F.R. § 225.4(a). Since this is an activity in which Bishop Trust could engage directly, it may be engaged in by a laws of Guam, including acting as fiduciary, agent or wholly-owned subsidiary of Bishop Trust after the acquisition of Bishcustodian for personal, employee benefit and corpo- op Trust by Applicant is approved. Northwestern Financial Corporarate trusts, and providing investment advice. Bishop tion, 65 FEDERAL RESERVE BULLETIN 566 (1979). 3. Protestants primarily include other financial organizations lo- Trust also provides data processing services with re- cated in Hawaii that compete with Bishop Trust and Hawaii Finance. gard to financial or related economic data. Hawaii Fi- None of the Protestants has requested that the Board hold a hearing on this application as provided in section 4(c)(8) of the Act. nance is an industrial loan company chartered under 4. All financial data are as of December 31, 1978, unless otherwise Hawaii law that makes small unsecured loans to indi- indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 67 of $11.2 billion, conducts commercial and retail bank- any foreign bank from engaging in banking business in ing business from branches located throughout Cali- Hawaii. However, the Board notes that trust comfornia. In addition, through subsidiaries, Applicant en- panies are specifically excluded from this prohibition, gages in various nonbanking activities, including and Hawaiian industrial loan companies are not emprovision of trust services, mortgage activities, leas- powered to engage in a banking business. Based on ing, and related insurance activities. these statutory provisions, as well as the discussion Protestants contend that this proposal would result above, the Board concludes that the proposed acquisiin the acquisition by Applicant of an additional bank tion would not violate state law.8 outside of the State of California where Applicant con- Bishop Trust, with assets of $900 million under manducts its principal banking operations, and that section agement, ranks 96th in the United States in terms of 3(d) of the Act would preclude the Board from approv- trust assets.9 With offices in Hawaii and Guam, it is the ing this application.5 The Board has examined this second largest of five trust companies chartered in Hacontention and concludes that it is without merit. waii and holds approximately 30 percent of the trust Moreover, the Board has examined the substance of assets in that state. Bishop Trust derives substantially Protestants' objection to determine whether this pro- all of its trust business from Hawaii. It is the Board's posal would contravene the spirit of the ban imposed judgment that in view of the unique geographical charin section 3(d) of the Act, and has concluded that it acteristics of Hawaii, the market in which the comwould not. petitive effects of the proposed acquisition should be Applicant has applied to engage in trust company evaluated is the State of Hawaii. activities as authorized by state law, activities which Applicant is also engaged in trust activities through the Board has determined are permissible for bank Bank and several of Applicant's nonbanking subholding companies under section 4 of the Act, and for sidiaries, including Crocker Investment Management this reason, the provisions of section 3(d) of the Act Corp. and Western Bradford Trust Company. It manare not applicable to this application. When it first con- ages total trust assets of $5.0 billion, and ranks 22nd sidered this nonbank activity, the Board noted that in among banks and trust companies in the United States many jurisdictions, authorized trust company activi- in terms of trust assets under management. Applicant ties may fall within the definition of "bank" contained derives its trust business from throughout the contiin section 2(c) of the Act.6 Thus, in order to ensure nental United States, but particularly from California. that trust companies acquired by bank holding com- However, Applicant and its subsidiaries do not have panies under section 4(c)(8) of the Act did not in fact any offices in Hawaii, and it derives only a minimal operate as banks, the Board, in adopting this as a per- amount of trust business from Hawaii. Inasmuch as missible activity for bank holding companies, restrict- Applicant and Bishop Trust do not compete for trust ed the lending activities of trust companies for which business in the same market, the Board concludes that application could be made under section 4(c)(8) of the consummation of the proposal will not eliminate any Act.7 The Board finds no evidence in the record that existing competition between the two. However, Prothis proposal would contravene either the letter or testants contend that consummation of the proposal spirit of section 3(d) of the Act, and the Board finds would result in other adverse effects on competition that the Protestants' contentions in this regard are within the Hawaii market. without merit. Finally, the Board notes that a similar Protestants, noting Applicant's substantial reobjection has been interposed by the Director of the sources, believe that Applicant should be required to Hawaii Department of Regulatory Agencies ("Direc- enter the Hawaii market de novo, rather than by actor") based on a provision of Hawaii law that prohibits quiring the second largest trust company in Hawaii. They further assert that Applicant's entry in the market by acquiring Bishop Trust will result in elimination 5. This section provides that the Board may not approve an appliof potential competition, undue concentration of recation under section 3 of the Act by a bank holding company to acquire a bank outside of the state where the applicant conducts its prin- sources and unfair competition within the Hawaii marcipal banking operations. (12 U.S.C. § 1842(d)). ket. Applicant contends that due to the unique charac- 6. "Bank" is defined as any institution that "accepts deposits that teristics of the Hawaiian market, de novo entry is not the depositor has a legal right to withdraw on demand, and engages in the business of making commercial loans." (12 U.S.C. § 1842(c)). feasible. The Board notes that Applicant has not at- 7. Section 225.4(a)(4) of Regulation Y provides, with certain ex- tempted to enter that market in any fashion prior to ceptions not applicable here, that trust companies authorized under that section may not engage in lending activities. In this connection, the Board notes that Bishop Trust makes short term "bridge" loans to 8. The Director also suggests that the proposed acquisition may be its trust customers pending receipt of income on investments. Howsubject to approval of Hawaiian authorities under other provisions of ever, in view of the broad deposit-taking powers of trust companies law. While the Board has not determined whether such approval is under 12 C.F.R. § 225.4(a)(4), permitting additional lending activities necessary, the Board expects that Applicant will obtain all necessary appears inconsistent with the provisions of section 3(d) of the Act. approvals from state authorities, and the Board's action on this appli- Applicant has committed that such lending activities of Bishop Trust cation is not intended to preempt any such requirements. will be terminated upon consummation of the proposal. 9. American Banker, June 26, 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 68 Federal Reserve Bulletin • January 1980 this proposal. Moreover, in the Board's view, even if tion to supply Hawaii Finance with additional capital Applicant may be regarded as a likely potential entrant and thereby increase its ability to make loans to its for trust services in the Hawaiian market, numerous customers. While the Board agrees with Protestants other large organizations providing trust services in that these benefits are not substantial, in the Board's the continental United States would remain as poten- view, they are sufficient to outweigh any adverse comtial entrants after consummation of this acquisition. petitive effects that may result from the proposal. With respect to the acquisition by Applicant of Hawaii Moreover, it appears that consummation of the pro- Finance ($1.9 million in assets as of June 30, 1978, and posed transaction would not result in conflicts of intera negligible market share), in the Board's judgment the ests or unsound banking practices. acquisition represents a foothold entry by Applicant As noted above, Bishop Investment holds real esinto the consumer finance business in Hawaii. Thus, tate and stock that represent impermissible investbased on the record of this application, the Board con- ments for bank holding companies. Applicant procludes that consummation of this proposal would not poses to dispose of such assets by means of a eliminate a significant amount of potential competition transaction whereby Bishop Investment will transfer between Applicant and Bishop Investment. the assets to a subsidiary, Bico Properties ("Bico"), in Protestants also contend that the proposed acquisi- return for three-year notes in the amount of $4.2 miltion will result in an undue concentration of resources lion secured by the assets. Prior to merging with Appliand unfair competitive practices in the Hawaii market. cant, Bishop Investment will spinoff the shares of Bico While the combination of two such significant organi- to its shareholders. When it merges with Bishop Inzations within the continental United States might be vestment, Applicant would acquire the note and secuof some concern to the Board, given the unique geo- rity interest, as well as the right to receive a 50 percent graphic separation of the Hawaii market from the mar- share in the proceeds from liquidation of the impermiskets in which Applicant competes, the Board is unable sible assets over and above the face amount of the to conclude that this proposal will result in an undue note. concentration of resources. Similarly, while Appli- The Board regards Bico as a shell corporation cant's size and resources are expected to be of some whose "business" is restricted to the liquidation of advantage to Bishop Trust in providing new and im- Bishop's impermissible assets primarily on behalf of proved services to its customers, there is no reason to Applicant. Moreover, the proposed liquidation would believe that Applicant will engage in any unfair com- take place over a three-year period, with Applicant petitive practices, as alleged by Protestants. In this having a security interest in the assets as well as the connection, the Board notes that section 106 of the Act right to appoint a trustee to complete the liquidation at prohibits unfair competition as a result of tying of serv- the end of the three-year period.10 Thus, Applicant ices offered by bank holding company affiliates, and would retain a beneficial interest in the impermissible Applicant has stated that the personnel and manage- assets for a substantially longer period than the Board ment of all of its affiliates are fully aware of these pro- normally permits a bank holding company acquiring a hibitions. Moreover, Protestants have provided no nonbank company to hold impermissible assets.11 For evidence that Applicant has engaged in unfair or pred- the foregoing reasons, the Board believes that Appliatory practices with respect to any of its subsidiaries, cant's divestiture proposal for disposing of Bishop Inand their fears of such practices appear to be based vestment's impermissible assets is contrary to the purprimarily on Applicant's absolute size. In the Board's poses of the Act, and that modification of the proposal judgment, based on the facts of record, these practices to address those concerns will be necessary before are not likely to occur as a result of this acquisition. consummation. Accordingly, the Board concludes that any adverse ef- On the basis of all the facts of record, the Board fects on competition that would result from the pro- concludes that the benefits to the public that would reposal should not be regarded as significant. sult from Applicant's acquisition of Bishop Investment Applicant's subsidiaries presently provide a number are sufficient to outweigh any adverse effects that of sophisticated trust services to their clients. For ex- would result from the proposed acquisition. Based upample, these subsidiaries have a significant in- on the foregoing and other considerations reflected in volvement in trading desk activities for corporate and the record, the Board has determined that the balance municipal securities and provide investment management services to large employee benefit trusts. The availability of these and other services to Bishop Trust 10. With regard to divestitures, the Board has stated that "the retention of an economic interest in the divested company that would will allow it to better serve Hawaiian trust customers create an incentive for the divesting company to attempt to influence that might otherwise forego such services or seek them the management of the divested company will preclude a finding that from large financial institutions located in the conti- the divestiture is complete." 12 C.F.R. § 225.139. 11. United Missouri Bancshares, Inc., 64 FEDERAL RESERVE BULnental United States. Applicant will also be in a posi- LETIN 415 (1978). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 69 of the public interest factors the Board is required to lated to banking (12 C.F.R. § 225.4(a)(13); Republic of consider under section 4(c)(8) is favorable. Accord- Texas Corporation, 63 FEDERAL RESERVE BULLETIN ingly, the application is hereby approved, subject to 414 (1977)). the conditions that: (1) Upon consummation of the Notice of this application, affording opportunity for proposed acquisition, Applicant will cause Bishop interested persons to submit comments and views, Trust to terminate all of its "bridge" lending activities; was duly published (44 Federal Register 61,257 (2) Applicant will cause Bishop Trust to terminate all (1979)). The time for filing comments and views has impermissible property management agreements as expired, and the Board has considered the application soon after consummation as possible in accordance and all comments received in the light of the public with the terms of the agreements, but in any event no interest factors set forth in section 4(c)(8) of the Act. later than one year from the date of consummation; (3) Applicant controls The Rock Island Bank ("Bank"), Applicant will, prior to consummation of this pro- Rock Island, Illinois (deposits of $92.7 million), which posal, submit a divestiture proposal for the Board's is the 113th largest banking organization in the State of approval that will result in a divestiture by Applicant Illinois, controlling 0.11 percent of the total deposits in of its interest in Bishop Investment's impermissible as- commercial banks in the state. Applicant also has a sets within two years from the date of consummation. nonbanking subsidiary, Federal Discount Corporation This determination is also subject to the conditions ("FDC"), the parent of the seven subsidiaries through set forth in § 225.4(c) of Regulation Y and to the which Applicant by this application proposes to sell Board's authority to require such modification or ter- money orders.1 FDC engages in finance, industrial mination of the activities of a holding company or any loan, and credit-related insurance activities directly of its subsidiaries as the Board finds necessary to as- and indirectly through 76 offices of its subsidiaries in sure compliance with the provisions and purposes of Illinois, Iowa, Minnesota, North Dakota, and Wisconthe Act and the Board's regulations and orders issued sin. thereunder, or to prevent evasion thereof. The trans- Applicant proposes to issue money orders which it action shall be made not later than three months after will sell to the general public through its bank and nonthe effective date of this Order, unless such period is bank subsidiaries. Applicant does not propose that extended for good cause by the Board or by the Feder- these instruments be sold through unaffiliated agents. al Reserve Bank of San Francisco, pursuant to author- The Board has previously taken note of the limited ity hereby delegated. number of competitors in this industry (Republic of By order of the Board of Governors, effective De- Texas Corporation, supra). Applicant's entry into this cember 10, 1979. industry as an issuer would enhance competition in the provision of this service. In addition, Applicant's retail Voting for this action: Vice Chairman Schultz and Gover- sale of money orders through its nonbank subsidiaries nors Partee, Teeters, and Rice. Absent and not voting: Chair- is expected to result in some increased convenience to man Volcker and Governors Wallich and Coldwell. the public and may stimulate competition and ultimately result as well in a reduction of the costs to con- (Signed) GRIFFITH L. GARWOOD, sumers. Furthermore, there is no evidence in the rec- [SEAL] Deputy Secretary of the Board. ord indicating that Applicant's engaging in these activities would lead to any undue concentration of resources, unfair competition, conflicts of interests, un- Financial Services Corporation of the Midwest, sound banking practices, or other adverse effects. Ac- Rock Island, Illinois cordingly, it is the Board's view that the issuance and sale of money orders as proposed by Applicant would Order Approving produce benefits to the public and would be in the pubthe Issuance and Sale of Money Orders lic interest. Based upon the foregoing and other considerations Financial Services Corporation of the Midwest, Rock reflected in the record, the Board has determined that Island, Illinois, a bank holding company within the the balance of the public interests factors it is required meaning of the Bank Holding Company Act, has ap- to consider under section 4(c)(8) is favorable. Accordplied for the Board's approval, under section 4(c)(8) of ingly, the application is hereby approved. This deterthe Act (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) mination is subject to the conditions set forth in secof the Board's Regulation Y (12 C.F.R. § 225.4(b)(2)), to engage de novo in the issuance and, through its non- 1. The Money Shops of Iowa, Inc., The Money Shops of Minnebank subsidiaries, in the retail sale of money orders sota, Inc.; The Money Shops Industrial Loan and Thrift Company; The Money Shops of Wisconsin, Inc.; The Money Shops, Inc. (Wishaving a face value of not more than $1,000. The consin): The Money Shops, Inc. (Delaware); and The Money Shops, Board has determined these activities to be closely re- Inc. (North Dakota). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 70 Federal Reserve Bulletin • January 1980 tion 225.4(c) of Regulation Y and the Board's authority vices activities. Through its nonbank subsidiaries, Apto require such modification or termination of the ac- plicant engages in credit-related insurance activities. tivities of a holding company or any of its subsidiaries Sutter originates single- and multi-family residential to assure compliance with the provisions and purposes mortgage loans, commercial loans and construction of the Act and the Board's regulations and order is- and land development loans from six offices located in sued thereunder, or to prevent evasion thereof. Arizona. Sutter sells these loans in the secondary mar- The activity shall be commenced not later than three ket to permanent investors and then acts as the sermonths after the effective date of this Order, unless vicing agent for the investor. During 1978, Sutter origisuch period is extended for good cause by the Board or nated a total of $61.4 million in loans and serviced by the Federal Reserve Bank of Chicago pursuant to loans totaling $204.3 million. delegated authority. Applicant also engages in the origination and ser- By order of the Board of Governors, effective De- vicing of real estate loans through its indirect subsidicember 21, 1979. ary, Seafirst Mortgage Corporation ("Mortgage"). Mortgage does not solicit business in Arizona. Thus, Voting for this action: Vice Chairman Schultz and Gover- the acquisition of Sutter by Applicant is regarded as an nors Wallich, Coldwell, Partee, Teeters, and Rice. Absent and expansion of Applicant's mortgage banking operations not voting: Chairman Volcker. into Arizona. Accordingly, it is concluded that consummation of the proposal would have no adverse ef- (Signed) GRIFFITH L. GARWOOD, fects on competition in the relevant area. [SEAL] Deputy Secretary of the Board. Upon consummation of the proposed acquisition, Applicant would assist Sutter in expanding the types of mortgage loans it offers its customers to include in- Seafirst Corporation, dustrial financing, loans to low- and moderate-income Seattle, Washington borrowers, and loans to small businesses. In addition, Applicant intends to utilize data processing and an in- Order Approving ventory control system in the operation of Sutter, Acquisition of Mortgage Banking Firm thereby reducing Sutter's operating costs. Finally, affiliation with Applicant will enable Sutter to expand its Seafirst Corporation, Seattle, Washington, a bank lending capacity. Accordingly, it is concluded that the holding company within the meaning of the Bank proposed acquisition of Sutter by Applicant can rea- Holding Company Act, has applied for the Board's ap- sonably be expected to produce benefits to the public proval, under section 4(c)(8) of the Act (12 U.S.C. § that outweigh any adverse effects. Furthermore, there 1843(c)(8)) and section 225.4(b)(2) of the Board's Reg- is no evidence in the record indicating that consumulation Y (12 C.F.R. § 225.4(b)(2)) to acquire 100 per- mation of this proposed transaction would result in cent of the voting shares of Sutter Trust Company, any undue concentration of resources, decreased or Phoenix, Arizona ("Sutter"), a company that engages unfair competition, conflicts of interest, unsound in the activities of mortgage banking, including the banking practices or other adverse effects upon the origination of residential real estate loans and the ser- public interest. vicing of such loans for the account of others. Such ac- Based upon the foregoing and other considerations tivities have been determined by the Board to be close- reflected in the record, it has been determined, in acly related to banking (12 C.F.R. § 225.4(a)(1) and (3)). cordance with the provisions of section 4(c)(8) of the Notice of the application, affording opportunity for Act, that Applicant's acquisition of Sutter can reasoninterested persons to submit comments and views, has ably be expected to produce favorable public benefits. been duly published (44 Federal Register 60826). The Accordingly, the application is hereby approved. This time for filing comments and views has expired and the determination is subject to the conditions set forth in application and all comments received have been con- section 225.4(c) of Regulation Y and to the Board's authority to require such modification or termination sidered in light of the public interest factors set forth in of the activities of a holding company or any of its subsection 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)). sidiaries as the Board finds necessary to assure com- Applicant, the largest banking organization in the pliance with the provisions and purposes of the Act State of Washington, controls one bank with total deposits of approximately $6.3 billion.1 Applicant en- and the Board's regulations and orders issued thereunder, or to prevent evasion thereof. gages, through subsidiaries of the bank, in mortgage banking, leasing, escrow company and computer ser- The transaction shall be made not later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or 1. All banking data are as of June 30, 1979. by the Federal Reserve Bank of San Francisco. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 71 By order of the Secretary of the Board, acting pur- the meaning of section 2(a) of the BHC Act) a bank or suant to delegated authority from the Board of Gover- a bank holding company; and nors, effective December 18, 1979. C. the distribution of such 8,360 shares is necessary or appropriate to effectuate the policies of the BHC (Signed) GRIFFITH L. GARWOOD, Act. [SEAL] Deputy Secretary of the Board. 3. The prior certification issued April 3, 1978, was granted upon the representation of Brantley that it would elect, for purposes of Part VIII of subchapter O CERTIFICATIONS PURSUANT of Chapter 1 of the Code, to have the determination of To THE BANK HOLDING COMPANY whether property is "prohibited property" or is prop- TAX ACT OF 1976 erty eligible to be distributed without recognition of gain under section 1101(b)(1) of the Code, made under The Brantley Company, the BHC Act as if such act did not contain clause (ii) of Blackshear, Georgia section 4(c) or the proviso of section 4(a)(2) thereof as provided in section 1103(g) and 1103(h) of the Code. Final Certification Pursuant to the On December 11, 1979, Brantley made such an elec- Bank Holding Company Tax Act of 1976 tion by resolution of its board of directors and filed a written statement with the Board to that effect. Sec- [Docket No. TCR 76-134] tions 1103(g) and 1103(h) of the Code provide that a company making such election must dispose of either The Brantley Company, Blackshear, Georgia all banking property or all nonbanking property. ("Brantley"), has requested a final certification pur- 4. On April 28, 1978, Brantley distributed to its suant to section 1101(e) of the Internal Revenue Code shareholders, on a pro rata basis, a total of 8,360 (the "Code"), as amended by section 2(a) of the Bank shares of Bank and sold the remaining 200 shares of Holding Company Tax Act of 1976 (the "Tax Act"), Bank owned by it. Brantley does not currently hold that it has (before the expiration of the period prohibit- any interest in Bank. ed property is permitted under the Bank Holding Com- 5. The prior certification issued on April 3, 1978, pany Act (12 U.S.C. § 1841 et seq.) ("BHC Act") to was granted upon the condition that no person holding be held by a bank holding company) ceased to be a an office or position (including an advisory or honorary bank holding company. position) with Brantley or any of its subsidiaries as a In connection with this request, the following infor- director, policy-making employee or consultant, or mation is deemed relevant for purposes of issuing the who performs, (directly, or through an agent, reprerequested certification:1 sentative or nominee) functions normally associated 1. Effective April 3, 1978, the Board issued a prior with such office or position, will hold any such office or certification pursuant to section 1101(b) of the Code position or perform any such function with Bank or with respect to the proposed divestiture by Brantley of any of its subsidiaries. Effective June 19, 1978, all such 8,360 shares of The Blackshear Bank, Blackshear, interlocking relationships between Brantley and Bank Georgia ("Bank"), then held by Brantley, through the and their respective subsidiaries were terminated. pro rata distribution of such shares to Brantley's 6. Brantley does not directly or indirectly own, conshareholders.2 trol or have power to vote 25 percent or more of any 2. The Board's Order certified that: class of voting securities of any bank or any company A. Brantley is a qualified bank holding corporation that controls a bank. within the meaning of section 1103(b) of the Code, and 7. Brantley has represented that it does not control satisfies the requirements of that subsection; in any manner the election of a majority of directors, B. The 8,360 shares of Bank that Brantley proposes or exercise a controlling influence over the manageto distribute to its shareholders are all of part of the ment or policies of Bank or any other bank or any property by reason of which Brantley controls (within company that controls a bank. On the basis of the foregoing information, it is hereby certified that Brantley has (before the expiration of the period prohibited property is permitted under the 1. This information derives from Brantley's communications with BHC Act to be held by a bank holding company) the Board concerning its request for this certification, Brantley's Reg- ceased to be a bank holding company, and has disistration Statement filed with the Board pursuant to the BHC Act, and posed of all its banking property. other records of the Board. 2. The prior certification noted that Brantley owned and controlled This certification is based upon the representations 8,560 shares of Bank, but that under section 1101(c) of the Code, 200 made to the Board by Brantley and upon the facts set shares of Bank acquired by Brantley after July 7, 1970, would not be entitled to special tax treatment under section 1101(b) of the Code. forth above. In the event the Board should determine Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 72 Federal Reserve Bulletin • January 1980 that facts material to this certification are otherwise erty by reason of which Agency controls (within the than as represented by Brantley, or that Brantley has meaning of section 2(a) of the BHC Act) a bank or a failed to disclose to the Board other material facts, it bank holding company ; and may revoke this certification. C. the distribution of such 905 shares is necessary By order of the Board of Governors, acting through or appropriate to effectuate the policies of the BHC its General Counsel, pursuant to delegated authority Act. (12 C.F.R. § 265.3(b)(3)), effective December 20, 1979. 3. The prior certification issued June 14, 1978, was granted upon the representation of Agency that it (Signed) THEODORE E. ALLISON, would elect, for purposes of Part VIII of subchapter O [SEAL] Secretary of the Board. of Chapter 1 of the Code, to have the determination of whether property is "prohibited property" or is property eligible to be distributed without recognition of Evans Insurance Agency, gain under § 1101(b)(1) if the Code, made under the Billings, Oklahoma BHC Act as if such Act did not contain clause (ii) of section 4(c) or the proviso of section 4(a)(2) thereof, as Final Certification Pursuant to the provided in sections 1103(g) and 1103(h) of the Code. Bank Holding Company Tax Act of 1976 On November 23, 1979, Agency made such an election by resolution of its board of directors and filed a writ- [Docket No. TCR 76-133] ten statement with the Board to that effect. Sections 1103(g) and 1103(h) of the Code provide that a compa- Evans Insurance Agency, Inc., Billings, Oklahoma ny making such election must dispose of either all ("Agency"), has requested a final certification pur- banking property or all nonbanking property. suant to section 1101(e) of the Internal Revenue Code 4. On September 12, 1978, Agency distributed to its (the "Code"), as amended by section 2(a) of the Bank sole shareholder a total of 494 shares of Bank and sold Holding Company Tax Act of 1976 (the "Tax Act"), the remaining 411 shares of Bank owned by it to that that it has (before the expiration of the period prohibit- shareholder. Agency does not currently hold any intered property is permitted under the Bank Holding Com- est in Bank. pany Act (12 U.S.C. § 1841 et seq.) ("BHC Act") to 5. Agency does not directly or indirectly own, conbe held by a bank holding company) ceased to be a trol or have power to vote 25 percent or more of any bank holding company. class of voting securities of any bank or any company In connection with this request, the following infor- that controls a bank. mation is deemed relevant for purposes of issuing the 6. Agency has represented that it does not control requested certification:1 in any manner the election of a majority of directors or 1. Effective June 14, 1978, the Board issued a prior exercise a controlling influence over the management certification pursuant to section 1101(b) of the Code or policies of Bank, any other bank, or any company with respect to the proposed divestiture by Agency of that controls a bank. 494 shares of First State Bank in Billings, Billings, On the basis of the foregoing information, it is here- Oklahoma ("Bank"), then held by Agency through the by certified that Agency has (before the expiration of distribution of such shares to Agency's sole share- the period prohibited property is permitted under the holder.2 BHC Act to be held by a bank holding company) 2. The Board's Order certified that: ceased to be a bank holding company, and has dis- A. Agency is a qualified bank holding corporation posed of all its banking property. within the meaning of subsection 1103(b) of the Code, This certification is based upon the representations and satisfies the requirements of that subsection; made to the Board by Agency and upon the facts set B. the 905 shares of Bank that Agency proposes to forth above. In the event the Board should determine distribute to its shareholders are all or part of the prop- that facts material to this certification are otherwise than as represented by Agency, or that Agency has failed to disclose to the Board other material facts, it may revoke this certification. By order of the Board of Governors, acting through 1. This information derives from Agency's communications with its General Counsel, pursuant to delegated authority the Board concerning its request for this certification, Agency's Regis- (12 C.F.R. § 265.2(b)(3)), effective December 28,1979. tration Statement filed with the Board pursuant to the BHC Act, and other records of the Board. 2. The prior certification noted that Agency owned and controlled 905 shares of Bank, but that under section 1101(c) of the Code, 411 (Signed) GRIFFITH L. GARWOOD, shares of Bank acquired by Agency after July 7, 1970, would not be entitled to special tax treatment under section 1101(b) of the Code. [SEAL] Deputy Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 73 How-Win Development Co., ited property" within the meaning of section 1103(c) of Cresco, Iowa the Code; C. The exchange of the Farm Property for the Prior Certification Pursuant to the shares of the new corporation and the distribution to Bank Holding Company Tax Act of 1976 How-Win's shareholders of such shares are necessary or appropriate to effectuate section 4 of the BHC Act. [Docket No. TCR 76-181] This certification is based upon the representations made to the Board by How-Win and upon the facts set How-Win Development Co., Cresco, Iowa ("How- forth above. In the event that the Board should hereaf- Win"), has requested a prior certification pursuant to ter determine that the facts material to this certificasection 1101(a) of the Internal Revenue Code tion are otherwise than as represented by How-Win or ("Code"), as amended by section 2(a) of the Bank that How-Win has failed to disclose to the Board other Holding Company Tax Act of 1976, that its proposed material facts, the Board may revoke this certification. divestiture of all of the farmland and farm-related By order of the Board of Governors, acting through property ("Farm Property"), currently held by How- its General Counsel pursuant to delegated authority Win, through the pro rata distribution of shares of a (12 C.F.R. § 265.2(b)(3)), effective December 13,1979. proposed new corporation formed solely for the purpose of receiving such property, to all of the share- (Signed) GRIFFITH L. GARWOOD, holders of How-Win, is necessary or appropriate to ef- [SEAL] Deputy Secretary of the Board. fectuate section 4 of the Bank Holding Company Act (12 U.S.C. § 1841 et seq.) ("BHC Act"). In connection with this request, the following infor- Keystone Consolidated Industries, Inc., mation is deemed relevant for the purpose of issuing Peoria, Illinois the requested certification.1 1. How-Win is a corporation organized under the Prior Certification Pursuant to the laws of the State of Iowa on November 14, 1969, and Bank Holding Company Tax Act of 1975 in December 1969 How-Win acquired control of Cresco Union Savings Bank, Cresco, Iowa ("Bank"). [Docket No. TCR 76-191] 2. How-Win became a bank holding company on December 31, 1970, as a result of the enactment of the Keystone Consolidated Industries, Inc., Peoria, Illi- 1970 Amendments to the BHC Act by virtue of its di- nois ("Keystone"), has requested a prior certification rect ownership and control at that time of more than 25 pursuant to section 6158(a) of the Internal Revenue percent of the outstanding voting shares of Bank, and Code ("Code"), as amended by section 3(a) of the it registered as such with the Board on June 10, 1971. Bank Holding Company Tax Act of 1976 ("Tax Act"), How-Win presently has 3,262.5 shares, representing that its proposed sale of 100,000 shares of common 82.9 percent of the outstanding shares of Bank. stock ("Bank Shares") of Jefferson Trust and Savings 3. How-Win acquired the Farm Property on Janu- Bank of Peoria, Peoria, Illinois ("Bank"), to two indiary 1, 1970. The disposition of the Farm Property by viduals ("Buyers") for cash, is necessary or appropri- How-Win would be necessary or appropriate to ef- ate to effectuate the policies of the Bank Holding Comfectuate section 4 of the BHC Act if How-Win contin- pany Act (12 U.S.C. § et seq.) ("BHC Act"). ues to be a bank holding company beyond December In connection with this request, the following infor- 31, 1980, and such property is "prohibited property" mation is deemed relevant for purposes of issuing the within the meaning of section 1103(c) of the Code. On requested certification.1 the basis of the foregoing information, it is hereby cer- 1. Keystone is a corporation organized and existing tified that: under the laws of the State of Delaware. A. How-Win is a qualified bank holding company 2. On December 17, 1947, Keystone acquired ownwithin the meaning of section 1103(b) of the Code, and ership and control of 100,000 shares, representing 50 satisfies the requirements of that section; percent of the outstanding voting shares, of Bank. B. The Farm Property that How-Win proposes to 3. Keystone became a bank holding company on exchange for shares of the new corporation is "prohib- December 31, 1970, as a result of the 1970 Amendments to the BHC Act, by virtue of its ownership and 1. This information derives from How-Win's communications with 1. This information derives from Keystone's correspondence with the Board concerning its request for this certification, How-Win's reg- the Board concerning its request for this certification, Keystone's istration statement filed with the Board pursuant to the BHC Act, and Registration Statement filed with the Board pursuant to the BHC Act, other records of the Board. and other records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 74 Federal Reserve Bulletin • January 1980 control at that time of more than 25 percent of the out- its General Counsel, pursuant to delegated authority, standing voting shares of Bank. Keystone would have effective December 5, 1979. been a bank holding company on July 7, 1970, if the BHC Act Amendments of 1970 had been in effect on (Signed) GRIFFITH L. GARWOOD, such date, by virtue of ownership and control on that [SEAL] Deputy Secretary of the Board. date of more than 25 percent of the outstanding voting shares of Bank. Keystone currently owns 100,000 shares, representing 50 percent of the outstanding vot- Pioneer Industrial Park, Inc., ing shares, of Bank. Peoria, Illinois 4. Keystone holds property acquired by it on or before July 7, 1970, the disposition of which would be Prior Certification Pursuant to the necessary or appropriate under section 4 of the BHC Bank Holding Company Act of 1976 Act if Keystone were to remain a bank holding company beyond December 31, 1980, and which property is [Docket No. TCR 76-185] "prohibited property" within the meaning of section 1103(c) of the Code. Pioneer Industrial Park, Inc., Peoria, Illinois ("Pio- 5. August 14, 1978, Keystone filed with the Board neer"), has requested a prior certification pursuant to an irrevocable declaration pursuant to section 225.4(d) section 1101(b) of the Internal Revenue Code of the Board's Regulation Y that it would cease to be a ("Code"), as amended by section 2(a) of the Bank bank holding company prior to January 1, 1981, by di- Holding Company Act of 1976 ("Tax Act"), that its vesting itself of all of its interest in Bank. In accord- proposed divestiture of 9,000 shares of Pioneer State ance with the portion of the regulation and Keystone's Bank, Peoria, Illinois ("Bank") presently held by Piocommitment, Keystone has been permitted to expand neer through the pro rata distribution of such shares to its nonbanking activities without seeking the Board's Pioneer's six shareholders, is necessary or appropriate prior approval. to effectuate the policies of the Bank Holding Compa- 6. Keystone has committed that after the sale of ny Act. (12 U.S.C. § 1841 et seq.) ("BHC Act"). Bank Shares, no person who is a director or officer of In connection with this request the following infor- Keystone or its parent or subsidiaries will serve in a mation is deemed relevant for purposes of issuing the similar capacity with Bank. In addition, all persons af- requested certification:1 filiated with Keystone currently serving as directors or 1. Pioneer is a corporation organized on January 2, officers of Bank will resign their positions effective as 1959 under the laws of the state of Delaware. of the closing date of the sale. Keystone has further 2. On November 8, 1968, Pioneer acquired owncommitted that none of Buyers is, or will be, indebted ership and control of 9,000 shares, representing 60 perto Keystone, and that none of Buyers is affiliated in cent of the outstanding voting shares, of Bank. any way with Keystone. 3. Pioneer became a bank holding company on De- On the basis of the foregoing information, it is here- cember 31, 1970, as a result of the 1970 amendments to by certified that: the BHC Act by virtue of its ownership and control at (A) Keystone is a qualified bank holding corpora- that time of more than 25 percent of the outstanding tion within the meaning of section 1103(b) of the Code, voting shares of Bank, and it registered as such with and satisfies the requirements of that section; the Board on January 26, 1972. Pioneer would have (B) Bank Shares covered by the instant request are been a bank holding company on July 7, 1970, if the the property by reason of which Keystone controls BHC Act Amendments of 1970 had been in effect on (within the meaning of section 2(a) of the BHC Act) a such date, by virtue of its ownership and control on bank; and that date of more than 25 percent of the outstanding (C) the sale of such shares is necessary or appropri- voting shares of Bank. Pioneer presently owns and ate to effectuate the policies of the BHC Act. controls 10,500 shares, representing 61.8 percent of This certification is based upon the representations the outstanding voting shares, of Bank.2 and commitments made to the Board by Keystone and 4. Pioneer holds property acquired by it on or beupon the facts set forth above. In the event the Board fore July 7, 1970, the disposition of which would be should determine that facts material to this certification are otherwise than as represented by Keystone, or that Keystone has failed to disclose to the Board other 1. This information derives from Pioneer's communications with the Board concerning its request for this certification, Pioneer's Regismaterial facts or to fulfill any commitments made to tration Statement filled with the Board pursuant to the Bank Holding the Board in connection herewith, it may revoke the Company Act, and other records of the Board. certification. 2. Subsequent to July 7, 1970, Pioneer purchased 1,500 shares of Bank. Under section 1101(c)(1) of the Code, property acquired after By order of the Board of Governors, acting through July 7, 1970, generally does not qualify for the tax benefits of section Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 75 required under section 4 of the BHC Act if Pioneer Safeway Insurance Company, Chicago, Illinois were to remain a bank holding company beyond De- ("Safeway"), has requested a prior certification purcember 31, 1980, and which property is "prohibited suant to section 1101(b) of the Internal Revenue Code property" within the meaning of section 1103(c) of the ("Code"), as amended by section 2(a) of the Bank Code. Holding Company Tax Act of 1976, that its proposed 5. Pioneer has committed to the Board that within divestiture of 411,588 of the voting shares of The Nathree months after consummation of the proposed di- tional Republic Bank of Chicago, Chicago, Illinois vestiture, no person holding an office or position (in- ("Bank"), currently held by Safeway, through the pro cluding an advisory or honorary position) with Pioneer rata distribution of such shares to the shareholders of as a director, officer, policy-making employee or con- Safeway is necessary or appropriate to effectuate the sultant, or who performs (directly or through an agent, policies of the Bank Holding Company Act (12 U.S.C. representative or a nominee) functions comparable to § 1841 et seq.) ("BHC Act"). those normally associated with such office or position, In connection with this request, the following inforwill hold any such office or position or perform any mation is deemed relevant for the purpose of issuing such function with Bank or any of its subsidiaries or the requested certification.1 affiliates. 1. Safeway is a corporation organized under the On the basis of the foregoing information, it is here- laws of the state of Illinois on December 28, 1962. by certified that: 2. On June 30, 1968, Safeway controlled 17.5 per- (A) Pioneer is a qualified bank holding corporation cent of the outstanding voting shares of Bank. Bewithin the meaning of section 1103(b) of the Code, and tween June 30, 1968, and July 7, 1970, Safeway acsatisfies the requirements of that section; quired additional shares of Bank, and as of July 7, (B) the 9,000 shares of Bank that Pioneer proposes 1970, Safeway owned and controlled 62.685 percent of to distribute to its shareholders are all or part of the Bank's outstanding shares. property by reason of which Pioneer controls (within 3. Safeway became a bank holding company on Dethe meaning of section 2(a) of the BHC Act) a bank or cember 31, 1970, as a result of the 1970 Amendments bank holding company; and to the BHC Act, by virtue of its ownership and control (C) the distribution of the 9,000 shares of Bank is at that time of more than 25 percent of the outstanding necessary or appropriate to effectuate the policies of voting shares of Bank, and registered as such with the the BHC Act. Board on August 24, 1971. Safeway would have been a The certification is based upon the representations bank holding company on July 7, 1970, if the BHC Act made to the Board by Pioneer and upon the facts set Amendments of 1970 had been in effect on that date by forth above. In the event the Board should hereafter virtue of its ownership and control on that date of determine that facts material to this certification are more than 25 percent of the outstanding voting shares otherwise than as represented by Pioneer or that Pio- of Bank. Safeway presently owns 423,500 shares, repneer has failed to disclose to the Board other material resenting approximately 64.5 percent of the outfacts, it may revoke this certification. standing voting shares of Bank.2 By order of the Board of Governors, acting through 4. Safeway holds property acquired by it on or beits General Counsel, pursuant to delegated authority fore July 7, 1970, the disposition of which would be (12 C.F.R. § 265.2(2)(3)), effective December 17,1979. required by section 4 of the BHC Act, if Safeway were to continue to be a bank holding company beyond De- (Signed) GRIFFITH L. GARWOOD, [SEAL] Deputy Secretary of the Board. 1. This information derives from Safeway's communications with the Board concerning its request for this certification, Safeway's regis- Safeway Insurance Company, tration statement filed with the Board pursuant to the BHC Act, and other records of the Board. Chicago, Illinois 2. Under subsection (c) of section 1101 of the Code, property acquired after July 7, 1970, generally does not qualify for the tax benefits of section 1101(b) when distributed by an otherwise qualified bank Prior Certification Pursuant to the holding company. However, when such property was acquired by a Bank Holding Company Tax Act of 1976 qualified bank holding company in a transaction in which gain was not recognized under section 305(a) of the Code, then § 1101(b) is applicable. Accordingly, shares received by Safeway after July 7, 1970 in [Docket No. TCR 76-173] transactions for which no gain was recognized pursuant to section 305(a) of the Code with respect to shares held on or before July 7, 1101(b) of the Code when distributed by an otherwise qualified bank 1970, qualify as property eligible for the tax benefits of section 1101(b) holding company. Since Pioneer has not claimed that any of the ex- of the Code. Safeway also purchased an additional 1,313 and 800 emptions to this general rule are applicable to it, the 1,500 shares ac- shares of Bank on July 28, 1970, and in January, 1972, respectively. quired after July 7, 1970, do not appear to be eligible for tax benefits Since these shares were acquired by Safeway subsequent to July 7, under the Tax Act. Pioneer proposes to retain ownership of the 1,500 1970, section 1101(c) makes these shares ineligible for the tax benefits shares, which represent approximately 8.8 percent of the outstanding of section 1101(b), as well as 45,277 shares subsequently received in stock of Pioneer State Bank. tax-free transactions with respect to those shares. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 76 Federal Reserve Bulletin • January 1980 cember 31, 1980, and which property is "prohibited [Docket No. TCR 76-136] property" within the meaning of section 1103(c) of the Code. Schnitzler Corporation, Froid, Montana ("Schnitz- 5. Safeway and Bank have committed to the Board ler"), has requested a final certification pursuant to that no person holding an office or position (including section 1101(e) of the Internal Revenue Code (the an advisory or honorary position) with Safeway or any "Code"), as amended by section 2(a) of the Bank of its subsidiaries as a director, policy-making employ- Holding Company Tax Act of 1976 (the "Tax Act"), ee or consultant, or who performs (directly, or through that it has (before the expiration of the period prohibitan agent, representative or nominee) functions com- ed property is permitted under the Bank Holding Comparable to those normally associated with such office pany Act (12 U.S.C. § 1841 et seq.) ("BHC Act") to or position, will hold any such office or position or per- be held by a bank holding company) ceased to be a form any such function with Bank or any of its sub- bank holding company. sidiaries. Safeway and Bank have further committed In connection with this request, the following inforthat all such interlocking relationships presently exist- mation is deemed relevant for purposes of issuing the ing between Safeway and Bank and their respective requested certification:1 subsidiaries will be terminated. 1. Effective June 30, 1978, the Board issued a prior 6. Safeway holds 47,390 shares, representing 7.2 certification pursuant to section 1101(b) of the Code percent of Bank's outstanding voting shares, which it with respect to the proposed divestiture by Schnitzler is not entitled to transfer to its shareholders in a tax- of 1,320 shares of First State Bank of Newcastle free distribution under section 1101(b). However, ("Bank"), then held by Schnitzler through the pro rata Safeway has committed that it will reduce its interest distribution to Schnitzler's stockholders of all of the in Bank to below five percent of Bank's outstanding shares of Northeastern Wyoming Corporation voting shares. ("Northeastern"), a corporation created and availed On the basis of the foregoing information, it is here- of solely for the purpose of receiving Schnitzler's by certified that: shares of Bank. (A) Safeway is a qualified bank holding company 2. The Board's Order certified that: within the meaning of section 1103(c) of the Code, and A. Schnitzler is a qualified bank holding corporasatisfies the requirements of that section; tion within the meaning of section 1103(b) of the Code, (B) The 411,588 shares of Bank that Safeway pro- and satisfied the requirements of that subsection; poses to distribute pro rata to its shareholders are all B. the 1,320 shares of Bank that Schnitzler proor part of the property by reason of which Safeway poses to exchange for shares of Northeastern are all or controls (within the meaning of section 2(a) of the part of the property by reason of which Schnitzler con- BHC Act) a bank or bank holding company; and trols (within the meaning of section 2(a) of the BHC (C) The distribution to the shareholders of Safeway Act) a bank or a bank holding company; and of the shares of Bank held by it is necessary or appro- C. the exchange of the shares of Bank for the shares priate to effectuate the policies of the BHC Act. of Northeastern and the distribution to the share- This certification is based upon representations and holders of Schnitzler of the shares of Northeastern are commitments made to the Board by Safeway and upon necessary or appropriate to effectuate the policies of the facts summarized above. In the event the Board the BHC Act. should hereafter determine that facts material to this 3. The prior certification issued June 30, 1978, was certification are otherwise than as represented by granted upon the representation of Schnitzler that it Safeway or that Safeway has failed to disclose to the would elect, for purposes of Part VIII of subchapter 0 Board other material facts, or has failed to meet its of Chapter I of the Code, to have the determination of commitments, it may revoke this certification. whether property is "prohibited property" or is prop- By order of the Board of Governors, acting through erty eligible to be distributed without recognition of its General Counsel, pursuant to delegated authority gain under § 1101(b)(1) of the Code, made under the (12 C.F.R. § 265.2(b)(3)), effective December 31,1979. BHC Act as if such act did not contain clause (ii) of section 4(c) or the proviso of section 4(a)(2) thereof as (Signed) THEODORE E. ALLISON, provided in sections 1103(g) and 1103(h) of the Code. [SEAL] Secretary of the Board. On August 1, 1979, Schnitzler made such an election by resolution of its board of directors and filed a writ- Schnitzler Corporation, Froid, Montana 1. This information derives from Schnitzler's communications with Final Certification Pursuant to the the Board concerning its request for this certification, Schnitzler's Registration Statement filed with the Board pursuant to the BHC Act, Bank Holding Company Tax Act of 1976 and other record^ of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 78 ten statement with the Board to that effect. Sections ("BHC Act") to be held by a bank holding company) 1103(g) and 1103(h) of the Code provide that a compa- ceased to be a bank holding company and disposed of ny making such election must dispose of either all all banking property. banking property or all nonbanking property. In connection with this request, the following infor- 4. On June 18, 1979, Schnitzler exchanged its 1,320 mation is deemed relevant for purposes of issuing the shares of Bank for all of the shares of Northeastern, requested certification.1 and immediately thereafter distributed to its share- 1. Effective July 13, 1978, the Board issued a prior holders, on a pro rata basis, all of the shares of North- certification, as corrected, pursuant to section 1101(b) eastern. Schnitzler does not currently hold any inter- of the Code with respect to the proposed divestiture by est in Bank or Northeastern. T-W of all of the 6,020 shares of common stock of 5. Schnitzler does not directly or indirectly own, American State Bank of New England, New England, control or have power to vote 25 percent or more of North Dakota ("Bank"), currently held by T-W, any class of voting securities of any bank or any com- through the pro rata distribution of such shares to the pany that controls a bank. holders of common stock of T-W.2 6. Schnitzler has represented that it does not con- 2. The Board's Order, as corrected, certified that: trol in any manner the election of a majority of direc- A. T-W is a qualified bank holding corporation, tors, or exercise a controlling influence over the man- within the meaning of subsection (b) of section 1103 of agement or policies of Bank, Northeastern, or any the Code, and satisfies the requirements of that subother bank or any company that controls a bank. section; On the basis of the foregoing information it is hereby B. the 6020 shares of Bank that T-W proposes to certified that Schnitzler has (before the expiration of distribute to its shareholders are all or part of the propthe period prohibited property is permitted under the erty by reason of which T-W controls (within the BHC Act to be held by a bank holding company) meaning of section 2(a) of the BHC Act) a bank or a ceased to be a bank holding company, and has dis- bank holding company; and posed of all its banking property. C. the distribution of such shares is necessary or This certification is based upon the representations appropriate to effectuate the policies of the BHC Act. made to the Board by Schnitzler and upon the facts set 3. On December 28, 1978, T-W distributed to its forth above. In the event the Board should determine shareholders, on a pro rata basis, a total of 6,020 that facts material to this certification are otherwise shares of Bank then held by T-W. T-W currently does than as represented by Schnitzler, or that Schnitzler not hold any interest in Bank. has failed to disclose to the Board other material facts, 4. The prior certification issued on July 13, 1978, it may revoke this certification. was granted upon the representation of T-W that it will By order of the Board of Governors, acting through elect, for purposes of Part VIII of subchapter 0 of its General Counsel, pursuant to delegated authority chapter 1 of the Code, to have the determination (12 C.F.R. § 265.2(b)(3)), effective December 28, 1979. whether the property is "prohibited property" or is property eligible to be distributed without recognition (Signed) GRIFFITH L. GARWOOD, of gain under section 1101(b)(1) of the Code, made un- [SEAL] Deputy Secretary of the Board. der the BHC Act as if the BHC Act did not contain respectively, the proviso of section 4(a)(2) thereof and clause (ii) of section 4(c) thereof as provided in sec- Trans-Western Corp., tions 1103(g) and 1103(h) of the Code. T-W has made Dickinson, North Dakota such an election by resolution of its board of directors and has filed a written statement with the Board to that Final Certification Pursuant to the effect. Sections 1103(g) and 1103 (h) of the Code pro- Bank Holding Company Tax Act of 1976 vide that a company making such elections must dispose of either all banking property or all nonbanking [Docket No. TCR 76-163] property. Trans-Western Corp., Dickinson, North Dakota ("T- 1. This information derives from T-W's correspondence with the W"), has requested a final certification pursuant to Board concerning its request for this certification, T-W's Registration sections 1101(e) and 1103(g) and (h) of the Internal Statement filed with the Board pursuant to the BHC Act, and other Revenue Code (the "Code"), as amended by section records of the Board. 2. The prior certification issued on July 13, 1978, stated that T-W 2(a) of the Bank Holding Company Tax Act of 1976 held a total of 5,820 shares of bank that were acquired by it prior to (the "Tax Act"), that it has (before the expiration of July 7, 1970. In August, 1978, T-W advised the Board that it held 6,020 the period prohibited property is permitted under the shares rather than 5,820 shares of Bank acquired prior to July 7, 1970. Accordingly, the Board has issued a correction to its prior certifica- Bank Holding Company Act (12 U.S.C. § 1841 et seq.) tion of July 13, 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 78 Federal Reserve Bulletin • January 1980 5. T-W has represented to the Board that it has dis- under the laws of the State of Indiana. posed of all of its banking property and that it does not 2. Between January 30, 1969, and July 7, 1970, Verown or control any shares of any bank or any company non acquired ownership and control of 7287 of the outthat controls a bank. standing voting shares of Bank. 6. T-W has represented that it does not control in 3. Vernon became a bank holding company on Deany manner the election of a majority of directors, or cember 31, 1970, as a result of the 1970 Amendments exercise a controlling influence over the management to the BHC Act, by virtue of its ownership and control or policies of Bank or any company that controls a at that time of more than 25 percent of the outstanding bank. voting shares of Bank, and it registered as such with On the basis of the foregoing information, it is here- the Board on September 7, 1971. Vernon would have by certified that: been a bank holding company on July 7, 1970, if the (A) T-W has (before the expiration of the period BHC Act Amendments of 1970 had been in effect on prohibited property is permitted under the BHC Act to such date, by virtue of ownership and control on that be held by a bank holding company) ceased to be a date of more than 25 percent of the outstanding voting bank holding company; and shares of Bank. Vernon currently owns 7,335 shares, (B) T-W has disposed of all banking property. representing 84.35 percent of the outstanding voting This certification is based upon the representations shares, of Bank.2 made to the Board by T-W and upon the facts set forth 4. Vernon holds property acquired by it on or beabove. In the event the Board should determine that fore July 7, 1970, the disposition of which would be facts material to this certification are otherwise than as necessary or appropriate under section 4 of the BHC represented by T-W, or that T-W has failed to disclose Act if Vernon were to remain a bank holding company to the Board other material facts, it may revoke this beyond December 31, 1980, and which property is certification. "prohibited property" within the meaning of section By order of the Board of Governors, acting through 1103(c) of the code. its General Counsel, pursuant to delegated authority 5. Vernon has committed that upon consummation (12 C.F.R. § 265.3(b)(3)), effective December 28,1979. of the proposed divestiture, which shall occur no later than December 31, 1980, no person holding an office or (Signed) GRIFFITH L. GARWOOD, position (including an advisory or honorary position) [SEAL] Deputy Secretary of the Board. with Vernon as a director, officer, policy-making employee or consultant, or who performs (directly or through an agent, representative or a nominee) func- Vernon Financial Corporation tions comparable to those normally associated with Indianapolis, Indiana such office or position, will hold any such office or position or perform any such function with Bank or any Prior Certification Pursuant to the of its subsidiaries or affiliates. Vernon has further com- Bank Holding Company Tax Act of 1976 mitted that none of Buyers is, or will be, indebted to Vernon, and that none of Buyers is affiliated in any [Docket No. TCR 76-194] way with Vernon. On the basis of the foregoing information, it is here- Vernon Financial Corporation, Indianapolis, Indiana by certified that: ("Vernon") has requested a prior certification pur- (A) Vernon is a qualified bank holding corporation suant to section 6158(a) of the Internal Revenue Code within the meaning of section 1103 (b) of the Code and ("Code"), as amended by section 3(a) of the Bank satisfied the requirements of that section; Holding Company Tax Act of 1976 ("Tax Act"), that (B) Bank Shares covered by the instant request are its proposed sale of 7,335 shares of common stock the property by reason of which Vernon controls ("Bank Shares") of The First National Bank, North Vernon, Indiana ("Bank") to Albert R. Jackson, 1. This information derives from Vernon's communications with North Vernon, Indiana, for himself as principal and the Board concerning its request for this certification, Vernon's Regisagent for 27 principals (together referred to as "Buy- tration Statement filed with the Board pursuant to the BHC Act, and other records of the Board. ers"), for cash is necessary or appropriate to ef- 2. Subsequent to July 7, 1970, Vernon acquired 48 shares of Bank. fectuate the policies of the Bank Holding Company Under section 1101(c)(1) of the Code, property acquired after July 7, Act (12 U.S.C. § 1841 et seq.) ("BHC Act"). 1970, generally does not qualify for the tax benefits of section 1101(b) when distributed by an otherwise qualified bank holding company. In connection with this request, the following infor- Similarly, property sold before a prior certification is granted generalmation is deemed relevant for purposes of issuing the ly is not eligible for tax benefits. Since Vernon has not claimed that requested certification:1 any of the exceptions to these general rules are applicable to it, the 48 shares acquired after July 7, 1970, appear to be ineligible for tax bene- 1. Vernon is a corporation organized and existing fits under the Tax Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 79 (within the meaning of section 2(a) of the BHC Act) a including the following facts. Agency is a closely held bank; and Oklahoma corporation of which H. B. Evans is the (C) The sale of such shares is necessary or appro- sole shareholder and employee. Bank is located in a priate to effectuate the policies of the BHC Act. rural area in Oklahoma and holds total deposits of ap- This certification is based upon the representations proximately $7 million. Agency divested its interest in and commitments made to the Board by Vernon and Bank by distributing the Bank shares held by it on a upon the facts set forth above. In the event the Board pro rata basis to H. B. Evans. Thus, Agency now should determine that facts material to this certifica- holds no interest in Bank. Mr. Evans and his three tion are otherwise than as represented by Vernon, or sons now hold a total of 59 percent of Bank's voting that Vernon has failed to disclose to the Board other shares. Inasmuch as Mr. Evans is the sole shareholder material facts or to fulfill any commitments made to of Agency, and he and his spouse are its only officers the Board in connection herewith, it may revoke the and directors, the divestiture of Bank does not appear certification. to have been a means for perpetuating Agency's con- By order of the Board of Governors, acting through trol over Bank. On the basis of the above and other its General Counsel, pursuant to delegated authority, facts of record, the Board concludes that control of effective December 28, 1979. Agency resides with H. B. Evans as an individual and that Agency does not control and is not in fact capable (Signed) GRIFFITH L. GARWOOD, of controlling Mr. Evans in his capacity as transferee [SEAL] Deputy Secretary of the Board. of Bank's stock or otherwise. Accordingly, it is ordered that the request of Agency for a determination pursuant to section 2(g)(3) be and Orders Under Section 2 is hereby granted. This determination is based upon of Bank Holding Company Act the representations made to the Board by Agency and Mr. Evans. In the event the Board should hereafter Evans Insurance Agency, Inc., determine that facts material to this determination are Billings, Oklahoma otherwise than as represented, or that Agency or Mr. Evans have failed to disclose to the Board other mate- Order Granting Determination Under rial facts, this determination may be revoked, and any the Bank Holding Company Act change in the facts or circumstances relied upon by the Board in making this determination could result in the [Docket No. 077] Board reconsidering the determination made herein. By order of the Board of Governors, acting through Evans Insurance Agency, Inc., Billings, Oklahoma its General Counsel, pursuant to delegated authority ("Agency"), a bank holding company within the (12 C.F.R. §265.2(b)(1)), effective December 28, 1979. meaning of section 2(a) of the Bank Holding Company Act of 1956, as amended (12 U.S.C. 51841(a)) ("Act"), (Signed) GRIFFITH L. GARWOOD, by virtue of its indirect control of First State Bank in [SEAL] Deputy Secretary of the Board. Billings, Billings, Oklahoma ("Bank"), has requested a determination, pursuant to the provisions of section 2(g)(3) of the Act (12 U.S.C. § 1841(g)(3)), that Agency Schnitzler Corporation, is not in fact capable of controlling H. B. Evans, to Froid, Montana whom it transferred its interest in Bank, notwithstanding the fact that H. B. Evans is an officer and director Order Granting Determination Under of Agency and Bank, and is indebted to Agency. the Bank Holding Company Act Under the provisions of section 2(g)(3) of the Act, shares transferred after January 1, 1966, by any bank [Docket No. 076] holding company to a transferee that is indebted to the transferor or has one or more directors, trustees, or Schnitzler Corporation, Froid, Montana ("Schnitzbeneficiaries in common with or subject to control by ler"), a bank holding company within the meaning of the transferor, are deemed to be indirectly owned or section 2(a) of the Bank Holding Company Act of controlled by the transferor unless the Board, after op- 1956, as amended (12 U.S.C. §1841(1)), by virtue of its portunity for hearing, determines that the transferor is indirect control of First State Bank of Newcastle, not in fact capable of controlling the transferee. Newcastle, Wyoming ("Bank"), has requested a de- It is hereby determined that Agency is not, in fact, termination, pursuant to the provisions of section capable of controlling H. B. Evans. This determina- 2(g)(3) of the Act (12 U.S.C. § 1841(g)(3)) that Schnitztion is based on the evidence of record in this matter, ler is not in fact capable of controlling Helen Hornby, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 80 Federal Reserve Bulletin • January 1980 her spouse or son ("Hornbys"), individuals to whom may be revoked, and any change in the facts or cirit indirectly transferred its interest in Bank, or North- cumstances relied upon by the Board in making this eastern Wyoming Corporation ("Northeastern"), a determination could result in the Board reconsidering corporation created to receive Schnitzler's interest in the determination made herein. Bank, notwithstanding the fact that the Hornbys are By order of the Board of Governors, acting through officers and directors of Schnitzler, Bank, and North- its General Counsel, pursuant to delegated authority eastern. (12 C.F.R. §265.2(b)(1)), effective December 18, 1979. Under the provisions of section 2(g)(3) of the Act, shares transferred after January 1, 1966, by any bank (Signed) GRIFFITH L. GARWOOD, holding company to a transferee that is indebted to the [SEAL] Deputy Secretary of the Board. transferor or has one or more officers, directors, trustees, or beneficiaries in common with or subject to control by the transferor, are deemed to be indirectly Trans-Western Corp., owned or controlled by the transferor unless the Dickinson, North Dakota Board, after opportunity for hearing, determines that the transferor is not in fact capable of controlling the Order Granting Determination Under transferee. the Bank Holding Company Act It is hereby determined that Schnitzler is not, in fact, capable of controlling the Hornbys or North- [Docket No. 043] eastern. This determination is based on the evidence of record in this matter, including the following facts. Trans-Western Corp., Dickinson, North Dakota ("T- Schnitzler is a small, closely held Montana corpora- W"), a bank holding company within the meaning of tion, all of the voting shares of which are owned or section 2(a) of the Bank Holding Company Act of controlled by Mrs. Hornby, her husband, son and sis- 1956, as amended (12 U.S.C. § 1841(a)), by virtue of its ter. Bank is located in a rural area of Wyoming, and control of American State Bank of New England, holds total deposits of approximately $23 million. North Dakota ("Bank"), has requested a determina- Schnitzler divested its interest in Bank by forming a tion, pursuant to section 2(g)(3) of the Act (12 U.S.C. new one-bank holding company, Northeastern, and § 1841(g)(3)) that T-W is not in fact capable of contransferring the shares of Bank to it. Schnitzler then trolling Kathleen O'Connell or her husband, Maurice distributed the shares of Northeastern on a pro rata O'Connell (the "O'Connells") individuals to whom it basis to its shareholders, the Hornbys. Thus, Schnitz- transferred its interest in Bank, or AMERICAN BANler now holds no interest in Bank. In addition to the COR, LTD., Dickinson, North Dakota ("AMERIshares of Bank received from Schnitzler, the Hornbys CAN"), a North Dakota Corporation created to reowned or controlled 1.5 percent of the outstanding ceive the O'Connell's interest in Bank, and shares of Bank, and they now hold a total of 67.5 per- AMERICAN. cent of Bank, both directly and through Northeastern. Under the provisions of section 2(g)(3) of the Act, Inasmuch as the Hornbys own or control all of shares transferred after January 1, 1966, by any bank Schnitzler's voting shares, and also represent the ma- holding company to a transferee that is indebted to the jority of its directors and officers, the divestiture of transferor or has one or more officers, directors, Bank does not appear to have been a means for perpet- trustees, or beneficiaries in common with or subject to uating Schnitzler's control over Bank. On the basis of control by the transferor are deemed to be indirectly the above and other facts of record, the Board con- owned or controlled by the transferor unless the cludes that control of Schnitzler resides with the Horn- Board, after opportunity for a hearing, determines that bys as individuals, and that Schnitzler does not control the transferor is not in fact capable of controlling the and is not a fact capable of controlling the Hornbys or transferee. Northeastern in their capacity as transferees of Bank's It is hereby determined that T-W is not, in fact, castock or otherwise. pable of controlling the O'Connells or AMERICAN. Accordingly, it is ordered, that the request of This determination is based upon the evidence of rec- Schnitzler for a determination pursuant to section ord in this matter, including the following facts. Bank 2(g)(3) be and hereby is granted. This determination is is located in a predominantly rural area of North Dabased upon the representations made to the Board by kota and holds total deposits of approximately $7.7 Schnitzler and the Hornbys. In the event the Board million. T-W is a small closely-held North Dakota corshould hereafter determine that facts material to this poration, all of the voting shares of which are owned determination are otherwise than as represented, or or controlled by Kathleen O'Connell (94.71 percent) that Schnitzler or the Hornbys have failed to disclose and her husband, Maurice O'Connell (5.29 percent). to the Board other material facts, this determination T-W divested its interest in Bank by a pro rata distri- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 81 bution of Bank's shares to T-W's shareholders. All of for a determination pursuant to section 2(g)(3) be and the shareholders of Bank then exchanged their shares hereby is granted. This determination is based upon of Bank for shares of a new corporation, AMERI- the representations made to the Board by T-W, CAN, which was formed to control Bank and the two AMERICAN, and the O'Connells. In the event the other banks previously owned by the principals of T- Board should hereafter determine that facts material to W in their individual capacities. Therefore, T-W cur- this determination are otherwise than as represented, rently holds no interest in Bank. The O'Connells now or that T-W, AMERICAN, or the O'Connells have own a total of 80.3 percent of AMERICAN, which failed to disclose to the Board other material facts, this controls 100 percent of Bank. Inasmuch as the determination may be revoked, and any change in the O'Connells own or control all of T-W's voting shares, facts or circumstances relied upon by the Board in the divestiture of Bank does not appear to have been a making this determination could result in the Board remeans of perpetuating T-W's control over Bank. On considering the determination made herein. the basis of the above and other facts of record, the By order of the Board of Governors, acting through Board concludes that control of T-W resides with the its General Counsel, pursuant to delegated authority O'Connells as individuals, and that T-W does not con- (12 C.F.R. §265.2(b)(1)), effective December 28, 1979. trol and is not in fact capable of controlling AMERI- CAN or the O'Connells in their capacity as transferees of Bank's stock or otherwise. (Signed) GRIFFITH L. GARWOOD, Accordingly, it is ordered that the request of T-W [SEAL] Deputy Secretary of the Board. ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During December 1979 the Board of Governors approved the applications listed below. Copies are available upon request to Publications Services, Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Board action (effective Applicant Bank(s) date) Clover Bottom Estates, Inc., Bank of Hendersonville, Hendersonville, December 21, 1979 Hendersonville, Tennessee Tennessee First American Bank Corporation, Farmers and Merchants State Bank of December 4, 1979 Kalamazoo, Michigan Sebawaing, Michigan, Sebawaing, Michigan First City Bancorporation of Texas, Inc., First City Bank Greenspoint, N. A., December 20,1979 Houston, Texas Houston, Texas Grandville Financial Holdings Limited Independence Bank, Encino, California December 3, 1979 Hong Kong, B.C.C., et al. Sabrina Properties, N.V. Curacao, Central National Bank of Miami, December 21,1979 Netherlands Antilles Miami, Florida Eagle National Holding Company, Inc., Miami, Florida Southwest Bancshares, Inc., Houston, The Woodlands National Bank, The December 28,1979 Texas Woodlands, Montgomery County, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 82 Federal Reserve Bulletin • January 1980 Sections 3 and 4 Reserve Effective Applicant Bank(s) Bank date Callao Banschares, Inc., Callao, Callao Community Bank, St. Louis December 24, 1979 Missouri Callao, Missouri By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date Bradley Bancorporation, Inc., Bradley Bank Minneapolis December 3,1979 Tomahawk, Wisconsin Tomahawk, Wisconsin Buffalo National Bancshares, Inc., Buffalo National Minneapolis December 28, 1979 Buffalo, Colorado Buffalo, Minnesota Central Bancorporation, Inc., Denver, First National Bank in Aspen Kansas City December 26,1979 Colorado Aspen, Colorado, et al. CITIZENS STATE Citizens State Bank of Minneapolis December 27,1979 BANCORPORATION Petersburg Petersburg, North Dakota Petersburg, North Dakota Colonial American Bankshares The Mountain National Bank of Richmond December 14, 1979 Corporation, Roanoke, Virginia Clifton Forge, Clifton Forge, Va. Carthage Holding Company, Inc., Farmers State Bank of Minneapolis December 19, 1979 Carthage, South Dakota Carthage Carthage, South Dakota Crested Butte Bankshares, Inc., Crested Butte State Bank, Kansas City December 13, 1979 Crested Butte, Colorado Crested Butte, Colorado Commercial Bankshares, Inc., Griffin, Bank of Hampton, Hampton, Atlanta November 27, 1979 Georgia Georgia D & B Holding Company, Inc., Bank of Beulah Minneapolis December 27, 1979 Beulah, North Dakota Beulah, North Dakota Delano State Agency, Inc., Delano, State Bank of Delano Minneapolis December 20,1979 Minnesota Delano, Minnesota Douglas County Bancshares, Inc., Citizens Bank St. Louis December 10,1979 Kansas City, Missouri Ava, Missouri Elizabethtown, Bancshares, Inc., Citizens Bank of St. Louis December 21,1979 Elizabethtown, Kentucky Elizabethtown, Elizabethtown, Kentucky First Charter Financial Corporation, Syracuse Bancorp, Inc., Chicago December 12, 1979 Syracuse, Indiana Syracuse, Indiana FIRST CICERO BANC First National Bank of Cicero, Chicago December 20,1979 CORPORATION, Chicago, Illinois Cicero, Illinois First Dakota Financial, Bismarck, State Bank of Burleigh County Minneapolis December 3,1979 North Dakota Trust Company, Bismarck, North Dakota First Kiowa Bancshares, Inc., Kiowa, The First State Bank, Kansas City December 11,1979 Kansas Kiowa, Kansas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 83 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date General Bancorporation, Inc., Broomfield State Bank Kansas City December 14, 1979 Broomfield, Colorado Broomfield, Colorado Hoffman Banschares, Inc., Hoffman, Farmers State Bank Minneapolis December 18,1979 Minnesota Hoffman, Minnesota J. J. Flynn Investment Co. Inc., The State Bank Kansas City December 20,1979 Parsons, Kansas Parsons, Kansas Marshall-Putnam County Marshall County State Bank, Chicago December 17, 1979 Bancorporation, Inc., Varna, Illinois Varna Illinois Osakis Bancshares, Osakis, Minnesota First National Bank of Osakis, Minneapolis December 3, 1979 Osakis, Minnesota Ranger Financial Corporation, Ranger, Ranger National Bank Dallas December 18,1979 Texas Corporation Ranger, Texas Security Bancorp, Inc., Southgate, Keatington State Bank, Lake Chicago December 21, 1979 Michigan Orion, Michigan Security Bancorp, Inc., Southgate, Security Bank of Richmond, Chicago December 21,1979 Michigan Richmond, Michigan Texas Security Bancshares, Inc., Fort Central Bank and Trust, Fort Dallas December 12,1979 Worth, Texas Worth, Texas North Fort Worth Bank, Fort Worth, Texas Verndale Bancshares, Inc., Verndale, The First National Bank of Minneapolis Minnesota Verndale, Verndale, Minnesota Section 4 Nonbanking company Reserve Effective Applicant (or activity) Bank date First Bankshares Corp. of S.C., First National Credit Richmond December 5, 1979 Columbia, South Carolina Life Insurance Company, Columbia, South Carolina First Tennessee National Corporation, Norlen Life Insurance St. Louis December 27, 1979 Memphis, Tennessee Company, Phoenix, Arizona ORDER APPROVED UNDER BANK MERGER ACT Reserve Effective Applicant Bank(s) Bank date The Midwest Bank and Trust The Firelands Community Cleveland December 3,1979 Company, Cleveland, Ohio Bank, Huron, Ohio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 84 Federal Reserve Bulletin • January 1980 PENDING CASES INVOLVING THE BOARD OF GOVERNORS Does not include suits against the Federal Reserve Banks in which the Board of Governors is not named a party. Board of Governors, filed May 1979, U.S.C.A. for the District of Columbia. Boggs, et al. v. Board of Governors, filed October Independent Insurance Agents of America, et al., v. 1979, U.S.C.A. for the Eighth Circuit. Board of Governors, filed April 1979, U.S.C.A. for Independent Bank Corporation v. Board of Gover- the District of Columbia. nors, filed October 1979, U.S.C. A. for the Sixth Cir- Independent Insurance Agents of America, et al., v. cuit. Board of Governors, filed March 1979, U.S.C.A. for Wiley v. United States, et al., filed September 1979, the District of Columbia. U.S.D.C. for the District of Columbia. Credit and Commerce American Investment, et al., v. County National Bancorporation and TGB Co. v. Board of Governors, filed March 1979 U.S.C.A. for Board of Governors, filed September 1979, the District of Columbia. U.S.C.A. for the Eighth Circuit. Consumers Union of the United States, v. G. William State of Indiana v. The United States of America, et Miller, et al., filed December 1978, U.S.D.C. for the al., filled September 1979, U.S.D.C. for the District District of Columbia. of Columbia. Manchester-Tower Grove Community Organization! Edwin F. Gordon v. Board of Governors, et al., filed ACORN v. Board of Governors, filed September August 1979, U.S.D.C. for the Northern District of 1978, U.S.C.A. for the District of Columbia. Georgia. Beckley v. Bord of Governors, filed July 1978, Edwin F. Gordon v. Board of Governors, et al., filed U.S.C.A. for the Northern District of Illinois. August 1979, U.S.C.A. for the Fifth Circuit. Independent Bankers Association of Texas v. First American Bankers Association v. Board of Governors, National Bank in Dallas, et al., filed July 1978, et al, filed August 1979, U.S.D.C. for the District of U.S.D.C. for the Northern District of Texas. Columbia. Mid-Nebraska Bancshares, Inc. v. Board of Gover- Gregory v. Board of Governors, filed July 1979, nors, filed July 1978, U.S.C.A. for the District of U.S.D.C. for the District of Columbia. Columbia. Donald W. Riegel, Jr. v. Federal Open Market Com- Security Bancorp and Security National Bank v. mittee, filed July 1979, U.S.D.C. for the District of Board of Governors, filed March 1978, U.S.C.A. for Columbia. the Ninth Circuit. Connecticut Bankers Association, et al., v. Board of Vickars-Henry Corp. v. Board of Governors, filed De- Governors, filed May 1979, U.S.C.A. for the Dis- cember 1977, U.S.C.A. for the Ninth Circuit. trict of Columbia. Investment Company Institute v. Board of Governors, Ella Jackson et al., v., Board of Governors, filed May filed September 1977, U.S.D.C. for the District of 1979, U.S.C.A. for the Fifth Circuit. Columbia. Memphis Trust Company v. Board of Governors, filed Roberts Farms, Inc. v. Comptroller of the Currency, May 1979, U.S.C.A. for the Sixth Circuit. et al, filed November 1975, U.S.D.C. for the South- Independent Insurance Agents of America, et al., v. ern District of California. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics CONTENTS Domestic Financial Statistics WEEKLY REPORTING COMMERCIAL BANKS A3 Monetary aggregates and interest rates Assets and liabilities A4 Factors affecting member bank reserves A20 All reporting banks A5 Reserves and borrowings of member banks A21 Banks with assets of $ 1 billion or more A6 Federal funds transactions of money market A22 Banks in New York City banks A23 Balance sheet memoranda A24 Commercial and industrial loans POLICY INSTRUMENTS A24 Major nondeposit funds of commercial banks A25 Gross demand deposits of individuals, A8 Federal Reserve Bank interest rates partnerships, and corporations A9 Member bank reserve requirements A10 Maximum interest rates payable on time and savings deposits at federally insured institutions FINANCIAL MARKETS A11 Federal Reserve open market transactions A25 Commercial paper and bankers dollar acceptances outstanding FEDERAL RESERVE BANKS A26 Prime rate charged by banks on short-term business loans A12 Condition and Federal Reserve note statements A26 Terms of lending at commercial banks A13 Maturity distribution of loan and security All Interest rates in money and capital markets holdings A28 Stock market—Selected statistics A29 Savings institutions—Selected assets and MONETARY AND CREDIT AGGREGATES liabilities A13 Bank debits and deposit turnover A14 Money stock measures and components FEDERAL FINANCE A15 Aggregate reserves and deposits of member banks A30 Federal fiscal and financing operations A15 Loans and investments of all commercial banks A31 U.S. budget receipts and outlays A32 Federal debt subject to statutory limitation A32 Gross public debt of U.S. Treasury—Types and COMMERCIAL BANK ASSETS AND LIABILITIES ownership A33 U.S. government marketable securities- A16 Last-Wednesday-of-month series Ownership, by maturity A17 Call-date series A34 U.S. government securities dealers— A18 Detailed balance sheet, September 30,1978 Transactions, positions, and financing A3 5 Federal and federally sponsored credit agencies—Debt outstanding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 2 Federal Reserve Bulletin • January 1980 SECURITIES MARKETS AND International Statistics CORPORATE FINANCE A54 U.S. international transactions—Summary A36 New security issues—State and local A55 U.S. foreign trade governments and corporations A55 U.S. reserve assets A37 Open-end investment companies—Net sales and A56 Foreign branches of U.S. banks—Balance sheet asset position data A37 Corporate profits and their distribution A58 Selected U.S. liabilities to foreign official A38 Nonfinancial corporations—Assets and liabilities institutions A38 Business expenditures on new plant and equipment A39 Domestic finance companies—Assets and REPORTED BY BANKS IN THE UNITED STATES liabilities; business credit A58 Liabilities to and claims on foreigners A59 Liabilities to foreigners REAL ESTATE A61 Banks' own claims on foreigners A62 Banks' own and domestic customers' claims on A40 Mortgage markets foreigners A41 Mortgage debt outstanding A62 Banks' own claims on unaffiliated foreigners A63 Claims on foreign countries—Combined domestic offices and foreign branches CONSUMER INSTALLMENT CREDIT A42 Total outstanding and net change SECURITIES HOLDINGS AND TRANSACTIONS A43 Extensions and liquidations A64 Marketable U.S. Treasury bonds and notes- Foreign holdings and transactions FLOW OF FUNDS A64 Foreign official assets held at Federal Reserve Banks A44 Funds raised in U.S. credit markets A 65 Foreign transactions in securities A45 Direct and indirect sources of funds to credit markets REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES Domestic Nonfinancial Statistics A66 Liabilities to unaffiliated foreigners A46 Nonfinancial business activity—Selected A67 Claims on unaffiliated foreigners measures A46 Output, capacity, and capacity utilization A47 Labor force, employment, and unemployment INTEREST AND EXCHANGE RATES A48 Industrial production—Indexes and gross value A50 Housing and construction A68 Discount rates of foreign central banks A51 Consumer and producer prices A68 Foreign short-term interest rates A52 Gross national product and income A68 Foreign exchange rates A53 Personal income and saving A69 Guide to Tabular Presentation and 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 1978 1979 1979 Item Q4 Q1 Q2 Q3 July Aug. Sept. Oct. Nov. Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)1 Member bank reserves 1 Total 2.4 -3.0 -5.0 6.3 12.7 7.2 11.5 20.9' 4.5 2 Required 2.2 -2.9 -4.8 6.0 13.1 7.0 12.5 18.4 ' 5.6 3 Nonborrowed 4.7 -3.4 -8.8 8.2 20.7 10.0 4.2 1.3' 8.1 4 Monetary base2 8.5 5.6 4.0 9.8 11.2 12.1 13.9 10.7' 4.6 Concepts of money 3 5 M-l 4.1 -2.1 7.6 9.7 10.4 6.8 11.2 2.5 1.0 6 M-l + 2.7 -5.0 3.7 8.3' 10.2 6.7' 7.2 -4.8' -11.8 7 M-2 7.6 1.8 8.6 12.0 12.9 11.0 12.4' 8.5' 6.1 8 M-3 9.3 4.7 7.9 10.5 11.4 10.0 10.9 7.1' 5.5 Time and savings deposits Commercial banks 9 Total 12.3 8.4 1.2 9.0 12.2 14.6 15.1 16.6 15.5 10 Savings .2 -9.6 -3.1 5.5 9.4 6.6 .0 -16.3' -34.7 11 Other time 18.2 15.6 18.5 19.2 18.1 19.4 21.2 32.0 37.9 12 Thrift institutions 4 11.6 8.8 6.8 8.4 9.2r 8.4r 8.9 5.2' 4.3 13 Total loans and investments at commercial banks 5 12.7 13.3 11.9 15.8 13.4 11.6 21.7 6.4 -0.5 1979 1979 Q1 Q2 Q3 Q4 Aug. Sept. Oct. Nov. Dec. Interest rates (levels, percent per annum) Short-term rates 14 Federal funds <* 10.07 10.18 10.94 13.58 10.94 11.43 13.77 13.18 13.78 15 Federal Reserve discount 7 9.50 9.50 10.21 11.92 10.24 10.70 11.77 12.00 12.00 16 Treasury bills (3-month market yield) 8 9.38 9.38 9.67 11.84 9.52 10.26 11.70 11.79 12.04 17 Commercial paper (3-month)8'9 10.04 9.85 19.64 13.35 10.43 11.63 13.23 13.57 13.24 Long-term rates Bonds 18 U.S. government Jo 9.03 9.08 9.03 10.18 8.97 9.21 9.99 10.37 10.18 19 State and local government11 6.37 6.22 6.28 7.20 6.20 6.52 7.08 7.30 7.22 20 Aaa utility (new issue)12 9.58 9.66 9.64 11.21 9.48 9.93 10.97 11.42 11.25 21 Conventional mortgages13 10.33 10.35 11.13 12.38 11.10 11.35 12.15 12.50 -12.50 1. Unless otherwise noted, rates of change are calculated from average 5. Quarterly changes calculated from figures shown in table 1.23. amounts outstanding in preceding month or quarter. Growth rates for 6. Seven-day averages of daily effective rates (average of the rates on member bank reserves are adjusted for discontinuities in series that result a given date weighted by the volume of transactions at those rates). from changes in Regulations D and M. 7. Rate for the Federal Reserve Bank of New York. 2. Includes total reserves (member bank reserve balances in the current 8. Quoted on a bank-discount basis. week plus vault cash held two weeks earlier); currency outside the U.S. 9. Beginning Nov. 1977, unweighted average of offering rates quoted Treasury, Federal Reserve Banks and the vaults of commercial banks; by at least five dealers. Previously, most representative rate quoted by and vault cash of nonmember banks. these dealers. Before Nov. 1979, data shown are for 90- to 119-day 3. M-l equals currency plus private demand deposits adjusted. maturity. M-l + equals M-l plus savings deposits at commercial banks, NOW 10. Market yields adjusted to a 20-year maturity by the U.S. Treasury. accounts at banks and thrift institutions, credit union share draft ac- 11. Bond Buyer series for 20 issues of mixed quality. counts, and demand deposits at mutual savings banks. 12. Weighted averages of new publicly offered bonds rated Aaa, Aa M-2 equals M-l plus bank time and savings deposits other than large and A by Moody's Investors Service and adjusted to an Aaa basis. negotiable certificates of deposit (CDs). Federal Reserve compilations. M-3 equals M-2 plus deposits at mutual savings banks, savings and 13. Average rates on new commitments for conventional first mortgages loan associations, and credit union shares. on new homes in primary markets, unweighted and rounded to nearest 4. Savings and loan associations mutual savings banks, and credit 5 basis points, from Dept. of Housing and Urban Development. unions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Nonfinancial Statistics • January 1980 1.11 FACTORS AFFECTING MEMBER BANK RESERVES Millions of dollars Monthly averages of daily figures Weekly averages of daily figures for weeks ending— Factors 1979 1979 Oct.p Nov.f Dec.? Nov. I4P Nov. 21? Nov. 28*> Dec. 5? Dec. 12 P Dec. 19P Dec. 26P SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 134,923 136,696 140,008 135,454 138,522 138,192 137,877 138,523 139,051 141,347 2 U.S. government securities1 113,775 115,240 117,821 114,620 116,046 115,232 117,138 116,976 117,538 118,393 3 Bought outright 113,282 114,815 117,195 114,620 111166,,004466 111155,,223322 116,554 111166,,997766 111177,,332266 111177,,332288 4 Held under repurchase agreements 493 425 626 0 0 0 584 0 212 1,065 5 Federal agency securities 8,414 8,363 8,455 8,221 8,221 8,221 8,732 8,219 8,353 8,401 6 Bought outright 8,222 8,221 8,218 8,221 8,221 88,,222211 88,,222211 88,,221199 88,,221166 88,,221166 7 Held under repurchase agree- 192 142 237 0 0 0 511 0 137 185 8 Acceptances 173 116 353 0 0 0 195 0 31 806 2,022 1,908 1,454 1,858 1,865 2,021 1,819 1,291 1,684 1,224 10 Float 6,116 6,119 6,499 5,725 7,226 7,548 5,037 6,629 6,128 6,857 11 Other Federal Reserve assets 4,423 4,950 5,426 5,031 5,164 5,170 4,956 5,408 5,318 5,667 12 Gold stock 1111,,220055 11,159 11,112 11,164 1111,,116644 1111,,114422 11,112 1111,,111122 11,112 11,112 13 Special drawing rights certificate 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 14 Treasury currency outstanding 12,745 12,828 12,913 12,816 12,834 12,837 12,933 12,896 12,911 12,938 ABSORBING RESERVE FUNDS 15 Currency in circulation 119,813 121,397 123,836 121,230 121,744 122,252 122,314 123,030 123,682 124,738 16 Treasury cash holdings 347 397 426 397 397 403 421 427 431 430 Deposits, other than member bank reserves, with Federal Reserve Banks 17 Treasury 3,090 3,050 2,963 2,851 3,215 3,098 2,595 3,093 2,640 3,095 310 353 318 350 386 341 396 308 326 266 19 Other 645 294 355 253 275 346 363 297 332 316 20 Other Federal Reserve liabilities and capital 44,,887700 4,894 5,349 4,666 5,085 5,190 5,195 5,422 5,149 55,,444455 21 Member bank reserves with Federal Reserve Banks 31,599 32,098 32,585 31,488 33,218 32,341 32,436 31,752 32,314 32,908 End-of-month figures Wednesday figures 1979 1979 Oct.* Nov.*7 Dec.? Nov. 14 V Nov. 21? Nov. 28p Dec. Dec. 12* Dec. 19? Dec. 26P SUPPLYING RESERVE FUNDS 22 Reserve bank credit outstanding 135,005 138,008 140,705 135,832 138,113 139,749 137,758 138,355 137,207 137,836 23 U.S. government securities1 114,580 118,087 117,458 113,147 114,814 116,239 115,236 116,311 115,186 113,057 24 Bought outright 114,455 117,528 116,291 113,147 114,814 116,239 115,236 116,311 115,186 111122,,885566 25 Held under repurchase agreements 125 559 1,167 0 0 0 0 0 0 201 26 Federal agency securities 8,278 9,194 8,709 8,221 8,221 8,221 8,221 8,216 8,216 8,331 27 Bought outright 8,221 8,221 8,216 8,221 8,221 8,221 8,221 8,216 8,216 8,216 28 Held under repurchase agree- 57 973 493 0 0 0 0 0 0 115 29 Acceptances 317 269 704 0 0 0 0 0 0 415 30 Loans 2,672 2,034 1,454 1,425 2,240 4,715 2,244 1,810 1,561 1,982 31 Float 4,685 3,729 6,767 6,882 7,605 5,367 6,471 6,768 6,690 8,030 32 Other Federal Reserve assets 4,473 4,695 5,613 6,157 5,233 5,207 5,586 5,250 5,554 6,021 33 Gold stock 11,194 11,112 11,112 11,164 11,164 11,112 11,112 11,112 1111,,111122 1111,,111122 34 Special drawing rights certificate account 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 35 Treasury currency outstanding 12,937 13,020 12,947 12,834 12,834 12,842 12,868 12,895 12,937 12,947 ABSORBING RESERVE FUNDS 36 Currency in circulation 120,125 122,082 125,473 121,881 122,275 122,682 122,806 123,849 124,449 125,595 37 Treasury cash holdings 394 427 426 398 405 373 425 429 431 430 Deposits, other than member bank reserves, with Federal Reserve Banks 38 Treasury 2,209 2,590 4,075 2,981 3,402 2,941 2,467 2,610 3,061 2,883 39 Foreign 352 490 429 379 294 320 329 270 274 216 40 Other 286 352 1,412 252 267 312 288 305 303 370 41 Other Federal Reserve liabilities and capital 5,011 5,378 4,957 4,989 4,993 5,124 4,868 4,946 5,235 5,681 42 Member bank reserves with Federal Reserve Banks 32,561 32,617 29,792 30,751 32,275 33,750 32,354 31,753 29,302 28,520 1. Includes securities loaned—fully guaranteed by U.S. government NOTE. For amounts of currency and coin held as reserves, see table securities pledged with Federal Reserve Banks—and excludes (if any) 1.12. securities sold and scheduled to be bought back under matched salepurchase 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 1978 1979 Dec. Apr. May June July Aug. Sept. Oct. Nov.35 Dec.*5 All member banks Reserves 1 At Federal Reserve Banks.. 31,158 30,675 30,208 29,822 30,191 30,006 29,986 31,599 32,098 2 Currency and coin 10,330 9,737 10,044 10,154 10,552 10,523 10,726 10,681 10,740 3 Total held i 41,572 40,546 40,382 40,105 40,900 40,687 40,868 42,423 42,979 4 Required 41,447 40,548 40,095 39,884 40,710 40,494 40,863 42,002 42,770 5 Excess1 125 -2 287 221 190 193 5 421 209 Borrowings at Reserve Banks2 6 Total 874 897 1,777 1,396 1,179 1,097 1,344 2,022 1,908 7 Seasonal 134 134 173 188 168 177 169 161 141 Large banks in New York City 8 Reserves held 7,120 6,804 6,658 6,346 6,605 6,408 6,437 6,655 6,695 9 Required 7,243 6,837 6,544 6,415 6,586 6,427 6,378 6,851 6,932 10 Excess -123 -33 114 -69 19 -19 59 -196 -237 11 Borrowings2 99 61 150 78 97 79 87 183 139 Large banks in Chicago 12 Reserves held 1,907 1,801 1,730 1,726 1,709 1,694 1,654 1,790 1,869 13 Required 1,900 1,824 1,712 1,697 1,713 1,706 1,760 1,859 1,950 14 Excess 7 -23 18 29 -4 -12 -106 -69 -81 15 Borrowings2 10 18 60 64 45 6 136 118 Other large banks 16 Reserves held 16,446 15,948 15,926 15,989 16,374 16,370 16,426 16,519 16,663 17 Required 16,342 16,014 15,893 15,877 16,339 16,321 16,491 16,796 17,000 18 Excess 104 -66 33 112 35 49 -65 -277 -337 19 Borrowings2 276 271 721 586 517 484 600 856 804 All other banks 20 Reserves held 16,099 15,993 16,068 16,044 16,212 16,215 16,351 16,495 16,496 2 2 2 1 E R x e c q e u s i s r ed 15,9 1 6 3 2 7 15,8 1 7 2 3 0 15,9 1 4 2 6 2 15,8 1 9 4 5 9 16,0 1 7 4 2 0 16,0 1 4 7 0 5 16,2 1 3 1 4 7 16,42 7 4 1 16,42 7 0 6 23 Borrowings2 489 547 846 668 520 528 577 847 847 Edge corporations 24 Reserves held n.a. n.a. n.a. n.a. n.a. n.a. 90 308 25 Required n.a. n.a. n.a. n.a. n.a. n.a. n.a. 72 287 26 Excess n.a. n.a. n.a. n.a. n.a. 18 21 U.S. agencies and branches 27 Reserves held n.a. n.a. n.a. n.a. n.a. n.a. 185 28 Required n.a. n.a. n.a. n.a. n.a. n.a. 181 29 Excess n.a. n.a. n.a. 4 Weekly averages of daily figures for week (in 1979) ending Oct. 24*> Oct. 31 P Nov. 1P Nov. 14P Nov. 21 P Nov. 28P Dec. 5* Dec. 12P Dec. 19» Dec. 26P All member banks Reserves 30 At Federal Reserve Banks.. 31,599 32,587 31,396 31,488 33,218 32,341 32,436 31,752 32,314 31 Currency and coin 9,942 10,891 11,046 11,242 10,045 10,542 11,038 11,772 11,341 32 Total held l 41,684 43,621 42,585 42,871 43,406 43,022 43,614 43,668 43,816 33 Required 41,533 43,285 42,109 42,618 43,291 42,887 43,379 43,082 43,697 34 Excess 1 151 336 476 253 115 135 235 586 119 Borrowings at Reserve Banks2 35 Total 2,960 3,056 1,928 1,858 1,865 2,021 1,819 1,291 1,684 36 Seasonal 164 187 151 133 151 136 100 80 83 Large banks in New York City 37 Reserves held 410 6,753 6,477 6,578 6,888 6,699 7,275 7,082 7,439 38 Required 539 7,136 6,729 6,804 7,316 6,779 7,271 7,290 7,506 39 Excess 129 383 -252 -226 -428 -80 4 -208 -67 40 Borrowings2 308 96 78 107 149 239 136 12 4 4 1 2 L R a e R r s g e e e r q v u b e i s a r n e h k d e s ld i n Chicago , 7 8 9 3 5 0 1 1 , , 8 8 6 6 6 0 1 1 , , 8 8 7 8 9 4 1 1 , , 9 8 5 5 1 0 1 1 , , 9 8 9 8 4 1 1 1 , , 9 8 6 7 0 5 2 1 , , 0 9 0 4 5 0 1 1 , , 8 8 8 4 4 3 2 1 , , 0 9 5 6 4 7 4 4 4 3 Bo E rr x o c w es i s n gs2 - 2 3 2 5 6 3 -6 0 9 2 5 -1010 -11 7 3 5 - 4 8 2 5 4 -6 6 5 9 - 1 4 7 1 8 -8 7 7 4 Other large banks 45 Reserves held ,447 16,447 17,093 16,296 16,450 16,969 16,946 17,181 16,980 46 Required ,279 17,279 16,843 16,744 17,142 17,197 17,261 17,245 17,357 47 Excess •832 -832 250 -448 -692 -228 -315 -64 -377 48 Borrowings2 ,265 1,391 835 997 779 601 814 584 990 All other banks 49 Reserves held ,508 16,508 16,371 16,460 16,507 16,567 16,627 16,301 16,563 50 Required ,686 16,686 16,364 16,236 16,488 16,565 16,518 16,342 16,471 51 Excess •178 -178 7 224 19 2 109 -41 92 52 Borrowings2 ,161 1,260 1,013 754 862 757 800 529 608 Edge corporations 53 Reserves held 396 309 312 292 310 304 349 319 54 Required 318 294 282 276 298 286 298 302 55 Excess 78 15 30 16 12 18 51 17 U.S. agencies and branches 56 Reserves held n.a. n.a. 609 79 91 39 31 33 57 Required n.a. n.a. 601 75 381 23 7 58 Excess n.a. n.a. 4 26 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. Digitized for FnoRnAmSemEbRer bank merges into an existing member bank, or when a 2. Based on closing figures. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • January 1980 1.13 FEDERAL FUNDS TRANSACTIONS Money Market Banks Millions of dollars, except as noted 1979, week ending Wednesday TTyyppee Oct. 31 Nov. 7 Nov. 14 Nov. 21 Nov. 28 Dec. 5 Dec. 12 Dec. 19 Dec. 26 Total, 46 banks Basic reserve position 1 Excess reserves1 194 288 113 16 -32 46 77 32 186 LESS: 2 Borrowings at Federal Reserve Banks 869 213 438 243 757 489 332 362 128 3 Net interbank federal funds transactions 2200,,333322 22,729 22,817 20,945 16,939 18,871 24,250 22,439 21,490 EQUALS: Net surplus, or deficit (—) 4 Amount -21,008 -22,653 -23,142 -21,173 -17,728 -19,314 -24,504 -22,770 -21,433 5 Percent of average required 113.8 126.4 128.6 112.8 96.9 102.8 130.8 119.0 114.6 Interbank federal funds transactions Gross transactions 27,700 28,973 30,733 23,397 25,712 27,432 31,488 29,642 28,792 7 Sales 7,367 6,244 7,915 7,451 8,773 8,561 7,239 7,203 7,301 5,737 5,308 5,890 5,614 6,694 6,113 6,584 6,633 7,039 Net transactions 21,963 23,665 24,843 22,783 19,018 21,318 24,904 23,009 21,753 10 Sales of net selling banks 1,630 937 2,025 1,838 2,079 2,448 655 569 262 Related transactions with U.S. government securities dealers 1,800 2,322 2,121 2,293 2,488 2,676 2,322 2,347 3,036 1,285 1,546 980 1,177 1,115 2,383 1,515 1,637 1,723 514 776 1,141 1,116 1,373 293 808 710 1,314 8 banks in New York City Basic reserve position 202 92 46 18 -20 48 87 41 40 LESS: 15 Borrowings at Federal Reserve Banks 58 0 0 142 221 71 0 0 83 16 Net interbank federal funds 55,,665566 6,256 8,122 5,682 3,027 3,598 6,890 4,849 4,617 EQUALS: Net surplus, or deficit (—) --55,,551122 -6,165 -8,076 -5,805 -3,268 -3,621 -6,803 -4,807 -4,660 18 Percent of average required 86.4 101.3 131.8 88.1 53.6 55.5 103.7 71.0 72.8 Interbank federal funds transactions Gross transactions 7,300 7,454 9,004 6,958 5,178 6,184 8,775 7,084 6,438 1,645 1,198 882 1,276 2,151 2,586 1,885 2,236 1,822 1,459 1,198 881 1,276 1,828 1,664 1,885 2,014 1,822 Net transactions 5,841 6,256 8,122 5,681 3,350 4,520 6,890 5,070 4,617 23 Sales of net selling banks 186 0 0 0 323 923 0 222 0 Related transactions with U.S. government securities dealers 24 Loans to dealers 3 1,107 1,407 1,400 1,489 1,722 1,874 1,594 1,584 2,074 25 Borrowings from dealers 4 595 698 543 557 557 559 545 694 818 26 Net loans 512 709 857 932 1,165 1,315 1,049 890 1,256 38 banks outside New York City Basic reserve position 27 Excess reserves1 -8 196 67 -2 -12 -2 -9 -9 146 LESS: 28 Borrowings at Federal Reserve Banks 811 213 438 101 536 418 332 362 45 29 Net interbank federal funds transactions 1144,,667777 16,472 14,695 15,264 13,912 15,274 1177,,336600 17,591 1166,,887744 EQUALS: Net surplus, or deficit (—) 30 Amount 1155,,449966 -16,488 -15,066 -15,367 -14,460 -15,694 --1177,,770011 -17,963 -16,773 31 Percent of average required reserves 128.4 139.3 126.9 126.2 118.6 127.8 145.3 145.4 136.4 Interbank federal funds transactions Gross transactions 32 Purchases 20,399 21,519 12,729 21,439 20,535 21,248 22,713 22,558 22,353 33 Sales 5,723 5,047 7,034 6,176 6,623 5,974 8,354 4,967 5,480 4,278 4,110 5,009 4,338 4,866 4,450 4,699 4,619 5,217 Net transactions 35 Purchases of net buying banks 16,122 17,409 16,721 17,101 15,669 16,798 18,014 17,939 17,136 36 Sales of net selling banks 1,444 937 2,025 1,838 1,757 1,525 655 348 262 Related transactions with U.S. government securities dealers 37 Loans to dealers 3 693 915 721 804 766 802 728 762 962 38 Borrowings from dealers 4 691 848 437 621 558 1,824 969 943 905 39 Net loans 2 68 284 184 203 -1,021 -241 -180 57 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Funds A 7 1.13 Continued Millions of dollars, except as noted 1979, week ending Wednesday TTyyppee Oct. 31 Nov. 7 Nov. 14 Nov. 21 Nov. 28 Dec. 5 Dec. 12 Dec. 19 Dec. 26 5 banks in City of Chicago Basic reserve position 40 Excess reserves1 4 19 12 6 9 1188 — 1 -2 1 LESS: 41 Borrowings at Federal Reserve Banks 300 0 0 75 422 56 164 43 11 42 Net interbank federal funds transactions 7,266 7,498 7,108 6,781 5,754 7,304 7,281 7,171 7,375 EQUALS: Net surplus, or deficit (—) 43 Amount --77,,556633 -7,480 -7,096 6,850 6,166 -7,341 -7,446 -7,216 -7,385 44 Percent of average required reserves 433.9 425.7 388.1 367.4 336.1 390.6 423.2 381.7 390. 1 Interbank federal funds transactions Gross transactions 45 Purchases 8,380 8,481 8,470 7,928 7,222 8,373 8,460 8,272 8,652 46 Sales 1,114 983 1,362 1,147 1,468 1,069 1,179 1,101 1,277 47 Two-way transactions2 11,,111144 983 1,362 1,147 1,468 1,069 1,179 1,101 1,277 Net transactions 48 Purchases of net buying banks 7,266 7,499 7,108 6,781 5,754 7,304 7,281 7,171 7,375 49 Sales of net selling banks 0 0 0 0 0 0 0 0 0 Related transactions with U.S. government securities dealers 50 Loans to dealers 3 59 64 64 101 112 181 145 89 187 51 Borrowings from dealers4 160 110 0 28 16 174 54 78 19 52 Net loans -101 -46 64 73 96 7 91 11 168 33 other banks Basic reserve position 53 Excess reserves1 -12 178 55 -8 -21 -20 -8 -7 145 LESS: 54 Borrowings at Federal Reserve Banks 511 213 438 26 115 362 168 320 35 55 Net interbank federal funds transactions 7,410 8,974 7,587 8,482 8,158 7,970 10,079 10,420 9,499 EQUALS: Net surplus, or deficit (—) 56 Amount --77,,993333 -9,009 -7,970 -8,517 -8,294 -8,352 -10,255 -10,747 -9,388 57 Percent of average required reserves 76.8 89.4 79.4 82.6 80.1 80.3 98.4 102.7 90.2 Interbank federal funds transactions Gross transactions 58 Purchases 12,019 13,038 13,259 13,511 13,313 12,875 14,253 14,286 13,702 59 Sales 4,609 4,064 5,672 5,029 5,155 4,906 4,174 3,866 4,203 60 Two-way transactions 2 3,164 3,128 3,647 3,191 3,398 3,381 3,519 3,518 3,940 Net transactions 61 Purchases of net buying banks 88,,885555 9,910 9,612 10,320 9,915 9,495 10,734 10,768 9,762 11,,444444 937 2,025 1,838 1,757 1,525 655 348 262 Related transactions with U.S. government securities dealers 63 Loans to dealers 3 634 851 657 703 655 621 583 674 775 531 737 437 592 543 1,650 915 865 886 65 Net loans 103 114 220 111 112 -1,028 -332 -191 -111 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 policy clearing banks, reverse repurchase agreements (sales of securities to of the Board of Governors 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. government 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, see 3. Federal funds loaned, net funds supplied to each dealer by clearing August 1964 BULLETIN, pp. 944-53. Back data for 46 banks appear in banks, repurchase agreements (purchase from dealers subject to resale), the Board's Annual Statistical Digest, 1971-1975, table 3. or other lending arrangements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Financial Statistics • January 1980 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per annum Current and previous levels Loans to member banks LLLoooaaannnsss tttooo aaallllll ooottthhheeerrrsss Under sec. 10(b)i uuunnndddeeerrr ssseeeccc... 111333,,, lllaaasssttt pppaaarrr... 222 FFFFeeeeddddeeeerrrraaaallll RRRReeeesssseeeerrrrvvvveeee UUnnddeerr sseeeess.. 1133 aanndd 1133aa33 BBBBaaaannnnkkkk Regular rate Special rate 4 Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous 12/31/79 date rate 12/31/79 date rate 12/31/79 date rate 12/31/79 date rate Boston 12 10/10/79 11 121/2 10/10/79 IH/2 13 10/10/79 12 15 10/10/79 14 New York 12 10/8/79 11 121/2 10/8/79 IH/2 13 10/8/79 12 15 10/8/79 14 Philadelphia 12 10/8/79 11 121/2 10/8/79 IH/2 13 10/8/79 12 15 10/8/79 14 Cleveland 12 10/8/79 11 121/2 10/8/79 IH/2 13 10/8/79 12 15 10/8/79 14 Richmond 12 10/8/79 11 121/2 10/8/79 H1/2 13 10/8/79 12 15 10/8/79 14 Atlanta 12 10/9/79 11 121/2 10/9/79 H1/2 13 10/9/79 12 15 10/9/79 14 Chicago 12 10/9/79 11 121/2 10/9/79 IH/2 13 10/9/79 12 15 10/9/79 14 St. Louis 12 10/8/79 11 121/2 10/8/79 H1/2 13 10/8/79 12 15 10/8/79 14 Minneapolis 12 10/8/79 11 121/2 10/8/79 H!/2 13 10/8/79 12 15 10/8/79 14 Kansas City 12 10/9/79 11 121/2 10/9/79 IH/2 13 10/9/79 12 15 10/9/79 14 Dallas 12 10/9/79 11 121/2 10/9/79 H1/2 13 10/9/79 12 15 10/9/79 14 San Francisco 12 10/8/79 11 121/2 10/8/79 111/2 13 10/8/79 12 15 10/8/79 14 Range of rates in recent years 5 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. I 1 n 9 7 e 1 ff — ec J t a D n. e c. 1 8 5 3 1, 1970 51/ 5 5 4 1 - % 5 /4 1/ 2 5 5 5 1 1 1 / / / 4 4 2 1973— A Ju u ly g . 2 1 3 4 2 i 7 7 - 1 m /2 7 7 7 1 1 / / 2 2 1977— S O A e c u p t g . t . . 2 3 3 6 0 2 1 5 5 1 V / 5 6 a 4 3 - - / 5 5 4 3 3 4 4 5 6 5 5 1 3 3 / 4 4 4 19 5-51/4 51/4 1974—Apr. 25 71/2-8 22 5-514 5 30 8 1978—Jan. 9 6-61/2 61/2 Feb. 2 1 9 3 43/ 5 4 -5 5 5 Dec. 1 9 6 73/ 7 4 3 - / 8 4 7 7 3 3 / 4 4 May 1 2 1 0 6V 6 i 1 - / 7 2 7 6 1/2 J N D u o e ly c v . . 2 2 1 1 1 1 1 1 1 6 3 9 3 4 9 7 4 4 4 4 1 1 3 3 4 4 / 5 4 / 4 4 2 2 3 3 1 - - - - / / / 4 4 5 5 4 4 2 3 3 4 4 4 5 5 4 4 4 5 4 3 3 3 V i / / / / 4 4 4 i i 1975— F M M Ja e n a a b y . r . . 2 1 1 1 1 4 5 6 7 0 6 4 0 7 7 6 6 1 1 3 1 / / 4 7 6 6 6 4 4 4 1 - 3 1 - - / - - 7 6 6 7 7 4 4 4 1 3 3 3 1 4 4 4 4 4 7 7 7 6 6 6 6 6 3 1 1 3 3 1 1 / / / 4 4 4 4 4 4 4 J N A S O u e u o c l p y t g v . t . . . 2 2 2 1 1 1 1 2 0 3 6 1 3 2 0 81/ 7 7 7 7 9 g 8 m 2 1 1 3 - - - 7 / / 9 / 8 4 2 4 1 1 V / / 4 2 i 7 7 7 7 m 9 8 g 8 1 3 1 1 1 V / / / / / 4 4 4 2 2 z 1973— F Ja e n b . . 2 1 6 5 5 5 -51/2 5 51 /2 23 6 6 1979—July 20 10 10 A M M p a a r y r . . 23 2 4 51/ 5 5 2 1 3 - / 5 4 2 3 4 5 5 5 1 1 3 / / 4 2 2 1976— N Ja o n v . . 2 2 1 2 3 9 5 5 1 1 / / 5 4 2 1 - - 5 / 6 2 1 / 2 5 5 5 1 1 1 / / / 2 2 4 S A e u p g t . . 1 2 1 9 7 0 10 1 1 0 1 / - 0 1 2 1 0 / - 2 1 1 1 / 2 1 1 1 0 0 1 1 1 / 4 2 June 1 1 1 1 1 1 5 8 53 6 66 4 1 - - 6/ 6 V22 6 6 6 6 1 1 / / 2 2 26 5V4 5V4 In effec O t c D t. e c. 2 1 1 8 3 0 1 , 1979 1 1 1 1 1 2 2 - 1 1 2 1 1 1 1 1 2 2 2 1. Advances secured to the satisfaction of the Federal Reserve Bank. U.S. government obligations or any other obligations eligible for Federal Advances secured by mortgages on 1- to 4-family residential property Reserve Bank purchase. are made at the section 13 rate. 4. Applicable to special advances described in section 201.2(e)(2) of 2. Advances to individuals, partnerships, or corporations other than Regulation A. member banks secured by direct obligations of, or obligations fully 5. Rates under sees. 13 and 13a (as described above). For description guaranteed as to principal and interest by, the U.S. government or any and earlier data, see the following publications of the Board of Governors: agency thereof. Banking and Monetary Statistics. 1914-1941 and 1941-1970; Annual 3. Discounts or eligible paper and advances secured by such paper or by Statistical Digest, 1971-1975,1972-1976, and 1973-1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.15 MEMBER BANK RESERVE REQUIREMENTS 1 Percent of deposits Requirements in effect Previous requirements Type of deposit, and deposit interval December 31, 1979 in millions of dollars Percent Effective date Percent Effective date Net demand2 0-2 7 12/30/76 7% 2/13/75 2 O 1 1- 0 0 v 1 0 - e 01 - r 0 4 4 0 0 0 0 0 n 1 16 9 2 y 1 * % / 4 4 4 1 1 1 1 2 2 2 2 / / / / 3 3 3 3 0 0 0 0 / / / / 7 7 7 7 6 6 6 6 1 1 1 1 6 3 2 0 V i 2 2 2 2 / / / / 1 1 1 1 3 3 3 3 / / / / 7 7 7 7 5 5 5 3 Time and savings 2- 3.4 Savings 3/16/67 3*4 3/2/67 Time 5 0-5, by maturity 30-179 days 3 3/16/67 3*4 3/2/67 Ov 4 1 e 8 r y 0 e 5 a d , r a b s y y s o r m t o a m t 4 u o r y r i e e ty a . . rs .. 1 10 1 /3 /8 0/ / 7 7 5 6 3 3 3 3 / / 1 1 6 6 / / 6 6 7 7 4 3 1 8 0 y 0 - e 1 a d 7 r a 9 s y s d o r a t y o m s 4 o r y e e ars 2 6 1 % 1 1 2 0 1 / / 3 1 /8 0 2 / / / 7 7 7 5 6 4 1 1 2 1 2 / 0 / 1 1 / 2 1 2 / / / 7 7 7 0 4 4 Legal limits Net demand Reserve city banks Other banks Time Borrowings from foreign banks 1. For changes in reserve requirements beginning 1963, see Board's (d) Effective with the reserve computation period (beginning Nov. 16, Annual Statistical Digest, 1971-1975 and for prior changes, see Board's 1978, domestic deposits of Edge corporations are subject to the same Annual Report for 1976, table 13. reserve requirements as deposits of member banks. 2. (a) Requirement schedules are graduated, and each deposit interval 3. Negotiable order of withdrawal (NOW) accounts and time deposits applies to that part of the deposits of each bank. Demand deposits such as Christmas and vacation club accounts are subject to the same subject to reserve requirements are gross demand deposits minus cash requirements as savings deposits. items in process of collection and demand balances due from domestic 4. The average reserve requirement on savings and other time deposits banks. must be at least 3 percent, the minimum specified by law. (b) The Federal Reserve Act specifies different ranges of requirements 5. Effective Nov. 2, 1978, a supplementary reserve requirement of 2 for reserve city banks and for other banks. Reserve cities are designated percent was imposed on large time deposits of $100,000 or more, obligaunder a criterion adopted effective Nov. 9, 1972, by which a bank having tions of affiliates, and ineligible acceptances. net demand deposits of more than $400 million is considered to have the Effective with the reserve maintenance period beginning Oct. 25, 1979, character of business of a reserve city bank. The presence of the head a marginal reserve requirement of 8 percent was added to managed office of such a bank constitutes designation of that place as a reserve liabilities in excess of a base amount. Managed liabilities are defined as city. Cities in which there are Federal Reserve Banks or branches are also large time deposits, Eurodollar borrowings, repurchase agreements reserve cities. Any banks having net demand deposits of $400 million or against U.S. government and federal agency securities, federal funds less are considered to have the character of business of banks outside of borrowings from nonmember institutions, and certain other obligations. reserve cities and are permitted to maintain reserves at ratios set for banks In general, the base for the marginal reserve requirement is $100 million or not in reserve cities. For details, see the Board's Regulation D. the average amount of the managed liabilities held by a member bank, (c) Effective Aug. 24, 1978, the Regulation M reserve requirements Edge corporation, or family of U.S. branches and agencies of a foreign on net branches due from domestic banks to their foreign branches and bank for the two statement weeks ending Sept. 26, 1979. on deposits that foreign branches lend to U.S. residents were reduced to zero from 4 percent and 1 percent, respectively. The Regulation D reserve NOTE. Required reserves must be held in the form of deposits with requirement on borrowings from unrelated banks abroad was also reduced Federal Reserve Banks or vault cash. to zero from 4 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • January 1980 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions Percent per annum Commercial banks Savings and loan associations and mutual savings banks Type and maturity of deposit In effect Dec. 31, 1979 Previous maximum In effect Dec. 31, 1979 Previous maximum Percent Effective Percent Effective Percent Effective Percent Effective date date date date 1 Savings 51/4 7/1/79 5 7/1/73 5Vi 7/1/79 5!/4 0) 2 Nego a t c ia c b o l u e n t o s r 2 d er of withdrawal 1/1/74 (3) 5 1/1/74 (3) Time accounts4 5 6 4 3 Fix 2 9 3 1 e 0 0 d t t o - o d 8 c a 9 2 2 e y V i s l y d i i n a e t g o y y a s r e s 1 r a 6 a r y t s e e 6 s a r b y maturity 5 5 6 1 * /4 i 7 7 9 / / / 1 1 1 / / / 7 7 7 3 3 9 5 5 5 53 V / i 4 1 1 ( 7 / / 5 2 2 ) / 1 1 1 / / / 7 7 7 3 0 0 5 6 ( 1 y 3 / ) 4 2 6 0 0 ) ) 5 5 6 ( 1 y 3 / ) 4 4 1 1 1 / / / 2 2 2 1 1 1 / / / 7 7 7 0 0 0 1 7 9 0 8 2 8 6 4 V y t t i o o e a t 8 6 o r s y y 4 o e e r a a y r r e m s s a 7 7 o r s r 6 e 7 7 7 7 61 1 V y / / 2 4 4 2 1 1 2 7 6 1 /2 / / / 1 1 1 3 / / / / 7 7 7 7 3 8 3 4 7 5 ( ( V 1 3 8 / ) ) 4 4 1 1 / 1 2 /1 1 / / 7 7 3 0 m m 1 1 2 0 6 1 /2 / / ) 1 1 3 / / / 7 7 7 8 3 4 7 6 ( ( 1 8 3 / ) ) 2 1 11 /2 /1 1 / / 7 7 3 0 11 Issued to governmental units (all maturities) 6/1/78 7% 12/23/74 6/1/78 7% 12/23/74 12 Individual retirement accounts and Keogh (H.R. 10) plans (3 years or more) 9 6/1/78 IVA 7/6/77 6/1/78 7% 7/6/77 Special variable ceiling rates by maturity 1 1 3 4 6 4 m ye o a d n r e s t p h o s o r s m i m t o s o ) n 1 r e e o y market time O (12 1 ) ) O (12 1 ) ) ( O 12 1 ) ) (( n1)2) ( O 12 1 ) ) ( O 12 1 ) ) ( O 12 1 ) ) ( O 12 1 ) ) 1. July 1, 1973, for mutual savings bank; July 6, 1973 for savings and 11. Commercial banks, savings and loan associations, and mutual loan associations. savings banks were authorized to offer money market time deposits effec- 2. For authorized states only. Federally insured commercial banks, tive June 1, 1978. The ceiling rate for commercial banks is the discount rate savings and loan associations, cooperative banks, and mutual savings on most recently issued 6-month U.S. Treasury bills. Until Mar. 15, banks in Massachusetts and New Hampshire were first permitted to offer 1979, the ceiling rate for savings and loan associations and mutual savings negotiable order of withdrawal (NOW) accounts on Jan. 1, 1974. banks was % percentage point higher than the rate for commercial banks. Authorization to issue NOW accounts was extended to similar institutions Beginning Mar. 15, 1979, the V4 percentage point interest differential throughout New England on Feb. 27, 1976, and in New York State on is removed when the 6-month Treasury bill rate is 9 percent or more. Nov. 10, 1978. The full differential is in effect when the 6-month bill rate is 834 percent 3. No separate account category. or less. Thrift institutions may pay a maximum 9 percent when the 6-month 4. For exceptions with respect to certain foreign time deposits see the bill rate is between 8% and 9 percent. Also effective March 15, 1979 FEDERAL RESERVE BULLETIN for October 1962 (p. 1279), August 1965 (p. interest compounding was prohibited on money market time deposits 1094), and February 1968 (p. 167). at all offering institutions. For both commercial banks and thrift institu- 5. Multiple maturity: July 20, 1966; single maturity: September 26, tions, the maximum allowable rates in December were as follows: Dec. 1966. 6, 11.767; Dec. 13, 11.769; Dec. 20, 11.999; Dec. 27, 11.854. 6. No minimum denomination. Until July 1, 1979, a minimum of 12. Effective July 1, 1979, commercial banks, savings and loan associa- $1,000 was required for savings and loan associations, except in areas tions, and mutual savings banks are authorized to offer variable ceiling where mutual savings banks permitted lower minimum denominations. accounts with no required minimum denomination and with maturities of This restriction was removed for deposits maturing in less than 1 year, 4 years or more. The maximum rate for commercial banks is 1 percenteffective Nov. 1, 1973. age points below the yield on 4-year U.S. Treasury securities; the ceiling 7. No minimum denomination. Until July 1, 1979, minimum denomina- rate for thrift institutions is percentage point higher than that for comtion was $1,000 except for deposits representing funds contributed to an mercial banks. In December, the ceiling at commercial banks is 9.6 per- Individual Retirement Account (IRA) or a Keogh (H.R. 10) Plan es- cent, and the ceiling at thrift institutions is 9.85 percent. tablished pursuant to the Internal Revenue Code. The $1,000 minimum requirement was removed for such accounts in December 1975 and No- NOTE. Maximum rates that can be paid by federally insured commervember 1976, respectively. cial banks, mutual savings banks, and savings and loan associations are 8. Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for established by the Board of Governors of the Federal Reserve System, certificates maturing in 4 years or more with minimum denominations the Board of Directors of the Federal Deposit Insurance Corporation, of $1,000; however, the amount of such certificates that an institution and the Federal Home Loan Bank Board under the provisions of 12 could issue was limited to 5 percent of its total time and savings deposits. CFR 217, 329, and 526, respectively. The maximum rates on time de- Sales in excess of that amount, as well as certificates of less than $1,000, posits in denominations of $100,000 or more with maturities of 30-89 were limited to the 6V2 percent ceiling on time deposits maturing in 2l/i days were suspended in June 1970; such deposits maturing in 90 days or years or more. more were suspended in May 1973. For information regarding previous Effective Nov. 1, 1973, ceilings were reimposed on certificates maturing interest rate ceilings on all types of accounts, see earlier issues of the in 4 years or more with minimum denominations of $1,000. There is no FEDERAL RESERVE BULLETIN, the Federal Home Loan Bank Board Journal limitation on the amount of these certificates that banks can issue. and the Annual Report of the Federal Deposit Insurance Corporation. 9. Accounts maturing in less than 3 years subject to regular ceilings. 10. Must have a maturity of exactly 26 weeks and a minimum denomination of $10,00Q, and must be nonnegotiable. 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 1979 Type of transaction 1976 1977 1978 May June July Aug. Sept. Oct. Nov. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched salepurchase transactions) Treasury bills 1 Gross purchases 14,343 13,738 16,628 0 518 2,252 2,351 1,692 1,528 2,752 2 Gross sales 8,462 7,241 13,725 251 623 0 380 353 780 154 3 Redemptions 5,0171 2,136 2,033 200 0 0 0 200 968 300 Others within 1 year2 472 3,017 1,184 0 42 218 57 120 28 0 5 Gross sales 0 0 0 0 0 0 0 0 0 0 792 4,499 -5,170 4,660 1,152 33 1,526 876 -116 -937 0 2,500 0 0 0 0 0 0 668 0 1 to 5 years 3,2021 2,833 4,188 0 0 237 699 354 703 0 177 0 0 0 0 0 0 0 0 0 -2,588 -6,649 -178 -5,209 -1,152 -33 -1,591 -876 116 222 5 to 10 years 1,048 758 1,526 0 0 96 140 73 0 0 0 0 0 0 0 0 0 0 0 0 1,572 584 2,803 350 0 0 -240 0 0 400 Over 10 years 642 553 1,063 0 0 142 81 87 0 0 0 0 0 0 0 0 0 0 0 0 225 1,565 2,545 200 0 0 305 0 0 314 All maturities2 19,7071 20,898 24,591 0 561 2,945 3,327 2,326 2,259 2,752 8,639 7,241 13,725 251 623 0 380 353 780 154 19 Redemptions 5,0171 4,636 2,033 200 0 0 0 200 1,636 300 Matched sale-purchase transactions 20 Gross sales 196,078 425,214 511,126 54,343 52,640 40,310 35,159 41,395 58,656 45,204 21 Gross purchases 196,579 423,841 510,854 53,692 52,949 40,300 35,480 41,583 58,671 45,979 Repurchase agreements 22 Gross purchases 232,891 178,683 151,618 2,188 1155,,553311 18,464 1100,,553399 10,850 10,599 4,303 230,355 180,535 152,436 3,488 12,226 19,690 12,226 10,380 11,336 3,869 24 Net change in U.S. government securities 9,087 5,798 7,743 -2,403 3,552 1,708 1,582 2,431 -878 3,507 FEDERAL AGENCY OBLIGATIONS Outright transactions 25 Gross purchases 891 1,433 301 0 371 482 0 0 0 0 26 Gross sales 0 0 173 0 0 0 0 0 0 0 169 223 235 40 33 0 * 18 3 * Repurchase agreements 28 Gross purchases 10,520 13,811 40,567 1,149 4,443 7,247 4,057 5,016 5,146 1,992 10,360 13,638 40,885 1,298 3,617 7,434 4,544 4,069 6,188 1,075 30 Net change in federal agency obligations 882 1,383 -426 -189 1,163 295 -487 928 -1,045 917 BANKERS ACCEPTANCES 31 Outright transactions, net -545 -196 0 0 0 0 0 0 0 0 32 Repurchase agreements, net 410 159 -366 -252 1,400 -241 -684 578 -735 -48 33 Net change in bankers acceptances -135 -37 -366 -252 1,400 -241 -684 578 -735 -48 34 Total net change in System Open Market 9,833 7,143 6,951 -2,844 6,115 1,761 412 3,937 -2,658 4,376 1. In 1976, the System acquired $189 million of 2-year Treasury notes 2. Both gross purchases and redemptions include special certificates in exchange for maturing bills. In April 1979, the System acquired $640 created when the Treasury borrows directly from the Federal Reserve, million of 2-day cash management bills in exchange for maturing 2-year as follows (millions of dollars): Sept. 1977, 2,500; Mar. 1979, 2,600. notes. New 2-year notes were later obtained in exchange for the maturing bills. Each of these transactions is treated in the table as both a purchase NOTE. Sales, redemptions, and negative figures reduce holdings of and a redemption. In Oct. 1979, $668 million of maturing 2- and 4-year the System Open Market Account; all other figures increase such holdings. notes were exchanged for a like amount of short-term bills, later exchanged Details may not add to totals because of rounding. for new 2- and 4-year notes. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Nonfinancial Statistics • January 1980 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month Account 1979 1979 Nov. 28? Dec. 5*> Dec. 12? Dec. 19? Dec. 26? Oct.? Nov. v Dec.? Consolidated condition statement ASSETS 1 Gold certificate account 11,112 11,112 11,112 11,112 11,112 11,194 11,112 11,112 2 Special drawing rights certificate account 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 3 Coin 428 408 412 420 412 449 415 403 Loans 4 Member bank borrowings 4,715 2,244 1,810 1,561 1,982 2,672 2,034 1,454 5 Other 0 0 0 0 0 0 0 0 Acceptances 0 0 0 0 0 0 0 0 7 Held under repurchase agreements 0 0 0 0 415 317 269 704 Federal agency obligations 8,221 8,221 8,216 8,216 8,216 8,221 8,221 8,216 9 Held under repurchase agreements 0 0 0 0 115 57 973 493 U.S. governments securities Bought outright 10 Bills 45,812 44,809 45,264 44,139 41,809 44,028 47,101 45,244 0 0 0 0 0 0 0 0 55,928 55,928 56,494 56,494 56,494 56,242 55,928 56,494 13 Bonds 14,499 14,499 14,553 14,553 14,553 14,185 14,499 14,553 14 Total i 116,239 115,236 116,311 115,186 112,856 114,455 117,528 116,291 15 Held under repurchase agreements 0 0 0 0 201 125 559 1,167 116,239 115,236 116,311 115,186 113,057 114,580 118,087 117,458 129,175 125,701 126,337 124,963 123,785 125,847 129,584 128,325 12,137 14,208 13,768 14,495 14,793 11,693 10,137 13,571 402 402 404 404 406 402 403 408 Other assets 2,554 2,573 2,609 2,519 2,508 1,432 2,607 2,483 21 Allother 2,251 2,611 2,237 2,631 3,107 2,639 1,685 2,722 22 Total assets 159,859 158,815 158,679 158,344 157,923 155,456 157,743 160,824 LIABILITIES 111100,,664422 110,772 111111,,779955 112,364 113,490 110088,,002299 109,908 113,355 Deposits Reserve accounts 33,278 32,024 31,475 28,872 28,100 32,192 32,280 29,520 369 300 242 403 412 369 296 265 26 U.S. agencies and branches of foreign banks 103 30 36 27 8 0 41 7 27 Total 33,750 32,354 31,753 29,302 28,520 32,561 32,617 29,792 28 U.S. Treasury—General account 2,941 2,467 2,610 3,061 2,883 2,209 2,590 4,075 320 329 270 274 216 352 490 429 312 288 305 303 370 286 352 1,412 37,323 35,438 34,938 32,940 31,989 35,408 36,049 35,708 32 Deferred availability cash items 6,770 7,737 7,000 7,805 6,763 7,008 6,408 6,804 33 Other liabilities and acrued dividends 3 2,049 2,435 2,301 2,385 2,612 1,849 2,313 2,667 156,784 156,382 156,034 155,494 154,854 152,294 154,678 158,534 CAPITAL ACCOUNTS 1,142 1,143 1,144 1,144 1,145 1,136 1,142 1,145 1,078 1,078 1,078 1,078 1,078 1,078 1,078 1,145 855 212 423 628 846 948 845 0 159,859 158,815 158,679 158,344 157,923 155,456 157,743 160,824 39 MEMO: Marketable U.S. government securities held in custody for foreign and international 74,473 76,002 77,648 77,448 77,809 81,928 74,403 80,828 Federal Reserve note statement 40 Federal Reserve notes outstanding (issued to Bank) 124,819 125,450 125,841 125,729 125,465 124,342 124,864 125,301 Collateral held against notes outstanding 11,112 1111,,111122 1111,,111122 1111,,111122 1111,,111122 1111,,119944 1111,,111122 1111,,111122 42 Special Drawing Rights certificate account 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 43 Eligible paper 1,373 1,438 755 972 949 1,743 1,246 894 44 U.S. government and agency securities 110,534 111,100 112,174 111,845 111,604 109,605 110,706 111,495 45 Total collateral 124,819 125,450 125,841 125,729 125,465 124,342 124,864 125,301 1. Includes securities loaned—fully guaranteed by U.S. government 2. Beginning December 29, 1978, such assets are revalued monthly securities pledged with Federal Reserve Banks—and excludes (if any) at market exchange rates. securities sold and scheduled to be bought back under matched sale- 3. Includes exchange-translation account reflecting, beginning Decempurchase transactions. ber 29, 1978, the monthly revaluation at market exchange rates of foreign-exchange commitments. 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 TTTyyypppeee aaannnddd mmmaaatttuuurrriiitttyyy 1979 1979 Nov. 28 Dec. 5 Dec. 12 Dec. 19 Dec. 26 Oct. 31 Nov. 30 Dec. 31 1 Loans 4,715 2,244 1,810 1,561 1,982 2,672 2,034 1,453 2 Within 15 days 4,681 2,196 1,780 1,537 1,969 2,577 1,894 1,441 3 16 days to 90 days 34 48 30 24 13 95 140 12 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Acceptances 0 0 0 0 415 317 269 704 6 Within 15 days 0 0 0 0 415 317 269 704 7 16 days to 90 days 0 0 0 0 0 0 0 0 8 91 days to 1 year 0 0 0 0 0 0 0 0 9 U.S. government securities 116,239 115,236 116,311 115,186 113,057 114,580 118,087 117,458 10 Within 15 days i 5,063 4,389 3,097 3,822 2,996 6,848 4,402 3,133 11 16 days to 90 days 23,077 23,490 24,046 22,302 20,407 20,930 24,787 23,708 12 91 days to 1 year 35,592 34,655 35,937 35,831 36,423 35,036 36,196 37,231 13 Over 1 year to 5 years 27,116 27,311 27,709 27,709 27,709 27,089 27,311 27,864 14 Over 5 years to 10 years 12,694 12,694 12,774 12,774 12,774 12,294 12,694 12,774 15 Over 10 years 12,697 12,697 12,748 12,748 12,748 12,383 12,697 12,748 16 Federal agency obligations 8,221 8,221 8,216 8,216 8,331 8,278 9,194 8,709 17 Within 15 days i 125 56 0 151 266 109 1,098 644 18 16 days to 90 days 420 528 608 457 457 352 420 457 19 91 days to 1 year 1,354 1,324 1,307 1,307 1,307 1,350 1,363 1,307 20 Over 1 year to 5 years 4,177 4,168 4,234 4,234 4,234 4,290 4,168 4,234 21 Over 5 years to 10 years 1,403 1,403 1,325 1,325 1,325 1,435 1,403 1,325 22 Over 10 years 742 742 742 742 742 742 742 742 1. Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. 1.20 BANK DEBITS AND DEPOSIT TURNOVER Debits are shown in billions of dollars, turnover as ratio of debits to deposit. Monthly data are at annual rates. 1979 Bank group, or type 1976 1977 1978 of customer June July Aug. Sept. Oct. Debits to demand deposits1 (seasonally adjusted) 1 All commercial banks 222999,,,111888000...444 333444,,,333222222...888 444000,,,333000000...333 555000...333888888...333 555222,,,111000222...777 555222,,,444000222...555 555444,,,222333333...111 555333,,,333222444...999 2 Major New York City banks 111111,,,444666777...222 111333,,,888666000...666 111555,,,000000888...777 111999...777444777...444 222000,,,444888000...555 222000...333555777...222 222111,,,111111777...666 111999,,,777444000...222 3 Other banks 111777,,,777111333...222 222000,,,444666222...222 222555,,,222999111...666 333000,,,666444111...000 333111,,,666222222...222 333222...000444555...333 333333,,,111111555...555 333333,,,555888444...777 Debits to savings deposits2 (not seasonally adjusted) 444 AAAllllll cccuuussstttooommmeeerrrsss 111177774444....0000 444411118888....1111 666655558888....8888 777733332222....8888 777733335555....8888 666666667777....6666 888844443333....6666 5 Business3 22221111....7777 55556666....7777 77772222....6666 77774444....1111 77778888....2222 77774444....5555 99990000....8888 6 Others 111155552222....3333 333366661111....4444 555588886666....2222 666655558888....8888 666655557777....6666 555599993333....1111 777755552222....8888 Demand deposit turnover1 (seasonally adjusted) 777 AAAllllll cccooommmmmmeeerrrccciiiaaalll bbbaaannnkkksss 111111666...888 111222999...222 111333999...444 111666777...333 111777111...999 111777333...111 111777555...000 111777222...000 8 Major New York City banks 444111111...666 555000333...000 555444111...999 666888555...444 777111777...777 777000999...111 777111111...555 666444111...222 9 Other banks 777999...888 888555...999 999666...777 111111222...555 111111555...222 111111666...999 111111888...222 111222000...222 Savings deposit turnover2 (not seasonally adjusted) 111000 AAAllllll cccuuussstttooommmeeerrrsss 1111....6666 1111....9999 3333....1111 3333....4444 3333....4444 3333....1111 4444....0000 11 Business3 4444....1111 5555....1111 7777....2222 7777....2222 7777....4444 7777....0000 8888....6666 12 Others 1111....5555 1111....7777 2222....9999 3333....2222 3333....2222 2222....9999 3333....8888 1. Represents accounts of individuals, partnerships, and corporations, NOTE. Historical data—estimated for the period 1970 through June and of states and political subdivisions. 1977, partly on the basis of the debits series for 233 SMS As, which were 2. Excludes negotiable order of withdrawal (NOW) accounts and available through June 1977—are available from Publications Services, special club accounts, such as Christmas and vacation clubs. Board of Governors of the Federal Reserve System, Washington, D.C. 3. Represents corporations and other profit-seeking organizations (ex- 20551. Debits and turnover data for savings deposits are not available cluding commercial banks but including savings and loan associations, prior to July 1977. mutual savings banks, credit unions, the Export-Import Bank, and federally sponsored lending agencies). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • January 1980 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures 1979 1975 1976 1977 1978 Dec. Dec. Dec. Dec. Item June July Aug. Sept. Oct. Nov. Seasonally adjusted MEASURES1 1 M-L 295.4 313.8 338.7 361.2 369.0 372.2 374.3 377.8 378.6 378.9 2 M-1 + 456.8 517.2 560.6 587.2 590.1 595.1 598.4' 602.0' 599.6R 593.7 3 M-2 664.8 740.6 809.4 875.8 904.4 914.1 922.5 932.0' 938.6 943.4 4 M-3 1,092.4 1,235.6 1,374.3 1,500.1 1,552.3 1,567.0 1,580.0 1,594.3 1,603.8R 1,611.1 5 M-4 745.8 803.0 883.1 972.4 989.3 998.8 1,008.4 1,020.0 1,029.6R 1,038.4 6 M-5 1,173.5 1,298.0 1,448.0 1,596.7 1,637.2 1,651.7 1,666.0 1,682.4 1,694.9R 1,706.1 COMPONENTS 73.8 80.8 88.6 97.5 101.5 102.4 103.6 104.9 105.4 105.8 Commercial bank deposits 221.7 233.0 250.1 263.7 267.5 269.8 270.7 273.0 273.2 273.1 9 Time and savings 450.3 489.2 544.4 611.2 620.3 626.6 634.2 642.2 651. 1 659.5 10 Savings 160.7 202.1 219.7 223.0 217.8 219.5 220.7 220.7 217.7r 211.4 11 Negotiable CDs 2 81.0 62.4 73.7 96.6 84.9 84.7 85.9 88.1 91.1 95.0 12 Other time 208.6 224.7 251.0 291.5 317.6 322.4 327.6 333.4 342.3 353.1 13 Nonbank thrift institution deposits 3... 427.7 495.0 564.9 624.4 647.9 652.9 657.5 662.4 665.3 ' 667.7 Not seasonally adjusted MEASURES 1 14 M-L 303.9 322.6 348.2 371.3 368.2 374.1 371.6 375.6 378.4 381.0 15 M-1 + 463.6 524.2 568.0 595.2 591.0 598.8 595.7' 597.9' 597.8 594.0 16 M-2 670.0 745.8 814.9 881.5 906.0 917.0 919.3 927.2 935.6R 940.5 17 M-3 1,095.0 1,238.3 1,377.2 1,502.8 1,556.3 1,573.0 1,577.1 1,588.6R 1,599.6R 1,604.6 18 M-4 753.5 810.0 890.8 981.0 990.4 1,001.0 1,005.7 1,017.0 1,028.9 R 1,036.4 19 M-5 1,178.4 1,302.6 1,453.2 1,602.4 1,640.7 1,657.0 1,663.4 1,678.4 1,692.9' 1,700.5 COMPONENTS 75.1 82.1 90.1 99.1 101.8 103.2 103.9 104.5 105.1R 106.5 Commercial bank deposits 21 Demand 228.8 240.5 258.1 272.2 266.4 270.9 267.7 271.1 273.2 274.5 22 Member 162.8 169.4 177.5 183.0 177.1 180.5 178.5 179.4 180.4 181.6 23 Domestic nonmember 62.6 67.5 76.2 85.2 84.8 86.1 85.3 87.4 88.3 88.5 24 Time and savings 449.6 487.4 542.6 609.7 622.2 627.0 634.1 641.4 650.6 655.3 25 Savings 159.1 200.2 217.7 220.9 219.4 221.4 220.7 218.9 216.0 209.6 26 Negotiable CDs 2 83.5 64.3 75.9 99.5 84.4 84.0 86.4 89.8 93.4' 95.9 27 Other time 207.1 222.9 249.0 289.2 318.3 321.6 327.1 332.7 341.2 349.8 28 Other checkable deposits 4 .7 1.4 2.1 3.0 3.3 3.4 3.4 3. 5 r 3.4 3.4 29 Nonbank thrift institution deposits 3 424.9 492.5 562.3 621.4 650.3 656.0 657.8 661.4 664.0' 664.1 30 U.S. government demand deposits (all commercial banks) 5 4.1 4.4 5.1 1100..22 10.8 13.2 9.8 12.4 11.7 5.5 1. Composition of the money stock measures is as follows: M-4: M-2 plus large negotiable CDs. M-l: Averages of daily figures for (1) demand deposits at commercial M-5: M-3 plus large negotiable CDs. banks other than domestic interbank and U.S. government, less cash items 2. Negotiable time CDs issued in denominations of $100,000 or more in process of collection and Federal Reserve float; (2) foreign demand by large weekly reporting commercial banks. balances at Federal Reserve Banks; and (3) currency outside the Treasury, 3. Average of the beginning- and end-of-month figures for deposits of Federal Reserve Banks, and vaults of commercial banks. mutual savings banks, for savings capital at savings and loan associations, M-l +: M-l plus savings deposits at commercial banks, NOW accounts and for credit union shares. at banks and thrift institutions, credit union share draft accounts, and 4. Includes NOW accounts at thrift institutions, credit union share demand deposits at mutual savings banks. draft accounts, and demand deposits at mutual savings banks. M-2: M-l plus savings deposits, time deposits open account, and time 5. Includes Treasury note balances beginning Nov. 2, 1978. certificates of deposit (CDs) other than negotiable CDs of $100,000 or more at large weekly reporting banks. NOTE. Latest monthly and weekly figures are available from the Board's M-3: M-2 plus the average of the beginning- and end-of-month deposits H.6 (508) release. Back data are available from the Banking Section, of mutual savings banks, savings and loan shares, and credit union shares Division of Research and Statistics. (nonbank thrift). NOTES TO TABLE 1.23: 1. Includes domestic chartered banks, U.S. branches, agencies and 6. As of Dec. 31, 1978, commercial and industrial loans were reduced New York investment company subsidiaries of foreign banks; and Edge $0.1 billion as a result of reclassifications. Act corporations. 7. As of Dec. 31, 1978, nonbank financial loans were reduced $0.1 2. Excludes loans to commercial banks in the United States. billion as the result of reclassifications. 3. As of Dec. 31, 1978, total loans and investments were reduced by 8. Loans sold are those sold outright to a bank's own foreign branches, $0.1 billion. "Other securities" were increased by $1.5 billion and total nonconsolidated nonbank affiliates of the bank, the bank's holding loans were reduced by $ 1.6 billion largely as the result of reclassifications company (if not a bank), and nonconsolidated nonbank subsidiaries of of certain tax-exempt obligations. Most of the loan reduction was in the holding company. "all other loans." 9. As of Dec. 31, 1978, commercial and industrial loans sold outright 4. As of Jan. 3, 1979, as the result of reclassifications, total loans and were increased $0.7 billion as the result of reclassifications, but $0.1 investments and total loans were increased by $0.6 billion. Business loans billion of this amount was offset by a balance sheet reduction of $0.1 were increased by $0.4 billion and real estate loans by $0.5 billion. Non- billion as noted above. bank financial loans were reduced by $0.3 billion. 10. United States includes the 50 states and the District of Columbia. 5. As of Dec. 31, 1977, as the result of loan reclassifications, business loans were reduced by $0.2 billion and nonbank financial loans by $0.1 NOTE. Data are prorated averages of Wednesday data for domestic billion; real estate loans were increased by $0.3 billion. chartered banks, and averages of current and previous month-end data for foreign-related institutions. 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 1979 Item 1976 1977 1978 Dec. Dec. Dec. Apr. May June July Aug. Sept. Oct. Nov. Seasonally adjusted 1 Reserves1 34.89 36.10 41.27 40.65 40.48 40.42 40.82 41.07 41.46 42.32 43.13 2 Nonborrowed 34.84 35.53 40.40 39.73 38.72 39.00 39.65 39.98 40.12 40.30 41.22 3 Required 34.61 35.91 41.04 40.47 40.34 40.20 40.61 40.85 41.27 42.04 42.88 4 Monetary base2 118.4 127.8 142.3 144.5 144.9 145.6 146.9 148.4 150.1 151.6 152.8 5 Deposits subject to reserve requirements3 528.6 568.6 616.7 618.6 613.9 613.1 618.7 623.7 630.5 639.0 644.1 6 Time and savings 354.1 386.7 429.4 432.0 428.7 425.9 429.4 434.4 439.8 445.6 451.8 Demand 7 Private 171.5 178.5 185.1 184.7 183.5 184.8 187.5 187.1 189.0 191.7 190.4 8 U.S. government 3.0 3.5 2.3 1.8 1.7 2.4 1.8 2.2 1.8 1.8 2.0 Not seasonally adjusted 9 Monetary base2 120.3 129.8 144.6 144.2 144.4 145.6 147.9 148.4 149.4 151.3 153.5 10 Deposits subject to reserve requirements 3 534.8 575.3 624.0 621.1 610.9 613.9 619.2 620.4 629.0 638.6 642.2 11 Time and savings 353.6 386.4 429.6 432.3 429.8 427.2 429.8 434.1 439.4 445.7 449.7 Demand 12 Private 177.9 185.1 191.9 186.8 179.2 183.9 187.8 184.5 187.5 191.4 191.4 13 U.S. government 3.3 3.8 2.5 2.0 1.8 2.8 1.6 1.7 2.1 1.6 1.7 1. Series reflects actual reserve requirement percentages with no adjust- 3. Includes total time and savings deposits and net demand deposits as ment to eliminate the effect of changes in Regulations D and M. There defined by Regulation D. Private demand deposits include all demand are breaks in series because of changes in reserve requirements effective deposits except those due to the U.S. government, less cash items in Jan. 8 and Dec. 30, 1976; and Nov. 2, 1978. In addition, effective Jan. 1, process of collection and demand balances due from domestic commercial 1976, statewide branching in New York was instituted. The subsequent banks. merger of a number of banks raised 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 reserves (member bank reserve balances in the current and changes in reserve requirements are shown in table 14 of the Board's week plus vault cash held two weeks earlier); currency outside the U.S. Annual Statistical Digest, 1971-1975. Treasury, Federal Reserve Banks, and the vaults of commercial banks; and vault cash of nonmember banks. 1.23 LOANS AND INVESTMENTS All Commercial Banks 1 Billions of dollars; averages of Wednesday figures 1979 1979 CCaatteeggoorryy 1977 1978 1977 1978 Dec. Dec. Dec. Dec. Sept .P Oct.P NOV.P Sept.P Oct.f Nov.? Seasonally adjusted Not seasonally adjusted 1 Total loans and securities2 891.1 1,014.33 1,122.84 1,128.9 1,128.4 899.1 1,023.83 1,124.74 1,130.9 1,130.5 2 U.S. Treasury securities 99.5 93.4 95.2 95.3 94.3 100.7 94.6 93.6 93.2 93.4 3 Other securities 159.6 173.13 187.6 188.8 190.5 160.2 173.93 187.6 189.0 190.7 4 Total loans and leases2 632.1 747.83 840.04 844.8 843.6 638.3 755.43 843.54 848.7 846.5 5 Commercial and industrial loans.... 211.25 246.56 285.94 288.6 288.3 212.65 248.26 285.84 288.4 288.3 6 Real estate loans 175.25 210.5 234.14 237.1 239.7 175.55 210.9 235.34 238.3 240.9 7 Loans to individuals 138.2 164.9 180.2 181.3 182.3 139.0 165.9 182.4 183.3 183.7 8 Security loans 20.6 19.4 23.5 20.6 18.4 22.0 20.7 23.6 20.8 18.8 9 Loans to nonbank financial institutions 25.85 27.17 29.84 30.9 30.9 26.35 27.67 30.34 31.0 31.0 25.8 28.2 29.6 30.0 29.4 25.7 28.1 30.1 30.3 29.5 11 Lease financing receivables 5.8 7.4 8.7 8.9 9.1 5.8 7.4 8.7 8.9 9.1 12 All other loans 29.5 43.63 48.0 47.4 45.5 31.5 46.63 47.2 47.6 45.2 MEMO: 13 Total loans and investments plus loans sold2-8 895.9 1,018.13 1,126.54 1,132.5 1,132.0 903.9 1,027.63 1,128.44 1,134.5 1,134.1 14 Total loans plus loans sold2.8 636.9 751.63 843.74 848.4 847.2 643.0 759.23 847.24 852.3 850.1 15 Total loans sold to affiliates 8 4.8 3.8 3.7 3.6 3.6 4.8 3.8 3.7 3.6 3.6 16 Commercial and industrial loans plus loans sold 8 213.95 248.59 288.74 291.2 290.8 215.35 250.19 288.64 291.1 290.8 17 Commercial and industrial loans sold 8 2.7 1.99 2.8 2.7 2.5 2.7 1.99 2.8 2.7 2.5 18 Acceptances held 7.5 6.8 8.6 8.0 7.6 8.6 7.5 8.0 7.9 7.9 19 Other commercial and industrial loans 203.75 239.7 277.3 280.6 280.7 203.95 240.9 277.8 280.5 280.4 20 To U.S. addressees1 o 193.85 226.6 258.7 261.2 261.3 193.75 226.5 259.2 261.4 260.9 21 To non-U. S. addressees 9.95 13.1 18.6 19.5 19.4 10.35 14.4 18.7 19.2 19.5 22 Loans to foreign banks 13.5 21.2 24.0 22.9 19.4 14.6 23.0 23.6 22.4 18.9 23 Loans to commercial banks in the United States 54.1 57.3 75.9 76.4 75.0 56.9 60.3 73.5 74.2 76.4 For notes see bottom of opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 DomesticN onfinancial Statistics • January 1980 1.24 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1979 AAccccoouunntt Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov.r Dec. DOMESTICALLY CHARTERED COMMERCIAL BANKS1 1 Loans and investments 1,025.2 1,031.4 1,048.3 1,059.4 1,071.3 1,081.8 1,094.3 1,112.1 1,118.4 1,118.0 1,143.3 2 Loans, gross 755.6 759.8 773.9 785.3 797.9 807.6 819.4 833.8 839.0 836.7 860.1 3 Interbank 42.1 42.3 44.4 45.9 46.3 48.1 50.3 53.6 54.0 52.6 62.9 4 Commercial and industrial 225.3 227.8 233.0 236.4 240.5 242.0 244.1 249.4 249.8 248.0 253.4 5 Other 488.2 489.6 496.5 503.0 511.2 517.4 525.0 530.9 535.3 536.1 543.7 6 U.S. Treasury securities 93. 1 93.6 94.2 93.2 91.6 92.1 90.6 91.9 91.5 92.1 92.5 7 Other securities 176.5 178.0 180.2 181.0 181.7 182.1 184.3 186.4 187.8 189.3 190.7 8 Cash assets, total 147.1 135.8 139.9 158.8 146.3 140.2 145.7 148.5 160.7 158.1 146.4 9 Currency and coin 15.0 15.2 15.6 16.0 16.3 16.1 16.8 16.7 16.6 18.2 17.9 10 Reserves with Federal Reserve Banks.. 29.7 30.0 33.9 32.8 32.6 29.6 33.7 31.6 34.1 34.7 28.4 11 Balances with depositary institutions.. 42.5 36.8 39.0 44.6 40.8 41.2 41.1 40.7 45.5 43.7 37.7 12 Cash items in process of collection.... 59.9 53.7 51.4 65.4 56.5 53.4 54.1 59.5 64.6 61.5 62.4 13 Other assets 62.4 58.9 55.8 52.7 55.1 53.9 53.8 57.5 57.8 59.3 61.2 14 Total assets/total liabilities and capital.. . 1,234.8 1,226.1 1,244.0 1,270.9 1,272.7 1,275.9 1,293.8 1,318.2 1,336.9 1,335.4 1,351.0 15 Deposits 969.2 954.9 964.4 975.5 971.3 975.2 982.9 996.6 1,023.6 1,017.6 1,030.6 16 Demand 352.1 335.0 348.0 357.8 352.4 352.6 352.4 358.7 376.6 365.1 377.6 17 Time and savings 617.1 619.8 616.4 617.8 618.9 622.6 630.5 637.9 647.0 652.4 653.0 18 Savings 215.2 216.8 215.9 215.5 216.4 218.3 216.6 213.4 207.6 205.0 203.4 19 Time 401.9 403.0 400.5 402.3 402.5 404.2 413.8 424.5 439.4 447.4 449.7 20 Borrowings 111.9 115.2 123.5 132.0 137.1 137.2 140.1 147.0 137.4 135.6 140.5 21 Other liabilities 59.0 60.9 60.8 65.4 65.5 64.9 69.7 71.2 74.0 78.5 74.1 22 Residual (assets less liabilities) 94.7 95.1 95.3 98.1 98.9 98.7 101.1 103.3 101.9 103.7 105.8 MEMO: 23 U.S. Treasury note balances included in borrowing 4.0 4.8 5.9 4.9 12.9 11.9 8.6 17.8 8.4 5.0 12.8 24 Number of banks 14,593 14,597 14,610 14,616 14,620 14,584 14,607 14,616 14,605 14,608 14, 610 ALL COMMERCIAL BANKING INSTITUTIONS2 25 Loans and investments 1,087.4'" 1,101.4 1,114.8 1,131.2 1,146.9 1,153.1 1,169.8 1,197.7 1,200.3 1,200.9 26 Loans, gross 815.3 r 827.2 837.7 854.2 870.7 876.2 892.1 915.9 917.6 916.2 27 Interbank 53.4' 56.1 57.3 61.8 60.4 60.6 63.8 69.2 71.6 71.8 28 Commercial and industrial 255.7'" 259.8 264.7 268.8 274.6 276.9 280.5 288.1 288.3 287.9 29 Other 506.3r 511.3 515.6 523.6 535.7 538.6 547.8 558.6 557.7 556.6 30 U.S. Treasury securities 94.3 94.9 95.6 94.6 93.1 93.5 91.9 93.5 93.1 93.7 31 Other securities 177.8 179.4 181.5 182.3 183.1 183.5 185.8 188.3 189.5 190.9 32 Cash assets, total 166.6' 157.0 156.6 176.5 167.8 160.4 166.0 172.2 179.9 176.7 33 Currency and coin 15.1 15.2 15.6 16.1 16.3 16.1 16.8 16.7 16.6 18.2 34 Reserves with Federal Reserve Banks.. 30.3 30.7 34.6 33.5 33.4 30.4 34.5 32.5 34.9 35.6 35 Balances with depositary institutions.. 60. C" 56.0 53.9 60.3 60.3 59.3 59.3 62.4 62.5 60.0 36 Cash items in process of collection 61.3 55.1 52.5 66.6 57.7 54.7 55.3 60.6 65.9 62.9 37 Other assets 76.9 74.1 70.8 67.7 71.4 69.7 70.9 76.7 76.5 78.5 nn.. aa.. 38 Total assets/total liabilities and capital... 1,331.0 1,332.5 1,342.1 1,375.5 1,386.1 1,383.2 1,406.7 1,446.5 1,456.7 1,456.1 39 Deposits 1,002.0r 994.0 997.4 1,013.2 1,015.6 1,012.3 1,020.9 1,043.6 1,062.6 1,058.5 40 Demand 367. 5*- 355.7 362.0 375.8 376.4 369.7 369.1 383.2 394.2 384.9 41 Time and savings 634.4 638.3 635.4 637.4 639.2 642.5 651.8 660.5 668.4 673.6 42 Savings 215.9 218.0 216.9 216.7 217.2 219.1 217.6 214.2 208.3 205.9 43 Time 418.4 420.3 418.5 420.7 422.0 423.5 434.2 446.2 460.1 467.7 44 Borrowings 137.9 r 141.7 150.5 159.5 165.4 165.8 169.5 182.1 171.6 169.5 45 Other liabilities 94.6 99.8 97.1 102.8 104.2 104.4 113.1 115.2 118.5 122.2 46 Residual (assets less liabilities) 96.5 97.1 97.2 100.0 100.9 100.8 103.2 105.6 104.0 105.8 MEMO: 47 U.S. Treasury note balances included in borrowing 4.0 4.8 5.9 4.9 12.9 11.9 8.6 17.8 8.4 5.0 48 Number of banks 14,926 14,930 14,946 14,954 14,968 14,933 14,960 14,972 14,963 14,969 1. Domestically chartered commercial banks include all commercial NOTE. Figures are partly estimated. They include all bank-premises banks in the United States except branches of foreign banks; included are subsidiaries and other significant majority-owned domestic subsidiaries. member and nonmember banks, stock savings banks, and nondeposit Data for domestically chartered commercial banks are for the last trust companies. Wednesday of the month ; data for other banking institutions are for last 2. Commercial banking institutions include domestically chartered Wednesday except at end of quarter, when they are for the last day of the commercial banks, branches and agencies of foreign banks, Edge Act month. and Agreement corporations, and New York state foreign investment corporations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks All 1.25 COMMERCIAL BANK ASSETS AND LIABILITIES Call-Date Series Millions of dollars, except for number of banks 1976 1977 1978 1976 1977 1978 AAccccoouunntt 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 882277,,669966 854,733 914,779 956,431 476,610 488,240 523,000 542,218 Loans 2 Gross 578,734 601,122 885577,,550099 695,443 340,691 351,311 384,722 403,812 3 Net 556600,,007777 558811,,114433 636,318 672,207 329,971 339,955 372,702 390,630 Investments 4 U.S. Treasury securities 101,461 100,568 99,333 97,001 55,727 53,345 52,244 50,519 5 Other 147,500 153,042 157,936 163,986 80,191 83,583 86,033 87,886 129,562 130,726 159,264 157,393 76,072 74,641 92,050 90,728 7 Total assets/total liabilities1 1,003,970 1,040,945 1,129,712 1,172,772 583,304 599,743 651,360 671,166 825,003 847,372 922,657 945,874 469,377 476,381 520,167 526,932 Demand 9 U.S. government 3,022 2,817 7,310 7,956 1,676 1,632 4,172 4,483 10 Interbank 44,064 44,965 49,843 47,203 23,149 22,876 25,646 22,416 11 Other 228855,,220000 284,544 319,873 312,707 163,346 161,358 181-, 821 176,025 Time and savings 12 Interbank 8,248 7,721 88,,773311 8,987 4,907 4,599 55,,773300 5,791 13 Other 484,467 507,324 536,899 569,020 276,296 285,915 302,795 318,215 14 Borrowings 75,291 81,137 89,339 98,351 54,421 57,283 63,218 68,948 15 Total capital accounts 75,061 75,502 79,082 83,074 41,319 43,142 44,994 47,019 16 MEMO: Number of banks 14,397 14,425 14,397 14,381 4,735 4,701 4,654 4,616 State member (all insured) Insured nonmember 17 Loans and investments, gross 144,000 144,597 152,514 157,464 207,085 221,896 239,265 256,749 Loans 102,277 102,117 110,243 115,736 135,766 147,694 162,543 175,894 19 Net 99,474 99,173 107,205 112,470 130,630 142,015 156,411 169,106 Investments 20 U.S. Treasury securities 18,849 19,296 18,179 16,886 26,884 27,926 28,909 29,595 21 Other 22,874 23,183 24,091 24,841 44,434 46,275 47,812 51,259 32,859 35,918 42,305 43,057 20,631 20,166 24,908 23,606 23 Total assets/total liabilities1 189,579 195,452 210,442 217,384 231,086 245,748 267,910 284,221 114499,,449911 152,472 163,436 167,403 206,134 218,519 239,053 251,539 Demand 429 371 1,241 1,158 917 813 1,896 2,315 26 Interbank 19,295 20,568 22,346 23,117 1,619 1,520 1,849 1,669 27 Other 52,204 52,570 57,605 55,550 69,648 70,615 80,445 81,131 Time and savings 28 Interbank 2,384 2,134 2,026 2,275 956 988 997733 920 29 Other 75,178 76,827 80,216 85,301 132,993 144,581 153,887 165,502 17,310 19,697 21,736 23,167 3,559 4,155 4,384 6,235 31 Total capital accounts 13,199 13,441 14,182 14,670 17,542 18,919 19,905 21,384 1,023 1,019 1,014 1,005 8,639 8,705 8,729 8,760 Noninsured nonmember Total nonmember 33 Loans and investments, gross 18,819 22,940 24,415 28,699 225,904 244,837 263,681 285,448 Loans 34 Gross 16,336 20,865 22,686 26,747 152,103 168,559 185,230 202,641 35 Net 16,209 20,679 22,484 26,548 146,840 162,694 178,896 195,655 Investments 36 U.S. Treasury securities 1,054 993 879 869 27,938 28,919 29,788 30,465 37 Other 1,428 1,081 849 1,082 45,863 47,357 48,662 52,341 6,496 8,330 9,458 9,360 27,127 28,497 34,367 32,967 39 Total assets/total liabilities1 26,790 33,390 36,433 42,279 257,877 279,139 304,343 326,501 13,325 14,658 16,844 19,924 219,460 233,177 255,898 271,463 Demand 4 8 10 8 921 822 1,907 2,323 1,277 1,504 1,868 2,067 2,896 3,025 3,718 3,736 43 Other 3,236 3,588 4,073 4,814 72,884 74,203 84,518 85,946 Time and savings 1,041 1,164 1,089 1,203 1,997 2,152 2,063 2,123 45 Other 7,766 8,392 9,802 11,831 140,760 152,974 163,690 177,334 4,842 7,056 6,908 8,413 8,401 11,212 11,293 14,649 818 893 917 962 18,360 19,812 20,823 22,346 275 293 310 317 8,914 8,998 9,039 9,077 1. Includes items not shown separately. For Note see table 1.24. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • January 1980 1.26 COMMERCIAL BANK ASSETS AND LIABILITIES Detailed Balance Sheet, September 30, 1978 Millions of dollars, except for number of banks Member banks1 Insured Non- Asset account commercial Large banks member banks banks i Total All other New York City of Other City Chicago large 1 Cash bank balances, items in process 158,380 134,955 43,758 5,298 47,914 37,986 23,482 2 Currency and coin 12,135 8,866 867 180 2,918 4,901 3,268 3 Reserves with Federal Reserve Banks 28,043 28,041 3,621 1,152 12,200 11,067 3 4 Demand balances with banks in United States.. 41,104 25,982 12,821 543 3,672 8,945 15,177 5 Other balances with banks in United States 4,648 2,582 601 15 648 1,319 2,066 6 Balances with banks in foreign countries 3,295 2,832 331 288 1,507 705 463 7 Cash items in process of collection 69,156 66,652 25,516 3,119 26,969 11,049 2,504 8 Total securities held—Book value 262,199 179,877 20,808 7,918 58,271 92,881 82,336 9 U.S. Treasury 95,068 65,764 9,524 2,690 22,051 31,499 29,315 10 Other U.S. government agencies 40,078 25,457 1,828 1,284 7,730 14,616 14,622 11 States and political subdivisions 121,260 85,125 9,166 3,705 27,423 44,831 36,136 12 All other securities 5,698 3,465 291 240 1,048 1,887 2,234 13 Unclassified total 94 66 19 47 28 14 Trading-account securities 6,833 6,681 3,238 708 2,446 290 151 15 U.S. Treasury 4,125 4,103 2,407 408 1,210 78 23 16 Other U.S. government agencies 825 816 401 82 278 55 9 17 States and political subdivisions 1,395 1,381 363 117 794 107 14 18 All other trading account securities 394 316 67 101 145 3 78 19 Unclassified 94 66 19 47 28 20 Bank investment portfolios 255,366 173,196 17,570 7,210 55,825 92,591 82,185 21 U.S. Treasury 90,943 61,661 7,117 2,282 20,840 31,422 29,293 22 Other U.S. government agencies 39,253 24,641 1,426 1,201 7,452 14,561 14,613 23 States and political subdivisions 119,865 83,745 8,803 3,588 26,629 44,724 36,123 24 All other portfolio securities 5,305 3,149 224 138 903 1,884 2,156 25 Federal Reserve stock and corporate stock 1,656 1,403 311 111 507 475 253 26 Federal funds sold and securities resale agreement 41,258 31,999 3,290 1,784 16,498 10,427 9,365 27 Commercial banks 34,256 25,272 1,987 1,294 12,274 9,717 9,090 28 Brokers and dealers 4,259 4,119 821 396 2,361 541 140 29 Others 2,743 2,608 482 94 1,863 169 135 30 Other loans, gross 675,915 500,802 79,996 26,172 190,565 204,069 175,113 31 LESS : Unearned income on loans 17,019 11,355 675 107 3,765 6,809 5,664 32 Reserves for loan loss 7,431 5,894 1,347 341 2,256 1,949 1,537 33 Other loans, net 651,465 483,553 77,974 25,724 184,544 195,311 167,912 Other loans, gross, by category 34 Real estate loans 203,386 138,730 10,241 2,938 52,687 72,863 64,656 35 Construction and land development 25,621 19,100 2,598 685 9,236 6,581 6,521 36 Secured by farmland 8,418 3,655 23 34 453 3,146 4,763 37 Secured by residential properties 117,176 81,370 5,362 1,559 31,212 43,236 35,806 38 1- to 4-family residences 111,674 77,422 4,617 1,460 29,774 41,570 34,252 39 FHA-insured or VA-guaranteed 7,503 6,500 508 44 3,446 2,502 1,003 40 Conventional 104,171 70,922 4,109 1,417 26,328 39,068 33,249 41 Multifamily residences 5,502 3,948 746 99 11,,443388 1,665 1,554 42 FHA-insured 399 340 132 27 8888 92 59 43 Conventional 5,103 3,609 613 72 1,350 1,573 1,495 44 Secured by other properties 52,171 34,605 2,258 660 11,786 19,901 17,566 45 Loans to financial institutions 37,072 34,843 12,434 4,342 15,137 2,930 2,228 46 REITs and mortgage companies 8,574 8,162 2,066 801 4,616 680 412 47 Domestic commercial banks 3,362 2,618 966 165 1,206 281 744 48 Banks in foreign countries 7,359 7,187 3,464 268 2,820 635 171 49 Other depositary institutions 1,579 1,411 290 76 785 261 167 50 Other financial institutions 16,198 15,465 5,649 3,033 5,710 1,073 733 51 Loans to security brokers and dealers 11,042 10,834 6,465 1,324 2,846 199 207 52 Other loans to purchase or carry securities 4,280 3,532 410 276 1,860 985 747 53 Loans to farmers except real estate 28,054 15,296 168 150 3,781 11,196 12,758 54 Commercial and industrial loans 213,123 171,815 39,633 13,290 67,833 51,059 41,309 55 Loans to individuals 161,599 110,974 7,100 2,562 40,320 60,993 50,624 56 Installment loans 131,571 90,568 5,405 1,711 33,640 49,811 41,003 57 Passenger automobiles 58,908 37,494 1,077 209 11,626 24,582 21,414 58 Residential repair and modernization 8,526 5,543 331 60 2,088 3,064 2,983 59 Credit cards and related plans 21,938 19,333 2,268 1,267 9,736 6,062 2,605 60 Charge-account credit cards 17,900 16,037 1,573 1,219 8,192 5,053 1,863 61 Check and revolving credit plans 4,038 3,296 695 47 1,545 1,009 742 62 Other retail consumer goods 19,689 13,296 427 57 5,242 7,570 6,393 63 Mobile homes 9,642 6,667 .179 19 2,563 3,905 2,976 64 Other 10,047 6,629 249 38 2,678 3,664 3,417 65 Other installment loans 22,510 14,902 1,302 119 4,948 8,533 7,608 66 Single-payment loans to individuals 30,027 20,406 1,694 851 6,680 11,182 9,621 67 All other loans 17,360 14,778 3,545 1,290 6,100 3,844 2,582 68 Total loans and securities, net 956,579 696,833 102,383 35,536 259,820 299,094 259,867 69 Direct lease financing 6,717 6,212 1,145 96 3,931 1,041 505 70 Fixed assets—Buildings, furniture, real estate. 22,448 16,529 2,332 795 6,268 7,133 5,926 71 Investment in unconsolidated subsidiaries 3,255 3,209 1,642 188 1,282 96 46 72 Customer acceptances outstanding 16,557 16,036 8,315 1,258 6,054 409 521 73 Other assets 34,559 30,408 11,323 1,000 12,810 5,275 4,249 74 Total assets 1,198,495 904,182 170,899 44,170 338,079 351,034 294,595 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 i Insured Non- LLiiaabbiilliittyy oorr ccaappiittaall aaccccoouunntt commercial Large banks member banks banks1 Total All other New York City of Other City Chicago large 75 Demand deposits 369,030 282,450 66,035 10,690 100,737 104,988 86,591 76 Mutual savings banks 1,282 1,089 527 1 256 305 194 77 Other individuals, partnerships, and corporations 279,651 205,591 31,422 7,864 79,429 86,876 74,061 78 U.S. government 7,942 5,720 569 188 1,987 2,977 2,222 79 States and political subdivisions 17,122 11,577 764 252 3,446 7,116 5,545 80 Foreign governments, central banks, etc 1,805 1,728 1,436 19 211 62 77 81 Commercial banks in United States 39,596 38,213 21,414 1,807 10,803 4,189 1,393 82 Banks in foreign countries 7,379 7,217 5,461 207 1,251 298 162 83 Certified and officers' checks, etc 14,253 11,315 4,443 352 3,354 3,166 2,937 84 Time deposits 368,562 266,496 38,086 15,954 98,525 113,931 102,066 85 Accumulated for personal loan payments 79 66 0 0 1 65 13 86 Mutual savings banks 399 392 177 40 148 27 7 87 Other individuals, partnerships, and corporations 292,120 210,439 29,209 12,074 76,333 92,824 81,680 88 U.S. government 864 689 61 40 356 232 175 89 States and political subdivisions 59,087 40,010 1,952 1,554 16,483 20,020 19,077 90 Foreign governments, central banks, etc 6,672 6,450 3,780 1,145 1,401 124 222 91 Commercial banks in United States 7,961 7,289 2,077 999 3,585 629 672 92 Banks in foreign countries 1,381 1,161 829 103 219 9 220 223,326 152,249 10,632 2,604 54,825 84,188 71,077 94 Individuals and nonprofit organizations > 207,701 141,803 9,878 2,448 51,161 78,316 65,897 95 Corporations and other profit organizations 11,216 7,672 519 148 3,195 3,809 3,544 96 U.S. government 82 65 2 3 24 35 17 97 States and political subdivisions 4,298 2,682 215 4 437 2,025 1,616 98 All other 30 27 18 * 8 2 3 99 Total deposits 960,918 701,195 114,753 29,248 254,087 303,107 259,733 100 Federal funds purchased and securities sold under agreements to repurchase 91,981 85,582 21,149 8,777 41,799 13,857 6,398 101 Commercial banks 42,174 39,607 6,991 5,235 21,609 5,773 2,566 102 Brokers and dealers 12,787 11,849 2,130 1,616 6,381 1,722 939 103 Others 37,020 34,126 12,028 1,926 13,809 6,362 2,894 104 Other liabilities for borrowed money 8,738 8,352 3,631 306 3,191 1,225 386 105 Mortgage indebtedness 1,767 1,455 234 27 701 491 316 106 Bank acceptances outstanding 16,661 16,140 8,398 1,260 6,070 412 521 107 Other liabilities 27,124 23,883 8,600 1,525 9,020 4,477 3,494 108 Total liabilities 1,107,188 836,607 157,026 41,144 314,868 323,569 270,849 109 Subordinated notes and debentures 5,767 4,401 1,001 79 2,033 1,287 1,366 110 Equity capital 8855,,554400 63,174 12,871 2,947 21,177 26,178 22,380 8888 36 0 0 5 31 52 112 Common stock 17,875 12,816 2,645 570 4,007 5,594 5,064 113 Surplus 32,341 23,127 4,541 1,404 8,148 9,034 9,217 114 Undivided profits 33,517 26,013 5,554 921 8,680 10,858 7,509 115 Other capital reserves 1,719 1,182 132 52 337 661 538 1,198,495 904,182 170,899 44,170 338,079 351,034 294,595 MEMO: 117 Demand deposits adjusted2 252,337 171,864 18,537 5,576 60,978 86,774 80,472 Average for last 15 or 30 days 118 Cash and due from bank 146,283 124,916 36,862 6,030 45,731 36,293 21,379 119 Federal funds sold and securities purchased under agree- 43,873 33,682 4,272 1,887 16,007 11,517 10,307 120 Total loans 651,874 483,316 76,750 25,722 184,790 196,054 168,558 121 Time deposits of $100,000 or more 183,614 150,160 32,196 13,216 65,776 38,972 33,454 122 Total deposits 944,593 687,543 107,028 28,922 250,804 300,789 257,062 123 Federal funds purchased and securities sold under agreements to repurchase 92,685 86,635 22,896 9,473 40,541 13,725 6,053 124 Other liabilities for borrowed money 8,716 8,326 3,679 370 3,211 1,067 390 125 Standby letters of credit outstanding 18,820 17,658 10,063 1,477 4,820 1,297 1,162 126 Time deposits of $100,000 or more 186,837 152,553 32,654 13,486 66,684 39,728 34,284 160,227 129,667 27,950 11,590 56,383 33,743 30,560 26,610 22,886 4,704 1,896 10,301 5,985 3,724 129 Number of banks 14,390 5,593 12 9 153 5,419 8,810 1. Member banks exclude and nonmember banks include 13 noninsured NOTE. Data include consolidated reports, including figures for all trust companies that are members of the Federal Reserve System. bank-premises subsidiaries and other significant majority-owned do- 2. Demand deposits adjusted are demand deposits other than domestic mestic subsidiaries. Securities are reported on a gross basis before deduccommercial interbank and U.S. government, less cash items reported tions of valuation reserves. Back data in lesser detail were shown in as in process of collection. previous issues of the BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • January 1980 1.27 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $750 Million or More on December 31, 1977, Assets and Liabilities Millions of dollars, Wednesday figures 1979 bank, Oct. 31 Nov. 7 Nov. 14 Nov. 21 Nov. 28 Dec. 5*> Dec. 12» Dec. 19? Dec. 26*> 1979A 1 Cash items in process of collection 52,185 52,573 58,698 54,058 50,635 54,832 53,588 54,391 50,219 148 2 Demand deposits due from banks in the United States 17,685 18,787 18,389 15,768 17,905 16,522 15,151 18,836 9,090 109 3 All other cash and due from depositary institutions 33,326 29,446 31,558 31,708 34,726 33,316 32,877 30,302 28,011 280 4 Total loans and securities 503,229 503,148 506,553 501,108 500,814 509,020 505,753 512,758 518,182 4,999 Securities 5 U.S. Treasury securities 35,360 34,701 35,928 35,559 35,777 36,954 37,271 36,381 35,583 426 6 Trading account 4,746 4,262 5,452 5,121 5,234 6,049 6,314 5,483 5,033 7 Investment account, by maturity 30,613 30,439 30,476 30,438 30,544 30,905 30,958 30,898 30,550 426 8 One year or less 8,127 8,193 8,296 8,037 8,096 7,931 8,030 8,095 7,951 43 9 Over one through five years 18,161 17,963 17,894 17,898 17,953 18,354 18,295 18,281 18,079 359 10 Over five years 4,325 4,282 4,286 4,503 4,494 4,620 4,632 4,522 4,520 25 11 Other securities 70,833 70,452 70,755 70,420 70,582 71,669 71,711 71,527 71,418 891 12 Trading account 3,774 3,622 3,734 3,439 3,419 4,450 4,208 3,768 3,597 Investment account 67,060 66,830 67,021 66,981 67,162 67,219 67,503 67,759 67,821 890 U.S. government agencies 15,322 15,215 15,400 15,347 15,454 15,458 15,590 15,679 15,691 167 States and political subdivision, by maturity. . 49,057 48,947 48,942 48,983 49,058 49,125 49,257 49,424 49,474 711 One year or less 6,457 6,645 6,401 6,588 6,420 6,428 6,425 6,439 6,361 41 Over one year 42,599 42,302 42,541 42,395 42,638 42,697 42,832 42,984 43,114 671 Other bonds, corporate stocks and securities. 2,681 2,668 2,678 2,651 2,650 2,636 2,656 2,657 2,655 12 Loans 19 Federal funds sold1 25,198 27,195 28,568 24,744 24,202 26,217 25,288 27,329 30,898 299 20 To commercial banks 17,912 19,606 20,836 17,862 17,668 19,010 18,952 20,562 22,877 299 21 To nonbank brokers and dealers in securities. 5,041 5,272 5,257 5,005 4,626 5,159 4,667 5,100 5,663 22 To others 2,246 2,317 2,475 1,877 1,909 2,048 1,669 1,667 2,358 23 Other loans, gross 383,764 382,809 383,368 382,519 382,377 386,280 383,640 389,781 392,525 3,583 24 Commercial and industrial 152,701 152,623 152,107 151,941 150,996 152,644 151,829 154,681 156,030 866 25 Bankers' acceptances and commercial paper. 3,934 3,837 3,801 3,917 3,749 4,738 4,512 4,848 5,388 215 26 All other 148,767 148,786 148,306 148,024 147,246 147,905 147,317 149,833 150,642 652 27 U.S. addresses 142,142 142,142 141,564 141,425 140,678 141,375 140,805 143,312 144,114 651 28 Non-U.S. addressees 6,625 6,644 6,742 6,599 6,569 6,531 6,512 6,520 6,527 29 Real estate 96,096 96,431 96,616 96,932 97,277 97,464 97,990 98,277 98,204 1,159 30 To individuals for personal expenditures 70,117 70,057 70,152 70,289 70,505 70,636 70,843 71,224 71,702 1,392 To financial institutions 31 Commercial banks in the United States 3,677 3,446 3,187 3,286 3,253 3,482 3,140 3,332 3,715 I 32 Banks in foreign countries 6,802 7,051 7,474 7,025 6,642 6,974 6,896 6,974 6,796 33 Sales finance, personal finance companies, etc 9,580 9,383 9,349 9,323 9,396 9,946 9,477 9,621 10,122 4 34 Other financial institutions 16,910 16,878 16,777 16,617 16,648 16,819 16,714 17,001 16,966 31 35 To nonbank brokers and dealers in securities. . 7,362 6,754 7,314 6,965 7,352 8,375 7,043 8,180 7,483 36 To others for purchasing and carrying securities2 2,506 2,471 2,474 2,497 2,508 2,540 2,573 2,607 2,588 3 37 To finance agricultural production 4,933 4,940 4,933 4,894 4,912 4,848 4,823 4,850 4,889 41 38 All other 13,080 12,773 12,985 12,749 12,887 12,552 12,311 13,033 14,030 84 39 LESS: Unearned income 6,825 6,868 6,920 6,964 6,955 6,892 6,939 7,039 7,051 166 40 Loan loss reserve 5,100 5,141 5,147 5,170 5,169 5,209 5,218 5,222 5,191 34 41 Other loans, net 371,838 370,800 371,301 370,384 370,253 374,180 371,483 377,520 380,282 3,384 42 Lease financing receivables 7,405 7,480 7,516 7,531 7,544 7,675 7,784 7,810 7,842 31 43 All other assets 59,273 58,961 59,940 58,877 59,794 60,148 60,633 61,558 60,465 199 44 Total assets 673,105 670,395 682,654 669,051 671,418 681,513 675,786 685,656 673,808 5,767 Deposits 45 Demand deposits 191,607 194,489 200,192 188,105 185,166 196,858 193,130 199,303 188,878 11,,558855 46 Mutual savings banks 779 796 780 685 613 717 602 638 657 Individuals, partnerships, and corporations 134,886 133,421 140,382 133,102 130,639 134,685 136,482 137,067 144,836 1,428 States and political subdivisions 5,134 4,616 4,594 4,888 4,562 4,560 4,562 5,112 4,805 85 U.S. government 1,305 756 876 926 786 2,703 1,774 3,082 839 9 Commercial banks in the United States 32,904 37,887 36,026 31,274 30,612 33,394 29,706 34,669 20,621 8 Banks in foreign countries 7,274 7,461 8,074 7,816 7,740 8,195 8,305 7,678 8,670 Foreign governments and official institutions. . . 991 1,292 1,820 1,760 2,239 1,891 2,463 1,894 1,902 Certified and officers' checks 8,333 8,260 7,639 7,655 7,976 10,713 9,236 9,163 6,549 54 54 Time and savings deposits 261,521 261,561 262,518 264,098 264,662 265,622 265,460 265,452 265,004 3,279 55 Savings 74,008 73,766 73,236 73,035 72,559 72,722 72,464 72,413 72,223 1,440 56 Individuals and nonprofit organizations 69,314 69,077 68,588 68,444 67,961 68,094 67,845 67,898 67,729 1,383 57 Partnerships and corporations operated for profit 3,984 3,954 3,912 3,874 3,911 3,924 3,896 3,805 3,796 53 58 Domestic governmental units 689 717 708 690 662 684 696 688 674 4 59 All other 21 18 27 26 25 21 27 23 23 60 Time 187,513 187,795 189,282 191,063 192,103 192,900 192,996 193,039 192,782 1,839 61 Individuals, partnerships, and corporations.. 154,614 155,076 156,440 158,092 158,937 159,956 159,563 159,817 159,572 1,645 62 States and political subdivisions 22,240 22,185 22,165 22,209 22,248 22,063 22,056 21,682 21,651 189 63 U.S. government 462 477 509 498 494 494 493 493 492 2 64 Commercial banks in the United States 5,305 5,272 5,309 5,385 5,498 5,485 5,485 5,252 5,217 3 65 Foreign governments, official institutions, and banks 4,891 4,785 4,859 4,879 4,927 4,901 5,398 5,795 5,849 66 Federal funds purchased3 94,354 93,865 97,837 92,658 91,540 95,767 95,720 92,667 90,567 8 Other liabilities for borrowed money 67 Borrowings from Federal Reserve Banks 1,631 245 673 1,449 3,740 1,620 1,285 951 1,410 68 Treasury tax-and-loan notes 4,866 356 1,288 2,609 2,540 434 574 6,566 8,195 2 69 All other liabilities for borrowed money 12,669 14,104 13,506 13,412 14,282 13,649 13,440 13,555 14,842 380 70 Other liabilities and subordinated note and debentures 61,655 60,975 61,823 62,027 64,712 62,559 61,023 62,170 59,935 138 71 Total liabilities 628,304 625,595 637,838 624,338 626,643 636,510 630,632 640,664 628,831 5,392 72 Residual (total assets minus total liabilities)4 4444,,880011 44,800 44,816 44,712 44,775 45,003 45,154 44,991 44,977 375 1. Includes securities purchased under agreements to resell. 4. This is not a measure of equity capital for use in capital adequacy 2. Other than financial institutions and brokers and dealers. analysis or for other analytic uses. 3. Includes securities sold under agreements to repurchase. A See p. A-23. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A 21 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $1 Billion or More on December 31, 1977 Assets and Liabilities Millions of dollars, Wednesday figures 1979 Account bank, Oct. 31 Nov. 7 Nov. 14 Nov. 21 Nov. 28 Dec. 5P Dec. 12® Dec. 19P Dec. 26» 1979A 1 Cash items in process of collection 49,806 50,322 55,734 51,464 48,418 52,343 51,214 51,803 47,392 99 2 Demand deposits due from banks in the United States 16,915 17,848 17,507 14,952 17,202 15,715 14,344 17,999 8,353 69 3 All other cash and due from depositary institutions 31,596 27,929 29,788 30,153 32,757 31,590 31,055 28,658 26,258 201 4 Total loans and securities 471,119 470,727 474,286 468,642 468,790 476,548 473,323 479,954 485,305 3,262 Securities 5 U.S. Treasury securities 33,098 32,451 33,669 33,262 33,472 34,655 34,961 34,064 33,266 254 6 Trading account 4,693 4,220 5,409 5,080 5,194 6,008 6,277 5,445 5,002 7 Investment account, by maturity 28,405 28,230 28,260 28,183 28,279 28,647 28,684 28,620 28,264 254 8 One year or less 7,645 7,707 7,818 7,512 7,566 7,411 7,511 7,586 7,440 36 9 Over one through five years 16.732 16,538 16,453 16,470 16,522 16,931 16,858 16,839 16,637 208 10 Over five years 4,028 3,985 3,988 4,200 4,190 4,304 4,315 4,194 4,187 10 11 Other securities 65,512 65,154 65,418 65,068 65,212 66,292 66,332 66,127 66,012 607 12 Trading account 3,688 3,554 3,648 3,342 3,316 4,328 4,110 3,656 3,488 13 Investment account 61,824 61,600 61,770 61,727 61,896 61,964 62,222 62,471 62,524 607 14 U.S. government agencies 14,276 14,171 14,338 14,287 14,385 14,391 14,516 14,597 14,610 165 15 States and political subdivision, by maturity.. 45,032 44,925 44,918 44,950 45,017 45,090 45,203 45,372 45,413 432 16 One year or less 5,869 6,062 5,821 6,013 5,844 5,873 5,868 5,875 5,798 22 17 Over one year 39,163 38,864 39,097 38,936 39,174 39,217 39,335 39,496 39,615 410 18 Other bonds, corporate stocks and securities. 2,516 2,503 2,514 2,490 2,494 2,483 2,503 2,503 2,502 10 Loans 19 Federal funds sold1 22,977 24,605 26,089 22,158 22,064 23,657 22,589 24,417 28,081 193 20 To commercial banks 16,017 17,399 18,797 15,776 15,934 16,820 16,762 18,054 20,540 193 21 To nonbank brokers and dealers in securities.. 4,771 4,956 4,877 4,566 4,284 4,844 4,219 4,749 5,236 22 To others 2,189 2,250 2,415 1,817 1,846 1,993 1,608 1,614 2,306 23 Other loans, gross 360,611 359,679 360,327 359,434 359,313 363,193 360,747 366,746 369,330 2,349 24 Commercial and industrial 145,176 145,092 144,611 144,449 143,552 145,236 144,465 147,273 148,583 521 25 Bankers' acceptances and commercial paper.. 3,848 3,756 3,723 3,842 3,674 4,667 4,443 4,768 5,310 26 All other 141,328 141,336 140,888 140,607 139,878 140,570 140,022 142,504 143,272 521 27 U.S. addresses 134,749 134,738 134,192 134,054 133,358 134,085 133,558 136,033 136,795 520 28 Non-U.S. addressees 6,579 6,599 6,696 6,554 6,520 6,484 6,463 6,471 6,478 1 29 Real estate 90,421 90,770 90,947 91,247 91,589 91,771 92,274 92,550 92,476 808 30 To individuals for personal expenditures 62,074 62,024 62,136 62,238 62,425 62,536 62,905 63,230 63,656 929 To financial institutions 31 Commercial banks in the United States 3,611 3,367 3,124 3,208 3,189 3,412 3,070 3,268 3,647 1 32 Banks in foreign countries 6,724 6,984 7,386 6,959 6,576 6,899 6,817 6,883 6,714 33 Sales finance, personal finance companies, 9,395 9,205 9,158 9,142 9,203 9,754 9,282 9,422 9,929 34 Other financial institutions 16,438 16,417 16,326 16,155 16,187 16,358 16,254 16,557 16,533 9 35 To nonbank brokers and dealers in securities... 7,257 6,660 7,222 6,877 7,277 8,293 6,959 8,095 7,375 36 To others for purchasing and carrying securities2 2,284 2,248 2,257 2,275 2,284 2,316 2,343 2,377 2,355 3 37 To finance agricultural production 4,763 4,770 4,767 4,729 4,744 4,681 4,656 4,685 4,722 34 38 All other 12,466 12,142 12,393 12,155 12,287 11,934 11,721 12,406 13,338 43 39 LESS: Unearned income 6,253 6,295 6,345 6,386 6,380 6,321 6,366 6,464 6,478 120 40 Loan loss reserve 4,827 4,866 4,871 4,895 4,891 4,928 4,940 4,936 4,907 21 41 Other loans, net 349,532 348,517 349,111 348,153 348,042 351,944 349,441 355,345 357,945 2,208 42 Lease financing receivables 7,208 7,283 7,317 7,329 7,340 7,469 7,578 7,603 7,633 30 43 All other assets 57,641 57,331 58,328 57,292 58,180 58,405 58,932 59,806 58,702 136 44 Total assets 634,286 631,441 642,959 629,832 632,688 642,070 636,446 645,823 633,644 3,797 Deposits 45 Demand deposits 180,166 183,233 188,263 176,738 174,200 185,036 181,345 187,245 176,740 1,025 46 Mutual savings banks 744 757 748 660 587 690 578 613 635 47 Individuals, partnerships, and corporations 125,874 124,692 131,020 124,181 121,899 125,418 127,096 127,800 135,202 916 48 States and political subdivisions 4,615 4,082 4,074 4,274 4,013 4,056 4,018 4,406 4,151 60 49 U.S. government 1,207 683 807 845 719 2,497 1,639 2,845 770 5 50 Commercial banks in the United States 31,488 36,403 34,468 29,854 29,336 31,936 28,369 33,211 19,212 2 51 Banks in foreign countries 7,223 7,391 8,006 7,763 7,679 8,127 8,236 7,626 8,613 52 Foreign governments and official institutions. . . 989 1,261 1,800 1,757 2,232 1,890 2,456 1,893 1,900 53 Certified and officers' checks 8,026 7,963 7,339 7,403 7,735 10,422 8,954 8,851 6,258 39 54 Time and savings deposits 243,906 243,906 244,818 246,251 246,834 247,869 247,713 247,796 247,333 2,203 55 Savings 68,739 68,513 68,018 67,832 67,384 67,512 67,271 67,240 67,084 1,026 56 Individuals and nonprofit organizations 64,403 64,164 63,722 63,586 63,136 63,244 63,006 63,076 62,932 985 57 Partnerships and corporations operated for profit 3,689 3,665 3,627 3,589 3,621 3,633 3,605 3,520 3,514 41 58 Domestic governmental units 626 666 642 631 601 614 633 621 614 1 59 All other 21 18 27 26 25 20 26 22 23 60 Time 175,167 175,393 176,800 178,418 179,450 180,357 180,443 180,555 180,249 1,177 61 Individuals, partnerships, and corporations. 144,469 144,892 146,176 147,738 148,554 149,652 149,242 149,455 149,196 1,064 62 States and political subdivisions 20,285 20,213 20,210 20,192 20,263 20,120 20,119 19,845 19,778 111 63 U.S. government 456 470 502 491 487 488 487 486 484 1 64 Commercial banks in the United States 5,072 5,038 5,057 5,122 5,223 5,200 5,202 4,979 4,946 65 Foreign governments, official institutions, and banks 4,885 4,780 4,855 4,874 4,922 4,896 5,393 5,791 5,845 66 Federal funds purchased 3 89,507 88,428 92,378 87,471 86,366 90,538 90,688 87,557 85,516 8 Other liabilities for borrowed money 67 Borrowings from Federal Reserve Banks 1,410 201 651 1,360 3,581 1,568 1,261 884 1,294 68 Treasury tax-and-loan notes 4,509 319 1,181 2,449 2,386 400 528 6,095 7,691 69 All other liabilities for borrowed money 12,388 13,687 13,130 12,989 13,938 13,336 12,888 13,208 14,420 216 70 Other liabilities and subordinated note and debentures 60,396 59,686 60,566 60,709 63,430 61,172 59,724 60,872 58,544 111 71 Total liabilities 592,283 589,460 600,987 587,968 590,736 599,918 594,146 603,656 591,539 3,564 72 Residual (total assets minus total liabilities)4 42,003 41,980 41,972 41,864 41,952 42,152 42,300 42,167 42,104 233 1. Includes securities purchased under agreements to resell. 4. This is not a measure of equity capital for use in capital adequacy 2. Other than financial institutions and brokers and dealers. analysis or for other analytic uses. 3. Includes securities sold under agreements to repurchase. A See p. A-23. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 DomesticN onfinancial Statistics • January 1980 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1979 Oct. 31 Nov. 7 Nov. 14 Nov. 21 Nov. 28 Dec. 5P Dec. 12 P Dec. 19 P Dec. 26* 1 Cash items in process of collection 1188,,004455 2200,,444488 1199,,771133 1177,,338888 1188,,001155 1199,,444422 1199,,008833 1199,,007788 1144,,220055 2 Demand deposits due from banks in the United States 1111,,884477 1133,,003377 11,922 1100,,337722 1111,,779955 1111,,003366 99,,665555 1122,,333399 33,,336699 3 All other cash and due from depositary institutions 8,997 6,065 9,961 7,117 6,469 8,076 8,291 6,658 4,692 4 Total loans and securities1 108,327 109,360 108,618 108,034 109,022 110,699 108,335 112,927 115,511 Securities 5 U.S. Treasury securities2 6 Trading account2 7 Investment account, by maturity 6,314 6,300 6,2 i 8 6,292 6,167 6,342 6,165 6,055 5,857 8 One year or less 1,343 1,348 1,348 1,333 1,276 1,265 1,165 1,165 1,165 9 Over one through five years 4,385 4,376 4,294 4,271 4,240 4,461 4,281 4,284 4,066 10 Over five years 586 576 576 688 651 616 720 605 626 11 Other securities2 13 Investment account 11,939 11,899 12,011 12,034 12,137 12,166 12,204 12,412 12,419 14 U.S. government agencies 2,356 2,356 2,479 2,478 2,544 2,539 2,546 2,550 2,530 15 States and political subdivision, by maturity 9,028 8,990 8,954 8,999 9,035 9,066 9,083 9,269 9,301 16 One year or less 1,400 1,411 1,407 1,470 1,442 1,471 1,472 1,524 1,551 17 Over one year 7,628 7,579 7,546 7,529 7,592 7,595 7,611 7,745 7,749 18 Other bonds, corporate stocks and securities 555 553 578 557 558 561 576 592 588 Loans 19 Federal funds sold 3 5,749 7,183 5,533 5,456 7,208 7,188 6,210 7,411 10,166 20 To commercial banks 3,198 4,625 3,198 3,498 5,192 4,745 4,230 5,415 7,870 21 To nonbank brokers and dealers in securities 1,823 1,761 1,646 1,327 1,372 1,790 1,509 1,376 1,502 22 To others 728 796 690 631 644 653 471 621 794 23 Other loans, gross 86,850 86,532 87,445 86,864 86,127 87,608 86,381 89,724 89,740 24 Commercial and industrial 45,383 45,392 45,541 45,315 44,790 45,598 45,347 46,963 47,143 25 Bankers' acceptances and commercial paper 1,228 1,195 1,371 1,531 1,437 1,661 1,682 1,836 1,929 26 All other 44,155 44,197 44,170 43,784 43,353 43,936 43,665 45,127 45,214 27 U.S. addresses 42,025 42,027 41,924 41,653 41,232 41,838 41,595 43,034 43,101 28 Non-U.S. addressees 2,130 2,169 2,245 2,132 2,121 2,098 2,070 2,093 2,113 29 Real estate 12,062 12,073 12,072 12,120 12,141 12,137 12,191 12,243 12,284 30 To individuals for personal expenditures 88,,110000 88,,009988 88,,111188 88,,114444 88,,116666 88,,118888 88,,441199 88,,446699 8,495 To financial institutions 31 Commercial banks in the United States 1,695 1,313 1,289 1,414 1,422 1,469 1,272 1,260 1,389 32 Banks in foreign countries 33,,001100 33,,224455 33,,553333 33,,331199 22,,883399 33,,116666 33,,116677 33,,115544 22,,992244 33 Sales finance, personal finance companies, etc 3,574 3,485 3,542 3,478 3,550 3,784 3,560 3,547 3,874 34 Other financial institutions 5,058 5,108 5,052 4,993 5,012 4,972 4,921 5,274 5,262 35 To nonbank brokers and dealers in securities 44,,118800 44,,112200 44,,334422 44,,228877 44,,338866 44,,774455 44,,003333 55,,113333 44,,442233 36 To others for purchasing and carrying securities4 444 430 426 422 426 425 421 422 426 37 To finance agricultural production 249 262 278 266 274 264 252 276 290 38 All other 3,097 3,007 3,252 3,107 3,119 2,860 2,796 2,983 3,228 39 LESS: Unearned income 938 950 971 985 994 972 983 1,039 1,050 40 Loan loss reserve 1,587 1,603 1,619 1,626 1,622 1,633 1,643 1,636 1,621 41 Other loans, net 84,325 83,978 84,856 84,252 83,511 85,003 83,755 87,049 87,069 42 Lease financing receivables 1,424 1,425 1,421 1,426 1,426 1,504 1,498 1,501 1,505 43 All other assets 5 28,588 27,928 29,237 27,802 27,648 29,308 30,350 29,630 28,110 44 Total assets 177,228 178,263 180,872 172,140 174,375 180,067 177,212 182,134 167,394 Deposits 45 Demand deposits 61,697 66,715 64,284 58,677 58,994 63,763 60,850 65,120 51,261 46 Mutual savings banks 394 431 402 350 288 360 311 351 347 47 Individuals, partnerships, and corporations 31,885 32,137 33,166 30,274 29,868 29,882 30,933 32,027 33,368 48 States and political subdivisions 434 385 436 557 403 470 340 407 431 49 U.S. government 229 144 115 119 84 718 352 758 104 50 Commercial banks in the United States 18,776 23,199 19,533 16,913 17,242 18,926 16,110 20,470 6,727 51 Banks in foreign countries 5,426 5,622 6,050 5,906 5,830 6,238 6,377 5,635 6,509 52 Foreign governments and official institutions 723 953 1,446 992 1,457 1,069 1,545 1,061 1,086 53 Certified and officers' checks 3,830 3,844 3,137 3,566 3,821 6,098 4,880 4,410 2,689 54 Time and savings deposits 42,903 42,991 43,295 44,049 44,383 44,652 44,972 45,646 45,359 55 Savings 9,511 9,546 9,472 9,430 9,385 9,423 9,431 9,408 9,448 56 Individuals and nonprofit organizations 8,993 9,034 88,,996677 88,,993388 8,890 88,,993355 8,922 88,,992277 88,,996655 57 Partnerships and corporations operated for profit 358 352 348 344 348 353 351 338 345 58 Domestic governmental units 149 150 140 134 132 125 143 131 126 59 All other 11 9 17 13 15 9 15 12 12 60 Time 33,391 33,445 33,823 34,619 34,998 35,229 35,541 36,239 35,911 61 Individuals, partnerships, and corporations 27,391 27,537 27,795 28,577 28,852 29,213 29,109 29,591 29,233 62 States and political subdivisions 1,772 1,762 1,748 1,734 1,723 1,672 1,613 1,591 1,569 63 U.S. government 48 49 47 42 42 42 41 47 46 64 Commercial banks in the United States 11,,551111 11,,447700 11,,448888 11,,449955 11,,559933 11,,558899 11,,557766 11,,444422 11,,337799 65 Foreign governments, official institutions, and banks 2,670 2,628 2,746 2,770 2,788 2,714 3,201 3,568 3,684 66 Federal funds purchased6 27,983 26,712 3300,,557722 2266,,336622 2244,,335544 2277,,551188 28,693 25,299 2255,,001188 Other liabilities for borrowed money 67 Borrowings from Federal Reserve Banks 293 1,252 500 631 68 Treasury tax-and-loan notes 942 4 332 626 580 3 49 i ,820 2,058 69 All other liabilities for borrowed money 6,390 5,896 55,,993322 6,442 66,,880077 66,,443300 66,,002200 6,301 7,234 70 Other liabilities and subordinated note and debentures 23,571 22,227 22,665 21,972 24,326 23,311 22,700 24,061 21,986 71 Total liabilities 163,485 164,546 167,082 158,421 160,696 166,177 163,285 168,247 153,547 72 Residual (total assets minus total liabilities) 7 13,743 13,717 13,790 13,719 13,680 13,890 13,926 13,887 13,846 1. Excludes trading account securities. 5. Includes trading account securities. 2. Not available due to confidentiality. 6. Includes securities sold under agreements to repurchase. 3. Includes securities purchased under agreements to resell. 7. This is not a measure of equity capital for use in capital adequacy 4. Other than financial institutions and brokers and dealers. analysis or for other analytic uses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A 23 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions of dollars, Wednesday figures 1979 Adjust- Category bank, Oct. 31 Nov. 7 Nov. 14 Nov. 21 Nov. 28 Dec. 5p Dec. 12f Dec. 19 p Dec. 26 p 1979 A BANKS WITH ASSETS OF $750 MILLION OR MORE 1 Total loans (gross) and investments adjusted1 493,566 492,105 494,597 492,094 492,017 498,629 495,818 501,126 503,832 4,899 2 Total loans (gross) adjusted1 387,373 386,952 387,914 386,114 385,658 390,006 386,836 393,217 396,831 3,582 3 Demand deposits adjusted 2 105,213 103,274 104,592 101,847 103,133 105,929 108,063 107,161 117,199 1,419 4 Time deposits in accounts of $100,000 or more. .. 126,333 126,568 127,714 129,255 129,959 130,518 130,352 130,213 129,695 426 5 Negotiable CDs 90,645 90,574 91,381 92,964 93,350 93,775 93,170 92,972 92,581 238 6 Other time deposits 35,688 35,994 36,333 36,291 36,608 36,742 37,182 37,242 37,114 188 7 Loans sold outright to affiliates 3 3,633 3,610 3,660 3,576 3,602 3,146 3,184 3,200 2,707 8 Commercial and industrial 2,648 2,622 2,618 2,525 2,535 2,070 2,097 2,110 1,780 9 Other 985 988 1,042 1,051 1,067 1,077 1,087 1,090 927 BANKS WITH ASSETS OF $1 BILLION OR MORE 10 Total loans (gross) and investments adjusted1 462,570 461,122 463,581 460,939 460,938 467,565 464,797 470,033 472,502 3,209 11 Total loans (gross) adjusted1 363,960 363,518 364,494 362,608 362,254 366,618 363,504 369,841 373,224 2,348 12 Demand deposits adjusted2 97,666 95,824 97,254 94,575 95,726 98,260 100,123 99,385 109,367 918 13 Time deposits in accounts of $100,000 or more... 118,478 118,703 119,788 121,190 121,903 122,588 122,434 122,367 121,826 247 14 Negotiable CDs 84,739 84,685 85,430 86,920 87,333 87,883 87,302 87,111 86,710 67 15 Other time deposits 33,739 34,018 34,357 34,270 34,570 34,705 35,132 35,255 35,116 180 16 Loans sold outright to affiliates 3 3,576 3,542 3,593 3,509 3,534 3,082 3,120 3,140 2,649 17 Commercial and industrial 2,621 2,590 2,586 2,494 2,503 2,038 2,066 2,080 1,752 18 Other 955 952 1,007 1,015 1,031 1,044 1,054 1,060 898 BANKS IN NEW YORK CITY 19 Total loans (gross) and investments adjusted1.4.. 105,960 105,976 106,721 105,735 105,024 107,091 105,459 108,927 108,923 20 Total loans (gross) adjusted1 87,707 87,777 88,492 87,408 86,720 88,582 87,089 90,460 90,647 21 Demand deposits adjusted2 24,647 22,924 24,923 24,257 23,653 24,676 25,305 24,812 30,225 22 Time deposits in accounts of $100,000 or more... 26,714 26,702 26,955 27,718 28,022 28,187 28,479 29,106 28,760 23 Negotiable CDs 18,810 18,857 19,050 19,807 20,110 20,192 20,109 20,447 20,214 24 Other time deposits 7,904 7,845 7,904 7,911 7,912 7,994 8,370 8,659 8,546 1. Exclusive of loans and federal funds transactions with domestic 4. Excludes trading account securities. commercial banks. A These amounts represent accumulated adjustments originally made 2. All demand deposits except U.S. government and domestic banks to offset the cumulative effects of mergers. A "positive" adjustment bank less cash items in process of collection. should be added to, and a "negative" adjustment bank subtracted from, 3. Loans sold are those sold outright to a bank's own foreign branches, outstanding data for any date in the year to establish comparability with nonconsolidated nonbank affiliates of the bank, the bank's holding com- any date in the subsequent year. pany (if not a bank) and nonconsolidated nonbank subsidiaries of the holding company. NOTES TO TABLE 1.311. 1. Commercial banks are those in the 50 states and the District of bank balances, loan RPs, and participations in pooled loans. Includes Columbia with national or state charters plus U.S. branches, agencies, averages of daily figures for member banks and averages of current and and New York investment company subsidiaries of foreign banks and previous month-end data for foreign-related institutions. Edge Act corporations. 4. Loans initially booked by the bank and later sold to affiliates that 2. Includes seasonally adjusted Federal funds, RPs, and other borrow- are still held by affiliates. Averages of Wednesday data. ings from nonbanks and not seasonally adjusted net Eurodollars and 5. Includes averages of daily figures for member banks and quarterly loans to affiliates. Includes averages of Wednesday data for domestic call report figures for nonmember banks. chartered banks and averages of current and previous month-end data 6. Includes averages of current and previous month-end data. for foreign-related institutions. 7. Based on daily average data reported by 46 large banks. 3. Other borrowings are borrowings on any instrument, such as a 8. Includes U.S. Treasury demand deposits and Treasury tax and loan promissory note or due bill, given for the purpose of borrowing money notes at commercial banks. Averages of daily data. for the banking business. This includes borrowings from Federal Reserve 9. Averages of Wednesday figures. Banks and from foreign banks, term federal funds, overdrawn due from Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • January 1980 1.31 LARGE WEEKLY REPORTING COMMERCIAL BANKS Domestic Classified Commercial and Industrial Loans Millions of dollars Outstanding Net change during AAAdddjjjuuusssttt--- IIInnnddduuussstttrrryyy ccclllaaassssssiiifffiiicccaaatttiiiooonnn 1979 1979 1979 mmmeeennnttt bbbaaannnkkkAAA Aug. 29 Sept. 26 Oct. 31 Nov. 28 Dec. 26? Q3 Q4f Oct. Nov. Dec.*5 1 Durable goods manufacturing 21,703 23,594 23,472' 22,857 23,593 2,689 1 -122' -614 736 46 2 Nondurable goods manufacturing 18,441 18,907 19,121' 18,379 19,205 1,503' 298 214' -741 826 39 3 Food, liquor, and tobacco 4,598 4,906 5,024 4,968 5,220 535 314 118 -57 252 6 4 Textiles, apparel, and leather 5,090 5,029 4,849 4,608 4,342 328 -686 -180 -241 -266 6 5 Petroleum refining 1,841 1,972 2,182 1,873 2,677 6 705 210 -309 805 1 6 Chemicals and rubber 3,641 3,627 3,810 3,749 3,836 179 209 183 -61 87 14 7 Other nondurable goods 3,270 3,372 3,255' 3,182 3,129 456 -243 -117' -73 -53 12 8 Mining (including crude petroleum and natural gas) 11,442 11,681 11,697 11,502 11,998 673 317 16 --119955 449955 1144 9 Trade 24,389' 24,655' 25,410' 25,078 24,885 685' 230 755' -331 -193 121 10 Commodity dealers 1,675 1,859 2,191 1,861 2,134 -58 275 332 -330 273 6 11 Other wholesale 12,038 11,940 12,170 11,902 11,992 199 52 229 -268 90 34 12 Retail 10,675' 10,855 r 11,049' 11,316 10,759 544 -96 194' 267 -557 82 13 Transportation, communication, and other public utilities 15,788 16,760' 16,885 17,212 17,840 1,434' 1,080 125' 327 628 1144 14 Transportation 6,691 6,833' 7,065 7,075 7,133 380' 300 232' 10 58 7 15 Communication 2,139 2,325 2,404 2,475 2,522 274 197 80 70 47 1 16 Other public utilities 6,959 7,602 7,416 7,662 8,186 779 583 -187 247 523 5 17 Construction 5,805 5,892' 5,687 5,692 5,783 309' -109 -205 6 90 23 18 Services 18,082 18,359 18,782 18,926 19,399 1,108' 1,040 423 144 472 96 19 All other i 14,213' 13,725' 13,694' 13,710 14,092 -1,335' 367 -31' 16 382 168 20 Total domestic loans 129,863' 133,573' 134,747' 133,358 136,795 7,066' 3,222 1,174' -1,389 3,437 520 21 MEMO: Term loans (original maturity more than 1 year) included in domestic loans 65,293 66,950' 68,691' 69,416 72,120 2,710' 5,169 1,741' 724 2,704 133 1. Includes commercial and industrial loans at a few banks with assets A These amounts represent accumulated adjustments originally made of $1 billion or more that do not classify their loans. to offset the cumulative effects of mergers. A "positive" adjustment bank should be added to, and a "negative" adjustment bank subtracted from, NOTE. New series. The 134 large weekly reporting commercial banks outstanding data for any date in the year to establish comparability with with domestic assets of $1 billion or more as of December 31, 1977 are any date in the subsequent year. included in this series. The revised series is on a last-Wednesday-of-themonth basis. 1.311 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars December outstanding Outstanding in 1979 SSoouurrccee 1976 1977 1978 Apr. May June July Aug. Sept. Oct. Nov. Total nondeposit funds 1 Seasonally adjusted2 54.6 61.8 85.4' 104.9 111.2 115.8 119.5 130.3 131.4 130.4 125.5 2 Not seasonally adjusted 53.3 60.4 84.9' 102.6 113.4 115.6 122.2 131.9 131.6 131.1 128.2 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted3 47.1 58.4 74.8 82.3 84.3 84.5 86.6 92.9 91.3 91.9 85.7 4 Not seasonally adjusted 45.8 57.0 73.8 80.1 86.5 84.3 89.3 94.5 91.5 92.6 88.5 5 Net Eurodollar borrowings, not seasonally adjusted... 3.7 -1.3 6.8 18.9 23.2 27.5 29.1 33.8 36.4 35.0 36.1 6 Loans sold to affiliates, not seasonally adjusted* 3.8 4.8 3.8 3.6 3.7 3.8 3.7 3.7 3.7 3.6 3.6 MEMO 7 Domestic chartered banks net positions with own foreign branches, not seasonally adjusted5 -6.0 -12.5 -10.2 -1.9 2.6 5.8 6.3 8.9 11.0 9.7 11.3 8 Gross due from balances 12.8 21.1 24.9 21.6 19.7 20.0 20.1 19.2 21.4 21.9 21.7 9 Gross due to balances 6.8 8.6 14.7 19.7 22.3 25.7 26.3 28.1 32.5 31.5' 33.0 10 Foreign-related institutions net positions with directly related institutions, not seasonally adjusted 6 9.7 11.1 17.0 20.8 20.6 21.7 22.8 24.9 25.4 25.3 24.8 11 Gross due from balances 8.3 10.3 14.2 15.7 15.9 17.6 17.6 16.2 18.1 20.5 21.9 12 Gross due to balances 18.1 21.4 31.2 36.5 36.5 39.3 40.4 41.0 43.5 45.7 46.8 13 Security RP borrowings, seasonally adjusted? 27.9 36.3 43.8 43.0 42.2 45.0 42.8 40.9 42.8 44.6 39.7 14 Not seasonally adjusted 27.0 35.1 42.4 42.5 44.8 44.5 42.5 42.5 44.5 44.1 41.7 15 U.S. Treasury demand balances, seasonally adjusted 8 3.9 4.4 8.6 5.1 9.3 9.2 15.3 12.4 11.1 12.9 5.7 16 Not seasonally adjusted 4.4 5.1 10.2 5.3 8.4 10.8 13.2 9.8 12.4 11.7 5.5 17 Time deposits, $100,000 or more, seasonally adjusted 9 136.0 159.8 204.4 202.1 196.8 189.6 190.4 192.5' 197.2 203.8' 209.7 18 Not seasonally adjusted 138.4 162.5 207.8 200.4 196.0 189.4 188.9 192.7 198.5' 205.2' 209.7 For notes see bottom of page A23. 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 Corporations1 Billions of dollars, estimated daily-average balances Commercial banks TTyyppee ooff hhoollddeerr 1977 1978 19792 11997744 11997755 11997766 DDeecc.. DDeecc.. DDeecc.. Dec. June Sept. Dec. Mar. June Sept. 1 All holders—Individuals, partnerships, and 225.0 236.9 250.1 274.4 271.2 278.8 294.6 270.4 285.6 292.4 2 Financial business 19.0 20.1 22.3 25.0 25.7 25.9 27.8 24.4 25.4 26.7 3 Nonfinancial business 118.8 125.1 130.2 142.9 137.7 142.5 152.7 135.9 145.1 148.8 73.3 78.0 82.6 91.0 92.9 95.0 97.4 93.9 98.6 99.2 2.3 2.4 2.7 2.5 2.4 2.5 2.7 2.7 2.8 2.8 6 Other 11.7 11.3 12.4 12.9 12.4 13.1 14.1 13.5 13.7 14.9 Weekly reporting banks 1978 19793 11997755 11997766 11997777 DDeecc.. DDeecc.. DDeecc.. Sept. Oct. Nov. Dec. Mar. June Sept. 7 All holders—Individuals, partnerships, and 124.4 128.5 139.1 139.7 141.3 142.7 147.0 121.9 128.8 132.7 8 Financial business 15.6 17.5 18.5 18.9 19.1 19.3 19.8 16.9 18.4 19.7 9 Nonfinancial business 69.9 69.7 76.3 74.1 75.0 75.7 79.0 64.6 68.1 69.1 10 Consumer 29.9 31.7 34.6 37.1 37.5 37.7 38.2 31.1 33.0 33.7 11 Foreign 2.3 2.6 2.4 2.4 2.5 2.5 2.5 2.6 2.7 2.8 12 Other 6.6 7.1 7.4 7.3 7.2 7.5 7.5 6.7 6.6 7.4 1. Figures include cash items in process of collection. Estimates of gross 3. After the end of 1978 the large weekly reporting bank panel was deposits are based on reports supplied by a sample of commercial banks. changed to 170 large commercial banks, each of which had total assets in Types of depositors in each category are described in the June 1971 domestic offices exceeding $750 million as of Dec. 31, 1977. See "An- BULLETIN, p. 466. nouncements," p. 408 in the May 1978 BULLETIN. Beginning in March 2. Beginning with the March 1979 survey, the demand deposit ownership 1979, demand deposit ownership estimates for these large banks survey sample was reduced to 232 banks from 349 banks, and the estima- are constructed quarterly on the basis of 97 sample banks and are not tion procedure was modified slightly. To aid in comparing estimates comparable with earlier data. The following estimates in billions of dollars based on the old and new reporting sample, the following estimates in for December 1978 have been constructed for the new large-bank panel: billions of dollars for December 1978 have been constructed using the new financial business, 18.2; nonfinancial business, 67.2; consumer, 32.8; smaller sample; financial business, 27.0; nonfinancial business, 146.9; foreign, 2.5; other, 6.8. consumer, 98.3; foreign, 2.8; and other, 15.1. 1.33 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1979 1976 1977 1978 Instrument Dec. Dec. Dec. May June July Aug. Sept. Oct.1 Nov. Commercial paper (seasonally adjusted) 1 All issuers 52,971 65,101 83,665 96,106 101,516 102,447 103,907 107,621 106,613' 108,965 Financial companies2 Dealer-placed paper 3 2 Total 7,261 8,884 12,296 15,551 16,537 17,042 17,379 18,207 16,085 16,702 3 Bank-related 1,900 2,132 3,521 4,141 3,826 3,951 4,062 4,485 3,052 2,958 Directly placed paper* 4 Total 32,511 40,484 51,630 57,886 61,256 60,532 60,402 61,369 62,761 64,236 5 Bank-related 5,959 7,102 12,314 13,799 15,130 14,722 15,817 15,930 18,024 18,339 6 Nonfinancial companies 5 13,199 15,733 19,739 22,669 23,723 24,873 26,126 28,045 27,767 28,027 Bankers dollar acceptances (not seasonally adjusted) 7 Total 22,523 25,450 33,700 35,286 36,989 39,040 42,354 42,147 43,486 43,599 Holder 8 Accepting banks 10,442 10,434 8,579 7,844 8,180 8,288 7,994 8,119 7,785 8,297 8,769 8,915 7,653 6,895 6,956 7,243 7,138 7,288 7,121 7,514 10 Bills bought 1,673 1,519 927 950 1,224 1,045 856 831 664 782 Federal Reserve Banks 991 954 1 0 1,400 1,159 475 1,053 317 269 375 362 664 940 971 952 957 1,470 1,498 1,465 13 Others 10,715 13,700 r 24,456 26,501 26,439 r 28,641 32,928 31,505 33,886 33,569 Basis 4,992 6,378 8,574 9,007 9,202 9,499 9,847 9,724 10,129 10,354 4,818 5,863 7,586 8,367 8,599 8,784 9,578 9,354 9,519 9,271 16 All other 12,713 13,209 17,540 17,912 19,189 20,756 22,929 23,069 23,838 23,974 1. A change in reporting instructions resulted in offsetting shifts in the 3. Includes all financial company paper sold by dealers in the open dealer-placed and directly placed financial company paper in October. market. 2. Institutions engaged primarily in activities such as, but not limited to, 4. As reported by financial companies that place their paper directly Digitized focro FmRmAerSciEalR, s avings, and mortgage banking; sales, personal, and mortgage with investors. http://fraserfi.nsatnlociungis; fefadc.toorrgin/g , finance leasing, and other business lending; insurance 5. Includes public utilities and firms engaged primarily in activities such underwriting; and other investment activities. as communications, construction, manufacturing, mining, wholesale and Federal Reserve Bank of St. Louis retail trade, transportation, and services.

A26 Domestic Nonfinancial Statistics • January 1980 1.34 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per annum Month Average Month Effective date Rate Effective date Rate rate 1979—June 19 11% 1979—Oct. 9, 14% 1979—Jan. 11.75 I979—July J A u u ly g . 2 2 1 7 8 6 . 1 1 1 1 2 2 3 % /4 Nov. 2 1 3 9 , 1 1 1 5 5 5 1 % /4 F M A e p a b r r . . 1 1 1 1 1 1 . . . 7 7 7 5 5 5 A S O e u c p g t t . Sept. 7 12% 16 153/4 May 11.75 Nov. 2 1 1 4 1 13 3 V 4 Dec. 3 7 0 1 15 5% % June 11.65 Dec. 28 13% 1.35 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 5-10,1979A Size of loan (in thousands of dollars) All Item sizes 1,000 1-24 25-49 50-99 100-499 500-999 and over SHORT-TERM COMMERCIAL AND INDUSTRIAL LOANS 1 Amount of loans (thousands of dollars) 8,046,052 689,179 365,934 428,441 1,707,259 678,645 4,176,594 2 Number of loans 126,938 96,306 11,074 6,926 10,261 1,052 1,320 3 Weighted average maturity (months) 3.0 3.6 3.3 3.3 3.5 3.9 2.5 4 Weighted average interest rate (percent per annum) 15.81 14.77 14.92 1155..9933 15.41 1166..0022 1166..1199 5 Interquartile range 1 15.25-16.82 12.68-16.99 13.23-16.87 14.58-17.48 13.65-16.91 15.25-16.86 15.31-16.70 Percentage of amount of loans 6 With floating rate 52.6 17.1 2211..77 4444..66 36.5 6666..66 6666..33 7 Made under commitment 49.4 19.7 26.2 38.4 43.6 61.1 58.0 LONG-TERM COMMERCIAL AND INDUSTRIAL LOANS 8 Amount of loans (thousands of dollars) 1,636,882 322,465 203,211 136,801 974,405 9 Number of loans 28,486 27,023 1,015 206 242 10 Weighted average maturity (months) 48.5 35.0 39.0 35.6 56.8 11 Weighted average interest rate (percent per annum) 15.56 14.78 15.66 1155..4433 1155..8811 12 Interquartile range 1 15.25-16.50 13.00-16.19 15.00-17.23 15.25-17.00 15.25-16.25 Percentage of amount of loans 13 With floating rate 71.8 27.9 66.4 7744..00 8877..11 14 Made under commitment 63.3 33.3 60.3 62.0 74.1 CONSTRUCTION AND LAND DEVELOPMENT LOANS 15 Amount of loans (thousands of dollars) 1,050,513 204,258 194,619 144,341 274,856 232,439 16 Number of loans 34,460 25,154 5,311 2,256 1,562 177 17 Weighted average maturity (months) 9.7 7.9 18.5 6.3 7.4 9.1 18 Weighted average interest rate (percent per annum) 15.51 14.21 15.73 15.72 15.83 1155..9977 19 Interquartile range 1 14.49-17.25 11.85-16.31 14.58-17.21 13.72-16.99 14.58-17.61 15.69-17.50 Percentage of amount of loans 20 With floating rate 40.2 16.2 12.8 29.6 58.1 6699..88 21 Secured by real estate 77.0 70.4 66.1 61.4 91.0 85.2 22 Made under commitment 40.5 31.4 26.5 31.3 53.0 51.1 Type of construction 23 1- to 4-family 38.8 58.6 49.6 20.5 44.2 1177..33 24 Multifamily 7.4 1.3 1.5 4.8 10.8 15.1 25 Nonresidential 53.8 40.1 48.8 74.8 44.9 67.5 All 250 sizes 1-9 10-24 25-49 50-99 100-249 and over LOANS TO FARMERS 26 Amount of loans (thousands of dollars) 1,192,740 160,093 184,178 181,278 234,279 247,826 185,086 27 Number of loans 65,857 42,436 12,814 4,926 3,604 1,670 406 28 Weighted average maturity (months) 6.9 7.3 7.1 7.0 7.3 5.8 7.3 29 Weighted average interest rate (percent per annum) 13.63 1122..9911 13.20 13.32 13.11 1133..8866 1155..3322 30 Interquartile range1 12.42-14.49 11.83-13.80 11.72-14.32 12.00-14.41 12.00-14.00 13.42-13.80 13.42-17.55 By purpose of loan 3 3 1 2 O Fe th ed er e r l i l v iv es e t s o to ck ck 1 1 3 2 . .9 5 1 1 1 1 2 2 . .1 0 6 3 1 1 2 3 . . 5 2 5 0 1 1 4 2 . . 1 8 9 7 1 1 1 3 . . 5 4 7 4 (2) 11 33..4455 (2) 11 44..6622 3 3 3 4 O Fa th rm er m cu a r c r h e i n n t e o ry p e a r n a d ti n e g q u e i x p p m en e s n e t s 1 1 3 3 . . 6 1 5 6 1 1 3 3 . . 0 0 9 3 1 1 3 3 . . 2 7 8 5 1 1 3 3 . . 8 5 1 3 1 12 2 . . 0 9 9 6 (2) 1 5.45 , (2) 1 5.20 35 Other 14.53 13.38 12.92 13.30 14.15 14.21 16.76 1. Interest rate range that covers the middle 50 percent of the total NOTE. For more detail, see the Board's E.2(416) statistical release, dollar amount of loans made. A These data are preliminary; final figures will appear in the February 2. Fewer than 10 sample loans. BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets All 1.36 INTEREST RATES Money and Capital Markets Averages, percent per annum 1979 1979,, week ending IInnssttrruummeenntt 1977 1978 1979 Sept. Oct. Nov. Dec. Dec. 1 Dec. 8 Dec. 15 Dec. 22 Dec. 29 Money market rates 1 Federal funds1 5.54 7.94 11.20 11.43 13.77 13.18 13.78 12.46 13.77 13.79 13.90 13.49 Commercial paper2,3 5.42 7.76 10.86 11.52 13.06 13,34 13.35 12.28 12.85 13.44 13.66 1133..4499 5.54 7.94 10.97 11.63 13.23 13.57 13.24 12.65 12.85 13.31 13.53 13.31 5.60 7.99 10.91 11.60 13.23 13.26 12.80 12.40 12.62 12.87 13.01 12.73 Finance paper, directly placed2.3 5.38 7.73 10.78 11.45 12.85 13.25 13.27 1122..1144 1122..7700 1133..2299 1133..5599 1133..5511 5.49 7.80 10.47 10.89 12.24 12.52 11.74 11.80 11.68 11.69 11.77 11.83 5.50 7.78 10.25 10.43 11.50 12.00 11.68 11.43 11.48 11.74 11.77 11.73 8 Prime bankers acceptances, 90-day3.4 5.59 8.11 11.04 11.70 13.44 13.53 13.31 12.62 12.83 13.58 13.47 13.42 Certificates of deposit, secondary markets 5.48 7.88 11.03 11.70 13.36 13.60 13.36 1122..6611 1122..9944 13.62 1133..5599 1133..3300 5.64 8.22 11.22 11.89 13.66 13.90 13.43 12.96 13.09 13.63 13.56 13.43 5.92 8.61 11.44 12.01 13.83 13.97 13.42 13.09 13.12 13.60 13.48 13.54 6.05 8.74 11.96 12.61 14.59 15.00 14.51 14.21 14.18 14.09 14.79 14.65 U.S. Treasury bills3.7 Secondary market 5.27 7.19 10.07 10.26 11.70 11.79 12.04 11.26 11.75 12.34 1122..0066 1111..9999 5.53 7.58 10.06 10.20 11.66 11.82 11.84 11.25 11.65 12.09 11.80 11.85 5.71 7.74 9.75 9.89 11.23 11.22 10.92 10.74 10.86 11.10 10.85 10.86 Auction averages 5.265 7.221 10.041 10.182 11.472 11.868 12.071 11.018 11.927 12.054 1122..222288 1122..007744 5.510 7.572 10.017 10.125 11.339 11.856 11.847 11.022 11.767 11.769 11.999 11.854 Capital market rates U.S. TREASURY NOTES AND BONDS Constant maturities 9 6.09 8.34 10.67 10.84 12.44 12.39 11.98 1111..7766 11.93 1122..2288 1111..9911 1111..8844 6.45 8.34 10.12 10.06 11.49 11.81 11.39 11.27 11.24 11.57 11.39 11.39 OH 91A_vf»NRLO . . . 10.90 6.69 8.29 9.71 9.69 10.95 11.18 10.71 10.64 10.61 10.86 10.68 10.71 97 4-VPARLO 9.50 11.55 10.85 6.99 8.32 9.52 9.41 10.63 10.93 10.42 10.42 10.34 10.45 10.39 10.51 7.23 8.36 9.48 9.38 10.47 10.80 10.42 10.40 10.35 10.48 10.39 10.49 7.42 8.41 9.44 9.33 10.30 10.65 10.39 10.34 10.29 10.45 10.37 10.45 7.67 8.48 9.33 9.21 9.99 10.37 10.18 10.09 10.07 10.23 10.21 10.24 27 30-year 8.49 9.29 9.17 9.85 10.30 10.12 10.07 10.03 10.18 10.13 10.18 Composite11 6.85 8.30 9.58 9.56 10.75 10.98 10.45 10.42 10.33 10.49 10.45 10.55 29 Over 10 years (long-term) 7.06 7.89 8.74 8.68 9.44 9.80 9.59 9.51 9.49 9.65 9.60 9.64 STATE AND LOCAL NOTES AND BONDS Moody's series12 30 Aaa 5.20 5.52 5.92 5.90 6.25 6.49 6.50 6.60 6.50 66..5500 66..5500 66..5500 31 Baa 6.12 6.27 6.73 6.75 7.34 7.66 7.42 7.40 7.10 7.40 7.60 7.60 5.68 6.03 6.52 6.52 7.08 7.30 7.22 7.26 7.17 7.26 7.22 7.23 CORPORATE BONDS 33 Seasoned issues, all industries14 8.43 9.07 10.12 9.93 10.71 11.37 11.35 11.30 11.23 11.29 11.40 11.49 By rating groups 8.02 8.73 9.63 9.44 10.13 10.76 10.74 10.63 10.58 10.70 10.79 10.87 35 Aa 8.24 8.92 9.94 9.70 10.46 11.22 11.15 11.14 11.08 11.06 11.20 11.25 36 A 8.49 9.12 10.20 10.03 10.83 11.50 11.46 11.40 11.32 11.41 11.52 11.59 37 Baa 8.97 9.45 10.69 10.54 11.40 11.99 12.06 12.00 11.93 11.99 12.10 12.22 Aaa utility bonds15 1Q "Wpw ICCIIF* .... 8.19 8.96 10.03 9.83 1100..9977 11.42 1111..2255 1111..2200 1111..2222 1111..2288 8.19 8.97 10.02 9.87 10.91 11.36 11.33 11.17 11.16 11.37 11.35 11.39 MEMO: Dividend/price ratio16 7.60 8.25 7.41 9.16 7.44 7.40 7.42 7.39 r 77..4411 77..4466 77..4433 77..3311 4.56 5.28 5.67 5.31 5.56 5.71 5.53 5.53' 5.53 5.52 5.55 5.66 1. Weekly figures are 7-day averages of daily effective rates for the week 10. Each figure is an average of only five business days near the end of ending Wednesday; the daily effective rate is an average of the rates on the month. The rate for each month is used to determine the maximum a given day weighted by the volume of transactions at these rates. interest rate payable in the following month on small saver certificates. 2. Beginning November 1977, unweighted average of offering rates (See table 1.16.) quoted by at least five dealers (in the case of commercial paper), or 11. Unweighted averages for all outstanding notes and bonds in maturity finance companies (in the case of finance paper). Previously, most repre- ranges shown, based on daily closing bid prices. "Long-term" includes sentative rate quoted by those dealers and finance companies. Before all bonds neither due nor callable in less than 10 years, including several Nov. 1979, maturities for data shown are 30-59 days, 90-119 days, and very low yielding "flower" bonds. 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 12. General obligations only, based on figures for Thursday, from 150-179 days for finance paper. Moody's Investors Service. 3. Yields are quoted on a bank-discount basis. 13. Twenty issues of mixed quality. 4. Average of the midpoint of the range of daily dealer closing rates 14. Averages of daily figures from Moody's Investors Service. offered for domestic issues. 15. Compilation of the Board of Governors of the Federal Reserve 5. Five-day average of rates quoted by five dealers (3-month series System. was previously a 7-day average). Issues included are long-term (20 years or more). New-issue yields 6. Averages of daily quotations for the week ending Wednesday. are based on quotations on date of offering; those on recently offered 7. Except for auction averages, yields are computed from daily closing issues (included only for first 4 weeks after termination of underwriter bid prices. price restrictions), on Friday close-of-business quotations. 8. Rates are recorded in the week in which bills are issued. 16. Provided by Standard and Poor's Corporation. Digitized for F9R. AYSieEldR o n the more actively traded issues adjusted to constant maturities by the U.S. Treasury, based on daily closing bid prices. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • January 1980 1.37 STOCK MARKET Selected Statistics 1979 Indicator 1977 1978 1979 June July Aug. Sept. Oct. Nov. Dec. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31,1965 = 50) 53.67 53.76 55.67 57.61 58.38 61.19 61.89 59.27 59.02 61.75 2 Industrial 57.84 58.30 61.82 63.57 64.24 67.71 69.17 66.68 66.45 69.82 3 Transportation 41.07 43.25 45.20 47.53 48.85 52.48 52.21 48.07 47.61 50.59 4 Utility 40.91 39.23 36.46 38.44 38.88 39.26 38.39 36.58 36.55 37.29 55.23 56.74 58.65 61.87 64.43 68.40 67.21 61.64 60.64 63.21 6 Standard & Poor's Corporation (1941-43 = 10)*. . . 98.18 96.11 98.34 101.73 102.71 107.36 108.60 104.47 103.66 107.78 7 American Stock Exchange (Aug. 31,1973 = 100). .. 116.18 144.56 186.56 196.08 197.63 208.29 223.00 212.33 216.58 238.83 Volume of trading (thousands of shares) 20,936 28,591 32,233 34,662 3322,,441166 35,870 37,576 37,301 31,126 35,510 2,514 3,622 4,182 5,236 3,890 4,503 5,405 5,446 3,938 5,389 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers/dealers2. 9,993 11,035 11,763 12,019 12,236 12,178 11,483 11,083 11 Margin stock 3 9,740 10,830 11,590 11,840 12,060 12,000 11,310 10,920 1 1 2 3 C Su o b n s v c e r r i t p ib ti l o e n b i o s n su d e s s 250 3 205 1 172 1 178 1 176 177 1 173 16 2 1 Free credit balances at brokers* 14 Margin-account 640 835 895 885 910 960 950 955 15 Cash-account 2,060 2,510 2,880 3,025 2,995 3,325 3,490 3,435 Margin-account debt at brokers (percentage distribution, end of period) 16 Total 100.0 100.0 T 100.0 100.0 100.0 100.0 100.0 100.0 By equity class (in percent)5 17 Under 40 18.0 33.0 i 21.0 1199..00 1144..00 1166..00 27.0 17.0 18 40-49 36.0 28.0 n.a. 28.0 28.0 26.0 26.0 31.0 31.0 n.a. 2 1 0 9 6 5 0 0 - - 6 5 9 9 2 1 3 1 . . 0 0 1 1 8 0 . . 0 0 2 1 6 2 . . 0 0 2 1 8 2 . . 0 0 3 1 1 4 . . 0 0 3 1 0 4 . . 0 0 2 1 0 0 . . 0 0 2 1 5 3 . . 0 0 21 70-79 6.0 6.0 7.0 7.0 8.0 8.0 6.0 7.0 22 80 or more 5.0 5.0 6.0 6.0 7.0 6.0 6.0 7.0 Special miscellaneous-account balances at brokers (end of period) 23 Total balances (million dollars)6 9,910 13,092 I 13,634 13,280 14,130 14,460 14,800 14,995 T Distribution by equity status (percent) 1 1 24 Net credit status 43.4 41.3 n.a. 42.6 43.5 44.1 45.3 4444..55 n.a. n.a. Debt status, equity of 1 1 25 60 percent or more 44.9 45.1 47.3 47.1 47.8 46.4 45.5 n.a. 26 Less than 60 percent 11.7 13.6 i 10.1 9.4 8.1 8.3 10.0 n.a. I Margin requirements (percent of market value and effective date) ? Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 27 Margin stocks 70 80 65 55 65 50 28 Convertible bonds, 50 60 50 50 50 50 29 Short sales 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and in- 5. Each customer's equity in his collateral (market value of collateral surance companies. With this change the index includes 400 industrial less net debit balance) is expressed as a percentage of current collateral stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public values. utility (formerly 60), and 40 financial. 6. Balances that may be used by customers as the margin deposit re- 2. Margin credit includes all credit extended to purchase or carry quired for additional purchases. Balances may arise as transfers based stocks or related equity instruments and secured at least in part by stock. on loan values of other collateral in the customer's margin account or Credit extended is end-of-month data for member firms of the New York deposits of cash (usually sales proceeds) occur. Stock Exchange. 7. Regulations G, T, and U of the Federal Reserve Board of Governors, In addition to assigning a current loan value to margin stock generally, prescribed in accordance with the Securities Exchange Act or 1934, Regulations T and U permit special loan values for convertible bonds limit the amount of credit to purchase and carry margin stocks that may and stock acquired through exercise of subscription rights. be extended on securities as collateral by prescribing a maximum loan 3. A distribution of this total by equity class is shown on lines 17-22. value, which is a specified percentage of the market value of the collateral 4. Free credit balances are in accounts with no unfulfilled commitments, at the time the credit is extended. Margin requirements are the difference to the brokers and are subject to withdrawal by customers on demand. between the market value (100 percent) and the maximum loan value. The term "margin stocks" is defined in the corresponding regulation. 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 1979 Account 1977 1978 Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov.® Savings and loan associations 1 Assets 459,241 523,542 534,044 539,582 543,320 549,031 555,409 561,037 566,493 570,479 576,251 578,752 2 Mortgages 381,163 432,808 437,849 441,358 445,638 450,978 456,544 460,620 464,609 468,307 472, 198 474,534 3 Cash and investment 39,150 44,884 49,042 50,153 48,698 48,280 48,253 49,496 50,007 49,301 49,220 48,212 4 Other 38,928 45,850 47,153 48,071 48,984 49,773 50,612 50,721 51,877 52,871 54,833 56,006 5 Liabilities and net worth 459,241 523,542 534,044 539,582 543,320 549,031 555,409 561,037 566,493 570,479 576,251 578,752 386,800 430,953 438,564 446,898 445,751 447,788 454,642 456,657 457,856 462,626 464,489 465,550 7 Borrowed money 27,840 42,907 41,315 41,538 43,710 44,324 46,993 48,437 50,437 52,738 54,268 54,397 8 FHLBB 19,945 31,990 31,004 31,123 32,389 33,003 34,266 35,286 36,009 37,620 39,223 39,684 9 Other 7,895 10,917 10,311 10,415 11,321 11,321 12,727 13,151 14,428 15,118 15,045 14,713 9,911 10,721 10,271 10,331 10,690 11,118 11,260 11,309 11,047 10,909 10,766 10,186 11 Other 9,506 9,904 14,230 10,905 12,950 15,259 11,681 13,503 15,712 12,497 14,673 16,247 12 Net worth2 25,184 29,057 29,664 29,910 30,219 30,542 30,833 31,131 31,441 31,709 32,055 32,372 13 MEMO : Mortgage loan commitments outstanding 3.. . . 19,875 18,911 19,037 21,082 22,915 23,560 22,770 22,360 22,282 22,397 20,930 17,831 Mutual savings banks4 14 Assets 147,287 158,174 160,078 161,866 161,231 161,380 161,814 162,598 163,388 163,431 163,133 Loans 88,195 95,157 95,821 96,136 95,900 96,239 96,743 97,238 97,637 97,973 98, 304 16 Other 6,210 7,195 8,455 9,421 9,290 9,444 9,577 10,282 10,430 9,982 9, 510 Securities 17 U.S. governments 5,895 4,959 4,801 4,814 8,193 8,148 8,029 7,992 7,921 7,891 7,750 18 State and local government. .. 2,828 3,333 3,167 3,126 3,326 3,264 3,175 3,154 3,149 3,150 3,100 19 Corporate and other <> 37,918 39,732 40,307 40,658 37,211 37,304 37,281 37,171 37,125 37,076 37,210 20 Cash 2,401 3,665 3,306 3,410 3,072 2,785 2,764 2,540 2,866 3,020 2,909 21 Other assets 3,839 4,131 4,222 4,300 4,239 4,198 4,245 4,220 4,260 4,339 4,351 22 Liabilities 147,287 158,174 160,078 161,866 161,231 161,380 161,814 162,598 163,388 163,431 163,133 n. a. 23 Deposits 134,017 142,701 143,539 145,650 145,096 145,056 146,057 145,757 145,713 146,252 145,096 24 Regular 7 132,744 141,170 142,071 144,042 143,210 143,271 144,161 143,843 143,731 144,258 143,263 25 Ordinary savings 78,005 71,816 68,817 68,829 67,758 67,577 68,104 67,537 66,733 65,676 62,672 26 Time and other 54,739 69,354 73,254 75,213 75,452 75,694 76,057 76,306 76,998 78,572 80,591 27 Other 1,272 1,531 1,468 1,608 1,886 1,784 1,896 1,914 1,982 2,003 1,834 28 Other liabilities 3,292 4,565 5,485 5,048 5,050 5,172 4,545 5,578 6,350 5,790 6,600 29 General reserve accounts 9,978 10,907 11,054 11,167 11,085 11,153 11,212 11,264 11,324 11,388 11,437 30 MEMO: Mortgage loan commitments outstanding8.. . • 4,066 4,400 4,453 4,482 4,449 4,352 4,469 4,214 4,071 4,123 3, 749 Life insurance companies 351,722 389,924 396,190 399,579 402,963 405,627 409,853 414,120 418,350 421,660 Securities 32 Government 19,553 20,009 20,222 20,463 20,510 20,381 20,397 20,468 20,472 20,379 33 United States 9 5,315 4,822 5,114 5,234 5,272 5,149 5,178 5,228 5,229 5,067 34 State and local 6,051 6,402 6,255 6,259 6,268 6,272 6,241 6,243 6,258 6,295 35 Foreign10 8,187 8,785 8,853 8,970 8,970 8,960 8,978 8,997 8,985 9,017 175,654 198,105 202,843 204,895 206,160 207,775 209,804 212,876 215,252 216,500 n. a. n.a. 37 Bonds 141,891 162,587 167,548 168,622 169,817 171,762 173,130 175,854 176,920 177,698 38 Stocks 33,763 35,518 35,295 36,273 36,343 36,013 36,674 37,022 38,332 38,802 96,848 106,167 107,385 108,417 109,198 110,023 111,123 112,120 113,102 114,368 40 Real estate 11,060 11,764 11,943 11,484 12,086 12,101 12,199 12,351 12,738 12,740 41 Policy loans 27,556 30,146 30,778 31,160 31,512 31,832 32,131 32,390 32,713 33,046 42 Other assets 21,051 23,733 23,019 23,160 23,497 23,515 24,199 23,915 24,073 24,637 Credit unions 43 Total assets/liabilities and 53,755 62,348 62,105 63,671 63,030 64,158 65,435 68,840 65,547 66,280 65,063 65,419 44 Federal 29,564 34,760 34,529 35,406 34,758 35,379 36,146 35,413 35,724 36,151 35,537 35,670 45 State 24,191 27,588 27,576 28,265 28,272 28,779 29,289 29,427 29,823 30,129 29,526 29,749 46 Loans outstanding 41,845 50,269 50,120 50,828 50,846 51,351 52,028 52,083 52,970 53,545 53,533 56,267 47 Federal 22,634 27,687 27,502 27,961 27,869 28,103 28,487 28,379 28,848 29,129 29,020 30,613 48 State 19,211 22,582 22,618 22,867 27,977 23,248 23,541 23,704 24,122 24,416 24,513 25,654 49 Savings 46,516 53,517 52,931 54,713 54,199 55,107 56,437 56,393 56,583 57,255 55,739 55,797 50 Federal (shares) 25,576 29,802 29,195 30,212 29,796 30,222 31,048 30,732 30,761 31,097 30,366 30,399 51 State (shares and deposits). .. 20,940 23,715 23,736 24,501 24,403 24,885 25,389 25,661 25,822 26,158 25,373 25,398 For notes see bottom of page A30. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 DomesticN onfinancialS tatistics • January 1980 1.39 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year Fiscal Fiscal Fiscal TTyyppee ooff aaccccoouunntt oorr ooppeerraattiioonn year year year 1978 1979 1979 1977 1978 1979 HI H2 HI Sept. Oct. Nov. U.S. budget 1 Receipts1 357,762 401,997 465,940 210,650 206,275 246,574 47,295 33,099 38,320 2 Outlays1 402,725 450,938r 493,221 222,561 238,186 245,616 29,625 47,807 46,841 3 Surplus, or deficit (—) -44,963 -48,940' -27,281 -11,912 -31,912 958 17,670 -14,708 -8,522 4 Trust funds 9,497 12,693 18,335 4,334 11,754 4,041 16,039 -6,555 8,108 5 Federal funds 2 -54,460 — 61,633 r -45,616 -16,246 -43,666 -4,999 1,631 -8,153 -16,630 Off-budget entities surplus, or deficit (-) 6 Federal Financing Bank outlays -8,415 -10,661 -13,261 -5,105 -5,082 -7,712 -1,383 -1,536 -538 7 Other 3 -264 355 832 -790 1,843 -447 -730 1,598 118 U.S. budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (—) --5533,,664422 --5599,,224466'' -39,710 --1177,,880066 -35,151 --77,,220011 1155,,555577 --1144,,664466 --88,,994422 Source or financing 9 Borrowing from the public 53,516 -59,106'" 33,641 23,378 3300,,331144 66,,003399 44,,224499 22,,221177 55,,554488 10 Cash and monetary assets (decrease, or increase (—))4 -2,247 -3,023' -408 -5,098 3,381 -8,878 -16,562 14,220 4,533 11 Others 2,373 3,163' 6,477 -474 1,456 10,040 -3,244 -1,791 -1,139 MEMO: 12 Treasury operating balance (level, end of period) 19,104 22,444 24,176 17,526 16,291 17,485 24,176 10,460 5,591 13 Federal Reserve Banks 15,740 16,647 6,489 11,614 4,196 3,290 6,489 2,209 2,590 14 Tax and loan accounts 3,364 5,797 17,687 5,912 12,095 14,195 17,687 8,251 3,001 1. Effective June 1978, earned income credit payments in excess of 5. Includes accrued interest payable to the public; deposit funds; misan individual's tax liability, formerly treated as income tax refunds, are cellaneous liability (including checks outstanding) and asset accounts; classified as outlays retroactive to January 1976. seignorage; increment on gold; net gain/loss for U.S. currency valuation 2. Half-year figures calculated as a residual (total surplus/deficit less adjustment; net gain/loss for IMF valuation adjustment; and profit on trust fund surplus/deficit). the sale of gold. 3. Includes Pension Benefit Guaranty Corp.; Postal Service Fund; Rural Electrification and Telephone Revolving Fund; and Rural Telephone SOURCE. "Monthly Treasury Statement of Receipts and Outlays of Bank. the U.S. Government," Treasury Bulletin, and the Budget of the United 4. Includes U.S. Treasury operating cash accounts; special drawing States Government, Fiscal Year 1980. rights; gold tranche drawing rights; loans to International Monetary Fund; and other cash and monetary assets. NOTES TO TABLE 1.38 1. Holdings of stock of the Federal Home Loan Banks are included in 10. Issues of foreign governments and their subdivisions and bonds Oi "other assets." the International Bank for Reconstruction and Development. 2. Includes net undistributed income, which is accrued by most, but not all, associations. NOTE. Savings and loan associations: Estimates by the FHLBB for 3. Excludes figures for loans in process, which are shown as a liability. all associations in the United States. Data are based on monthly reports 4. The NAMSB reports that, effective April 1979, balance sheet data of federally insured associations and annual reports of other associations. are not strictly comparable with previous months. Beginning April 1979, Even when revised, data for current and preceding year are subject to data are reported on a net-of-valuation-reserves basis. Prior to that date, further revision. data were reported on a gross-of-valuation-reserves basis. Mutual savings banks: Estimates of National Association of Mutual 5. Beginning April 1979, includes obligations of U.S. government Savings Banks for all savings banks in the United States. agencies. Prior to that date, this item was included in "Corporate and Life insurance companies: Estimates of the American Council of Life other." Insurance for all life insurance companies in the United States. Annual 6. Includes securities of foreign governments and international organiza- figures are annual-statement asset values, with bonds carried on an tions and, prior to April 1979, nonguaranteed issues of U.S. government amortized basis and stocks at year-end market value. Adjustments for agencies. interest due and accrued and for differences between market and book 7. Excludes checking, club, and school accounts. values are not made on each item separately but are included, in total, in 8. Commitments outstanding (including loans in process) of banks in "other assets." New York State as reported to the Savings Banks Association of the Credit unions: Estimates by the National Credit Union Administration State of New York. for a group of federal and state-chartered credit unions that account for 9. Direct and guaranteed obligations. Excludes federal agency issues about 30 percent of credit union assets. Figures are preliminary and not guaranteed, which are shown in the table under "business" securities. revised annually to incorporate recent benchmark data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A3 3 1.40 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calend ar year FFiissccaall FFiissccaall FFiissccaall SSoouurrccee oorr ttyyppee yyeeaarr yyeeaarr yyeeaarr 1978 1979 1979 11997777 11997788 rr 11997799 HI H2 HI Sept. Oct. Nov. RECEIPTS 1 All sources1 357,762 401,997 465,940 210,650 206,275 246,574 47,295 33,099 38,320 2 Individual income taxes, net 157,626 180,988 217,841 90,336 98,854 111,603 23,341 18,682 18,972 3 Withheld 144,820 165,215 195,295 82,784 90,148 98,683 16,194 17,777 18,725 4 Presidential Election Campaign Fund 37 39 36 36 3 32 0 0 0 5 Nonwithheld 42,062 47,804 56,215 37,584 10,777 44,116 7,349 1,183 589 6 Refunds1 29,293 32,070 33,705 30,068 2,075 31,228 201 278 342 Corporation income taxes 7 Gross receipts 60,057 65,380 71,448 38,496 28,536 42,427 10,096 2,543 1,684 8 Refunds 5,164 5,428 5,771 2,782 2,757 2,889 463 1,068 523 9 Social insurance taxes and contributions, net 108,683 123,410 141,591 66,191 61,064 75,609 10,809 9,384 14,433 10 Payroll employment taxes and contributions2 88,196 99,626 115,041 51,668 5511,,005522 59,298 9,893 8,013 12,259 11 Self-employment taxes and contributions 3 4,014 4,267 5,034 3,892 369 4,616 417 0 0 12 Unemployment insurance 11,312 13,850 15,387 7,800 6,727 8,623 154 840 1,650 13 Other net receipts 4 5,162 5,668 6,130 2,831 2,917 3,072 344 530 524 14 Excise taxes 17,548 18,376 18,745 8,835 9,879 8,984 1,660 1,547 1,653 15 Customs deposits 5,150 6,573 7,439 3,320 3,748 3,682 559 646 605 16 Estate and gift taxes 7,327 5,285 5,411 2,587 2,691 2,657 434 526 518 17 Miscellaneous receipts 5 6,536 7,413 9,237 3,667 4,260 4,501 859 838 977 OUTLAYS 18 All types i 402,725 450,938 493,221 222,561 238,186 245,616 29,625 47,807 46,841 19 National defense 97,501 105,192 116,491 52,535 55,124 57,643 9,200 10,448 10,734 20 International affairs 4,813 6,083 5,419 3,347 2,060 3,538 748 1,263 1,190 21 General science, space, and 4,677 4,721 5,620 2,395 2,383 2,461 965 451 515 22 Energy 4,172 5,901 7,855 2,721 4,279 4,417 459 52 643 23 Natural resources and environment 10,000 11,167 12,346 4,690 6,020 5,672 1,234 1,433 538 24 Agriculture 5,532 7,618 6,410 2,435 4,967 3,020 -28 402 769 25 Commerce and housing credit -44 3,319 2,592 -443 3,292 60 -46 2,078 222 26 Transportation 14,636 15,462 17,013 7,215 8,740 7,688 1,589 1,923 1,670 27 Community and regional development 6,286 11,263 9,735 5,500 55,,884444 4,499 1,003 630 997733 28 Education, training, employment, and social services 20,985 25,890 2288,,552244 1133,,221188 1144,,224477 1144,,446677 2,341 2,330 2,330 29 Health 38,785 43,676 49,614 21,147 23,830 24,860 4,109 4,662 4,449 137,915 146,503 160,496 75,370 73,127 81,173 4,546 14,477 15,370 31 Veterans benefits and services 18,038 18,987 19,916 9,625 9,532 10,127 599 1,809 2,701 32 Administration of justice 3,600 3,786 4,138 1,945 1,989 2,096 281 460 350 33 General government 3,374 3,723 4,671 1,845 2,304 2,291 333 209 342 34 General-purpose fiscal assistance 9,499 9,377 8,234 4,678 4,610 3,890 131 1,822 378 35 Interest 6 38,009 44,040 52,634 22,280 24,036 26,934 3,818 4,082 4,719 36 Undistributed offsetting receipts6.7 -15,053 -15,772 -18,489 -7,945 -8,199 -8,999 -1,655 -722 -1,052 1. Effective June 1978, earned income credit payments in excess of an 6. Effective September 1976, "Interest" and "Undistributed Offsetting individual's tax liability, formerly treated as income tax refunds, are Receipts" reflect the accounting conversion for the interest on special classified as outlays retroactive to January 1976. issues for U.S. government accounts from an accrual basis to a cash basis. 2. Old-age, disability, and hospital insurance, and railroad retirement 7. Consists of interest received by trust funds, rents and royalties on accounts. the Outer Continental Shelf, and U.S. government contributions for 3. Old-age, disability, and hospital insurance. employee retirement. 4. Supplementary medical insurance premiums, federal employee retirement contributions, and Civil Service retirement and disability fund. SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the 5. Deposits of earnings by Federal Reserve Banks and other miscel- U.S. Government" and the Budget of the U.S. Government, Fiscal Year laneous receipts. 1980. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • January 1980 1.41 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1977 1978 1979 IItteemm June 30 Sept. 30 Dec. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 685.2 709.1 729.2 758.8 780.4 797.7 804.6 812.2 833.8 2 Public debt securities 674.4 698.8 718.9 749.0 771.5 789.2 796.8 804.9 826.5 3 Held by public 523.2 543.4 564.1 587.9 603.6 619.2 630.5 626.4 638.8 4 Held by agencies 151.2 155.5 154.8 161.1 168.0 170.0 166.3 178.5 187.7 5 Agency securities 10.8 10.3 10.2 9.8 8.9 8.5 7.8 7.3 7.2 6 Held by public 9.0 8.5 8.4 8.0 7.4 7.0 6.3 5.9 5.8 7 Held by agencies 1.8 1.8 1.8 1.8 1.5 1.5 1.5 1.5 1.5 8 Debt subject to statutory limit 675.6 700.0 720.1 750.2 772.7 790.3 797.9 806.0 827.6 9 Public debt securities 673.8 698.2 718.3 748.4 770.9 788.6 796.2 804.3 825.9 10 Other debt1 1.7 1.7 1.7 1.8 1.8 1.7 1.7 1.7 1.7 11 MEMO: Statutory debt limit 700.0 700.0 752.0 752.0 798.0 798.0 798.0 830.0 830.0 1. Includes guaranteed debt of government agencies, specified participa- NOTE. Data from Treasury Bulletin (U.S. Treasury Department), tion certificates, notes to international lending organizations, and District of Columbia stadium bonds. 1.42 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1979 Type and holder 1975 1976 1977 1978 Aug. Sept. Oct. Nov. Dec. 576.6 653.5 718.9 789.2 813.1 826.5 826.8 833.8 845.1 By type 2 Interest-bearing debt 575.7 652.5 715.2 782.4 812.1 819.0 825.7 832.7 844.0 3 Marketable 363.2 421.3 459.9 487.5 509.2 506.7 515.0 519.6 530.7 4 Bills 157.5 164.0 161.1 161.7 160.5 161.4 161.7 165.1 172.6 5 Notes 167.1 216.7 251.8 265.8 277.6 274.2 280.8 279.7 283.4 6 Bonds 38.6 40.6 47.0 60.0 71.1 71.1 72.5 74.8 74.7 7 Nonmarketable1 212.5 231.2 255.3 294.8 302.9 312.3 310.7 313.2 313.2 8 Convertible bonds2 2.3 2.3 2.2 2.2 2.2 2.2 2.2 2.2 2.2 9 State and local government series 1.2 4.5 13.9 24.3 24.6 24.6 24.4 24.5 24.6 10 Foreign issues 3 21.6 22.3 22.2 29.6 27.7 28.1 28.0 29.2 28.8 11 Government 21.6 22.3 22.2 28.0 23.5 24.0 23.9 23.9 23.6 12 Public 0 0 0 1.6 4.2 4.2 4.2 5.3 5.3 13 Savings bonds and notes 67.9 72.3 77.0 80.9 80.9 80.0 80.5 i$ 0.0 79.9 14 Government account series 4 119.4 129.7 139.8 157.5 167.3 176.4 175.3 177.0 177.5 15 Non-interest-bearing debt 1.0 1.1 3.7 6.8 1.0 7.5 1.1 1.1 1.2 By holder 5 16 U.S. government agencies and trust funds 139.1 147.1 154.8 170.0 178.6 187.7' 185.7 17 Federal Reserve Banks 89.8 97.0 102.5 109.6 113.0 114.8 114.6 18 Private investors 349.4 409.5 461.3 508.6 521.5 524.0 526.5 19 Commercial banks 85.1 103.8 101.4 93.4 92.7 92.3 93.5 20 Mutual savings banks 4.5 5.9 5.9 5.2 4.6 4.7 4.5 21 Insurance companies 9.5 12.7 15.1 15.0 14.6 14.6 14.8 22 Other corporations 20.2 27.7 22.7 20.6 20.7 23.7 24.1 n. a. n.a. 23 State and local governments 34.2 41.6 55.2 68.6 70.1 68.9 69.7 Individuals 24 Savings bonds 67.3 72.0 76.7 80.7 80.7 80.6 80.5 25 Other securities 24.0 28.8 28.6 30.0 32.3 32.6 32.9 26 Foreign and international6 66.5 78.1 109.6 137.8 123.7 125.2 124.4 27 Other miscellaneous investors 7 38.0 38.9 46.1 57.4 82.2 81.3 82.0 1. Includes (not shown separately): Securities issued to the Rural 6. Consists of the investments of foreign balances and international Electrification Administration, depositary bonds, retirement plan bonds, accounts in the United States. Beginning with July 1974, the figures exclude and individual retirement bonds. non-interest-bearing notes issued to the International Monetary Fund. 2. These nonmarketable bonds, also known as Investment Series B 7. Includes savings and loan associations, nonprofit institutions, cor- Bonds, may be exchanged (or converted) at the owner's option for 1 Vi porate pension trust funds, dealers and brokers, certain government percent, 5-year marketable Treasury notes. Convertible bonds that have deposit accounts, and government sponsored agencies. been so exchanged are removed from this category and recorded in the NOTE. Gross public debt excludes guaranteed agency securities and, notes category above. beginning in July 1974, includes Federal Financing Bank security issues. 3. Nonmarketable dollar-denominated and foreign currency denomi- Data by type of security from Monthly Statement of the Public Debt of nated series held by foreigners. the United States (U.S. Treasury Department); data by holder from 4. Held almost entirely by U.S. government agencies and trust funds. Treasury Bulletin. 5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual holdings; data for other groups are Treasury estimates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A3 3 1.43 U.S GOVERNMENT MARKETABLE SECURITIES Ownership, by maturity Par value; millions of dollars, end of period 1979 1979 TTyyppee ooff hhoollddeerr 1977 1978 1977 1978 Sept. Oct. Sept. Oct. All maturities 1 to 5 years 1 All holders 459,927 487,546 506,693 515,124 151,264 162,886 157,315 164,448 2 U.S. government agencies and trust funds 14,420 12,695 11,379 11,379 4,788 3,310 3,099 3,099 101,191 109,616 104,645 114,580 27,012 31,283 26,642 27,139 344,315 365,235 390,669 389,165 119,464 128,293 127,574 134,210 75,363 68,890 66,653 67,575 38,691 38,390 36,874 37,663 4,379 3,499 3,287 3,100 2,112 1,918 1,719 1,626 7 Insurance companies 12,378 11,635 11,777 12,005 4,729 4,664 5,013 5,138 8 Nonfinancial corporations 9,474 8,272 8,952 9,146 3,183 3,635 3,178 3,337 9 Savings and loan associations 4,817 3,835 3,517 3,512 2,368 2,255 1,994 1,980 10 State and local governments 15,495 18,815 17,491 18,145 3,875 3,997 4,051 3,946 222,409 250,288 278,991 275,682 64,505 73,433 74,745 80,519 Total, within 1 year 5 to 10 years 12 All holders 230,691 228,516 246,693 246,462 45,328 50,400 45,507 45,500 13 U.S. government agencies and trust funds 1,906 1,488 1,417 1,416 2,129 1,989 872 872 56,702 52,801 53,254 62,754 10,404 14,809 12,356 12,303 172,084 174,227 192,023 182,292 32,795 33,601 32,279 32,325 29,477 20,608 20,478 20,410 6,162 7,490 6,870 6,982 17 Mutual savings banks 1,400 817 849 790 584 496 470 465 2,398 1,838 1,923 1,918 3,204 2,899 2,587 2,608 19 Nonfinancial corporations 5,770 4,048 5,052 5,105 307 369 355 267 20 Savings and loan associations 2,236 1,414 1,381 1,390 143 89 68 68 21 State and local governments 7,917 8,194 5,600 6,169 1,283 1,588 1,712 1,694 122,885 137,309 156,741 146,510 21,112 20,671 20,218 20,241 Bills, within 1 year 10 to 20 years 23 All holders 161,081 161,747 161,378 161,692 12,906 19,800 26,241 27,778 24 U.S. government agencies and trust funds 32 2 * * 3,102 3,876 4,520 4,520 42,004 42,397 44,449 44,072 1,510 2,088 3,232 3,229 119,035 119,348 127,068 117,619 8,295 13,836 18,489 20,029 11,996 5,707 5,137 5,138 456 956 1,006 1,072 28 Mutual savings banks 484 150 157 167 137 143 134 124 1,187 753 489 455 1,245 1,460 1,331 1,389 30 Nonfinancial corporations 4,329 1,792 2,302 2,562 133 86 221 276 31 Savings and loan associations 806 262 192 202 54 60 58 58 32 State and local governments 6,092 5,524 2,715 3,241 890 1,420 1,993 2,033 33 All others 94,152 105,161 116,076 105,854 5,380 9,711 13,747 15,077 Other, within 1 year Over 20 years 34 All holders 69,610 66,769 85,315 84,770 19,738 25,944 30,937 30,937 35 U.S. government agencies and trust funds 1,874 1,487 1,416 1,416 2,495 2,031 1,472 1,472 14,698 10,404 8,805 18,682 5,564 8,635 9,161 9,156 53,039 54,879 64,955 64,672 11,679 15,278 20,304 20,309 15,482 14,901 15,340 15,272 578 1,446 1,427 1,449 39 Mutual savings banks 916 667 692 623 146 126 115 94 1,211 1,084 1,433 1,463 802 774 925 952 41 Nonfinancial corporations 1,441 2,256 2,750 2,543 81 135 147 161 42 Savings and loan associations 1,430 1,152 1,190 1,188 16 17 15 15 1,825 2,670 2,885 2,928 1,530 3,616 4,135 4,303 28,733 32,149 40,665 40,655 8,526 9,164 13,540 13,335 NOTE. Direct public issues only. Based on Treasury Survey of Owner- (1) 5,398 commercial banks 460 mutual savings banks, and 724 insurance ship from Treasury Bulletin (U.S. Treasury Department). companies, each about 80 percent; (2) 420 nonfinancial corporations and Data complete for U.S. government agencies and trust funds and 483 savings and loan associations, each about 50 percent; and (3) 491 Federal Reserve Banks, but data for other groups include only holdings state and local governments, about 40 percent. of those institutions that report. The following figures show, for each "All others," a residual, includes holdings of all those not reporting category, the number and proportion reporting as of Oct. 31, 1979: in the Treasury Survey, including investor groups not listed separately. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 DomesticN onfinancial Statistics • January 1980 1.44 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1979 1979, week ending Wednesday IItteemm 11997766 11997777 11997788 Sept. Oct. Nov. Sept. 12 Sept. 19 Sept. 26 Oct. 3 Oct. 10 Oct. 17 1 U.S. government securities 10,449 10,838 10,285 13,489 13,846 16,677 13,523 14,049 12,627 12,407 14,485 14,585 By maturity 2 Bills 6,676 6,746 6,173 8,056 7,856 9,787 7,708 8,639 7,661 7,992 8,144 8,223 3 Other within 1 year 210 237 392 606 430 607 372 472 744 682 357 414 4 1-5 years 2,317 2,320 1,889 2,425 3,076 3,119 2,747 2,575 1,974 1,522 3,764 2,498 5 5-10 years 1,019 1,148 965 1,033 955 1,592 1,059 968 1,080 1,031 961 1,034 6 Over 10 years 229 388 866 1,368 1,529 1,572 1,636 1,395 1,168 1,180 1,259 2,416 By type of customer 7 U.S. government securities dealers 1,360 1,267 1,135 1,720 1,613 1,973 1,630 2,036 1,806 2,188 1,222 1,901 8 U.S. government securities brokers 3,407 3,709 3,838 5,580 6,123 6,439 6,053 5,843 4,867 4,206 6,607 6,401 9 Commercial banks 2,426 2,295 1,804 1,836 1,823 2,259 1,842 1,851 1,783 1,673 2,103 1,839 10 All others i 3,257 3,568 3,508 4,342 4,288 6,005 3,998 4,319 4,172 4,341 4,553 4,444 11 Federal agency securities 1,548 1,729 1,894 3,230 3,151 3,324 2,807 3,030 3,837 3,023 3,113 3,230 1. Includes, among others all other dealers and brokers in commodities Transactions are market purchases and sales of U.S. government and securities, foreign banking agencies, and the Federal Reserve System. securities dealers reporting to the Federal Reserve Bank of New York. The figures exclude allotments of, and exchanges for, new U.S. government NOTE. Averages for transactions are based on number of trading days securities, redemptions of called or matured securities, or purchases or in the period. sales of securities under 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 1979 1979, week ending Wednesday IItteemm 11997766 11997777 11997788 Sept. Oct. Nov. Aug. 22 Aug. 29 Sept. 5 Sept. 12 Sept. 19 Sept. 26 Positions1 1111 UUUU....SSSS.... ggggoooovvvveeeerrrrnnnnmmmmeeeennnntttt sssseeeeccccuuuurrrriiiittttiiiieeeessss 7,592 5,172 2,656 866 700 3,931 -120 345 1,383 814 999 915 2222 BBBBiiiillllllllssss 6,290 4,772 2,452 2,476 2,291 4,446 822 815 2,197 2,444 2,603 2,414 3333 OOOOtttthhhheeeerrrr wwwwiiiitttthhhhiiiinnnn 1111 yyyyeeeeaaaarrrr 188 99 260 -380 -800 -896 -35 -75 -219 -346 -259 -422 4444 1111----5555 yyyyeeeeaaaarrrrssss 515 60 -92 -1,085 -535 -197 -1,005 -311 -454 -1,059 -1,146 -1,068 402 92 40 146 17 347 294 228 172 134 132 174 6666 OOOOvvvveeeerrrr 11110000 yyyyeeeeaaaarrrrssss 198 149 -4 -291 -272 231 -196 -313 -313 -359 -332 -184 7777 FFFFeeeeddddeeeerrrraaaallll aaaaggggeeeennnnccccyyyy sssseeeeccccuuuurrrriiiittttiiiieeeessss 729 693 606 2,164 1,809 1,534 2,147 1,944 1,937 1,941 1,966 2,549 Financing2 8888 AAAAllllllll ssssoooouuuurrrrcccceeeessss 8,715 9,877 10,204 18,057 16,021 19,122 15,969 16,558 16,621 18,451 18,047 18,697 CCCCoooommmmmmmmeeeerrrrcccciiiiaaaallll bbbbaaaannnnkkkkssss 9999 NNNNeeeewwww YYYYoooorrrrkkkk CCCCiiiittttyyyy 1,896 1,313 599 1,292 1,152 1,778 1,113 8 777 1,352 1,501 1,373 11110000 OOOOuuuuttttssssiiiiddddeeee NNNNeeeewwww YYYYoooorrrrkkkk CCCCiiiittttyyyy 1,660 1,987 2,174 3,517 3,247 3,386 2,283 2,454 2,979 3,764 3,682 3,438 11111111 CCCCoooorrrrppppoooorrrraaaattttiiiioooonnnnssss 3333 1,479 2,423 2,370 3,918 3,131 4,102 4,153 4,137 4,197 4,112 4,074 3,765 11112222 AAAAllllllll ooootttthhhheeeerrrrssss 3,681 4,155 5,052 9,329 8,491 9,857 8,420 9,960 8,668 9,223 8,789 10,122 1. New 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 department 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 securities held under agreement to resell are excluded where the borrowing been sold under agreements to repurchase. The maturities of some re- contract and the agreement to resell are equal in amount and maturity, purchase agreements are sufficiently long, however, to suggest that the that is, a matched agreement. securities involved are not available for trading purposes. Securities 3. All business corporations except commercial banks and insurance owned, and hence dealer positions, do not include securities purchased companies. under agreement to resell. 2. Total amounts outstanding of funds borrowed by nonbank dealer NOTE. Averages for positions are based on number of trading days firms and dealer departments of commercial banks against U.S. govern- in the period; those for financing, on the number of calendar days in the ment and federal agency securities (through both collateral loans and sales period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A3 3 1.46 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt outstanding Millions of dollars, end of period 1979 Agency 1976 1977 1978 Apr. May June July Aug. Sept. 1 Federal and federally sponsored agencies1 103,848 112,472 137,063 145,556 146,429 149,612 152,653 153,788 154,753 2 Federal agencies 22,419 22,760 23,488 23,568 23,366 24,170 24,274 24,415 24,341 3 Defense Department2 1,113 983 968 822 807 796 787 777 767 4 Export-Import Bank 3.4 8,574 8,671 8,711 8,322 8,107 8,806 8,783 8,781 8,886 5 Federal Housing Administrations 575 581 588 576 568 562 559 552 551 6 Government Yational Mortgage Association participation certificates 6 4,120 3,743 3,141 3,099 3,099 3,039 3,004 3,004 3,004 7 Postal Service 7 2,998 2,431 2,364 2,364 2,202 2,202 2,202 2,202 1,837 8 Tennessee Valley Authority 4,935 6,015 7,460 7,985 8,155 8,335 8,495 8,655 8,850 9 United States Railway Association? 104 336 356 400 428 430 444 444 446 10 Federally sponsored agencies1 81,429 89,712 113,575 121,988 123,063 125,442 128,379 129,373 130,412 11 Federal Home Loan Banks 16,811 18,345 27,563 28,121 28,577 28,758 29,600 29,994 30,303 12 Federal Home Loan Mortgage Corporation.. .. 1,690 1,686 2,262 2,330 2,323 2,522 2,522 2,720 2,622 13 Federal National Mortgage Association 30,565 31,890 41,080 44,792 44,639 45,775 46,341 46,108 46,378 14 Federal Land Banks 17,127 19,118 20,360 18,389 18,389 18,389 17,075 17,075 17,075 15 Federal Intermediate Credit Banks 10,494 11,174 11,469 6,994 5,958 5,122 4,269 3,427 2,676 16 Banks for Cooperatives 4,330 4,434 4,843 2,473 1,483 785 785 785 785 17 Farm Credit Banks1 2,548 5,081 17,838 20,597 22,949 26,606 28,033 29,297 18 Student Loan Marketing Associations 410 515 915 1,050 1,095 1,140 1,180 11,,223300 11,,227755 19 Other 2 2 2 1 2 2 1 11 MEMO: 20 Federal Financing Bank debt7.9 28,711 38,580 51,298 56,610 58,186 60,816 61,798 62,880 64,211 Lending to federal and federally sponsored agencies 21 Export-Import Bank 4 5,208 5,834 6,898 7,131 7,131 7,846 7,846 7,846 7,953 22 Postal Service 7 2,748 2,181 2,114 2,114 1,952 1,952 1,952 1,952 1,587 23 Student Loan Marketing Associations 410 515 915 1,050 1,095 1,140 1,180 1,230 1,275 24 Tennessee Valley Authority 3,110 4,190 5,635 6,260 6,430 6,610 6,770 6,930 7,125 25 United States Railway Association 104 336 356 400 428 430 444 444 446 Other lending10 26 Farmers Home Administration 10,750 16,095 23,825 26,890 28,050 29,200 29,765 30,445 31,080 27 Rural Electrification Administration 1,415 2,647 4,604 5,122 5,253 5,497 5,639 5,754 5,926 28 Other 4,966 6,782 6,951 7,643 7,847 8,141 8,202 8,279 8,819 1. In September 1977 the Farm Credit Banks issued their first consoli- Department of Housing and Urban Development; Small Business Addated bonds, and in January 1979 they began issuing these bonds on a ministration; and the Veterans Administration. regular basis to replace the financing activities of the Federal Land Banks, 7. Off-budget. the Federal Intermediate Credit Banks, and the Banks for Cooperatives. 8. Unlike other federally sponsored agencies, the Student Loan Line 17 represents those consolidated bonds outstanding, as well as any Marketing Association may borrow from the Federal Financing Bank discount notes that have been issued. Lines 1 and 10 reflect the addition (FFB) since its obligations are guaranteed by the Department of Health, of this item. Education, and Welfare. 2. Consists of mortgages assumed by the Defense Department between 9. The FFB, which began operations in 1974, is authorized to purchase 1957 and 1963 under family housing and homeowners assistance programs. or sell obligations issued, sold, or guaranteed by other federal agencies. 3. Includes participation certificates reclassified as debt beginning Since FFB incurs debt solely for the purpose of lending to other agencies, Oct. 1, 1976. its debt is not included in the main portion of the table in order to avoid 4. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget double counting. thereafter. 10. Includes FFB purchases of agency assets and guaranteed loans; 5. Consists of debentures issued in payment of Federal Housing Ad- the latter contain loans guaranteed by numerous agencies with the ministration insurance claims. Once issued, these securities may be sold guarantees of any particular agency being generally small. The Farmers privately on the securities market. Home Administration item consists exclusively of agency assets, while the 6. Certificates of participation issued prior to fiscal 1969 by the Govern- Rural Electrification Administration entry contains both agency assets ment National Mortgage Association acting as trustee for the Farmers and guaranteed loans. Home Administration; Department of Health, Education, and Welfare; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 DomesticN onfinancial Statistics • January 1980 1.47 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1979 TTyyppee ooff iissssuuee oorr iissssuueerr,, 11997766 11997777 11997788 oorr uussee Mayr Juner July Aug.r Sept.r Oct. 1 All issues, new and refunding1 35,313 46,769 48,607 3,045 4,694 3,336 4,213 2,607 4,194 Type of issue 2 General obligation 18,040 18,042 17,854 1,141 1,536 787 741 699 1,041 3 Revenue 17,140 28,655 3300,,665588 11,,990022 33,,113399 22,,554466 33,,446622 1,901 33,,114411 4 Housing Assistance Administration2 5 U.S. government loans 133 72 95 2 19 3 10 7 12 Type of issuer 6 State 7,054 6,354 6,632 207 641 234 200 113 294 7 Special district and statutory authority 15,304 21,717 24,156 1,465 2,039 1,604 2,529 1,568 2,750 8 Municipalities, counties, townships, school districts 12,845 18,623 17,718 1,371 1,994 1,495 1,474 919 1,138 9 Issues for new capital, total 32,108 36,189 37,629 3,035 4,349 2,839 4,149 2,560 4,136 Use of proceeds 4,900 5,076 5,003 668 526 383 555 217 308 11 Transportation 2,586 2,951 3,460 125 278 149 151 35 562 12 Utilities and conservation 9,594 8,119 9,026 591 982 608 813 332 1,431 13 Social welfare 6,566 8,274 10,494 585 1,449 1,163 1,722 1,043 1,146 14 Industrial aid 483 4,676 3,526 407 321 268 407 354 425 15 Other purposes 7,979 7,093 6,120 659 793 268 501 579 264 1. Par amounts of long-term issues based on date of sale. SOURCE. Public Securities Association. 2. Only bonds sold pursuant to the 1949 Housing Act, which are secured by contract requiring the Housing Assistance Administration to make annual contributions to the local authority. 1.48 NEW SECURITY ISSUES of Corporations Millions of dollars 1979 Type of issue or issuer, 1976 1977 1978 or use Mar. Apr. May June July Aug. 1 All issues1 53,488 53,792 47,230 4,401 4,692 4,167 6,247 4,008 3,840 2 Bonds 42,380 42,015 36,872 3,729 4,113 3,575 5,356 3,027 2,671 Type of offering 3 Public 26,453 24,072 19,815 1,904 2,984 1,999 4,171 2,247 1,973 4 Private placement 15,927 17,943 17,057 1,825 1,129 1,576 1,185 780 698 Industry group 5 Manufacturing 13,264 12,204 9,572 739 536 1,208 1,146 925 736 6 Commercial and miscellaneous 4,372 6,234 5,246 362 73 267 573 229 397 7 Transportation 4,387 1,996 2,007 245 307 205 423 375 137 8 Public utility 8,297 8,262 7,092 721 1,153 638 1,125 174 102 9 Communication 2,787 3,063 3,373 517 261 102 379 26 313 10 Real estate and financial 9,274 10,258 9,586 1,145 1,782 1,154 1,710 1,298 987 11 Stocks 11,108 11,777 10,358 672 579 592 891 981 1,169 Type 12 Preferred 2,803 3,916 2,832 231 155 174 278 392 346 13 Common 8,305 7,861 7,526 441 424 418 613 589 823 Industry group 14 Manufacturing 2,237 1,189 1,241 24 36 85 47 38 360 15 Commercial and miscellaneous 1,183 1,834 1,816 114 210 203 363 173 266 16 Transportation 24 456 263 55 49 3 142 17 Public utility 6,121 5,865 5,140 335 257 227 248 598 311 18 Communication 776 1,379 264 65 7 30 68 19 Real estate and financial 771 1,049 1,631 79 " '78' 21 200 103 91 1. Figures, which represent gross proceeds of issues maturing in more companies other than closed-end, intracorporate transactions, and sales to than one year, sold for cash in the United States, are principal amount or foreigners. number of units multiplied by offering price. Excludes offerings of less than $100,000, secondary offerings, undefined or exempted issues as SOURCE. Securities and Exchange Commission. defined in the Securities Act of 1933, employee stock plans, investment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Corporate Finance A37 1.49 OPEN-END INVESTMENT COMPANIES Net Sales and Asset Position Millions of dollars 1979 IItteemm 11997777 11997788 May June July Aug. Sept. Oct. Nov. INVESTMENT COMPANIES1 1 Sales of own shares2 6,401 6,645 549 676 744 675 580 617 619 2 Redemptions of own shares3 6,027 7,231 715 667 706 832 784 805 579 3 Net sales 357 -586 -166 9 38 -157 -204 -188 111 45,049 44,980 46,431 48,064 48,771 50,802 50,147 46,271 48,613 5 Cash position 5 3,274 4,507 4,869 5,012 5,052 4,924 5,016 4,521 4,984 6 Other 41,775 40,473 41,562 43,052 43,719 45,878 45,131 41,750 43,629 1. Excluding money market funds. 5. Also includes all U.S. government securities and other short-term 2. Includes reinvestment of investment income dividends. Excludes debt securities. reinvestment of capital gains distributions and share issue of conversions from one fund to another in the same group. NOTE. Investment Company Institute data based on reports of mem- 3. Excludes share redemption resulting from conversions from one fund bers, which comprise substantially all open-end investment companies to another in the same group. registered with the Securities and Exchange Commission. Data reflect 4. Market value at end of period, less current liabilities. newly formed companies after their initial offering of securities. 1.50 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1978 1979 Account 1976 1977 1978 Ql Q2 Q3 Q4 Ql Q2 Q3 1 Profits before tax 156.0 177.1 206.0 177.5 207.2 212.0 227.4 233.3 227.9 242.3 2 Profits tax liability 63.8 72.6 84.5 70.8 84.7 87.5 95.1 91.3 88.7 94.0 3 Profits after tax 92.2 104.5 121.5 106.7 122.4 124.5 132.3 142.0 139.3 148.3 4 Dividends 37.5 42.1 47.2 45.1 46.0 47.8 49.7 51.5 52.3 52.8 5 Undistributed profits 54.7 62.4 74.3 61.6 76.4 76.8 82.6 90.5 87.0 95.5 6 Capital consumption allowances 97.1 109.3 119.8 116.5 119.1 120.6 123.1 125.5 130.4 132.8 151.8 171.7 194.1 178.1 195.5 197.3 205.7 216.0 217.3 228.3 SOURCE. Survey of Current Business (U.S. Department of Commerce.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • January 1980 1.51 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1977 1978 1979 AAccccoouunntt 11997755 11997766 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 759.0 826.3 881.8 900.9 925.0 954.2 992.6 1,028.1 1,078.6 1,110.2 2 Cash 82.1 87.3 83.5 94.3 88.8 91.3 91.6 103.5 102.4 100.1 3 U.S. government securities 19.0 23.6 19.3 18.7 18.6 17.3 16.1 17.8 19.2 20.8 4 Notes and accounts receivable 272.1 293.3 326.9 325.0 337.4 356.0 376.4 381.9 405.3 418.8 5 Inventories 315.9 342.9 368.3 375.6 390.5 399.3 415.5 428.3 452.6 468.9 6 Other 69.9 79.2 83.8 87.3 89.6 90.3 92.9 96.5 99.1 101.4 7 Current liabilities 451.6 492.7 533.2 546.8 574.2 593.5 626.3 662.2 701.9 723.7 8 Notes and accounts payable 264.2 282.0 306.1 313.7 325.2 337.9 356.2 375.1 392.6 410.5 9 Other 187.4 210.6 227.1 233.1 249.0 255.6 270.0 287.1 309.2 313.1 10 Net working capital 307.4 336.6 348.6 354.1 350.7 360.7 366.3 365.9 376.7 386.5 11 MEMO : Current ratio1 1.681 1.677 1.654 1.648 1.611 1.608 1.585 1.552 1.537 1.534 1. Ratio of total current assets to total current liabilities. All data in this table have been revised to reflect the most current benchmarks. Complete data are available upon request from the Flow NOTE. For a description of this series, see "Working Capital of Non- of Funds Section, Division of Research and Statistics, financial Corporations" in the July 1978 BULLETIN, pp. 533-37. SOURCE. Federal Trade Commission. 1.52 BUSINESS EXPENDITURES on New Plant and Equipment Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1978 1979 1980 IInndduussttrryy 11997788'' 11997799 pp Q3 Q4 Ql Q2 Q3 r Q42 Q12 Q22 153.82 176.37 155.41 163.96 165.94 173.48 179.33 184.32 189.32 195.76 Manufacturing 2 Durable goods industries 31.66 37.89 32.25 3333..9999 34.00 36.86 39.72 40.16 42.32 44.44 3 Nondurable goods industries 35.96 40.41 35.50 39.26 37.56 39.56 40.50 42.88 42.70 44.68 Nonmanufacturing 4 Mining 4.78 5.52 44..9999 44..9988 5.46 5.31 5.42 5.91 4.95 5.04 Transportation 5 Railroad 33..3322 3.88 33..3388 33..4499 44..0022 33..6666 4.03 4.00 3.92 3.68 6 Air 2.30 3.34 2.20 2.39 3.35 3.26 3. 10 3.74 5.09 3.89 7 Other 2.43 2.97 2.47 2.55 2.71 2.79 3.16 3.22 3.75 3.98 Public utilities 8 Electric 29.48 33.18 24.92 26.95 27.70 28.06 28.32 28.53 27.72 28.32 9 Gas and other 4.70 4.99 4.70 4.78 4.66 5.18 5.01 5.24 5.35 6.13 1 1 0 1 C C o o m m m m u er n c i i c a a l t i a o n n d other1 2 1 5 8 . . 7 1 1 6 2 2 0 8 . . 1 9 8 8 2 1 6 8 . . 0 9 9 0 2 1 7 8 . . 1 4 2 6 2 1 7 8 . . 7 7 3 5 2 2 0 8 . . 2 5 9 1 2 2 0 9 . . 4 6 1 6 1\ 5cr0v. 6n5c 53. 52 55. 60 1. Includes trade, service, construction, finance, and insurance. agriculture; real estate operators; medical, legal, educational, and cultural 2. Anticipated by business. service; and nonprofit organizations. NOTE. Estimates for corporate and noncorporate business, excluding Source. Survey of Current Business (U.S. Dept. of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Corporate Finance A39 1.53 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1978 1979 AAccccoouunntt 11997733 11997744 11997755 11997766 11997777 Q3 Q4 Q1 Q2 Q3 ASSETS Accounts receivable, gross 1 Consumer 35.4 36.1 36.0 38.6 44.0 49.7 52.6 54.9 58.7 62.3 2 Business 32.3 37.2 39.3 44.7 55.2 58.3 63.3 66.7 70.1 68.1 3 Total 67.7 73.3 75.3 83.4 99.2 108.0 116.0 121.6 128.8 130.4 4 LESS ; Reserves for unearned income and losses... 8.4 9.0 9.4 10.5 12.7 14.3 15.6 16.5 17.7 18.7 6 5 A Ca c s c h o u a n n t d s r b e a c n e k i v d a e b p le o , s n it e s t 5 2 9 . . 6 3 6 3 4 . . 0 2 6 2 5 . . 9 9 7 2 2 . . 6 9 8 2 6 . . 6 5 9 2 3 . . 7 7 10 3 0 . . 5 4 ) 105.1 111.1 111.7 7 Securities .8 .4 1.0 1.1 .9 1.8 1.3 \ 23.81 24.6 25.8 8 All other 10.6 12.0 11.8 12.6 14.3 17.1 17.3 J 73.2 79.6 81.6 89.2 104.3 115.3 122.4 128.9 135.8 137.4 LIABILITIES 10 Bank loans 7.2 9.7 8.0 6.3 5.9 5.4 6.5 6.5 7.3 7.8 11 Commercial paper 19.7 20.7 22.2 23.7 29.6 29.3 34.5 38.1 41.0 39.2 Debt 12 Short-term, n.e.c 4.6 4.9 4.5 5.4 6.2 6.8 8.1 6.7 8.8 9.1 13 Long-term, n.e.c 24.6 26.5 27.6 32.3 36.0 41.3 43.6 44.5 46.0 47.5 14 Other 5.6 5.5 6.8 8.1 11.5 15.2 12.6 15.1 14.4 15.4 15 Capital, surplus, and undivided profits 11.5 12.4 12.5 13.4 15.1 17.3 17.2 18.0 18.2 18.4 16 Total liabilities and capital 73.2 79.6 81.6 89.2 104.3 115.3 122.4 128.9 135.8 137.4 1. Beginning Q1 1979, asset items on lines 6, 7, and 8 are combined. NOTE. Components may not add to totals due to rounding. 1.54 DOMESTIC FINANCE COMPANIES Business Credit Millions of dollars, seasonally adjusted except as noted Changes in accounts Extensions Repayments AAAccccccooouuunnntttsss receivable rrreeeccceeeiiivvvaaabbbllleee TTTyyypppeee ooouuutttssstttaaannndddiiinnnggg OOOcccttt... 333111,,, 1979 1979 1979 111999777999111 Aug. Sept. Oct. Aug. Sept. Oct. Aug. Sept. Oct. 1 Total 69,465 251 -1,245 399 15,606 15,310 16,354 15,355 16,555 15,955 2 Retail automotive (commercial vehicles) 15,409 101 94 -16 1,239 1,236 1,151 1,138 1,142 1,167 3 Wholesale automotive 14,008 -583 -1,453 -408 5,633 5,320 6,079 6,216 6,773 6,487 4 Retail paper on business, industrial and farm equipment 18,154 282 135 369 1.194 1,172 1,300 912 1,037 931 6 5 F L a o c a t n o s r e o d n c c o o m m m m e e r r c c i i a a l l a a c c c c o o u u n n t t s s re re ce c i e v i a v b a l b e2 l e2.... } 6,455 97 -281 168 5.195 5,369 5,200 5,098 5,650 5,032 7 All other business credit 15,439 354 260 286 2,345 2,213 2,624 1,991 1,953 2,338 1. Not seasonally adjusted. 2. Beginning January 1979 the categories "Loans on commercial accounts receivable" and "Factored commercial accounts receivable" are combined. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 DomesticN onfinancial Statistics • January 1980 1.55 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1979 Item 1976 1977 1978 June July Aug. Sept. Oct. Nov. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms1 1 Purchase price (thousands of dollars) 48.4 54.3 62.6 73.7 74.3 80.0 75.5 76.4' 77.1 2 Amount of loan (thousands of dollars) 35.9 40.5 45.9 52.5 52.7 56.9 53.9 54.9 ' 55.4 3 Loan/price ratio (percent) 74.2 76.3 75.3 73.5 73.0 73.1 73.4 73.7 r 73.8 4 Maturity (years) 27.2 27.9 28.0 28.4 28.1 28.1 28.6 28.5' 28.5 5 Fees and charges (percent of loan amount)2 1.44 1.33 1.39 1.53 1.63 1.60 1.67 1.70' 1.82 6 Contract rate (percent per annum) 8.76 8.80 9.30 10.39 10.49 10.73 10.72 10.91' 11.04 Yield (percent per annum) 7 FHLBB series 3 8.99 9.01 9.54 10.66 10.78 11.01 11.02 11.21' 11.37 8 HUD series. 4 8.99 8.95 9.68 10.90 10.95 11.10 11.35 12.15' 12.50 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series) 5 8.82 8.68 9.70 10.49 10.46 10.58 11.37 n.a.' 12.41 10 GNMA securities 6 8.17 8.04 8.98 9.78 9.77 9.91 10.31 11.25' 11.57 FNMA auctions 7 11 Government-underwritten loans 8.99 8.73 9.77 10.77 10.66 10.66 11.08 12.52' 12.75 12 Conventional loans 9.11 8.98 10.01 11.57 11.52 11.52 11.75 12.85' 13.66 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 13 Total 32,904 34,370 43,311 48,206 48,539 48,909 49,173 49,744 50,356 14 FHA-insured 18,916 18,457 21,243 23,204 23,378 23,526 n.a. n.a. n.a. 15 VA-guaranteed 9,212 9,315 10,544 10,502 10,450 10,386 n.a. n.a. n.a. 16 Conventional 4,776 6,597 11,524 14,500 14,710 14,997 15,203 15,517 15,797 Mortgage transactions (during period) 17 Purchases 3,606 4,780 12,303 739 602 646 545 859 872 18 Sales 86 67 5 0 0 0 0 0 0 Mortgage commitments8 19 Contracted (during period) 6,247 9,729 18,960 634 354 593 1,407 2,369 496 20 Outstanding (end of period) 3,398 4,698 9,201 6,476 5,912 5,692 6,352 7,472 6,974 Auction of 4-month commitments to buy Government-underwritten loans 21 Offered 9 4,929.8 7,974.1 12,978 219.9 133.2 162.3 1,421.1 2,943.4 558.4 22 Accepted 2,787.2 4,846.2 6,747.2 99.9 69.6 82.7 599.9 1,130.4 264.6 Conventional loans 23 Offered 9 2,595.7 5,675.2 9,933.0 357.5 93.5 245.9 527.3 1,049.9 366.1 1,879.2 3,917.8 5,110.9 195.3 69.9 184.1 325.6 431.2 190.2 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period) IO 25 Total 4,269 3,276 3,064 3,334 3,487 3,549 3,729 3,726 3,990 26 FHA/VA 1,618 1,395 1,243 1,171 1,156 1,145 1,132 1,120 1,112 2,651 1,881 1,822 2,163 2,331 2,404 2,597 2,606 2,879 Mortgage transactions (during period) 28 Purchases 1,175 3,900 6,524 447 518 636 537 552 458 29 Sales 1,396 4,131 6,211 382 321 554 347 530 186 Mortgage commitments11 30 Contracted (during period) 1,477 5,546 7,451 528 528 655 437 504 221 31 Outstanding (end of period) 333 1,063 1,410 1,590 1,572 1,536 1,400 1,312 1,036 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 mortgages carrying the prevailing ceiling rate. Monthly figures are Loan Bank Board in cooperation with the Federal Deposit Insurance unweighted averages of Monday quotations for the month. Corporation. 7. Average gross yields (before deduction of 38 basis points for mort- 2. Includes all fees, commissions, discounts, and "points" paid (by the gage servicing) on accepted bids in Federal National Mortgage Associaborrower or the seller) in order to obtain a loan. tion's auctions of 4-month commitments to purchase home mortgages, 3. Average effective interest rates on loans closed, assuming prepay- assuming prepayment in 12 years for 30-year mortgages. No adjustments ment at the end of 10 years. are made for FNMA commitment fees or stock related requirements. 4. Average contract rates on new commitments for conventional first Monthly figures are unweighted averages for auctions conducted within mortgages, rounded to the nearest 5 basis points; from Department of the month. Housing and Urban Development. 8. Includes some multifamily and nonprofit hospital loan commit- 5. Average gross yields on 30-year, minimum-downpayment, Federal ments in addition to 1- to 4-family loan commitments accepted in FNMA's Housing Administration insured first mortgages for immediate delivery free market auction system, and through the FNMA-GNMA tandem in the private secondary market. Any gaps in data are due to periods of plans. adjustment to changes in maximum permissible contract rates. 9. Mortgage amounts offered by bidders are total bids received. 6. Average net yields to investors on Government National Mortgage 10. Includes participation as well as whole loans. Association guaranteed, mortgage-backed, fully modified pass-through 11. Includes conventional and government-underwritten loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate Debt A41 1.56 MORTGAGE DEBT OUTSTANDING Millions of dollars, end of period 1978 1979 TTyyppee ooff hhoollddeerr,, aanndd ttyyppee ooff pprrooppeerrttyy 11997766 11997777 11997788 Q3 Q4 Ql Q2 Q3 1 All holders 889,327 1,023,505 1,172,502 1,133,503 1,172,737 1,206,280 1,252,519 1,295,449 2 1- to 4-family 556,557 656,566 761,905 734,709 761,892 784,602 817,018 845,284< 104,516 111,841 122,004 119,381 121,978 123,970 125,923 129,079 171,223 189,274 212,597 205,629 212,743 217,501 224,507 232,084 5 Farm 57,031 65,824 75,996 73,784 76,124 80,207 85,071 89,002 6 Major financial institutions 647,650 745,011 847,910 821,988 848,145 866,036 894,471 919,984 7 Commercial banks1 151,326 178,979 213,963 205,445 213,963 220,063 229,564 239,363 8 1- to 4-family 86,234 105,115 126,966 121,911 126,966 130,585 136,223 142,038 9 Multifamily 8,082 9,215 10,912 10,478 10,912 11,223 11,708 12,208 10 Commercial 50,289 56,898 67,056 64,386 67,056 68,968 71,945 75,016 11 Farm 6,721 7,751 9,029 8,670 9,029 9,287 9,688 10,101 12 Mutual savings banks 81,639 88,104 95,157 93,403 95,157 96,136 97,155 97,929 13 1- to 4-family 53,089 57,637 62,252 61,104 62,252 62,892 63,559 64,065 14 Multifamily 14,177 15,304 16,529 16,224 16,529 16,699 16,876 17,010 15 Commercial 14,313 15,110 16,319 16,019 16,319 16,488 16,663 16,795 16 60 53 57 56 57 57 58 59 17 Savings and loan associations 323,130 381,163 432,858 420,971 432,858 441,420 456,629 468,324 18 1- to 4-family 260,895 310,686 356,156 345,617 356,156 363,774 377,587 387,257 19 Multifamily 28,436 32,513 36,057 35,362 36,057 36,682 37,078 38,028 20 33,799 37,964 40,645 39,992 40,645 40,964 41,964 43,039 21 Life insurance companies 91,555 96,765 105,932 102,169 106,167 108,417 111,123 114,368 22 1- to 4-family 16,088 14,727 14,449 14,158 14,436 14,507 14,489 14,884 23 19,178 18,807 19,026 18,742 19,000 19,080 19,102 19,107 24 48,864 54,388 62,086 59,153 62,232 63,908 66,055 68,513 25 7,425 8,843 10,371 10,116 10,499 10,922 11,477 11,864 26 Federal and related agencies 66,753 70,006 81,853 78,672 81,853 86,689 90,095 93,143 27 Government National Mortgage Assn. .. 4,241 3,660 3,509 3,560 3,509 3,448 3,425 3,382 28 1- to 4-family 1,970 1,548 877 897 877 821 800 780 29 Multifamily 2,271 2,112 2,632 2,663 2,632 2,627 2,625 2,602 30 Farmers Home Administration 1,964 1,353 926 1,384 926 956 1,200 1,383 31 1- to 4-family 454 626 288 460 288 302 363 163 32 218 275 320 240 320 180 75 299 33 Commercial 72 149 101 251 101 283 278 262 34 Farm 320 303 217 433 217 191 484 659 35 Federal Housing and Veterans Admin. .. 5,150 5,212 5,419 5,295 5,419 5,522 5,597 5,672 36 1- to 4-family 1,676 1,627 1,641 1,565 1,641 1,693 1,744 1,795 37 Multifamily 3,474 3,585 3,778 3,730 3,778 3,829 3,853 3,877 38 Federal National Mortgage Association.. 32,904 34,369 43,311 41,189 43,311 46,410 48,206 49,173 39 1- to 4-family 26,934 28,504 37,579 35,437 37,579 40,702 42,543 43,534 40 5,970 5,865 5,732 5,752 5,732 5,708 5,663 5,639 41 Federal Land Banks 19,125 22,136 25,624 24,758 25,624 26,893 28,459 29,804 42 1- to 4-family 601 670 927 819 927 1,042 1,198 1,374 43 Farm 18,524 21,466 24,697 23,939 24,697 25,851 27,261 28,430 44 Federal Home Loan Mortgage Corp 4,269 3,276 3,064 2,486 3,064 3,460 3,208 3,729 45 1- to 4-family 3,889 2,738 2,407 1,994 2,407 2,685 2,489 2,850 46 Multifamily 380 538 657 492 657 775 719 879 47 Mortgage pools or trusts2 49,801 70,289 88,633 82,730 88,633 94,551 102,259 110,648 48 Government National Mortgage Assn. .. 30,572 44,896 24,347 50,844 54,347 57,955 63,000 69,357 49 1- to 4-family 29,583 43,555 52,732 49,276 52,732 56,269 61,246 67,535 50 Multifamily 989 1,341 1,615 1,568 1,615 1,686 1,754 1,822 51 Federal Home Loan Mortgage Corp.. .. 2,671 6,610 11,892 10,511 11,892 12,467 13,708 14,421 52 1- to 4-family 2,282 5,621 9,657 8,616 9,657 10,088 11,096 11,568 53 Multifamily 389 989 2,235 1,895 2,235 2,379 2,612 2,853 54 Farmers Home Administration 16,558 18,783 22,394 21,375 22,394 24,129 25,551 26,870 55 1- to 4-family 10,219 11,379 13,400 12,851 13,400 13,883 14,329 14,972 56 Multifamily 532 759 1,116 1,116 1,116 1,465 1,764 1,763 57 Commercial 2,440 2,945 3,560 3,369 3,560 3,660 3,833 4,054 58 Farm 3,367 3,682 4,318 4,039 4,318 5,121 5,625 6,081 59 Individual and others 3 125,123 138,199 154,106 150,113 154,106 158,014 165,694 171,674 60 1- to 4-family 62,643 72,115 82,574 80,004 82,574 85,056 89,352 92,469 61 Multifamily 20,420 20,538 21,395 21,119 21,395 21,670 22,094 22,992 62 Commercial 21,446 21,820 212,830 22,459 22,830 23,292 23,770 24,405 63 Farm 20,614 23,726 27,307 26,531 27,307 27,996 30,478 31,808 1. Includes loans held by nondeposit trust companies but not bank trust NOTE. Based on data from various institutional and government departments. sources, with some quarters estimated in part by the Federal Reserve in 2. Outstanding principal balances of mortgages backing securities in- conjunction with the Federal Home Loan Bank Board and the Departsured or guaranteed by the agency indicated. ment of Commerce. Separation of nonfarm mortgage debt by type of 3. Other holders include mortgage companies, real estate investment property, if not reported directly, and interpolations and extrapolations trusts, state and local credit agencies, state and local retirement funds, when required, are estimated mainly by the Federal Reserve. Multinoninsured pension funds, credit unions, and U.S. agencies for which family debt refers to loans on structures of five 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 NonfinancialS tatistics • January 1980 1.57 CONSUMER INSTALLMENT CREDIT 1 Total Outstanding, and Net Change Millions of dollars 1979 Holder, and type of credit 1976 1977 1978 May June July Aug. Sept. Oct. Nov. Amounts outstanding (end of period) 1 Total. 193,977 230,829 275,629 287,315 291,856 295,052 299,813 303,902 305,217 307,641 By major holder 2 Commercial banks 93,728 112,373 136,189 142,102 144,035 145,169 147,312 148,657 149,152 149,057 3 Finance companies 38,919 44,868 54,298 59,635 60,996 62,463 63,362 64,822 65,692 67,164 4 Credit unions 31,169 37,605 45,939 46,832 47,478 47,772 48,631 49,214 48,770 48,673 5 Retailers2 19,260 23,490 24,876 23,421 23,672 23,713 24,114 24,446 24,860 25,732 6 Savings and loans 6,246 7,354 8,394 9,066 9,290 9,425 9,760 9,972 10,073 10,241 7 Gasoline companies 2,830 2,963 3,240 3,537 3,704 3,872 4,048 4,244 4,174 4,281 8 Mutual savings banks.. 1,825 2,176 2,693 2,722 2,681 2,638 2,586 2,547 2,496 2,493 By major type of credit 9 Automobile 67,707 82,911 102,468 109,211 110,930 111,952 113,351 114,765 114,876 115,121 10 Commercial banks... 39,621 49,577 60,564 63,891 64,480 64,826 65,389 65,813 65,973 65,646 11 Indirect paper 22,072 27,379 33,850 35,917 36,251 36,475 36,887 37,267 37,469 37,334 12 Direct loans 17,549 22,198 26,714 27,974 28,229 28,351 28,502 28,546 28,504 28,312 13 Credit unions. 15,238 18,099 21,967 22,394 22,703 22,844 23,255 23,534 23,322 23,275 14 Finance companies.. 12,848 15,235 19,937 22,926 23,747 24,282 24,707 25,418 25,581 26,200 15 Revolving 17,189 3399,,227744 4477,,005511 4466,,448899 4477,,445588 4477,,889944 4499,,227700 5500,,442222 5500,,888833 5522,,006600 16 Commercial banks... 14,359 1188,,337744 2244,,443344 2255,,005544 2255,,665522 2255,,992277 2266,,778822 2277,,444466 2277,,660000 2277,,882277 17 Retailer 1177,,993377 1199,,337777 1177,,889988 1188,,110022 1188,,009955 1188,,444400 1188,,773322 1199,,110099 1199,,995522 18 Gasoline companies. 2,830 22,,996633 33,,224400 33,,553377 33,,770044 33,,887722 44,,004488 44,,224444 44,,117744 44,,228811 19 Mobile home 14,573 15,141 16,042 16,453 16,607 16,719 16,972 17,105 17,244 17,349 20 Commercial banks.. 8,737 9,124 9,553 9,702 9,759 9,801 9,912 9,940 10,013 10,036 21 Finance companies. 3,263 3,077 3,152 3,177 3,191 3,212 3,231 3,258 3,295 3,321 22 Savings and loans.. 2,241 2,538 2,848 3,076 3,152 3,198 3,312 3,384 3,418 3,475 23 Credit unions 332 402 489 498 505 508 517 523 518 517 24 Other 94,508 93,503 110,068 115,162 116,861 118,487 120,220 121,610 122,214 123,111 25 Commercial banks. . . 31,011 35,298 41,638 43,455 44,144 44,615 45,229 45,458 45,566 45,548 26 Finance companies. . . 22,808 26,556 31,209 33,532 34,058 34,969 35,424 36,146 36,816 37,643 27 Credit unions 15,599 19,104 23,483 23,940 24,270 24,420 24,859 25,157 24,930 24,881 28 Retailers 19,260 5,553 5,499 5,523 5,570 5,618 5,674 5,714 5,751 5,780 29 Savings and loans.... 4,005 4,816 5,546 5,990 6,138 6,227 6,448 6,588 6,655 6,766 30 Mutual savings banks. 1,825 2,176 2,693 2,722 2,681 2,638 2,586 2,547 2,496 2,493 Net change (during period) 3 31 Total 21,647 35,278 44,810 3,306 2,558 2,443 2,446 4,446 2,186 2,407 By major holder 10,792 18,645 23,813 1,665 984 662 866 1,521 771 283 33 Finance companies 2,946 5,948 9,430 893 913 1,185 549 1,773 1,076 1,340 34 Credit unions 5,503 6,436 8,334 124 144 342 391 411 -152 -43 35 Retailers1 1,059 2,654 1,386 283 288 180 332 443 335 477 36 Savings and loans 1,085 1,111 1,041 280 240 120 253 207 76 143 37 Gasoline companies 124 132 276 96 39 2 116 127 122 218 38 Mutual savings banks 138 352 530 -35 -50 -48 -61 -36 -42 -9 By major type of credit 39 Automobile 10,465 15,204 19,557 1,225 690 616 594 1,823 487 533 40 Commercial banks 6,334 9,956 10,987 633 123 72 172 762 203 -75 41 Indirect paper 2,742 5,307 6,471 389 87 51 188 542 237 40 42 Direct loans 3,592 4,649 4,516 244 36 21 -16 220 -34 -115 43 Credit unions... 2.497 2,861 3,868 60 45 183 177 218 -79 -23 44 Finance companies 1,634 2,387 4,702 532 522 361 245 843 363 633 45 Revolving 2,170 6,248 7,776 749 796 429 787 1,057 664 799 46 Commercial banks 2,046 4,015 6,060 418 494 303 365 546 253 136 47 Retailers 2,101 1,440 235 263 124 306 384 289 445 124 132 276 96 39 2 116 127 122 218 49 Mobile home 140 565 897 234 102 72 182 89 150 103 50 Commercial banks 70 387 426 125 12 17 59 10 105 33 51 Finance companies -182 -189 74 13 14 11 13 17 27 19 52 Savings and loans 192 297 310 94 74 41 106 57 21 52 60 70 87 2 2 3 4 5 -3 0 54 Other 8,872 13,261 16,580 1,098 970 1,326 883 1,477 885 972 55 Commercial banks 2,342 4,287 6,340 489 355 270 270 203 210 190 56 Finance companies 1,494 3,750 4,654 348 377 813 291 913 686 688 57 Credit unions 2,946 3,505 4,379 62 97 156 210 188 -70 -18 58 Retailers 1,059 553 -54 48 25 56 26 59 46 32 59 Savings and loans 893 814 731 186 166 79 147 150 55 91 60 Mutual savings banks 138 352 530 -35 -50 -48 -61 -36 -42 -9 1. The Board's series cover most short- and intermediate-term credit NOTE. Total consumer noninstallment credit outstanding—credit extended to individuals through regular business channels, usually to scheduled to be repaid in a lump sum, including single-payment loans, finance the purchase of consumer goods and services or to refinance charge accounts, and service credit—amounted to $64.3 billion at the end debts incurred for such purposes, and scheduled to be repaid (or with of 1978, $58.6 billion at the end of 1977, $54.8 billion at the end of 1976, the option of repayment) in two or more installments. and $50.9 billion at the end of 1975. Comparable data for Dec. 31, 1979, 2. Includes auto dealers and excludes 30-day charge credit held by will be published in the February 1980 BULLETIN. travel and entertainment companies. 3. Net change equals extensions minus liquidations (repayments, chargeoffs, and other credits); figures for all months are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Debt A43 1.58 CONSUMER INSTALLMENT CREDIT Extensions and Liquidations Millions of dollars. 1979 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 1976 1977 1978 May June July Aug. Sept. Oct. Nov. Extensions1 1 Total 211,028 254,071 298,351 27,901 26,139 26,848 27,583 28,634 27,695 26,464 By major holder 2 Commercial banks 97,397 117,896 142,720 13,400 12,278 12,292 12,700 13,172 12,718 11,738 3 Finance companies 36,129 41,989 50,505 5,186 4,641 5,353 5,133 5,489 5,642 5,105 4 Credit unions 29,259 34,028 40,023 3,124 2,986 3,282 3,361 3,363 2,942 2,808 5 Retailers2 29,447 39,133 41,619 3,721 3,853 3,687 3,921 4,082 3,930 4,161 6 Savings and loans 3,898 4,485 5,050 723 682 592 728 678 571 606 7 Gasoline companies 13,387 14,617 16,125 1,613 1,589 1,525 1,640 1,734 1,773 1,913 8 Mutual savings banks 1,511 1,923 2,309 134 110 117 100 116 119 133 By major type of credit 9 Automobile 63,743 75,641 88,987 8,260 7,178 7,447 7,667 8,430 7,676 7,066 10 Commercial banks 37,886 46,363 53,028 4,680 3,952 3,936 4,085 4,544 4,185 3,640 11 Indirect paper 20,576 25,149 29,336 2,684 2,146 2,151 2,276 2,569 2,376 2,009 12 Direct loans 17,310 21,214 23,692 1,996 1,806 1,785 1,809 1,975 1,809 1,631 14,688 16,616 19,486 1,566 1,485 1,611 1,661 1,655 1,434 1,399 14 Finance companies 11,169 12,662 16,473 2,014 1,741 1,900 1,921 2,231 2,057 2,027 43,934 86,756 104,587 10,039 10,136 9,856 10,371 10,699 10,424 10,613 16 Commercial banks 30,547 38,256 51,531 5,154 5,166 5,078 5,280 5,398 5,165 5,014 33,883 36,931 3,272 3,381 3,253 3,451 3 567 3,486 3 686 18 Gasoline companies 13,387 14,617 16,125 1,613 1,589 1,525 1,640 1,734 1,773 1,913 4,859 5,425 6,067 668 547 519 655 531 582 515 20 Commercial banks 3,064 3,466 3,704 411 304 297 362 294 374 294 21 Finance companies 702 643 886 58 59 71 67 69 83 69 22 Savings and loans 929 1,120 1,239 182 167 133 206 148 114 139 23 Credit unions 164 196 238 17 17 18 20 20 11 13 24 Other 98,492 86,249 98,710 8,934 8,278 9,026 8,890 8,974 9,013 8,270 25 Commercial banks 25,900 29,811 34,457 3,155 2,856 2,981 2,973 2,936 2,994 2,790 26 Finance companies 24,258 28,684 33,146 3,114 2,841 3,382 3,145 3,189 3,502 3,009 27 Credit unions 14,407 17,216 20,299 1,541 1,484 1,653 1,680 1,688 1,497 1,396 28 Retailers 29,447 5,250 4,688 449 472 434 470 515 444 475 29 Savings and loans 2,969 3,365 3,811 541 515 459 522 530 457 467 30 Mutual savings banks 1,511 1,923 2,309 134 110 117 100 116 119 133 Liquidations1 31 Total 189,381 218,793 253,541 24,595 23,581 24,405 25,137 24,188 25,509 24,057 By major holder 32 Commercial banks 86,605 99,251 118,907 11,735 11,294 11,630 11,834 11,651 1111,,994477 11,455 33 Finance companies 33,183 36,041 41,075 4,293 3,728 4,168 4,584 3,716 4,566 3,765 23,756 27,592 31,689 3,000 2,842 2,940 2,970 2,952 3,094 2,852 35 Retailers2 28,388 36,479 40,233 3,438 3,565 3,507 3,589 3,639 3,595 3,684 36 Savings and loans 2,813 3,374 4,009 443 442 472 475 471 495 463 37 Gasoline companies 13,263 14,485 15,849 1,517 1,550 1,523 1,524 1,607 1,651 1,695 1,373 1,571 1,779 169 160 165 161 152 161 143 By major type of credit 53,278 60,437 69,430 7,035 6,488 6,831 7,073 6,607 77,,118899 6,533 40 Commercial banks 31,552 36,407 42,041 4,047 3,829 3,864 3,913 3,782 3,982 3,716 41 Indirect paper 17,834 19,842 22,865 2,295 2,059 2,100 2,088 2,027 2,139 1,969 42 Direct loans 13,718 16,565 19,176 1,752 1,770 1,764 1,825 1,755 1,843 1,747 43 Credit unions 12,191 13,755 15,618 1,506 1,440 1,428 1,484 1,437 1,513 1,423 44 Finance companies 9,535 10,275 11,771 1,482 1,219 1,539 1,676 1,388 1,694 1,394 41,764 80,508 96,811 9,290 9,340 9,427 9,584 9,642 9,760 9,814 2288,,550011 34,241 45,471 4,736 4,672 4,775 4,915 4,852 4,912 4,878 47 Retailers 31,782 35,491 3,037 3,118 3,129 3,145 3,183 3,197 3,241 48 Gasoline companies 13,263 14,485 15,849 1,517 1,550 1,523 1,524 1,607 1,651 1,695 4,719 4,860 5,170 434 445 447 473 442 432 412 50 Commercial banks 2,994 3,079 3,278 286 292 280 303 284 269 261 51 Finance companies 884 832 812 45 45 60 54 52 56 50 737 823 929 88 93 92 100 91 93 87 104 126 151 15 15 15 16 15 14 14 54 Other 89,620 72,988 82,130 7,836 7,308 7,700 8,007 7,497 8,128 7,298 23,558 25,524 28,117 2,666 2,501 2,711 2,703 2,733 2,784 2,600 56 Finance companies 22,764 24,934 28,492 2,766 2,464 2,569 2,854 2,276 2,816 2,321 11,461 13,711 15,920 1,479 1,387 1,497 11,,447700 1,500 1,567 1,415 58 Retailers 28,388 4,697 4,742 401 447 378 444444 456 398 443 59 Savings and loans 2,076 2,551 3,080 355 349 380 375 380 402 376 60 Mutual savings banks 1,373 1,571 1,779 169 160 165 161 152 161 143 1. Monthly figures are seasonally adjusted. 2. Includes auto dealers and excludes 30-day charge credit held by travel and entertainment companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • January 1980 1.59 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1976 1977 1978 1979 Transaction category, or sector 1973 1974 1975 1976 1977 1978 H2 HI H2 HI H2 HI Nonfinancial sectors 1 Total funds raised 203.1 191.3 210.8 271.9 338.5 400.3 274.9 298.1 378.9 384.5 416.1 386.5 2 Excluding equities 195.4 187.4 200.7 261.1 335.4 398.2 266.8 296.9 373.8 387.1 409.3 383.8 By sector and instrument 3 U.S. government 8.3 11.8 85.4 69.0 56.8 53.7 61.4 46.1 67.4 61.4 46.0 27.1 4 Treasury securities 7.9 12.0 85.8 69.1 57.6 55.1 61.8 46.7 68.6 62.3 47.9 29.4 5 Agency issues and mortgages .4 -.2 -.4 -.1 -.9 -1.4 -.3 -.6 -1.2 -.9 -1.9 -2.3 6 All other nonfinancial sectors 194.9 179.5 125.4 202.9 281.8 346.6 213.4 252.0 311.5 323.1 370.2 359.4 7 Corporate equities 7.7 3.8 10.1 10.8 3.1 2.1 8.1 1.2 5.1 -2.6 6.8 2.7 8 Debt instruments 187.2 175.6 115.3 192.0 278.6 344.5 205.4 250.8 306.4 325.7 363.4 356.7 9 Private domestic nonfinancial sectors 188.8 164.1 112.1 182.0 267.9 314.4 192.3 241.5 294.2 302.5 326.3 344.1 10 Corporate equities 7.9 4.1 9.9 10.5 2.7 2.6 7.7 .5 4.9 -1.8 7.0 2.8 11 Debt instruments 180.9 160.0 102.1 171.5 265.1 311.8 184.6 241.0 289.3 304.3 319.2 341.3 12 Debt capital instruments 105.1 98.0 98.4 123.5 175.6 196.6 126.5 158.7 192.5 188.0 205.1 204.8 13 State and local obligations 14.7 16.5 16.1 15.7 23.7 28.3 10.9 22.3 25.0 27.8 28.7 17.5 14 Corporate bonds 9.2 19.7 27.2 22.8 21.0 20.1 22.9 16.6 25.4 20.6 19.6 2233..77 Mortgages 15 Home 46.4 34.8 39.5 63.7 96.4 104.5 70.0 89.7 103.1 99.8 109.2 112.7 16 Multifamily residential 10.4 6.9 * 1.8 7.4 10.2 3.1 6.4 8.4 9.3 11.2 8.2 17 Commercial 18.9 15.1 11.0 13.4 18.4 23.3 12.5 14.8 21.9 21.2 25.4 25.8 18 Farm 5.5 5.0 4.6 6.1 8.8 10.2 7.3 9.0 8.7 9.3 11.1 17.1 19 Other debt instruments 75.8 62.0 3.8 48.0 89.5 115.2 58.0 82.3 96.7 116.3 114.1 136.5 20 Consumer credit 26.0 9.9 9.7 25.6 40.6 50.6 27.6 36.6 44.5 50.1 51.0 47.7 21 Bank loans n.e.c 37.1 31.7 -12.3 4.0 27.0 37.3 10.8 27.3 26.7 43.1 31.4 48.9 22 Open market paper 2.5 6.6 -2.6 4.0 2.9 5.2 2.3 3.4 2.4 5.3 5.1 10.8 23 Other 10.3 13.7 9.0 14.4 19.0 22.2 17.4 14.9 23.2 17.8 26.5 29.1 24 By borrowing sector 188.8 164.1 112.1 182.0 267.9 314.4 192.3 241.5 294.2 302.5 326.3 344.1 25 State and local governments 13.2 15.5 13.7 15.2 20.4 23.6 11.7 15.7 25.0 21.0 26.1 14.6 26 Households 80.1 51.2 49.5 90.7 139.9 162.6 98.8 129.4 150.4 156.1 169.1 168.5 27 Farm 9.6 8.0 8.8 10.9 14.7 18.1 11.9 15.7 13.8 15.3 20.8 23.2 28 Nonfarm noncorporate 13.0 7.7 2.0 5.4 12.5 15.7 5.8 13.4 12.5 16.3 14.5 15.1 29 Corporate 73.0 81.7 38.1 59.8 80.3 94.5 64.1 67.3 92.4 93.7 95.8 122.7 30 Foreign 6.1 15.4 13.3 20.8 13.9 32.3 21.1 10.5 17.3 20.6 43.9 15.3 31 Corporate equities -.2 -.2 .2 .3 .4 -.5 .3 .6 .2 -.8 -.2 -.1 32 Debt instruments 6.3 15.7 13.2 20.5 13.5 32.8 20.8 9.9 17.1 21.4 44.1 15.4 33 Bonds 1.0 2.1 6.2 8.6 5.1 4.0 9.7 4.4 5.7 5.0 3.0 3.5 34 Bank loans n.e.c 2.7 4.7 3.9 6.8 3.1 18.3 5.1 -.4 6.5 9.3 27.3 2.8 35 Open market paper .9 7.3 .3 1.9 2.4 6.6 2.4 2.7 2.2 3.6 9.6 6.1 36 U.S. government loans 1.7 1.6 2.8 3.3 3.0 3.9 3.6 3.1 2.9 3.6 4.2 3.1 Financial sectors 37 Total funds raised 44.8 39.2 12.7 24.1 54.0 81.4 28.5 47.7 60.3 80.7 82.1 90.9 By instrument 38 U.S. government related 19.9 23.1 13.5 18.6 26.3 41.4 20.7 22.6 29.9 38.5 44.3 48.0 39 Sponsored credit agency securities 16.3 16.6 2.3 3.3 7.0 23.1 4.3 7.1 6.8 21.9 24.3 21.4 40 Mortgage pool securities 3.6 5.8 10.3 15.7 20.5 18.3 17.2 17.9 23.1 16.6 20.1 26.6 41 Loans from U.S. government 0 .7 .9 -.4 -1.2 0 -.7 -2.3 0 0 0 0 42 Private financial sectors 24.9 16.2 -.8 5.5 27.7 40.0 7.8 25.1 30.4 42.2 37.8 42.9 43 Corporate equities 1.5 .3 .6 1.0 .9 1.7 2.3 .9 .8 2.2 1.1 2.3 44 Debt instruments 23.4 15.9 -1.4 4.4 26.9 38.3 5.6 24.2 29.6 40.0 36.7 40.5 45 Corporate bonds 3.5 2.1 2.9 5.8 10.1 7.5 5.1 10.2 10. 1 8.5 6.4 10.1 46 Mortgages -1.2 -1.3 2.3 2.1 3.1 .9 2.8 3.1 3.0 2.1 -.3 -.4 47 Bank loans n.e.c 9.0 4.6 -3.7 -3.7 -.3 2.8 -5.3 -1.8 1.2 2.5 3.1 -1.4 48 Open market paper and RPs 4.9 3.8 1.1 2.2 9.6 14.6 5.0 9.8 9.5 13.5 15.7 24.5 49 Loans from FHLBs 7.2 6.7 -4.0 -2.0 4.3 12.5 -2.0 2.9 5.8 13.2 11.8 7.7 By sector 50 Sponsored credit agencies 16.3 17.3 3.2 2.6 5.8 23.1 3.5 4.7 6.8 21.9 24.3 21.4 51 Mortgage pools 3.6 5.8 10.3 15.7 20.5 18.3 17.2 17.9 23.1 16.6 20.1 26.6 52 Private financial sectors 24.9 16.2 -.8 5.5 27.7 40.0 7.8 25.1 30.4 42.2 37.8 42.9 53 Commercial banks 1.2 1.2 1.2 2.3 1.1 1.3 2.1 .8 1.5 1.5 1.1 1.1 54 Bank affiliates 2.2 3.5 .3 -.8 1.3 6.7 -.3 1.3 1.2 5.8 7.6 6.2 55 Savings and loan associations 6.0 4.8 -2.3 . 1 9.9 14.3 .3 8.3 11.5 16.4 12.2 10.4 56 Other insurance companies .5 .9 1.0 .9 .9 1.1 .9 .9 1.0 1.0 1.1 1.0 57 Finance companies 9.5 6.0 .5 6.4 17.6 18.6 7.2 16.7 18.5 18.9 18.2 24.7 58 REITs 6.5 .6 -1.4 -2.4 -2.2 -1.0 -2.7 -2.4 -2.0 -1.0 -1.0 -.4 59 Open-end investment companies -1.2 -.7 -.1 -1.0 -.9 -1.0 .4 -.6 -1.3 -.5 -1.5 -.3 All sectors 60 Total funds raised, by instrument 248.0 230.5 223.5 296.0 392.5 481.7 303.4 345.8 439.2 465.2 498.3 477.4 61 Investment company shares -1.2 -.7 -1.0 -.9 -1.0 .4 -.6 -1.3 -.5 -1.5 -.3 62 Other corporate equities 10.4 4.8 10.8 12.9 4.9 4.7 9.9 2.6 7.2 .1 9.4 5.3 63 Debt instruments 238.8 226.4 212.8 284.1 388.5 478.0 293.1 343.8 433.3 465.6 490.4 472.4 64 U.S. government securities 28.3 34.3 98.2 88.1 84.3 95.2 82.9 71.2 97.4 100.0 90.4 75.3 65 State and local obligations 14.7 16.5 16.1 15.7 23.7 28.3 10.9 22.3 25.0 27.8 28.7 17.5 66 Corporate and foreign bonds 13.6 23.9 36.4 37.2 36.1 31.6 37.7 31.2 41.1 34.2 29.1 37.2 67 Mortgages 79.9 60.5 57.2 87.1 134.0 149.0 95.5 122.9 145.1 141.6 156.4 163.2 68 Consumer credit 26.0 9.9 9.7 25.6 40.6 50.6 27.6 36.6 44.5 50.1 51.0 47.7 69 Bank loans n.e.c 48.8 41.0 -12.2 7.0 29.8 58.4 10.6 25.1 34.4 54.9 61.8 50.3 70 Open market paper and RPs 8.3 17.7 -1.2 8.1 15.0 26.4 9.6 15.9 14.0 22.4 30.4 41.3 71 Other loans 19.1 22.7 8.7 15.3 25.2 38.6 18.2 18.5 31.8 34.6 42.5 39.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A45 1.60 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS Billions of dollars, except as noted; quarterly data are at seasonally adjusted annual rates. 1976 1977 1978 1979 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11997733 11997744 11997755 11997766 11997777 11997788 H2 HI H2 HI H2 HI 1 Total funds advanced in credit markets to nonfinancial sectors 195.4 187.4 200.7 261.1 335.4 398.2 266.8 296.9 373.8 387.1 409.3 383.8 By public agencies and foreign 2 Total net advances 31.8 53.7 4444..66 5544..33 8855..11 110099..77 60.3 6666..11 110044..22 110022..88 111166..66 4477..33 3 U.S. government securities 9.5 11.9 22.5 26.8 40.2 43.9 30.2 27.1 53.3 43.7 44.0 -27.4 4 Residential mortgages 8.2 14.7 16.2 12.8 20.4 26.5 14.7 18.9 22.0 22.2 30.7 36.2 5 FHLB advances to S&Ls 7.2 6.7 -4.0 -2.0 4.3 12.5 -2.0 2.9 5.8 13.2 11.8 7.7 6.9 20.5 9.8 16.6 20.2 26.9 17.4 17.2 23.1 23.7 30.1 30.7 Totals advanced, by sector 2.8 9.8 15.1 8.9 11.8 20.4 11.9 5.9 17.8 19.4 21.4 24.4 8 Sponsored credit agencies 19.1 26.5 14.8 20.3 26.8 44.6 22.2 21.6 32.0 39.4 49.8 52.9 9 Monetary authorities 9.2 6.2 8.5 9.8 7.1 7.0 6.2 10.2 4.0 13.4 .5 -.6 10 Foreign .6 11.2 6.1 15.2 39.4 37.7 20.0 28.3 50.4 30.6 44.9 -29.5 11 Agency borrowing not included in line 1.. .. 19.9 23.1 13.5 18.6 26.3 41.4 20.7 22.6 29.9 38.5 44.3 48.0 Private domestic funds advanced 183.6 156.8 169.7 225.4 276.5 330.0 227.2 253.5 299.6 322.8 337.1 384.6 13 U.S. government securities 18.8 22.4 75.7 61.3 44.1 51.3 52.7 44.1 44.1 56.3 46.4 102.6 14 State and local obligations 14.7 16.5 16.1 15.7 .23.7 28.3 10.9 22.3 25.0 27.8 28.7 17.5 15 Corporate and foreign bonds 10.0 20.9 32.8 30.5 22.5 22.5 31.8 18.0 27.0 24.1 20.9 28.4 16 Residential mortgages 48.4 26.9 23.2 52.7 83.3 88.2 58.2 77.1 89.4 86.7 89.6 84.5 98.8 76.8 17.9 63.3 107.3 152.2 71.6 94.9 119.7 141.1 163.3 159.3 18 LESS: FHLB advances 7.2 6.7 -4.0 -2.0 4.3 12.5 -2.0 2.9 5.8 13.2 11.8 7.7 Private financial intermediation 19 Credit market funds advanced by private 161.3 125.5 122.5 190.3 255.9 296.9 202.2 249.1 265.0 301.7 292.0 332244..44 20 Commercial banking 84.6 66.6 29.4 59.6 87.6 128.7 68.3 84.6 90.7 132.5 125.0 131.4 35.1 24.2 53.5 70.8 82.0 75.9 70.4 81.4 82.6 75.8 75.9 59.3 22 Insurance and pension funds 23.7 29.8 40.6 49.9 67.9 73.5 47.9 65.2 70.6 76.9 70.2 81.3 17.9 4.8 -1.0 10.0 18.4 18.7 15.5 18.0 21.2 16.6 20.9 52.4 161.3 125.5 122.5 190.3 255.9 296.9 202.2 249.1 265.0 301.7 292.0 324.4 25 Private domestic deposits 97.3 67.5 92.0 124.6 141.2 142.5 132.4 138.6 143.8 138.3 146.7 111.8 23.4 15.9 -1.4 4.4 26.9 38.3 5.6 24.2 29.6 40.0 36.7 40.5 40.6 42.1 32.0 61.3 87.8 116.0 64.2 86.2 91.7 123.5 108.6 172.1 28 Foreign funds 3.0 10.3 -8.7 -4.6 1.2 6.3 -2.8 1.6 .8 5.7 6.9 52.2 -1.0 -5.1 -1.7 —. 1 4.3 6.8 -3.9 . 1 8.5 1.9 11.6 5.5 30 Insurance and pension reserves 18.4 26.2 29.7 34.5 49.4 62.7 33.2 45.3 53.4 66.2 59.2 60.8 20.2 10.6 12.7 31.4 32.9 40.3 37.8 39.3 29.0 49.6 31.0 53.6 Private domestic nonfinancial investors 32 Direct lending in credit markets 45.7 47.2 45.8 39.5 47.5 71.4 30.6 28.6 6644..11 6611..11 8811..77 110000..77 33 U.S. government securities 18.8 18.9 24.1 16.1 23.0 33.2 11.0 11.9 34.2 32.1 34.4 66.5 34 State and local obligations 5.4 9.3 8.4 3.8 2.6 4.5 -1.5 -.5 5.7 7.0 2.0 -3.0 35 Corporate and foreign bonds 2.0 5.1 8.4 5.8 -3.3 -1.4 6.0 —. 1 -6.5 -3.7 1.0 3.8 36 Commercial paper 9.8 5.8 -1.3 1.9 9.5 16.3 1.6 8.2 10.8 8.2 24.4 9.4 37 Other 9.7 8.0 6.2 11.8 15.7 18.7 13.5 9.2 19.9 17.5 20.0 24.1 38 Deposits and currency 101.2 73.8 98.1 131.9 149.5 151.8 141.0 144.5 154.5 148.7 154.8 121.8 39 Security RPs 11.0 -2.2 .2 2.3 2.2 7.5 3.2 4.3 .2 9.8 5.1 10.5 40 Money market fund shares 2 4 1.3 * .2 6.9 5 -.5 .9 6.1 7.7 30.2 41 Time and savings accounts 75.7 65.4 84.0 113.5 121.0 115.2 122'. 9 115.3 126.7 110.7 119.8 77.2 42 Large negotiable CDs 17.8 18.4 -14.3 -13.6 9.0 10.8 -7.8 -4.5 22.6 10.1 11.4 -39.4 43 Other at commercial banks 29.5 25.3 38.8 57.9 43.0 43.3 61.5 47.5 38.4 42.1 44.5 61.1 44 At savings institutions 28.5 21.8 59.4 69.1 69.0 61.1 69.3 72.3 65.7 58.5 63.8 55.5 14.5 8.2 12.6 16.1 26.1 22.2 14.3 25.4 26.8 22.1 22.3 3.8 46 Demand deposits 10.6 1.9 6.4 8.8 17.8 12.9 5.8 19.6 16.1 11.6 14.2 -6.1 3.9 6.3 6.2 7.3 8.3 9.3 8.6 5.8 10.8 10.5 8.1 10.0 48 Total of credit market instruments, deposits and currency 146.9 121.0 143.9 171.4 197.0 223.2 171.6 173.1 221188..66 209.8 223366..66 222222..55 49 Public support rate (in percent) 16.3 28.7 22.2 20.8 25.4 27.5 22.6 22.2 27.9 26.5 28.5 12.3 50 Private financial intermediation (in per- 87.9 80.0 72.2 84.4 92.5 90.0 89.0 98.2 88.5 93.5 8866..66 8844..44 3.6 21.5 -2.6 10.6 40.5 44.0 17.3 29.9 51.2 36.3 51.8 22.7 MEMO: Corporate equities not included above 9.2 4.1 10.7 11.9 4.0 3.7 10.3 2.1 5.9 -.4 77..99 5.0 53 Mutual fund shares -1.2 -.7 —. 1 -1.0 -.9 -1.0 .4 -.6 -1.3 -.5 -1.5 -.3 54 Other equities 10.4 4.8 10.8 12.9 4.9 4.7 9.9 2.6 7.2 -1 9.4 5.3 55 Acquisitions by financial institutions 13.1 5.8 9.6 12.3 7.4 7.6 11.8 6.8 88..11 .4 14.7 14.2 56 Other net purchases -3.9 -1.7 1.1 -.4 -3.4 -3.8 -1.5 -4.7 --22..22 -.8 -6.8 -9.2 NOTES BY LINE NUMBER. 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 and net issues of federally related mortgage pool securities. Included includes mortgages. below in lines 3, 13, and 33. 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. Line2/linel. 17. Includes farm and commercial mortgages. 48. Line 19/line 12. 25. Sum of lines 39 and 44. 49. Sum of lines 10 and 28. 26. Excludes equity issues and investment company shares. Includes 50. 52. Includes issues by financial institutions. line 18. NOTE. Full statements for sectors and transaction types quarterly, 28. Foreign deposits at commercial banks, bank borrowings from foreign and annually for flows and for amounts outstanding, may be obtained Digitized for FRb f A i r li aS a n t E e c s hR . e s, and liabilities of foreign banking agencies to foreign af- f o r f o G m o F ve lo r w no r o s f o F f u t n h d e s F S e e d c e t r i a o l n , R D es i e v r i v si e o n S y o s f t e R m e , s W ea a rc s h h in a g nd to n S , t a D ti . s C ti . c s 2 , 0 5 B 5 o 1 a . r d http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • January 1980 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1979 Measure 1976 1977 1978 May June July Aug. Sept. Oct.r Nov.r Dec. 1 Industrial production1 130.5 138.2 146.1 152.4 152.6 152.8 151.6 152.4 152.2 151.8 152.2 Market groupings 2 Products, total 129.7 137.9 144.8 150.3 150.2 149.7 148.7 149.9 r 149.5 149.4 149.9 3 Final, total 127.6 135.9 142.2 147.8 147.6 147.1 145.6 147.2r 146.8 146.6 147.3 137.1 145.3 149.1 152.0 151.8 150.8 148.2 149.7r 149.6 148.9 149.1 5 Equipment 114.6 123.0 132.8 141.9 141.9 142.1 141.8 143.9 r 143.0 143.5 144.8 6 Intermediate 137.2 145.1 154.1 159.5 159.5 159.4 160.6 159.8' 159.6 159.6 159.5 131.7 138.6 148.3 155.7 156.5 157.6 156.0 156.3r 156.4 155.6 155.8 Industry groupings 8 Manufacturing 130.3 138.4 146.8 153.8 153.9 154.1 152.4 153. 153.2 152.6 153.1 Capacity utilization (percent)1 -2 9 Manufacturing 79.5 81.9 84.4 86.3 86.2 86.1 84.9 85.3 84.9 84.4 84.4 10 Industrial materials industries 81.1 82.7 85.6 87.4 87.5 87.9 86.8 86.7 86.6 85.9 85.7 11 Construction contracts 3 190.2 160.5 174.3 178.0 177.0 165.0 164.0 185.0 171.0 156.0 n.a. 12 Nonagricultural employment, total4 120.7 125.3 131.4 135.9 136.2 136.3 136.4 136.5 136.8 137.0 137.4 13 Goods-producing, total 100.2 104.5 109.8 114.3 114.4 114.7 114.1 114.1 114.0 113.9 114.6 14 Manufacturing, total 97.7 101.2 105.3 108.3 108.3 108.4 107.8 107.7 107.5 107.2 107.7 15 Manufacturing, production-worker 95.3 98.8 102.8 105.6 105.5 105.5 104.5 104.5 104.1 103.7 104.4 131.9 136.7 143.2 147.7 148.1 148.2 148.7' 148.8r 149.3 149.6 150.0 17 Personal income, totals 220.5 244.4 274.1 301.9 304.0 308.5 310.6r 312.8r 315.7 319.1 n.a. 18 Wages and salary disbursements 208.2 230.2 258.1 283.2 285.5 287.7 289.2 291.9r 294.1 297.0 n.a. 19 Manufacturing.... 177.0 198.3 222.4 244.8 245.9 247.6 246.3 248.7r 250.5 251.6 n.a. 20 Disposable personal income 117766..88 119944..88 221177..77 223399..11 224444..88 21 Retail sales 6 207.4 229.8 253.8 274.8 274.4 276.5 285.8 293.9 288.9 291.1 294.3 Prices7 170.5 181.5 195.4 214.1 216.6 218.9 221.1 223.4 225.4 227.5 n.a. 23 Producer finished goods 170.3 180.6 194.6 212.7 213.7 216.2 217.3 220.4 223.7 225.9 227.8 1. The industrial production and capacity utilization series have been 6. Based on Bureau of Census data published in Survey of Current revised. For a description of the changes see the August 1979 BULLETIN, Business (U.S. Department of Commerce). pp. 603-07. 7. Data without seasonal adjustment, as published in Monthly Labor 2. Ratios of indexes of production to indexes of capacity. Based on data Review (U.S. Department of Labor). Seasonally adjusted data for changes from Federal Reserve, McGraw-Hill Economics Department, and De- in the price indexes may be obtained from the Bureau of Labor Statistics, partment of Commerce. U.S. Department of Labor. 3. Index of dollar value of total construction contracts, including residential, nonresidential, and heavy engineering, from McGraw-Hill NOTE. Basic data (not index numbers) for series mentioned in notes Informations Systems Company, F. W. Dodge Division. 4, 5, and 6, and indexes for series mentioned in notes 3 and 7 may also be 4. Based on data in Employment and Earnings (U.S. Department of found in the Survey of Current Business (U.S. Department of Commerce). Labor). Series covers employees only, excluding personnel in the Armed Figures for industrial production for the last two months are preliminary Forces. and estimated, respectively. 5. Based on data in Survey of Current Business (U.S. Department of Commerce). Series for disposable income is quarterly. 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1979 1979 1979 Series Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Manufacturing 153.4 153.1 153.3 153.0 176.9 178.2 179.5 180.8 86.7 85.9 85.4 84.6 2 Primary processing 162.1 161.9 163.4 162.2 182.7 184.2 185.7 187.2 88.7 87.9 88.0 86.6 3 Advanced processing 148.7 148.5 148.1'" 148.2 173.8 175.0 176.2 177.4 85.6 84.8 84.0 83.5 4 Materials 155.5 155.6 156.6r 155.9 176.8 178.1 179.8 181.2 88.0 87.3 87.1 86.1 5 Durable goods 158.4 157.7 158.7 156.1 181.5 183.0 184.6 186.0 87.3 86.2 86.0 83.9 6 Metal materials 124.7 124.3 126.9r 139.8 140.3 140.8 89.1 88.5 90.2 7 Nondurable goods 172.2 173.4 175.7 177.7 191.9 193.7 195.7 197.6 89.7 89.5 89.8 89.9 8 Textile, paper, and chemical 179.1 181.3 184.3 186.8 199.6 201.5 203.8 205.7 89.7 89.9 90.5 90.8 9 Textile 118.2 119.6 122.4r 136.9 137.3 137.7 86.3 87.1 88.9r 10 Paper 136.9 140.7 147.0 148.7 149.9 151.0 92.0 93.9 97.3 11 Chemical 222.7 224.8 226.6 247.4 250.6 253.8 90.0 89.7 89.3 12 Energy 127.9 128.1 128.3' 128.8 146.7 147.5 148.3 149.1 87.2 86.9 86.5' 86.4 1. The capacity utilization series has been revised. For a description of the changes, see the August 1979 BULLETIN, pp. 606-07. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Labor Market A47 2.12 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1979 Category 1976 1977 1978 June July Aug. Sept. Oct.' Nov.' Dec. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 156,048 158,559 161,058 163,469 163,685 163,891 164,106 164,468 164,682 164,898 2 Labor force (including Armed Forces)1 96,917 99,534 102,537 104,604 105,141 105,218r 105,586r 105,688 105,744 106,088 3 Civilian labor force 94,773 97,401 100,420 102,528 103,059 103,128 r 103,494r 103,595 103,652 103,999 Employment 4 Nonagricultural industries 2 84,188 87,302 91,031 93,494 93,949 93,689r 94,140' 94,180 94,223 94,553 5 Agriculture 3,297 3,244 3,342 3,260 3,262 3,315r 3,364' 3,294 3,385 3,359 Unemployment 6 Number 7,288 6,855 6,047 5,774 5,848 6,124' 5,990r 6,121 6,044 6,087 7 Rate (percent of civilian labor force) 7.7 7.0 6.0 5.6 5.7 5.9' 5.8 5.9 5.8 5.9 8 Not in labor force 59,130 59,025 58,521 59,865 58,545 58,673 r 58,519' 58,780 59,937 58,810 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment 3. 79,382 82,423 86,446 89,626 89,713 89,762 89,803 89,982 90,109 90,426 10 Manufacturing 18,997 19,682 20,476 21,063 21,079 20,957 20,949 20,899 20,846 20,954 11 Mining 779 813 851 949 956 968 973 979 984 999 12 Contract construction 3,576 3,851 4,271 4,662 4,688 4,674 4,671 4,694 4,712 4,759 13 Transportation and public utilities. 4,582 4,713 4,927 5,190 5,169 5,194 5,180 5,218 5,227 5,224 14 Trade 17,755 18,516 19,499 20,116 20,122 20,126 20,169 20,243 20,303 20,300 15 Finance 4,271 4,467 4,727 4,958 4,972 5,003 4,997 5,018 5,041 5,070 16 Service 14,551 15,303 16,220 17,051 17,092 17,141 17,191 17,257 17,314 17,385 17 Government 14,871 15,079 15,476 15,637 15,635 15,699 15,673 15,674 15,682 15,735 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 • January 1980 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value 1 Monthly data are seasonally adjusted. 1967 1978 1979 Grouping pro- 1978 por- avertion age Oct. Nov. Dec. Apr. May June July Aug Sept. r Oct. Nov. * Dec.e Index (1967 = 100) MAJOR MARKET 1 Total index 100.00 146.1 149.7 150.6 151.8 150.8 152.4 152.6 152.8 151.6 152.4 152.2 151.8 152.2 2 Products 60.71 144.8 147.5 148.0 149.0 148.4 150.3 150.2 149.7 148.7 149.9 149.5 149.4 149.9 3 Final products 47.82 142.2 145.1 145.3 146.1 145.4 147.8 147.6 147.1 145.6 147.2 146.8 146.6 147.3 4 Consumer goods 27.68 149.1 151.2 151.3 151.5 149.1 152.0 151.8 150.8 148.2 149.7 149.6 148.9 149.1 5 Equipment 20.14 132.8 136.6 137.1 138.6 140.4 141.9 141.9 142.1 141.8 143.9 143.0 143.5 144.8 6 Intermediate products 12.89 154.1 156.4 157.8 159.9 159.7 159.5 159.5 159.4 160.6 159.8 159.6 159.6 159.5 7 Materials 39.29 148.3 153.2 154.5 156.2 154.5 155.7 156.5 157.6 156.0 156.3 156.4 155.6 155.8 Consumer goods 8 Durable consumer goods 7.89 159.2 162.6 162.9 161.8 151.6 160.5 158.6 157.2 147.5 151.8 152.4 149.3 147.7 9 Automotive products 2.83 179.9 187.6 190.2 186.9 163.0 182.7 175.9 170.3 147.3 157.6 159.5 151.6 146.0 10 Autos and utility vehicles 2.03 172.5 181.0 185.0 179.2 147.4 176.3 167.4 155.6 125.1 139.7 142.4 131.1 123.1 11 Autos 1.90 148.6 154.7 159.7 151.9 128.6 153.1 148.0 141.8 118.5 128.0 129.0 118.3 110.2 12 Auto parts and allied goods 80 198.5 204.3 203.2 206.5 202.7 199.0 197.5 207.8 203.7 203.0 203.1 203.5 203.9 13 Home goods 5.06 147.7 148.6 147.6 147.7 145.2 148.1 148.8 149.8 147.7 148.5 148.4 148.1 148.6 14 Appliances, A/C, and TV 1.40 133.3 132.3 129.1 129.8 115.6 128.4 129.3 129.7 121.2 129.6 126.5 126.5 126.9 15 Appliances and TV 1.33 135.4 132.9 130.1 130.6 116.5 130.2 131.2 131.6 124.1 132.2 128.6 129.3 16 Carpeting and furniture 1.07 164.2 165.3 164.2 164.3 170.7 170.2 170.6 171.9 171.7 169.7 169.2 169.8 17 Miscellaneous home goods 2.59 148.6 150.5 150.7 150.6 150.8 149.6 150.5 151.6 152.1 150.0 151.7 150.8 151.6 18 Nondurable consumer goods 19.79 145.1 146.6 146.7 147.3 148.0 148.7 149.1 148.2 148.5 148.9 148.4 148.8 149.7 19 Clothing 4.29 131.1 132.6 132.4 132.2 127.7 128.6 130.7 126.9 128.0 129.0 127.7 20 Consumer staples 15.50 148.9 150.5 150.6 151.5 153.7 154.2 154.2 154.1 154.2 154.3 154.2 154.4 155.3 21 Consumer foods and tobacco 8.33 140.6 141.4 141.7 143.2 145.2 145.7 146.2 147.0 145.3 146.5 146.5 146.4 22 Nonfood staples 7.17 158.5 161.1 161.0 161.2 163.5 164.1 163.5 162.4 164.6 163.5 163.1 163.7 164.6 23 Consumer chemical products 2.63 192.7 198.3 195.9 196.5 201.6 205.2 205.9 206.1 209.2 207.2 206.4 208.3 24 Consumer paper products 1.92 118.4 118.0 119.0 118.0 120.9 121.3 121.1 119.9 121.2 121.1 121.6 121.2 25 Consumer energy products 2.62 153.6 155.3 156.8 157.6 156.4 154.3 152.0 149.8 151.6 150.8 150.2 150.1 26 Residential utilities 1.45 162.1 163.0 162.7 162.5 169.1 167.8 162.3 158.5 163.5 162.2 162.7 Equipment 27 Business 12.63 160.3 164.8 165.0 166.8 168.7 171.4 171.5 171.4 171.5 173.6 171.7 172.1 173.8 28 Industrial 6.77 145.8 148.1 147.6 148.4 150.4 151.8 152.0 151.3 151.7 153.5 151.0 152.5 154.5 29 Building and mining 1.44 207.3 208.8 207.8 206.3 204.2 203.7 205.3 207.4 210.6 212.0 200.6 204.2 210.0 30 Manufacturing 3.85 121.2 123.4 123.3 124.5 128.0 130.1 130.1 130.3 131.1 130.4 130.3 131.3 132.1 31 Power 1.47 149.4 153.0 152.1 154.2 156.0 157.7 156.8 151.0 147.7 156.3 156.3 157.4 158.7 32 Commercial transit, farm 5.86 177.2 184.1 185.0 188.0 189.9 193.9 194.0 194.6 194.4 196.8 195.6 194.7 196.0 33 Commercial 3.26 212.0 218.2 217.8 218.7 223.0 224.9 226.4 227.0 230.5 231.4 233.7 233.4 235.0 34 Transit 1.93 133.8 143.3 145.7 151.0 148.8 156.7 155.3 155.2 149.4 156.3 154.8 150.8 151.9 35 Farm 67 132.8 135.5 138.5 144.6 147.7 150.8 148.1 151.0 148.3 145.3 128.0 132.6 36 Defense and space 7.51 86.5 89.3 90.3 91.4 92.9 92.5 92.3 92.8 92.0 94.0 94.7 95.5 96.2 Intermediate products 37 Construction supplies 6.42 151.7 154.5 156.1 158.3 156.0 156.4 156.3 156.4 157.3 156.3 156.5 156.3 155.6 38 Business supplies 6.47 156.5 158.4 159.6 161.5 163.2 162.5 162.6 162.4 163.8 163.2 162.7 162.9 39 Commercial energy products 1.14 168.2 170.0 171.3 173.0 174.6 172.6 169.4 167.8 170.7 169.8 172.1 172.7 Materials 40 Durable goods materials 20.35 149.0 155.5 157.0 159.5 155.7 157.9 159.5 160.7 157.7 157.6 157.4 155.5 155.3 41 Durable consumer parts 4.58 140.8 147.0 147.2 148.6 136.9 142.5 141.8 138.5 129.7 132.2 130.0 126.7 124.4 42 Equipment parts 5.44 166.5 172.9 176.7 179.2 187.0 188.0 191.0 192.1 190.7 192.0 192.7 194.2 195.4 43 Durable materials n.e.c 10.34 143.3 150.1 151.0 154.0 147.7 149.0 150.8 154.0 152.7 150.7 149.9 147.9 147.8 44 Basic metal materials 5.57 121.2 129.3 130.2 132.0 123.2 122.9 126.1 130.5 127.7 124.8 121.6 120.1 45 Nondurable goods materials 10.47 165.6 168.8 170.2 171.9 173.0 173.8 173.4 174.6 175.8 176.7 177.2 177.2 178.7 46 Textile, paper, and chemical materials... 7.62 171.8 175.3 177.1 178.9 180.7 181.5 181.7 182.8 184.3 185.9 186.1 186.2 188.1 47 Textile materials 1.85 116.9 119.7 118.8 120.1 117.0 118.8 122.9 122.2 120.6 124.4 124.5 123.3 48 Paper materials 1.62 137.0 137.3 137.9 139.1 140.8 140.1 141.1 146.2 146.7 148.1 148.6 149.1 49 Chemical materials 4.15 210.0 214.9 218.4 220.8 224.7 225.7 223.9 224.1 227.5 228.2 228.4 228.9 50 Containers, nondurable 1.70 159.8 163.9 163.1 164.8 162.0 163.3 159.2 163.1 162.9 161.8 165.7 165.1 51 Nondurable materials n.e.c 1.14 132.7 133.2 135.2 135.7 138.2 138.4 139.0 137.5 138.2 136.9 134.1 134.6 52 Energy materials 8.48 125.3 128.6 129.3 128.8 128.4 127.7 128.3 129.1 127.7 128.1 128.6 129.0 128.7 53 Primary energy 4.65 112.6 116.7 117.0 116.1 113.0 111.7 112.4 112.8 112.0 113.6 114.7 115.3 54 Converted fuel materials 3.82 140.8 143.0 144.4 144.4 147.1 147.2 147.6 148.8 146.9 145.7 145.5 145.8 Supplementary groups 55 Home goods and clothing 9.35 140.0 141.2 140.6 140.6 137.2 139.1 140.5 139.3 138.6 139.5 138.9 139.1 139.8 56 Energy, total 12.23 135.4 138.2 139.1 139.1 138.7 137.6 137.2 137.1 136.8 136.8 137.3 137.6 137.5 57 Products 3.76 158.0 159.8 161.2 162.2 161.9 159.9 157.3 155.2 157.4 156.5 156.8 157.0 58 Materials 8.48 125.3 128.6 129.3 128.8 128.4 127.7 128.3 129.1 127.7 128.1 128.6 129.0 128.7 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Output A49 2.13 Continued 1967 1978 1979 Grouping SIC pro- 1978 code por- avertion age^ Oct. Nov. Dec. Apr. May June July Aug. Sept.r Oct. Nov.p Dec. Index (1967 = 100) MAJOR INDUSTRY 1 Mining and utilities. 12.05 141.7 144.6 140.9 145.0 143.8 143.4 143.0 143.7 149.0 144.5 145.3 2 Mining 6.36 124.0 127.9 129.4 127.4 122.7 122.8 123.9 124.7 126.9 125.8 127.8 3 Utilities 5.69 161.4 163.2 153.8 164.7 167.4 166.5 164.2 164.8 173.7 165.3 164.8 4 Electric 3.88 182.2 184.7 170.9 186.7 189.0 186.4 182.4 182.2 200.7 184.1 183.6 5 Manufacturing 87.95 146.8 150.7 151.9 152.9 151.6 153.8 153.9 154.1 152.8 153.5 153.2 6 Nondurable 35.97 156.9 159.5 160.8 161.7 161.7 162.8 163.0 164.1 168.8 164.6 163.9 7 Durable 51.98 139.7 144.6 145.6 146.8 144.6 147.6 147.6 147.2 141.7 145.9 145.8 Mining 8 Metal 10 .51 121.0 122.1 120.9 123.8 128.9 123. 123.2 128.6 132.8 122. 124.0 9 Coal 11,12 .69 114.7 141.9 146.1 144.7 130.1 133.4 137.5 137.1 144.1 142.6 144.7 10 Oil and gas extraction.. . 13 4.40 124.6 125.5 126.1 123.8 118.6 118.6 119.6 120.4 121.2 121.6 123.8 11 Stone and earth minerals. 14 .75 131.2 133.6 139.3 134.8 135.3 137.8 137.3 136.4 140.8 137.5 138.2 Nondurable manufacturers 12 Foods 8.75 142.7 143.2 145.7 144.7 147.0 149.2 149.5 149.4 155.0 148.8 148.6 13 Tobacco products .67 118.3 119.0 123.1 119.1 120.0 120.2 118.3 118.9 112.3 116.4 115.6 14 Textile mill products 2.68 137.5 139.6 140.2 141.7 141.2 141.5 114.6 143.0 148.3 146.9 146.1 15 Apparel products 3.31 134.2 136. 131.5 136.5 130.8 128.2 132.0 129.7 134.5 131.2 128.5 16 Paper and products 3.21 144.8 145.8 145.7 148.5 148.7 147.9 148.0 154.0 154. 155.3 154.1 17 Printing and publishing 4.72 131.5 132.6 135.2 134.4 135.7 136.8 136.9 135.6 149.7 137.1 136.9 18 Chemicals and products 7.74 197.4 202.7 203.9 207.2 204.7 209.7 207.8 210.5 215.6 212.0 211.0 19 Petroleum products 1.79 145.2 147.6 153.5 151.3 145.4 142.4 143.9 143.9 148.7 143.1 141.9 20 Rubber and plastic products. 2.24 253.6 262.3 265.5 263.3 265.5 270.0 270.0 278.0 268.5 272.9 274.2 21 Leather and products .86 73.8 72.4 72.9 73.8 69.6 72.3 70. 69.7 70.7 70.8 70. Durable manufactures 22 Ordnance, private and government. 19,91 3.64 73.7 74.2 72.6 74.6 75 75.3 75.1 74.6 74.8 75.3 76.3 23 Lumber and products 24 1.64 136.3 138.1 137.2 144.0 137.2 136.1 136.8 135.2 140.6 138.6 138.7 24 Furniture and fixtures 25 1.37 155.8 159.9 161.0 157.6 159.4 159.6 159.6 159.5 162.4 162.0 162.7 25 Clay, glass, stone products 32 2.74 157.2 161.3 164.7 164.0 161.2 163.8 162.7 163.3 168.1 160.6 162.3 26 Primary metals 33 6.57 119.9 129.4 123.3 132.1 121.7 121.0 124.3 127.1 115.7 121.7 118.7 27 Iron and steel 331,2 4.21 113.2 123.8 115.9 125.3 115.8 114.3 118.1 119.0 107.2 115.0 109.4 28 Fabricated metal products. 34 5.93 141.6 144.9 147.0 147.1 148.8 150.3 149.3 149.3 146.4 146.5 147.5 29 Nonelectrical machinery. .. 35 9.15 153.6 157.5 158.0 158.1 161.8 164.3 164.5 165.3 165.9 165.1 162.3 30 Electrical machinery 36 8.05 159.4 164.2 167.4 167.7 170.6 174.7 175.1 174.4 170.0 176.7 177.0 31 Transportation equipment 37 9.27 132.5 139.7 144.2 142.9 131.6 141.9 139.4 135.5 113.2 131.7 133.5 32 Motor vehicles and parts 371 4.50 169.9 178.9 185.1 182.1 156.0 176.3 169.6 160.2 116.7 150.6 150.6 33 Aerospace and miscellaneous transportation equipment. 372-9 4.77 97.2 102.8 105.6 106.0 108.6 109.6 111.0 112.2 109.9 113.9 117.3 34 Instruments 38 2.11 167.1 170.3 174.0 173.1 176.3 174.7 175.9 174.0 175.0 172.9 175.0 35 Miscellaneous manufactures 39 1.51 151.0 151. 152.5 151.7 152.3 150.7 152.7 155.7 161.2 153.6 154.5 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 Products, total 507.4 610.2 622.1 625.0 631.1 620.8 632.3 628.7 622.7 613.0 622.6 621.7 617.4 616.9 37 Final 390.92 471.0 481.0 482.8 486.6 476.4 488.2 485.1 479.6 468.8 478.8 477.9 473.8 474.0 38 Consumer goods. 277.52 326.6 331.8 332.8 334.1 323.9 331.5 329.8 326.0 319.2 323.6 324.5 322.0 321.5 39 Equipment 113.42 144.4 149.2 150.0 152.4 152.5 156.7 155.4 153.6 149.6 155.2 153.4 151.8 152.5 40 Intermediate 116.62 139.2 141.1 142.3 144.5 144.4 144.2 143.6 143.2 144.2 143.8 143.8 143.5 142.9 1. The industrial production series has been revised. For a description NOTE. Published groupings include some series and subtotals not of the changes, see "Revision of Industrial Production Index" in the shown separately. For description and historical data, see Industrial August 1979 BULLETIN, pp. 603-05. Production—1976 Revision (Board of Governors of the Federal Reserve 2. 1972 dollars. System: Washington, D.C.), December 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • January 1980 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1979 Item 1976 1977 1978 May June July Aug. Sept. ' Oct.' Nov.p Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,296 1,677 1,801 1,618 1,639 1,528 1,654 1,775 1,542 1,267 2 1-family 894 1,125' 1,183' 1,047 1,012 1,001 1,030 1,015 927 751 3 2-or-more-family 402 551 618' 571 627 527 624 760 615 516 4 Started 1,537' 1,987' 2,020' 1,835 1,923 1,786 1,793 1,921 1,762 1,518 1,162' 1,451 1,433 1,226 1,288 1,220 1,239 1,254 1,161 966 6 2-or-more-family 375' 536' 587' 609 635 568 554 667 601 552 7 Under construction, end of period1.... 922' 1,208' 1,310' 1,244 1,247 1,237 1,232' 1,228 1,223 n.a. 8 1-family 563' 730' 765' 730 723 715 714' 718 712 n.a. 9 2-or-more-family 359' 478' 546' 514 524 522 518' 510 511 n.a. 10 Completed 1,377' 1,656' 1,868' 2,016 1,866 1,745 1,739' 1,957 1,819 n.a. 11 1-family 1,037' 1,258' 1,369' 1,344 1,345 1,192 1,199' 1,199 1,242 n.a. 12 2-or-more-family 343' 399' 498' 672 521 553 540' 758 577 n.a. 13 Mobile homes shipped 246 277 276 271 279 282 277 268 293 n.a. Merchant builder activity in 1-family units 14 Number sold 647' 820' 818' 707 689 778 746' 723 698 604 15 Number for sale, end of period1 358' 408' 419' 431' 418 416 416 413 409 399 Price (ithousands of dollars)1 Median 16 Units sold 44.3' 49.0' 55.8' 62.8' 64.2 63.8 64.0' 66.1 62.4 63.8 17 Units for sale 41.6 48.2 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Average 18 Units sold 48.1 54.4 62.7 71.8 74.3 71.9 74.0' 77.1 71.9 75.2 EXISTING UNITS (1-family) 19 Number sold 3,001' 3,572 3,905 3,860 3,560 3,770 3,850 44,,001100 33,,999900 33,,556600 Price of units sold (thous. of dollars)2 20 Median 38.1 42.8' 48.7 5555..99 56.8 57.9 57.7 57.3 56.3 55.6 42.2 47.1' 55.1 64.2 66.1 66.7 66.3 66.1 65.2 64.6 Value of new construction 3 (millions of dollars) CONSTRUCTION 22 Total put in place 151,053 173,998 206,223 223,377' 224,331' 231,068' 230,303' 232,559 238,454 235,301 23 Private 111,931 135,824 160,403 174,974' 178,348' 180,103' 180,635' 181,626 185,574 184,074 24 Residential.. 60,519 80,957 93,425 95,160' 96,937' 97,022' 97,537' 98,996 99,248 98,346 51,412 54,867 66,978 79,814' 81,411' 83,081' 83,098' 82,630 86,326 85,728 Buildings 26 Industrial 7,182 7,713 10,993 1144,,550044 14,697 15,547 13,751 13,698 15,019 14,658 27 Commercial 12,757 14,789 18,568 23,601 24,785 24,785 25,818 25,693 26,663 26,632 28 Other 6,155 6,200 6,739 7,141 7,306 7,427 7,532 7,331 7,851 7,832 29 Public utilities and other 25,318' 26,165' 30,678' 34,568' 34,623' 35,322' 35,997' 35,908 36,793 36,606 30 Public 39,120 38,172 45,821 48,402' 45,983' 50,965' 49,669' 50,932 52,880 51,228 31 Military 1,630 1,428 1,498 1,531' 1,787 1,500' 1,859' 1,658 1,855 1,665 32 Highway 9,406 8,984 10,286 11,674 10,315' 11,166 10,802 n.a. n.a. n.a. 33 Conservation and development 3,741 3,862 4,436 5,383 3,571' 5,371 5,273 n.a. n.a. n.a. 34 Other 4 24,343 23,898 29,601 29,814' 30,310' 32,928' 31,735' n.a. n.a. n.a. 1. Not at annual rates. NOTE. Census Bureau estimates for all series except (a) mobile homes, 2. Not seasonally adjusted. which are private, domestic shipments as reported by the Manufactured 3. Value of new construction data in recent periods may not be strictly Housing Institute and seasonally adjusted by the Census Bureau, and comparable with data in prior periods due to changes by the Bureau of (b) sales and prices of existing units, which are published by the Nathe Census in its estimating techniques. For a description of these changes tional Association of Realtors. All back and current figures are availsee Construction Reports (C-30-76-5), issued by the Bureau in July 1976. able from originating agency. Permit authorizations are those reported 4. Beginning January 1977 Highway imputations are included in Other. to the Census Bureau from 14,000 jurisdictions through 1977, and 16,000 jurisdictions beginning with 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Prices A51 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted 12 months to 3 months (at annual rate) to 1 month to IIInnndddeeexxx llleeevvveeelll IIIttteeemmm 1978 1979 1979 NNNooovvv... 11997788 11997799 111999777999 NNoovv.. NNoovv.. (((111999666777 Dec. Mar. June Sept. July Aug. Sept. Oct. Nov. === 111000000)))111 CONSUMER PRICES2 1 All items 9.0 12.6 8.5 13.0 13.4 13.2 1.0 1.1 1.1 1.0 1.0 227.5 2 Commodities 8.4 12.7 9.6 14.5 13.3 12.3 .9 .9 1.1 .8 .9 217.4 3 Food 11.3 9.8 10.2 17.7 7.5 4.2 . 1 0 .9 .8 .5 239.1 4 Commodities less food 7.3 13.9 9.6 12.9 15.8 16.2 1.2 1.3 1.2 .8 1.1 205.4 5 Durable 8.8 10.2 11.3 10.0 9.1 8.7 .7 .7 .7 .7 1.5 198.4 5.3 18.9 6.7 16.5 25.8 25.7 2.1 1.9 1.8 .7 .6 212.9 9.6 12.6 7.2 10.6 13.8 14.3 1.1 1.2 1.1 1.2 1.1 246.2 8 Rent 7.3 8.1 7.7 3.6 8.7 10.7 .8 .9 .8 1.3 .4 182.1 9 Services less rent 9.9 13.3 7.1 11.7 14.5 15.1 1.2 1.3 1.1 1.2 1.2 258.2 Other groupings 10 All items less food 8.4 13.3 8.5 12.0 1144..99 1155..44 1.2 11..33 1.2 11..00 1.1 224.1 11 All items less food and energy 8.6 10.7 7.7 9.3 11.2 11.5 .7 1.0 1.0 1.0 1.2 216.1 12 Homeownership 12.9 18.3 10.9 16.7 18.0 19.3 1.4 1.7 1.4 1.9 2.1 282.4 PRODUCER PRICES 8.5 12.8 10.5 14.3 7.5 15.0 1.1' 1.0' 1.4 1.0 1.3 225.9 14 Consumer 8.8 14.5 11.1 16.0 6.7 19.6 1.2 ' 1.4' 1.8 1.0 1.6 226.6 15 Foods 11.1 8.9 15.3 21.0 -11.3 13.1 .2' 1.1' 1.8 -.1 2.6 230.5 16 Excluding foods 7.5 17.7 8.8 13.4 17.9 23.2 1.8' 1.6' 1.9 1.6 1.0 222.5 17 Capital equipment 8.0 8.6 8.8 10.3 9.8 4.3 . 8r 0.0' .3 1.2 .5 223.8 18 Materials 10.2 15.8 13.0 17.9 12.0 18.5 1.8' .9' 1.6 1.7 1.1 262.9 19 Intermediate 3 8.2 15.7 11.2 14.0 15.3 18.8 1. 6r 1.2' 1.5 1.9 .9 257.8 Crude 20 Nonfood 16.4 24.9 19.8 29.2 2222..22 21.0 1.2' .7' 2.9 2.8 2.0 374.8 21 Food 19.1 11.5 21.2 31.0 -7.1 13.9 2.1 -.2 1.5 .5 2.0 246.4 1. Not seasonally adjusted. 3. Excludes intermediate materials for food manufacturing and manu- 2. Figures for consumer prices are those for all urban consumers. factured animal feeds. SOURCE. Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • January 1980 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1978 1979 AAccccoouunntt 11997766 11997777 11997788 Q2 Q3 Q4 Ql Q2 Q3r GROSS NATIONAL PRODUCT 1 Total 1,702.2 1,899.5 2,127.6 2,104.2 2,159.6 2,235.2 2,292.1 2,329.8 2,396.5 By source 2 Personal consumption expenditures 1,089.9 1,210.0 1,350.8 1,331.2 1,369.3 1,415.4 1,454.2 1,475.9 1,528.6 3 Durable goods 157.4 178.8 200.3 200.3 203.5 212.1 213.8 208.7 213.4 4 Nondurable goods 443.9 481.3 530.6 521.8 536.7 558.1 571.1 581.2 604.7 5 Services 488.5 549.8 619.8 609.1 629.1 645.1 669.3 686.0 710.6 6 Gross private domestic investment 243.0 303.3 351.5 352.3 356.2 370.5 373.8 395.4 392.3 7 Fixed investment 233.0 281.3 329.1 326.5 336.1 349.8 354.6 361.9 377.8 164.9 189.4 221.1 218.8 225.9 236.1 243.4 249.1 261.8 9 Structures 57.3 62.6 76.5 75.2 79.7 84.4 84.9 90.5 95.0 10 Producers' durable equipment 107.6 126.8 144.6 143.6 146.3 151.8 158.5 158.6 166.7 11 Residential structures 68.1 91.9 108.0 107.7 110.2 113.7 111.2 112.9 116.0 12 Nonfarm 65.7 88.8 104.4 104.3 106.4 110.0 107.8 109.1 112.0 13 Change in business inventories 10.0 21.9 22.3 25.8 20.0 20.6 19.1 33.4 14.5 14 Nonfarm 12.1 20.7 21.3 25.3 18.5 19.3 18.8 32.6 12.6 15 Net exports of goods and services 8.0 -9.9 -10.3 -7.6 -6.8 -4.5 4.0 -8.1 -2.3 16 Exports 163.3 175.9 207.2 205.7 213.8 224.9 238.5 243.7 267.3 17 Imports 155.4 185.8 217.5 213.3 220.6 229.4 234.4 251.9 269.5 18 Government purchases of goods and services 361.3 396.2 435.6 428.3 440.9 453.8 460.1 466.6 477.8 19 Federal 129.7 144.4 152.6 148.2 152.3 159.0 163.6 161.7 162.9 20 State and local 231.6 251.8 283.0 280.1 288.6 294.8 296.5 304.9 314.9 By major type of product 21 Final sales, total 1,692.1 1,877.6 2,105.2 2,078.4 2,139.5 2,214.5 2,272.9 2,296.4 2,381.9 22 Goods 762.7 842.2 930.0 922.5 940.9 983.8 1,011.8 1,018.1 1,036.0 23 Durable 305.9 345.9 380.4 378.0 382.6 402.3 425.5 422.4 424.4 24 Nondurable 456.8 496.3 549.6 544.5 558.3 581.6 586.2 595.7 611.6 25 Services 776.7 866.4 969.3 956.2 981.7 1,005.3 1,041.4 1,064.2 1,100.6 26 Structures 162.7 190.9 228.2 225.6 237.0 246.0 238.9 247.5 259.8 27 Change in business inventories 10.0 21.9 22.3 25.8 20.0 20.6 19.1 33.4 14.5 28 Durable goods 5.3 11.9 13.9 13.1 10.3 13.4 18.4 24.3 7.3 29 Nondurable goods 4.7 10.0 8.4 12.7 9.7 7.2 .7 9.1 7.2 30 MEMO: Total GNP in 1972 dollars 1,273.0 1,340.5 1,399.2 1,395.2 1,407.3 1,426.6 1,430.6 1,422.3 1,433.3 NATIONAL INCOME 31 Total 1,359.8 1,525.8 1,724.3 1,703.9 1,752.5 1,820.0 1,869.0 1,897.9 1,941.9 32 Compensation of employees 1,037.8 1,156.9 1,304.5 1,288.2 1,321.1 1,364.8 1,411.2 1,439.7 1,472.9 33 Wages and salaries 890.0 984.0 1,103.5 1,090.0 1,117.4 1,154.7 1,189.4 1,211.5 1,238.0 34 Government and government enterprises 188.0 201.3 218.0 215.3 219.2 225.1 228.1 231.2 234.4 35 Other 702.0 782.7 885.5 874.6 898.1 929.6 961.3 980.3 1,003.6 36 Supplement to wages and salaries 147.8 172.9 201.0 198.3 203.7 210.1 221.8 228.2 234.8 37 Employer contributions for social insurance... 70.4 81.2 94.6 93.6 95.5 98.2 105.8 107.9 109.9 38 Other labor income 77.4 91.8 106.5 104.7 108.2 111.9 116.0 120.3 124.9 39 Proprietors' income 1 89.3 100.2 116.8 115.0 117.4 125.7 129.0 129.3 130.3 40 Business and professional1 71.0 80.5 89.1 87.3 91.3 94.4 94.8 95.5 99.4 41 Farm1 18.3 19.6 27.7 27.7 26.1 31.3 34.2 33.7 30.9 42 Rental income of persons2 22.1 24.7 25.9 24.4 26.8 27.1 27.3 26.8 26.6 43 Corporate profits1 126.8 150.0 167.7 169.4 175.2 184.8 178.9 176.6 180.8 44 Profits before tax 3 156.0 177.1 206.0 207.2 212.0 227.4 233.3 227.9 242.3 45 Inventory valuation adjustment -14.6 -15.2 -25.2 -25.1 -23.0 -28.8 -39.9 -36.6 -44.0 46 Capital consumption adjustment -14.5 -12.0 -13.1 -12.6 -13.8 -13.8 -14.5 -14.7 -17.6 47 Net interest 83.8 94.0 109.5 106.8 111.9 117.6 122.6 125.6 131.5 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.50. 2. With capital consumption adjustments. SOURCE. Survey of Current Business (Department 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; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1978 1979 AAccccoouunntt 11997766 11997777 11997788 Q2 Q3 Q4 Ql Q2 Q3r PERSONAL INCOME AND SAVING 1 Total personal income 1,381.6 1,531.6 1,717.4 1,689.3 1,742.5 1,803.1 1,852.6 1,892.5 1,946.6 2 Wage and salary disbursements 890.0 984.0 1,103.3 1,090.0 1,116.8 1,154.3 1,189.3 1,212.4 1,238.1 3 Commodity-producing industries 307.2 343.1 387.4 383.4 393.7 408.6 423.0 431.7 438.3 4 Manufacturing 237.4 266.0 298.3 294.1 300.8 312.7 324.8 328.5 331.9 5 Distributive industries 216.3 239.1 269.4 265.9 272.5 281.6 291.1 295.8 304.0 6 Service industries 178.5 200.5 228.7 225.4 231.9 239.4 247.2 252.8 261.3 7 Government and government enterprises 188.0 201.3 217.8 215.3 218.7 224.7 228.0 232.1 234.5 8 Other labor income 77.4 91.8 106.5 104.7 108.2 111.9 116.0 120.3 124.9 9 Proprietors' income1 89.3 100.2 116.8 115.0 117.4 125.7 129.0 129.3 130.3 10 Business and professional1 71.0 80.5 89.1 87.3 91.3 94.4 94.8 95.5 99.4 11 Farm1 18.3 19.6 27.7 27.7 26.1 31.3 34.2 33.7 30.9 12 Rental income of persons2 22.1 24.7 25.9 24.4 26.8 27.1 27.3 26.8 26.6 13 Dividends 37.5 42.1 47.2 46.0 47.8 49.7 51.5 52.3 52.8 14 Personal interest income 127.0 141.7 163.3 159.4 167.2 174.3 181.0 187.6 194.4 15 Transfer payments 193.8 208.4 224.1 218.8 228.3 231.8 237.3 243.6 260.8 16 Old-age survivors, disability, and health insurance benefits 92.9 105.0 116.3 112.4 119.8 121.5 123.8 127.1 138.7 17 LESS: Personal contributions for social insurance 55.6 61.3 69.6 69.0 70.2 71.8 78.7 79.8 81.2 18 EQUALS: Personal income 1,381.6 1,531.6 1,717.4 1,689.3 1,742.5 1,803.1 1,852.6 1,892.5 1,946.6 19 LESS: Personal tax and nontax payments 197.1 226.4 259.0 252.1 266.0 278.2 280.4 290.7 306.6 20 EQUALS: Disposable personal income 1,184.5 1,305.1 1,458.4 1,437.3 1,476.5 1,524.8 1,572.2 1,601.7 1,640.0 21 LESS: Personal outlays 1,115.9 1,240.2 1,386.4 1,366.1 1,405.6 1,453.4 1,493.0 1,515.8 1,569.7 22 EQUALS: Personal saving 68.6 65.0 72.0 71.2 70.9 71.5 79.2 85.9 70.3 MEMO: Per capita (1972 dollars) 23 Gross national product 5,916 6,181 6,402 6,392 6,433 6,506 6,514 6,459 6,494 24 Personal consumption expenditures 3,813 3,974 4,121 4,099 4,138 4,197 4,197 4,155 4,195 25 Disposable personal income 4,144 4,285 4,449 4,426 4,462 4,522 4,536 4,510 4,501 26 Saving rate (percent) 5.8 5.0 4.9 5.0 4.8 4.7 5.0 5.4 4.3 GROSS SAVING 271.9 295.6 324.9 324.2 330.4 336.1 345.2 360.5 352.1 28 Personal saving 68.6 65.0 72.0 71.2 70.9 71.5 79.2 85.9 70.3 29 Undistributed corporate profits1 25.5 35.2 36.0 38.7 40.0 40.1 36.1 35.6 34.0 30 Corporate inventory valuation adjustment -14.6 -15.2 -25.2 -25.1 -23.0 -28.8 -39.9 -36.6 -44.0 Capital consumption allowances 31 Corporate 111.6 121.3 132.9 131.7 134.3 136.8 139.9 145.1 150.4 32 Noncorporate 66.1 74.1 84.0 82.7 85.2 87.7 89.9 93.9 97.5 33 Wage accruals less disbursements 34 Government surplus, or deficit ( —), national income and product accounts -35.7 -19.5 -.3 5.0 2.3 10.8 15.8 12.7 14.0 35 Federal -53.6 -46.3 -27.7 -24.6 -20.4 -16.3 -11.7 -7.0 -11.3 36 State and local 17.9 26.8 27.4 29.6 22.7 27.1 27.6 19.7 25.3 37 Capital grants received by the United States, net J J 11..11 1.1 242.3 283.6 327.9 331.5 336.5 351.0 362.8 373.1 375.6 39 Gross private domestic 243.0 303.3 351.5 352.3 356.2 370.5 373.8 395.4 392.3 40 Net foreign -.1 -19.6 -23.5 -20.8 -19.6 -19.4 -11.0 -22.3 -16.7 41 Statistical discrepancy 6.1 7.5 3.3 2.3 3.9 4.1 .6 -1.3 8.3 1. With inventory valuation and capital consumption adjustments. SOURCE. Survey of Current Business (Department of Commerce). 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 54 International Statistics • January 1980 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1978 1979 Item credits or debits 1976 1977 1978 Q3 Q4 Ql Q2' Q3 1 Balance on current account. 4,605 -14,092 -13,478' --33,,116644'' 8855'' 441155 --11,,005566 776622 2 Not seasonally adjusted.. --55,,889922'' 11,,112200'' 11,,773311 --118822 --33,,008800 Merchandise trade balance2 -9,306 -30,873 -33,770' --77,,994499'' --55,,997711'' --66,,111155 --77,,771166 --77,,228822 Merchandise exports 114,745 120,816 142,052' 3366,,553322'' 3399,,441122'' 4411,,334488 4422,,779922 4477,,333377 Merchandise imports -124,051 -151,689 -175,822' --4444,,448811'' --4455,,338833'' --4477,,446633 --5500,,550088 --5544,,661199 Military transactions, net 674 1,679 492 224477 --223399 3344 --221177 --338844 Investment income, net3 15,975 17,989 21,645 44,,995522 66,,559999 66,,886644 77,,446655 88,,779944 Other service transactions, net 2,260 1,783 3,241 881199 11,,001100 995544 777755 11,,000088 MEMO: Balance on goods and services3.4. 9,603 -9,423 -8,392' --11,,993311'' 11,,339999'' 11,,773377 330077 22,,113366 10 Remittances, pensions, and other transfers -1,851 -1,895 -1,934 -463 -524 -517 -466 -504 11 U.S. government grants (excluding military) -3,146 -2,775 -3,152 -770 -790 -805 -897 -870 12 Change in U.S. government assets, other than official reserve assets, net (increase, — ) -4,214 -3,693 -4,656 -1,390 -994 -1,094 -1,001 -756 1 1 3 4 Ch G an o g ld e in U.S. official reserve assets (increase, —)... -2,558 0 - - 1 3 1 7 8 5 - 7 6 3 5 2 11 0 5 - 1 6 8 5 2 -3,585 0 343 0 2,779 0 15 Special drawing rights (SDRs) -78 -121 1,249 -43 1,412 -1,142 6 0 16 Reserve position in International Monetary Fund. -2,212 -294 4,231 195 3,275 -86 -78 -52 17 Foreign currencies -268 158 -4,683 -37 -4,440 -2,357 415 2,831 18 Change in U.S. private assets abroad (increase, — )3. -44,498 -31,725 -57,033 -8,774 -29,442 -2,958 -15,507 -25,348 19 Bank-reported claims -21,368 -11,427 -33,023 -5,488 -21,980 6,572 -8,266 -15,956 20 Nonbank-reported claims -2,296 -1,940 -3,853 -29 -1,898 -2,719 668 n.a. 21 U.S. purchase of foreign securities, net -8,885 -5,460 -3,487 -475 -918 -1,056 -629 -2,111 22 U.S. direct investments abroad, net3 -11,949 -12,898 -16,670 -2,782 -4,646 -5,755 -7,280 -7,281 23 Change in foreign official assets in the United States (increase, +) 17,573 36,656 33,758 4,641 18,764 -9,391 -10,043 5,562 24 U.S. Treasury securities 9,319 30,230 23,542 3,029 13,422 -8,872 -12,859 5,030 25 Other U.S. government obligations 573 2,308 656 443 -115 -5 94 335 26 Other U.S. government liabilities 5 4,507 1,240 2,754 122 2,045 -164 257 191 27 Other U.S. liabilities reported by U.S. banks 969 773 5,411 963 3,156 -563 2,321 -100 28 Other foreign official assets6 2,205 2,105 1,395 84 256 213 145 106 29 Change in foreign private assets in the United States (increase, -f-)3 18,826 14,167 29,956 10,717 10,475 10,868 16,100 17,497 30 U.S. bank-reported liabilities 10,990 6,719 16,975 7,958 7,556 7,157 12,067 13,009 31 U.S. nonbank-reported liabilities -578 473 1,640 1,004 -177 -651 1,086 n.a. 32 Foreign private purchases of U. S. Treasury securities, net. 2,783 534 2,180 -1,053 1,549 2,583 -239 1,579 33 Foreign purchases of other U.S. securities, net 1,284 2,713 2,867 528 540 790 1,161 591 34 Foreign direct investments in the United States, net3 4,347 3,728 6,294 2,280 1,008 989 2,025 2,317 35 Allocation of SDRs 0 0 0 00 00 11,,113399 00 00 36 Discrepancy 10,265 -937 10,722' --22,,114455'' 993300'' 44,,660066 1111,,116633 --449955 37 Owing to seasonal adjustments --22,,771166 11,,330011 998855 773377 --33,,775566 38 Statistical discrepancy in recorded data before seasonal adjustment 10,265 -937 10,722' 557711'' --337711'' 33,,662211 1100,,442266 33,,226611 MEMO: Changes in official assets 39 U.S. official reserve assets (increase, —) -2,558 -375 732 115 182 -3,585 343 2,779 40 Foreign official assets in the United States (increase, + ) 13,066 35,416 31,004 4,519 16,719 -9,227 -10,299 5,371 41 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 25 above). . 9,581 6,351 -727 -1,794 1,803 -1,916 151 1,488 42 Transfers under military grant programs (excluded from lines 4, 6, and 11 above) 373 204 259 69 63 31 48 85 1. Seasonal factors are no longer calculated for lines 13 through 42. makes various adjustments to merchandise trade and service transactions. 2. Data are on an international accounts (IA) basis. Differs from the 5. Primarily associated with military sales contracts and other transaccensus 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 6. Consists of investments in U.S. corporate stocks and in debt securiline 6. ties of private corporations and state and local governments. 3. Includes reinvested earnings of incorporated affiliates. 4. Differs from the definition of "net exports of goods and services" in NOTE. Data are from Bureau of Economic Analysis, Survey of Current the national income and product (GNP) account. The GNP definition 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. 1979 IItteemm 11997766 11997777 11997788 May June July Aug. Sept. Oct. Nov. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 115,156 121,150 143,574 13,862 15,038 15,669 15,821 15,832 16,838 17,004 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 121,009 147,685 172,026 16,342 16,937 16,777 18,177 18,666 18,856 18,422 3 Trade balance -5,853 -26,535 -28,452 -2,480 -1,900 -1,108 -2,357 -2,833 -2,018 -1,418 NOTE. Bureau of Census data reported on a free-alongside-ship (f.a.s.) and are reported separately in the "service account"). On the import value basis. Effective January 1978, major changes were made in side, the largest single adjustment is the addition of imports into the coverage, reporting, and compiling procedures. The international- Virgin Islands (largely oil for a refinery on St. Croix), which are not accounts-basis data adjust the Census basis data for reasons of coverage included in Census statistics. and timing. On the export side, the largest adjustments are: (a) the addition of exports to Canada not covered in Census statistics, and (b) the exclusion SOURCE. FT 900 "Summary of U.S. Export and Import Merchandise of military exports (which are combined with other military transactions Trade" (U.S. Department of Commerce, Bureau of the Census). 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1979 TTyyppee 11997766 11997777 11997788 June July Aug. Sept. Oct. Nov. Dec.25 1 Total i 18,747 19,312 18,650 21,246 20,023 20,023 18,534 17,994 19,261 18,937 2 Gold stock, including exchange Stabilization Fund i 11,598 11,719 11,671 11,323 11,290 11,259 11,228 11,194 11,112 11,172 3 Special drawing rights2.3 2,395 2,629 1,558 2,670 2,690 2,689 2,725 2,659 2,705 2,724 4 Reserve position in International Monetary Fund2 4,434 4,946 1,047 1,204 1,200 1,277 1,280 1,238 1,322 1,253 5 Foreign currencies4 320 18 4,374 6,049 4,843 4,798 3,301 2,903 4,122 3,788 1. Gold held under earmark at Federal Reserve Banks for foreign and 3. Includes allocations by the International Monetary Fund of SDRs as international accounts is not included in the gold stock of the United follows: $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 States; see table 3.24. million on Jan. 1, 1972; and $1,139 million on Jan. 1, 1979; plus net 2. Beginning July 1974, the IMF adopted a technique for valuing the transactions in SDRs. SDR based on a weighted average of exchange rates for the currencies 4. Beginning November 1978, valued at current market exchange rates. of 16 member countries. The U.S. SDR holdings and reserve position in the IMF also are valued on this basis beginning July 1974. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 56 International Statistics • January 1980 3.13 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1979 Asset account 1976 1977 19781 Apr. May June July Aug. Sept. Oct.* All foreign countries 1 Total, all currencies 219,420 258,897 306,795 303,996 311,334 327,012 326,545 350,441' 360,783 358,430 2 Claims on United States 7,889 11,623 17,340 19,985 24,624 29,293 26,605 41,917 37,685 34,889 3 Parent bank 4,323 7,806 12,811 14,259 18,014 22,641 19,734 35,203 29,931 28,055 4 Other 3,566 3,817 4,529 5,726 6,610 6,652 6,871 6,714 7,754 6,834 5 Claims on foreigners 204,486 238,848 278,135 271,107 274,384 284,595 286,590 295,079 309,003 309,616 6 Other branches of parent bank 45,955 55,772 70,338 64,126 65,967 69,608 70,124 74,749 80,196 80,282 7 Banks 83,765 91,883 103,111 101,852 103,329 107,673 107,957' 111,828' 118,674 119,156 8 Public borrowers 2 10,613 14,634 23,737 24,829 24,691 24,835 24,580 24,494' 25,074 25,293 9 Nonbank foreigners 64,153 76,560 80,949 80,300 80,397 82,479 83,929 ' 84,008' 85,059 84,885 10 Other assets 7,045 8,425 11,320 12,904 12,326 13,124 13,350 13,445' 14,095 13,925 11 Total payable in U.S. dollars 167,695 193,764 224,940 222,096 228,587 238,298 234,445 259,035' 263,557 263,094 12 Claims on United States 7,595 11,049 16,382 19,015 23,676 28,223 25,536 40,799 36,454 33,612 13 Parent bank 4,264 7,692 12,625 14,020 17,832 22,387 19,478 34,939 29,700 27,648 14 Other 3,332 3,357 3,757 4,995 5,844 5,836 6,058 5,860 6,754 5,964 15 Claims on foreigners 156,896 178,896 203,498 196,560 198,717 203,729 202,426 211,663 220,665 222,441 16 Other branches of parent bank 37,909 44,256 55,408 49,661 50,790 53,136 53,629 58,255 62,058 61,992 17 Banks 66,331 70,786 78,686 77,608 79,089 81,392 79,951 84,104 89,585 90,832 18 Public borrowers 2 9,022 12,632 19,567 20,852 20,816 20,553 20,188 20,350' 20,736 20,914 19 Nonbank foreigners 43,634 51,222 49,837 48,439 48,022 48,648 48,658 48,954' 48,286 48,703 20 Other assets 3,204 3,820 5,060 6,521 6,194 6,346 6,483 6,573' 6,438 7,041 United Kingdom 21 Total, all currencies 81,466 90,933 106,593 102,876 104,915 112,881 115,217 120,703 126,018 127,949 22 Claims on United States 3,354 4,341 5,370 5,268 6,303 7,492 8,408 10,559 10,614 11,653 23 Parent bank 2,376 3,518 4,448 3,679 4,410 5,495 6,177 8,520 8,322 9,643 24 Other 978 823 922 1,589 1,893 1,997 2,231 2,039 2,292 2,010 25 Claims on foreigners 75,859 84,016 98,137 94,120 95,266 101,693 103,033 106,394 111,598 112,450 26 Other branches of parent bank 19,753 23,017 27,830 24,435 25,248 29,158 28,376 31,800 32,998 32,464 27 Banks 38,089 39,899 45,013 43,308 43,657 44,800 46,291 46,625 49,938 51,466 28 Public borrowers2 1,274 2,206 4,522 4,547 4,579 4,872 4,489 4,639 4,882 4,646 29 Nonbank foreigners 16,743 19,895 20,772 21,830 21,782 22,863 23,877 23,330 23,780 23,874 30 Other assets 2,253 2,576 3,086 3,488 3,346 3,696 3,776 3,750 3,806 3,846 31 Total payable in U.S. dollars 61,587 66,635 75,860 72,015 73,480 78,155 79,211 85,380 88,959 91,485 32 Claims on United States 3,375 4,100 5,113 4,946 5,981 7,033 7,956 10,146 10,096 11,164 33 Parent bank 2,374 3,431 4,386 3,612 4,374 5,386 6,060 8,443 8,270 9,485 34 Other 902 669 727 1,334 1,607 1,647 1,896 1,703 1,826 1,679 35 Claims on foreigners 57,488 61,408 69,416 65,356 65,968 69,451 69,496 73,503 77,145 78,428 36 Other branches of parent bank 17,249 18,947 22,838 19,866 20,505 23,999 23,481 26,983 27,631 27,092 37 Banks 28,983 28,530 31,482 29,924 30,211 29,803 30,626 31,318 34,276 36,183 3 8 Public borrowers 2 846 1,669 3,317 3,429 3,331 3,396 3,166 3,210 3,336 3,206 39 Nonbank foreigners 10,410 12,263 11,779 12,137 11,921 12,253 12,223 11,992 11,902 11,947 40 Other assets 824 1,126 1,331 1,713 1,531 1,671 1,759 1,731 1,718 1,893 Bahamas and Caymans 41 Total, all currencies 66,774 79,052 91,735 93,832 98,057 103,387 98,839 113,512 109,925 106,484 42 Claims on United States 3,508 5,782 9,635 12,859 16,360 20,001 16,613 29,021 24,731 21,368 43 Parent bank 1,141 3,051 6,429 9,332 12,244 15,956 12,566 24,929 19,919 17,105 44 Other 2,367 2,731 3,206 3,527 4,116 4,045 4,047 4,092 4,812 4,263 45 Claims on foreigners 62,048 71,671 79,774 77,992 78,869 80,579 79,476 81,370 82,296 82,068 46 Other branches of parent bank 8,144 11,120 12,904 11,756 11,886 11,295 11,760 10,745 10,834 10,514 47 Banks 25,354 27,939 33,677 33,524 34,063 36,542 35,053' 37,899' 39,128 38,820 48 Public borrowers2 7,105 9,109 11,514 12,360 12,703 12,445 12,301 11,981 12,054 12,355 49 Nonbank foreigners 21,445 23,503 21,679 20,352 20,217 20,297 20,362' 20,745' 20,280 20,379 50 Other assets 1,217 1,599 2,326 2,981 2,828 2,807 2,750 3,121 2,898 3,048 51 Total payable in U.S. dollars 62,705 73,987 85,417 87,875 91,829 96,995 92,216 106,767 103,034 99,715 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Overseas Branches A57 3.13 Continued 1979 LLiiaabbiilliittyy aaccccoouunntt 1976 1977 19781 Apr. May June July Aug. Sept. Oct.» All foreign countries 52 Total, all currencies 219,420 258,897 306,795 303,996 311,334 327,012 326,545 350,441' 360,783 358,430 53 To United States 32,719 44,154 57,948 56,020 57,620 61,064 60,097 67,744 67,558 66,001 54 Parent bank 19,773 24,542 28.464' 23,895 23,343 19,355 20,256 20,242 21,420 21,352 55 Other banks in United States 12,338 9,871 9,884 15,008' 12,436' 17,785' 18,571 14,721 56 Nonbanks 17,146' 22,254 24,393 26,701' 27,405' 29,717' 27,567 29,928 57 To foreigners 179,954 206,579 238,912 237,588 242,513 254,050 253,785 270,328 280,313 279,372 58 Other branches of parent bank. . . . 44,370 53,244 67,496 62,005 63,731 66,631 67,961 72,977 78,412 78,066 59 Banks 83,880 94,140 97,711 100,214 101,936 109,295 105,296 117,794 118,260 116,184 60 Official institutions 25,829 28,110 31,936 33,006 34,107 34,303 35,363 33,511 35,712 35,943 61 Nonbank foreigners 25,877 31,085 41,769 42,363 42,739 43,821 45,165 46,046 47,929 49,179 62 Other liabilities 6,747 8,163 9,935 10,388 11,201 11,898 12,663 12,369' 12,912 13,057 63 Total payable in U.S. dollars 173,071 198,572 230,810 226,660 232,515 243,521 240,452' 264,339 269,734 268,769 64 To United States 31,932 42,881 55,811 54,051 55,488 58,524 57,455 65,126 64,921 63,411 65 Parent bank 19,559 24,213 27,393' 22,951 22,406 18,333 19,218 19,192 20,254 20,124 66 Other banks in United States 12,084 9,668 9,651 14,711' 12,130' 17,345' 18,116 14,383 67 Nonbanks 16,334' 21,432 23,431 25,480' 26,107' 28,589' 26,551 28,904 68 To foreigners 137,612 151,363 169,927 167,133 170,847 178,631 176,613' 192,481 197,890 198,324 69 Other branches of parent bank.... 37,098 43,268 53,396 48,393 49,442 51,101 52,048 56,840 60,588 60,476 70 Banks 60,619 64,872 63,000 64,042 65,404 71,041 65,945 78,006 76,453 74,888 71 Official institutions 22,878 23,972 26,404 27,108 28,310 28,117 29,497 27,468 29,476 29,653 72 Nonbank foreigners 17,017 19,251 27,127 27,590 27,691 28,372 29,123' 30,167 31,373 33,307 73 Other liabilities 3,527 4,328 5,072 5,476 6,180 6,366 6,384 6,732 6,923 7,034 United Kingdom 74 Total, all currencies 81,466 90,933 106,593 102,876 104,915 112,881 115,217 120,703 126,018 127,949 75 To United States 5,997 7,753 9,730 10,781 11,697 12,779 13,626 17,174 18,451 19,731 76 Parent bank 1,198 1,451 1,887 1,814 2,113 1,505 1,706 2,669 2,079 2,258 7 7 8 7 N O o th n e b r a b n a k n s ks in United States )V A FY7 QO8 0, J\JZ 4 3 , , 2 6 3 1 2 1 5 3 , , 4 5 4 2 6 1 6 3 , , 2 3 2 6 4 0 4 7 , ,0 2 2 4 9 5 4 7 , , 8 0 2 9 2 8 6 8 , , 1 3 5 5 5 0 7 8 , , 7 62 4 8 4 9 8 , , 4 0 4 3 2 1 79 To foreigners 73,228 80,736 93,202 88,174 88,796 95,385 96,258 98,557 102,520 103,092 80 Other branches of parent bank.... 7,092 9,376 12,786 11,023 10,931 11,353 11,193 11,507 13,045 13,139 81 Banks 36,259 37,893 39,917 39,391 38,417 42,297 41,336 46,256 45,346 44,458 82 Official institutions 17,273 18,318 20,963 20,115 21,312 23,140 24,017 21,825 24,015 24,437 83 Nonbank foreigners 12,605 15,149 19,536 17,645 18,136 18,595 19,712 18,969 20,114 21,058 84 Other liabilities 2,241 2,445 3,661 3,921 4,422 4,717 5,333 4,972 5,047 5,126 85 Total payable in U.S. dollars 63,174 67,573 77,030 72,653 74,127 79,256 80,398 86,642 90,609 92,817 86 To United States 5,849 7,480 9,328 10,439 11,200 12,199 13,077 16,572 17,817 19,188 87 Parent bank 1,182 1,416 1,836 1,780 2,047 1,460 1,637 2,613 1,975 2,196 8 8 9 8 N Ot o h n e b r a b n a k n s ks in United States | 4 667 6 064 4 3 , , 1 3 4 4 4 8 3 5 , , 4 18 7 7 2 5 3 , , 8 30 5 1 2 4 6 , , 1 5 7 6 4 5 4 6 , , 7 6 5 8 7 3 7 6 , , 8 0 9 6 1 8 8 7, , 6 1 6 7 9 3 9 7 , , 0 9 2 6 5 7 90 To foreigners 56,372 58,977 66,216 60,689 60,948 65,081 65,403 68,035 70,717 71,560 91 Other branches of parent bank 5,874 7,505 9,635 7,706 7,777 7,711 7,377 7,720 8,663 8,955 92 Banks 25,527 25,608 25,287 24,002 22,684 25,436 23,893 28,698 27,284 26,149 93 Official institutions 15,423 15,482 17,091 16,197 17,486 19,093 20,288 18,119 20,257 20,457 94 Nonbank foreigners 9,547 10,382 14,203 12,784 13,001 12,841 13,845 13,498 14,513 15,999 95 Other liabilities 953 1,116 1,486 1,525 1,979 1,976 1,918 2,035 2,075 2,069 Bahamas and Caymans 96 Total, all currencies 66,774 79,052 91,735 93,832 98,057 103,387 98,839 113,512 109,925 106,484 97 To United States 22,721 32,176 39,431 37,676 38,713 40,023 37,939 41,734 40,582 38,280 98 Parent bank 16,161 20,956 20,356' 16,527 15,957 12,276 12,232 11,117 13,525 12,864 1 9 0 9 0 O N t o h n e b r a b n a k n s ks in United States > OJDDU 11 220 1 6 2 , , 1 8 9 7 9 6 ' 1 5 5 , , 2 9 2 2 4 5 1 5 7 , , 4 3 0 5 4 2 1 8 8 , , 9 7 7 7 3 4 1 6 9 , , 3 3 4 6 2 5 2 1 0 0 , , 4 1 2 9 5 2 ' ' 1 8 8 , , 9 1 4 1 7 0 1 5 9 , , 7 65 5 9 7 101 To foreigners 42,899 45,292 50,447 54,146 57,184 61,216 58,724 69,373 67,017 65,934 102 Other branches of parent bank 13,801 12,816 16,094 14,716 15,997 17,104 18,223 20,246 20,730 19,304 103 Banks 21,760 24,717 23,104 25,964 28,599 31,662 28,204 35,121 32,799 32,266 104 Official institutions 3,573 3,000 4,208 5,328 4,970 4,074 4,375 4,751 4,418 4,712 105 Nonbank foreigners 3,765 4,759 7,041 8,138 7,618 8,376 7,922 9,255 9,070 9,652 106 Other liabilities 1,154 1,584 1,857 2,010 2,160 2,148 2,176 2,405 2,326 2,270 107 Total payable in U.S. dollars 63,417 74,463 87,014 88,942 92,797 97,993 93,470 107,623 104,113 100,820 1. In May 1978 the exemption level for branches required to report rowers, including corporations that are majority owned by foreign governwas increased, which reduced the number of reporting branches. ments, replaced the previous, more narrowly defined claims on foreign 2. In May 1978 a broader category of claims on foreign public bor- official institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 58 International Statistics • January 1980 3.14 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1979 IItteemm 11997766 11997777 11997788 May June July Aug. Sept. Oct. Nov. 1 Total i 95,634 131,097 162,567 141,084 144,017 147,829 148,567 149,761 146,697 141,394 By type 2 Liabilities reported by banks in the United States2.. 17,231 18,003 23,274 25,720 25,349 25,640 25,259 25,619 24,942 26,642 3 U.S. Treasury bills and certificates3 37,725 47,820 67,671 43,727 46,304 49,425 50,146 5500,,884422 4499,,441111 4433,,992211 U.S. Treasury bonds and notes 4 Marketable 11,788 32,164 35,912 36,179 36,478 37,510 38,025 38,126 38,176 37,254 5 Nonmarketable 4 20,648 20,443 20,970 20,467 20,697 19,797 19,547 19,547 18,497 17,837 6 U.S. securities other than U.S. Treasury securities 5. 8,242 12,667 14,740 14,991 15,189 15,457 15,590 15,627 15,671 15,740 By area 7 Western Europe1 45,882 70,748 92,989 8811,,002255 83,523 86,630 86,505 87,137 85,481 80,967 8 Canada 3,406 2,334 2,506 1,993 1,979 2,116 2,185 2,412 1,954 1,971 9 Latin America and Caribbean 4,926 4,649 5,045 4,822 4,610 5,397 4,497 4,890 4,557 4,579 10 Asia 37,767 50,693 58,858 49,827 50,573 50,380 51,749 52,374 51,737 51,109 11 Africa 1,893 1,742 2,423 2,604 2,614 2,618 3,219 2,513 2,583 2,218 12 Other countries 6 1,760 931 746 813 718 688 412 435 385 551 1. Includes the Bank for International Settlements. 5. Debt securities of U.S. government corporations and federally 2. Principally demand deposits, time deposits, bankers acceptances, sponsored agencies, and U.S. corporate stocks and bonds. commercial paper, negotiable time certificates of deposit, and borrowings 6. Includes countries in Oceania and Eastern Europe. under repurchase agreements. 3. Includes nonmarketable certificates of indebtedness (including those NOTE. Based on Treasury Department data and on data reported to payable in foreign currencies through 1974) and Treasury bills issued to the Treasury Department by banks (including Federal Reserve Banks) official institutions of foreign countries. and securities dealers in the United States. 4. Excludes notes issued to foreign official nonreserve agencies. Includes bonds and notes payable in foreign currencies. 3.15 LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in Foreign Currencies Millions of dollars, end of period 1978 1979 IItteemm 11997766 11997777 Sept. Dec. Mar. June Sept. 1 Banks' own liabilities 781 925 1,771 2,235 1,781 1,963 2,323 2 Banks' own claims1 1,834 2,356 2,950 3,522 2,602 2,492 2,607 3 Deposits 1,103 941 1,375 1,650 1,121 1,302 1,228 4 Other claims 731 11,,441155 1,575 1,871 1,481 1,189 1,379 5 Claims of banks' domestic customers2 444466 336677 447766 552200 661122 1. Includes claims of banks' domestic customers through March 1978. NOTE. Data on claims exclude foreign currencies held by U.S. monetary 2. Assets owned by customers of the reporting bank located in the authorities. United States that represent claims on foreigners held by reporting banks for the accounts of their domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A59 3.16 LIABILITIES TO FOREIGNERS Reported by Banks in the United States Payable in U.S. dollars Millions of dollars, end of period 1979 Holder and type of liability 1976 1977 1978 May June July Aug. Sept. Oct.f Nov.? 1 All foreigners 110,657 126,168 167,087 159,114 167,855 168,957 191,491 185,695 180,601 2 Banks' own liabilities.. 78,995 93,689 100,018 97,255 117,674 111,716 107,829 3 Demand deposits 16,803 18,996 19.201 18,105 19,326 19,088 18,910 20,163 17,897 4 Time deposits1 11,347 11,521 12,473 12,650 12,735 12,608 12,968 13,048 12,249 5 Other2 9,767 13,564 12,440 12,753 12,205 12,694 12,743 6 Own foreign offices 3. 37,554 49,370 55,517 52,806 73,591 65,811 64,940 7 Banks' custody liabilities4 88,091 65,425 67,837 71,702 73,817 73,978 72,772 8 U.S. Treasury bills and certificates 5 40,744 48,906 68.202 45,103 47,425 51,467 52,258 52,429 50,452 9 Other negotiable and readily transferable instruments6 17,396 18,118 18,115 18,020 19,275 19,312 20,130 10 Other 2,493 2,203 2,296 2,215 2,284 2,237 2,190 11 Nonmonetary international and regional organizations 7 5,714 3,274 2,617 2,757 2,851 3,437 3,462 2,909 2,389 12 Banks' own liabilities. 916 1,306 1,500 844 603 491 566 13 Demand deposits. . 290 231 330 298 264 216 154 161 143 14 Time deposits1.... 205 139 94 85 87 79 87 821 82 15 Other2 492 923 1.150 549 362 248 342 16 Banks' custody liabilities4 1,701 1,451 1,350 2,593 2,859 2,418 1,823 17 U.S. Treasury bills and certificates 2,701 706 201 175 199 1,345 1,442 912 327 18 Other negotiable and readily transferable instruments6 1,499 1,274 1.151 1,247 1,416 1,505 1,494 19 Other 1 1 2 20 Official institutions 8. 54,956 65,822 90,688 69,447 71,653 75,066 75,405 76,460 74,353 21 Banks' own liabilities. 12,112 13,958 13,305 14,240 12,806 13,488 11,983 22 Demand deposits... 3,394 3,528 3,390 3,170 3,196 2,850 2,397 3,139 2,372 23 Time deposits1 2,321 1,797 2,546 2,567 2,506 2,590 2,607 2,320 1,851 24 Other2 6,176 8,221 7,604 8,800 7,801 8,029 7,759 25 Banks' custody liabilities4 78,577 55,489 58,347 60,826 62,600 62,972 62,370 26 U.S. Treasury bills and certificates5 37,725 47,820 67,415 43,727 46,304 49,425 50,146 50,842 49,411 27 Other negotiable and readily transferable instruments6 10,992 11,692 12,003 11,350 12,401 12,080 12,902 28 Other 170 70 40 50 52 51 57 29 Banks 9. 37,174 42,335 57,758 70,178 76,465 73,313 95,465 88,947 86,150 30 Banks' own liabilities 52,973 65,010 71,434 68,362 90,444 83,800 81,050 31 Unaffiliated foreign banks. 15,419 15,640 15,917 15,556 16,853 17,989 16,110 32 Demand deposits 9,104 10,933 11,239 10,278 11,138 11,361 11,757 12,425 10,603 33 Time deposits1 2,297 2,040 1,479 1,263 1,398 1,209 1,525 1,752 1,547 34 Other2 2,700 4,099 3,382 2,987 3,571 3,813 3,960 35 Own foreign offices3. 37,554 49,370 55,517 52,806 73,591 65,811 64,940 36 Banks' custody liabilities4 4,785 5,168 5,031 4,951 5,020 5,147 5,100 37 U.S. Treasury bills and certificates 119 141 300 508 407 347 384 406 400 38 Other negotiable and readily transferable instruments6 2,425 2,593 2,480 2,556 2,509 2,625 2,684 39 Other 2,060 2,066 2,145 2,048 2,127 2,116 2,017 40 Other foreigners 12,814 14,736 16,023 16,732 16,886 17,140 17,195 17,379 17,709 41 Banks' own liabilities. 12,995 13,415 13,778 13,809 13,821 13,937 14,230 42 Demand deposits... 4,015 4,304 4,242 4,358 4,729 4,661 4,602 4,439 4,779 43 Time deposits1. . .. 6,524 7,546 8,353 8,735 8,744 8,731 8,748 8,894 8,769 44 Other2 399 322 305 417 470 604 682 45 Banks' custody liabilities4 3,028 3,317 3,108 3,332 3,338 3,442 3,479 46 U.S. Treasury bills and certificates 198 240 285 693 516 350 285 269 315 47 Other negotiable and readily transferable instruments6 2,481 2,559 2,482 2,867 2,948 3,103 3,050 48 Other 262 66 111 115 105 70 114 49 MEMO: Negotiable time certificates of deposit held in custody for foreigners 11,007 10,824 10,633 10,709 11,082 11,264 1,336 1. Excludes negotiable time certificates of deposit, which are included 5. Includes nonmarketable certificates of indebtedness (including those in "Other negotiable and readily transferable instruments." Data for time payable in foreign currencies through 1974) and Treasury bills issued to deposits prior to April 1978 represent short-term only. official institutions of foreign countries. 2. Includes borrowing under repurchase agreements. 6. Principally bankers acceptances, commercial paper, and negotiable 3. U.S. banks: includes amounts due to own foreign branches and time certificates of deposit. foreign subsidiaries consolidated in "Consolidated Report of Condition" 7. Principally the International Bank for Reconstruction and Developfiled with bank regulatory agencies. Agencies, branches, and majority- ment, and the Inter-American and Asian Development Banks. owned subsidiaries of foreign banks: principally amounts due to head 8. Foreign central banks and foreign central governments and the office or parent foreign bank, and foreign branches, agencies or wholly Bank for International Settlements. owned subsidiaries of head office or parent foreign bank. 9. Excludes central banks, which are included in "Official institutions." 4. Financial claims on residents of the United States, other than longterm securities, held by or through reporting banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 60 International Statistics • January 1980 3.16 LIABILITIES TO FOREIGNERS Continued 1979 Area and country 11997766 11997777 11997788 May June July Aug. Sept. Oct.f Nov.p Total. 110,657 126,168 167,087 159,114 167,855 168,957 191,491 185,695 180,601 184,028 2 Foreign countries. 104,943 122,893 164,470 156,357 165,004 165,520 188,029 182,786 178,212 181,311 3 Europe 47,076 60,295 85,387 75,221 79,513 81,510 86,110 88,584 87,998 87,502 4 Austria 346 318 513 475 449 444 446 444 426 404 5 Belgium-Luxembourg 2,187 2,531 2,552 2,282 2,419 2,493 2,714 2,920 2,710 2,786 6 Denmark 356 770 1,946 1,526 1,165 1,560 1,412 1,100 1,001 1,165 7 Finland 416 323 346 401 457 466 508 415 334 390 8 France 4,876 5,269 9,208 9,755 9,594 9,616 9,985 10,499 9,340 10,301 9 Germany 6,241 7,239 17,286 7,617 8,492 10,724 10,434 13,129 13,154 10,801 10 Greece 403 603 826 678 684 760 695 691 632 792 11 Italy 3,182 6,857 7,674 9,751 9,656 8,458 9,676 8,551 8,481 8,344 12 Netherlands 3,003 2,869 2,402 2,889 2,628 2,355 2,627 2,281 2,174 2,160 13 Norway 782 944 1,271 1,456 1,348 1,263 1,320 1,402 1,393 1,407 14 Portugal 239 273 330 244 353 303 411 554 620 595 15 Spain 559 619 870 897 1,211 1,107 1,060 1,133 1,103 1,184 16 Sweden 1,692 2,712 3,121 2,524 2,437 2,227 2,368 2,062 2,165 2,064 17 Switzerland 9,460 12,343 18,612 13,720 15,932 16,744 15,717 16,642 16,673 17,220 18 Turkey 166 130 157 127 156 193 160 135 150 145 19 United Kingdom 10,018 14,125 14,265 16,696 18,079 18,760 22,579 22,622 24,136 24,052 20 Yugoslavia 189 232 254 184 151 159 149 142 147 147 21 Other Western Europe i 2,673 1,804 3,346 3,686 3,961 3,553 3,504 3,493 3,049 3,240 22 U.S.S.R 51 98 82 58 62 63 80 52 53 43 23 Other Eastern Europe2 236 236 325 254 277 260 265 317 259 263 24 Canada. 4,659 4,607 6,966 7,959 6,674 7,610 8,376 8,319 8,640 7,143 25 Latin America and Caribbean 19,132 23,670 31,622 40,406 44,887 41,398 56,879 49,408 47,096 51,567 26 Argentina 1,534 1,416 1,484 1,886 1,891 1,693 1,757 1,935 1,693 1,573 27 Bahamas 2,770 3,596 6,743 11,682 16,383 13,022 24,085 18,372 15,377 18,533 28 Bermuda 218 321 428 345 402 339 415 392 399 404 29 Brazil 1,438 1,396 1,125 1,576 1,332 1,294 1,040 1,198 994 1,051 30 British West Indies 1,877 3,998 5,991 9,313 8,943 8,085 13,367 11,202 11,372 12,487 31 Chile 337 360 399 368 403 465 459 420 425 356 32 Colombia 1,021 1,221 1,756 2,192 2,402 2,292 2,378 2,188 2,243 2,377 33 Cuba 6 6 13 9 7 7 6 9 7 12 34 Ecuador 320 330 322 318 391 443 449 364 482 476 35 Guatemala3 416 318 319 319 320 335 361 374 36 Jamaica3 52 78 46 104 67 175 113 74 37 Mexico 2,870 2,876 3,417 3,215 3,392 3,632 3,658 3,549 3,527 3,666 38 Netherlands Antilles 158 196 308 396 414 422 361 359 609 460 39 Panama 1,167 2,331 2,992 2,903 3,125 3,070 3,049 3,336 3,926 4,288 40 Peru 257 287 363 321 382 425 391 477 388 417 41 Uruguay 245 243 231 223 248 231 222 217 217 185 42 Venezuela 3,118 2,929 3,821 3,664 2,982 3,920 3,180 2,903 3,168 3,014 43 Other Latin America and Caribbean. 1,797 2,167 1,760 1,601 1,825 1,636 1,675 1,977 1,795 1,822 44 Asia 29,766 30,488 36,532 28,510 29,513 30,614 32,019 32,505 30,574 31,014 China 45 Mainland 48 53 67 41 46 42 41 45 49 45 46 Taiwan 990 1,013 502 598 739 769 1,027 1,231 1,339 1,413 47 Hong Kong 894 1,094 1,256 1,496 1,555 1,452 1,571 1,634 1,542 1,624 48 India 638 961 790 1,016 940 873 704 674 496 582 49 Indonesia 340 410 449 394 409 509 317 463 555 481 50 Israel 392 559 674 650 706 621 625 626 621 574 51 Japan 14,363 14,616 21,927 12,262 12,572 13,104 13,094 13,292 10,843 7,867 52 Korea 438 602 795 986 809 816 825 938 950 951 53 Philippines 628 687 644 605 690 640 619 632 598 671 54 Thailand 277 264 427 302 413 307 330 421 304 415 55 Middle East oil-exporting countries4. 9,360 8,979 7,588 8,758 9,003 9,651 11,092 10,688 11,313 14,461 56 Other Asia 1,398 1,250 1,414 1,402 1,632 1,830 1,773 1,862 1,963 1,930 57 Africa 2,298 2,535 2,886 3,056 3,237 3,226 3,818 3,194 3,141 3,105 58 Egypt 333 404 404 297 306 378 302 245 294 380 59 Morocco 87 66 32 36 45 35 40 40 30 36 60 South Africa 141 174 168 206 316 196 174 235 194 213 61 Zaire 36 39 43 47 56 37 49 73 112 104 62 Oil-exporting countries 5. 1,116 1,155 1,525 1,523 1,566 1,699 2,441 1,832 1,711 1,513 63 Other Africa 585 698 715 946 948 881 811 768 800 859 64 Other countries. 2,012 1,297 1,076 1,206 1,181 1,162 826 776 762 979 65 Australia.... 1.905 1,140 838 991 891 806 621 549 528 714 66 All other 107 158 239 215 290 355 205 227 234 266 67 Nonmonetary international and regional organizations 5,714 3,274 2,617 2,757 2,851 3,437 3,462 2,909 2,389 2,717 68 International 5,157 2,752 1,485 1,535 1,738 2,257 2,427 1,810 1,343 1,504 69 Latin American regional 267 278 808 892 829 917 793 824 755 790 70 Other regional6 290 245 324 330 284 263 242 275 291 423 1. Includes the Bank for International Settlements. Beginning April 4. Comprises Bahrain, Iran, Iraq. Kuwait, Oman, Qatar, Saudi Arabia, 1978, also includes Eastern European countries not listed in line 23. and United Arab Emirates (Trucial States). 2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, German 5. Comprises Algeria, Gabon, Libya, and Nigeria. Democratic Republic, Hungary, Poland, and Romania. 6. Asian, African, Middle Eastern, and European regional organiza- 3. Included in "Other Latin America and Caribbean" through March tions, except the Bank for International Settlements, which is included in 1978. "Other Western Europe." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A61 3.17 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period 1979 Area and country 1976 1977 1978 May June July Aug. Sept. Oct.*' Nov.f i 79,301 90,206 115,307 106,554 115,297 113,417 125,772 127,247 121,093 124,392 2 Foreign countries 79,261 90,163 115,250 106,508 115,252 113,369 125,720 127,196 121,056 124,348 3 Euroce 14,776 18,114 24,235 20,267 24,377 24,097 25,774 28,380 26,174 26,126 4 Austria 63 65 140 150 169 188 223 191 210 167 5 Belgium-Luxembourg 482 561 1,200 1,328 1,689 1,657 1,483 1,737 1,538 1,420 6 Denmark 133 173 254 168 140 137 141 166 116 149 7 Finland 199 172 305 184 186 220 247 227 230 182 8 France 1,549 2,082 3,742 2,701 3,517 3,205 3,260 3,766 2,736 3,303 9 509 644 900 792 843 944 888 1,840 1,309 1,409 10 Greece 279 206 164 156 167 130 267 194 282 171 Italy 993 1,334 1,508 1,440 1,332 1,196 1,474 1,566 1,424 1,262 12 Netherlands 315 338 680 531 516 792 559 631 618 731 13 Norway 136 162 299 196 200 181 227 238 236 257 14 Portugal 88 175 171 190 172 235 297 325 349 352 15 Spain 745 722 1,110 925 994 999 969 1,126 1,117 1,050 16 Sweden 206 218 537 231 247 401 482 459 603 548 17 Switzerland 379 564 1,283 959 1,071 1,027 714 1,179 1,171 1,232 18 Turkey 249 360 283 119 135 118 148 119 141 151 19 United Kingdom 7,033 8,964 10,156 8,530 11,272 10,697 12,347 12,394 11,837 11,502 20 Yugoslavia 234 311 363 492 535 541 571 584 578 582 21 Other Western Europe1 85 86 122 171 187 199 216 247 154 185 22 U.S.S.R 485 413 366 291 300 282 292 326 349 311 23 Other Eastern Europe2 613 566 652 713 704 950 969 1,064 1,173 1,160 24 Canada 3,319 3,355 5,152 4,712 4,899 5,063 5,017 4,787 4,333 4,367 25 Latin America and Caribbean 38,879 45,850 57,166 53,708 57,328 54,015 62,927 62,465 59,224 62,028 26 Argentina 1,192 1,478 2,281 3,406 3,200 3,339 3,257 3,285 3,653 4,157 27 Bahamas 15,464 19,858 21,515 19,996 19,113 16,572 19,931 19,146 17,405 16,018 28 Bermuda 150 232 184 198 126 192 167 172 485 460 29 Brazil 4,901 4,629 6,251 6,271 6,121 6,169 6,548 7,286 7,567 7,499 30 British West Indies 5,082 6,481 9,391 4,896 9,221 6,525 10,564 9,176 6,730 8,874 31 Chile 597 675 972 1,058 1,089 1,120 1,173 1,323 1,396 1,346 32 Colombia 675 671 1,012 1,005 1,089 1,196 1,220 1,259 1,451 1,522 33 Cuba 13 10 * 4 4 4 6 4 4 4 34 375 517 705 877 908 916 921 943 1,000 1,007 35 Guatemala 3 94 101 95 98 100 103 110 115 36 Jamaica3 40 64 40 47 30 32 29 34 37 Mexico 4,822 4,909 5,423 6,024 6,424 7,171 7,699 8,430 8,416 8,336 38 Netherlands Antilles 140 224 273 234 280 392 342 301 230 227 39 Panama 1,372 1,410 3,094 3,702 3,600 4,189 4,400 4,523 4,268 5,774 40 Peru 933 962 918 739 720 727 730 716 607 604 41 Uruguay 42 80 52 61 58 56 66 60 72 71 42 Venezuela 1,828 2,318 3,474 3,601 3,793 3,819 4,043 4,176 4,348 4,392 43 Other Latin America and Caribbean 1,293 1,394 1,487 1,470 1,447 1,483 1,731 1,531 1,455 1,587 44 1199,,220044 19,236 2255,,448888 24,893 25,535 27,138 29,107 28,546 28,471 29,054 China 45 Mainland 3 10 4 22 9 20 2299 25 55 31 46 Taiwan 1,344 1,719 1,499 1,812 1,882 1,891 1,970 1,935 1,930 1,805 47 Hong Kong 316 543 1,573 1,970 2,105 1,978 1,788 1,859 1,737 1,794 48 India 69 53 54 59 82 43 75 74 68 69 49 Indonesia 218 232 143 138 138 131 156 140 147 138 50 Israel 755 584 870 824 842 865 857 882 891 842 51 Japan 11,040 9,839 12,686 12,342 12,523 13,908 15,193 14,656 14,997 16,149 52 Korea 1,978 2,336 2,282 2,940 3,366 3,465 3,612 3,750 3,839 3,732 53 Philippines 719 594 680 697 678 743 793 638 724 642 54 Thailand 442 633 758 836 895 925 919 1,036 956 971 55 Middle East oil-exporting countries4 1,459 1,746 3,135 1,723 1,586 1,784 1,689 1,914 1,190 1,107 56 Other Asia 863 947 1,804 1,531 1,429 1,386 2,026 1,637 1,939 1,775 57 Africa 2,311 2,518 2,221 1,971 2,128 2,043 1,969 2,101 1,926 1,865 58 Egypt 126 119 107 125 178 115 126 120 122 91 59 Morocco 27 43 82 46 37 34 31 23 66 73 60 South Africa 957 1,066 860 719 745 745 730 704 602 565 61 Zaire 112 98 164 151 151 189 151 149 135 135 62 Oil-exporting countries 5 524 510 452 460 478 452 398 563 435 442 63 Other 565 682 556 471 539 508 533 542 566 559 64 Other countries 772 1,090 988 956 984 1,013 926 916 928 908 65 Australia 597 905 877 789 779 765 756 744 748 733 66 All other 175 186 111 167 205 248 170 172 180 175 67 Nonmonetary international and regional organizations6 40 43 56 46 45 47 5511 50 36 44 1. Includes the Bank for International Settlements. Beginning April 5. Comprises Algeria, Gabon, Libya, and Nigeria. 1978, also includes Eastern European countries not listed in line 23. 6. Excludes the Bank for International Settlements, which is included 2. Beginning April 1978 comprises Bulgaria, Czechoslavkia, German in "Other Western Europe." Democratic Republic, Hungary, Poland, and Romania. 3. Included in "Other Latin America and Caribbean" through March NOTE. Data for period prior to April 1978 include claims of banks' 1978. domestic customers on foreigners. 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 62 International Statistics • January 1980 3.18 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period 1979 TTyyppee ooff ccllaaiimm 11997766 11997777 11997788 May June July Aug. Sept. Oct. Nov.f 1 Total 7799,,330011 9900,,220066 111111111222222222666666666,,,,,,,,,333333333999999999222222222 111111111222222222888888888,,,,,,,,,888888888333333333999999999 111111111444444444444444444,,,,,,,,,555555555333333333777777777rrrrrrrrr 2 Banks' own claims on foreigners 111111111111111111555555555,,,,,,,,,333333333000000000777777777 111000666,,,555555444 111111111111111111555555555,,,,,,,,,222222222999999999777777777 111111333,,,444111777 111222555,,,777777222 111111111222222222777777777,,,,,,,,,222222222444444444777777777rrrrrrrrr 111222111,,,000999333 111222444,,,333999222 3 Foreign public borrowers 111111111000000000,,,,,,,,,111111111000000000333333333 111000,,,555444222 111111111111111111,,,,,,,,,222222222666666666888888888 111111,,,777333777 111222,,,444999888 111111111333333333,,,,,,,,,888888888000000000888888888rrrrrrrrr 111444,,,111333888 111333,,,555888444 444444444111111111,,,,,,,,,444444444666666666555555555 333555,,,888888999 333333333777777777,,,,,,,,,333333333444444444777777777 333666,,,222666555 444000,,,222222999 333333333999999999,,,,,,,,,444444444999999999333333333 rrrrrrrrr 333888,,,000888333 444333,,,555444000 5 Unaffiliated foreign banks 444444444000000000,,,,,,,,,444444444222222222777777777 333555,,,444111555 444444444111111111,,,,,,,,,555555555111111111222222222 333888,,,888444333 444555,,,000999111 444444444666666666,,,,,,,,,000000000111111111000000000''''''''' 333999,,,888222444 333777,,,888111999 6 Deposits 555555555,,,,,,,,,777777777222222222111111111 555,,,444999888 777777777,,,,,,,,,333333333888888888444444444 666,,,999999000 777,,,555444111 777777777,,,,,,,,,333333333999999999444444444rrrrrrrrr 666,,,999888888 555,,,777777555 7 Other 333333333444444444,,,,,,,,,777777777000000000666666666 222999,,,999111777 333333333444444444,,,,,,,,,111111111222222222888888888 333111,,,888555333 333777,,,555555000 333333333888888888,,,,,,,,,666666666111111111666666666rrrrrrrrr 333222,,,888333666 333222,,,000444444 8 All other foreigners 222222222333333333,,,,,,,,,333333333111111111222222222 222444,,,777000777 222222222555555555,,,,,,,,,111111111666666666999999999 222666,,,555777222 222777,,,999555444 222222222777777777,,,,,,,,,999999999333333333555555555 rrrrrrrrr 222999,,,000444777 222999,,,444444999 9 Claims of banks' domestic customers2 111111111111111111,,,,,,,,,000000000888888888555555555 111111111333333333,,,,,,,,,555555555444444444222222222 111111111777777777,,,,,,,,,222222222999999999000000000 10 Deposits 999999999777777777222222222 111111111,,,,,,,,,444444444222222222888888888 999999999555555555555555555 11 Negotiable and readily transferable instruments3 444444444,,,,,,,,,777777777666666666222222222 666666666,,,,,,,,,222222222333333333000000000 111111111000000000,,,,,,,,,111111111666666666111111111 12 Outstanding collections and other claims4 55,,775566 66,,117766 555555555,,,,,,,,,333333333555555555111111111 555555555,,,,,,,,,888888888888888888333333333 666666666,,,,,,,,,111111111777777777555555555 13 MEMO * Customer liability on acceptances 111111111444444444,,,,,,,,,999999999111111111888888888 111111111666666666,,,,,,,,,888888888444444444777777777 111111111999999999,,,,,,,,,777777777444444444666666666 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 12,757 19,272 17,259 20,482 20,733 18,637 21,514 n.a. 1. U.S. banks: includes amounts due from own foreign branches and 4. Data for March 1978 and for period prior to that are outstanding foreign subsidiaries consolidated in "Consolidated Report of Condition" collections only. filed with bank regulatory agencies. Agencies, branches, and majority- 5. Includes demand and time deposits and negotiable and nonnegotiable owned subsidiaries of foreign banks: principally amounts due from head certificates of deposit denominated in U.S. dollars issued by banks abroad. office or parent foreign bank, and foreign branches, agencies, or wholly For description of changes in data reported by nonbanks, see July 1979 owned subsidiaries of head office or parent foreign bank. BULLETIN, p. 550. 2. Assets owned by customers of the reporting bank located in the United States that represent claims on foreigners held by reporting banks NOTE. Beginning April 1978, data for banks' own claims are given for the account of their domestic customers. on a monthly basis, but the data for claims of banks' domestic customers 3. Principally negotiable time certificates of deposit and bankers are available on a quarterly basis only. acceptances. 3.19 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period 1978 1979 MMaattuurriittyy;; bbyy bboorrrroowweerr aanndd aarreeaa June Sept. Dec. Mar. June Sept. 1 Total 55,902 60,096 73,633 71,528 77,648 87,233 By borrower 2 Maturity of 1 year or less1 44,558 47,230 58,341 55,347 59,999 67,877 3 Foreign public borrowers 3,128 3,709 4,579 4,627 4,583 5,949 4 All other foreigners 41,430 43,521 53,762 50,720 55,416 61,928 5 Maturity of over 1 year1 11,343 12,866 15,292 16,181 17,650 19,356 6 Foreign public borrowers 3,243 4,230 5,336 5,935 6,405 7,637 7 All other foreigners 8,101 8,635 9,956 10,246 11,244 11,719 By area Maturity of 1 year or less1 8 Europe 9,710 10,513 15,121 12,376 14,040 1166,,775544 9 Canada 1,598 1,953 2,670 2,512 2,703 2,462 10 Latin American and Caribbean 17,439 18,624 20,912 21,634 23,071 25,556 11 Asia 13,831 14,014 17,572 16,993 18,181 21,182 12 Africa 1,457 1,535 1,496 1,290 1,438 1,400 13 Allother2 523 591 569 541 565 523 Maturity of over 1 year1 14 Europe 2,920 3,102 3,149 3,108 3,486 33,,666677 15 Canada 344 794 1,426 1,456 1,221 1,371 16 Latin America and Caribbean 5,900 6,877 8,469 9,336 10,267 11,794 17 Asia 1,297 1,303 1,399 1,471 1,879 1,713 18 Africa 631 580 636 629 614 622 19 Allother2 252 211 214 180 183 189 1. Remaining time to maturity. NOTE. The first available data are for June 1978. 2. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A63 3.20 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks 1 Billions of dollars, end of period 1977 1978 1979 AArreeaa oorr CCoouunnttrryy 11997755 11997766 Sept. Dec. Mar. June 2 Sept. Dec. Mar. June Sept. 1 167.0 207.7 226.7 239.4 247.2 245.7 246.7 265.4 263.6 274.4' 293.8 2 G-10 countries and Switzerland 88.0 100.1 108.8 115.3 116.6 112.8 113.7 124.9 118.9 125.0' 135.2 3 5.3 6.1 7.1 8.4 8.3 8.3 8.4 9.0 9.4 9.7 10.7 4 8.5 10.0 10.5 11.0 11.4 11.4 11.7 12.2 11.7 12.7' 12.0 5 7.8 8.7 8.6 9.6 9.0 9.1 9.7 11.4 10.5 10.8 12.9 6 5.2 5.8 6.0 6.5 6.0 6.4 6.0 6.6 5.7 6.1 6.1 7 2.8 2.8 3.0 3.5 3.4 3.4 3.5 4.4 3.8 4.0 4.7 8 1.0 1.2 1.9 1.9 2.0 2.1 2.2 2.1 2.0 2.0 2.3 9 2.4 3.0 3.3 3.3 4.0 4.1 4.3 5.4 4.5 4.8 5.0 10 36.3 41.5 44.1 46.5 46.5 45.0 44.4 47.2 46.5 50.3 53.2 11 3.8 5.1 6.6 5.8 6.9 5.1 4.9 5.9 5.8 5.5 6.0 12 14.9 15.9 17.6 18.8 19.1 17.9 18.6 20.7 19.0 19.1 22.3 10.7 15.1 18.1 18.6 20.5 19.3 18.7 19.4 18.3 18.4 19.7 .7 1.2 1.3 1.3 1.5 1.5 1.5 1.7 1.7 1.8 2.0 15 .6 1.0 1.5 1.6 1.6 1.7 1.9 2.0 2.0 2.0 2.0 16 .9 1.1 1.2 1.2 1.2 1.1 1.0 1.2 1.1 1.1 1.2 17 1.4 1.7 2.0 2.2 2.7 2.3 2.2 2.3 2.3 2.2 2.3 18 1.4 1.5 1.8 1.9 1.9 2.1 2.1 2.1 2.1 2.1 2.3 19 .3 .4 .6 .6 .7 .6 .5 .6 .6 .5 .7 70 1.9 2.8 3.5 3.6 3.6 3.6 3.5 3.4 3.0 3.0 3.3 71 .6 1.3 1.4 1.5 1.5 1.4 1.5 1.5 1.4 1.4 1.4 77 .6 .7 1.2 .9 1.4 1.2 1.0 1.2 1.1 1.2 1.5 73 1.2 2.2 2.3 2.4 2.5 2.4 2.2 2.0 1.7 11..88 1.7 24 1.3 1.2 1.5 1.4 1.9 1.4 1.3 1.4 1.3 11..33 1.3 6.9 12.6 16.5 17.6 19.2 19.1 20.4 22.7 22.6 22.7 23.3 76 .4 .7 1.1 1.1 1.3 1.4 1.6 1.6 1.5 1.6 1.6 77 2.3 4.1 5.1 5.5 5.5 5.6 6.2 7.2 7.2 7.5 7.9 28 1.6 2.2 2.2 2.2 2.1 1.9 1.9 2.0 1.9 1.9 1.9 29 1.6 4.2 6.3 6.9 8.3 8.3 8.7 9.4 9.4 9.1 9.1 30 1.0 1.4 1.9 1.9 2.0 1.9 2.0 2.5 2.6 2.6 2.8 34.2 43.1 47.6 50.0 49.9 48.9 49.5 52.4 53.8 56.1 59.8 Latin America 32 1.7 1.9 2.4 2.9 3.0 3.0 2.9 3.0 2.9 33..55 44..11 33 8.0 11.1 11.8 12.7 13.0 13.3 14.0 14.9 15.2 15.0 15.1 34 .5 .8 .8 .9 1.1 1.3 1.3 1.6 1.7 1.8 2.2 35 1.2 1.3 1.2 1.3 1.3 1.3 1.3 1.4 1.5 1.5 1.7 36 9.0 11.7 12.6 11.9 11.2 11.0 10.7 10.8 10.9 11.0 11.6 37 1.4 1.8 1.9 1.9 1.7 1.8 1.8 1.7 1.6 1.4 1.4 38 2.6 2.7 2.5 2.7 3.5 3.3 3.4 3.6 3.5 3.3 3.7 Asia China 39 * * * * * * * * .. 11 .. 11 40 1.7 2.3 2.9 3.1 2.5 2.4 2.4 2.9 33..11 33..33 33!! 55 41 .2 .2 .3 .3 .3 .2 .3 .2 .2 .2 .2 42 .9 1.0 .7 .9 .8 .7 .7 1.0 1.0 .9 1.0 43 2.4 3.1 3.6 3.9 3.7 3.6 3.5 3.9 4.2 5.0 5.3 44 .3 .5 .7 .7 .6 .6 .6 .6 .6 .7 .7 45 1.7 2.2 2.4 2.5 2.6 2.7 2.8 2.8 3.2 3.7 3.7 46 .7 .7 .9 1.7 1.1 1.1 1.1 1.2 1.2 1.4 1.6 47 .4 .4 .4 .3 .4 .3 .3 .2 .3 .4 .3 Africa 48 .4 .4 .4 .3 .3 .3 .4 .4 .4 .7 1.2 49 . 1 .2 .4 .5 .4 .5 .5 .6 .6 .5 .5 50 .3 .2 .3 .3 .3 .2 .2 .2 .2 .2 .2 51 .5 .6 1.2 1.2 1.4 1.2 1.3 1.4 1.4 1.5 1.7 3.7 5.2 5.5 6.5 6.3 6.4 6.6 6.9 6.7 6.7 7.3 53 1.0 1.5 1.5 1.6 1.4 1.4 1.4 1.3 1.1 .9 .9 54 .6 .8 1.0 1.1 1.2 1.3 1.3 1.5 1.6 1.7 11..88 55 2.1 2.8 3.0 3.8 3.7 3.7 3.9 4.1 4.0 4.1 44..66 56 Offshore banking centers 19.4 26.2 25.3 26.1 29.0 31.1 29.2 30.0 33.8 35.6 37.9 57 7.3 11.8 9.9 9.8 11.3 11.8 11.1 9.9 12.9 13.3 13.0 58 .5 .5 .5 .6 .6 .7 .7 .7 .6 .7 .7 59 Cayman Islands and other British West Indies 2.5 3.8 4.3 3.8 4.5 6.3 6.2 6.9 6.7 7.2 9.1 60 .6 .6 .6 .7 .7 .6 .6 .8 ..88 1.0 11..11 61 2.6 2.7 2.8 3.1 3.2 3.2 3.1 2.9 33..33 3.5 33..00 6 6 2 3 1 . . 2 6 2. . 3 1 3. . 1 1 3 . . 2 7 4. . 0 2 4. . 1 1 44iioo 44.. .. 33 11 44.. .. 77 11 55.. .. 22 11 5. . 5 2 64 3.8 4.4 3.9 3.7 4.0 3.8 2.9 3.9 4.2 4.2 4.9 65 Others6 -1 * -1 .5 .5 .5 .5 .5 .5 .4 .4 66 Miscellaneous and unallocated 7 4.1 5.4 5.0 5.3 5.7 8.1 8.6 9.1 9.5 9.9 10.6 1. The banking offices covered by these data are the U.S. offices and in this table include only banks' own claims payable in dollars. For foreign branches of U.S.-owned banks and of U.S. subsidiaries of foreign- earlier dates the claims of the U.S. offices also include customer claims owned banks. Offices not covered include (1) U.S. agencies and branches and foreign currency claims (amounting in June 1978 to $10 billion). of foreign banks, and (2) foreign subsidiaries of U.S. banks. To minimize 3. Includes Algeria, Bahrain, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, duplication, the data are adjusted to exclude the claims on foreign branches Oman, Qatar, Saudi Arabia, and United Arab Emirates in addition to held by a U.S. office or another foreign branch of the same banking countries shown individually. institution. The data in this table combine foreign branch claims in table 4. Foreign branch claims only through December 1976. 3.13 (the sum of lines 7 through 10) with the claims of U.S. offices in table 5. Excludes Liberia. 3.17 (excluding those held by agencies and branches of foreign banks 6. Foreign branch claims only. and those constituting claims on own foreign branches). However see 7. Includes New Zealand, Liberia, and international and regional also footnote 2. organizations. 2. For June 1978 and subsequent dates, the claims of the U.S. offices Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 64 International Statistics • January 1980 3.21 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars 1979 1979 CCoouunnttrryy oorr aarreeaa 1977 1978 N Ja o n v . . - 2' May June July Aug. Sept. Oct.f NOV.p Holdings (end of period)1 1 Estimated total2 38,640 44,938 47,218 47,494 48,991 49,575 50,257 50,888 49,884 2 Foreign countries2 33,894 39,817 43,055 43,454 44,544 44,979 45,060 45,206 44,381 3 Europe2 13,936 17,072 20,667 21,047 22,213 22,558 22,599 22,692 22,015 4 Belgium-Luxembourg 19 19 20 24 24 24 65 65 60 5 Germany2 3,168 8,705 10,828 10,751 10,781 10,952 10,953 11,082 11,337 6 Netherlands 911 1,358 1,672 1,695 1,655 1,577 1,667 1,660 1,490 7 Sweden 100 285 479 484 481 525 588 600 593 8 Switzerland 497 977 1,458 1,582 1,843 2,048 2,496 2,427 2,066 9 United Kingdom 8,888 5,373 5,697 6,016 6,938 6,895 6,193 6,191 5,955 10 Other Western Europe 349 354 513 496 491 538 637 666 513 11 Eastern Europe 4 12 Canada 288 152 216 227 232 233 233 235 234 13 Latin America and Caribbean 551 416 387 387 537 539 539 541 539 14 Venezuela 199 144 183 183 183 183 183 183 183 15 Other Latin American and Caribbean. 183 110 42 42 192 192 192 194 192 16 Netherlands Antilles 170 162 162 162 162 165 165 164 164 17 Asia 18,745 21,488 21,097 21,103 20,874 20,960 21,000 21,050 21,012 18 Japan 6,860 11,528 13,014 13,040 13,090 12,818 12,789 12,591 12,502 19 Africa 362 691 691 691 691 691 691 691 584 20 All other 11 -3 -3 -3 -3 -3 -3 -3 -3 21 Nonmonetary international and regional organizations 4,746 5,121 4,163 4,040 4,447 4,596 5,197 5,682 5,503 22 International 4,646 5,089 4,114 3,993 4,400 4,551 5,150 5,636 5,463 23 Latin American regional 100 33 48 48 48 46 46 46 40 Transactions (net purchases, or sales (—), during period) 24 Total2 22,843 6,297 4,946 -913 277 1,497 584 681 632 -1,005 25 Foreign countries2 21,130 5,921 4,564 -122 399 1,090 435 81 146 -825 26 Official institutions 20,377 3,747 1,343 -149 298 1,033 515 101 50 -922 27 Other foreign2 753 2,175 3,220 27 101 57 -81 -20 94 98 28 Nonmonetary international and regional organizations 1,713 375 384 -791 -121 407 149 600 487 -180 MEMO: Oil-exporting countries 29 Middle East 3 4,451 -1,785 -1,176 -190 8 -193 394 72 299 71 30 Africa4 --118811 332299 --110000 --110000 1. Estimated official and private holdings of marketable U.S. Treasury 2. Beginning December 1978, includes U.S. Treasury notes publicly securities with an original maturity of more than 1 year. Data are based issued to private foreign residents. on a benchmark survey of holdings as of Jan. 31, 1971, and monthly 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, transactions reports. Excludes nonmarketable U.S. Treasury bonds and and United Arab Emirates (Trucial States). notes held by official institutions of foreign countries. 4. Comprises Algeria, Gabon, Libya, and Nigeria. 3.22 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS Millions of dollars, end ot period 1979 AAsssseettss 11997766 11997777 11997788 June July Aug. Sept. Oct. Nov. Dec.? 352 424 367 326 372 325 347 351 490 429 Assets held in custody 2 U.S. Treasury securities1 66,532 91,962 117,126 95,301 99,004 98,794 100,383 97,965 90,874 95,075 3 Earmarked gold2 16,414 15,988 15,463 15,356 15,322 15,296 15,294 15,253 15,230 11,946 1. Marketable U.S. Treasury bills, notes, and bonds; and nonmarket- NOTE. Excludes deposits and U.S. Treasury securities held for interable U.S. Treasury securities payable in dollars and in foreign currencies. national and regional organizations. Earmarked gold is gold held for 2. The value of earmarked gold increased because of the changes in par foreign and international accounts and is not included in the gold stock value of the U.S. dollar in May 1972 and in October 1973. of the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Investment Transactions A65 3.23 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1979 1979 TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy 1977 1978 N J O an V - .P May June July Aug. Sept. Oct.? Nov.27 U.S. corporate securities STOCKS 1 Foreign purchases 14,155 20,142 20,264 1,579 1,860 1,766 2,382 2,074 2,385 1,910 2 Foreign sales 11,479 17,723 18,830 1,389 1,794 1,774 2,224 2,023 2,372 1,727 3 Net purchases, or sales (—) 2,676 2,420 1,434 191 66 -8 158 51 13 183 4 Foreign countries 2,661 2,466 1,423 191 67 -8 156 58 13 185 5 Europe 1,006 1,283 121 136 11 -42 -48 -107 -34 57 6 France 40 47 113 48 41 18 19 -20 -48 -19 7 Germany 291 620 -211 -1 -16 -19 -30 -37 -32 -18 8 Netherlands 22 -22 -42 -7 -15 8 -3 * 38 15 9 Switzerland 152 -585 -454 18 -3 -52 -87 -64 -68 -152 10 United Kingdom 613 1,230 787 74 5 -12 97 19 83 257 11 Canada 65 74 516 47 33 30 78 145 67 27 12 Latin America and Caribbean 127 151 -57 -18 -28 -17 45 -8 -93 -4 13 Middle East i 1,390 781 624 20 15 -7 44 41 59 133 14 Other Asia 59 187 227 9 39 32 34 -12 18 -30 15 Africa 5 -13 -12 -2 -3 -4 -4 -2 -1 1 8 3 5 -1 -1 1 7 1 -3 2 17 Nonmonetary international and regional organizations 15 -46 11 * -1 * 2 -7 * -3 BONDS2 18 Foreign purchases 7,739 7,975 7,774 863 1,081 869 729 398 827 731 19 Foreign sales 3,560 5,517 6,996 922 793 648 673 288 639 916 4,179 2,458 778 -59 288 221 56 110 188 -184 21 Foreign countries 4,083 2,049 865 87 254 222 71 23 48 -121 22 Europe 1,850 908 640 121 163 159 -5 19 88 -206 23 France -34 30 10 — l 8 -34 -3 -1 1 11 24 Germany -20 68 81 6 24 -11 -10 -1 -7 2 25 Netherlands 72 12 -182 -37 -32 -9 -19 -2 -7 -15 94 -100 -68 -41 — i -4 -8 4 * -53 27 United Kingdom 1,690 930 778 151 169 232 24 23 103 -124 28 Canada 141 102 104 4 * 8 9 17 8 -2 29 Latin America and Caribbean 64 98 98 7 -10 11 10 -4 6 12 30 Middle East* 1,695 810 -82 -73 52 40 50 -7 -39 71 31 Other Asia 338 131 110044 28 48 5 7 -4 -16 5 32 Africa -6 -1 11 * * * * 1 * * 33 Other countries * 1 1 * * * * * 1 * 34 Nonmonetary international and regional organizations 96 409 -87 -146 34 -1 -14 8877 114400 --6633 Foreign securities 35 Stocks, net purchases, or sales (—) -410 527 -740 67 -18 -67 -100 -338 -198 -84 36 Foreign purchases 2,255 3,666 4,108 554 403 329 377 420 466 365 37 Foreign sales 2,665 3,139 4,849 487 421 396 476 758 663 449 38 Bonds, net purchases, or sales (—) -5,096 -4,018 -3,661 10 -689 -345 -543 -725 -75 -335 39 Foreign purchases 8,040 11,043 11,244 860 1,011 984 1,575 829 1,081 1,080 40 Foreign sales 13,136 15,061 14,905 851 1,700 1,330 2,118 1,554 1,156 1,415 41 Net purchases, or sales (—) of stocks and bonds... -5,506 -3,491 -4,401 77 -707 -412 -643 -1,063 -273 -420 42 Foreign countries -3,949 -3,314 -3,506 76 -425 -436 -559 -914 -277 -301 43 Europe -1,100 -40 -1,355 -25 -144 -305 -290 -120 -38 -119 44 Canada -2,404 -3,238 -2,496 85 -221 -178 -128 -891 -358 -97 45 Latin America and Caribbean -82 201 419 26 53 30 30 * 11 29 46 Asia -97 350 -79 -14 -114 16 -172 92 112 -114 47 Africa 2 -441 -18 4 4 * — 1 * -6 -3 48 Other countries -267 -146 23 1 -4 2 2 5 2 3 49 Nonmonetary international and regional organizations -1,557 -177 -895 1 -282 24 -83 --115500 4 --111188 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, 2. Includes state and local government securities, and securities of U.S. Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial government agencies and corporations. Also includes issues of new debt States). securities sold abroad by U.S. corporations organized to finance direct investments abroad. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 66 International Statistics • January 1980 3.24 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States 1 Millions of dollars, end of period 1978 1979 Type, and area or country 1976 1977 1978 June Sept. Mar. June Sept. Dec. Total. 10,099 11,085 14,192 11,870 12,786 13,683 14,661 2 Payable in dollars 9,390 10,284 11,136 11,044 11,955 10,984 12,126 3 Payable in foreign currencies2.. 709 801 3,056 825 831 2,699 2,515 By type 4 Financial liabilities 5,734 5,505 5,319 5 Payable in dollars 3,469 3,433 3,453 6 Payable in foreign currencies. 2,265 2,072 1,866 7 Commercial liabilities 8,458 8,178 9,322 8 Trade payables 3,929 3,445 4,213 9 Advance receipts and other liabilities. 4,529 4,733 5,109 10 Payable in dollars 7,667 7,551 8,673 11 Payable in foreign currencies. 791 627 648 By area or country Financial liabilities 12 Europe ,772 3.528 3,336 13 Belgium-Luxembourg. 287 264 313 14 France 162 138 142 15 Germany 371 329 295 16 Netherlands 364 396 375 17 Switzerland 204 190 181 18 United Kingdom ,064 2,009 1,838 19 Canada. 203 224 195 20 Latin America and Caribbean. 996 997 1,052 21 Bahamas 422 407 438 22 Bermuda 56 41 38 23 Brazil 10 13 19 24 British West Indies 122 132 118 25 Mexico 102 101 132 26 Venezuela 46 52 65 27 Asia 754 745 725 28 Japan 671 667 656 29 Middle East oil-exporting countries3. 36 36 30 Africa 6 31 Oil-exporting countries4. 2 32 All others. Commercial liabilities 33 Europe. 2,930 2,804 3,207 34 Belgium-Luxembourg. 75 70 80 35 France 317 339 339 36 Germany 529 394 473 37 Netherlands 208 194 202 38 Switzerland 314 329 439 39 United Kingdom 760 804 946 40 Canada. 663 612 659 41 Latin America 990 1,138 1,313 42 Bahamas 25 16 65 43 Bermuda 95 40 80 44 Brazil 74 61 165 45 British West Indies. 53 89 121 46 Mexico 105 236 203 47 Venezuela 303 356 323 48 Asia 2,946 2,632 3,003 49 Japan 431 412 500 50 Middle East oil-exporting countries3. 1,543 1,117 1,222 51 Africa 724 754 894 52 Oil-exporting countries4. 313 345 412 53 All others. 205 239 246 1. For a description of the changes in the International Statistics 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, tables, see July 1979 BULLETIN, p. 550. and United Arab Emirates (Trucial States). 2. Prior to December 1978, foreign currency data include only liabilities 4. Comprises Algeria, Gabon, Libya, and Nigeria. denominated in foreign currencies with an original maturity of less than 5. Includes nonmonetary international and regional organizations. one year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A67 3.25 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States 1 Millions of dollars, end of period 1978 1979 Type, and area or country 1976 1977 1978 June Sept. Mar. June Sept. Dec. 1 Total. 19,350 21,298 27,193 23,229 23,260 29,714 29,048 2 Payable in dollars 18,300 19,880 24,223 21,665 21,292 26,939 26,181 3 Payable in foreign currencies2. 1,050 1,418 2,971 1,564 1,968 2,775 2,867 By type 4 Financial claims 15,884 18,995 18,009 5 Deposits 10,770 13,899 12,835 6 Payable in dollars 9,707 12,991 11,873 7 Payable in foreign currencies. 1,063 908 961 8 Other financial claims 5,115 5,096 5,174 9 Payable in dollars 3,541 3,567 3,635 10 Payable in foreign currencies. 1,574 1,529 1,540 11 Commercial claims 11,309 10,719 11,039 12 Trade receivables 10,662 9,963 10,325 13 Advance payments and other claims. 647 756 714 14 Payable in dollars 10,976 10,381 10,673 15 Payable in foreign currencies. 333 338 366 By area or country Financial claims 16 Europe 5,010 5,191 5.486 17 Belgium-Luxembourg. 48 63 54 18 France 174 170 182 19 Germany 530 266 361 20 Netherlands 103 86 80 21 Switzerland 98 96 81 22 United Kingdom 3,814 4,283 4,491 23 Canada. 4,463 5,137 4,964 24 Latin America and Caribbean. 5,271 7,598 6.487 25 Bahamas 2,857 4,098 3,165 26 Bermuda 80 62 57 27 Brazil 151 137 122 28 British West Indies 1,275 2,438 2,264 29 Mexico 168 166 164 30 Venezuela 148 141 148 31 Asia 918 826 797 32 Japan 306 206 216 33 Middle East oil-exporting countries3. 18 17 17 34 Africa 182 204 227 35 Oil-exporting countries 4. 10 26 23 36 All others. 41 39 48 Commercial claims 37 Europe 3,939 3,818 3,820 38 Belgium-Luxembourg. 143 172 169 39 France 609 490 472 40 Germany 395 501 420 41 Netherlands 257 271 303 42 Switzerland 208 248 243 43 United Kingdom 803 681 712 44 Canada. 1,105 1,113 1,144 45 Latin America and Caribbean. 2,535 2,382 2,403 46 Bahamas 109 117 98 47 Bermuda 215 241 118 48 Brazil 625 490 500 49 British West Indies 9 10 25 50 Mexico 506 488 582 51 Venezuela 292 273 295 52 Asia 3,090 2,757 2,985 53 Japan 977 895 1,008 54 Middle East oil-exporting countries3. 712 670 691 55 Africa 451 446 490 56 Oil-exporting countries 4. 137 132 140 57 All other 5. 188 203 198 1. For a description of the changes in the International Statistics 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, tables, see July 1979 BULLETIN, p. 550. and United Arab Emirates (Trucial States). 2. Prior to December 1978, foreign currency data include only liabilities 4. Comprises Algeria, Gabon, Libya, and Nigeria. denominated in foreign currencies with an original maturity of less than 5. Includes nonmonetary international and regional organizations. one year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 68 International Statistics • January 1980 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on Dec. 31, 1979 Rate on Dec. 31,1979 Rate on Dec. 31,1979 Country Country Country Per- Month Per- Month Per- Month cent effective cent effective cent effective Argentina 18.0 Feb. 1972 France 9.5 Aug. 1977 9.0 Nov. 1979 Austria... 3.75 Jan. 1979 Germany, Fed. Rep. of. 6.0 Nov. 1979 9.0 Nov. 1979 Belgium. . 10.5 Dec. 1979 Italy 12.0 Oct. 1979 2.0 Nov. 1979 Brazil 33.0 Nov. 1978 Japan 6.25 Nov. 1979 United Kingdom 17.0 Nov. 1979 Canada... 14.0 Oct. 1979 Mexico 4.5 June 1942 8.5 May 1979 Denmark. 11.0 Sept. 1979 Netherlands 9.5 Nov. 1979 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. 3.27 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1979 CCoouunnttrryy,, oorr ttyyppee 1977 1978 1979 July Aug. Sept. Oct. Nov. Dec. 6.03 8.74 11.96 10.87 11.53 12.61 14.59 15.00 14.51 8.07 9.18 13.60 13.87 14.06 14.11 14.12 16.09 16.71 7.47 8.52 11.91 11.29 11.78 11.89 13.34 14.19 14.02 4.30 3.67 6.64 6.77 7.04 7.82 8.84 9.57 9.54 2.56 0.74 2.04 1.19 1.67 1.94 2.57 3.97 5.67 4.73 6.53 9.33 9.53 9.51 9.82 10.09 11.86 14.56 7 France 9.20 8.10 9.44 9.90 10.85 11.67 12.14 12.72 12.55 8 Italy 14.26 11.40 11.85 11.46 11.50 11.51 12.71 13.12 16.01 6.95 7.14 10.48 11.18 11.42 11.88 12.99 14.17 14.49 6.22 4.75 6.10 6.26 7.00 7.00 7.01 8.13 8.42 NOTE. Rates are for 3-month interbank loans except for the following: francs and over; and Japan, loans and discounts that can be called after Canada, finance company paper; Belgium, time deposits of 20 million being held over a minimum of two month-ends. 3.28 FOREIGN EXCHANGE RATES Cents per unit of foreign currency 1979 CCoouunnttrryy//ccuurrrreennccyy 11997777 11997788 11997799 July Aug. Sept. Oct. Nov. Dec. 1 Australia/dollar 110.82 114.41 111.77 112.83 112.83 112.63 111.31 109.34 110.30 2 Austria/schilling 6.0494 6.8958 7.4799 7.4628 7.4786 7.7211 7.7570 7.8345 8.0039 3 Belgium/franc 2.7911 3.1809 3.4098 3.4240 3.4140 3.4684 3.4656 3.4822 3.5423 4 Canada/dollar 94.112 87.729 85.386 85.920 85.425 85.814 85.084 84.771 85.471 5 Denmark/krone 16.658 18.156 19.010 19.072 18.964 19.279 19.110 19.034 18.618 6 Finland/markka 24.913 24.337 25.732 26.040 26.075 26.242 26.483 26.428 26.830 7 France/franc 20.344 22.218 23.504 23.535 23.491 23.826 23.809 24.065 24.614 8 Germany/deutsche mark 43.079 49.867 54.561 54.817 54.666 55.758 55.884 56.470 57.671 9 India/rupee 11.406 12.207 12.265 12.651 12.484 12.289 12.159 12.209 12.350 10 Ireland/pound 174.49 191.84 204.65 206.79 205.79 209.18 208.28 208.70 212.76 11 Italy/lira .11328 .11782 .12035 .12192 .12219 .12326 .12112 .12112 .12329 .37342 .47981 .45834 .46189 .45890 .44963 .43405 .40834 .41613 13 Malaysia/ringgit 40.620 43.210 45.720 46.422 46.363 46.382 46.074 45.661 45.931 14 Mexico/peso 4.4239 4.3896 4.3826 4.3767 4.3804 4.3858 4.3825 4.3726 4.3768 15 Netherlands/guilder 40.752 46.284 49.843 49.821 49.805 50.635 50.379 50.686 52.092 16 New Zealand/dollar 96.893 103.64 102.23 102.04 101.40 100.28 98.564 96.813 98.100 17 Norway/krone 18.789 19.079 19.747 19.824 19.877 20.080 20.143 19.928 20.092 18 Portugal/escudo 2.6234 2.2782 2.0437 2.0551 2.0332 2.0297 1.9992 1.9852 2.0036 19 South Africa/rand 114.99 115.01 118.72 118.46 119.38 119.91 120.79 120.32 120.79 20 Spain/peseta 1.3287 1.3073 1.4896 1.5118 1.5132 1.5135 1.5117 1.5051 1.5039 21 Sri Lanka/rupee 11.964 6.3834 6.4226 6.3786 6.4174 6.4126 6.4000 6.4053 6.4300 22 Sweden/krona 22.383 22.139 23.323 23.687 23.693 23.860 23.747 23.677 23.935 23 Switzerland/franc 41.714 56.283 60.121 60.650 60.349 62.087 61.350 60.870 62.542 24 United Kingdom/pound 174.49 191.84 212.24 225.98 223.68 219.66 214.38 213.52 220.07 MEMO: 25 United States/dollar* 103.31 92.39 88.09 86.93 87.24 86.73 87.67 88.12 86.32 1. Index of weighted average exchange value of U.S. dollar against cur- the Weighted-Average Exchange Value of the U.S. Dollar: Revision" on rencies of other G-10 countries plus Switzerland. March 1973 = 100. page 700 of the August 1978 BULLETIN. Weights are 1972-76 global trade of each of the 10 countries. Series revised as of August 1978. For description and back data, see "Index of NOTE. Averages of certified noon buying rates in New York for cable transfers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 69 Guide to Tabular Presentation and Statistical Releases GUIDE TO TABULAR PRESENTATION Symbols and Abbreviations c Corrected 0 Calculated to be zero e Estimated n.a. Not available p Preliminary n.e.c. Not elsewhere classified r Revised (Notation appears on column heading IPCs Individuals, partnerships, and corporations when more than half of figures in that column REITs Real estate investment trusts are changed.) RPs Repurchase agreements * Amounts insignificant in terms of the last decimal SMSAs Standard metropolitan statistical areas place shown in the table (for example, less than Cell not applicable 500,000 when the smallest unit given is millions) General Information Minus signs are used to indicate (1) a decrease, (2) a negative gations of the Treasury. "State and local government" also figure, or (3) an outflow. includes municipalities, special districts, and other political "U.S. government securities" may include guaranteed is- subdivisions. sues of U.S. government agencies (the flow of funds figures In some of the tables details do not add to totals because of also include not fully guaranteed issues) as well as direct obli- rounding. STATISTICAL RELEASES List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for individual releases December 1979 A-76 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 70 Federal Reserve Board of Governors PAUL A. VOLCKER, Chairman HENRY C. WALLICH FREDERICK H. SCHULTZ, Vice Chairman PHILIP E. COLDWELL OFFICE OF BOARD MEMBERS OFFICE OF STAFF DIRECTOR FOR MONETARY AND FINANCIAL POLICY JOSEPH R. COYNE, Assistant to the Board JAY PAUL BRENNEMAN, Special Assistant to the Board STEPHEN H. AXILROD, Staff Director FRANK O'BRIEN, JR., Special Assistant to the Board EDWARD C. ETTIN, Deputy Staff Director JOSEPH S. SIMS, Special Assistant to the Board MURRAY ALTMANN, Assistant to the Board DONALD J. WINN, Special Assistant to the Board PETER M. KEIR, Assistant to the Board STANLEY J. SIGEL, Assistant to the Board NORM AND R. V. BERNARD, Special Assistant to the Board LEGAL DIVISION NEAL L. PETERSEN, General Counsel DIVISION OF RESEARCH AND STATISTICS ROBERT E. MANNION, Deputy General Counsel CHARLES R. MCNEILL, Assistant to the General Counsel JAMES L. KICHLINE, Director J. VIRGIL MATTINGLY, Assistant General Counsel JOSEPH S. ZEISEL, Deputy Director GILBERT T. SCHWARTZ, Assistant General Counsel JOHN H. KALCHBRENNER, Associate Director MICHAEL J. PRELL, Associate Director ROBERT A. EISENBEIS, Senior Deputy Associate Director OFFICE OF THE SECRETARY JOHN J. MINGO, Senior Deputy Associate Director ELEANOR J. STOCK WELL, Senior Deputy Associate Director THEODORE E. ALLISON, Secretary JAMES M. BRUNDY, Deputy Associate Director GRIFFITH L. GARWOOD, Deputy Secretary JARED J. ENZLER, Deputy Associate Director * WILLIAM N. MCDONOUGH, Assistant Secretary J. CORTLAND G. PERET, Deputy Associate Director RICHARD H. PUCKETT, Manager, Regulatory Improvement HELMUT F. WENDEL, Deputy Associate Director Project ROBERT M. FISHER, Assistant Director FREDERICK M. STRUBLE, Assistant Director STEPHEN P. TAYLOR, Assistant Director DIVISION OF CONSUMER LEVON H. GARABEDIAN, Assistant Director (Administration) AND COMMUNITY AFFAIRS JANET O. HART, Director DIVISION OF INTERNATIONAL FINANCE NATHANIEL E. BUTLER, Associate Director JERAULD C. KLUCKMAN, Associate Director EDWIN M. TRUMAN, Director ROBERT F. GEMMILL, Associate Director GEORGE B. HENRY, Associate Director DIVISION OF BANKING CHARLES J. SIEGMAN, Associate Director SUPERVISION AND REGULATION SAMUEL PIZER, Staff Adviser JEFFREY R. SHAFER, Deputy Associate Director JOHN E. RYAN, Director DALE W. HENDERSON, Assistant Director FREDERICK R. DAHL, Associate Director LARRY J. PROMISEL, Assistant Director WILLIAM TAYLOR, Associate Director RALPH W. SMITH, JR., Assistant Director WILLIAM W. WILES, Associate Director JACK M. EGERTSON, Assistant Director ROBERT A. JACOBSEN, Assistant Director DON E. KLINE, Assistant Director ROBERT S. PLOTKIN, Assistant Director THOMAS A. SIDMAN, Assistant Director SAMUEL H . TALLEY, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 71 and Official Staff J. CHARLES PARTEE EMMETT J. RICE NANCY H. TEETERS OFFICE OF OFFICE OF STAFF DIRECTOR FOR STAFF DIRECTOR FOR MANAGEMENT FEDERAL RESERVE BANK ACTIVITIES JOHN M. DENKLER, Staff Director WILLIAM H. WALLACE, Staff Director EDWARD T. MULRENIN, Assistant Staff Director HARRY A. GUINTER, Assistant Director for Contingency JOSEPH W. DANIELS, SR. , Director of Equal Employment Op- Planning portunity DIVISION OF FEDERAL RESERVE DIVISION OF DATA PROCESSING BANK OPERATIONS CHARLES L. HAMPTON, Director JAMES R. KUDLINSKI, Director BRUCE M. BEARDSLEY, Associate Director CLYDE H. FARNSWORTH, JR., Deputy Director UYLESS D. BLACK, Assistant Director WALTER ALTHAUSEN, Assistant Director GLENN L. CUMMINS, Assistant Director CHARLES W. BENNETT, Assistant Director ROBERT J. ZEMEL, Assistant Director BRIAN M. CAREY, Assistant Director LORIN S. MEEDER, Assistant Director P. D. RING, Assistant Director DIVISION OF PERSONNEL RAYMOND L. TEED, Assistant Director DAVID L. SHANNON, Director JOHN R. WEIS, Assistant Director CHARLES W. WOOD, Assistant Director OFFICE OF THE CONTROLLER JOHN KAKALEC, Controller GEORGE E. LIVINGSTON, Assistant Controller DIVISION OF SUPPORT SERVICES DONALD E. ANDERSON, Director JOHN L. GRIZZARD, Associate Director WALTER W. KREIMANN, Associate Director *On loan from the Federal Reserve Bank of Boston. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 72 Federal Reserve Bulletin • January 1980 FOMC and Advisory Councils FEDERAL OPEN MARKET COMMITTEE PAUL A. VOLCKER, Chairman JOHN BALLES MONROE KIMBREL FREDERICK H. SCHULTZ ROBERT BLACK ROBERT MAYO NANCY H. TEETERS PHILIP E. COLDWELL J. CHARLES PARTEE HENRY C. WALLICH EMMETT J. RICE MURRAY ALTMANN, Secretary EDWARD C. ETTIN, Associate Economist NORMANDR. V. BERNARD, Assistant Secretary GEORGE B. HENRY, Associate Economist NEAL L. PETERSEN, General Counsel PETER M. KEIR, Associate Economist JAMES H. OLTMAN, Deputy General Counsel MICHAEL KERAN, Associate Economist ROBERT E. MANNION, Assistant General Counsel JAMES L. KICHLINE, Associate Economist STEPHEN H. AXILROD, Economist JAMES PARTHEMOS, Associate Economist ALAN R. HOLMES, Adviser for Market Operations KARL SCHELD, Associate Economist HARRY BRANDT, Associate Economist EDWIN M. TRUMAN, Associate Economist RICHARD G. DAVIS, Associate Economist JOSEPH S. ZEISEL, Associate Economist PETER D. STERNLIGHT, Manager for Domestic Operations, System Open Market Account SCOTT E. PARDEE, Manager for Foreign Operations, System Open Market Account FEDERAL ADVISORY COUNCIL HENRY S. WOODBRIDGE, JR., First District ROGER E. ANDERSON, Seventh District WALTER B. WRISTON, Second District CLARENCE C. BARKSDALE, Eighth District WILLIAM B. EAGLESON, JR., Third District CLARENCE G. FRAME, Ninth District MERLE E. GILLIAND, Fourth District J. W. MCLEAN, Tenth District J. OWEN COLE, Fifth District JAMES D. BERRY, Eleventh District FRANK A. PLUMMER, Sixth District CHAUNCEY E. SCHMIDT, Twelfth District HERBERT V. PROCHNOW, Secretary WILLIAM J. KORSVIK, Associate Secretary CONSUMER ADVISORY COUNCIL WILLIAM D. WARREN, Los Angeles, California, Chairman MARCIA A. HAKALA, Omaha, Nebraska, Vice Chairman JULIA H. BOYD, Washington, D.C. HARVEY M. KUHNLEY, Minneapolis, Minnesota ROLAND E. BRANDEL, San Francisco, California ROBERT J. MCEWEN, S.J., Boston, Massachusetts ELLEN BROADMAN, Washington, D.C. R. C. MORGAN, El Paso, Texas JAMES L. BROWN, Milwaukee, Wisconsin MARGARET REILLY-PETRONE, Upper Montclair, New Jersey MARK E. BUDNITZ, Atlanta, Georgia RENE REIXACH, Rochester, New York ROBERT V. BULLOCK, Frankfort, Kentucky FLORENCE M. RICE, New York, New York RICHARD S. D'AGOSTINO, Philadelphia, Pennsylvania RALPH J. ROHNER, Washington D.C. JOANNE FAULKNER, New Haven, Connecticut HENRY B. SCHECHTER, Washington, D.C. VERNARD W. HENLEY, Richmond, Virginia PETER D. SCHELLIE, Washington, D.C. JUAN JESUS HINOJOSA, McAllen, Texas E. G. SCHUHART, II, Amarillo, Texas SHIRLEY T. HOSOI, LOS Angeles, California CHARLOTTE H. SCOTT, Charlottesville, Virginia F. THOMAS JUSTER, Ann Arbor, Michigan RICHARD A. VAN WINKLE, Salt Lake City, Utah RICHARD F. KERR, Cincinnati, Ohio RICHARD D. WAGNER, Simsbury, Connecticut ROBERT J. KLEIN, New York, New York MARY W. WALKER, Monroe, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 73 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* ..02016 Robert M. Solow Frank E. Morris Robert P. Henderson James A. Mcintosh NEW YORK* .,10045 Robert H. Knight Vacancy Boris Yavitz Thomas M. Timlen Buffalo ..14240 Frederick D. Berkeley, III John T. Keane PHILADELPHIA 19105 John W. Eckman David P. Eastburn Werner C. Brown Richard L. Smoot CLEVELAND* ,.44101 Robert E. Kirby Willis J. Winn Arnold R. Weber Walter H. MacDonald Cincinnati ..45201 Lawrence H. Rogers, II Robert E. Showaiter Pittsburgh ..15230 G. J. Tankersley Robert D. Duggan RICHMOND* 23261 Maceo A. Sloan Robert P. Black Steven Muller George C. Rankin Baltimore 21203 I. E. Killian Jimmie R. Monhollon Charlotte 28230 Robert E. Elberson Stuart P. Fishburne Culpeper Communications and Records Center 22701 Albert D. Tinkelenberg ATLANTA 30303 Vacancy Monroe Kimbrel William A. Fickling, Jr. Robert P. Forrestal Birmingham 35202 William H. Martin, III Hiram J. Honea Jacksonville ,,32203 Copeland D. Newbern Charles D. East Miami 33152 Castle W. Jordan F. J. Craven, Jr. Nashville ..37203 Cecelia Adkins Jeffrey J. Wells New Orleans 70161 Levere C. Montgomery Pierre M.Viguerie CHICAGO* 60690 Robert H. Strotz Robert P. Mayo John Sagan Daniel M. Doyle Detroit 48231 Jordan B. Tatter William C. Conrad ST. LOUIS 63166 Armand C. Stalnaker Lawrence K. Roos William B. Walton Donald W. Moriarty, Jr. Little Rock 72203 G. Larry Kelley John F. Breen Louisville 40232 James F. Thompson Donald L. Henry Memphis ,38101 Frank A. Jones, Jr. L. Terry Britt MINNEAPOLIS ..55480 Stephen F. Keating Mark H. Willes William G. Phillips Thomas E. Gainor Helena ..59601 Patricia P. Douglas Betty J. Lindstrom KANSAS CITY 64198 Vacancy Roger Guffey Joseph H. Williams Henry R. Czerwinski Denver 80217 A. L. Feldman Wayne W. Martin Oklahoma City ,73125 Christine H. Anthony William G. Evans Omaha .68102 Durward B. Varner Robert D. Hamilton DALLAS . .75222 Irving A. Mathews Ernest T. Baughman Gerald D. Hines Robert H. Boykin El Paso ..79999 A. J. Losee Joel L. Koonce Jr. Houston ..77001 Gene M. Woodfin J. Z. Rowe San Antonio ..78295 Pat Legan Carl H. Moore SAN FRANCISCO .... ,94120 Joseph F. Alibrandi John J. Balles Cornell C. Maier John B. Williams Los Angeles ..90051 Caroline L. Ahmanson Richard C. Dunn Portland . .97208 Loran L. Stewart Angelo S. Carella Salt Lake City 84125 Wendell J. Ashton A. Grant Holman Seattle ..98124 Lloyd E. Cooney Gerald R. Kelly *Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016; Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; 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 Copies are available from PUBLICATIONS SERVICES. request and be made payable to the order of the Board of ROOM MP-510, BOARD OF GOVERNORS OF THE FED- Governors of the Federal Reserve System. Remittance from ERAL RESERVE SYSTEM, WASHINGTON, D.C. 20551. foreign residents should be drawn on a U.S. bank. Stamps When a charge is indicated, remittance should accompany and coupons are not accepted. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNC- BANK CREDIT-CARD AND CHECK-CREDIT PLANS. 1968. 102 TIONS. 1974. 125 pp. pp. $1.00 each; 10 or more to one address, $.85 each. ANNUAL REPORT. SURVEY OF CHANGES IN FAMILY FINANCES. 1968. 321 pp. FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or $1.00 each; 10 or more to one address, $.85 each. $2.00 each in the United States, its possessions, Canada, REPORT OF THE JOINT TREASURY-FEDERAL RESERVE STUDY and Mexico; 10 or more of same issue to one address, OF THE U.S. GOVERNMENT SECURITIES MARKET. 1969. $18.00 per year or $1.75 each. Elsewhere, $24.00 per 48 pp. $.25 each; 10 or more to one address, $.20 each. year or $2.50 each. JOINT TREASURY-FEDERAL RESERVE STUDY OF THE GOV- BANKING AND MONETARY STATISTICS, 1914-1941. (Reprint ERNMENT SECURITIES MARKET: STAFF STUDIES—PART of Part I only) 1976. 682 pp. $5.00. 1. 1970. 86 pp. $.50 each; 10 or more to one address, $.40 BANKING AND MONETARY STATISTICS, 1941-1970. 1976. each. Part 2, 1971. 153 pp. and Part 3. 1973. 131 pp. Each 1,168 pp. $15.00. volume $1.00; 10 or more to one address, $.85 each. ANNUAL STATISTICAL DIGEST OPEN MARKET POLICIES AND OPERATING PROCEDURES— 1971-75. 1976. 339 pp. $4.00 per copy for each paid sub- STAFF STUDIES. 1971. 218 pp. $2.00 each; 10 or more to scription to Federal Reserve Bulletin; all others $5.00 one address, $1.75 each. REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT MECHA- 1972-76. 1977. 377 pp. $10.00 per copy. NISM. Vol. 1. 1971. 276 pp. Vol. 2. 1971. 173 pp. Vol. 3. 1973-77. 1978. 361 pp. $12.00 per copy. 1972. 220 pp. Each volume $3.00; 10 or more to one ad- 1974-78. 1980. 305 pp. $10.00 per copy. dress, $2.50 each. FEDERAL RESERVE CHART BOOK. Issued four times a year in THE ECONOMETRICS OF PRICE DETERMINATION CONFER- February, May, August, and November. Subscription ENCE, October 30-31, 1970, Washington, D.C. 1972. 397 includes one issue of Historical Chart Book. $7.00 per pp. Cloth ed. $5.00 each; 10 or more to one address, year or $2.00 each in the United States, its possessions, $4.50 each. Paper ed. $4.00 each; 10 or more to one ad- Canada, and Mexico. Elsewhere, $10.00 per year or dress, $3.60 each. $3.00 each. FEDERAL RESERVE STAFF STUDY: WAYS TO MODERATE HISTORICAL CHART BOOK. Issued annually in Sept. Subscrip- FLUCTUATIONS IN HOUSING CONSTRUCTION. 1972. 487 tion to Federal Reserve Chart Book includes one issue. pp. $4.00 each; 10 or more to one address, $3.60 each. $1.25 each in the United States, its possessions, Canada, LENDING FUNCTIONS OF THE FEDERAL RESERVE BANKS. and Mexico; 10 or more to one address, $1.00 each. Else- 1973. 271 pp. $3.50 each; 10 or more to one address, where, $1.50 each. $3.00 each. CAPITAL MARKET DEVELOPMENTS. Weekly. $15.00 per year IMPROVING THE MONETARY AGGREGATES: REPORT OF THE or $.40 each in the United States, its possessions, Cana- ADVISORY COMMITTEE ON MONETARY STATISTICS. 1976. 43 pp. $1.00 each; 10 or more to one address, $.85 da, and Mexico; 10 or more of same issue to one address, each. $13.50 per year or $.35 each. Elsewhere, $20.00 per year or $.50 each. ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— Regulation Z) Vol. / (Regular Transactions). 1969. 100 SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SEpp. Vol. II (Irregular Transactions). 1969. 116 pp. Each RIES OF CHARTS. Weekly. $15.00 per year or $.40 each in volume $1.00; 10 or more of same volume to one adthe United States, its possessions, Canada, and Mexico; dress, $.85 each. 10 or more of same issue to one address, $13.50 per year or $.35 each. Elsewhere, $20.00 per year or $.50 each. FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one THE FEDERAL RESERVE ACT, as amended through December address, $1.50. each. 1976, with an appendix containing provisions of certain other statutes affecting the Federal Reserve System. 307 THE BANK HOLDING COMPANY MOVEMENT TO 1978: A COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to pp. $2.50. one address, $2.25 each. REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- IMPROVING THE MONETARY AGGREGATES: STAFF PAPERS. ERAL RESERVE SYSTEM 1978. 170 pp. $4.00 each; 10 or more to one address, PUBLISHED INTERPRETATIONS OF THE BOARD OF GOVER- $3.75 each. NORS, as of Dec. 31, 1979. $7.50. 1977 CONSUMER CREDIT SURVEY. 1978. 119 pp. $2.00 each. INDUSTRIAL PRODUCTION: 1976 Edition. 1977. 304 pp. $4.50 FLOW OF FUNDS. 1979. 171 pp. $1.75 each; 10 or more to each; 10 or more to one address, $4.00 each. one address, $1.50 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 75 CONSUMER EDUCATION PAMPHLETS • Short pamphlets suitable for classroom use. Multiple MEASUREMENT OF CAPACITY UTILIZATION: PROBLEMS AND copies available without charge. TASKS, by Frank de Leeuw, Lawrence R. Forest, Jr., Richard D. Raddock, and Zoltan E. Kenessey. July 1979. The Board of Governors of the Federal Reserve System 264 pp. Consumer Handbook To Credit Protection Laws THE MARKET FOR FEDERAL FUNDS AND REPURCHASE The Equal Credit Opportunity Act and . . . Age AGREEMENTS, by Thomas D. Simpson. July 1979. 106 pp. The Equal Credit Opportunity Act and . . . Credit Rights in IMPACT OF BANK HOLDING COMPANIES ON COMPETITION Housing AND PERFORMANCE IN BANKING MARKETS, by Stephen The Equal Credit Opportunity Act and . . . Doctors, A. Rhoades and Roger D. Rutz. Aug. 1979. 30 pp. Lawyers, Small Retailers, and Others Who May Provide THE GNMA-GUARANTEED PASSTHROUGH SECURITY: MAR- Incidental Credit KET DEVELOPMENT AND IMPLICATIONS FOR THE GROWTH The Equal Credit Opportunity Act and . . . Women AND STABILITY OF HOME MORTGAGE LENDING, by Fair Credit Billing David F. Seiders. Dec. 1979. 65 pp. The Federal Open Market Committee Federal Reserve Bank Board of Directors Printed in Full in the Bulletin Federal Reserve Banks AN ASSESSMENT OF BANK HOLDING COMPANIES, by Federal Reserve Glossary Robert J. Lawrence and Samuel H. Talley. January 1976. How to File A Consumer Credit Complaint If You Borrow To Buy Stock If You Use A Credit Card REPRINTS Truth in Leasing Except for Staff Studies, and some leading articles, most U.S. Currency of the articles reprinted do not exceed 12 pages. WHAT TRUTH IN LENDING MEANS TO YOU. Measures of Security Credit. 12/70. Revision of Bank Credit Series. 12/71. STAFF STUDIES Assets and Liabilities of Foreign Branches of U.S. Banks. Studies and papers on economic and financial subjects that 2/72. are of general interest. Bank Debits, Deposits, and Deposit Turnover—Revised Series. 7/72. Summaries Only Printed in the Bulletin Yields on Newly Issued Corporate Bonds. 9/72. Requests to obtain single copies of the full text or to be One-Bank Holding Companies Before the 1970 Amendadded to the mailing list for the series may be sent to Pub- ments. 12/72. lications Services. Yields on Recently Offered Corporate Bonds. 5/73. Rates on Consumer Instalment Loans. 9/73. New Series for Large Manufacturing Corporations. 10/73. INTEREST RATE CEILINGS AND DISINTERMEDIATION, by Edward F. McKelvey. Sept. 1978. 105 pp. The Structure of Margin Credit. 4/75. THE RELATIONSHIP BETWEEN RESERVE RATIOS AND THE Industrial Electric Power Use. 1/76. MONETARY AGGREGATES UNDER RESERVES AND FED- Revision of Money Stock Measures. 2/76. ERAL FUNDS RATE OPERATING TARGETS, by Kenneth J. Revised Series for Member Bank Deposits and Aggregate Re- Kopecky. Dec. 1978. 58 pp. serves. 4/76. TIE-INS BETWEEN THE GRANTING OF CREDIT AND SALES OF Industrial Production— 1976 Revision. 6/76. INSURANCE BY BANK HOLDING COMPANIES AND OTHER Federal Reserve Operations in Payment Mechanisms: A LENDERS, by Robert A. Eisenbeis and Paul R. Schweitzer. Summary. 6/76. Feb. 1979. 75 pp. New Estimates of Capacity Utilization: Manufacturing and GEOGRAPHIC EXPANSION OF BANKS AND CHANGES IN BANK- Materials. 11/76. ING STRUCTURE, by Stephen A. Rhoades. Mar. 1979. 40 Bank Holding Company Financial Developments in 1976. 4/77. pp. Survey of Terms of Bank Lending—New Series. 5/77. IMPACT OF THE DOLLAR DEPRECIATION ON THE U.S. PRICE The Commercial Paper Market. 6/77. LEVEL: AN ANALYTICAL SURVEY OF EMPIRICAL ESTI- The Federal Budget in the 1970's. 9/78. MATES, by Peter Hooper and Barbara R. Lowrey. Apr. Redefining the Monetary Aggregates. 1/79. 1979. 53 pp. U.S. International Transactions in 1978. 4/79. INNOVATIONS IN BANK LOAN CONTRACTING: RECENT EVI- Implementation of the International Banking Act. 10/79. DENCE by Paul W. Boltz and Tim S. Campbell. May 1979. Changes in Bank Lending Practices, 1977-79. 10/79. 40 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 76 Index to Statistical Tables References are to pages A-3 through A-68 although the prefix "A" is omitted in this index ACCEPTANCES, bankers, 11,25,27 Deposits (See also specific types) Agricultural loans, commercial banks, 18,20-22, 26 Banks, by classes, 3, 16, 17,19,20-23,29 Assets and liabilities (See also Foreigners) Federal Reserve Banks, 4,12 Banks, by classes, 16, 17,18,20-23,29 Subject to reserve requirements, 15 Domestic finance companies, 39 Turnover, 13 Federal Reserve Banks, 12 Discount rates at Reserve Banks (See Interest rates) Nonfinancial corporations, current, 38 Discounts and advances by Reserve Banks (See Loans) Automobiles Dividends, corporate, 37 Consumer installment credit, 42,43 Production, 48,49 EMPLOYMENT, 46, 47 Eurodollars, 27 BANKERS balances, 16, 18, 20, 21, 22. (See also Foreigners) Banks for Cooperatives, 35 FARM mortgage loans, 41 Bonds (See also U.S. government securities) Farmers Home Administration, 41 New issues, 36 Federal agency obligations, 4, 11,12,13,34 Yields, 3 Federal and federally sponsored credit agencies, 35 Branch banks Federal finance Assets and liabilities of foreign branches of U.S. banks, 56 Debt subject to statutory limitation and types and Liabilities of U.S. banks to their foreign branches, 23 ownership of gross debt, 32 Business activity, 46 Receipts and outlays, 30, 31 Business expenditures on new plant and equipment, 38 Treasury operating balance, 30 Business loans (See Commercial and industrial loans) Federal Financing Bank, 30,35 Federal funds, 3,6, 18, 20, 21, 22,27,30 CAPACITY utilization, 46 Federal Home Loan Banks, 35 Capital accounts Federal Home Loan Mortgage Corporation, 35,40,41 Banks, by classes, 16, 17, 19,20 Federal Housing Administration, 35,40,41 Federal Reserve Banks, 12 Federal Intermediate Credit Banks, 35 Central banks, 68 Federal Land Banks, 35,41 Certificates of deposit, 23, 27 Federal National Mortgage Association, 35,40,41 Commercial and industrial loans Federal Reserve Banks Commercial banks, 15, 18,26 Condition statement, 12 Weekly reporting banks, 20, 21,22,23, 24 Discount rates (See Interest rates) Commercial banks U.S. government securities held, 4, 12, 13, 32, 33 Assets and liabilities, 3, 15-19, 20-23 Federal Reserve credit, 4, 5, 12,13 Business loans, 26 Federal Reserve notes, 12 Commercial and industrial loans, 24, 26 Federally sponsored credit agencies, 35 Consumer loans held, by type, 42,43 Finance companies Loans sold outright, 23 Assets and liabilities, 39 Number, by classes, 16, 17,19 Business credit, 39 Real estate mortgages held, by type of holder and Loans, 20, 21, 22,42, 43 property, 41 Paper, 25,27 Commercial paper, 3, 25, 27, 39 Financial institutions, loans to, 18,20-22 Condition statements (See Assets and liabilities) Float, 4 Construction, 46, 50 Flow of funds, 44,45 Consumer installment credit, 42,43 Foreign Consumer prices, 46, 51 Currency operations, 12 Consumption expenditures, 52, 53 Deposits in U.S. banks, 4,12,19,20,21,22 Corporations Exchange rates, 68 Profits, taxes, and dividends, 37 Trade, 55 Security issues, 36,65 Foreigners Cost of living (See Consumer prices) Claims on, 56, 58,61,62, 63,67 Credit unions, 29,42,43 Liabilities to, 23, 56-60, 64-66 Currency and coin, 5,16,18 Currency in circulation, 4,14 GOLD Customer credit, stock market, 28 Certificates, 12 Stock, 4,55 DEBITS to deposit accounts, 13 Government National Mortgage Association, 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 Banks, by classes, 16, 17,19,20-23 Ownership by individuals, partnerships, and INCOME, personal and national, 46, 52,53 corporations, 25 Industrial production, 46,48 Subject to reserve requirements, 15 Installment loans, 42,43 Turnover, 13 Insurance companies, 29, 32,33,41 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 77 Insured commercial banks, 17, 18,19 Real estate loans—continued Interbank loans and deposits, 16,17 Life insurance companies, 29 Interest rates Mortgage terms, yields, and activity, 3,40 Bonds, 3 Type of holder and property mortgaged, 41 Business loans of banks, 26 Reserve position, basic, member banks, 6 Federal Reserve Banks, 3,8 Reserve requirements, member banks, 9 Foreign countries, 68 Reserves Money and capital markets, 3,27 Commercial banks, 16, 18, 20,21,22 Mortgages, 3,40 Federal Reserve Banks, 12 Prime rate, commercial banks, 26 Member banks, 3,4, 5,15,16,18 Time and savings deposits, 10 U.S. reserve assets, 55 International capital transactions of the United States, 56-67 Residential mortgage loans, 40 International organizations, 56-61,64-67 Retail credit and retail sales, 42,43,46 Inventories, 52 Investment companies, issues and assets, 37 SAVING Investments (See also specific types) Flow of funds, 44,45 Banks, by classes, 16,17,18,20,21,22,29 National income accounts, 53 Commercial banks, 3,15,16,17,18 Savings and loan assns., 3, 10, 29, 33,41,44 Federal Reserve Banks, 12,13 Savings deposits (See Time deposits) Life insurance companies, 29 Savings institutions, selected assets, 29 Savings and loan associations, 29 Securities (See also U.S. government securities) Federal and federally sponsored agencies, 35 LABOR force, 47 Foreign transactions, 65 Life insurance companies (See Insurance companies) New issues, 36 Loans (See also specific types) Prices, 28 Banks, by classes, 16, 17, 18, 20-23, 29 Special drawing rights, 4, 12, 54, 55 Commercial banks, 3,15-18,20-23,24,26 State and local governments Federal Reserve Banks, 3,4,5,8,12,13 Deposits, 19,20,21,22 Insurance companies, 29,41 Holdings of U.S. government securities, 32, 33 Insured or guaranteed by United States, 40,41 New security issues, 36 Savings and loan associations, 29 Ownership of securities of, 18,20, 21, 22, 29 Yields of securities, 3 MANUFACTURING State member banks, 17 Capacity utilization, 46 Stock market, 28 Production, 46,49 Stocks (See also Securities) Margin requirements, 28 New issues, 36 Member banks Prices, 28 Assets and liabilities, by classes, 16,17, 18 Borrowings at Federal Reserve Banks, 5,12 TAX receipts, federal, 31 Number, by classes, 16, 17, 19 Time deposits, 3,10, 13, 15,16,17,19,20,21,22,23 Reserve position, basic, 6 Trade, foreign, 55 Reserve requirements, 9 Treasury currency, Treasury cash, 4 Reserves and related items, 3,4,5,15 Treasury deposits, 4,12,30 Mining production, 49 Treasury operating balance, 30 Mobile home shipments, 50 Monetary aggregates, 3,15 UNEMPLOYMENT, 47 Money and capital market rates (See Interest rates) U.S. balance of payments, 54 Money stock measures and components, 3, 14 U.S. government balances Mortgages (See Real estate loans) Commercial bank holdings, 19, 20, 21, 22 Mutual funds (See Investment companies) Member bank holdings, 15 Mutual savings banks, 3, 10, 20-22, 29, 32, 33, 41 Treasury deposits at Reserve Banks, 4,12, 30 U.S. government securities NATIONAL banks, 17 Bank holdings, 16, 17, 18,20,21,22,29, 32,33 National defense outlays, 31 Dealer transactions, positions, and financing, 34 National income, 52 Federal Reserve Bank holdings, 4,12,13, 32, 33 Nonmember banks, 17, 18, 19 Foreign and international holdings and transactions, 12, 32, 64 OPEN market transactions, 11 Open market transactions, 11 Outstanding, by type and ownership, 32, 33 PERSONAL income, 53 Rates, 3,27 Prices Utilities, production, 49 Consumer and producer, 46,51 Stock market, 28 VETERANS Administration, 40,41 Prime rate, commercial banks, 26 Production, 46,48 WEEKLY reporting banks, 20-24 Profits, corporate, 37 Wholesale prices, 46, 51 REAL estate loans YIELDS (See Interest rates) Banks, by classes, 18,20-22,29,41 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories Helena Chicagi cisco 'ngeles Dallas® January 1978 ALASKA LEGEND Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories • Federal Reserve Bank Facility © Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis