Federal Reserve Bulletin, 1980-08

Volume 66 □ N umber 8 □ August 1980 FED ER A L R ESERVE BULLETIN B oard o f G overn ors o f th e F ed eral R eserv e S y stem W ash in gton , D .C . P u b l ic a t io n s C o m m it t e e 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. The artwork is provided by the Graphic Communications Section under the direction of Peter G. Thomas. 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 613 Perspectives on P ersonal Saving Lending Act that removes the 5 percent limit on discounts for cash, before the Sub­ Discussion of personal saving, which has committee on Consumer Affairs of the Sen­ attracted increased attention in recent ate Committee on Banking, Housing, and years, with particular emphasis on its sharp Urban Affairs, July 24, 1980. decline in the 1975-79 business expansion. 642 Governor Henry C. Wallich testifies on a 627 DOMESTIC FINANCIAL DEVELOPMENTS bill that would facilitate the establishment in th e Second Q uarter o f 1980 and operation of export trading companies and recommends a ceiling on the ownership Quarterly report to Congress on financial interest held by either individual banks or a developments: interest rates reached rec­ group of banks in an export trading com­ ord levels in early spring and then fell pany, before the Senate Committee on Bank­ steeply until they came to a halt near the ing, Housing, and Urban Affairs, July 25, end of the period. 1980. 635 In du strial P roduction 644 Chairman Volcker discusses the actions taken by the Depository Institutions Dereg­ Output decreased about 1.6 percent in July. ulation Committee (DIDC) including the DIDC’s most significant decision—adjust­ 636 Statem ents to C ongress ing the ceiling rates payable on both 6- and Chairman Paul A. Volcker offers his per­ 30-month floating ceiling deposits by chang­ sonal perspective on monetary policy and ing the relationship of the rates to those on stresses the need to maintain financial dis­ the corresponding Treasury securities and cipline in retoring price stability, particular­ establishing minimum ceilings for each of ly in light of evidence that inflation under­ the deposit categories—before the Senate cuts other goals such as balanced growth Committee on Banking, Housing, and Ur­ and full employment, before the Senate ban Affairs, August 5, 1980. Budget Committee on July 24, 1980. Similar testimony was presented also to the House 649 Announcem ents Committee on Banking, Finance and Urban Letter to Congress concerning monetary Affairs, the Senate Committee on Banking, target ranges for 1981. Housing, and Urban Affairs, the House Ways and Means Committee, and the Tentative schedule for implementation of Senate Finance Committee. the Monetary Control Act. 641 Governor Nancy H. Teeters presents the Change in discount rate. Board’s endorsement of the Consumer Return of special deposits held under the Usury Study Commission Act and offers Board’s credit restraint program. the views of the Board on other consumerrelated legislation including its support for Amendment to Regulation Z that increases the integration of the Fair Credit Billing Act the tolerance for accuracy in annual per­ and the Electronic Fund Transfer Act, as centage rates for certain mortgage transac­ well as the amendment to the Truth in tions. (See Legal Developments.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Approval of policy for assessment of civil Al Financial and Business S tatistics money penalties for violation of certain A3 Domestic Financial Statistics laws. A46 Domestic Nonfinancial Statistics Amendment to Regulation T that permits A54 International Statistics brokers and dealers to lend on mutual funds A69 Special Tables shares. A73 Guide to Tabular P resentation Interpretation of Regulation Y pertaining to and S tatistical R eleases operations subsidiaries of bank holding companies. (See Legal Developments.) A74 Board o f G overnors and S ta ff Changes in Board staff. A76 F ederal Open M arket Com m ittee Admission of one state bank to member­ and S taff; A dvisory C ouncils ship in the Federal Reserve System. a h Federal Reserve Banks, 653 L egal D evelopm ents Branches, and Offices Amendments to Regulations D and Z and the credit restraint program; interpretation A78 F ederal R eserve B oard of Regulation Y; various rules and bank P ublications holding company and bank merger orders; and pending cases. A83 INDEX TO STATISTICAL TABLES A85 Map o f F ederal R eserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Perspectives on Personal Saving Carol Corrado and Charles Steindel of the Na­ tion attention turns to the balance sheet of the tional Income Section of the Board's Division of household sector. Personal saving is then viewed Research and Statistics prepared this article within the broader context of aggregate saving with the assistance of Jeffrey Fuhrer. Footnotes and capital formation. The concluding section appear at the end of the article. summarizes the findings and discusses some of their implications. Personal saving behavior has recently attracted attention both as an element in the analysis of cyclical movements in the economy and as an in­ Personal Saving and Spending dicator of prospects for capital formation. One focus of discussion—and frequently of con­ Saving may be described as the abstention from cern—has been the sharp decline in the ratio of current consumption, or it may be viewed as the personal saving to disposable personal income purchase of a capital asset. This section first dis­ during the 1975-79 business expansion. cusses broad trends in the composition of per­ Consumers often step up their rate of saving sonal saving flows characterized by type of asset during periods of economic expansion, after hav­ acquired. That discussion is followed by a more ing spent relatively large proportions of their in­ detailed examination of the allocation of dis­ come to maintain their living standards when the posable personal income to gain further insight in­ economy fell into recession. During the most re­ to the forces that have been motivating increases cent expansion, the behavior of personal saving in spending at the expense of saving. did not follow this pattern. Immediately follow­ Table 1 lays out a framework that is relevant as ing the cyclical trough in early 1975, the rate of background for analyzing saving flows. It shows personal saving reached an extremely high level as income was buoyed by the payment of a tax rebate. Then in 1976 the personal saving rate be­ 1. Personal saving rate gan to fall, and from the second half of 1976 Percent through the first half of 1979, it generally fluc­ tuated around 5V4 percent, about 1 percentage point below its postwar mean (chart 1). Sub­ sequently, the saving rate fell sharply further, and by the end of 1979 it had reached 3V2 per­ cent, the lowest quarterly level in almost 30 years. In the first half of 1980, the rate of per­ sonal saving rose somewhat; still, it remained in a historically low range as the economy entered a period of business recession. Average value 1952-79 The analysis that follows examines these re­ cent developments in personal saving behavior. The first section takes a detailed look at both per­ sonal saving flows and—the other side of the coin—consumer spending patterns. Because the National income and product accounts data, plotted annually to 1967 behavior of consumers is influenced strongly by and quarterly from 1967 Q4. Shaded areas represent periods of busi­ ness recession as defined by the National Bureau of Economic Re­ their holdings of assets or debts, in the next sec­ search (NBER). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

614 Federal Reserve Bulletin □ August 1980 1. Relation of current and capital account transactions less net increase in liabilities. Financial as­ with stock-flow reconciliation sets acquired by households include deposits and other claims on financial institutions, as well as Type of account and type of transaction claims directly held against governments, for­ Current account Capital account eigners, and corporate and noncorporate busi­ Income or expenditure Household balance sheet ness. Increases in household debt are sub­ transaction transaction tractions from the investment flows, and, on net, (1) (2) NIPA personal saving excluding capital ex­ Disposable personal Net investment in tangible income assets penditures on new homes is a measure of funds plus: Net financial investment made available by households for use by other (net acquisition of sectors.1 financial assets less net increase in Purchases of consumer durable goods are part less: Personal outlays liabilities) of consumption in the NIPA; hence personal sav­ equals: Personal saving equals: Hous o e r h p ol e d r s n o e n t a i l n s v a e v s i t n m g ent, ing is reduced by the value of outlays on these goods. The purchase of a durable good such as plus: Net revaluations of physical and financial an automobile or a home appliance, however, assets due to price changes constitutes for many people an investment in a tangible asset rather than a current consumption equals: Change in the value of consumer net worth outlay. The reasoning is that these goods have long lives and provide services that are con­ sumed by the owners over those lives. There­ the relation between transactions on the current fore, in recognition of the investment character account, in which saving is measured as the of durable goods, for some purposes it is desir­ difference between disposable personal income able to modify the NIPA concept of personal and personal outlays, and transactions on the saving by adding in the net purchases of con­ capital account, in which saving is measured as sumer durables.2 the sum of purchases of tangible and financial The top curve of chart 2 shows this broader assets minus increases in debt. These two mea­ measure of total consumer investment (or sav­ sures of personal saving are in principle equiv­ ing) that includes consumer durables as well as alent if they rest on consistent definitions of net new owner-occupied housing and net financial worth and of the income earned by the net worth. 2. Components of consumer investment relative to disposable personal income The Composition of Personal Saving Percent In the national income and product accounts (NIPA), personal saving is measured on current account, as shown in column 1 of table 1. In the equivalent capital account transactions, de­ scribed in column 2, the major type of house­ hold tangible investment is the purchase of new housing by owner-occupants, net of deprecia­ Housing tion. New housing predominates in the household investment total because most purchases of Net financial investment existing homes are also sales, or disinvestments, by other individuals and cancel out for the sector as a whole. Apart from net capital expenditures on homes, NIPA data. Shaded areas represent periods of business recession as defined by the NBER. household investment according to NIPA con­ Housing covers expenditures by owner-occupants only. Both con­ cepts consists mainly of net financial invest­ sumer durables and housing are net of capital consumption. Net finan­ cial investment is derived as a residual and includes net investment in ment—that is, net acquisition of financial assets noncorporate business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Perspectives on Personal Saving 615 2. Average rate of consumer investment, selected periods 1955-791 Percent of disposable personal income Item r 1955-79 1955-64 1965-74 1975-79 1975-76 1977-79 NIPA saving plus net purchases of consumer durables...................... 9.5 8.2 10.8 8.9 9.7 8.4 Net purchases of tangible assets2.......................... 6.5 6.4 6.4 6.7 5.4 7.4 Consumer durables................................................ 3.4 2.4 3.9 3.4 3.0 3.6 Owner-occupied housing....................................... 3.1 4.0 2.5 3.3 2.4 3.8 Net financial investment3......................................... 3.0 1.7 4.4 2.2 4.3 1.0 Acquisition of financial assets3............................ 10.4 7.5 10.5 11.6 11.0 11.9 Less: Increase in liabilities................................... 7.4 5.9 6.1 9.4 6.6 10.9 MEMO: NIPA saving rate................................................... 6.1 5.7 6.9 5.5 6.7 4.8 1. All rates calculated as average value of item for the period, di­ Sources. The National Income and Product Accounts of the vided by average value of disposable personal income. Details may United States, 1929-74: Statistical Tables (Department of Commerce, not sum to totals because of rounding. Bureau of Economic Analysis); subsequent issues of the Survey of 2. Excluding nonprofit plant and equipment expenditures. Current Business; Flow of Funds Accounts 1949-78 (Board of Gover­ 3. Derived as residual; includes net investment in noncorporate nors of the Federal Reserve System), and subsequent issues of the business. flow of funds statistical release. investment. The middle curve excludes durables tion of its income to saving, as the high propensi­ and is the more widely used NIPA concept of ty to acquire tangible assets is typically out­ personal saving. Finally, the bottom portion is weighed by low rates of net financial investment the rate of net financial household investment associated with stepped-up borrowing. (which includes net investment in noncorporate During this five-year period, however, the business). distinct break in the orientation of consumer The composition of the broad measure of sav­ investment appears too abrupt to have been ing has varied substantially over subperiods of solely demographic in origin. Between 1975the past 25 years (see table 2). Between 1955 and 76—a period that encompasses the trough of the 1964, investment in owner-occupied housing was last recession—and 1977-79, the rate of total tan­ at a notably high rate. As the chart highlights, gible investment jumped sharply, pushed partic­ this strength was especially evident during the ularly by the housing component. Net financial mid-1950s, when household formation was rapid investment by households fell substantially, as a and demands for shelter pent up during World modest increase in the rate of acquisition of fi­ War II and its aftermath were still being worked nancial assets was more than outweighed by a off. From the mid- to the late 1960s, all measures dramatic rise in borrowing. The increase in tan­ of saving trended upward; then a leveling-off be­ gible investment and the fall in net financial in­ gan that lasted through the mid-1970s. During vestment resulted in a decline in the broad mea­ this ten-year period of high saving, the rate of sure of saving during 1977-79 to about the average household acquisition of durable goods and fi­ level of the late 1950s and early 1960s. nancial assets was particularly strong. It has been suggested that during recent years For the five years ending in 1979 the broad the accumulation of tangible goods, and the bor­ measure of saving averaged about 2 percentage rowing normally associated with those purchases, points lower than the levels that had prevailed has been bolstered by the anticipation of price during the high-saving period of 1965-74. The to­ increases. To the extent that stockpiling of tangi­ tal dropped as increases in the rate of acquisition ble goods is financed by borrowing or liquidation of both owner-occupied housing and financial as­ of other assets, it does not affect the broad mea­ sets were offset by a rise in household borrowing sure of saving. But because the rise in borrowing of more than 3 percentage points. In part, outstripped the increase in net tangible invest­ these changes in the composition of consumer ment in the late 1970s, much of the increase in investment may have reflected demographic funds raised probably financed consumer spend­ trends: During the late 1970s a significant ing, including household capital consumption, portion of the nation’s population matured to the rather than the accumulation of durable goods or age when traditionally households are formed housing. and their homes are equipped. On the average, The decline in the NIPA saving rate between this age group devotes a relatively low propor­ 1975-76 and 1977-79 was somewhat larger than Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

616 Federal Reserve Bulletin □ August 1980 the fall in the broad measure of saving. The dis­ posable personal income during the late 1960s crepancy is the result of a moderate increase, and 1970s, and other financial costs also rose; 0.6 percentage point, in the rate of acquisition of meanwhile the share of income devoted to prop­ consumer durables, probably arising from demo­ erty taxes paid by homeowners declined slightly graphic trends and normal cyclical influences as during the second half of the 1970s. On balance, well as stockpiling. Inasmuch as the rate of net therefore, when the low-saving period 1977-79 is purchases of consumer durable goods in 1977-79 compared with the high-saving period 1970-74, was not out of line with historical experience, the growth of total contractual outlays, which is factors other than the stockpiling of durable dominated by the rise in interest costs, accounts goods played a more important role in account­ for 1 percentage point of the rise of more than 2 ing for the recent low levels of the NIPA saving percentage points in total NIPA outlays relative rate. A look at the allocation of disposable per­ to income. sonal income in greater detail is useful in investi­ Another category of obligatory payments en­ gating further the overall decline in this rate. compasses outlays on goods and services typi­ cally thought of as “essential”—household oper­ ation, personal transportation, medical care, Allocation of Disposable Personal Income food and clothing, and legal services. These costs, which were on a downtrend until 1974, To obtain a more complete picture of the pro­ have claimed a growing share of income since cesses that have been affecting saving, the con­ then: in 1977-79 the share was IV2 percent­ sumption and investment decisions of individuals age points higher than it had been in the first half should be viewed together. A good starting point of the decade. A significant part of this increase is the various types of contractual payments that presumably reflects the sharp rise in the relative may be regarded as limiting the discretion con­ prices of some of these goods and services, par­ sumers have, especially in the short run, over the ticularly food and energy items, for which price disposal of their income. Contributions to pen­ elasticities of demand are low in the short run.3 sion funds, payments of life insurance premiums, Discretionary saving and outlays are obtained scheduled payments of principal on consumer as residuals—that is, they are calculated by de­ and mortgage debt, and the like are obvious can­ ducting the contractual components from the re­ didates for inclusion in “contractual” saving. spective totals. The discretionary saving of indi­ When individuals have incurred debt, the inter­ viduals, therefore, consists of investment in est portion of the scheduled payment is a con­ owner-occupied housing and discretionary ac­ tractual outlay, and the local property tax can be quisition of financial assets, minus changes in regarded this way as well. debts not associated with scheduled repayments Table 3 shows the allocation of disposable per­ of mortgages. Most of gross mortgage borrowing sonal income based on the simple notion of con­ is used to purchase homes or to retire out­ tractual payments described above. Contractual standing mortgage debt and thus produces no saving through increases in pension fund and life change in saving. But funds raised in mortgage insurance reserves has been rising relative to in­ markets may exceed housing purchases and pos­ come since the first half of the 1970s, while the sibly finance consumption expenditures. Thus it scheduled liquidation of home mortgage debt has is useful to compare gross investment in ownerremained a relatively constant proportion over occupied housing with discretionary mortgage the period for which data are available. Thus the borrowing to obtain an indicator of the volume of total of these forms of contractual saving, shown funds made available for discretionary non­ in line 2 of table 3, was more than 1 percentage housing uses. During recent years, discretionary point higher in 1977-79 than in the high-saving mortgage borrowing has exceeded new capital period 1970-74. expenditures on homes: in 1977-79 the excess On the outlay side, interest payments associat­ averaged about 23/4 percent of disposable per­ ed with home mortgages and other types of con­ sonal income, a rise of l3/4 percentage points sumer debt rose continuously in relation to dis­ from the 1970-74 average (line 18).4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Perspectives on Personal Saving 617 The total decline in discretionary saving, en significantly in recent years, despite the which more than offset increased saving through marked expansion of borrowing. In the peak year contractual payments, was not solely the result of consumer borrowing, 1978, the rate of discre­ of increased excess mortgage borrowing. A tionary spending was about equal to its average sharp rise in nonmortgage borrowing by house­ for the 15 years 1965-79. Then in 1979 the share holds during 1977-79 also played an important devoted to these purchases fell 1 percentage role. On the other hand, households actually in­ point, enough just to offset a rise in spending on creased their propensity to acquire discretionary essentials that was probably brought about by financial assets, on the average, during the same the sharp increase in energy prices in 1979. This period.5 development suggests that individuals are begin­ Discretionary outlays on goods and services, ning to adjust their consumption of discretionary about one-third of which consists of purchases of goods and services to accommodate increases in consumer durables, do not appear to have ris­ the relative prices of essential items. 3. Allocation of disposable personal income, selected periods 1965-791 Percent Item 1965-79 1965-69 1970-74 1975-79 1975-76 1977-79 1978 1979 1. Disposable personal income............................ 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 \ Devoted to contractual payments 2. Saving or investment—total ............................ n.a. n.a. 3.8 4.8 4.4 5.0 5.2 4.8 3. Private pension funds and life insurance2 .. 2.6 2.4 2.3 3.1 2.8 3.3 3.5 3.2 4. Scheduled principal payment on home mortgages3............................................. n.a. n.a. 1.5 1.6 1.6 1.6 1.7 1.6 5. Outlays—total.................................................... 10.0 9.1 9.7 10.6 10.1 10.8 10.8 11.1 6. Interest on installment and home mortgage debt4 ...................................... 5.2 4.7 5.0 5.9 5.3 6.1 6.1 6.5 7. Other financial costs5.................................... 2.7 2.4 2.6 2.9 2.9 2.9 2.9 3.0 8. Property tax6 ................................................. 1.9 1.9 2.1 1.8 2.0 1.8 1.8 1.7 Devoted to essentials 9. Goods and services7 ......................................... 47.6 47.6 47.0 48.3 47.9 48.5 48.1 49.0 Available for discretionary payments 10. Saving or in vestment—total ............................ n.a. n.a. 5.3 2.9 4.4 2.1 2.0 2.0 11. Owner-occupied housing, gross of capital consumption................ 4.7 4.2 4.5 5.5 4.5 6.0 6.3 5.9 12. Acquisition of financial assets8.................... n.a. n.a. 8.9 8.5 8.2 8.7 8.8 8.1 13. Less: home mortgages, gross of scheduled principal payments9............ n.a. n.a. 5.5 7.8 5.9 8.7 8.8 8.5 14. Less: consumer credit and other borrowing10 ......................... 2.9 2.6 2.6 3.3 2.2 3.9 4.3 3.5 15. Outlays—goods and services ......................... 34.3 35.2 34.2 33.5 33.2 33.6 33.9 33.0 Memo 16. Capital consumption11....................................... 2.0 1.8 1.9 2.2 2.1 2.3 2.3 2.3 17. NIPA personal saving (2+10-16) ................. 6.2 6.5 7.3 5.5 6.7 4.8 4.9 4.5 18. Excess discretionary investment in housing (11-13) .................................... n.a. n.a. -1.0 -2.3 -1.6 -2.7 -2.5 -2.6 19. NIPA personal outlays (5+9+15+16)............ 93.8 93.5 92.7 94.5 93.3 95.2 95.1 95.5 20. Total goods and services (9+15) .................... 81.9 82.8 81.1 81.8 81.1 82.1 82.0 82.0 1. All rates calculated as average value of item for the period, di­ consumption, net interest, and property taxes paid by owner-occuvided by average value of disposable personal income. Details may pants; outlays for maintenance of household appliances, motor vehi­ not sum to totals because of rounding. cles, and furnishings and garments; purchases of food (excluding 2. Flow of funds data. alcoholic beverages and purchased meals), clothing and shoes, and 3. Federal Reserve Board staff calculation; pertains to single-family local transportation services (excluding taxis). homes only and may not be strictly comparable with data for all own­ 8. Derived as residual; not strictly comparable to flow of funds er-occupied homes. data. 4. Interest paid by consumers to business plus net interest paid by 9. Net change in home mortgages (flow of funds) plus line 4. owner-occupants of farm and nonfarm dwellings (NIPA). 10. Other consists of other mortgages; other consumer credit; bank 5. Consists of financial services furnished without pay by financial loans, n.e.c.; and other debts. intermediaries and expense of handling life insurance (NIPA). 11. Allowance for owne -occupied housing. 6. Tax paid by owner-occupants of farm and nonfarm dwellings n.a. Not available. (NIPA). Sources. The National Income and Product Accounts of the 7. Derived from NIPA detail on personal consumption ex­ United States, 1929-74; subsequent issues of the Survey of Current penditures. The grouping consists of medical outlays; legal services; Business; and the Federal Reserve’s flow of funds statistical release, household utilities and gasoline and oil; housing services less capital various issues. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

618 Federal Reserve Bulletin □ August 1980 To summarize, developments in the allocation gains or losses). Calculations of the size and dis­ of household income during the 1977-79 period tribution of capital gains and losses in real terms reveal that the discretion of consumers over their are reported, followed by a discussion of the im­ income continued to weaken: contractual saving plications of consumer balance sheet positions at and outlays, as well as spending on essential the end of 1979 for near-term trends in saving.7 goods and services, increased relative to income in comparison with the first half of the decade. On the spending side, the rate of discretionary Trends in Capital Gains and Losses consumption was relatively stable, despite a dip in 1979. This stability was accomplished in the The revaluation of an existing asset owing to a face of the heightened pressure on household rise in its market value—a nominal capital gain— budgets arising from the sharp advances in the does not necessarily increase the asset owner’s relative prices of essential goods and services. purchasing power over currently produced goods Moreover, increasing nominal rates of interest and services. Purchasing power is enhanced only coupled with growing levels of outstanding debt if the price of an existing asset rises faster than led to a sharp rise in interest payments relative the general price level for goods and services; in to income. Thus about half of the increase of that case a real capital gain is said to have oc­ more than 2 percentage points in the NIPA out­ curred. The distinction between nominal and real lay rate between 1970-74 and 1977-79 is ac­ capital gains is drawn because widely accepted counted for by the rise in contractual interest theories of consumer behavior emphasize that costs; much of the remaining increase resulted spending will be encouraged more by real gains from an advance in the share of income de­ than by revaluations that serve only to maintain voted to essential goods and services that was the purchasing power of existing holdings. not offset by downward adjustments to other, During a period of inflation the distinction be­ discretionary, consumption.6 tween a nominal and a real capital gain is of par­ On the saving side in capital accounts, the rate ticular relevance to holders of fixed-price assets of discretionary acquisition of financial assets and liabilities. As the overall price level rises, the has been relatively well maintained. The drop in constant-dollar value of a deposit, such as a nonpersonal saving is reflected, instead, predomi­ interest-bearing bank account, falls; the result is nantly by the excess of mortgage borrowing over a real capital loss. At the same time, inflation re­ capital expenditures on housing and also by other duces the real value of existing debts that have a types of consumer borrowing that have grown fixed rate of interest, thus leading to a real capital faster than the acquisition of assets. gain. Whether components of consumer balance sheets that are not fixed in price bring about real gains or losses during periods of inflation de­ Changes in Consumer Balance pends upon the course of their prices in relation Sheets to that for goods and services in general. In any period a real capital gain or loss on an In the preceding section trends in the disposition asset can be calculated by comparing the change of personal income and their relationship to per­ in the constant-dollar purchasing power of the sonal saving were discussed. In this section, at­ asset with the cumulated real investment (or sav­ tention turns to balance sheet data that summa­ ing) in it. If the real value of the asset has grown rize changes in consumer net worth over the past more (less) than real investment, then a real capi­ 25 years because personal saving and spending tal gain (loss) has occurred. Table 4 illustrates decisions are influenced by the net worth of con­ changes in the real value of consumer net worth sumers, as well as by their income. As shown in and its components for selected periods since column 2 of table 1, the net worth of consumers 1955 and contrasts these changes with the value can change through net investment in financial or of the real investment made in each period. Curtangible assets or through revaluations of the rent-dollar holdings and investments are deflated existing stock of assets (that is, through capital by the NIPA personal consumption expenditures Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Perspectives on Personal Saving 619 4. Consumer investment and changes in net worth, selected periods 1955-791 Billions of 1972 dollars2 Item, and change in value 1955-79 1955-59 1960-64 1965-69 1970-74 1975-79 1975 1976 1977 1978 1979 or in net investment over period Total net worth 1. Change .................................... 1,953.7 455.2 413.3 411.8 -84.5 757.9 221.9 258.6 63.1 132.0 82.6 2. Investment .............................. 1,371.5 182.2 196.1 262.2 347.5 383.5 85.6 80.1 71.0 75.9 70.9 Deposits, credit market instruments, and other3 3. Change....................................... 777.9 88.1 158.6 158.1 153.6 219.5 40.4 61.4 61.8 41.3 14.7 4. Investment ............................... 1,687.1 141.5 200.6 295.5 446.3 603.1 98.2 115.9 125.7 131.6 131.7 Corporate equities 5. Change....................................... 152.6 196.6 175.3 83.2 -412.5 110.0 96.6 97.8 -68.0 -19.1 2.7 6. Investment4............................... -82.3 7.6 -9.9 -31.0 -25.3 -23.6 -3.0 -2.7 -4.8 -4.6 -8.5 Private pension fund and life insurance reserves 7. Change ....................................... 205.5 48.1 63.6 42.8 -24.2 75.2 25.7 23.8 2.4 11.7 11.7 8. Investment ............................... 440.2 55.8 65.1 81.5 92.8 145.0 22.5 26.2 30.6 33.9 31.9 Equity in noncorporate business 9. Change.................................... 10. Investment ............................... 437.9 59.8 35.2 52.4 105.2 185.3 34.6 44.3 30.6 51.0 24.8 Liabilities -96.7 -13.9 -4.8 3.0 -18.4 -62.6 -8.2 -11.7 -11.9 -13.8 -17.0 11. Change ....................................... 12. Investment ............................... -608.4 -101.2 -134.0 -96.7 -83.8 -192.7 -6.6 -41.0 -64.6 -53.9 -26.6 Tangible assets -1,164.2 -128.3 -158.7 -181.9 -264.0 -431.3 -41.1 -73.2 -103.4 -110.9 -102.7 13. Change...................................... 14. Investment ............................... 988.2 163.8 114.6 172.0 177.2 360.6 31.2 72.3 100.9 101.0 55.3 587.3 119.5 103.8 95.1 116.0 153.0 17.2 25.7 34.8 39.8 35.5 Memo Owner-occupied real estate 15. Change....................................... 903.0 149.4 96.7 147.4 153.4 356.1 32.7 73.7 98.7 97.4 53.7 16. Change excluding land............ 668.8 100.4 65.3 108.9 118.8 275.3 26.2 52.5 82.0 72.6 42.0 17. Investment ............................... 533.9 109.3 90.2 79.6 104.5 150.3 16.5 24.9 34.2 39.5 35.3 Equity in owner-occupied real estate5 18. Change....................................... 519.8 84.2 14.5 101.5 98.9 220.8 23.2 46.9 55.8 62.9 32.1 19. Investment ............................... -179.5 28.2 -7.0 -16.4 -54.7 -129.6 -13.6 -21.2 -32.1 -29.7 -32.9 1. Consumer durables and government pension and insurance the year indicated and the first quarter of the following year. Quarterly funds are not included in total net worth. Current-dollar nonequity data on current-dollar investment are deflated by the NIPA personal financial and liability stocks (including those held in private pension consumption expenditures deflator and totaled to obtain constant-dol­ fund and life insurance reserves) were derived by cumulating sea­ lar investment over longer periods. sonally adjusted flows from a 1952 Q4 benchmark. Current-dollar total 3. Other consists of security credit and miscellaneous assets. investment differs from NIPA personal saving by the discrepancy in 4. Excludes capital gains dividends. the flow of funds household sector. Details may not add to totals be­ 5. Owner-occupied real estate less home mortgages. cause of rounding. Sources. Balance Sheets for U.S. Economy (Board of Governors 2. Constant-dollar net worth and components were obtained by de­ of the Federal Reserve System, Division of Research and Statistics, flating current-dollar stocks at year-end by the average of the NIPA Flow of Funds Section, June 1980), and the Federal Reserve’s flow of personal consumption expenditures deflator for the fourth quarter of funds statistical release, various issues. deflator. (An appendix to this article elaborates and composition of consumer net worth. From on some assumptions used in the construction of the mid-1950s through the 1960s, real wealth table 4.) grew substantially more than the cumulated val­ In general, the calculations presented in table 4 ue of investment. Gains that accrued to financial suggest that real capital gains and losses, in the assets, particularly corporate equity holdings aggregate and over a long period, have not great­ (table 4, line 5 less line 6), played a role in this ly raised or lowered real consumer net worth. growth. Tangible assets held by households, Since the mid-1950s, constant-dollar net worth which consist primarily of real estate (land plus has grown $1,950 billion, while the cumulated structures), also had real gains over this pe­ value of investment has been about $1,400 bil­ riod, although these were not substantial until lion. Thus from 1955 through 1979 consumers the late 1960s (line 13 less line 14). In the first half had an average real capital gain of approximately of the 1970s, consumers suffered a sizable capital $23 billion per year, slightly under 4 percent of loss on their total net worth, but this loss was average real disposable income in this period. followed by striking gains in 1975 and 1976 re­ Over shorter time horizons, capital gains and flecting the cyclical swing in the corporate equity losses have had a significant impact on the size market. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

620 Federal Reserve Bulletin □ August 1980 In the late 1970s capital gains on owner-occu­ and credit market instruments (table 4, line 3 less pied real estate were substantial (line 15 less line line 4). As a result, the real capital gain on the 17). As a result of the sharp rise in the price of total consumer balance sheet was $20 billion per housing in relation to all consumer goods and year in this period; this amount was less than the services, between 1977 and 1979 an average of $30 billion per year that accrued in the second almost $50 billion per year in real capital gains half of the 1960s and slightly smaller than the av­ accrued to homeowners from their real estate, erage yearly gain of $23 billion for the whole more than three times the average for the 25 1955-79 period. Thus, on balance and in the years 1955-79. When the accruals brought about aggregate, real capital gains accrued to con­ by this shift in relative prices are added to those sumers in 1977-79 at about the average rate for that occurred as inflation reduced the real value the last 25 years.8 of home mortgages, gains to homeowners were even more substantial: between 1977 and 1979 the total real capital gain on home equity aver­ Trends in the Composition of Net Worth aged over $80 billion per year (line 18 less line 19). These large gains may have spurred con­ The ratio of net worth and its components to dis­ sumer spending, as is reflected in the recent in­ posable personal income are shown in table 5 to crease in the “liquefaction”—the turning into provide some historical perspective on the com­ cash—of equity in owner-occupied real estate. position of net worth. The aggregate value of Line 18 of table 3 shows one measure of this consumer net worth was about four and one-half liquefaction, and its marked increase in the late times disposable income at the end of 1959. Dur­ 1970s in relation to income may reflect down­ ing the 1960s the ratio of net worth to income fell ward pressure exerted on the saving rate by the somewhat. The downtrend continued into the substantial real capital gains on home equity. 1970s, and by the end of 1976 net worth was un­ Offsetting the stimulus to consumption pro­ der four times income. This latter decline reflect­ vided by the large gains on equity in owner- ed a dramatic drop in the value of corporate occupied real estate in 1977-79 was a real equity in relation to income. capital loss on corporate equity and a signifi­ Capital gains on tangible assets and losses on cant decline in the purchasing power of deposits financial wealth in the late 1970s, together with 5. Consumer net worth and its components in relation to disposable personal income, selected years 1954-791 Ratio Item 1954 1959 1964 1969 1974 1 1976 1979 4.0 4.4 4.2 4.0 3.4 3.6 3.6 2. Financial assets net of liabilities ....................................................... 3.0 3.2 3.1 2.9 2.1 2.4 2.2 3. Deposits, credit market instruments, and corporate equities.... 2.0 2.3 2.4 2.3 1.7 1.9 1.8 4. Deposits, credit market instruments, and other3.................... 1.1 1.1 1.2 1.2 1.2 1.2 1.2 5. Corporate equities...................................................................... .9 1.2 1.2 1.1 .5 .7 .5 6. Private pension fund and life insurance reserves ....................... .3 .4 .4 .4 .3 .3 .3 7. Equity in noncorporate business ................................................. 1.2 1.1 1.0 .9 .9 .9 .9 8. Liabilities ......................................................................................... .5 .6 .7 .7 .7 .7 .8 9. Home mortgages......................................................................... .3 .4 .4 .4 .4 .4 .5 10. Consumer installment credit and other4 ................................. .2 .2 .3 .3 .3 .3 .3 11. Tangible assets .................................................................................... 1.0 1.2 1.1 1.2 1.2 1.2 1.4 Memo 12. Owner-occupied real estate .............................................................. .9 1.1 1.0 1.0 1.1 1.1 1.3 13. Excluding land................................................................................. .8 .9 .8 .8 .8 .9 1.0 14. Equity in owner-occupied real estate5 .......................................... .6 .7 .6 .6 .7 .7 .8 1. All ratios are the outstanding value of item at year-end divided funds are not included in total net worth. Details may not add to totals by the average of NIPA disposable personal income for the year in­ because of rounding. dicated and its value in the following year. Current-dollar nonequity 3. Other consists of security credit and miscellaneous assets. financial and liability stocks (including those held in private pension 4. Other consists of other mortgages; other consumer credit; bank fund and life insurance reserves) were derived by cumulating season­ loans, n.e.c.; and other debt. ally adjusted flows from a 1952 Q4 benchmark. 5. Owner-occupied real estate less home mortgages. 2. Consumer durables and government pension and insurance Sources. Balance Sheets for U.S. Economy, June 1980, and the Federal Reserve’s flow of funds statistical release, various issues. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Perspectives on Personal Saving 621 the shift in saving flows from financial to tangible vestment ignores funds supplied by other sec­ forms, continued to shift the structure of the con­ tors—business, government, and the rest of the sumer balance sheet heavily toward tangibles. world—as well as the direct investment house­ The ratio of deposits, credit market instruments, holds undertake in their capacity as owner-occu­ and corporate equities to income fell lower while pants of homes. the ratio of liabilities to income rose. Offsetting Gross saving as reported in the NIPA, which the resulting decline in the ratio of net financial covers saving by all U.S. persons and entities, is wealth to income was an increase in the ratio of a measure of aggregate saving before deductions tangible assets to income, especially in owner- for depreciation of fixed capital. Line 1 of table 6 occupied real estate. Indeed, the substantial rise shows gross saving scaled by gross national in the value of owner-occupied real estate was product. After falling during the last recession, enough to outstrip the rise in outstanding home gross saving returned by the late 1970s to its his­ mortgages, so that the equity position of house­ toric range above 15 percent of gross output. The holds in their real estate increased relative to in­ pattern was mirrored in the aggregate gross in­ come (line 14), despite the increased pace of vestment performance of the United States. The liquefaction. net saving rate, obtained by removing the allow­ In 1979 household borrowing tailed off (lines 13 ance for replacing worn-out capital from the and 14 of table 3), a development suggesting gross saving rate, fell off markedly during 1975— that individuals were attempting to rebuild finan­ 76. In contrast to gross saving, during the last cial wealth by restricting their rate of debt three years net saving recovered only partially, acquisition. Expectations of an economic down­ as capital consumption, bolstered by high rates turn probably operated with other factors to in­ of depreciation on short-lived plant and equip­ hibit borrowing. One factor that may have acted ment, continued to offset a large share of output. as a check on further liability acquisition was the Thus the aggregate amount of saving by U.S. deterioration after 1976 in the ratio of the sum of persons and other entities flowing into net invest­ deposits, credit market instruments, and corpo­ ment was comparatively low from 1975 through rate equity holdings to liabilities, as shown by a 1979. comparison of lines 3 and 8 of table 5. Another Because personal saving is a component of net factor discouraging borrowing was the absorp­ saving, it often has been suggested that increases tion by interest payments on outstanding debt of in household thrift will boost net saving and capi­ a substantial fraction of income (line 6 of table 3), tal formation. But other factors affect the total of which had particular relevance given the uncer­ potential funds available for net additions to the tain prospects for income growth. capital stock at any given time. For instance, as the historical trends shown in table 6 indicate, net corporate saving was at a reduced rate throughout the 1970s. On the other hand, part of Personal Saving and National the low levels of net private saving in the late CAPITAL FORMATION 1970s was offset by net capital inflows from abroad; that is, net foreign investment was nega­ Personal saving is a component of aggregate sav­ tive. Thus total domestic capital formation, in­ ing, and it contributes to the formation of capital cluding investment in housing and inventories inasmuch as the amount of aggregate saving a na­ (line 12), was larger in 1977-79 than is suggested tion does must be equal to the amount of invest­ by the low rate of net saving. Domestic net fixed ment it undertakes. Expositions of income-deter- investment, which excludes inventory accumula­ mination theory often make the convenient tion, was also well maintained by historic stan­ assumption that all saving takes place in the dards. However, the rise in the net nonresidential household sector and all investment in the busi­ share in the most recent period still left it IV2 ness sector. This view is incomplete: the identity percentage points lower than it was in the highbetween saving and investment applies solely to investment period of the late 1960s. their totals in an economy, and the simple dichot­ As a result of the moderate pace of net non­ omy between household saving and business in­ residential investment, the real nonresidential Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

622 Federal Reserve Bulletin □ August 1980 6. U.S. saving and investment, selected periods 1955-79' Percent of GNP Item 1955-79 1955-59 1960-64 1965-69 1970-74 1975-76 1977-79 1. Gross saving................................................. 15.1 15.8 15.2 15.8 15.1 13.4 15.1 2. Capital consumption2 ............................ 9.5 9.4 9.0 8.5 9.3 . 10.5 10.2 3. Net saving3.................................................... 5.5 6.4 6.2 7.3 5.9 2.8 4.8 4. Net private saving ................................. 6.1 6.7 6.4 7.5 6.3 5.9 4.9 5. Net personal ....................................... 4.2 4.3 3.6 4.4 5.0 4.7 3.3 6. Net corporate....................................... 1.9 2.3 2.8 3.1 1.3 1.1 1.6 7. Government surplus or deficit (-) ....... -.6 -.2 -.2 .2 -.5 -3.1 -.1 8. Federal................................................. -1.2 .1 -.3 -.3 -1.2 -3.8 -1.3 9. State and local .................................... .6 -.3 .1 .0 .7 .7 1.2 10. Gross investment......................................... 15.3 16.0 15.5 15.8 15.3 13.8 15.3 11. Net investment ............................................ 5.7 6.6 6.5 7.3 6.0 3.3 5.1 12. Net private domestic investment......... 5.9 6.4 6.0 7.2 6.3 2.9 6.0 13. Net fixed investment ......................... 5.1 5.7 5.1 6.0 5.5 2.9 5.1 14. Net nonresidential ......................... 2.7 2.5 2.3 3.9 3.0 1.4 2.4 15. Net residential................................. 2.5 3.2 2.8 2.1 2.5 1.5 2.6 16. Change in business inventories......... .8 .7 .9 1.3 .8 .0 1.0 17. Net foreign investment ......................... -.2 .1 .6 .1 -.3 .3 -1.0 1. All rates are calculated as the average value of item for the peri­ 3. Gross saving less noncorporate and corporate capital consump­ od, divided by the average value of GNP. Gross saving differs from tion. Foreign saving (capital grants received by the United States) is gross investment, and net saving from net investment, by the NIPA not included in categories. statistical discrepancy. Details may not add to totals because of Sources. National Income and Product Accounts of the United rounding. States, 1929-1974, and subsequent issues of the Survey of Current 2. With capital consumption adjustment. Business. capital stock expanded at an average annual rate product, as shown in table 6). From the middle of of 3.1 percent from 1977 through 1979, compared 1976 to late 1979, when personal saving fell to with a 5.7 percent average rate over the late 5V4 percent of disposable income (3V3 percent of 1960s. Because this slowdown occurred during a GNP), growth in real household income aver­ period of rapid expansion in the labor force, over aged only IV2 percent. Consumers are widely be­ the last five years the real nonresidential capital lieved to base their spending decisions more on stock per worker has been virtually unchanged. perceptions of their long-run—“permanent” — The recent disappointing performance of produc­ income than on current receipts. If these per­ tivity in the United States may be related to this ceptions were slow to adjust to the dimmer pros­ lack of growth. Many factors have played a role pects for real income gains, consumers may have in these two interrelated developments: for ex­ spent in the late 1970s as if real income even­ ample, the dramatic increase in energy prices in tually would return to its historical trend. Such a the United States probably has rendered a por­ rate of spending would result in a lower average tion of the capital stock less efficient and may rate of personal saving. Thus if the low rate of have reduced the demand for capital goods pend­ personal saving were a factor retarding non­ ing development of new technologies.9 To the residential capital formation and productivity extent that the recent low rate of net non­ growth, it contributed to forces that worked residential investment reflected such a weakness against its own recovery. in demand, higher rates of personal saving would have had only a limited impact on the formation of business capital. SUMMARY OF FINDINGS AND Moreover, low productivity gains act to slow Implications for the Future the growth of real household income, a develop­ ment that emerged during the recent economic The recent decline in the personal saving rate has expansion and that may, in turn, have been one been accompanied by a decline in net financial of the causes of the low personal saving rate. investment and an increase in purchases of tan­ From early 1975 to the middle of 1976, real dis­ gible assets, particularly owner-occupied hous­ posable income per household grew at the rela­ ing. The sharp falloff in net financial saving by tively rapid annual rate of 23/4 percent, and per­ households apparently did not reflect a reduced sonal saving averaged llU percent of disposable propensity to acquire financial assets but rather a personal income (or 43/4 percent of gross national large rise in borrowing. This reduced rate of net Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Perspectives on Personal Saving 623 financial saving by the household sector has set by a relatively low rate of spending on dis­ meant a diminution in funds advanced to other cretionary items, the increase appears to have sectors; such funds are used to finance business come mostly at the expense of saving. In capital capital investment and also government deficits. accounts the drop in aggregate personal saving Consumer balance sheets have shifted from fi­ appears largely as an increase in the excess of nancial wealth to tangible assets, reflecting both mortgage borrowing over expenditures on new the swing in saving flows from financial to tan­ housing. gible forms and the course of overall prices in • Because real capital gains on equity in ownrelation to those in asset markets. er-occupied housing were largely offset by real This analysis of personal saving on household losses on financial assets, aggregate gains in the current and capital accounts, and of its relation late 1970s were not a significant support to con­ to aggregate saving and capital formation, has sumer purchasing power, especially when com­ shed light on recent developments in personal pared with those of earlier periods. If net capital saving behavior and has implications for its fu­ gains on household wealth worked to stimulate ture course: aggregate consumer spending, it was, therefore, • The low rates of NIPA personal saving dur­ through a differential effect: boosts in consumer ing the second half of the 1970s, together with spending associated with capital gains on homes related developments such as the increase in the were greater than cuts stemming from capital rate of residential investment and the increase in losses on financial assets. borrowing by households, are probably partly re­ • Some rebuilding of household financial lated to demographic trends. However, short-run wealth relative to income might have been ex­ movements of the saving rate—for instance, the pected during 1979, given the high ratio of liabili­ abrupt fall in 1976—most likely are independent ties relative to both financial assets and income, of demographic trends, which unfold slowly. In and the prospect of declines in income growth. In any event, as demographic factors continue to fact borrowing fell over 1979, and an increase in foster high levels of investment in housing, a net financial saving was evident by mid-1980. smaller proportion of the total of all funds sup­ • Low rates of personal saving probably were plied tend to be available for nonresidential capi­ not directly responsible for the recent relatively tal formation. low rates of nonresidential fixed investment. The • Net purchases of durable goods—sometimes disruption to the U.S. economy caused by the considered a substitute for saving, but counted sharp rise in energy prices was at least one factor as consumption in the NIPA—rose from 3.0 that both temporarily reduced the demand for percent of income during 1975-76 to 3.6 percent capital goods and simultaneously, by increasing in 1977-79 (table 2), thus exerting some down­ the costs of essentials and reducing productivity ward pressure on the NIPA saving rate. This in­ and income growth, depressed the rate of per­ crease in net purchases of durables, which often sonal saving. has been attributed to stockpiling in advance of Many aspects of consumer behavior that im­ price increases, was also in part the result of pinge on the saving decision have not been dis­ normal cyclical influences and demographic cussed in this article. Nonetheless, the above factors. analysis of household current and capital ac­ • Obligatory outlays—spending on items such counts suggests that no one simple factor ex­ as essentials and contractual interest costs— plains the recent sharp decline in the personal have been taking a growing fraction of income: in saving rate. In any event, efforts to spur business 1977-79 a measure of these payments claimed a capital formation are likely to meet with only lim­ share more than 2lh percentage points greater ited success if they are focused narrowly on than that in the late 1960s and early 1970s (table personal saving and do not treat incentives to 3, lines 5 plus 9). While some of this rise was off­ save and invest on a broader front. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

624 Federal Reserve Bulletin □ August 1980 Appendix A2. Inflation rates for housing, two indexes, 1970-79 Percent change, annual rate Special assumptions used in the construction of Commerce National Association Period table 4 affect the calculation of the change in Department1 of Realtors2 holdings and cumulated investment in certain 1970-79 .................... 8.9 10.1 1970-74 .................... 7.3 8.3 categories of net worth and also influence the 1975-79 .................... 10.6 12.0 change in aggregate net worth and the total of 1975 ......................... 6.8 9.0 1976 ......................... 8.9 9.8 cumulated investment: 1977 ......................... 12.8 11.5 1978 ......................... 14.2 20.3 1. Undistributed corporate profits are not in­ 1979 ......................... 10.3 9.5 cluded as a component of investment in corpo­ 1. NIPA deflator for nonfarm residential structures. Changes are rate stock even though it is plausible that a large measured from fourth quarter to fourth quarter. portion of increases in equity values results from 2. Average price of existing single-family homes sold, including both structures and land. Changes are measured from December to corporate retentions; that is, that portion results December. from acquisitions of financial or tangible assets by corporations rather than from revaluations of already existing assets. Lines 1 and 2 of table Al consumer balance sheets, and net investment in show the impact of including retained earnings in these funds excluded from personal investment, investment in corporate equity. Cumulative in­ in order to replicate the treatment of these funds vestment is increased and the estimate of the to­ in the NIPA. Their inclusion would reduce the es­ tal capital gain over 1955-79 is reduced to $70 timated total capital gain over 1955-79 to $481 billion (line 1 minus line 2); the comparable billion (line 5 minus line 6). amount in table 4 is $582 billion. 4. Existing stocks of reproducible assets are 2. Durable goods were excluded from con­ valued at reproduction cost rather than at market sumer balance sheets. Their inclusion would re­ prices. Therefore, the use of the outstanding duce the estimate of total capital gains in every nominal value of the housing stock on this basis period because losses have consistently accrued contains the assumption that the NIPA deflator to holders of these assets. The overall effect for residential construction is an appropriate as­ would be a reduction of the estimated total capi­ set price. In fact, while the NIPA construction tal gain over 1955-79 to $312 billion (line 3 minus deflator recently has been rising relative to over­ line 4). all consumption prices—as reflected by the siz­ 3. The net worth of government pension fund able capital gains calculated for owner-occupied and insurance reserves was also excluded from housing—other indexes of house prices, such as Al. Consumer investment and changes in net worth under alternative assumptions, selected periods 1955-791 Billions of 1972 dollars Total net worth concept, and change in value or 1955-79 1955-59 1960-64 1965-69 1970-74 1975-79 1975 1976 1977 1978 1979 net investment over period Including retained earnings 1. Change.......................... 1,953.7 455.2 413.3 411.8 -84.5 757.9 221.9 258.6 63.1 132.0 82.6 2. Investment ..................... 1,883.8 257.8 301.2 418.0 423.7 483.1 96.7 99.3 96.1 99.8 91.2 Including consumer durables 3. Change........................... 2,249.9 495.4 439.4 497.0 -19.1 837.1 236.3 275.7 83.0 152.5 89.8 4. Investment ..................... 1,938.1 240.0 257.9 403.7 495.3 541.2 106.6 110.6 107.3 114.1 102.6 Including government pension fund and insurance reserves 5. Change........................... 2,059.9 468.2 433.8 432.3 -64.5 790.0 227.3 265.9 71.7 139.6 85.8 6. Investment ..................... 1,578.8 200.2 220.9 297.4 400.5 459.9 97.5 93.6 86.9 93.9 87.9 Including retained earnings, consumer durables, and government pension fund and insurance reserves 7. Change........................... 2,356.1 508.4 459.9 518.7 .9 869.2 241.7 283.0 91.6 160.1 93.0 8. Investment ..................... 2,657.7 333.6 387.8 594.7 624.5 717.2 129.7 143.4 148.2 156.1 139.8 1. See notes to text table 4. Source. Balance Sheets for U.S. Economy, June 1980, and the Federal Reserve’s flow of funds statistical release, various issues. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Perspectives on Personal Saving 625 the one for existing single-family homes com­ bonds, which are included in deposits and credit piled by the National Association of Realtors market instruments as well as in private pension (table A2), have risen faster, suggesting even fund and life insurance reserves, are valued at larger real gains. issue rather than market prices. The market val­ 5. All growth in the real value of land is con­ ue of these assets falls when interest rates rise. sidered a capital gain. No component of saving is As bonds approach maturity, their values rise to assumed to increase the value of land; further­ the redemption price. In a period of sizable in­ more, since households are apparently net sellers creases in interest rates, such as the 1970s, there of land to other sectors, this treatment tends to is likely to be a wide divergence between the understate actual gains on land. market and issue values of outstanding bond 6. Holdings of corporate and government holdings. Footnotes 1. The physical investment of noncorporate business could est rate ceilings toward assets with market-determined yields. be included with household tangible investment and the fi­ See Charles Luckett, “Recent Financial Behavior of House­ nancial activity of these firms could be combined with that holds,” Federal Reserve Bulletin, vol. 66 (June 1980), of households. This treatment would lump together tangible pp. 437-43. investment by all individuals, in their capacity as both house­ 6. The increase in the capital consumption allowance for holders and as proprietors. Alternatively, the activities of owner-occupied housing was an offset of 0.4 percentage point noncorporate business can be treated separately from those over this period. When housing prices are rising rapidly, the of households, as in the Federal Reserve’s flow of funds ac­ depreciation charge may grow more rapidly than the rental counts. In this view, which is used in this article, the equity income credited to houses, with the overall effect of depress­ position of households in noncorporate business is represent­ ing the saving rate. ed by a single entry in household net financial wealth. There­ 7. The data on net worth are taken from balance sheets for fore, household net financial investment includes net invest­ the U.S. economy, prepared by the Federal Reserve staff, ment in noncorporate business. that consist of estimates of stocks of reproducible physical 2. Only net purchases of durable goods may be included assets on a replacement-cost basis (obtained from the Depart­ because the portion of gross purchases that serves to replace ment of Commerce), land holdings at current market value, worn-out stock is consumed. Moreover, when consumer du­ and financial assets and liabilities (from the flow of funds ac­ rables are considered as investment, in principle a rental in­ counts). In these accounts, a measure of the net worth of con­ come in excess of depreciation may accrue to and be con­ sumers that corresponds to the NIPA concept of consumer sumed by owners, and therefore count as personal income. investment (and the income from those investments) can be This adjustment was not made because of the complexity of derived from the balance sheet of the household sector when measuring this income. In any event, only income and con­ holdings of consumer durable goods and government pension sumption—not saving—would differ by its recognition. and insurance reserves are excluded. With these exclusions, 3. In fact, food price elasticities in the short run may be the concepts of consumer and household net worth are identi­ larger than commonly thought. The downgrading of food out­ cal. lays and other budgetary adjustments by consumers are ana­ 8. Nominal capital gains, the increment to current-dollar lyzed more fully in Susan Burch, “Consumer Reaction to net worth not accounted for by current-dollar saving, were High Inflation Rates” (Board of Governors of the Federal Re­ very substantial in the late 1970s, averaging well over $250 serve System, Division of Research and Statistics, National billion per year during 1977-79. The deflated value of these Income Section, December 1978; processed). nominal gains would be many times larger than the real capi­ 4. This measure, which is intended to capture mortgage tal gains calculated from table 4. The discrepancy arises be­ borrowing against equity in existing owner-occupied real es­ cause the bulk of the nominal capital gains earned over this tate, understates this borrowing to the extent that capital ex­ period simply maintained the purchasing power of the exist­ penditures on housing are financed by means other than mort­ ing capital stock. It is the remainder that is deflated to obtain gages, and overstates it to the extent that sales of land the real capital gain as defined in the text. involved in most house transactions are also financed by 9. Recently there have been many studies of these issues. mortgages. This borrowing is discussed in David F. Seiders, As an example of the input-imputation approach to explaining Mortgage Borrowing against Equity in Existing Homes: the productivity slowdown, see J. R. Norsworthy, Michael J. Measurement, Generation, and Implications for Economic Harper, and Kent Kunze, “The Slowdown in Productivity Activity, Staff Economic Studies 96 (Board of Governors of Growth: Analysis of Some Contributing Factors,” Brookings the Federal Reserve System, May 1978). Papers on Economic Activity, 2:1979, pp. 387-421; for other 5. However, in 1979 there was a significant restructuring studies, see the references cited there. within this total away from savings deposits subject to inter­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

627 Domestic Financial Developments in the Second Quarter of 1980 This report, which was sent to the Joint Econom­ contraction in economic activity and with bor­ ic Committee of the U.S. Congress on August 6, rower response to the credit restraint actions 1980, highlights the important developments in taken by the Federal Reserve in March. Also domestic financial markets during the spring and contributing to the decline in rates were an ap­ early summer. parent reduction of inflationary expectations in the light of the growing slack in the economy, the Interest rates reached record levels in early smaller increases registered by major price in­ spring, and then fell steeply over the course of dexes in the second quarter, and the weakness of the second quarter. On balance, short-term rates the narrow money stock measures relative to the declined an unprecedented 7 to 10 percentage Federal Reserve’s announced ranges for 1980. points, reaching their lowest levels of the past Downward adjustments in administered rates, in­ two years in June, while long-term security cluding the commercial bank prime rate and yields retraced the increases recorded early in home mortgage rates, lagged well behind the the year. The plunge in interest rates principally drop in market yields over most of the second reflected an abrupt diminution of demands for quarter. money and credit associated with the developing The fall in market rates of interest came to a Interest rates Percent SHORT TERM LONG-TERM Federal funds Conventional mortgages HUD Aaa utility bonds Treasury bills 3-month .S. government bonds "•"Federal Reserve discount rate State and local government bonds Monthly averages except for Federal Reserve discount rate and con­ and Urban Development; Aaa utility bonds, weighted averages of new ventional mortgages (based on quotations for one day each month). publicly offered bonds rated Aaa, Aa, and A by Moody’s Investors Yields: U.S. Treasury bills, market yields on three-month issues; Service and adjusted to Aaa basis; U.S. government bonds, market prime commercial paper, dealer offering rates; conventional mort­ yields adjusted to 20-year constant maturity by U.S. Treasury; state gages, rates on first mortgages in primary markets, unweighted and and local government bonds (20 issues, mixed quality), Bond Buyer. rounded to nearest 5 basis points, from U.S. Department of Housing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

628 Federal Reserve Bulletin □ August 1980 Changes in selected monetary aggregates1 Based on seasonally adjusted data unless otherwise noted, in percent 1979 1980 Item 1977 1978 1979 Q2 Q3 Q4 Ql Q2 Member bank reserves2 Total..................................................... 5.0 6.6 2.9 -3.3 5.3 12.3 4.3 1.2 Nonborrowed.......................................... 2.6 6.7 .7 -7.4 7.3 6.2 3.3 7.8 Monetary base3....................................... 8.2 9.2 7.7 5.0 9.5 9.5 7.6 5.3 Concepts of money4 M-1A ................................................... 7.7 7.4 5.0 7.2 7.8 4.5 4.8 -3.9 M-1B ................................................... 8.1 8.2 7.6 10.4 9.6 5.0 5.9 -2.4 M-2 ..................................................... 11.5 8.4 8.9 10.2 10.7 7.1 7.2 5.4 M-3 ..................................................... 12.6 11.3 9.8 9.3 10.8 9.1 7.8 5.7 Nontransaction components of M-2 Total (M-2 minus M-lB) ............................ 12.8 8.5 9.4 10.2 11.1 7.8 7.7 8.1 Small time deposits................................ 15.1 16.2 23.1 20.0 14.7 25.8 18.3 24.9 Savings deposits.................................... 9.8 -.5 -12.0 -10.1 -1.2 -21.6 -21.1 -25.3 Money market mutual fund shares5 .......... 5.9 163.9 324.2 204.1 166.2 120.0 151.9 82.7 Overnight RPs and overnight Eurodollar deposits5 ....................... 42.5 25.4 17.2 58.5 11.3 -33.1 -7.5 -72.0 Memo (change in billions of dollars) Managed liabilities at commercial banks......... 27.8 73.5 59.7 13.4 17.9 8.6 10.6 -4.1 Large time deposits, gross ........................ 19.2 50.4 19.6 -4.2 2.4 10.7 6.4 5.9 Nondeposit funds .................................... 8.6 23.1 40.1 17.6 15.5 -2.1 4.2 -10.0 Net due to foreign related institutions ...... -3.8 6.6 25.2 11.9 8.9 .1 -2.3 -8.4 Other6 .............................................. 12.4 16.5 15.0 5.7 6.6 -2.1 6.4 -1.6 U.S. government deposits at commercial banks................................................. -.2 3.3 1.5 -.9 5.0 -4.0 1.6 -1.6 1. Changes are calculated from the average amounts outstanding in M-2 is M-1B plus overnight repurchase agreements (RPs) issued by each quarter. commercial banks, overnight Eurodollar deposits held by U.S. non­ 2. Annual rates of change in reserve measures have been adjusted bank residents at Carribbean branches of U.S. banks, money market for regulatory changes in reserve requirements. mutual fund shares, and savings and small time deposits at all deposi­ 3. Consists of total reserves (member bank reserve balances in the tory institutions. M-3 is M-2 plus large time deposits at all depository current week plus vault cash held two weeks earlier), currency in cir­ institutions and term RPs issued by commercial banks and savings and culation (currency outside the U.S. Treasury, Federal Reserve Banks, loan associations. For more information on the redefined monetary and the vaults of commercial banks), and vault cash of nonmember aggregates, see the Federal Reserve Bulletin, vol. 66 (February banks. 1980), pp. 97-114. 4. M-l A is currency plus private demand deposits net of deposits 5. Not seasonally adjusted. due to foreign commercial banks and official institutions. M-1B is 6. Consists of borrowings from other than commercial banks M-l A plus other checkable deposits (negotiable order of withdrawal through federal funds purchased and securities sold under repurchase accounts, accounts subject to automatic transfer service, credit union agreements plus loans sold to affiliates, loans sold under repurchase share draft balances, and demand deposits at mutual savings banks). agreements, and other borrowings. halt near the end of the quarter; yields on both below levels consistent with the growth ranges short- and long-term securities retraced a small adopted by the Federal Open Market Committee portion of their earlier declines in late June and (FOMC) for the fourth quarter of 1979 to the July. A growing federal deficit and discussions of fourth quarter of 1980. In contrast, by June M-2 a possible tax cut contributed to the view that and M-3 were within the ranges set by the FOMC, market rates might have attained cyclical lows. as growth of the nontransaction components of Nonetheless, the prime rate continued to move the broader aggregates over the quarter was some­ downward in July, further narrowing the ex­ what above the first-quarter pace. ceptionally wide gap that had existed relative to Net funds raised in credit markets by domestic market rates over the preceding months. nonfinancial sectors of the economy in the second The narrow monetary aggregates, M-l A and quarter totaled only $195 billion at a seasonally M-1B, dropped sharply in April, and despite pro­ adjusted annual rate, roughly half the pace of the gressive strengthening in May and June, con­ first three months of the year. Households, tracted for the quarter as a whole. The decline in faced with declining real incomes, heavy debt these aggregates was greater than would have burdens, and more stringent credit terms, cur­ been expected on the basis of the historical rela­ tailed borrowing in both the home mortgage and tionship among money, interest rates, and income. the consumer credit markets. Nonfinancial busi­ At the end of the quarter, M-l A and M-1B were nesses also reduced their credit demands sub­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Q2 1980 629 stantially, as large runoffs in commercial bank M-2 growth slowed only moderately, to a 5lU loans and smaller commercial mortgage borrow­ percent pace, in the second quarter, with slightly ing were only partly offset by stepped-up issu­ faster expansion in the nontransaction portion ance of commercial paper and bond financing. offsetting in part the reduction in M-1B. The U.S. Treasury borrowing was little changed from growth rate of small-denomination time deposits the first-quarter pace on a seasonally adjusted accelerated from its already rapid pace, boosted basis, while state and local government credit- by increased inflows to the variable-ceiling, 2lhmarket financing picked up in response to lower year-and-over small saver certificates (SSCs) and long-term rates. by a reduced pace of outflows from fixed-ceiling The actions taken by the Federal Reserve on accounts. The strong expansion in SSCs largely March 14, some of which were under the author­ reflected desires of investors to lock in their high­ ity of the Credit Control Act, contributed to the er yields. The six-month money market certifi­ slower pace of credit growth in the second quar­ cates (MMCs), meanwhile, expanded rapidly in ter. As incoming data indicated that excessive April, but then declined in May and June for the use of credit was no longer contributing to infla­ first time since their introduction in mid-1978; on tion, the Board began a phaseout of the program, a quarterly average basis, growth of MMCs re­ relaxing various provisions in May and ending mained near the first-quarter pace. In early the program entirely in July. June—following an action by the Depository In­ stitutions Deregulation Committee (DIDC) that raised maximum rates payable on the two vari­ Monetar y Aggregates able-ceiling accounts relative to Treasury and Bank Credit yields—ceiling rates on both MMCs and SSCs exceeded yields available on market in­ M-l A declined at a record annual rate near 4 per­ struments.1 cent in the second quarter. With nominal gross The reduced spread of market yields over reg­ national product (GNP) showing almost no ulatory ceilings at depository institutions, per­ change, the decline in M-1A translated into a AlU haps coupled with a desire of the public to ac­ percent increase in its velocity. Such an increase quire highly liquid assets in view of uncertain­ in velocity, occurring as it did in the face of the ties about economic prospects and future inter­ extraordinary drop in interest rates, indicates est rate movements, produced a progressive that the public’s demand for transaction bal­ strengthening of flows to savings accounts over ances was exceptionally weak in the second the second quarter. Outflows from savings ac­ quarter. The surge in interest rates early in the counts were extremely large during April, but year may have triggered greater-than-usual ef­ were much reduced in May and reversed in June forts by the public to economize on non-interest- at both banks and thrift institutions; the rise in bearing assets; episodes of apparent weakness in total savings deposits in June was the first since the demand for money also followed sharp inter­ July 1979. Nevertheless, on a quarterly average est rate increases in 1974 and 1978. The reduc­ basis, savings deposits fell somewhat more rap­ tion in M-l A in the second quarter also may have idly than in the preceding three months. reflected the surge in debt repayments, espe­ Inflows to money market mutual funds cially bank loans, and a speedup in the collection (MMMFs) continued strong, though at a slower of individual tax payments by the Treasury in the rate than in the first quarter. Early in the second second half of April. As a result of the latter quarter, expansion of MMMF assets halted temevent, the balances built up to cover tax-payment checks were drawn down unusually quick­ ly. The second-quarter decline in M-1B was 1. The DIDC, created by the Depository Institutions Dereg­ ulation and Monetary Control Act of 1980, has been directed somewhat less than in M-l A, owing to continued to provide for the orderly phaseout of the interest rate ceil­ rapid expansion of negotiable order of with­ ings on time and savings deposits during the six-year period drawal (NOW) accounts and accounts subject to beginning March 31, 1980. The new ceiling rate structure for MMCs and SSCs is reported in the Federal Reserve Bul­ automatic transfer services (ATS) at commercial letin, table 1.16, “Maximum Interest Rates Payable,” page banks. A9. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

630 Federal Reserve Bulletin □ August 1980 Components of Major categories of discount window, introduced in mid-March, was bank credit bank loans removed in early May, and the basic discount Change, billions of dollars rate was lowered 1 percentage point late in May TREASURY SECURITIES n + 4 BUSINESS 16 and again in June. Nevertheless, by June the dis­ , ,■..r-i..lit,,,,,, 0 "T=T" 12 count rate, at 11 percent, was well above the fed­ 4 8 eral runds rate and adjustment borrowing fell to OTHER SECURITIES 8 n 4 frictional levels. In late July, the discount rate + X I Jj__1 1 M 4 0 0 was lowered to 10 percent, an action designed to TOTAL LOANS ' 40 4 bring the rate into closer alignment with short­ 8 term market interest rates. S 32 Bank credit declined at a 4lh percent annual REAL ESTATE 12 rate between March and June, following an in­ 24 8 crease of IIV2 percent over the preceding three [I 4 months. A record drop in loans more than offset 0 16 additions to bank holdings of securities. Reduc­ CONSUMER tions in business and consumer loans led the de­ cline, while real estate loans were virtually flat n n following brisk expansion in the first quarter. The falloff in loans—evident at both large and I small banks—reflected the reduced demands for credit as economic activity weakened. In addi­ nonbank financial tion, tighter lending policies adopted by most 16 ■■. . __— banks—a trend encouraged by the Federal Re­ 11 serve’s special credit restraint program—further curtailed credit growth. In particular, sluggish Q2 Q3 Q4 Ql Q2 Q2 Q3 Q4 Ql Q2 1979 1980 1979 1980 downward adjustments in the prime lending rate Seasonally adjusted. Total loans and business loans are adjusted for encouraged many business firms to shift their transfers between banks and their holding companies, affiliates, sub­ sidiaries, or foreign branches. credit demands from banks to other markets where borrowing rates were more attractive. With the sharp decline in bank credit, banks porarily, as the managements of most funds re­ were able to reduce their reliance on managed stricted or suspended sales to new depositors in liabilities. Eurodollar borrowings dropped $8V2 response to the special deposit requirement an­ billion and other nondeposit liabilities fell $1V4 nounced by the Federal Reserve in mid-March. billion. Although net sales of large time deposits By late April, however, after the Federal Re­ totaled $53/4 billion on average for the quarter, serve had modified the special deposit require­ near the pace in the first three months of 1980, ments and many MMMFs had formulated tech­ such deposits also began to contract late in the niques to enable them to accept new deposits, spring. the rapid growth of MMMFs resumed. Yields on MMMF shares remained above those on most other short-term market obligations over much Business Finance of the quarter, increasing their attractiveness to investors. Total funds raised by nonfinancial businesses in Despite a substantial increase in nonborroiwed debt and equity markets dropped markedly in the reserves supplied through open market opera­ second quarter. Although the cash needs of non­ tions, expansion of total member bank reserves financial corporations remained substantial as slowed in the second quarter as banks, given profits weakened further and increased inventory weakness in reservable deposits, repaid borrow­ accumulation largely offset declines in fixed in­ ings at the Federal Reserve discount window. vestment outlays, firms financed a large portion The special surcharge of 3 percentage points on of these needs through reductions in financial as­ frequent borrowing by large member banks at the sets. Most notably, after accumulating a large Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Q2 1980 631 Business loans and term business loan extensions were being made short- and intermediate-term business credit at rates below prime—especially for loans of Seasonally adjusted annual rates of change, in percent1 short maturity at money center banks. Even so, Short- and the average effective rate on business loans in Business loans Period intermediate-term at banks2 early May was still well above the commercial business credit3 paper rate. As a result, many firms shifted their 1973 .................. 21.8 21.5 1974 .................. 19.3 23.5 short-term financing to the commercial paper 1975 .................. -3.8 -4.0 market ; net issuance of commercial paper surged 1976 .................. 1.3 4.4 1977 .................. 10.5 13.6 to a record level in May and continued to expand 1978 .................. 16.3 18.3 1979 .................. 17.5 20.0 rapidly in June. 1979-Q1.............. 20.5 20.8 Yields on corporate bonds, like other market Q2.............. 16.6 20.1 rates, declined sharply in the second quarter Q3.............. 22.7 27.4 Q4.............. 6.0 6.4 from their record levels near the end of the first 1980-Q1 .............. 16.4 22.0 quarter. The Federal Reserve index of yields on Q2.............. -7.9 4.1 recently issued Aaa-rated utility bonds fell from 1. Growth rates calculated between last months of period. more than 14 percent in late March to near 11 2. Based on monthly averages of Wednesday data for domestically percent in late June. Spreads between yields on chartered banks and an average of current and previous month-end data for foreign-related institutions. Adjusted for outstanding amounts Aaa-rated and lower-rated bonds, which wid­ of loans sold to affiliates. Includes holdings of bankers acceptances. ened substantially further in April, narrowed 3. Short- and intermediate-term business credit is business loans at commercial banks plus nonfinancial commercial paper plus finance somewhat in May and June, but they still re­ company loans to businesses and bankers acceptances outstanding mained historically large. outside banks. Commercial paper is a prorated average of Wednesday data. Finance company loans and bankers acceptances outstanding As long-term interest rates fell, the volume of are averages of current and previous month-end data. corporate bond financing ballooned, with the funds in many cases being used to repay bank volume of liquid assets in the first quarter, when debt. Public offerings of new security issues to­ they evidently increased their borrowing in antic­ taled a record $67 (seasonally adjusted an­ ipation of credit controls, firms drew upon those nual rate) in the second quarter, with both non­ holdings in the second quarter. A major portion financial and financial concerns contributing to of the borrowing by businesses to fill the remain­ the surge. The increased bond issuance by finan­ ing financing gap was concentrated in the bond cial corporations mainly reflected the heavy pace market, with firms taking advantage of lower of intermediate- and long-term offerings by fi­ bond rates in many cases for the purpose of re­ nance companies. Among nonfinancial corpora­ structuring balance sheets. Business loans at tions, all of the increase was accounted for by banks, meanwhile, contracted sharply, as the industrial companies; issuance by utilities re­ lagging adjustment in the prime rate made alter­ mained at about the first-quarter pace. The pro­ native sources of credit, including commercial portion of new bonds issued by nonfinancial paper issuance, relatively more attractive to firms with maturities of 10 years or over rose apfirms. The comparatively high cost of bank credit in Gross offerings of new security issues the second quarter was the result in part of the Seasonally adjusted annual rates, in billions of dollars increased cost of funds to banks associated with 1979 1980 special reserve requirements imposed in March, Type of security coupled with bankers’ concerns about meeting Q2 Q3 Q4 Ql Q2e the loan growth guidelines of the special credit Domestic corporate.... 58 56 47 63 91 restraint program. In May, the spread between Bonds .................. 50 39 35 44 78 Publicly offered..... 35 26 25 23 67 the prime rate and the rate on commercial paper Privately offered .... 15 13 10 21 11 Stocks .................. 8 17 12 19 13 widened to an unprecedented llh percentage Foreign.................... 7 9 5 2 6 points; although the spread narrowed to about 3 percentage points in June, it still remained large State and local government........ 42 44 47 33 58 by historical standards. A survey of banks in May indicated that a substantial portion of short­ e Estimated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

632 Federal Reserve Bulletin □ August 1980 preciably in May and June, as investors were couraged equity issues in April, and the greatly more receptive to such long-term securities than increased attractiveness of debt financing result­ they had been in the first quarter when inflation­ ing from declining bond yields during the quarter ary fears had been intense. also may have damped demands for equity funds. Although public offerings of bonds by higher­ rated (Aa or above) corporations were especially heavy during the second quarter, an increased Government Finance volume of lower-rated issues also was marketed. These latter issues offset to some extent the ap­ Gross bond issuance by state and local govern­ parently reduced flow of credit in the private ments increased sharply in the second quarter, placement market, a major source of funds for to a record $58 billion (seasonally adjusted) annual lower-rated borrowers. rate. The volume of tax-exempt bonds continued Stock prices rose substantially in the second to be bolstered by increased offerings of single­ quarter. The major composite indexes of stock family housing revenue bonds. In addition, total prices advanced 13 to 26 percent, as investors financing needs of state and local units were en­ apparently gave more weight to declines in inter­ larged owing to slower growth of revenues. A est rates than to prospects of lower earnings number of bond issues that had been postponed associated with the contraction in economic ac­ early in the year because of high interest rates tivity. The American Stock Exchange index con­ generally, or because rates rose above statutory tinued to post the largest percentage rise, reflect­ ceilings for some governmental units, were ing the greater relative importance of oil and brought to market in the second quarter when natural gas industry shares on this exchange. yields dropped. Stock prices continued their upward movement The Bond Buyer index of yields on general ob­ in early July, with most indexes surpassing rec­ ligation bonds fell substantially in the second ord highs reached earlier in the year. Owing to quarter, reaching its lowest level this year in the increase in the major stock price indexes, May. Subsequently, the index edged back up to conventional measures of price-earnings ratios near 8 percent in mid-July, but was still almost edged up a bit, but they continued to be histori­ VIi percentage points below its peak reached cally low. Following a record volume in the first early in the second quarter. The backup in rates quarter, equity issuance fell back in the second since the middle of the second quarter has been period to near the 1979 pace. Reductions in stock relatively greater for tax-exempt yields than for prices late in the first quarter apparently dis­ yields on corporate bonds, reflecting in part the Federal government borrowing and cash balance Not seasonally adjusted, in billions of dollars 1978 1979 1980 Item Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Treasury financing Budget surplus, or deficit (-).............. -8.1 -23.8 -20.4 21.4 -4.4 -24.6 -27.1 8.2 Off-budget deficit1............................ -3.1 -.1 -3.0 -5.2 -4.2 -.9 -3.8 -4.4 New cash borrowings or repayments (-)........................... 15.1 15.3 10.62 -4.6 12.4 18.9 19.1 5.4 Other means of financing3.................. 1.0 2.6 4.2 -1.9 2.9 -1.7 4.1 -3.1 Change in cash balance .................... 4.9 -6.1 -8.6 9.8 6.7 -8.3 -7.7 5.9 Federally sponsored credit agencies, net cash borrowings4 .................... 6.1 5.2 6.3 5.5 4.7 7.3 8.6 5.6e 1. Includes outlays of the Pension Guaranty Corporation, Postal 3. Checks issued less checks paid, accrued items, and other trans­ Service Fund, Rural Electrication and Telephone Revolving Fund, actions. Rural Telephone Bank, Housing for the Elderly or Handicapped 4. Includes debt of the Federal Home Loan Mortgage Corporation Fund, and Federal Financing Bank. All data have been adjusted to (FHLMC), Federal Home Loan Banks, Federal Land Banks, Federal reflect the return of the Export-Import Bank to the unified budget. Intermediate Credit Banks, Banks for Cooperatives, and Federal 2. Includes $2.6 billion of borrowing from the Federal Reserve on National Mortgage Association. March 31, which was repaid April 4 after enactment of a new debt- e Estimated. ceiling bill. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Q2 1980 633 record volume of tax-exempt issues coupled with rose to more than 16 percent; moreover, nonrate some falloff in the demands for such bonds by loan terms and lending standards became more property-casualty insurance companies. stringent. On the demand side, many would-be Net cash borrowing by the Treasury amounted homebuyers that satisfied eligibility criteria re­ to about $5V2 billion (not seasonally adjusted) in quired by lenders were deterred by high interest the second quarter, a period in which large tax costs and more stringent terms. Already bur­ receipts usually reduce Treasury financing dened with heavy debt, consumers were increas­ needs. With the combined federal budget—in­ ingly reluctant to take on, in addition, the high cluding off-budget agencies—moving to a slight monthly house payments, especially as real in­ surplus position, the Treasury was able to in­ come declined and indications of a steep reces­ crease its operating cash balance over the quar­ sion in activity became apparent. Businesses, ter; however, the increase was much smaller likewise, reduced their use of mortgage credit in than in the same quarter of the preceding year. association with cutbacks in commercial con­ All the Treasury’s financing needs in the second struction activity. quarter were met by sales of marketable secu­ Consequently, net mortgage lending by com­ rities. Total marketable debt outstanding in­ mercial banks, savings and loan associations, creased approximately $10 billion, reflecting an and mutual savings banks came to a virtual increase of $16 billion in the stock of coupon is­ standstill in the second quarter. A considerable sues that was partly offset by a decline of $6 bil­ amount of mortgage funds was made available by lion in Treasury bills. Nonmarketable debt out­ state and local government housing authorities, standing, meanwhile, decreased $4V2 billion as they expanded the issuance of tax-exempt during the quarter, with savings bond redemp­ bonds for the purchase of residential mortgages tions, as in the previous quarter, accounting for at below-market interest rates. However, in con­ more than half of the decline. The runoff of sav­ trast with the last cyclical downturn, federal and ings bonds appeared to slow somewhat in June, related agencies operating in the secondary mar­ however, as the differential between market ket provided only modest support to the mortgage rates and yields on such instruments narrowed. market. Federal programs that would provide Net borrowing by federally sponsored credit for purchases of home mortgages at belowagencies totaled slightly more than $5V2 billion market rates by the Government National Mort- (not seasonally adjusted) in the second quarter, below the record volume of the previous quarter. Net change in mortgage debt outstanding Almost all of the net agency borrowing was con­ Seasonally adjusted annual rates, in billions of dollars centrated in April. During the remainder of the 1979 1980 quarter, the major housing agencies reduced Mortgage debt their indebtedness, as the weakness in demand Ql Q2 Q3 Q4 Ql Q2e for home mortgage credit and the increase in de­ By type of debt Total .............................. 156 164 161 150 144 74 posit flows greatly reduced the demand for ad­ Residential.................... 118 118 115 114 104 46 Other1 .......................... 38 47 46 36 40 28 vances from Federal Home Loan Banks and as deliveries of mortgages to the Federal National By type of holder Commercial banks.............. 30 30 34 32 27 6 Mortgage Association (FNMA) slowed. Savings and loans .............. 45 51 44 34 25 -1 Mutual savings banks.......... 6 4 4 2 2 * Life insurance companies ..... 11 11 14 15 16 13 FNMA and GNMA............ 12 7 3 10 12 9 GNMA mortgage pools ...... 14 19 24 27 18 17 Mortgage and Consumer Finance FHLMC and FHLMC pools . 5 4 5 3 3 3 Other2 ............................ 33 38 33 27 41 27 Activity in mortgage markets contracted sharply 1. Includes commercial and other nonresidential as well as farm properties. in the second quarter. Faced with weak deposit 2. Includes mortgage companies, real estate investment trusts, inflows and pressures on earnings margins, de­ state and local credit agencies, state and local retirement funds, non­ insured pension funds, credit unions, Farmers Home Administration pository institutions became very restrictive in and Farmers Home Administration pools, Federal Land Banks, their mortgage lending. In April, average interest Federal Housing Administration, Veterans Administration, and individuals. rates on new commitments for conventional e Partially estimated. home mortgages at savings and loan associations *Less than $0.5 billion. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

634 Federal Reserve Bulletin □ August 1980 gage Association (GNMA) have not been used in loans, the average interest rate on new com­ the current recession as they were in the last. mitments for conventional home mortgages fell Also the pricing of purchase commitments by to near \2lU percent in July, more than 4 per­ FNMA has not been particularly aggressive ow­ centage points below the peak in April. Although ing in part to earnings problems experienced dur­ mortgage commitment activity remained quite ing earlier quarters, and sales of mortgages to weak in April and May, both new and out­ FNMA based on purchase commitments made standing commitments at savings and loans in­ previously fell off in the second quarter as mar­ creased sharply in June. ket interest rates declined. Rather than selling to Consumer installment credit outstanding con­ FNMA, mortgage companies sold most of the tracted at an average annual rate of IOV2 percent Federal Housing Administration/Veterans Ad­ in the April-May period, the first drop since May ministration mortgages that they had originated 1975 and the largest reduction in the postwar era. by issuing passthrough securities that were guar­ Substantial decreases in both closed-end and re­ anteed by GNMA. volving credit occurred, as consumers curtailed By the end of the second quarter, there were expenditures and credit use in the face of declin­ indications that mortgage market conditions ing real incomes and worsening employment were improving. The decline in short-term mar­ prospects. Credit-tightening measures by lenders ket interest rates over the quarter helped to re­ after imposition of the March credit-control duce cost pressures at thrift institutions, while package contributed to the reduction in credit enhancing deposit flows. As loan demands weak­ use. The contraction in consumer credit was ened and deposit flows began to pick up, home most pronounced at commercial banks and credit mortgage rates were lowered. At savings and unions. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

635 Industrial Production Released for publication August 15 July. Production of durable goods materials fell 2.8 percent further, reflecting sharp reductions in Industrial production declined an estimated 1.6 output of parts for consumer goods and equip­ percent in July, reflecting sharp curtailments in ment and of basic metals (exacerbated by a strike the production of most durable and nondurable in the copper industry). Output of nondurable goods materials and further cutbacks in the out­ goods materials declined by a similar amount in put of business equipment, home goods, and July as a consequence of large reductions in pro­ consumer nondurable goods. Output of electric duction of textiles, paper, and chemicals. Energy and gas utilities—mainly because of the heat materials production, bolstered by weatherwave—increased 1.7 percent, while that of man­ induced use and generation of electricity, in­ ufacturing dropped 1.9 percent and of mining 0.9 creased more than 1.0 percent in July. percent. The decline in July in total industrial Seasonally adjusted, ratio scale, 1967 = 100 production follows revised decreases for April, May, and June of 2.3, 2.6, and 2.3 percent re­ spectively. At 138.8 percent of the 1967 average, the index in July was 9.0 percent below its level in January 1980. Output of consumer goods declined 1.1 per­ cent in July—about the same as in June and less than in the preceding two months. These some­ what smaller declines were related mainly to in­ creases in the output of automotive products, as auto assemblies increased about 9.0 percent in July to an annual rate of 6.4 million units. Output of both home goods and consumer nondurable goods in July is estimated to have declined sharp­ ly further. Production of business equipment was reduced 1.4 percent in July ; large cutbacks in this grouping also occurred in the preceding three months. Output of construction supplies was re­ duced further in July, but the decline was smaller than in each of the previous five months. Federal Reserve indexes, seasonally adjusted. Latest figures: July. Production of materials declined 2.1 percent in Auto sales and stocks include imports. 1967= 100 Percentage change from preceding month Percentage change Grouping 1980 1980 July 1979 to Junep Julye Feb. Mar. Apr. May June July July 1980 Total industrial production........... 141.0 138.8 -.2 -.4 -2.3 -2.6 -2.3 -1.6 -9.2 Products, total........................... 141.7 140.0 -.1 -.4 -1.9 -1.8 -1.5 -1.2 -6.5 Final products ....................... 141.2 139.6 .3 -.2 -1.4 -1.4 -1.3 -1.1 -5.1 Consumer goods ................. 141.0 139.4 .2 -.5 -2.0 -1.7 -1.0 -1.1 -7.6 Durable ......................... 128.7 128.0 1.5 -.3 -5.3 -5.4 -.3 -.5 -18.6 Nondurable..................... 145.9 143.9 -.3 -.5 -.7 -.3 -1.2 -1.4 -2.9 Business equipment............. 168.6 166.2 .5 .1 -.9 -1.2 -2.1 -1.4 -3.0 Intermediate products ............. 143.4 141.7 -.9 -1.0 -4.0 -3.1 -2.3 -1.2 -11.1 Construction supplies........... 127.7 126.4 -1.3 -1.2 -7.5 -4.8 -4.8 -1.0 -19.2 Materials ................................. 139.9 137.0 -.5 -.3 -2.8 -4.0 -3.5 -2.1 -13.1 p Preliminary. e Estimated. Note. Indexes are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

636 Statements to Congress Statement by Paul A. Volcker, Chairman, Board effort does not reflect simply a concern about the of Governors of the Federal Reserve System, be­ need for greater monetary and price stability for fore the Budget Committee, U.S. Senate, July its own sake—critical as that is—the experience 24, 1980. of the 1970s strongly suggests that the inflation­ ary process undercuts efforts to achieve and I am pleased to be here today to review the con­ maintain other goals, expressed in the Humduct of monetary policy and to report on the Fed­ phrey-Hawkins Act, of growth and employment. eral Reserve’s economic objectives for the year As you know, our operating techniques since as a whole, as well as its tentative thinking on last October have placed more emphasis on policy goals for 1981. Our so-called Humphrey- maintaining reserve growth consistent with tar­ Hawkins Report has already been distributed to geted ranges for the various monetary aggre­ you.1 I would like simply to add some personal gates, with the implication that interest rates perspective this morning on the course of mone­ might move over a wider range. Those targets tary policy, in the context of the economic pros­ were reduced this year as one step toward pects and choices facing us with respect to other achieving monetary growth consistent with policy instruments. greater price stability. For several months after Seldom has the direction of economic activity the new techniques were introduced in October, changed so swiftly as in recent months. Today the various aggregates were remarkably close to the country is faced simultaneously with acute the targeted ranges. problems of recession and inflation. There have At that time, and for months earlier, you will been unprecedented changes in interest rates as recall widespread anticipations of recession. well as the imposition and removal of extraordi­ Nevertheless, reflecting a variety of develop­ nary measures of credit restraint. The fiscal posi­ ments at home and abroad—including an tion of the federal government is changing rapid- enormous new increase in oil prices, political ly- volatility in the Middle East, and interpretations In these circumstances, confusion and uncer­ of adverse budgetary developments—a marked tainty can arise about our goals and policies, not surge occurred in the most widely disseminated just those of the Federal Reserve, but of econom­ price indexes and in inflationary expectations in ic policy generally. Therefore I particularly wel­ the early part of this year. Those expectations in come this opportunity to emphasize the under­ the short run probably helped to support busi­ lying continuity in our approach in the Federal ness activity for a time; in particular, consumer Reserve and its relationship to other economic spending relative to income remained very high, policies—matters that are critical to public un­ with the consequence of historically (and funda­ derstanding and expectations. mentally unhealthy) low saving rates and high The Federal Reserve has been and will contin­ debt ratios. Speculation was rife in commodity ue to be guided by the need to maintain financial markets. discipline—a discipline concretely reflected in Spending and speculative activities of that reduced growth over time of the monetary and kind are ultimately unsustainable. But they carry credit aggregates—as part of the process of re­ the clear threat of feeding upon themselves for a storing price stability. As I see it, this continuing time, contributing to among other things a fur­ ther acceleration of wage rates and prices. In that 1. Federal Reserve Bulletin, vol. 66 (July 1980) pp. way, inflation threatens to escalate still further in 531-42. a kind of self-fulfilling prophecy, posing the clear Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

637 risk that the subsequent economic adjustment equilibrium and of fostering recovery. Indeed, will be still more difficult. there is already evidence—if still tentative—that Credit markets reflected these developments homebuilding and other sectors of the economy and attitudes. Bond prices fell precipitously. sensitive to credit costs and availability are bene­ Long-term money—including mortgages—be­ fiting. Meanwhile, progress is being made toward came difficult to raise. Partly as a consequence, reducing consumer indebtedness relative to in­ short-term demands for credit ballooned in the come and toward restructuring corporate bal­ face of sharply rising interest rates, at the ex­ ance sheets as bond financing has resumed at a pense in some instances of further weakening in very high level. The sharp improvement in credit business balance sheets. That heavy borrowing market conditions has been accompanied by also was reflected in acceleration in the money slower rates of increase in consumer and pro­ and credit aggregates during the winter. ducer prices, helping to quiet earlier fears, on the An attempt to stabilize interest rates by the part of many, of an explosive increase in infla­ provision of large amounts of bank reserves tion. through open market operations to support even The suddenness of the change in market condi­ more rapid growth in money would probably tions has, however, raised questions in some have been doomed to futility even in the short minds as to whether the interest rate declines run, for it could only have fed the expectations of were in some manner “contrived” or “forced” more inflation. It would certainly have been by the Federal Reserve—whether, to put it counterproductive in terms of the overriding bluntly, the performance of the markets (togeth­ long-term need to combat inflation and inflation­ er with the phased removal of the special credit ary anticipations. Instead, consistent with our restraints) reflects some weakening of our basic basic policy approaches and techniques, the Fed­ commitment to disciplined monetary policy and eral Reserve resisted accommodating the exces­ the priority of the fight on inflation. These per­ sive money and credit growth. ceptions are not irrelevant, for they could affect During this period of rising inflation and inter­ both expectations and behavior, most immedi­ est rates, the administration and the Congress al­ ately in the financial and foreign exchange mar­ so appropriately and intensively reviewed their kets but also among businessmen and con­ own budget planning. Coordinated with the an­ sumers. nouncement of the results of that broad govern­ The facts seem to me quite otherwise. ment effort and the decision of the President to Growth in money and credit since March has invoke the Credit Control Act of 1969, the Feder­ certainly not exceeded our targets; the M-l mea­ al Reserve announced on March 14 a series of sures have in fact been running below our target exceptional, temporary measures to restrain ranges, and bank credit has declined in recent credit growth, reinforcing and supplementing our months. While the decline in commercial loans of more traditional and basic instruments of policy. banks can be explained in part by exceptionally The demand for money and credit dropped heavy bond and commercial paper issuance by abruptly in subsequent weeks, reflecting the corporations, there is simply no evidence cur­ combined cumulative effects of the tightening of rently of excessive rates of credit expansion. In market conditions, the announcement of the new these circumstances it is apparent that interest actions, and the rather sudden weakening of eco­ rates have responded—and have been permitted nomic activity. In response, interest rates within to respond—not to any profligate and potentially a few weeks fell about as fast—in some instances inflationary increase in the supply of money, but faster and further—as they had risen in earlier to changes in credit demands and (so far as long­ months. Growth in the aggregates slowed, and term interest rates are concerned) to reduced in­ for some weeks M-l A and M-1B turned sharply flationary expectations. negative. It is in that context—with credit demands re­ There is no doubt in my mind that these lower duced and growth of credit running well within levels of interest rates can play a constructive our expectations and targets—that the special role in the process of restoring a better economic credit restraint programs simply served no fur­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

638 Federal Reserve Bulletin □ August 1980 ther purpose. Those measures were invoked to least for a time, the demand for money subsided achieve greater assurance that credit growth (much more than can be explained on the basis of would in fact slow and that appropriate caution established relationships to business activity and would be observed in credit usage. The special interest rates) apparently because consumers restraints are inevitably cumbersome and arbi­ and others hastened debt repayment at the ex­ trary in specific application. They involve the pense of cash balances and because the earlier kind of intrusion into private decisionmaking and interest rate peaks had induced individuals to competitive markets that should not be part of draw on cash to place the funds in investment the continuing armory of monetary policy; their outlets available in the market. use was justified only by highly exceptional cir­ As the Report illustrates, growth in M-l has cumstances—circumstances that no longer exist. clearly resumed, and the broader aggregate M-2 Our normal and traditional tools of control is now at or above the midpoint of its range. In (which in fact have been solidified by the Mone­ the judgment of the Federal Open Market Com­ tary Control Act passed earlier this year) are in­ mittee (FOMC), forcing reserves on the market tact and fully adequate to deal with foreseeable in recent weeks simply to achieve the fastest pos­ needs. sible return to, for example, the midpoint of the Neither the decline in interest rates nor the re­ M-l ranges may well have required early reversal moval of the special restraints should be inter­ of that approach, may have been inconsistent preted as an invitation to consumers or business­ with the close-to-target performance of the men to undertake incautious or imprudent broader aggregates, and therefore may have led borrowing commitments or as lack of concern to unwarranted interpretations and confusion should excessive growth in money or credit reap­ about our continuing objectives. Depending on pear. That is not happening now, but markets the performance of the broader aggregates and (and the public at large) remain understandably our continuing analysis of general economic de­ sensitive to developments that might aggravate velopments, the FOMC is in fact prepared to inflationary forces. As we saw only a few months consider that M-l measures may fall significantly ago, consumers and businessmen will react short of the midpoint of their specified ranges for quickly to that threat in their lending and borrow­ the year. ing behavior. I have emphasized the FOMC’s intention to While the recent easing of financial pressures work toward the lower levels of monetary expan­ helps to provide an environment conducive to sion over time. In reviewing the situation this growth, we should not be misled. A resurgence month, the Committee felt that, on balance, it of inflationary pressures, or policies that would would be unwise to translate that intention into seem to lead to that result, would not be consist­ specific numerical targets for 1981 for the various ent with maintenance of present—much less monetary aggregates at this time. That view was lower—interest rates, receptive bond markets, strongly reinforced by certain important techni­ and improving mortgage availability. We in the cal uncertainties related to the introduction of Federal Reserve believe the kind of commitment negotiable order of withdrawal (NOW) accounts we have made to reduce monetary growth over nationwide next January, as well as by the need time is a key element in providing assurance that to assess whether the apparent shift in demand th$ inflationary process will be wound down. for cash that took place in the spring persists. I noted earlier that the money stock actually At the same time, the general nature of the po­ dropped sharply during the early spring. In a tential problems and dilemmas for 1981 and technical sense, working on the supply side, we beyond is clear enough; these are important provided substantial reserves through open mar­ questions, not just for monetary policy but for ket operations during that period. But com­ the full armory of public policy. mercial banks, finding demands for credit and in­ The targets for the monetary aggregates are terest rates dropping rapidly, repaid discount designed to be consistent with, and to encourage, window borrowings as their reserve needs dimin­ progress toward price stability without stifling ished. In general terms, it seems clear that, at sustainable growth. But in the short run, the de­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 639 mand for money (at any given level of interest Federal Reserve, they obviously will bear on the rates) tends to be related not to prices or real out­ performance of financial markets and the econo­ put alone, but to the combined effects of both— my as the Federal Reserve moves toward reduc­ the nominal gross national product. If recovery ing over time the rate of growth in money and and expansion are accompanied by inflation at credit. current rates or higher, pressures on interest In that connection, I recognize the strong con­ rates could develop to the point at which con­ ceptual case that can be made for action to re­ sistency of strong economic expansion with re­ duce taxes. Federal taxes already account for a duced monetary growth would be questionable. historically large proportion of income. With in­ Obviously, a satisfactory answer cannot lie in flation steadily pushing income taxpayers into the direction of indefinitely continued high levels higher brackets and with another large payrollof unemployment and poor economic perform­ tax increase to finance social security scheduled ance. But ratifying strong price pressures by in­ for 1981, the ratio will go higher still. The thesis creases in the money supply offers no solution; that this overall tax burden—and the way our tax that approach could only prolong and intensify structure impinges on savings and investment, the inflationary process—and in the end under­ costs, and incentives—damages growth and pro­ mine the expansion. The insidious pattern of ris­ ductivity seems to me valid. Moreover, depend­ ing rates of inflation and unemployment in suc­ ing on levels of spending and the business out­ ceeding cycles needs to be broken; with today’s look next year, the point can be made that the markets so much more sensitized to the dangers implicit and explicit tax increases in store for of inflation, economic performance would likely next year will drain too much purchasing power be still less satisfactory if that pattern should from the economy, unduly affecting prospects emerge again. The only satisfactory approach for recovery. must lie in a different direction—a credible effort But I must also emphasize the existence of po­ to reduce inflation further in the period ahead tentially adverse consequences that cannot be and policies that hold out the clear prospect of escaped—to ignore them would be to jeopardize further gains over time, even as recovery takes any benefits from tax reduction and to risk fur­ hold. ther damage to the economy. We are now in the process of seeing the infla­ Whatever the favorable effects of tax reduc­ tion rate, as recorded in the consumer and pro­ tion on incentives for production and productiv­ ducer price indexes, drop to or even below what ity over time, the more immediate consequences can be thought of as the underlying or core rate for the size of the federal deficit, and potentially of inflation of 9 to 10 percent. That core rate is for interest rates and for sectors of the economy roughly determined by trends in wages and pro­ sensitive to credit market conditions, need to be ductivity. We can take some satisfaction in the considered. observed drop of inflation and in the damping of Many of the most beneficial effects of a tax re­ inflationary expectations. But the hardest part of duction depend on a conviction that such a re­ this job lies ahead, for we now need to make duction will have some permanence, which in progress in improving productivity or reducing turn raises questions of an adequate commitment underlying cost and wage trends—as a practical to complementary spending policies and appro­ matter, both—to sustain the progress. priate timing. We are not dealing with the notion The larger the productivity gain, the smoother of a “quick fix” over the next few months for a will be the road to price stability—partly because recession of uncertain duration, but of tax action that is the only way of achieving and sustaining for 1981 and beyond at a time when federal growth in real incomes needed to satisfy the aspi­ spending levels, even for fiscal 1981, appear to be rations of workers. Put in that light, the impor­ a matter of considerable uncertainty, with the di­ tance of a concerted set of policies to reconcile rection of movement higher. our goals—not simply relying on monetary pol­ Experience is replete with examples of stimu­ icy alone—is apparent. While those other poli­ lation, undertaken with the best motives in the cies clearly extend beyond the purview of the world, that in retrospect has been ill-timed and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

640 Federal Reserve Bulletin □ August 1980 excessive. Given the demonstrable frailty of our prematurely would surely risk dissipating the po­ economic forecasting, it takes a brave man in­ tential benefits of tax reduction amid the fears deed to project with confidence the precise na­ and actuality of releasing fresh inflationary ture of the budgetary and economic situation that forces. will face the nation around the end of this year. I have spoken before with this committee and Moreover, an intelligent decision on the revenue others about the need for changes in other areas side of the budget implies knowledge of the of economic policy to support our economic spending priorities of an administration and a goals. Paramount is the need to reduce our de­ Congress, a matter that by the nature of things pendence on foreign oil—a matter not unrelated can only be fully clarified after the election. to tax policy. We need to attack those elements For all the developing consensus on the need in the burgeoning regulatory structure that im­ for “supply side” tax reduction—and I share in pede competition or add unnecessarily to costs. that consensus—some time seems to me neces­ And I believe it would be a serious mistake to sary to explore the implications of the competing seek relief from our present problems by retreat proposals and to reduce them to an explicit de­ to protectionism at the plain risk of weakening tailed program for action. I have emphasized the the forces of competition—the pressures on need to achieve not only improvement in produc­ American industry to innovate—and under­ tivity but also a lower trend of costs and wages; mining the attack on inflation. despite its importance, I have seen little discus­ We are now at the critical point in our efforts sion in the current context of how tax reduc­ to reduce inflation while putting the economy tion plans might be brought to bear more directly back on the path to sustainable growth in the on the question of wage and price increases. 1980s. The continuing sensitivity of financial markets, I sense that the essential objectives are widely domestic and international, to inflationary fears understood and agreed on: the need to wind is a fact of life. It adds point and force to these down inflation even as recovery proceeds; the observations and questions. Tax and budgetary importance of restoring productivity and increas­ programs leading to the anticipation of excessive ing incentives for production and investment; the deficits and more inflation can be virtually as maintenance of open, competitive markets; and a damaging as the reality in driving interest rates substantial reduction in our dependence on for­ higher at home and the dollar lower abroad. eign energy. I believe it is obvious from these remarks that You know as well as I how much remains to be a convincing case for tax reduction can be made done to convert glittering generalities into practi­ only when crucial questions are resolved—ques­ cal action: to achieve and maintain the necessary tions that are not resolved today. The appropri­ fiscal discipline; to make responsible tax reduc­ ate time for decision seems to me late this year or tion and reform a reality; to conserve energy and early 1981. Spending plans for fiscal 1982 as well increase domestic sources; and to tackle the reg­ as fiscal 1981 can be clarified. We will know if ulatory maze. But I also know there is no escape recovery of business is firmly under way. There from facing up to the many difficulties. Our poli­ will have been time to develop and debate the cies must be coherently directed toward the long­ most effective way of maximizing the cost-cut­ er-range needs. In that connection, I believe that ting and incentive efforts of tax reduction, and to economic policies, public and private, should see whether a tax program can contribute to a recognize that the need for discipline and for consensus—a consensus that has been elusive in moderation in the growth of money and credit the past—on wage and pricing policies consistent provides the framework for decisionmaking in with progress toward price stability. To go ahead the Federal Reserve. □ Chairman Volcker submitted similar statements (July 28, 1980) and to the House committees on to the Senate committees on Banking, Housing, Banking, Finance and Urban Affairs (July 23, and Urban Affairs (July 22, 1980) and on Finance 1980) and on Ways and Means (July 24, 1980). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 641 Statement by Nancy H. Teeters, Member, Board tous borrowers, but beyond that the Board leans of Governors of the Federal Reserve System, be­ toward allowing competition to set the rate. fore the Subcommittee on Consumer Affairs of The Board would suggest that the question of the Committee on Banking, Housing, and Urban consumer credit rates not be taken up in isolation Affairs, U.S. Senate, July 24, 1980. from other consumer and creditor rights and re­ sponsibilities. Consumer protections often affect I am pleased to appear before the subcommittee revenues or costs and, therefore, are an integral this morning to deliver the Board’s endorsement part of any consideration of the rate issue. Fur­ of the Consumer Usury Study Commission Act. thermore, we believe that a comprehensive ap­ A more analytical approach to the regulation of proach is preferable to a piecemeal approach. consumer credit is highly desirable, and the While the Board supports the idea of a study Board hopes that this commission will make a commission, it hopes that this subcommittee real contribution to the legislative process. will, nonetheless, consider the Board’s recom­ A study commission will be able to assess the mendation to integrate the Fair Credit Billing Act extent to which the recommendations of the Na­ and the newly enacted Electronic Fund Transfer tional Commission on Consumer Finance Act. A staff draft of an integration bill was re­ (NCCF) have been fulfilled and, in addition, will cently distributed to the Board’s Consumer Ad­ be able to update the NCCF’s recommendations, visory Council, and the Council is expected to particularly with respect to open-end credit give the draft a preliminary review at its meeting that has grown so rapidly since the NCCF re­ next week. The basic good sense of having simi­ port was published in 1972. While the Board is lar, if not identical, rules for consumers to follow skeptical that much original research can be ac­ in both credit and debit transactions speaks for complished in the time given the commission, we prompt consideration of the bill. are hopeful that fruitful recommendations will re­ The Board continues to support the amend­ sult. The Board and its staff will be pleased to ment to the Truth in Lending Act that removes assist the commission to the extent possible. the 5 percent limit on discounts for cash. In addi­ The Board has previously testified before this tion to the discount bill, you asked that the Board subcommittee on the issue of federal rather than comment on a further amendment that permits state law regulating consumer credit matters. As merchants to impose a surcharge on credit-card this subcommittee may recall, the Board did not as opposed to cash transactions. To begin with, support the bill that prohibits use of the rule of from an economic standpoint, we do not per­ 78s in certain transactions. The Board opposed ceive any difference between a discount for cash that bill not because it believes creditors should and a surcharge for credit. Most probably, how­ continue to use the rule of 78s, but because it ever, a merchant can administer a surcharge believes state regulation is generally preferable much more easily than a discount. to federal regulation. This preference is based Permitting cash discounts or credit surcharges not only on general philosophical principles but makes a good deal of economic sense, in the also on the basis of experience in attempting to Board’s view, because it allows greater flexibili­ impose a national, uniform disclosure standard ty in allocating costs to those who should bear under the Truth in Lending Act. Whereas the them. If a credit-card transaction costs the mer­ Board does not recommend retreating from the chant more than a cash transaction, then the goal of national, uniform disclosure, it is inclined merchant should have the right to pass that cost to recommend that substantive regulation be left along to the card user. If the consumer prefers to to the states. use a credit card rather than bear the risks of car­ The Board has generally favored the abolition rying cash or the inconvenience of using a check, of artificial rate ceilings that reduce competition the legislation not only would permit the card­ among creditors, create unwarranted and unfair holder to do so but also would allow a merchant subsidies among classes of consumers, and arti­ to pass along the cost. The Board supports the ficially reduce credit availability. Some limit on bill because it frees up the market, encourages the amount that can be charged may be neces­ competition among payment mechanisms, and sary for smaller transactions involving necessi­ leads to a more equitable distribution of costs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

642 Federal Reserve Bulletin □ August 1980 Statement by Henry C. Wallich, Member, Board erations of trading companies; and the regula­ of Governors of the Federal Reserve System, be­ tions necessary to protect banks from a range of fore the Committee on Banking, Housing, and possible future problems could well hamper the Urban Affairs, U.S. Senate, July 25, 1980. operations of these trading companies. • Bank-owned trading companies and their I am pleased to testify on S. 2718, a bill that clients may have access to credit on more favor­ would facilitate the establishment and operation able terms than other companies; alternatively, of export trading companies. large banks could use bargaining power obtained At the outset, I should like to reaffirm the view through trading-company affiliates to obtain an of the Board that the United States needs a increasing share of the banking business of client strong export sector. The development of export firms. Although regulations can help avoid the trading companies will probably assist in achiev­ most blatant types of abuse (and the bill includes ing this goal, although in my view fundamental provisions regarding terms of credits), it would economic factors, such as U.S. price perform­ be a difficult task to supervise credit judgments ance and exchange rates, will continue to be the through regulations with the specificity needed to most important factors. Banks have an important ensure protection from unfair competition. role to play in financing U.S. exports, and banks In light of these problems, the Federal Reserve can assist export trading companies in this coun­ has tried to design safeguards that would make it try by providing financing and by offering a wide possible to permit a degree of bank participation range of export-related services. But bank own­ in export trading companies without breaching ership of trading companies raises broad issues the separation of banking and commerce. In this of public policy, some of which were set forth in connection it needs to be recognized that trading an earlier statement submitted to this committee. companies may be engaged in importing, and My statement today on behalf of the Board of thus involved in some commercial activities in Governors is limited to the issues raised by pro­ the United States as well as in commercial activi­ visions for bank ownership of trading companies, ties abroad. Most of the Board’s recommenda­ and to possible ways of dealing with these issues. tions have been incorporated in S. 2718, and they The separation of banking and commerce has a have helped strengthen the provisions of the bill long tradition in American banking and is embod­ by reducing risks to banks. But two important ied in several banking laws, most notably the provisions were omitted, and because the Bank Holding Company Act and the Glass-Stea- Board’s recommendations represented an in­ gall Act. The Federal Reserve believes that this tegrated proposal, the omissions substantially re­ separation has been a major element of strength duce the protections that the Federal Reserve be­ for the American banking system and the Ameri­ lieves are needed. can economy. In particular, the Board urges that S. 2718 be While I covered many of the problems in­ further amended to provide the following: volved in permitting significant bank ownership 1. A banking organization would be permitted of trading companies in my earlier statement sub­ to invest in an export trading company only up to mitted to the committee, I would like to briefly 20 percent of the shares of the trading company. summarize the main problems. 2. A group of banking organizations could not • Banks that are engaged in commercial trad­ own more than 50 percent of the voting stock of ing may be exposed to high risks, particularly any single export trading company. when leveraging is involved as is typically the I should like to provide some background on case with trading companies. This risk could well these proposals. be much larger than the original investment. I Although there may be debate on the exact might note that a few years ago a Japanese bank percentage of equity interest at which an investor reported losses of $0.5 billion from the failure of ceases to be essentially a portfolio investor and a major trading company with which it was close­ becomes actively associated with management, ly associated. the best guideline appears to be the point at • Bank supervisors would be involved to a which an investor can make use of equity ac­ substantial degree in decisions regarding the op­ counting—generally 20 percent. When an own­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 643 ership interest is 20 percent or more, accepted It is sometimes argued that banks can better standards of accounting normally call for a bank limit their risks by maintaining control over their (or any company) to include on its balance sheet affiliates. This proposition may well be valid for and income statements its proportionate share of commercial banking affiliates; it does not, how­ the net assets and earnings of a company. Expe­ ever, represent a basis for preferring to allow a rience in international banking has generally bank to acquire control over a commercial firm shown that when bank ownership in a foreign rather than to limit bank involvement in manage­ company permits the use of equity accounting, ment of that firm through restrictions on bank the bank frequently tends to become involved in ownership. management aspects of the business and to be The philosophy of the Federal Reserve pro­ identified with the company in the eyes of the fi­ posals—that bank ownership and management of nancial community. When such identification ex­ trading companies should be limited—was de­ ists, a bank may find it necessary to stand behind signed not only to reduce risks to banks, but also all of the liabilities of a company in case of finan­ to hold to a minimum the need for regulation of cial difficulties, in order to preserve the bank’s the operation of export trading companies, while standing in international financial markets. For permitting banks to provide some financial sup­ companies that are highly leveraged, a bank’s port. Underlying this approach is the view of the potential loss could well be much larger than the Board that bank supervisors need to develop original investment. ways of reducing the burden of supervision, both By contrast, at levels of ownership interest at on the supervisory agencies and on the banking which equity accounting does not apply, the im­ community. In the area of international banking, mediate rewards to an investing bank would be the Board has taken some steps to implement the dividends it might receive on shares and in­ this view in revising its Regulation K last year, come from loans or services provided to the trad­ and the Board staff is reviewing proposals that ing company. Under those circumstances a bank would further reduce the regulatory restrictions would tend to treat a trading company on an on Edge corporations. “arm’s-length” basis, and the bank’s reputation The export trading companies provided for in would not become clearly associated with that of S. 2718 would be organized and operated princi­ the company in which it had invested. pally for the purpose of exporting goods or serv­ To strengthen its recommendation on limiting ices produced in the United States as well as pro­ ownership interests, the Federal Reserve earlier viding services to facilitate such exports. If U.S. proposed that an export trading company could banks were to have important ownership and not bear the name of an investing bank nor repre­ management interests in trading companies, they sent that it was affiliated with a bank. Provisions would be engaged indirectly in a host of activities to accomplish this have been included in S. 2718. not currently permissible under U.S. law. Under As we saw with real estate investment trusts in the act, for example, trading companies could the mid-1970s, public identification of a bank purchase for export commodities and manufac­ with another enterprise can involve the bank in tured goods, and could provide services in such substantial potential commitments and, in the fields as accounting, tourism, engineering, archi­ case of difficulties, in substantial losses, even tecture, and transportation. U.S. banking organi­ when there is no bank ownership interest. How­ zations do not have extensive experience in ever, when a significant ownership interest ex­ these nonbanking activities, nor do the bank su­ ists, even if there is no public identification pervisory agencies. through the name of the trading company, there The bill directs the bank regulatory agencies to is also a likely commitment on the part of the establish standards to ensure against unsafe or bank. Thus, in devising rules for export trading unsound export trading company practices that companies when bank investments are contem­ could affect any banking organization that con­ plated, it is necessary to couple the restriction on trolled a trading company. Development of the public identification of banks and trading com­ requisite expertise to cope with the almost limit­ panies with a limitation on bank ownership inter­ less range of activities that would be permitted to ests. export trading companies under S. 2718 would be Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

644 Federal Reserve Bulletin □ August 1980 time consuming and costly to the bank regulatory exceed 10 percent of the bank’s capital, while to­ agencies. If banks owned trading companies, tal equity investment by a bank in one or more they would, of course, also need to develop ex­ trading companies could not exceed, in the ag­ pertise in those lines of activity in which the trad­ gregate, 5 percent of the bank’s capital. Such ing company specialized. In sum, in view of the loans could be made by the bank, its Edge corpo­ risks of bank ownership of trading companies, rations, or other holding company affiliates. and of the large costs that would be associated These different members of a banking organi­ with efforts to control those risks through regula­ zation could also provide other services, such as tion, we believe there is a basic presumption that foreign exchange, information on foreign mar­ bank ownership should only be allowed on a kets, letters of credit, advice on arranging ship­ scale that does not involve an important manage­ ments, and insurance brokerage. I recognize ment interest. that, under the Board’s Regulation K, it would The second Board recommendation was that not be possible for Edge corporations to supply S. 2718 contain a limit on the total investment in to export trading companies the full range of a single export trading company by all banking services that a bank could supply, and I believe organizations combined. If banks as a group con­ that it would be appropriate to allow Edge corpo­ trolled a trading company, the banks would rations additional authority to enable them to as­ likely be identified with the company even sist export trading companies. The Board might, though none had an interest of 20 percent or under appropriate restrictions, create for export more. This identification could expose the in­ trading companies a special status under Regula­ vesting banks to the risk of large losses in the tion K similar to that proposed last year for quali­ event of the failure of the trading company. fied domestic business entities—a proposal on These recommended restrictions on bank in­ which the Board has not yet acted. vestment do not represent severe restraints on Moreover, I should note that Regulation K the operations of export trading companies. For provides that Edge corporations will apply to the example, under the Federal Reserve proposal, Board to engage in providing services that would three banks together could supply up to 50 per­ be incidental to international or foreign business, cent of the capital of a trading company. And and the Board may expand that list of per­ that trading company would be able to operate missible financial services on the basis of the on the basis of its own business judgment with­ facts submitted in the applications. out being subject to the special operating rules In conclusion I should reemphasize that the established by bank supervisory agencies that U.S. economy would best be served by having are contemplated under S. 2718. banking organizations assist trading companies Banks can provide support to trading com­ as bankers and limited investors rather than as panies in a number of ways apart from equity in­ owner-operators of these firms. This arrange­ vestments. First among these is financing—the ment will permit banks to provide the financially area in which the bank’s expertise is likely to be related services in which they have expertise, of greatest value to the trading company. The while permitting trading companies to innovate Federal Reserve proposals contemplated that a unfettered by regulation of their activities. At the banking organization could lend to any single ex­ same time it will preserve the separation of bank­ port trading company an amount that together ing and commerce and the role of banks as the with its investment in that company would not impartial arbiters of credit. □ Statement by Paul A. Volcker, Chairman, Board I am pleased to be here this morning on behalf of of Governors of the Federal Reserve System, be­ the Depository Institutions Deregulation Com­ fore the Committee on Banking, Housing, and mittee (DIDC) to discuss the actions taken by Urban Affairs, U.S. Senate, August 5, 1980. that committee in the months since its creation Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 645 by the Depository Institutions Deregulation and latory limits on the value of gifts have been diffi­ Monetary Control Act of 1980. cult to enforce, and it is evident that those limita­ At the outset, I would like to emphasize my tions are being widely exceeded in some personal view that the committee has worked ef­ instances. The effect is to increase yields above fectively, with good coordination and coopera­ deposit rate ceilings and to divert valuable examin­ tion among the constituent agencies that make up er time that clearly could better be spent eval­ its membership. As might be expected, dif­ uating the safety and soundness of institutions. ferences of opinion or emphasis on some issues Offers of cash by some institutions to those that have been expressed, but I have been much more bring a “friend” to make a deposit have recently impressed with the degree of consensus that has increased deposit yields IV2 or more percent­ developed as we have attempted to solve com­ age points above ceiling rates in some markets; it mon problems. The committee staff, drawing on is apparent that such finders’ fees are often the expertise of each agency, has provided a bal­ shared, directly or indirectly, with the depositor, anced analysis of the issues, so that discussion contrary to the intent of present regulation. among the DIDC members has had a common An extended comment period on DIDC pro­ base as well as the ability to draw on the special posals to ban both premiums and finders’ fees for insights of the individual members. Our dis­ any deposit subject to rate ceilings has resulted cussions have focused—I believe in a balanced in widespread comment. These comments, along way—on the needs of savers and borrowers, the with other relevant material, are now being ana­ relationship between DIDC decisions and the lyzed by our staff. Our present schedule calls for pattern of economic growth, the needs of finan­ the DIDC to make its decision on September 9. cial institutions within the context of a changing In order to provide planning time for the indus­ competitive environment, and the charge of the try, the committee has already announced that, Congress to the committee to look toward the should it take action on these proposals to elimi­ eventual elimination of deposit rate ceilings. As nate or significantly reduce premiums or finders’ this listing suggests, we see our central responsi­ fees, its decision would not be effective until De­ bility under the law as one of managing interest cember 31. rate ceilings in a manner that supports the na­ In its most significant decision, the DIDC at tion’s economic goals and prepares the way for the end of May adjusted the ceiling rates payable ultimate deregulation; the controversial matter of on both 6- and 30-month floating-ceiling depos­ the differential on various types of deposit in­ its—those deposits whose ceiling rates are tied to struments created after December 1975 should interest rates on Treasury securities with com­ be evaluated in that larger context. parable maturities. (See attachment I.1) The ad­ The first major issue before the committee was justments increased the ceilings by changing that of premiums and finders’ fees for new depos­ their relationship to the yields on corresponding its. The issue had been under study by the vari­ Treasury securities and established minimum ous agencies and had already been scheduled for ceilings for each of the deposit categories. discussion by the Interagency Coordinating Several factors led us to take these actions. Committee when the DIDC was created. While With respect to increasing the ceilings relative to the question of permitting or eliminating pre­ Treasury securities, the primary objective was to miums or finders’ fees is sometimes posed as an improve the competitive position of all deposi­ issue of further regulation rather than deregula­ tory institutions in order to attract funds at a time tion, that view seems oversimplified. The fact is when the extreme pressures on earnings of that premiums and finders’ fees have been regu­ institutions seemed to be subsiding. Savings and lated in large part as a means of enforcing depos­ loan associations, mutual savings banks, and it rate ceilings, but DIDC members have found smaller commercial banks—all of which had that current industry practices involving the use of premiums and finders’ fees make it increas­ 1. The attachments to this statement are available on ingly difficult to administer such ceilings fairly request from Publications Services, Board of Governors and effectively during the phaseout period. Regu­ of the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

646 Federal Reserve Bulletin □ August 1980 been under liquidity pressure—are a primary porarily, suffer should yields on Treasury secur­ source of credit for housing, agriculture, and ities, to which floating ceilings are tied, dip to small business. These institutions had been find­ relatively low levels. In an environment of de­ ing it increasingly difficult to compete with alter­ clining interest rates, in which pressures on insti­ native market instruments for funds, particularly tutional earnings would in any event be reduced, money market mutual funds and Treasury secur­ the best approach seemed to be to permit the ities. In that connection, I should note that yields thrift institutions and small banks to compete on Treasury securities to which the deposit ceil­ more effectively. ings are related are often significantly below oth­ In the past, declines in interest rates have been er interest rates available in the market. associated with an acceleration of deposit in­ I believe all of the DIDC members are sensi­ flows to thrift institutions and small banks be­ tive to the reality of an environment in which the cause their fixed-rate-ceiling deposits became in­ cutting edge of competition faced by depository creasingly more attractive relative to competitive institutions has been increasingly not among instruments. Today, those fixed-rate deposits are themselves, but with nondeposit instruments — well below market rates. But establishment of a and especially with new vehicles such as money minimum ceiling rate on the popular 6- and 30market mutual funds. Funds diverted to the mar­ month floating-ceiling certificates potentially en­ ket or to money market funds do not directly find ables depository institutions to enhance their their way into important credit markets—espe­ competitive performance in an environment of cially for housing, agriculture, and small busi­ relatively low rates. ness-emphasized by the institutions. By allow­ In addition, the congressional mandate to the ing depository institutions the flexibility to offer DIDC to look toward ultimate removal of deposhigher returns, the changes made by the com­ it-rate ceilings suggested that it would be desir­ mittee should facilitate a larger increase in their able for the depository institutions, when consis­ deposits and, consequently, in the flow of funds tent with other goals, to gain experience with to the credit markets they serve. Moreover, the greater competitive freedom in rate setting. overall decline in interest rates occurring at the DIDC members are aware that there has been a time the actions were taken, by easing the earn­ general tendency for institutions to pay the ceil­ ings pressures faced by many of these institu­ ing rate, and that consequently, institutions may tions, made them better able to offer the more be reluctant to follow open market rates down, competitive rates. In short, from the point of should they drop appreciably. In the short run, at view of both economic recovery and concern the minimum levels of the ceiling, the result with the long-run financial strength and com­ should be higher inflows of deposits than would petitive posture of depository institutions, it otherwise take place. Should rates in the open seemed to the committee a desirable time for market persist at lower levels, institutions should banks and thrift institutions to be placed in a in time respond; indeed, any other result would stronger position to increase flows of small time cast in doubt the concept of deregulation. deposits with floating ceilings. The question of a differential in deposit rates The concept of minimum ceilings (which, at between thrift institutions and banks has, of the time the decision was made, were at levels course, been highly controversial. The DIDC left near or below those prevailing) was adopted in intact the differential of lU percent for 30-month part in recognition of the fact that Treasury se­ savings certificates. Those longer-term deposits curity yields are not only generally below other are considered particularly appropriate to the market rates but generally lead declines in other longer-term nature of asset distribution of thrift rates available to savers. Thus, floating deposit- institutions and provide a more solid base and in­ rate ceilings related to such instruments would centive for mortgage lending. decline more rapidly than yields on other avail­ The DIDC, in establishing the new rate ceil­ able instruments, such as money market mutual ings, also faced the prospect that the decline in funds. As a consequence, the competitive posi­ interest rates would, under preexisting arrange­ tion of depository institutions might, at least tem­ ments, reintroduce a differential on six-month Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 647 money market certificates (MMCs) after more While the committee is aware that the depositor than a year during which commercial banks and who breaks his deposit contract by withdrawing thrift institutions had competed on equal terms. the deposit before maturity may be concerned Small commercial banks, which are significant upon finding his principal reduced by early with­ lenders not only in the mortgage market but also drawal penalties, a similar situation would also to agriculture and to small businesses, could thus occur if an investor were to liquidate a market have faced substantial deposit attrition and sig­ security before maturity in an environment of nificant pressure on their ability to extend credit rising rates. A depositor provided a market-orito vulnerable sectors of the economy. In the ented rate of return on a term deposit is, in ef­ light of that potential problem, the committee, fect, asked to share more of the interest rate risk while permitting the differential to reappear formerly borne by the depository institution, a generally at levels of rates prevailing in recent risk that appeared to be limiting the willingness months, also permitted commercial banks tem­ of the institutions to commit funds to credit mar­ porarily to reissue maturing MMCs to the same kets. holder at a rate equal to the thrift ceiling. More­ Since the DIDC acted in late May, on a sea­ over, the minimum deposit ceiling established sonally adjusted basis over the last two months, made no allowance for a differential, mainly on small time deposits (mostly MMCs and smallthe basis that should those minimums be effective, saver certificates) at all institutions have shown all institutions would be in a relatively favorable only modest growth, but thrift institutions appear position to attract deposits. to have performed somewhat better than com­ DIDC members, in evaluating the potential im­ mercial banks. Both banks and thrift institutions pact of the deposit-rate-ceiling adjustments of have experienced outflows of MMC balances, as late May, were apprehensive that lenders might the ceiling rate on such deposits generally re­ not be willing to commit additional deposit in­ mained below those available on alternative in­ flows to mortgage and other credit markets be­ vestments, despite the ceiling rate adjustment. cause of their concern that those deposits would Both kinds of institutions have attracted larger be rapidly withdrawn if market rates sub­ inflows of 2V2-year-or-longer, small-saver cer­ sequently rose. In the environment of rising in­ tificates, but thrift institutions, which have had terest rates in late 1979 and early 1980, the vol­ the advantage of a 25-basis-point differential, ume of withdrawals before maturity for the have done relatively better. Presumably, growth purpose of acquiring higher-yielding deposits— in total small-denomination time deposits at both often at the same institution—rose sharply be­ sets of institutions would have been slower, and cause the early withdrawal penalty in the early even negative, without the DIDC actions of late months of a deposit’s life was not sufficient to May. offset the gain from reinvestment. Technically, The biggest surprise has been the behavior of this situation reflected the provision that the min­ savings accounts, which rose substantially at all imum required penalty was imposed only on ac­ types of institutions in spite of ceiling rates well crued interest and did not require a reduction in below market rates. Undoubtedly, economic un­ the amount of the original deposit; in the early certainty-including questions in depositor’s months of a deposit’s life, insufficient interest minds about the interest rate outlook—has in­ has accrued to act as a deterrent to early with­ creased the public’s desire to hold highly liquid drawal when interest rates are rising appreciably. assets. Although the increase in total time and In those circumstances, the original maturity of savings deposits has not as yet been reflected in the deposit lost significance. Therefore, in late expanded mortgage holdings at the various insti­ May, the DIDC modified the early withdrawal tutions, both outstanding and new commitments rule to increase the early withdrawal penalty in by savings and loan associations registered in­ the early months of a deposit’s life, while leaving creases in June. the penalty in subsequent months virtually un­ Questions have arisen about the effects of the changed; in the first months of the life of the de­ DIDC actions on mortgage rates. As a general posit, the penalty will exceed accrued interest. principle, the effect of the ceilings on mortgage Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

648 Federal Reserve Bulletin □ August 1980 rates must be viewed in the context of the entire Finally, I would like to comment on S. 2927, a capital market, of which the mortgage market is bill that would require a differential of a full 25 just one part. Mortgage rates are unlikely for basis points on all deposit categories established long to diverge substantially from other capital after December 10, 1975, for 12 months, and then market rates because many potential mortgage reduce the differential 5 basis points per year for buyers can shift freely from bonds to mortgages, the subsequent 5 years. The DIDC presently has or the reverse. However, to the extent that high­ the authority to institute a schedule such as that er ceilings increase the ability of depository insti­ proposed in the bill for all such deposit cate­ tutions to compete for deposit funds, the flow of gories and to create new deposit categories with mortgage credit should be enhanced, tending to or without the differential. However, my own bring downward pressure on mortgage rates rela­ feeling—reinforced by my actual experience in tive to the bond market. Deposit costs can at working with the committee—is that the public times play some role in that process, but the cur­ interest in the face of shifting and uncertain mar­ rent spread between mortgage rates and deposit kets is likely to be enhanced by retaining flexibili­ costs appears wide enough to induce profitable ty within the overall context of working toward mortgage lending should deposit inflows materi­ deregulation. I understand some other members alize in size, and that factor appears to have con­ of the committee may have a different view of the tributed to the recent tendency for mortgage matter; the bill has not been discussed at a com­ rates to fall. mittee meeting. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

649 Announcements Letter on Monetary Target Ranges clear up any misunderstanding, let me indicate that, abstracting from the institutional influences and ques­ tions cited above, the general intent of the FOMC at Following is the text of a letter sent by Chairman this time can be summarized as looking toward a re­ Volcker on July 29, 1980, to Senator William duction in ranges for M-l A, M-1B, and M-2 for 1981 Proxmire and Representative Henry S. Reuss on the order of V2 percentage point. Converting that discussing monetary target ranges for 1981: approach into specific numerical ranges for next year requires making a number of technical judgments that involve considerable uncertainty and necessarily, at It is apparent to me from the questions and dis­ this point, a degree of arbitrariness. Specific ranges for cussions at the recent monetary policy oversight hear­ each aggregate, and assumptions behind their deriva­ ing before your committee that confusion has unfortu­ tion, follow this letter. nately arisen over the intent of the Federal Open Mar­ In accordance with usual procedures, all of the ket Committee in characterizing monetary target ranges will have to be reassessed in or before next ranges for 1981 only in general terms. I was, for in­ February. The extent of downward adjustments in the stance, disturbed that some members of the com­ ranges not only will be influenced by the various tech­ mittee apparently seriously considered that the FOMC nical factors described below, but also will be condi­ was somehow signaling a reluctance to provide specif­ tioned by the speed with which inflationary biases in la­ ic numerical targets for 1981 at an appropriate time—a bor and product markets can be reduced, and by the like­ thought, I can confidently say, that has never entered lihood that the economy can make an orderly adaptation FOMC discussion. to curtailed money growth. The need for public policies, Our concern was quite different. We wanted to other than monetary policy, to move in a complemen­ reiterate, as clearly as possible, the intent of the tary way to speed those adjustments was, of course, FOMC “to seek reduced rates of monetary expansion the essence of my testimony before the committee. over coming years, consistent with a return to price The appropriate performance of money growth in stability” and the “broad agreement in the Committee 1981, within the ranges adopted, relative to actual re­ that it is appropriate to plan for some further progress sults in 1980 will also depend to some extent on the in 1981 toward reduction of targeted ranges.” We be­ outcome this year—on for instance, whether this year lieved then, and believe now, that those general state­ sees a very slow growth in narrow money because the ments are the clearest and most useful indication of public has, for one reason or another, economized intentions that we can make (and are responsive to the sharply on cash balances. requirements of P.L. 95-523, the Humphrey-Hawkins The FOMC approaches the targeting process with a Act) and we have been concerned that an attempt to great deal of care, and is frankly concerned that set forth precise numerical ranges for each target could changes in numerical targets, particularly once speci­ well prove to be ultimately a source of confusion fied in detail as below, will give rise to confusion even rather than clarity. A major part of the reason is that when (perhaps particularly when!) such changes are certain institutional changes are in train or in pros­ purely in response to a technical, institutional change pect—in particular the introduction of NOW accounts that has no real significance for monetary policy. But I on a nationwide basis but also the possible continued trust this additional information will, despite those development of money market funds—that will upset concerns, help further the greater public understanding “normal” relationships among the various aggregates of monetary policy that we both wish to foster. and their relationship to economic activity. While we know these institutional changes are under way, the magnitude of their impact is (and for a time inevitably Derivation of Specific Monetary Growth Ranges will remain) in substantial doubt. Moreover, the FOMC wished to appraise for a period of time the last­ for 1981 on the Basis of Certain Assumptions ing significance, if any, of the recent shortfall in M-l relative to economic activity. A number of technical judgments need to be made in Unfortunately, our attempt to cut through the insti­ deriving specific numerical monetary growth ranges tutional uncertainty to describe the broad substances for the aggregates in 1981 consistent with the intention of our intent with respect to monetary growth ranges to reduce ranges for M-l A, M-1B, and M-2 on the or­ seems to be subject to misinterpretation. To attempt to der of V2 percentage point. These include: (a) the ex­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

650 Federal Reserve Bulletin □ August 1980 tent to which the public will shift from demand somewhat arbitrary, judgments of the impact of insti­ deposits to NOW accounts next year; (b) the extent to tutional change and must be considered illustrative. which there will be shifts from savings accounts or These complications should not obscure the basic in­ other interest-bearing assets to NOW accounts; (c) the tent of achieving a modest further reduction in mone­ degree to which money market funds will continue tary growth rates next year, as the FOMC indicated their phenomenal growth (in the process drawing earlier. That the range for M-1B next year will, in all funds that would otherwise have flowed both through likelihood, be higher than this year needs to be under­ institutions whose liabilities are in M-2 and the open stood as no more than a technical adjustment to ac­ market); and (d) the extent to which the public will or commodate one-time shifts out of savings accounts in will not tend to return to longer-run relationships be­ response to the introduction of NOW accounts on a tween cash holdings, interest rates, and the nominal nationwide basis. The reduction in M-l A is exaggerat­ GNP—in other words, assessment of factors affecting ed downward for comparable reasons. The basic point shifts in the public’s desire over the longer run to hold is that these ranges, abstracting from such shifts, are money balances in relation to income. expected to be lower than in the preceding year, and The degree of shifting into NOW and ATS accounts thus reflect a further curtailment of money growth. will depend on the aggressiveness with which banks and other depository institutions promote the new ac­ counts, as well as on public response. Partly on the basis of experience in various New England states it may be estimated that in 1981 shifts from demand de­ Implementation of posits to NOW accounts could lower M-l A growth by Monetary Control A ct amounts ranging from 1 to 5 percentage points. Simi­ larly, such shifts from savings accounts could raise M-1B growth V2 to 2V2 percentage points. The Federal Reserve Board has announced a ten­ If the midpoints of those ranges are taken as the best tative schedule for carrying out provisions of the (but obviously crude) estimate available at the present Monetary Control Act. Included is a 60-day time, target ranges for M-l A and M-1B would be im­ grace period for the posting of reserve require­ plied of 0 to 2V2 percent and 5 to percent, respec­ ments by nonmember institutions. tively. In essence, those changes represent a 1/2-point reduction in the ranges adopted for 1980—which are Enacted last March 31, the act is designed to 3V2 to 6 percent for M-l A and 4 to 6V2 percent for improve the effectiveness of monetary policy by M-IB—but with the downward adjustment noted above applying new reserve requirements set by the for M-l A to allow for the effect of shifts into newly Federal Reserve for commercial banks, savings introduced NOW accounts from demand deposits and banks, savings and loan associations, and credit the upward adjustment for M-1B to allow for shifts from other assets. The target growth range for M-l A unions that offer transaction accounts or non­ would have to be raised if shifts out of demand depos­ personal time deposits. its were less than assumed, and lowered if shifts were The act also provides access to Federal Re­ greater. Similar reasoning would apply to the range for serve services for all institutions subject to re­ M-1B with regard to shifts out of savings deposits and serve requirements, and requires the Board to other interest-bearing assets. The ranges for M-l A and M-1B also imply continued efforts in general by the publish a set of pricing principles and a proposed public to economize on transactions-type cash bal­ schedule of fees for services by September 1, ances. 1980. The Board is required to begin actual pric­ Consistent with a reduction in ranges on the order of ing of services by September 1, 1981. V2 percentage point, the growth range for M-2 for 1981 Three proposals—on reserve requirements, would be 5V2 to 8V2 percent unless money market funds, included in M-2, are judged to be drawing sub­ the discount window, and passthrough arrange­ stantial new amounts of funds that in the past would ments for reserve maintenance—have already have been lodged in open market instruments (which been issued by the Board. However, substantial are not in M-2). Consistent with the indicated M-l and effort will still be required to complete and dis­ M-2 targets, M-3 and bank credit ranges of growth for tribute reporting forms, to prepare operations 1981 of 6V2 to 9V2 percent and 6 to 9 percent, respec­ tively, could be the same as for 1980. Maintenance of manuals, and to familiarize a large number of de­ these ranges relative to M-l and M-2 is related to the pository institutions with the new requirements growth in housing, business, and other credit that and procedures. would be a normal accompaniment of the expected re­ Consequently, instead of the originally covery in economic activity. planned September 1 start for implementing the It should be emphasized that the relationship among the specific numerical ranges for the M-ls and M-2 are new reserve requirements, an alternative time­ dependent at this state on necessarily rough, and table has been adopted that provides for large Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 651 nonmember institutions to begin posting required mutual funds would be eliminated and that de­ reserves by early November. Member banks posits would be returned on August 11. would continue to post reserves under existing Because of technical considerations relating to rules until that time. Reserves for member the return of the special deposits as originally banks—which will be reduced under the pro­ proposed, the Board has decided to return the gram—will be adjusted later to ensure that re­ deposits two weeks earlier than scheduled. serves posted over the first year will be the same as if the reduction had started in September. Regulation Z. Amendment The Federal Reserve Board has approved, ef­ Change in Discount Rate fective August 1, 1980, an amendment to Regula­ tion Z (Truth in Lending) that increases the toler­ The Federal Reserve Board approved a reduc­ ance for accuracy in disclosure of the annual tion in the discount rate from 11 percent to 10 percentage rate in mortgage transactions in­ percent, effective July 28, 1980. The action is a volving irregular payments or advances. purely technical adjustment to bring the discount The amendment allows for a tolerance of V2 of rate into alignment with the level of short-term 1 percentage point above or below the actual an­ market interest rates and bank lending rates. nual percentage rate in the case of irregular mort­ In making the change, the Board acted on gage transactions, through March 31, 1981. requests from the directors of the Federal Re­ After that date, the tolerance for accuracy re­ serve Banks of New York, Cleveland, Rich­ verts to the standard Vs of 1 percentage point mond, Atlanta, Chicago, St. Louis, Minneapolis, above or below the actual annual percentage rate Kansas City, Dallas, and San Francisco. (Sub­ generally allowable under Regulation Z. sequently, the Board approved similar actions by The Board’s action put into effect a recom­ the directors of the Federal Reserve Banks of mendation in the legislative history of the Truth Boston and Philadelphia, effective July 29, 1980.) in Lending Simplification and Reform Act, under The discount rate is the interest rate that is which the Board is revising Regulation Z. The charged for borrowings from the District Federal congressional conference report on which the act Reserve Banks. is based suggested that the Board temporarily re­ lax the rules for accuracy in disclosure of annual percentage rates with respect to irregular mort­ gage transactions. Return of Special Deposits These are defined in the amendment as real property transactions involving multiple ad­ The Federal Reserve Board has announced that vances (made, for example, in the course of con­ it would return on July 28 to money market mu­ struction financing) or irregular payment sched­ tual funds and like creditors some $573 million of ules other than the first payment period or the special deposits they have made with the Federal first or last payment amount (for example, loans Reserve under the requirements of the Board’s with mortgage insurance premiums that vary credit restraint program initiated March 14 and over the terms of the loan). now being phased out. The Board acted in light of comment received The special deposit requirements of the pro­ on a proposal made last May to permit temporar­ gram called in part for money market mutual ily a more generous tolerance for error in the funds to deposit with the Federal Reserve 15 per­ case of irregular mortgage transactions. cent of the increases in their assets covered by The temporary relaxation is intended to give the program. This was reduced effective June 16 mortgage lenders time to acquire and put into use to Vh percent. On July 3, the Board announced calculation tools adequate to make the complex that the program was no longer needed in light of calculations required to determine accurately the developments in the economy, and said that the annual percentage rate for complicated mort­ special deposit requirement for money market gages. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

652 Federal Reserve Bulletin □ August 1980 Policy for Assessment of and Exchange Commission from giving credit Civil Money Penalties on the initial purchase of mutual fund shares. The Federal Reserve Board has approved a su­ pervisory policy for the assessment of civil mon­ Regulation Y: Interpretation ey penalties for violation of certain laws. The policy was recommended to federal financial reg­ The Federal Reserve Board has announced an ulatory agencies by the Federal Financial Institu­ interpretation of its Regulation Y (Bank Holding tions Examination Council. Companies), effective August 11, 1980. The in­ The Financial Institutions Regulatory and In­ terpretation allows a bank holding company to terest Rate Control Act of 1978 provides that the establish, without prior approval of the Board, Board may assess penalties for violations of cer­ an operations subsidiary to perform services for tain provisions of statutes including the Change the bank holding company and its banking and in Bank Control Act, the National Banking Act, nonbanking subsidiaries that the bank holding the Bank Holding Company Act, and the Federal company could perform directly. Reserve Act. The principal points in the statement of super­ visory policy with respect to civil money penal­ Changes in Board Staff ties are as follows: 1. Establishment of procedures by the bank The Board of Governors has announced the fol­ regulatory agencies for the exchange of detailed lowing appointments in the Division of Con­ reports on enforcement actions taken. sumer and Community Affairs, effective August 2. Specification of the factors that should be 10, 1980. taken into consideration in deciding whether, Glenn E. Loney as Assistant Director. Mr. and in what amounts, civil money penalties Loney, who joined the Board’s staff in February should be imposed. 1975, holds a B.A. from Michigan State Uni­ The supervisory policy developed by the coun­ versity and a J.D. from the University of Michi­ cil and adopted by the Board is additional to the gan Law School. Board’s existing policies for implementation of Dolores S. Smith as Assistant Director. Ms. the civil money penalties provisions of the Finan­ Smith came to the Board in December 1975; she cial Institutions Regulatory and Interest Rate holds a B.A. from the University of Texas and a Control Act. J.D. from Georgetown University Law Center. The Board has also announced the resignation of Robert C. Plows, Assistant Director, Division Regulation T: Amendment of Consumer and Community Affairs, effective August 18, 1980. The Federal Reserve Board has announced ap­ proval, effective November 3, of an amendment to Regulation T (Credit by Brokers and Dealers) to permit brokers and dealers to lend on mutual System Membership.fund shares. The Board acted after consideration Admission of State Bank of comment received on a proposed amendment The following bank was admitted to membership issued in 1979. Under the amendment brokers and dealers can in the Federal Reserve System during the peri­ extend and maintain credit only on fully paid-for od July 11, 1980, through August 10, 1980: mutual fund shares. A broker-dealer would be prohibited under provisions of the Securities Ex­ Oklahoma change Act and existing rules of the Securities Elk C ity............................Elk City State Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

653 Legal Developments Amendments to Regulation D 1981, after which data the general standard of accura­ cy in paragraph (b) of this section shall apply. The Board of Governors has determined to rescind the marginal reserve requirement on managed liabilities of member banks (and Edge and Agreement Corpora­ Amendments to Credit Restraint tions) and United States branches and agencies of for­ eign banks with total worldwide consolidated bank Subpart A assets in excess of $1 billion, and the supplementary reserve requirement imposed on large denomination In view of current economic conditions, the Board of time deposits of member banks (and Edge and Agree­ Governors is terminating the reporting and special de­ ment Corporations). posit requirements of the consumer credit restraint Effective July 24, 1980, the Board amends Regula­ program. The provisions regarding change in terms of tion D as follows: open-end and 30-day credit accounts will remain tem­ 1. Sections 204.5(a) (1) (ii) and (2) (ii) are amended by porarily in effect in order to permit the orderly phase­ deleting the last two sentences. out of those provisions. 2. Section 204.5(f) is deleted in its entirety. 1. Effective July 24, 1980, 12 C.F.R. Part 229, Sub­ part A is amended as follows: (a) Sections 229.3 and 229.4 are removed and re­ Amendments to Regulation Z served. The Board of Governors has amended Regulation Z Section 229.3—[Reserved.] (Truth in Lending) to increase the tolerance for accu­ racy in disclosing the annual percentage rate in irregu­ Section 229.4—[Reserved.] lar mortgage transactions to one-half of one percent­ age point. (b) Paragraph (d) is added to Section 229.6 as follows: Effective August 1, 1980, Regulation Z is amended by adding paragraph (d) to read as follows: # Section 229.6—Change in Terms of Open-£nd Credit Accounts Section 226.5—Determination of Annual * * * * * Percentage Rate. (d) (1) A change in terms is effective under this sec­ * * * * * tion, only if notice of such change is mailed or (d) Special rule for irregular mortgage transactions. delivered on or before September 5, 1980. Notwithstanding any other provision in this section, (2) A change-in-terms notice that is mailed or the annual percentage rate in an irregular mortgage delivered after September 5, 1980, is not subject transaction shall be considered accurate if it is not to this Subpart and must comply with the re­ more than one-half of one percentage point above or quirements of Regulation Z (12 C.F.R. 226.7(f)) below the annual percentage rate determined in ac­ and other applicable Federal or State law. cordance with either the actuarial method or the United States Rule method. For the purpose of this 2. Effective October 31, 1980, 12 C.F.R. Part 229, paragraph, an irregular mortgage transaction is a real Subpart A, §§ 229.1 through 229.6 are rescinded. property transaction involving one or more of the fol­ lowing features: multiple advances, irregular payment periods (other than an irregular first period, as defined Subpart B in footnote 5c), and irregular payment amounts (other than irregular first and last payment amounts). This On March 14, 1980, the Board adopted this Subpart to paragraph shall cease to be effective on March 31, restrain the expansion of short term credit through Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

654 Federal Reserve Bulletin □ August 1980 money market funds and other similar creditors. In Interpretation of Regulation Y view of current economic conditions, the Board has determined to rescind this Subpart, effective July 28, The Board of Governors has issued an interpretation 1980. of Regulation Y (Bank Holding Companies and Change in Bank Control) which delineates the conditions gov­ erning the holding and disposition of assets acquired Subpart C by bank holding companies and their banking or non­ banking subsidiaries in satisfaction of debts previously On March 14, 1980, the Board adopted this Subpart to contracted. restrain the expansion of credit through nonmember Effective July 22, 1980, Regulation Y is amended by commercial banks. In view of current economic condi­ adding a new section 225.140 to read as follows: tions, the Board has determined to rescind this Sub­ part, effective July 24, 1980. Section 225.140—Disposition of Property Acquired in Satisfaction of Debts Previously Contracted. Subpart D The Board recently considered the permissibility, un­ The Board is terminating the reporting requirements der section 4 of the Bank Holding Company Act, of a that U.S. commercial banks, U.S. branches and subsidiary of a bank holding company acquiring and agencies of foreign banks, U.S. bank holding com­ holding assets acquired in satisfaction of a debt pre­ panies, finance companies, and certain other selected viously contracted in good faith (a “dpc” acquisition). corporations are required to file in view of the phase­ In the situation presented, a lending subsidiary of a out of the Board’s voluntary Special Credit Restraint bank holding company made a “dpc” acquisition of Program. Effective July 28, 1980, the Board rescinds assets and transferred them to a wholly-owned subsid­ Subpart D. iary of the bank holding company for the purpose of effecting an orderly divestiture. The question present­ ed was whether such “dpc” assets could be held indef­ initely by a bank holding company subsidiary as in­ Amendments to Rules Regarding cidental to its permissible lending activity. Delegation of Authority While the Board believes that “dpc” acquisitions may be regarded as normal, necessary and incidental The Board of Governors has delegated to the Director to the business of lending, the Board does not believe of the Division of Banking Supervision and Regulation that the holding of assets acquired “dpc” without any the authority to approve the retirement of capital notes time restrictions is appropriate from the standpoint of of state member banks prior to maturity if, after the prudent banking and in light of the prohibitions in sec­ proposed redemption, the bank’s capital position re­ tion 4 of the Act against engaging in nonbank activi­ mains satisfactory. ties. If a nonbanking subsidiary of a bank holding com­ Effective July 1, 1980, section 265.2 is amended by pany were permitted, either directly or through a adding subparagraph (26) to read as follows: subsidiary, to hold “dpc” assets of substantial amount over an extended period of time, the holding of such Section 265.2—Specific Functions Delegated to property could result in an unsafe or unsound banking Board Employees and Federal Reserve Banks practice or in the holding company engaging in an im­ permissible activity in connection with the assets, rather than liquidating them. (c) The Director of the Division of Banking Super­ The Board notes that section 4(c) (2) of the Bank vision and Regulation (or, in the Director’s absence, Holding Company Act provides an exemption from the Acting Director) is authorized: the prohibitions of section 4 of the Act for bank hold­ ing company subsidiaries to acquire shares “dpc”. It also provides that such “dpc” shares may be held for a (26) To approve the retirement prior to maturity of period of two years, subject to the Board’s authority to capital notes issued by a state member bank pur­ grant three one-year extensions up to a maximum of suant to sections 204.1(f) (3) (i) and 217.1(f) (3) (i) of five years.1 Viewed in light of the Congressional policy this Part (Regulations D and Q), provided the Direc­ tor is satisfied that that bank’s capital position will be adequate after the proposed redemption. 1. The Board notes that where the dpc shares or other similar Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 655 evidenced by section 4(c) (2), the Board believes that a holding company system, including a section 4(c) (1) lending subsidiary of a bank holding company or the (D) liquidating subsidiary, or to the holding company holding company itself, should be permitted, as an in­ itself, such transfers would not alter the original di­ cident to permissible lending activities, to make acqui­ vestiture period applicable to such shares or assets at sitions of “dpc” assets. Consistent with the principles the time of their acquisition. Moreover, to ensure that underlying the provisions of section 4(c) (2) of the Act assets are not carried at inflated values for extended and as a matter of prudent banking practice, such as­ periods of time, the Board expects, in the case of all sets may be held for no longer than five years from the such intracompany transfers, that the shares or assets date of acquisition. Within the divestiture period it is will be transferred at a value no greater than the fair expected that the company will make good faith efforts market value at the time of transfer and that the trans­ to dispose of “dpc” shares or assets at the earliest fer will be made in a normal arms-length transaction. practicable date. While no specific authorization is With regard to “dpc” assets acquired by a banking necessary to hold such assets for the five-year period, subsidiary of a holding company, so long as the assets after two years from the date of acquisition of such continue to be held by the bank itself, the Board will assets, the holding company should report annually on regard them as being solely within the regulatory au­ its efforts to accomplish divestiture to its Reserve thority of the primary supervisor of the bank. Bank. The Reserve Bank will monitor the efforts of the company to effect an orderly divestiture, and may or­ der divestiture before the end of the five-year period if Bank Holding Company and Bank Merger supervisory concerns warrant such action. Orders Issued by the Board of Governors The Board recognizes that there are instances where a company may encounter particular difficulty in at­ Orders Under Section 3 of Bank tempting to effect an orderly divestiture of “dpc” real Holding Company Act estate holdings within the divestiture period, notwith­ standing its persistent good faith efforts to dispose of Central Colorado Company and C.C.B., Inc., such property. In the Depository Institutions Deregu­ Denver, Colorado lation and Monetary Control Act of 1980, (P.L. 96-221) Congress, recognizing that real estate possesses un­ Order Approving Formation of usual characteristics, amended the National Banking Bank Holding Companies Act to permit national banks to hold real estate for five years and for an additional five-year period subject to Central Colorado Company, Denver, Colorado, a lim­ certain conditions. Consistent with the policy under­ ited partnership (“Partnership”), and its general part­ lying the recent Congressional enactment, and as a ner, C.C.B., Inc., Denver, Colorado (“CCB”), have matter of supervisory policy, a bank holding company applied for the Board’s approval under section 3(a) (1) may be permitted to hold real estate acquired “dpc” of the Bank Holding Company Act (“Act”) (12 U.S.C. beyond the initial five-year period provided that the § 1842(a) (1)) of formation of bank holding companies value of the real estate on the books of the company through the acquisition by Partnership of 100 percent has been written down to fair market value, the car­ of the voting shares of Central Bancorporation, Inc., rying costs are not significant in relation to the overall Denver, Colorado (“Bancorporation”), a registered financial position of the company, and the company bank holding company. Bancorporation’s subsidiary has made good faith efforts to effect divestiture. Com­ banks are Central Bank of Denver, Denver, Central panies holding real estate for this extended period are Bank of Academy Boulevard, Colorado Springs, Cen­ expected to make active efforts to dispose of it, and tral Bank of Aurora, Aurora, Central Bank of North should keep the Reserve Bank advised on a regular Denver, Denver, First National Bank of Glenwood basis concerning their ongoing efforts. Fair market val­ Springs, Glenwood Springs, First National Bank of ue should be derived from appraisals, comparable Grand Junction, Grand Junction, First National Bank sales or some other reasonable method. In any case, in Aspen, Aspen, First National Bank-North in Grand “dpc” real estate would not be permitted to be held Junction, Grand Junction, First National Bank in beyond 10 years from the date of its acquisition. Craig, Craig, Central Bank of Colorado Springs, Colo­ With respect to the transfer by a subsidiary of other rado Springs, Central Bank of Greeley, Greeley, “dpc” shares or assets to another company in the Rocky Ford National Bank, Rocky Ford, all in Col­ orado (collectively “Banks”). Notice of the applications affording opportunity for interests represent less than 5 per cent of the total of such interests outstanding, they may be retained on the basis of section 4(c) (6), even interested persons to submit comments and views, has if originally acquired dpc. been given in accordance with section 3(b) of the Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

656 Federal Reserve Bulletin □ August 1980 The time for filing comments and views has expired, December 31, 1980. Baldwin submitted its divestiture and the Board has considered the applications and all plan in order to fulfill its irrevocable declaration. comments received in light of the factors set forth in The first element of Baldwin’s divestiture plan is the section 3(c) of the Act (12 U.S.C. § 1842(c)). acquisition of Bancorporation by Partnership. Partner­ Partnership, a nonoperating limited partnership with ship is a limited partnership created by a limited part­ no subsidiaries, and its general partner, CCB, a nonop­ nership agreement and CCB is its corporate general erating corporation with no subsidiaries, were orga­ partner. The shares of CCB will be sold to the direc­ nized for the purpose of becoming bank holding com­ tors, officers and employees of CCB and Banks. Part­ panies through the indirect acquisition of Banks. nership will sell Class I limited partnership interests to Applicants and their officers and directors are not as­ a number of institutional investors (“Investors”). In sociated with any other banks or banking organiza­ addition to those rights accorded to limited partners tions. Bancorporation through its twelve subsidiary under Colorado law, the Class I limited partners will banks holds commercial bank deposits of $915.5 mil­ have the right to vote on the amendment of certain pol­ lion representing 8.41 percent of total deposits in com­ icy requirements provided for in the limited partner­ mercial banks in the state of Colorado.1 ship agreement. In exchange for the shares of Bancor­ Upon consummation of the proposal Applicants poration, Baldwin will receive a Class II limited would be the fourth largest banking organization in the partnership interest in Partnership. Baldwin’s only state of Colorado with twelve subsidiary banks in eight rights under the limited partnership agreement are to local banking markets in Colorado. Based on the rec­ receive distributions on its interest from Partnership ord, it appears that consummation of this proposal and to have access to all information concerning Part­ would have no adverse effect upon competition, or the nership. The agreement provides Baldwin with no vot­ concentration of banking resources in any relevant ing rights of any kind. area. Accordingly, the Board concludes that com­ The second element of the divestiture plan is Bald­ petitive considerations associated with this proposal win’s sale of debentures with associated warrants to are consistent with approval of the applications. Investors. The debentures and warrants are governed The financial and managerial resources and future by an indenture administered by an independent bank prospects of Applicants and Bancorporation and its trustee located outside of Colorado. The only use banking subsidiaries are generally satisfactory. Ac­ Baldwin may make of the distributions it receives by cordingly, the Board concludes that banking factors virtue of its Class II limited partnership interest is to are consistent with approval of the applications. pay, in part, the interest on the debentures. The asso­ While no immediate changes in Bancorporation’s ciated warrants can be exercised for a proportionate operations or in the services offered to its customers are interest in Baldwin’s Class II limited partnership inter­ anticipated to follow from consummation of the pro­ est. Partnership distributions received by Baldwin in posed acquisition, convenience and needs consid­ excess of a certain amount will be contributed by Bald­ erations are consistent with approval of the appli­ win, on behalf of the warrant holders, toward the exer­ cations. cise of the warrants. If such payments have not caused In connection with the applications, the Board has the warrants to be fully exercised, thereby divesting considered a proposal submitted by Baldwin-United Baldwin of its ownership of the Class II limited part­ Corporation and its subsidiary, D. H. Baldwin Com­ nership interest by 1995, the warrant holders must pany, both of Cincinnati, Ohio (collectively referred to commit to exercise the warrants or the warrants will as “Baldwin”), for divesting Bancorporation. Baldwin be sold by the trustee to purchasers willing to exercise became a bank holding company on December 31, them. If the trustee is unable to sell the warrants by the 1970, as a result of the 1970 Amendments to the Act by year 2001, Baldwin’s remaining interest in the Class II virtue of its ownership of Central Bank of Denver, limited partnership interest must be donated to Part­ Denver, Colorado. Baldwin also holds an insurance nership. company and a savings and loan association that it ac­ In addition to the above, Baldwin and CCB have quired after June 30, 1968, both of which engage in provided, inter alia, the following commitments and impermissible activities under the Act. In 1977, pur­ representations in order to assure that Baldwin will no suant to section 255.4(d) of the Board’s Regulation Y longer control Bancorporation and Banks and will not (12 C.F.R. § 225.4(d)), Baldwin filed an irrevocable control Partnership or CCB: declaration to cease to be a bank holding company by 1. The officers and directors of Baldwin and its sub­ sidiaries are prohibited by the partnership agree­ ment from purchasing: (i) the shares of the general partner, CCB; or 1. All banking data are as of March 31, 1979. (ii) any Class I limited partnership interest. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 657 2. CCB’s board of directors will not hold more than manner the election of a majority of the directors or ex­ 5 percent of Baldwin’s shares in the aggregate. ercises a controlling influence over the other company. 3. Persons or groups holding more than 5 percent of The Board does not believe that Baldwin’s Class II Baldwin’s stock must choose between the invest­ limited partnership interest constitutes a voting securi­ ment in Baldwin and in Partnership or CCB. ty for purposes of section 2(a) (2) (A). The Board has 4. Officers and directors of Baldwin and its sub­ issued an interpretation of its Regulation Y which sidiaries will be prohibited from acquiring stock in states that for the purpose of assessing the adequacy of an Investor. a divestiture in situations where section 2(g) (3) of the 5. Baldwin will not hold any of the debentures or Act (12 U.S.C. § 1841(g) (3)) applies, limited partner­ warrants it intends to issue. ship interests will be considered to be voting secur­ 6. Not more than 5 percent or more of the Class I ities. (12 C.F.R. § 225.139(c) (3)). Although this inter­ limited partnership interests will be sold to any bank pretation is not directly applicable to the instant case, holding company or 25 percent or more to any com­ the Board believes that as a general rule limited part­ pany. nership interests afford limited partners a sufficient op­ 7. No interlocking directors, officers or employees portunity to influence the partnership’s affairs such will be permitted between CCB, Partnership and that limited partnership interests should be considered their subsidiaries, on the one hand, and Baldwin and voting securities for purposes of the Act. However, its subsidiaries, on the other. Baldwin’s Class II limited partnership interest pro­ 8. There will be no interlocks between Baldwin and vides Baldwin with no legal means to influence CCB or Investors and approval of the Federal Reserve Bank Partnership. Furthermore, the Class II limited partner­ of Kansas City will be sought prior to any extension ship interest has far fewer rights than the Class I inter­ of credit by Baldwin to any Investor. ests and fewer than those accorded to limited partners 9. CCB and Partnership will abide by the com­ under state law. For these reasons, the Board finds mitments set forth in the Board’s Order of Septem­ that Baldwin’s Class II limited partnership interest is ber 28, 1973, approving the acquisition by Baldwin not a voting security. of five of Banks. (59 Federal Reserve Bulletin The Board notes that three of the proposed directors 752 (1973)). of CCB are senior officers of several of Banks, and 10. Partnership will seek the approval of the Re­ seven other proposed directors are directors of serve Bank for all current and proposed business Banks.2 Only one of the total of eleven proposed direc­ dealings with Baldwin of any kind. tors is not associated with any of Baldwin’s sub­ 11. Baldwin’s board of directors has submitted a sidiaries. The composition of the proposed board of resolution to the effect that Baldwin will not attempt directors of CCB raises some question regarding Bald­ to exercise control over Partnership. win’s ability to influence CCB. The Board notes, how­ 12. Baldwin’s chief executive officer has submitted ever, that each director must make a substantial per­ an affidavit stating that he will not attempt to exer­ sonal investment in CCB, and concludes that the size cise control over Partnership. of this investment greatly reduces the possibility that 13. The boards of CCB and all twelve banks have Baldwin will be able to influence these individuals. submitted resolutions that they will report any ac­ Moreover, it appears that the seven directors of Banks tion by Baldwin inconsistent with its status as a involved will be “outside directors” to the extent that Class II limited partner to the Reserve Bank. they are not employees of Banks and will not be em­ 14. Baldwin will not attend any meeting of Partner­ ployees of CCB. Particularly in view of the size of the ship’s partners. investment involved, and in light of the other facts of 15. Baldwin will not offer any advice to CCB on record, the Board believes that the proposed composi­ matters of policy and management and CCB will not tion of CCB’s board of directors does not preclude a solicit such advice from Baldwin. finding that the proposed divestiture will be adequate. Baldwin will also retain an indirect economic inter­ In order to determine whether the applications of est in Bancorporation by virtue of its Class II interest. CCB and Partnership are consistent with the require­ The Board’s interpretation of section 2(g) (3) men­ ments of the Act, the Board has considered whether tioned above states that “the retention of an economic the proposed transaction assures that Baldwin will no interest in the divested company that would create an longer control Bancorporation or Banks, and will not incentive for the divesting company to attempt to in­ acquire control of Partnership of CCB. Section 2(a) (2) of the Act generally provides that one company con­ trols another if it controls 25 percent or more of the 2. Bancorporation’s board of directors will be identical to that of other company’s voting securities, controls in any CCB. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

658 Federal Reserve Bulletin □ August 1980 fluence the management of the divested company will nors Wallich, Teeters, Rice, and Gramley. Absent and not preclude a finding that the divestiture is complete.” voting: Chairman Volcker and Governor Partee. (12 C.F.R. § 225.139 n.3). The Board is satisfied that Baldwin has provided adequate safeguards to assure (Signed) Griffith L. Garwood, that the Class II limited partnership interest will not [seal] Deputy Secretary of the Board. provide sufficient incentive for Baldwin to attempt to influence CCB and Partnership. Baldwin will not have the use of its distributions from Partnership which it is Concurring Statement of Governors Teeters and Rice required to pass on to the debenture holders. Further, since the sale price of Baldwin’s Class II limited part­ Although we believe that Baldwin’s proposal to divest nership interest is represented by the price of the Banks will, on balance, result in an adequate divesti­ debentures, the degree to which Baldwin could benefit ture, we are more concerned about the proposed com­ from an increase in the value of Partnership is fixed. position of the board of directors of CCB than is the Finally, the divestiture plan provides that Baldwin’s majority of the Board. As noted in the majority opin­ Class II interest can begin to be acquired by the war­ ion, ten of the eleven proposed directors are now offi­ rant holders after five years and will be completely cers or directors of Banks, and thus have a previous divested within twenty-one years at the latest. This association with Baldwin. We believe that it would be proposal contemplates, in essence, a deferred payment preferable for the majority of CCB’s board to consist for Baldwin’s interest in Banks and in many respects of persons not previously associated with Baldwin or resembles long-term debt. Banks. Nevertheless, the structure of the proposal, After a review of Baldwin’s plan, together with the and the extensive commitments made by the various limited partnership agreement, the debenture and war­ parties persuade us that the composition of CCB’s rant indenture, Partnership’s and CCB’s applications, board of directors will not provide Baldwin with a other submissions and applicable state and federal means to exert control over Banks. Thus, while the law, the Board has determined that upon consum­ proposed composition of CCB’s board might, standing mation of Partnership and CCB’s acquisition of Ban­ alone, prompt us to vote to disapprove this appli­ corporation and the implementation of all of the other cation, we believe that when viewed in the context of elements of the divestiture plan, Baldwin will not con­ the entire proposal, this factor is not sufficient to war­ trol a bank or bank holding company and, accordingly, rant denial. will cease to be a bank holding company. However, pursuant to the Board’s power under section 5(b) of July 30, 1980 the Act (12 U.S.C. § 1844(b)) to issue orders to admin­ ister and carry out the purposes of the Act and to pre­ vent evasion thereof, the Board hereby conditions this National Bancshares Corporation of Texas, determination, as well as its approval of Partnership’s San Antonio, Texas and CCB’s applications under section 3(a)(1) of the Act, upon compliance with the commitments made by Order Approving Acquisition of Bank CCB, Partnership and Baldwin. Based upon the fore­ going and other considerations reflected in the record, National Bancshares Corporation of Texas, San An­ the Board concludes that consummation of the pro­ tonio, Texas, a bank holding company within the posal would be consistent with the public interest and meaning of the Bank Holding Company Act, has ap­ that the applications should be approved. plied for the Board’s approval under section 3(a) (3) of On the basis of the record, the application is ap­ the Act (12 U.S.C. § 1842(a) (3)) to acquire 100 percent proved for the reasons summarized above. The trans­ (less directors’ qualifying shares) of the voting shares action shall not be made before the thirtieth calendar of Harlandale Bank, San Antonio, Texas (“Bank”). day following the effective date of this Order or later Notice of the application, affording opportunity for than three months after the effective date of this Or­ interested persons to submit comments and views, has der, unless such period is extended for good cause by been given in accordance with section 3(b) of the Act. the Board of Governors or by the Federal Reserve The time for filing comments and views has expired, Bank of Kansas City, pursuant to delegated authority. and the Board has considered the application and all By order of the Board of Governors, effective July 30, comments received in light of the factors set forth in 1980. section 3(c) of the Act (12 U.S.C. § 1842(c)). Applicant, the eleventh largest banking organization in Texas, controls nine subsidiary banks with aggre­ Voting for this action: Vice Chairman Schultz and Gover­ gate deposits of approximately $786.0 million, repre­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 659 senting 1.1 percent of total commercial bank deposits the community by informing area residents of the in the state.1 Bank ($41.0 million in deposits) ranks as range of banking services that Bank will make avail­ the 197th largest banking organization in Texas hold­ able to them. These services will include full retail ing 0.06 percent of total deposits in commercial banks services and Applicant proposes to add a foreign ex­ in the state. Acquisition of Bank would not change Ap­ change service to enable area residents to exchange plicant’s ranking in the state nor have any serious ad­ foreign currency at Bank’s current location. In addi­ verse effects on the concentration of banking re­ tion to these services, Applicant has committed to ex­ sources in Texas. pand Bank’s level of commercial lending, including the Bank is the fifteenth largest of 42 commercial bank­ making of Small Business Administration loans. Affili­ ing organizations located in the relevant banking mar­ ation of Bank with Applicant will also provide Bank’s ket,2 controlling 1.1 percent of total market deposits. customers with access to trust services and investment Applicant is the second largest banking organization in assistance. In light of the above, considerations relat­ the market through its control of five subsidiary banks. ing to the convenience and needs of the community to These banks currently hold deposits of $635.5 million, be served lend such weight toward approval as to out­ representing 17.8 percent of total commercial bank de­ weigh any adverse effects on competition that may re­ posits in the market. As the Board has noted in the sult from consummation of the proposal. Accordingly, past, horizontal acquisitions by banking organizations it is the Board’s judgment that the subject proposal is already represented in a market must be given careful in the public interest and that the application should be scrutiny in order to determine whether the adverse ef­ approved. fects on competition would be so serious as to warrant On the basis of the record, the application is ap­ denial of the application. In this case, although acqui­ proved for the reasons summarized above. The trans­ sition of Bank would result in the elimination of exist­ action shall not be made before the thirtieth calendar ing competition, the Board finds that consummation of day following the effective date of this Order, or later the proposal would not have significantly adverse than three months after the effective date of this Order competitive effects. While consummation of the pro­ unless such period is extended for good cause by the posed acquisition would increase Applicant’s share of Board or by the Federal Reserve Bank of Dallas under market deposits, Applicant’s rank within the market delegated authority. would not change. In view of all the facts of record in By order of the Board of Governors, effective July 9, this matter, including the absolute and relative size of 1980. Bank, the number of banking organizations within the San Antonio banking market, and the fact that there Voting for this action: Chairman Volcker and Governors will remain numerous organizations that could serve Schultz, Wallich, Partee, Teeters, Rice, and Gramley. as entry vehicles for organizations not now represent­ ed in the market, the Board is of the opinion that the (Signed) Cathy L. Petryshyn, acquisition’s adverse effects on competition are not so [seal] Assistant Secretary of the Board. serious as to warrant denial of the proposal, especially in light of favorable convenience and needs consid­ erations. The Union of Arkansas Corporation, The financial and managerial resources of Appli­ Little Rock, Arkansas cant, its subsidiaries, and Bank are considered satis­ factory and the future prospects for each appear favor­ Order Approving Formation of Bank Holding able. Thus, considerations relating to banking factors Company are consistent with approval of the application. In con­ nection with the proposal to acquire Bank, Applicant The Union of Arkansas Corporation, Little Rock, Ar­ kansas, has applied for the Board’s approval under proposes to develop a bilingual advertising program targeted to reach residents of the low- and moderate- section 3(a)(1) of the Bank Holding Company Act (12 income neighborhoods that constitute a large portion U.S.C. § 1842(a)(1)) of formation of a bank holding company by acquiring 80 percent of the voting shares of Bank’s service area. The Board is of the view that this program may prove to be of significant benefit to of Union National Bank of Little Rock, Little Rock, Arkansas (“Bank”). Notice of the application, affording opportunity for interested persons to submit comments and views, has 1. All banking data are as of June 30, 1979, and reflect bank hold­ been given in accordance with section 2(b) of the Act. ing company formations and acquisitions approved as of May 31, 1980. The time for filing comments and views has expired, 2. The relevant banking market is approximated by the San Antonio SMSA. and the Board has considered the application and all Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

660 Federal Reserve Bulletin □ August 1980 comments received in light of the factors set forth in tions under previous management and the fact it was section 3(c) of the Act (12 U.S.C. § 1842(c)). operating at a loss and losing large numbers of depos­ Applicant is a nonoperating company organized for itors. Under the direction of Applicant’s principal, the purpose of becoming a bank holding company by Bank’s condition has become satisfactory and its fu­ acquiring Bank ($240.1 million in deposits).1 Upon ac­ ture prospects are favorable. Bank has improved and quisition of Bank, Applicant would control the third expanded its services, and has added five branches largest of 260 commercial banking organizations in Ar­ and tripled the amount of its deposits. The evidence of kansas and approximately 3.1 percent of total deposits record suggests that were Applicant’s principal to sell in commercial banks in the state. Bank is the third Bank, local control of Bank probably would not be largest of 13 commercial banks located in the Little preserved. Accordingly, the Board finds that under Rock banking market2 and holds approximately 15 these circumstances and in light of the general public percent of the market’s total deposits in commercial interest in preserving local ownership, it is appropriate banks. Inasmuch as Applicant controls no other bank, to apply the standards that would be applicable for one and no principal of Applicant is a principal of any other bank holding company formations involving banks bank located in the relevant banking market,3 consum­ with assets of less than $150 million. In applying such a mation of the proposed transaction would have no ad­ standard, it is the Board’s opinion that banking factors verse effects on either existing or potential com­ are consistent with approval of the application. petition and would not increase the concentration of While no immediate changes in Bank’s services are resources in any relevant area. Therefore, competitive anticipated as a result of approval of this application, considerations are consistent with approval. approval would probably serve to preserve local con­ The financial and managerial resources of Applicant trol of Bank, which the Board finds is generally in the and Bank are satisfactory and the future prospects for public interest. Thus, considerations relating to the each appear favorable. In its consideration of this ap­ convenience and needs of the community to be served plication, the Board applied the less restrictive debt lend weight for approval. Accordingly, it is the service standards for one-bank holding company for­ Board’s judgment that the application should be ap­ mations announced by the Board earlier this year.4 proved. While the Board stated at that time that these stan­ On the basis of all the facts of record, the application dards would be applicable to one-bank holding com­ is approved for the reasons summarized above. The panies whose subsidiary bank would have total assets transaction shall not be made before the thirtieth cal­ of approximately $150 million or less, the Board never­ endar day following the effective date of this Order, or theless intended to permit larger one-bank holding later than three months after the effective date of this companies to come under the policy if the Board found Order unless such period is extended for good cause that circumstances warranted such an exception. The by the Board or by the Federal Reserve Bank of St. Board, after reviewing all the facts of record, finds that Louis pursuant to delegated authority. such circumstances exist in this case. By order of the Board of Governors, effective July 14, Approval of this application would solidify local 1980. ownership of Bank and perpetuate Bank’s current management, both of which the Board finds in this in­ Voting for this action: Chairman Volcker and Governors stance to be substantial public benefits. Applicant’s Schultz, Wallich, Partee, Teeters, Rice, and Gramley. principal and largest shareholder acquired control of Bank in 1970, at a time when Bank’s future prospects (Signed) Griffith L. Garwood, were uncertain, particularly in view of Bank’s opera­ [seal] Deputy Secretary of the Board. Orders Under Section 4 of Bank Holding 1. All deposit data are as of June 30, 1978, and reflect bank Company Act holding company formations and acquisitions approved as of June 30, 1980. BankAmerica Corporation, 2. The relevant banking market is approximated by the Little Rock-North Little Rock SMSA, which consists of Pulaski and Saline San Francisco, California Counties, Arkansas. 3. Three of the four principal shareholders of Applicant are officers and directors of a one-bank holding company, Citizens Order Concerning Permissibility of Bankshares Corporation, Jonesboro, Arkansas, which controls Underwriting Home Loan Life Insurance Citizens Bank of Jonesboro, Arkansas ($92.8 million in deposits). Bank and Citizens Bank of Jonesboro are located in separate banking markets 90 miles apart. BankAmerica Corporation, San Francisco, California, 4. 45 Federal Register 24,233 (1980). a bank holding company within the meaning of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 661 Bank Holding Company Act, has applied for the Regulation Y or within the meaning of section 4(c)(8) Board’s approval under section 4(c)(8) of the Act (12 of the Act. U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of the In determining whether a proposed activity is close­ Board’s Regulation Y (12 C.F.R. § 225.4(b)(2)), to en­ ly related to banking, the Board found recent court de­ gage through its wholly-owned subsidiary, BA Insur­ cisions dealing with section 4(c)(8) of the Act particu­ ance Company, San Francisco, California (“BA Insur­ larly useful. A federal circuit court has set forth ance”), in underwriting home loan life insurance guidelines for determining whether an activity is close­ directly related to residential real estate loans made or ly related to banking: (1) Banks generally have in fact acquired by its subsidiary bank, Bank of America, provided the proposed services; (2) Banks generally N.A. & S.T. (“Bank”). The Board has not heretofore provide services that are operationally or functionally determined this activity to be closely related to bank­ so similar to the proposed services as to equip them ing. particularly well to provide the proposed services; or Section 225.4(a) of Regulation Y, (12 C.F.R. § (3) Banks generally provide services that are so in­ 225.4(a)) provides that a bank holding company may tegrally related to the proposed services as to require file an application to engage in activities other than their provision in a specialized form.2 The Board has those determined to be permissible for bank holding analyzed proposed activities in terms of the court’s companies if it is of the opinion that the proposed ac­ guidelines to determine whether there is a reasonable tivities in the circumstances surrounding a particular basis for finding them closely related to banking. case are closely related to banking or managing or con­ In this regard, the Board finds that there is no evi­ trolling banks. The regulation further provides that the dence in the record that banks have engaged in the Board will publish in the Federal Register a notice of proposed activity. The Board understands that while opportunity for hearing regarding the proposed activi­ banks traditionally have been engaged in underwriting ty only if the Board believes there is a reasonable basis credit life, accident and health insurance, banks in fact for the bank holding company’s opinion. have not been engaged in the underwriting of home Since the Board has not found the proposed activity loan life mortgage insurance. Indeed, home loan life to be closely related to banking, Applicant as a propo­ mortgage insurance generally is underwritten by life nent of the activity is required to demonstrate in ac­ insurance companies and may more appropriately be cordance with section 225.4(a) of the Board’s Regula­ characterized as a type of term life insurance. Further, tion Y that there is a reasonable basis for its opinion there is insufficient evidence to support the conclusion that these activities are closely related to banking. that the proposed activity is operationally or function­ Applicant contends that underwriting home loan life ally so similar to activities presently conducted by mortgage insurance directly related to extensions of bank holding companies so as to indicate that bank credit by Applicant’s subsidiary bank is closely related holding companies are particularly well equipped to to banking. It bases its contention on the Board’s de­ provide the proposed activity. In this regard, the termination that underwriting credit life, accident and Board notes Applicant seeks to engage in the proposed health insurance is permissible for bank holding com­ service only as reinsurer and will continue to utilize panies. Applicant argues that there is no substantive the expertise of an independent, direct underwriter. difference between the underwriting activities it pro­ Lastly, there is no evidence that banks generally pro­ poses to engage in and those presently permissible. vide services that are so integrally related to the under­ Applicant concedes, however, that there are differenc­ writing of home loan life insurance as to require bank es between its proposed underwriting activities and holding companies to provide this service in a special­ the underwriting activities authorized by the Board’s ized form. In fact, this service presently is being sup­ Regulation Y.1 plied by the insurance industry and home loan life in­ In the circumstances presented, the Board con­ surance is not integrated into the lending transaction, cludes that Applicant has failed to demonstrate that as is group credit life insurance. Accordingly, the there is a reasonable basis for the opinion that the ac­ Board finds that there is no reasonable basis for finding tivity is closely related to banking or managing or con­ trolling banks as to be a proper incident thereto within the meaning of the Section 225.4(a)(10) of the Board’s 2. National Courier Association v. Board of Governors of the Federal Reserve System, 516 F.2d 1229 at 1737 (D.C. Cir. 1975). These guidelines are cited, for example, in Association of Bank Travel Bureaus, Inc. v. Board of Governors of the Federal Reserve 1. Unlike traditional credit life insurance, home loan life is not System, 568 F.2d 549 (7th Cir. Jan. 12, 1978), and Alabama group insurance, age is a factor in the premium charged, it is of Association of Insurance Agents v. Board of Governors of the Federal higher value and longer duration and is not offered to the borrower Reserve System, 533 F.2d 224, 241 (5th Cir. 1976), rehearing denied, at the time of the loan transaction. 658 F.2d 729 (1977), cert, denied, 435 U.S. 904 (Feb. 27, 1978). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

662 Federal Reserve Bulletin □ August 1980 the activity is closely related to banking or managing public interest factors set forth in section 4(c)(8) of the and controlling banks. Act (12 U.S.C. § 1843(c)(8)). Based upon the foregoing and the other facts of rec­ Applicant, with consolidated assets of $39.4 billion,1 ord, the Board concludes that there is no reasonable is the fifth largest banking organization in the United basis for believing the proposed activity is closely re­ States and the fourth largest in New York State. Appli­ lated to banking or managing or controlling banks and cant’s domestic bank subsidiary, Chemical Bank, with therefore a Federal Register notice of opportunity for $29.0 billion in deposits, operates out of 266 offices hearing on this matter should not be published. throughout New York State and 15 foreign branches, By order of the Board of Governors, effective July 7, and accounts for approximately 99 percent of Appli­ 1980. cant’s consolidated assets. Applicant also engages, through six wholly-owned subsidiaries, in a variety of Voting for this action: Chairman Volcker and Governors nonbanking activities including mortgage banking, Partee, and Gramley. Voting against this action: Governor consumer finance, and insurance. CBCC (assets of ap­ Rice. Present and not voting: Governor Schultz. Absent and proximately $11.3 million), is one of Applicant’s non­ not voting: Governors Wallich and Teeters. bank subsidiaries and, as previously noted, has been engaged primarily in originating leases for Chemical (Signed) Griffith L. Garwood, Bank. Chemical Bank entered the factoring business in [seal] Deputy Secretary of the Board. March 1968 through its acquisition of certain assets and assumption of certain liabilities of L. F. Dommerich & Company, Inc. (“Dommerich”). At the time, Dommerich, with total assets of $87.0 million, was the Chemical New York Corporation, eleventh largest factoring company in the United New York, New York States. Dommerich also engaged in a small amount of commercial financing. Dommerich’s activities are cur­ Order Approving Transfer of Factoring Business rently conducted through Chemical Bank’s Factoring and Assets from Chemical Bank to Chemical and Finance Division (“F and F Division”), and based Business Credit Corporation, and Establishment upon a 1979 factoring volume of $1.6 billion, is the of de novo office fourth largest factor in the United States.2 Applicant estimates that approximately 18.7 percent of the F and Chemical New York Corporation, New York, New F Division’s factoring volume was generated by its York, a bank holding company within the meaning of Los Angeles office, the remainder being derived from the Bank Holding Company Act (the “Act”), has ap­ its headquarters in New York. The proposed transac­ plied for the Board’s approval under section 4(c)(8) of tion involves the transfer of only the California factor­ the Act (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) ing business from Chemical Bank to CBCC (net asset of the Board’s Regulation Y (12 C.F.R. § 225.4(b)(2)), value of assets to be acquired is $31.3 million (as of to transfer the California factoring assets and business December 1, 1979)). from its subsidiary bank, Chemical Bank, New York, The Board believes that when a bank holding com­ New York, to an existing nonbank subsidiary, Chem­ pany indirectly acquires a nonbanking company ical Business Credit Corporation (“CBCC”), and to through a subsidiary bank and subsequently applies to establish a de novo office of CBCC in Los Angeles, the Board to transfer ownership of such nonbanking California. In connection with these transactions, company or activity to a nonbank subsidiary and oper­ CBCC, which is principally engaged in originating ate it pursuant to the authority of section 4(c)(8), the leases for Applicant’s lead bank, will engage in the ac­ Board must consider the transaction as if the non­ tivity of factoring of trade accounts receivables on a banking company was being acquired initially from an notification and non-notification basis, and, as an ac­ independent third party. Accordingly, in such circum­ commodation to its factoring clients, will engage from stances the Board must find that neither the original time to time in other secured commercial lending ac­ acquisition of the nonbanking company nor the tivities. Such activities have been determined by the Board’s approval of the section 4(c)(8) application Board to be closely related to banking under the would result in an undue concentration of resources, Board’s Regulation Y (12 C.F.R. § 225.4(a)(1)). decreased or unfair competition, conflicts of interest, Notice of the application, affording opportunity for or unsound banking practices. interested persons to submit comments and views on the public interest factors has been duly published in the Federal Register. The time for filing comments and 1. All financial data are as of December 31, 1979, unless otherwise views has expired, and the Board has considered the indicated. application and all comments received in light of the 2. Daily News Record, February 4, 1980. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 663 This proposal is essentially a reorganization de­ and the Board’s regulations and orders issued there­ signed to overcome certain competitive disadvantages under, or to prevent evasion thereof. and operational inefficiencies resulting from state re­ The transaction shall be made not later than three strictions placed upon California representative offices months after the effective date of this Order, unless of out-of-state banks. Therefore, no immediate com­ such period is extended for good cause by the Board or petitive effects will result from the proposed transac­ by the Federal Reserve Bank of New York. tion. Since Applicant neither directly nor indirectly en­ By order of the Board of Governors, effective July 29, gaged in factoring at the time of its indirect acquisition 1980. of Dommerich, no existing competition was eliminated by the acquisition. Although Applicant or Chemical Voting for this action: Vice Chairman Schultz and Gover­ Bank could have entered the factoring industry de nors Wallich, Teeters, Rice, and Gramley. Absent and not voting: Chairman Volcker and Governor Partee. novo, the high fixed cost of operations and the highly specialized nature of the industry made such entry un­ (Signed) Griffith L. Garwood, likely. While Applicant could have been viewed as a [seal] Deputy Secretary of the Board. potential entrant through a smaller factoring firm, the effect on potential competition does not appear to have been serious, particularly in view of the existence of First National Corporation of El Reno, Inc., several other potential entrants. Dommerich was also El Reno, Oklahoma engaged in limited secured commercial lending activi­ ties (outstanding loans of $4.7 million as of December Order Approving Acquisition of First Air Courier, Inc. 31, 1967) at the time of its acquisition by Chemical Bank. Although Applicant, through Chemical Bank, First National Corporation of El Reno, Inc., El Reno, was also engaged in that activity at the time, it does Oklahoma, a bank holding company within the mean­ not appear that the acquisition eliminated significant ing of the Bank Holding Company Act, has applied for existing competition in view of the amount of Dom­ the Board’s approval under section 4(c)(8) of the Act merich’s commercial lending activities. On the basis of and section 225.4(b)(2) of the Board’s Regulation Y to the facts of record, the Board finds that neither the engage de novo in air courier services through its sub­ 1968 acquisition, nor the subject reorganization, have sidiary, First Air Courier, Inc. (“Company”), El had or will have significant adverse effects upon either Reno, Oklahoma. The Board has determined these ac­ existing or potential competition in the factoring or tivities to be closely related to banking 12 C.F.R. commercial finance business. Accordingly, the Board § 225.4(a)(ll) finds that competitive considerations relating to the Notice of receipt of this application, affording op­ proposed transaction are consistent with approval. portunity for interested persons to submit comments There is no evidence in the record to indicate that and views, has been given in accordance with section 4 the proposed reorganization and establishment of a de of the Act (45 Federal Register 17,205 (1980)), and the novo office of CBCC would lead to an undue concen­ time for filing comments and views has expired. The tration of resources, conflicts of interest, or unsound Board has considered the application and all com­ banking practices. Consummation of the proposal is ments received in light of the considerations specified expected to provide some public benefits such as in­ in section 4(c)(8) of the Act. creased efficiency by eliminating the need for approval Applicant, through its control of The First National of California-originated transactions in New York. Bank and Trust Company (“Bank”), El Reno, Okla­ The public would also benefit from the proposed ex­ homa (deposits of $40.2 million), is the 91st largest pansion of the west coast factoring operations by the banking organization in the state controlling 0.24 per­ existence of an additional source of such services. cent of the total deposits in commercial banks in Okla­ Based upon the foregoing and other considerations homa. 1 Through subsidiaries Applicant also engages in reflected in the record, the Board has determined that mortgage banking, leasing, agricultural finance, and the balance of the public interest factors the Board is credit-related insurance agency activities. required to consider under section 4(c)(8) is favorable. Applicant proposes to engage through Company in Accordingly, the application is hereby approved. This transporting time-critical materials of limited intrinsic determination is subject to the conditions set forth in value of the types utilized by banks and bank-related section 225.4(c) of Regulation Y and to the Board’s authority to require such modification or termination of the activities of a holding company or any of its sub­ sidiaries as the Board finds necessary to assure com­ pliance with the provisions and purposes of the Act 1. Banking data are as of December 31, 1979. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

664 Federal Reserve Bulletin □ August 1980 firms in performing their business activities.2 Com­ Voting for this action: Chairman Volcker and Governors pany will provide these services for Applicant, Bank, Schultz, Teeters, Rice, and Gramley. Voting against this ac­ tion: Governor Wallich. Absent and not voting: Governor and other banks and bank-related firms. Company will Partee. perform these activities from an office in El Reno, Oklahoma, and will serve southern Kansas, south­ (Signed) Griffith L. Garwood, western Missouri, Oklahoma, and northern Texas. [seal] Deputy Secretary of the Board. Company proposes to offer a wider range of services than those currently available to banks and bank-re­ lated firms located in these areas. A number of the Dissenting Statement of Governor Wallich routes proposed by Company are not now served by air courier or comparable services, and com­ I would deny this application because it involves the mencement of Company’s activities will facilitate the use of real resources to economize paper money. timely transportation of documents by financial insti­ I do not dispute the majority’s conclusion that Ap­ tutions in Company’s service area. Furthermore, there plicant will provide a wider range of services than is is no evidence in the record to indicate that this pro­ currently available to banks and bank-related firms posal may lead to any undue concentration of re­ within the geographic area it intends to serve and that sources, decreased or unfair competition, conflicts of as a result of Applicant’s services the timely transpor­ interest, unsound banking practices, or other adverse tation of financially-related documents will be facili­ effects. In this connection, in accordance with the tated. Board’s principles governing bank holding company However, I question whether there are public bene­ performance of this activity, Company will operate as fits to the economy as a whole from the greater veloc­ an independent, profit-oriented subsidiary, and it will ity of circulation of money.1 I believe that to employ explicitly price its services to all customers and re­ real resources in order to accelerate the velocity of quire direct payment for all its services. In addition, money, as proposed here, represents a misallocation Company will not deny service to any bank or eligible of resources. The time value of money increases with data processing firm, provided the service requested is inflation, resulting in rising interest rates, and the pri­ within Company’s practical capacity, and it will ad­ vate sector is consequently under pressure to use real here to the other requirements of 12 C.F.R. § 225.129. resources to economize paper money. Applicant’s Based upon the foregoing and other considerations proposal would economize paper money by increasing reflected in the record, the Board has determined that its velocity of circulation. However, if the velocity of the balance of the public interest factors it is required circulation increases, the Board must slow the growth to consider under section 4(c)(8) is favorable. Accord­ of the money supply in order to avoid inflationary con­ ingly, the application is approved. This determination sequences. I believe it is more appropriate for the is subject to the conditions set forth in section 225.4(c) Board to achieve a desired level of aggregate demand of Regulation Y and 12 C.F.R. § 225.129, and to the and interest rates by providing a larger money supply Board’s authority to require such modification or ter­ circulating less rapidly because paper money is gener­ mination of the activities of a holding company or any ated by the banking system at virtually no cost where­ of its subsidiaries as the Board finds necessary to as­ as air courier activities require the consumption of real sure compliance with the provisions and purposes of resources, such as fuel and airplanes. the Act and the Board’s regulations and orders issued It is true that without the proposed service, payees thereunder, or to prevent evasion thereof. of large checks might have recourse to even less eco­ This activity shall be commenced not later than nomic techniques for expediting collection. In my three months after the effective date of this Order, un­ view, however, the Board should not approve an un­ less that period is extended for good cause by the desirable proposal simply because even less desirable Board or by the Federal Reserve Bank of Kansas City alternatives may be legally available to the private sec­ pursuant to authority hereby delegated. tor. Under certain circumstances, the Federal Reserve By order of the Board of Governors, effective July 28, System itself may decide to expedite collection mea- 1980. 1. I will not here question benefits involved in the speedier dis­ tribution of information as well as the attendant reduction of risk due to the speedier transportation of payment instruments. The eco­ 2. These materials will consist primarily of checks which have nomic benefit conferred on payees, however, who as the majority been restrictively endorsed and other non-negotiable documents claims would obtain somewhat quicker use of their money, is offset relating to transfers of funds, as well as accounting data. by the impact on payors, who lose the benefit of their funds earlier. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 665 sures, despite the real resources cost, if the alternative and all comments received in light of the factors set were a significantly larger expenditure of real re­ forth in section 4(c)(8) of the Act. sources by the private sector. I do not believe such Applicant (aggregate deposits of $537.2 million as of circumstances exist in the present case. December 31, 1979), a state-chartered building-loan For the foregoing reasons, I believe this application association, is a bank holding company by virtue of its should be denied. control of Newport National Bank (“Newport Nation­ al”), Newport, Rhode Island (deposits of $52.1 mil­ July 28, 1980 lion).2 Applicant is the second largest thrift institution and fifth largest financial organization in the state of Rhode Island. Acquisition of Mayflower (deposits of Old Colony Co-operative Bank, $20.9 million) would not change Applicant’s state Providence, Rhode Island ranks and would not significantly increase the concen­ tration of resources in the state. Order Approving Acquisition of Rhode Island Applicant is headquartered in the Providence bank­ Building-Loan Association ing market3 and with Newport National jointly oper­ ates 16 branches in that market, controlling approxi­ Old Colony Co-operative Bank, Providence, Rhode Is­ mately 7.8 percent of the market’s time and savings land, a bank holding company within the meaning of deposits in depository institutions, and ranking as the the Bank Holding Company Act (“Act”), has applied second largest thrift institution in the market. May­ for the Board’s approval, under section 4(c)(8) of the flower’s offices also operate in the Providence banking Act (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of market, and Mayflower controls 0.4 percent of the the Board’s Regulation Y (12 C.F.R. § 225.4(b)(2)), to market’s time and savings deposits and ranks as the acquire all the assets and assume all the liabilities of tenth largest thrift institution in the market. In view of Mayflower Savings and Loan Association (“May­ the small increase in Applicant’s market share result­ flower”), Providence, Rhode Island, by consolidation, ing from this transaction and the weakness of May­ and to operate Mayflower’s two offices as branches of flower as an effective competitor in the market, it ap­ Applicant. Mayflower is a state-chartered mutual pears that consummation of the proposed transaction building-loan association that engages primarily in ac­ would not have significant adverse effects on existing cepting share deposits and making real estate mort­ competition.4 Moreover, under the circumstances gage loans. Although the Board has not added the op­ Mayflower clearly is not a likely entrant into any other eration of a Rhode Island building-loan association to market Applicant serves. the list of activities specified in section 225.4(a) of Reg­ Consummation of the proposal will facilitate the ulation Y as generally permissible for bank holding continued availability of services to Mayflower’s cus­ companies, in 1972 the Board determined that the op­ tomers at its present locations and will protect depos­ eration of such an institution was closely related to its that exceed federal insurance limits. The Board Rhode Island banking and specifically approved Appli­ cant’s application to continue to engage in its activities as a thrift institution.1 Notice of the application, affording an opportunity for interested persons to submit comments and views, 2. All financial data are as of June 30, 1979, unless otherwise has been duly published. 45 Federal Register 42,036 indicated. 3. The Providence banking market includes the towns of Millville, (1980). The time for filing comments and views has ex­ Blackstone, Plainville, North Attleboro, Attleboro, Seekonk, Repired, and the Board has considered the application hoboth, Norton, Burrillville, North Smithfield, Woonsocket, Cum­ berland, Glocester, Smithfield, Lincoln, Central Falls, Foster, Scituate, Johnston, Cranston, Providence, North Providence, East Providence, Pawtucket, Coventry, Warwick, West Warwick, Barring­ ton, Warren, Bristol, West Greenwich, East Greenwich, Exiter, North Kingstown, South Kingstown, Narraganset, and Jamestown. 4. The Federal Home Loan Bank Board (“FHLBB”) and the 1. Old Colony Co-operative Bank, 58 Federal Reserve Bulletin State Bank Commissioner, Mayflower’s primary supervisors, have 417 (1972). There has been little change in the facts material to the helped arrange its proposed consolidation with Applicant in order to Board’s determination since it was made, and the Board confirms that resolve Mayflower’s serious financial difficulties. Both supervisors operation of a state-chartered building-loan association in closely have approved the transaction and have recommended that the related to banking in Rhode Island. See also Newport Savings and Board approve this application. The FHLBB has also advised the Loan Association, 58 Federal Reserve Bulletin 313 (1972). These Board that it considers Applicant to be the only institution in Rhode two decisions are viewed as exceptions to the Board’s policy against Island capable of acquiring Mayflower under the existing exigent bank holding company control of savings and loan associations. See circumstances with the assistance of the Federal Savings and Loan D. H. Baldwin, 63 Federal Reserve Bulletin 280, 284 n. 10. Insurance Corporation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

666 Federal Reserve Bulletin □ August 1980 views these public benefits as of considerable signifi­ Based upon the foregoing and other considerations cance. Applicant will also make new services available reflected in the record, the Board has determined that to Mayflower’s customers. Furthermore, except as the balance of the public interest factors the Board is noted below, there is no evidence in the record that required to consider under section 4(c)(8) is favorable. consummation of this transaction would result in any Accordingly, the application is approved. This deter­ undue concentration of resources, unfair competition, mination is subject to the conditions set forth in sec­ conflicts of interest, unsound banking practices, or tion 225.4(c) of Regulation Y and to the Board’s au­ other adverse effects on the public interest. thority to require such modification or termination of There is, however, one matter related to the appli­ the activities of a holding company or any of its sub­ cation that requires comment: the pairing of Appli­ sidiaries as the Board finds necessary to assure com­ cant’s thrift and commercial bank operations. New­ pliance with the provisions and purposes of the Act port National operates an office at each of Applicant’s and the Board’s regulations and orders issued there­ 21 offices, and the two institutions share teller stations under, or to prevent evasion thereof. The transaction at each location. With the approval of the Comptroller shall be made not later than three months after the ef­ of the Currency, Applicant intends to establish new fective date of this Order, unless that period is extend­ branches of Newport National at Mayflower’s two lo­ ed for good cause by the Board or by the Federal Re­ cations and to follow the same pattern of operation serve Bank of Boston acting pursuant to authority there. hereby delegated. The Board has recently expressed its view that the By order of the Board of Governors, effective July 11, tandem operation of affiliated thrift institutions and 1980. commercial banks in New Hampshire may entail seri­ ous adverse effect which only compelling public bene­ Voting for this action: Chairman Volcker and Governors fits will justify under section 4(c)(8) of the Act.5 The Schultz, Wallich, Partee, Teeters, Rice, and Gramley. Board recognizes that a different view of tandem oper­ ations in Rhode Island is possible because of historical (Signed) Griffith L. Garwood, and legal peculiarities affecting the operations and [seal] Deputy Secretary of the Board. competitive position of the state’s depository institu­ tions. Nearly all thrift institutions in Rhode Island are associated with commercial banks in varying degrees, and over half of them conduct common lobby opera­ Orbanco, Inc., tions. Consequently it is clear that the expansion of Portland, Oregon tandem operations in the state will be less unsettling structurally than it would be elsewhere.6 For purposes Order Approving Retention of of this application it is unnecessary to decide whether American Data Services, Inc. considerations of competitive equity in Rhode Island will invariably overcome objections to tendem opera­ Orbanco, Inc., Portland, Oregon, a bank holding com­ tions there, because the specific proposal before the pany within the meaning of the Bank Holding Compa­ Board entails compelling public benefits, unachievable ny Act (“Act”) has applied for the Board’s approval by other means, sufficient to outweigh those objec­ under section 4(c)(8) of the Act (12 U.S.C. tions and any slightly adverse competitive effects asso­ § 1843(c)(8)) and section 225.4(b)(2) of the Board’s ciated with the proposal. Regulation Y (12 C.F.R. § 225.4(b)(2)) to retain all of the voting shares of American Data Services, Inc., Port­ land, Oregon (“ADS”). ADS engages in the activities 5. First Financial Group of New Hampshire, Inc., 66 Federal of providing data processing services for the internal Reserve Bulletin 594 (1980). 6. The activities and powers of depository institutions in the state operations of Applicant, its subsidiaries, and others, are uniquely integrated, and have been for a long time. Each of and the leasing of computer equipment. Such activities Rhode Island’s seven mutual savings banks, having authority under have been determined by the Board to be closely re­ state law to own a commercial bank, had acquired a commercial bank by 1967. Congress enacted section 2(a)(5)(F) of the Act in order lated to banking (12 C.F.R. §§ 225.4(a)(6), (8)). to exempt these combined savings-commercial bank institutions from Notice of the application, affording opportunity for bank holding company status. In order partially to redress the com­ interested persons to submit comments and views on petitive imbalance resulting from the superior competitive position of the seven savings-commercial bank institutions, the Rhode Island the public interest factors, has been duly published (44 legislature, in May 1970, authorized state-chartered building—loan Federal Register 68,032). The time for filing comments associations to establish or acquire stock in a bank or trust company. In 1971, the state authorized state-chartered credit unions with deposit and views has expired, and the Board has considered shares over $1 million to accept demand deposits. the application and all comments received in light of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 667 the public interest factors set forth in section 4(c)(8) of counts receivable or payable, or billing services.” Ap­ the Act (12 U.S.C. § 1843(c)(8)). plicant contends that the phrase, “storing and Applicant, the third largest bank holding company in processing . . . data”, includes key entry. In the alter­ Oregon, controls The Oregon Bank, Portland, Oregon, native, Applicant contends that its contract key entry which has deposits representing 5.3 percent of total services should be considered incidental to ADS’s oth­ deposits in commercial banks in the state.1 In addition er data processing activities since they are functionally to engaging in data processing activities, Applicant al­ identical to the key entry service which is a necessary so engages through nonbanking subsidiaries in finance step in the processing of data by ADS computers company and mortgage banking activities. Applicant (“regular key entry”), and consequently, engaging in became a bank holding company as a result of the 1970 contract key entry would give ADS greater flexibility Amendments to the Act. Applicant acquired ADS in in expanding or contracting its regular key entry ca­ 1969 and under section 4 of the Act, has until Decem­ pacity. Finally, Applicant asserts that even if contract ber 31, 1980, to divest or, in the alternative, to secure key entry is neither data processing nor incidental the Board’s approval to retain its interest in ADS. thereto, it is otherwise closely related to banking. The Board regards the standards of section 4(c)(8) The Board has considered the record in this matter for the retention of shares in a nonbanking company to as well as the statute, its legislative history and rele­ be the same as the standards for a proposed section vant court decisions, and is unable to conclude that 4(c)(8) acquisition. When it acquired ADS, Applicant contract key entry is either data processing or reason­ was not engaged in data processing activities and this ably necessary to ADS’s permissible data processing transaction represented Applicant’s initial entry into activities. The Board views the phrase “processing this activity. Therefore, no existing competition was . . . data” within the meaning of section 225.4(a)(8) of eliminated by Applicant’s acquisition of ADS. More­ Regulation Y as being limited to those instances in over, in view of Company’s size and the large number which the data are substantively changed. In contrast, of data processing firms located in the Portland area in key entry involves the mere alteration of data from one 1969, it does not appear that any significant potential form to another. This position is consistent with the competition was eliminated. ADS now accounts for Board’s prior determination that computer output to less than one percent of total data processing sales in microfilm (“COM”) is not a permissible incident to the Portland area, and on the basis of this and other data processing unless the data involved have been facts of record, the Board concludes that Applicant’s previously processed by the bank holding company in­ acquisition of ADS had no significant effects on com­ volved.3 Applicant has produced no facts to demon­ petition and that Applicant’s retention of Company al­ strate that engaging in contract key entry is necessary so would have no significant competitive effects. to the operation of its data processing service, and the Applicant also seeks the Board’s approval under Board is not otherwise able to conclude that contract section 4(c)(8) of the Act for permission to engage key entry is a necessary incident to the permissible through ADS in the activity of providing contract key data processing activities performed by ADS.4 The entry services.2 Applicant contends that contract key Board also believes that contract key entry is not oth­ entry is closely related to banking within the meaning erwise closely related to banking because it is a basi­ of section 4(c)(8) of the Act and section 225.4(a)(8)(ii) cally clerical function that requires no expertise pecul­ of the Board’s Regulation Y. Section 225.4(a)(8)(ii) iar to banking. Applicant has not produced any states that a bank holding company may engage in evidence that banks commonly engage in this activity “storing and processing . . . banking, financial or re­ or that banks require the provision of such services in lated economic data, such as performing payroll, ac­ a specialized form.5 Accordingly, the Board concludes 1. Banking data are as of December 31, 1979, and reflect acquisi­ tions as of February 29, 1980. 2. Applicant describes contract key entry as: 3. 12 C.F.R. § 225.123(e)(4). Thus, only “on-line” is permissible. a process whereby ADS obtains information from customers in the The Board considers the contract key entry activities proposed by form of source documents which are not machine readable, and then Applicant to be analogous to “off-line” inasmuch as both of these converts the information into a form which is machine readable. To activities involve the alteration of data by various means, without accomplish this, ADS employs key entry operators who look at the changing the substance of the data, and both are performed indepen­ source documents and key the information they contain into a machine dently of any data processing activity. which records the information on either a mechanical medium (punch 4. National Courier Association v. Board of Governors of the Fed­ cards) or one of several magnetic media (cards, tapes, discs) in a form eral Reserve System, 516 F.2d 1229, 1240 (D.C. Cir. 1975). which is machine readable. The machine readable data is then re­ 5. An applicant bears the burden of demonstrating that an activity turned to the customer who further processes the data using com­ is closely related to banking. NCNB Corporation v. Board of Gov­ puters which are not owned or operated by ADS. ernors, 599 F.2d 609 (4th Cir. 1979). 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668 Federal Reserve Bulletin □ August 1980 that contract key entry is not closely related to bank­ permission to engage de novo, through its subsidiary, ing.6 VNB Insurance Agency, Inc., Norfolk, Virginia Retention of ADS by Applicant will result in public (“Agency”), in the sale of property and casualty insur­ benefits inasmuch as ADS will continue to serve as a ance directly related to extensions of credit or mort­ source of data processing services to its customers. gage loan servicing by Applicant’s lending subsidiaries These benefits to the public are consistent with ap­ in Virginia. Such nonbank activities have been deter­ proval of the application and such approval can rea­ mined by the Board to be closely related to banking sonably be expected to continue to produce benefits to and therefore permissible for bank holding companies the public that would outweigh possible adverse ef­ (12 C.F.R. § 225.4(a)(9)). fects. There is no evidence in the record indicating that Notice of the application, affording opportunity for retention of ADS would result in any undue concentra­ interested persons to submit comments and views on tion of resources, conflicts of interests, unsound bank­ the public interest factors has been duly published.1 ing practices, or other adverse effects. The time for filing comments and views has expired, Based upon the foregoing and other considerations and the Board has considered the application and all reflected in the record, the Board has determined that comments received, including those received from the the balance of the public interest factors the Board is Independent Insurance Agents of America, Inc., and required to consider under section 4(c)(8) of the Act is numerous other insurance agents and trade organiza­ favorable. Accordingly, the application is hereby ap­ tions (“Protestants”),2 as well as those received from proved on the condition that Applicant divest its con­ the office of the Virginia Insurance Commissioner, in tract key entry services by December 31, 1980. This the light of the considerations specified in section determination also is subject to the conditions set forth 4(c)(8) of the Act. in section 225.4(c) of Regulation Y and to the Board’s Applicant controls the second largest banking or­ authority to require such modification or termination ganization in Virginia, with aggregate domestic depos­ of the activities of a holding company or any of its sub­ its of approximately $2 billion.3 Applicant proposes to sidiaries as the Board finds necessary to assure com­ sell property and casualty insurance at the offices of pliance with the provisions and purposes of the Act the following credit granting subsidiaries: Virginia Na­ and the Board’s regulations and orders issued there­ tional Bank, VNB Mortgage Corporation, VNB under, or to prevent evasion thereof. Equity Corporation, and Atlantic Credit Corporation By order of the Board of Governors, effective of Virginia. It is anticipated that the area to be served July 8, 1980. for such insurance sales will be the area surrounding each such office. After credit has been granted and a Voting for this action: Chairman Volcker and Governors borrower at one of these offices indicates that he wish­ Schultz, Partee, Rice, and Gramley. Absent and not voting: es to receive a premium quotation from Agency, Ap­ Governors Wallich and Teeters. plicant’s lending officers will put the borrower in con­ tact with one of two licensed insurance agents (Signed) Griffith L. Garwood, employed by Applicant. [seal] Deputy Secretary of the Board. Section 4(c)(8) of the Act provides that the Board may approve a bank holding company’s application to engage in a nonbanking activity only after the Board Virginia National Bankshares, Inc., has determined that the proposed activity is so closely Norfolk, Virginia related to banking as to be a proper incident thereto. The Board has determined by regulation that the sale Order Approving Insurance Agency Activities as agent of credit-related insurance and the sale of in­ surance related to the provision of other financial serv­ Virginia National Bankshares, Inc. (“Applicant”), ices, such as mortgage servicing, are permissible non­ Norfolk, Virginia, a bank holding company within the meaning of the Bank Holding Company Act (“Act”), has applied pursuant to section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(1) of the 1. This application was initially processed under the procedures set forth in section 225.4(b)(1) of the Board’s Regulation Y (12 C.F.R. Board’s Regulation Y (12 C.F.R. § 225.4(b)(1)), for § 225.4(b)(1)) as a proposal to engage de novo in activities determined by the Board to be closely related to banking. Because of the nature of the protests filed and request for hearing, it was determined that the application should be processed at the Board. 2. In total, the Board received approximately 150 letters of protest 6. This determination does not preclude ADS from engaging in key regarding this application. In view of the large number of protests re­ entry type services in connection with its other, permissible data ceived, the Board will not separately identify each Protestant. processing activities. 3. Banking data are as of June 30, 1979. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 669 bank activites. This determination was affirmed in State Law Alabama Association of Insurance Agents v. Board of Governors.4 Virginia law prohibits the licensing of bank holding To approve an application under section 4(c)(8) of companies or their employees as agents for the sale of the Act the Board must also determine that the per­ property and casualty insurance.5 However, those formance of the proposed activities by a nonbank sub­ bank holding companies and their employees that were sidiary of a bank holding company can reasonably be licensed to sell insurance in Virginia on January 1, expected to produce benefits to the public such as 1977, are exempted from this prohibition.6 In inter­ greater convenience, increased competition, or gains preting a particular state law, the Board considers the in efficiency, that outweigh possible adverse effects, statute itself, any judicial interpretations of that law, such as undue concentration of resources, decreased and in the absence of any such interpretations, opin­ or unfair competition, conflicts of interests, or un­ ions of the state’s Attorney General or relevant admin­ sound banking practices. Section 4(c)(8) of the Act al­ istrative agency. The courts of the State of Virginia so provides that the Board may approve a bank hold­ have not interpreted these provisions. However, the ing company’s application to engage in, or to acquire, Board’s staff solicited the views of the Office of the voting shares of a company engaged in nonbanking ac­ Virginia Insurance Commissioner with regard to the tivities only after notice of the proposal and an oppor­ applicability of this exemption and the possibility that tunity for a hearing on the matter. Applicant’s proposal may result in its offices being en­ Both Applicant and Protestants have made numer­ gaged in the unauthorized solicitation of insurance.7 ous written submissions to support their respective po­ The Assistant Insurance Commissioner has advised sitions regarding this application. In reaching the con­ the Board that Agency and its employees were law­ clusions set forth below, the Board has considered the fully licensed on January 1, 1977, and that con­ application, Applicant’s supplementary comments and sequently, Applicant’s proposal is not prohibited by submissions, and all of the comments and submissions Virginia law. The Board believes that this opinion is made by Protestants. reasonable and consistent with the language of the Vir­ Protestants’ assertions may be summarized as fol­ ginia statute. lows: Applicant’s proposal is inconsistent with provi­ With regard to the issue of solicitation, Applicant sions of Virginia law that limit the insurance agency states that its lending officers, after advising a custom­ activities of bank holding companies and prohibit the er that the credit application had been granted, would solicitation of insurance by unlicensed persons. The inform the customer that Agency offers insurance cov­ fact that the insurance sales in question will be primar­ erage. With the borrower’s consent, the lending officer ily related to extensions of credit by Applicant will al­ would then provide Agency with sufficient information low Applicant to compete unfairly for insurance busi­ to offer insurance to the customer. The Assistant In­ ness since it will result in “voluntary tying” of surance Commissioner has concluded that this method insurance sales to such extensions of credit. More­ of operation would not constitute unlawful solicitation over, the method by which Agency proposes to con­ of insurance under Virginia law. The Board also be­ duct its operations will be inconvenient for its custom­ lieves this view is reasonable and consistent with the ers since most of the offices of Applicant’s lending relevant statutory language in view of the limited role subsidiaries will not have a licensed agent physically of the lending officer. present to serve the customer. Finally, Protestants contend that Applicant’s proposal is not sufficiently Unfair Competition specific to allow the Board to act on it, and this lack of specificity, as well as the issues raised above, should Section 106 of the Bank Holding Company Act prohib­ be resolved through a formal hearing. its a bank from requiring its customers to purchase in­ Applicant, in response to Protestants’ assertions, surance from it in order to receive credit. Although contends that each of the conclusions reached by Pro­ section 106 applies directly only to banks, the Board testants is incorrect. Additionally, Applicant states has applied the prohibition of that section to encompass that its proposal will in fact result in increased com­ bank holding companies through section 225.4(c) of its petition and greater convenience for its customers. Regulation Y. Thus, any action taken by Applicant to The Board will address each of these issues in turn. 5. Virginia Code Section 38.1-327.10(A). 6. Virginia Code Section 38.1-327.10(E). 7. The relevant provisions of Virginia law regarding unauthorized 4. 533 F.2d 224 (5th Cir. 1976). modified on rehearing, 558 F.2d 729 solicitation of insurance are Virginia Code Sections 38.1-327.1, (1977), cert, denied, 435 U.S. 904 (1978). 327.33. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

670 Federal Reserve Bulletin □ August 1980 require the purchase of insurance from it is unlawful. gards these commitments as significant, and has relied There is no evidence that Applicant has engaged in any on them in acting on this application.9 coercive tying in the past with regard to any of its ac­ Protestants also contend that Applicant’s size and tivities. access to “inside” information about its customers Protestants assert, however, that credit customers will provide Applicant with an unfair competitive ad­ may nevertheless believe that the likelihood that credit vantage. The Board does not believe that the size of an will be granted may be enhanced by agreeing to pur­ organization, standing alone, may properly be re­ chase insurance from Applicant, and that an effective garded as conveying an unfair competitive advantage. or voluntary tie will result. For the reasons explained In some instances larger organizations may experience below, the Board finds this contention to be without economies of scale that create an advantage over in­ merit. efficient competitors, but the Board does not believe The possibility of voluntary tying is significantly re­ that this advantage represents either unfair or de­ duced by the number of credit alternatives in the rele­ creased competition within the meaning of section vant markets. The Board notes that there are from 4 to 4(c)(8). Protestants have provided no evidence that 20 commercial banks in each of the 16 markets in Applicant has used any “inside” information in mak­ which Applicant competes, as well as a number of oth­ ing insurance sales or that Applicant has in any other er financial intermediaries, such as savings and loan way abused its access to any confidential information associations and credit unions. Moreover, in only one regarding its customers. The Board believes that the of the six major Virginia markets (those that have been mere speculative possibility of such abuse provides designated Standard Metropolitan Statistical Areas) negligible, if any, weight against approval.10 does Applicant hold more than 10 percent of a mar­ ket’s total commercial bank deposits. Each of the Greater Convenience /Gains in Efficiency State’s five largest banking organizations is represent­ ed in these six markets, and Applicant does not appear Protestants state that because Applicant does not in­ to be the dominant organization in any of these mar­ tend to place a licensed agent at every lending office, kets. Applicant’s proposal will result in inconvenience for At the time the Board added the activity of selling customers who desire personal assistance in such mat­ credit related insurance to the list of permissible activi­ ters as claims settlement. Protestants also contend that ties for bank holding companies, it determined that ab­ the small number of agents employed by Applicant will sent unusual circumstances associated with a particu­ not be able to adequately advise customers regarding lar application, there are, as a general matter, no the type of coverage best suited to the customer’s situ­ significant adverse effects, such as voluntary tying, in­ ation. In some respects, Applicant will not be a full herent in the performance of the activity by a bank service insurance agency, because, for example, it holding company on a de novo basis. The Board con­ tinues to believe that this is the case with regard to the customer may agree to make such a purchase out of gratitude to insurance agency activities, particularly in view of the Applicant for granting the credit. The Board does not believe that such court’s decision in Alabama Association of Insurance behavior by a consumer constitutes an adverse effect of the type de­ scribed in section 4(c)(8) of the Act. Furthermore, Applicant’s com­ Agents, supra. Protestants’ general objection to this mitment to advise the customer that they may choose the supplier of application on the basis that voluntary tying might oc­ any insurance eliminates any possible concern in this regard. cur is in substance an attack on the relevant regula­ 9. Protestants assert that the decision on real estate loan appli­ cations is commonly made by a committee and that consequently, the tion, a regulation that was upheld in Alabama Associa­ question of insurance is often discussed before credit is granted. On tion. this basis, Protestants state that Applicant’s commitment regarding the time at which insurance will be offered is “suspect,” and should With regard to this particular application, it is the be examined at a hearing. As noted above, however, the Board has Board’s judgment that the commitments provided by acted on this application in reliance on compliance with this com­ Applicant clearly eliminate any possibility of volun­ mitment. The Board has ample authority to ensure compliance with this commitment, 12 U.S.C. §§ 1818(b), 1844(b), and a violation of this tary tying as an adverse effect. Specifically, Applicant commitment may be brought to the Board’s attention by anyone. A has committed that it will inform credit customers that hearing on this point thus appears to be unnecessary. In any event, insurance is available from Applicant only after the Applicant’s commitment to advise its customers that the customer may choose the source of any insurance is sufficient to resolve this customer has been advised that the credit has been issue. granted. Applicant has further committed that it will 10. Among other things, Protestants assert that Applicant may so­ licit insurance sales through advertisements placed in its depositor’s advise each customer in writing that the customer may monthly statements. Such a practice appears unlikely because under choose the source of any insurance.8 The Board re- the Board’s regulations, Applicant will be limited to selling insurance directly related to extensions of credit and other financial services. 12 C.F.R. § 225.4(a)(9). Thus, although Applicant could insure a house 8. Protestants also suggest that if a customer is advised after credit for which it is the mortgagee, it could not insure a house solely on the has been granted that they may purchase insurance from Applicant, basis that it was owned by one of Applicant’s depositors. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 671 cannot renew insurance coverage once the related loan face-to-face contact with an insurance agent can sim­ has been paid. Moreover, the insurance needs of the ply decline to purchase insurance from Applicant, and relevant communities are being adequately served by Applicant has committed that it will so advise its cus­ independent insurance agents, according to Protes­ tomers. The Board considers the insurance agency ac­ tants, and thus Applicant’s proposal cannot result in tivities of holding companies to be an alternative to, greater convenience for those communities. rather than a replacement for, independent insurance Applicant responds that it currently assists its cus­ agents, and believes that insurance customers should tomers in filing claims, will continue to provide such be allowed to choose between such alternatives. Pro­ assistance, and will hire additional insurance agents as testants, on the other hand, in effect assert that cus­ necessary to properly serve its customers. Customers tomers should be denied this choice. Yet the fact that that choose to purchase insurance from Applicant will this proposal will create an alternative source of insur­ receive faster and more efficient service because the ance is one of the principal public benefits associated need to provide duplicative information will be elimi­ with the proposal. nated, and the established relationship between the lending officers and insurance agents will promote the Increased Competition rapid completion of necessary forms and allow more complete responses to the customer’s questions. Fi­ Applicant states that approval of its proposal will add nally, Applicant states that allowing the customer to one new competitor in the state of Virginia and numer­ purchase insurance at the same time he secures credit ous new locations where insurance may be obtained. will provide the convenience of “one-stop shopping.” Applicant has committed to make its best efforts to of­ The Board has considered the assertions of Appli­ fer such insurance at the lowest practicable cost to the cant and Protestants and concludes that on balance customer, and has also committed to provide the cus­ Applicant’s proposal is not likely to result in signifi­ tomer the option of financing the insurance premium cant gains in convenience or efficiency. Some gains in or paying for it directly. convenience and efficiency might be associated with While conceding that Applicant’s proposal would Applicant’s proposal, but Applicant has not provided create an additional competitor, Protestants dispute sufficient information for the Board to conclude that Applicant’s assertion that the proposal would also add such gains may reasonably be expected to occur. many new locations where insurance may be pur­ Thus, the Board has accorded Applicant’s claims no chased. Protestants also state that because Applicant weight in acting on this application. may combine loan and insurance billing, higher costs Having concluded that no significant gains in conve­ could result because the direct billing service offered nience or efficiency have been demonstrated by Appli­ by some underwriters is highly efficient. Finally, Pro­ cant, it is necessary to consider Protestants’ assertion testants contend that the financing of insurance pre­ that the limitations on the insurance services Appli­ miums to be offered by Applicant may increase costs cant proposes should be viewed as an adverse factor for the consumer because most underwriters provide lending weight toward denial of the proposal. The premium deferral plans that effectively finance pre­ Board believes that the fact that a holding company miums at rates more favorable than normal bank lend­ either chooses not to offer certain services, or is pre­ ing rates. vented by the Board’s regulations from offering those As noted above, Applicant will not have an insur­ services, does not represent an adverse effect within ance agent at each of its lending offices. For this rea­ the meaning of section 4(c)(8).11 The adverse effect as­ son, the Board is unable to accept Applicant’s asser­ serted by Protestants, a decrease in convenience for tion that its proposal will create a large number of new Applicant’s insurance customers, is not one of the ad­ locations where insurance may be obtained. It is clear, verse effects enumerated in section 4(c)(8). It is also however, that consummation of this proposal will add not the kind of adverse effect set forth in that section. an additional competitor because Applicant seeks to Unlike each of the examples of adverse effects con­ expand its insurance activites de novo. Because de tained in that section, the adverse effect asserted by novo expansion provides an additional source of com­ Protestants is completely avoidable from the borrow­ petition, the Board views such expansion as being proer’s perspective. For example, customers that desire competitive in the absence of evidence to the con­ trary.12 With regard to applications filed under section 11. See Automobile Leasing as an Activity for Bank Holding Com­ panies, 62 Federal Reserve Bulletin 930, 941 (1976). Contrary to Protestants’ assertions, there is also no requirement that Applicant 12. BankAmerica Corporation (Decimus Corporation) 66 Federal show a “need” for the proposed insurance services. BankAmerica Reserve Bulletin 511 (1980); Citicorp (Person to Person), 65 Fed­ Corporation (Decimus Corporation), 66 Federal Reserve Bulletin eral Reserve Bulletin 507 (1979); U.N. Bancshares, Inc., 59 Fed­ 511,514 n. 18 (1980). eral Reserve Bulletin 204 (1973). The United States Court of Ap- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

672 Federal Reserve Bulletin □ August 1980 4(c)(8) of the Act, Congress authorized the Board to tecting such collateral. For example, Applicant pro­ differentiate between activities commenced de novo poses to sell homeowners and motor vehicle insurance and activities commenced through the acquisition of a that provides both physical damage and liability cov­ going concern because Congress viewed de novo entry erage. The application also states that Applicant will as having beneficial effects on competition.13 The sell homeowners insurance in connection with one Board concludes that the de novo nature of this pro­ other financial service: mortgage loan servicing where posal represents a clear public benefit. This conclusion the mortgagee is a beneficiary of the policy. The Board is based on economic theory, Congressional instruc­ has interpreted the insurance provisions of its Regula­ tion, and the Board’s experience in administering the tion Y to authorize the sale of these types of insur­ Act. Moreover, Applicant has committed to offer in­ ance.14 surance at the lowest practicable cost to the customer. In order to be entitled to a hearing under section The Board regards this as a commitment to offer the 4(c)(8) of the Act, a Protestant must present issues of lowest practicable total cost, including the costs of fact that are material to the Board’s decision and dis­ billing, and believes that this moots protestants’ con­ puted by the relevant parties.15 Moreover, although a cerns regarding direct billing. The possibility that the hearing request may not lightly be denied, . . an premium financing to be offered by Applicant could agency is not required to conduct an evidentiary hear­ result in higher costs when compared to premium de­ ing when it can serve absolutely no purpose.”16 Appli­ ferral plans neither detracts from Applicant’s commit­ cant has committed not to sell any of the types of in­ ment regarding cost nor represents an adverse effect surance that the Board has determined are not because such premium financing is optional. permissible and Protestants do not assert that Appli­ On the basis of the preceeding discussion, the Board cant in fact intends to sell any such insurance. Appli­ concludes that the pro-competitive nature of Appli­ cant’s proposal is sufficiently specific to put com­ cant’s proposal can reasonably be expected to produce petitors and the public on notice regarding its benefits to the public. These clear public benefits eas­ intentions, and the Board’s continuing supervisory au­ ily outweigh the speculative adverse effects alleged by thority over bank holding companies enables it to pre­ Protestants with regard to unfair competition, which vent the commencement of impermissible insurance adverse effects the Board has concluded are not likely activities. Moreover, there is no evidence that Appli­ to occur. Indeed, the de novo nature of this proposal is cant has engaged in any unauthorized insurance activi­ alone sufficient to outweigh such speculative adverse ties in the past. Thus, the Board concludes that materi­ effects. There is no evidence that any other adverse al facts are not in issue regarding the scope of effects may be associated with this proposal, such as Applicant’s proposal and that no purpose would be undue concentration of resources or unsound banking served by ordering a hearing on this point. practices. Protestants assert that there are a number of other material issues of fact in dispute that require a hearing. Need for Hearing It bears repeating, however, that Protestants do not controvert the principal public benefit associated with Protestants assert, however, that further examination this proposal, the creation of an additional competitor of Applicant’s proposal is necessary for the Board to in the market. Most of the disagreement between Ap­ conclude that the benefits associated with the appli­ plicant and Protestant relates to Applicant’s con­ cation outweigh adverse effects, and that such exami­ tention that greater convenience for the consumer will nation can only be accomplished through a formal result from this proposal. The Board has resolved this hearing. Indeed, Protestants state that such a hearing issue in Protestants’ favor and, as indicated above, has is necessary simply to ascertain that Applicant will not accorded no weight to Applicant’s claims of greater sell any types of insurance that the Board has not de­ convenience. Consequently, a hearing on this point termined to be permissible for bank holding com­ would serve no purpose.17 Similarly, the Board ac­ panies. Applicant’s proposal is to sell insurance to protect 14. 12 C.F.R. § 225.128. collateral in which it has a security interest as a result 15. Connecticut Bankers Assn., supra at 12. The court stated that of its extensions of credit, and other insurance normal­ “a protestant does not become entitled to an evidentiary hearing ly sold to borrowers in conjunction with insurance pro- merely on request, or on a bald or conclusory allegation that such a dispute exists.” Id. 16. Independent Bankers Assn. v. Board of Governors, 516 F.2d peals for the District of Columbia Circuit affirmed the Board’s 1206, 1220 (D.C. Cir. 1975). conclusions regarding the procompetitive nature of de novo entry in 17. As explained above, the Board does not regard Protestants’ Connecticut Bankers Assn. v. Board of Governors, No. 79-1554 (D.C. claims of inconvenience as material to the decision in this case in view Cir. Feb. 7, 1980). of the Board’s rejection of Applicant’s claims of increased conve­ 13. S. Rep. No. 91-1084, 91st Cong., 2nd Sess. 15, 16 (1970). nience. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 673 cepted Protestants’ assertions regarding the number of are barred from mounting such an attack by previous new locations at which insurance may be obtained. litigation.19 In any event, Protestants’ claims regarding Protestants have also disputed Applicant’s state­ the closely relatedness of the activity and the propriety ments regarding the cost of insurance to the consumer. of bank holding company involvement in the activity The Board regards the commitment made by Appli­ are, in the Board’s judgment, without merit. More­ cant in this respect as being sufficient to resolve this over, when the Board determines that an activity is issue. Moreover, this commitment constitutes a mate­ permissible for bank holding companies, it makes an rial representation relied on by the Board, and the implicit determination that the activity can generally Board is prepared to insure compliance with such be expected to achieve net public benefits.20 The commitment by Applicant. Finally, Protestants con­ Board believes that this general finding is sufficient to tend that Applicant’s proposal must be examined at a overcome similarly general allegations that adverse ef­ hearing to determine whether voluntary tying is likely fects are associated with an activity. to result. The Board has found that the commitments Based upon the foregoing and other considerations made by Applicant in this regard, when coupled with reflected in the record, the Board has determined that the relevant market structure, remove any possibility the balance of the public interest factors that the Board that voluntary tying will occur. The Board is also pre­ is required to consider under section 4(c)(8) is favor­ pared to insure compliance with these commitments. able. Accordingly, the application is hereby approved. Furthermore, unlike the situation presented in Inde­ This determination is subject to the conditions set pendent Bankers Assn., supra, a case relied on by forth in section 225.4(c) of Regulation Y and to the Protestants, Applicant’s record is unblemished with Board’s authority to require such modification or ter­ regard to the type of allegations made by Protestants. mination of the activities of a holding company or any Applicant has been engaged in selling both credit life of its subsidiaries as the Board finds necessary to as­ insurance and limited property insurance for almost sure compliance with the provisions and purposes of five years, and there is no evidence that its activities the Act and the Board’s regulations and orders issued have resulted in any voluntary tying. The regulation of thereunder or to prevent evasion thereof. the property and casualty insurance activities of bank The transaction shall be made not later than three holding companies is not a new area for the Board, and months after the effect date of this Order, unless such the experience it has gained in this area over the years period is extended for good cause by the Board or by persuades it that a hearing on this application can the Federal Reserve Bank of Richmond, pursuant to serve no useful purpose.18 delegated authority. By order of the Board of Governors, effective July Balance of Public Benefits and Adverse Effects 24, 1980. The Board finds that consummation of this proposal as Voting for this action: Governors Partee, Teeters, Rice, approved herein cannot reasonably be expected to and Gramley. Present and not voting: Vice Chairman Schultz and Governor Wallich. Absent and not voting: Chairman produce any undue concentration of resources, de­ Volcker. creased or unfair competition, conflicts of interests, unsound banking practices or other adverse effects. (Signed) Griffith L. Garwood, Public benefits can reasonably be expected to result [seal] Deputy Secretary of the Board. from this proposal, and they are easily sufficient to outweigh any possible adverse effects which the Board has, in any event, found to be unlikely to occur. Pro­ testants argue that Applicant, nevertheless, bears a Orders Under Section 2 heavy burden to show that the public benefits associat­ of Bank Holding Company Act ed with its proposal outweigh “the other adverse ef­ fects that are inherent in bank holding company en­ 1st State Corporation, gagement in property and casualty insurance Chicago, Illinois activities.” Protestants are in essence attacking the validity of the regulation authorizing bank holding Order Granting Determination Under the companies to sell credit related insurance. Protestants Bank Holding Company Act 18. See American Bancorp., Inc. v. Board of Governors, 509 F.2d 1st State Corporation, Chicago, Illinois (“1st State”), 29, 39 (8th Cir. 1975) (bank holding company movement into un­ charted area lends weight to hearing request). Indeed, Protestant In­ dependent Insurance Agents of America, Inc. has appeared before the 19. Alabama Assn. of Ins. Agents, supra. Board in numerous application proceedings. 20. Connecticut Bankers Assn., supra. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

674 Federal Reserve Bulletin □ August 1980 a bank holding company within the meaning of section sentations made to the Board by 1st State, Parkway, 2(a) of the Bank Holding Company Act of 1956, as Travel and Transferees. In the event the Board should amended (12 U.S.C. § 1841 et seq.) (the “Act”), has hereafter determine that facts material to this determi­ requested a determination pursuant to section 2(g)(3) nation are otherwise than as represented, or that 1st of the Act, that with respect to the sale of all of the State, Parkway, Travel, or Transferees have failed to outstanding voting shares of Parkway Towers Insur­ disclose to the Board other material facts, this deter­ ance Agency, Inc. (“Parkway”) and First State Travel mination may be revoked, and any change in the cir­ Service, Inc. (“Travel”) to four individuals (“Trans­ cumstances relied upon in making this determination ferees”), 1st State is not in fact capable of controlling could result in the Board’s reconsideration of this de­ Transferees notwithstanding the fact that Parkway is termination. indebted to 1st State in connection with this transac­ By order of the Board of Governors, acting through tion, and such indebtedness is guaranteed by Transfer­ its General Counsel, pursuant to delegated authority ees and Travel. (12 C.F.R. § 265.2(b)(1)), effective July 2, 1980. Under the provisions of section 2(g)(3) of the Act, shares transfered after January 1, 1966, by any bank (Signed) Cathy L. Petryshyn, holding company to a transferee that is indebted to the [seal] Assistant Secretary of the Board. transferor are deemed to be indirectly owned or con­ trolled by the transferor unless the Board, after oppor­ tunity for hearing, determines that the transferor is not in fact capable of controlling the transferee. United Rock Construction, Inc., 1st State has not requested a hearing, but it has sub­ Omaha, Nebraska mitted evidence to the Board to show that it is not in fact capable of controlling Parkway, Travel or Trans­ Order Granting Determination Under the ferees, and the Board has received no contradictory Bank Holding Company Act evidence. It is hereby determined that 1st State is not in fact capable of controlling Parkway, Travel or United Rock Construction, Inc., Omaha, Nebraska Transferees. This determination is based upon the evi­ (“United”), a bank holding company within the dence of record in this matter that reflects the follow­ meaning of section 2(a) of the Bank Holding Company ing: of 1956, as amended (“the Act”) (12 U.S.C. § 1841(a)), The sale of Parkway and Travel appears to have by virtue of its ownership of over 99 percent of the been the result of arm’s length negotiations. There is issued and outstanding voting shares of National Se­ no evidence to indicate that the sale was motivated by curity Bank of Superior, Superior, Nebraska, has an intent to evade the requirements of the Act. The requested a determination, pursuant to section 2(g)(3) terms of the indebtedness involved are limited to those of the Act that United is not in fact capable of controlling reasonably required to protect 1st State’s extension of Cass Mining Company, Omaha, Nebraska (“Cass”), credit. Parkway has repaid a substantial portion of the Harold S. Myers, or David C. Myers (“Myers Broth­ initial indebtedness, and the remainder represents less ers”), individuals to whom it transferred 100 percent than 20 percent of the total purchase price. The finan­ of the voting shares of Cass, notwithstanding the fact cial resources of Transferees are sufficient to support that the Myers Brothers are officers and directors of the conclusion that 1st State is not in fact capable of both United and Cass. controlling Parkway, Travel or Transferees by reason Under the provisions of section 2(g)(3) of the Act, of this indebtedness. In addition, there are no officer or shares transferred after January 1, 1966, by a bank director interlocks between 1st State or any of its sub­ holding company to a transferee that is indebted to the sidiaries, on the one hand, and Parkway, Travel or transferor or has one or more officers, directors, Transferees on the other hand. 1st State has submitted trustees, or beneficiaries in common with or subject to a resolution of its board of directors stating that it is control by the transferor, are deemed to be indirectly not in fact capable of controlling Parkway, Travel or owned or controlled by the transferor unless the Transferees, and that it will not attempt to control Board, after opportunity for hearing, determines that them in the future. In addition, Parkway and Travel the transferor is not in fact capable of controlling the have submitted corporate resolutions, and Transferees transferee.1 No request for a hearing was made by have submitted affidavits, to the effect that they are not and will not be controlled by 1st State. Accordingly, it is ordered that the request of 1st 1. In its January 26, 1978, interpretation of section 2(g)(3), the Board stated that the presumption would also apply where shares are State for a determination pursuant to section 2(g)(3) is transferred directly to one or more persons who are directors or offi­ granted. This determination is based upon the repre­ cers of the transferor. 12 C.F.R. 225.139. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 675 United. United has submitted evidence to the Board to Prior Certification Pursuant to the support its contention that it is incapable of controlling Bank Holding Company Tax Act of 1976 either directly or indirectly the Myers Brothers. The Board has received no contradictory evidence. Warner Communications Inc., New York, New York It is hereby determined that United is not, in fact, (“WCI”), as the successor in interest to Kinney Serv­ capable of controlling Cass or the Myers Brothers. ices, Inc. (formerly Kinney National Services, Inc.), This determination is based upon the evidence in the New York, New York, (“Kinney”), has requested a matter, including the following facts. United is a close­ prior certification pursuant to section 6158(a) of the In­ ly-held Nebraska corporation in which the Myers ternal Revenue Code (the “Code”), as amended by Brothers each hold a 50 percent stock interest and section 3(a) of the Bank Holding Company Tax Act of serve as its only officers and directors. Under section 1976 (the “Tax Act”), that the proposed disposition by 4(a)(2) of the Bank Holding Company Act, United is WCI of certain shares of Common Stock of Garden required to divest its construction operations on or be­ State National Bank, Paramus, New Jersey (“Garden fore December 31, 1980. In anticipation of such a di­ State”) held by it is necessary or appropriate to ef­ vestiture, Cass was organized to hold United’s con­ fectuate the policies of the Bank Holding Company struction operations, and its shares were spun off to Act (12 U.S.C. § 1841 et seq.) (“BHC Act”). the Myers Brothers on a pro rata basis. Thus, United’s In connection with these requests, the following in­ interest in Cass has terminated. The Myers Brothers formation is deemed relevant for purposes of issuing are the only stockholders in Cass and are also its only the requested certification:1 directors and officers, and the divestiture does not ap­ 1. WCI is a corporation organized under the laws of pear to have been a means for perpetuating United’s the State of Delaware on December 30, 1971. Kin­ control over the divested construction operations. ney was a corporation organized under the laws of On the basis of the above and other facts of record the State of New York on December 26, 1961. the Board concludes that control of both United and 2. Between March 20, 1969 and July 7, 1970, Kin­ Cass resides with the Myers Brothers as individuals ney acquired ownership and control of 229,172 and that United does not control and is not in fact ca­ shares, representing 98.88 percent of the out­ pable of controlling the Myers Brothers in their capac­ standing voting shares, of Garden State Capital ity as transferees of Cass stock or otherwise. Stock. On February 1, 1971, North Jersey National Accordingly, it is ordered, that the request of United Bank, Jersey City, New Jersey (“North Jersey for a determination pursuant to section 2(g)(3) be and Bank”) was consolidated into Garden State. Pur­ hereby is granted. This determination is based on the suant to the terms of the consolidation Kinney ex­ representations made to the Board by United and the changed its Garden State Capital stock for 602,402 Myers Brothers. In the event the Board should hereaf­ shares of Class B Common Stock, representing ter determine that facts material to this determination 99.59 percent of the shares of that class out­ are otherwise than as represented, or that United or standing.2 Since that time Kinney or its successor the Myers Brothers have failed to disclose to the has received an additional 243,316 shares of Class B Board other material facts, this determination may be Common Stock through stock dividends with re­ revoked, and any change in the facts and circum­ spect to the shares of Class B Common Stock that stances relied upon by the Board in making this deter­ were exchanged for the Capital Stock held by Kin­ mination could result in the Board reconsidering the ney on July 7, 1970.3 determination made herein. By order of the Board of Governors, acting through its General Counsel, pursuant to delegated authority 1. This information derives from WCI’s correspondence with the (12. C.F.R. § 265.2(b)(1)), effective July 17, 1980. Board concerning its request for this certification, Kinney’s Registra­ tion Statement filed with the Board pursuant to the BHC Act, and other records of the Board. (Signed) Griffith L. Garwood, 2. Kinney also holds shares of Class A and Class B Common Stock, [seal] Deputy Secretary of the Board. that were acquired by it after July 7, 1970 through purchases and stock dividends. Under subsection (c) of section 1101 of the Code property acquired after July 7, 1970 generally does not qualify for the tax bene­ fits of section 1101(b) when distributed by an otherwise qualified bank holding company, and WCI has not requested certification with re­ spect to these shares. Certification Pursuant to the 3. While subsection (c) of section 1101 of the Code generally prohi­ Bank Holding Company Tax Act of 1976 bits tax benefits for the distribution of property acquired after July 7, 1970, where such property was acquired by a qualified bank holding corporation a transaction in which gain was not recognized under sec­ Warner Communications Inc., tion 305(a) of the Code, then section 1101(b) is applicable. Kinney and New York, New York WCI have indicated that pursuant to section 305(a) of the Code, no Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

676 Federal Reserve Bulletin □ August 1980 3. Kinney became a bank holding company on De­ 7. WCI has committed to the Board that on and af­ cember 31, 1970, as a result of the 1970 Amend­ ter the effective date of the consolidation, no person ments to the BHC Act, by virtue of its ownership holding an office or position (including an advisory and control at that time of more than 25 percent of or honorary position) with WCI or any of its sub­ the outstanding voting shares of Garden State, and it sidiaries as a director, policymaking employee or registered as such with the Board on August 17, consultant, who performs (directly or through an 1971. Kinney would have been a bank holding com­ agent, representative or nominee) functions com­ pany on July 7, 1970, if the BHC Act Amendments parable to those normally associated with such of­ of 1970 had been in effect on such date, by virtue of fice or position, will hold any such office or position its ownership and control on that date of more than or perform any such function with Fidelity or Gar­ 25 percent of the voting shares of Garden State. den State or any of their present or future affiliates. 4. On February 11, 1972, Kinney and WCI merged WCI has further committed that upon consum­ pursuant to the laws of New York and Delaware mation of the transaction, all persons now holding with WCI continuing as the surviving corporation. such positions with both WCI and Garden State will Pursuant to contract and the laws of New York and terminate their dual positions. Delaware, WCI succeeded to all the properties, as­ On the basis of the foregoing, it is certified that: sets and rights and liabilities of Kinney.4 (A) WCI is a qualified bank holding corporation, 5. WCI holds property acquired by it on or before within the meaning of subsection (b) of section July 7, 1970, the disposition of which is necessary to 1103 of the Code, and satisfies the requirements appropriate to effectuate section 4 of the BHC Act if of that subsection; WCI were to remain a bank holding company (B) 845,718 of the Class B Common Stock of beyond December 31, 1980, which property is “pro­ Garden State are “bank property” within the hibited property” within the meaning of sections meaning of section 6158(f)(3) of the Code and are 6158(f)(1) and 1103(c) of the Code. all or part of the property by reason of which 6. WCI proposes to dispose of all of the Class A and WCI controls (within the meaning of section 2(a) Class B Common Stock of Garden State held by it of the BHC Act) a bank; pursuant to a consolidation with New Garden State (C) the sale of the 845,718 shares of Class B National Bank, a wholly-owned subsidiary of Fidel­ Common Stock of Garden State is necessary or ity Union Bancorporation, Newark, New Jersey appropriate to effectuate the policies of the BHC (“Fidelity”). As consideration for the Garden State Act. shares, WCI will receive an aggregate of approxi­ This certification is based upon the representations mately $54.2 million, of which 60 percent will be and commitments made to the Board by WCI and up­ paid in cash and 40 percent in the form of notes of on the facts set forth above. In the event the Board Fidelity. The Fidelity notes will be payable in 28 should hereafter determine that facts material to this equal quarterly payments for seven years following certification are otherwise than as represented by the effective date of the consolidation, and will bear WCI, or that WCI has failed to disclose to the Board interest at the prime rate in effect from time to time. other material facts or has failed to meet its com­ mitments, it may revoke this certification. gains were recognized as a result of the stock dividends declared by By order of the Board of Governors acting through Bank. Accordingly, the shares of Class B Common Stock received as stock dividends on shares of stock exchanged for Capital Stock of its General Counsel, pursuant to delegated authority Garden State held by Kinney on July 7, 1970, are eligible for tax bene­ (12 C.F.R. § 265.2(b)(3)) effective July 3, 1980. fits. 4. Pursuant to section 1103(b)(3) of the Code a successor corpora­ tion in a reorganization described in section 368(a)(1)(F) may succeed (Signed) Griffith L. Garwood, to the status of its predecessor corporation as a qualified bank holding corporation. [seal] Deputy Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 677 Orders Approved Under Bank Holding Company Act By the Board of Governors During July 1980 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) First City Bancorporation of Texas, Inc., First National Bank of Madisonville, July 21, 1980 Houston, Texas Madisonville, Texas First Freeport Corporation, Alvin National Bank, July 17, 1980 Freeport, Texas Alvin, Texas Knoff Bancshares, Inc., First National Bank of Cokato, July 9, 1980 Cokato, Minnesota Cokato, Minnesota Stapleton Bancorporation, Ltd., Dominion Bank of Denver, July 22, 1980 Denver, Colorado Denver, Colorado Virginia National Bankshares, Inc., The First National Bank of Troutville, July 25, 1980 Norfolk, Virginia Troutville, Virginia By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks aslisted below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date Albany Bancshares, Inc., First Trust & Savings Bank of Chicago July 23, 1980 Albany, Illinois Albany Albany, Illinois American Bancorp., Inc., American Bank, Dallas July 21, 1980 Longview, Texas Longview, Texas Banco Central, S.A., United Americas Bank, New York July 17, 1980 Madrid, Spain New York, New York Banco Gering Corporation, Bank of Gering, Kansas City July 3, 1980 Gering, Nebraska Gering, Nebraska Buffalo Bancshares, Inc., The First National Bank of St. Louis July 23, 1980 Buffalo, Kentucky Buffalo Buffalo, Kentucky Carbondale Bancshares, Inc., Mid America Bank and Trust St. Louis July 18, 1980 Carbondale, Illinois Company of Carbondale, Carbondale, Illinois Central Bancompany, Empire Bank, St. Louis July 10,1980 Jefferson City, Missouri Springfield, Missouri Central Indiana Bancorp, Inc., The Fairland National Bank, Chicago July 25, 1980 Fairland, Indiana Fairland, Indiana Central National Bancshares, Inc., Spencer National Bank, Chicago July 11, 1980 Des Moines, Iowa Spencer, Iowa Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

678 Federal Reserve Bulletin □ August 1980 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Clarkfield Bancshares, Farmers and Merchants State Minneapolis July 18, 1980 Inc., Bank, Clarkfield, Minnesota Clarkfield, Minnesota Commercial Bankstock, Inc., The Commercial National Bank St. Louis July 17, 1980 Little Rock, Arkansas of Little Rock, Little Rock, Arkansas Dallas Bancshares, Inc., Bank of Dallas, Dallas July 1, 1980 Dallas, Texas Dallas, Texas Darfur Bancshares, Inc., State Bank of Darfur, Minneapolis July 25, 1980 Darfur, Minnesota Darfur, Minnesota East Troy Bancshares, Inc., State Bank of East Troy, Chicago July 14, 1980 East Troy, Wisconsin East Troy, Wisconsin Edwardsville Management Company, Edwardsville National Bank St. Louis July 18, 1980 Omaha, Nebraska and Trust Co., Edwardsville, Illinois Eustis Bancshares, Inc., Farmers State Bank, Kansas City July 20, 1980 Lincoln, Nebraska Eustis, Nebraska Extra Co., First National Bank of Temple, Dallas July 11, 1980 Temple, Texas Temple, Texas F and 0, Inc., First National Bank of Minneapolis June 30,1980 Montgomery, Minnesota Montgomery Montgomery, Alabama F.S.B. Holding Company, First Security Bank of Helena, Minneapolis July 28,1980 Helena, Montana Helena, Montana Fidelity Banc Corporation, The Fidelity State Bank and Kansas City July 10,1980 Dodge City, Kansas Trust Co., Dodge City, Kansas First Amherst Bancshares, Inc., The First National Bank of Dallas July 23, 1980 Amherst, Texas Amherst, Amherst, Texas First Commercial Bancorp, First Commercial Bank, San Francisco July 14, 1980 Sacramento, California Sacramento, California First Deerfield Corporation, First National Bank of Chicago July 18, 1980 Chicago, Illinois Deerfield, Deerfield, Illinois First Duncanville Corporation, First National Bank of Dallas July 3, 1980 Duncanville, Texas Duncanville, Duncanville, Texas First Eldorado Bancorporation, Inc., First State Bank, Kansas City July 3, 1980 Eldorado, Oklahoma Eldorado, Oklahoma First International Bancshares, Inc., Guaranty Bond State Bank, Dallas July 3, 1980 Dallas, Texas Tomball, Texas First Minnetonka Bancorporation, First Minnetonka City State Cleveland July 21, 1980 Inc., Bank Minnetonka, Minnesota Minnetonka, Minnesota First National Cincinnati Corporation, The Portsmouth Banking Cleveland June 30, 1980 Cincinnati, Ohio Company, Portsmouth, Ohio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 679 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date The First National Corporation in The First National Bank, Minneapolis July 16, 1980 Ontonagon, Ontonagon, Michigan Ontonagon, Michigan First National in Cordell Bancshares, First National Bank in Cordell, Kansas City June 30, 1980 Inc., Cordell, Oklahoma Cordell, Oklahoma First Poteau Corporation, Poteau State Bank, Kansas City July 3, 1980 Poteau, Oklahoma Poteau, Oklahoma First Schaumburg Bancorporation, Heritage Bank of Schaumburg, Chicago July 18, 1980 Inc. Schaumburg, Illinois Schaumburg, Illinois First South Bankcorp, The First National Bank of Atlanta July 10, 1980 Columbus Georgia Columbus, Columbus, Georgia Florence Bancorporation, Inc., State Bank of Florence, Minneapolis July 18, 1980 Florence, Wisconsin Florence, Wisconsin Floyd County Bancshares, Inc., The First National Bank of Dallas July 22, 1980 Floydada, Texas Floydada, Floydada, Texas Fremont State BancShares, Inc., Fremont First State Co., Kansas City July 11, 1980 Lincoln, Nebraska Lincoln, Nebraska Fremont BancShares, Inc., First National Bank & Trust Kansas City July 11, 1980 Lincoln, Nebraska Co. of Fremont, Fremont Nebraska Great Lakes Financial Corporation, Montcalm Central Bank, Chicago July 15, 1980 Grand Rapids, Michigan Stanton, Michigan Key Banks Inc., The Citizens National Bank and New York July 17, 1980 Albany New York Trust Co., Wellsville, New York LNB Bancshares, Inc., The Leonard National Bank, Dallas July 25, 1980 Leonard, Texas Leonard, Texas Lake Benton Bancorporation, Inc., Farmers State Agency of Lake Minneapolis July 3, 1980 Lake Benton, Minneapolis Benton, Inc., Lake Benton, Minnesota Le Sueur Bancorporation, Inc., Le Sueur State Bank, Minneapolis July 16, 1980 Le Sueur, Minnesota Le Sueur, Minnesota Lincoln East BancShares, Inc., LBE Co., Kansas City July 11, 1980 Lincoln, Nebraska Lincoln, Nebraska Lone Oak Financial Corporation, Lone Oak State Bank, Dallas July 15, 1980 Lone Oak, Texas Lone Oak, Texas Longview Capital Corporation, Longview State Bank, Chicago July 14, 1980 Longview, Illinois Longview, Illinois Manufacturers Bancshares, Inc., Manufacturers National Bank Atlanta July 30, 1980 Miami, Florida Hialeah, Florida Mountain Banks, Ltd., Chapel Hills National Bank, Kansas City June 27, 1980 Denver, Colorado Colorado Springs, Colorado Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

680 Federal Reserve Bulletin □ August 1980 Section 3—Continued Reserve effective Applicant Bank(s) Bank date National Commerce Corporation, National Bank of Commerce of Atlanta July 23, 1980 Birmingham, Alabama Birmingham, Birmingham, Alabama North Community Bancorp, Inc., North Community Bank, Chicago July 16, 1980 Chicago, Illinois Chicago, Illinois Ohio Citizens Bancorp, Inc., Ohio Citizens Trust Company Cleveland June 30, 1980 Toledo, Ohio Patriot Bancorporation, Harbor National Bank of Boston July 2, 1980 Boston, Massachusetts Boston, Boston, Massachusetts Portales National Bancshares, Inc., The Portales National Bank, Dallas July 23, 1980 Portales, New Mexico Portales, New Mexico Progressive Bancshares Corporation, Progressive Bank and Trust Atlanta July 9, 1980 Houma, Louisiana Company, Houma, Louisiana Raymondville Bancorp, Inc., Raymondville Bank of Texas, Dallas June 30, 1980 Harlingen, Texas Raymondville, Texas Roberts Bancorporation, Inc., State Bank of Roberts, Minneapolis July 8, 1980 Roberts, Wisconsin Roberts, Wisconsin SBT Corporation, First National Bank and Trust Atlanta June 30, 1980 Savannah, Georgia Company, Vidalia, Georgia Security State Bancshares of Bemidji, Security State Bank of Bemidji, Minneapolis July 24, 1980 Inc., Bemidji, Minnesota Bemidji, Minnesota Southwest State Corporation, Southwest State Bank, Kansas City July 10, 1980 Sentinel, Oklahoma Sentinel, Oklahoma Van Bancshares, Inc., First State Bank, Dallas July 11, 1980 Van, Texas Van, Texas Westex Bancorp, Inc., Del Rio Bank & Trust Co., Dallas July 31,1980 Del Rio, Texas Del Rio, Texas Sections 3 and 4 Nonbanking company Reserve Effective Applicant Bank(s) (or activity) Bank date Security State Agency of Security State Bank of to continue to sell Minneapolis June 29, 1980 Aitkin, Inc., Aitkin, insurance as a Aitkin, Minnesota Aitkin, Minnesota general insurance agent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 681 Section 4 Nonbanking company Reserve Effective Applicant (or activity) Bank date American Heritage Corporation, to engage in sale of insurance Kansas City July 11, 1980 St. Paul, Minnesota Blue Hill Agency, Inc., to continue to engage in general Kansas City June 27, 1980 Blue Hill, Nebraska insurance agency activities First Pennsylvania Corporation, Pennco Life Insurance Philadelphia July 25, 1980 Philadelphia, Pennsylvania Company, Phoenix, Arizona The Girard Company, GIRACO Life Insurance Philadelphia July 22, 1980 Bala-Cynwyd, Pennsylvania Company Phoenix, Arizona Houston Investments, Inc., to continue to sell insurance as Minneapolis July 22, 1980 Caledonia, Minnesota a general insurance agent Keystone Investment, Inc., to continue to engage in general Kansas City July 10, 1980 Keystone, Nebraska insurance agency activities Kit Carson Insurance Agency, Inc., to continue to engage in general Kansas City July 11, 1980 Kit Carson, Colorado insurance agency activities Maryland National Corporation, to engage de novo in Richmond July 1, 1980 Baltimore, Maryland underwriting as a reinsurer credit life and credit accident and health insurance Meader Insurance Agency, Inc., to continue to engage in general Kansas City June 27, 1980 Waverly, Kansas insurance agency activities North Central Banco, Inc., to continue making loans for its Minneapolis July 30, 1080 Hutchinson, Minnesota own account Northstar Bancorporation, Inc., Mithun Enterprises, Inc., Minneapolis July 3, 1980 Wayzata, Minnesota Wayzata, Minnesota Old Stone Corporation, to engage in underwriting Boston July 18, 1980 Providence, Rhode Island through reinsurance of credit and health insurance Republic of Texas Corp., to continue to engage in general Dallas July 18, 1980 Dallas, Texas insurance agent activities Roger Billings, Inc., to continue to engage in the sale Kansas City July 11, 1980 Delphos, Kansas of general life insurance and hazard insurance Stamford Banco, Inc., to engage in general insurance Kansas City July 3, 1980 Stamford, Nebraska agency activities Valley Bancorporation, to establish a de novo Chicago July 23, 1980 Appleton, Wisconsin subsidiary to engage in insurance underwriting Wausa Bancshares, Inc., to continue to engage in general Kansas City July 3, 1980 Wausa, Nebraska insurance agency activities Western Bancshares, Inc., to continue to engage in Kansas City July 3, 1980 Stockton, Kansas general insurance activities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

682 Federal Reserve Bulletin □ August 1980 Pending Cases Involving the Board of Governors This list of pending cases does not include suits Donald W. Riegel, Jr. v. Federal Open Market Com­ against the Federal Reserve Banks in which the Board mittee, filed July 1979, U.S.D.C. for the District of of Governors is not named a party. Columbia. Connecticut Bankers Association, et al., v. Board of Martin-Trigona v. Board of Governors, filed July 1980, Governors, filed May 1979, U.S.C.A. for the Dis­ U.S.C.A. for the District of Columbia. trict of Columbia. U.S. League of Savings Associations v. Depository Independent Insurance Agents of America, et al., v. Institutions Deregulation Committee, et al., filed Board of Governors, filed May 1979, U.S.C. A. for June 1980, U.S.D.C. for the District of Columbia. the District of Columbia. Edwin F. Gordon v. Board of Governors, et al., filed Independent Insurance Agents of America, et al., v. June 1980, U.S. Supreme Court Board of Governors, filed April 1979, U.S.C. A. for Mercantile Texas Corporation v. Board of Governors, the District of Columbia. filed May 1980, U.S.C.A. for the Fifth Circuit. Independent Insurance Agents of America, et al., v. Corbin, Trustee v. United States, filed May 1980, Board of Governors, filed March 1979, U.S.C.A. for United States Court of Claims. the District of Columbia. Louis J. Roussel v. Board of Governors, filed April Credit and Commerce American Investment, et al., v. 1980, U.S.D.C. for the District of Columbia. Board of Governors, filed March 1979 U.S.C. A. for Ulyssess S. Crockett v. United States, et al., filed the District of Columbia. April 1980, U.S.D.C. for the Eastern District of Independent Bankers Association of Texas v. First North Carolina. National Bank in Dallas, et al., filed July 1978, Angela Belk v. Government of Iran, et al., filed April U.S.D.C. for the Northern District of Texas. 1980, U.S.D.C. for the District of South Carolina, Security Bancorp and Security National Bank v. Columbia Division. Board of Governors, filed March 1978, U.S.C. A. for Independent Bank Corporation v. Board of Gover­ the Ninth Circuit. nors, filed October 1979, U.S.C. A. for the Sixth Cir­ Vickars-Henry Corp. v. Board of Governors, filed De­ cuit. cember 1977, U.S.C.A. for the Ninth Circuit. Wiley v. United States, et al., filed September 1979, Investment Company Institute v. Board of Governors, U.S.D.C. for the District of Columbia. filed September 1977, U.S.D.C. for the District of County National Bancorporation and TGB Co. v. Columbia. Board of Governors, filed September 1979, Roberts Farms, Inc. v. Comptroller of the Currency, U.S.C.A. for the Eighth Circuit. et al., filed November 1975, U.S.D.C. for the South­ Edwin F. Gordon v. Board of Governors, et al., filed ern District of California. August 1979, U.S.D.C. for the Northern District of David Merrill, et al. v. Federal Open Market Com­ Georgia. mittee, filed May 1975, U.S.D.C. for the District of Gregory v. Board of Governors, filed July 1979, Columbia. U.S.D.C. for the District of Columbia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Al 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 and repurchase agreements of All Banks in New York City large member 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, Al Federal Reserve Bank interest rates partnerships, and corporations A8 Member bank reserve requirements A9 Maximum interest rates payable on time and savings deposits at federally insured institutions Financial Markets A10 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 Al 1 Condition and Federal Reserve note statements A26 Terms of lending at commercial banks A12 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 A12 Bank debits and deposit turnover A13 Money stock measures and components Federal Finance A14 Aggregate reserves and deposits of member banks A30 Federal fiscal and financing operations A15 Loans and securities 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 A35 Federal and federally sponsored credit agencies—Debt outstanding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A2 Federal Reserve Bulletin □ August 1980 Securities Markets and Reported by Banks in the United States Corporate Finance A58 Liabilities to and claims on foreigners A36 New security issues—State and local A59 Liabilities to foreigners governments and corporations A61 Banks’ own claims on foreigners A37 Open-end investment companies—Net sales and A62 Banks’ own and domestic customers’ claims on asset position foreigners A37 Corporate profits and their distribution A62 Banks’ own claims on unaffiliated foreigners A38 Nonfinancial corporations—Assets and liabilities A63 Claims on foreign countries—Combined A38 Business expenditures on new plant and domestic offices and foreign branches equipment A39 Domestic finance companies—Assets and liabilities; business credit Securities Holdings and Transactions A64 Marketable U.S. Treasury bonds and notes— Real Estate Foreign holdings and transactions A64 Foreign official assets held at Federal Reserve A40 Mortgage markets Banks A41 Mortgage debt outstanding A65 Foreign transactions in securities Consumer Installment Credit Reported by Nonbanking Business Enterprises in the United States A42 Total outstanding and net change A66 Liabilities to unaffiliated foreigners A43 Extensions and liquidations A67 Claims on unaffiliated foreigners Flow of Funds Interest and Exchange Rates A44 Funds raised in U.S. credit markets A68 Discount rates of foreign central banks A45 Direct and indirect sources of funds to credit A68 Foreign short-term interest rates markets A68 Foreign exchange rates Domestic Nonfinancial Statistics Special Tables A46 Nonfinancial business activity—Selected A69 Survey of Time and Savings Deposits measures at Commercial Banks, April 30, 1980 A46 Output, capacity, and capacity utilization A47 Labor force, employment, and unemployment A48 Industrial production—Indexes and gross value A73 Guide to Tabular Presentation and A50 Housing and construction Statistical Releases A51 Consumer and producer prices A52 Gross national product and income A53 Personal income and saving International Statistics A54 U.S. international transactions—Summary A55 U.S. foreign trade A55 U.S. reserve assets A56 Foreign branches of U.S. banks—Balance sheet data A58 Selected U.S. liabilities to foreign official institutions Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Statistics A3 1.10 MONETARY AGGREGATES AND INTEREST RATES Q3 Q4 Ql Q2 Mar. Apr. May June Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)1 1 M To em ta b l e .. r . .. b .. a .. n .. k .. .. r . e .. s .. e . r .. v .. e . s ................................................. 5.0 12.7 4.4 2.0 -0.8 4.4 4.3 -.9 -1.0 2 Required ................................................................... 4.7 11.7 5.4 2.0 0.3 4.6 2.7 1.3 -1.8 3 Nonborrowed ........................................................... 6.9 7.1 3.6 8.1 -12.7 -29.3 15.5 41.1' 17.1 4 Monetary base2 ....................................................... 9.3 9.7 7.6 5.4 7.5 6.9 1.7 7.7 6.1 Concepts of money and liquid assets3 5 M-1A......................................................................... 7i 4.5 4.8 -3.9 9.4 -1.9 -17.7 .7 11.4 6 M-1B ......................................................................... 9.6 5.0 5.9 -2.4 9.9 -.3 -14.1 -1.6' 14.9 7 8 M M - - 3 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 10 0. .8 7 7 9 . . 1 1 7 7 . . 2 8 ' 5 5 . . 4 7 1 9 1 . . 5 8 ' 4 5 . .0 4' ' -2. . 6 0 ' ' 9 8 . . 8 9 ' ' 1 12 7. . 5 8 9 L ................................................................................. 12.2 8.5 8.4' n.a. 11.5 7.9' 5.6' 8.9 n.a. Time and savings deposits Commercial banks 10 Total....................................................................... 9.1 12.4 8.4 9.8 14.6 8.5 15.0 6.6 -1.6 11 Savings4 ................................................................. .4 -16.5 -19.3 -22.6 -22.5 -35.6 -43.3 -7.5 32.9 12 Small-denomination time5 ................................ 22.5 32.1 29.1 33.9 25.9 42.5 54.4 14.1 -3.1 13 Large-denomination time6 ................................ 4.5 19.7 11.3 10.1 34.0 7.6 16.2 8.5 -24.8 14 Thrift institutions7 ................................................... 7.4 6.7 2.7 4.9 1.6' 4.0' 3.0' 7.9' 9.2 15 Total loans and securities at commercial banks8 13.4 8.7 9.4 -.5 18.7 2.6 -4.3 -6.1 -2.8 Q3 Q4 Ql Q2 Apr. May July Interest rates (levels, percent per annum) Short-term rates 16 Federal funds9 ................................................................................. 10.94 13.58 15.07 12.67 17.19 17.61 10.98 9.47 9.03 17 Federal Reserve discount10 ........................................................... 10.21 11.92 12.51 12.45 13.00 13.00 12.94 11.40 10.87 18 Treasury bills (3-month market yield)11...................................... 9.67 11.84 13.35 9.62 15.20 13.20 8.58 7.07 8.06 19 Commercial paper (3-month)1112................................................ 10.64 13.35 14.54 11.18 16.81 15.78 9.49 8.27 8.41 Long-term rates Bonds 20 U.S. government13....................................................................... 9.03 10.18 11.78 10.58 12.49 11.42 10.44 9.89 10.32 21 State and local government14.................................................... 6.28 7.20 8.23 7.95 9.17 8.63 7.59 7.63 8.13 22 Aaa utility (new issue)15............................................................. 9.64 11.21 13.22 11.78 14.00 12.90 11.53 10.96' 11.60 23 Conventional mortgages16 ............................................................. 11.13 12.38 14.32 12.70 16.05 15.55 13.20 12.45 12.45 1. Unless otherwise noted, rates of change are calculated from average amounts 4. Savings deposits exclude NOW and ATS accounts at commercial banks. outstanding in preceding month or quarter. Growth rates for member bank reserves 5. Small-denomination time deposits are those issued in amounts of less than are adjusted for discontinuities in series that result from changes in Regulations $100,000. D and M. 6. Large-denomination time deposits are those issued in amounts of $100,000 2. Includes total reserves (member bank reserve balances in the current week or more. plus vault cash held two weeks earlier); currency outside the U.S. Treasury, Federal 7. Savings and loan associations, mutual savings banks, and credit unions. Reserve Banks, and the vaults of commercial banks; and vault cash of nonmember 8. Changes calculated from figures shown in table 1.23. banks. 9. Averages of daily effective rates (average of the rates on a given date weighted 3. M-1A: Averages of daily figures for (1) demand deposits at all commercial by the volume of transactions at those rates). banks other than those due to domestic banks, the U.S. government, and foreign 10. Rate for the Federal Reserve Bank of New York. banks and official institutions less cash items in the process of collection and 11. Quoted on a bank-discount basis. Federal Reserve float; and (2) currency outside the Treasury, Federal Reserve 12. Beginning Nov. 1977, unweighted average of offering rates quoted by at banks, and the vaults of commercial banks. least five dealers. Previously, most representative rate quoted by these dealers. M-1B: M-l A plus negotiable order of withdrawal and automated transfer service Before Nov. 1979, data shown are for 90- to 119-day maturity. accounts at banks and thrift institutions, credit union share draft accounts, and 13. Market yields adjusted to a 20-year maturity by the U.S. Treasury. demand deposits at mutual savings banks. 14. Bond Buyer series for 20 issues of mixed quality. M-2: M-1B plus savings and small-denomination time deposits at all depository 15. Weighted averages of new publicly offered bonds rated Aaa, Aa, and A by institutions, overnight repurchase agreements at commercial banks, overnight Moody’s Investors Service and adjusted to an Aaa basis. Federal Reserve com­ Eurodollars held by U.S. residents other than banks at Caribbean branches of pilations. member banks, and money market mutual fund shares. 16. Average rates on new commitments for conventional first mortgages on new M-3: M-2 plus large-denomination time deposits at all depository institutions homes in primary markets, unweighted and rounded to nearest 5 basis points, from and term RPs at commercial banks and savings and loan associations. Dept, of Housing and Urban Development. L: M-3 plus other liquid assets such as term Eurodollars held by U.S. residents other than banks, bankers acceptances, commercial paper, Treasury bills and other liquid Treasury securities, and U.S. savings bonds. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Financial Statistics □ August 1980 1.11 FACTORS AFFECTING MEMBER BANK RESERVES Millions of dollars Monthly averages of daily figures Weekly averages of daily figures for week-ending Factors 1980 1980 May.P June? JulyP June 18^ June 25p July 2p July 9p July 16 p July 23p July 30p Supplying Reserve Funds 1 Reserve Bank credit outstanding.......................... 139,561 141,246 141,814 140,213 141,632 142,451 142,291 143,315 142,916 138,456 2 U.S. government securities1 ........................................... 120,689 122,336 122,060 121,141 122,735 123,928 121,810 123,227 123,114 119,884 3 Bought outright ............................................................. 120,282 121,623 121,662 120,059 122,003 123,387 121,810 122,766 122,670 119,654 407 713 398 1,082 732 541 461 444 230 5 Federal agency securities ............................................... 8,974 9,020 8,937 9,126 8,963 8,904 8.875 8,925 8,952 8,920 6 Bought outright ............................................................. 8,877 8,875 8,874 8,875 8,875 8,875 8.875 8,873 8,873 8,873 97 145 63 251 88 29 52 79 47 75 171 74 245 163 101 117 68 49 9 Loans ..................................................................................... 1,028 365 390 396 318 348 215 332 354 629 10 Float ........................................................................................ 3,642 3,997 4,777 3,858 3,930 3,606 5.695 5,339 4,879 3,309 11 Other Federal Reserve assets ...................................... 5,153 5,357 5,576 5,446 5,522 5,564 5.696 5,375 5,548 5,667 12 Gold stock............................................................................ 11,172 11,172 11,172 11,172 11,172 11,172 11,172 11,172 11,172 11,172 13 Special drawing rights certificate account................ 2,968 2,986 3,053 2,968 3,011 3,018 3,018 3,018 3,061 3,118 14 Treasury currency outstanding...................................... 13,266 13,288 13,296 13,278 13,285 13,324 13,293 13,294 13,296 13,301 Absorbing Reserve Funds 15 Currency in circulation .................................................... 124,738 126,334 128,173 126,536 126,311 126,960 128,366 128,655 128,125 127,660 16 Treasury cash holdings .................................................... 577 543 512 546 538 527 520 520 508 498 Deposits, other than member bank reserves, with Federal Reserve Banks 17 Treasury............................................................................ 2,828 2,923 3,119 2,023 3,192 3,091 3,102 3,315 2,723 3,206 18 Foreign............................................................................... 377 354 324 276 311 398 351 302 282 324 19 Other2 ............................................................................... 643 1,378 1,051 1,355 1,458 1,415 1,209 1,067 1,148 793 20 Other Federal Reserve liabilities and capital......... 5,078 4,971 4,702 5,080 4,907 4,940 4,886 4,693 4,629 4,552 21 Reserve accounts3 ............................................................. 32,726 32,189 31,454 31,815 32,383 32,633 31,339 32,247 33,030 29,014 End-of-month figures Wednesday figures 1980 1980 May/7 June/7 JulyP June 18^ June 25p July 2p July 9p July 16 P July 23p July 30p Supplying Reserve Funds 22 Reserve bank credit outstanding .................................. 142,105 143,741 138,316 142,608 139,278 142,517 142,067 146,439 144,892 141,019 23 U.S. government securities1 ...................................... 124,277 124,515 119,563 121,979 119.841 123.078 120.418 123,519 124,386 119.577 24 Bought outright ........................................................ 121,371 124,058 118,497 121,542 119.841 123.078 120.418 122,797 121,275 119.577 25 Held under repurchase agreements .................. 2,906 457 1,066 437 722 3,111 26 Federal agency securities ........................................... 9,230 8,912 9,404 8,936 8.875 8.875 8.875 8,977 9,426 8.873 27 Bought outright ........................................................ 8,877 8,875 8,873 8,875 8.875 8.875 8.875 8,873 8,873 8.873 28 Held under repurchase agreements .................. 353 37 531 61 104 553 29 Acceptances .................................................................... 366 373 310 367 173 478 30 Loans ................................................................................. 602 215 562 798 364 420 284 559 548 2,620 31 Float ................................................................................... 2,475 4,167 2,808 5,039 4,483 4,486 7,017 7,690 4,417 4,025 32 Other Federal Reserve assets .................................. 5,155 5,559 5,669 5,489 5,715 5,658 5,473 5,521 5,637 5,924 33 Gold stock............................................................................ 11,172 11,172 11,172 11,172 11,172 11,172 11,172 11,172 11,172 11,172 34 Special drawing rights certificate account................ 2,968 3,018 3,118 2,968 3,018 3,018 3,018 3,018 3,118 3,118 35 Treasury currency outstanding...................................... 13,530 13,523 13,304 13,285 13,285 13,293 13,293 13,295 13,300 13,304 Absorbing Reserve Funds 36 Currency in circulation .................................................... 125,694 127,097 128,068 126,773 126,766 128,011 129,127 128,761 128,122 128,238 37 Treasury cash holdings .................................................... 554 529 482 545 534 526 518 513 504 492 Deposits, other than member bank reserves, with Federal Reserve Banks 38 Treasury............................................................................. 4,523 3,199 3,954 3,549 2,951 3,590 3,204 2,956 2,855 3,073 39 Foreign............................................................................... 380 691 436 254 295 257 301 294 246 301 40 Other2 ............................................................................... 1,160 1,332 500 1,400 1,525 1,184 1,014 1,103 1,178 415 41 Other Federal Reserve liabilities and capital......... 5,083 5,003 4,540 5,111 4,851 4,826 4,580 4,563 4,570 4,448 42 Reserve accounts3 ............................................................. 32,382 33,612 27,920 32,402 29,831 31,605 30,804 35,734 35,007 31,646 1. Includes securities loaned—fully guaranteed by U.S. government securities against managed liabilities, and held by any institution in conjunction with the pledged with Federal Reserve Banks—and excludes (if any) securities sold and consumer credit restraint program. scheduled to be bought back under matched sale-purchase transactions. 3. Includes reserves of member banks, Edge Act corporations, and U.S. agencies 2. Includes special deposits under the credit restraint program held by money and branches of foreign banks. market mutual funds and other financial intermediaries, held by nonmember banks Note: For amounts of currency and coin held as reserves, see table 1.12 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 1980 Dec. Nov. Dec. Jan. Feb. Mar.P Apr./7 May? June/7 Julyp All member banks Reserves 1 At Federal Reserve Banks........................ 31,158 32,030 32,473 32,712 31,878 32,400 33,663 32,726 32,189 31,454 2 Currency and coin .................................... 10,330 10,737 11,344 12,283 11,063 10,729 10,895 10,998 11,137 11,285 3 Total held1................................................. 41,572 42,908 43,972 45,170 43,156 43,352 44,769 43,933 43,531 42,927 4 Required ............................................... 41,447 42,753 43,578 44,928 42,966 42,907 44,678 43,793 43,280 42,509 5 Excess1 .................................................. 125 155 394 242 190 445 91 140 251 418 Borrowings at Reserve Banks2 6 Total ......................................................... 874 1,906 1,473 1,241 1,655 2,828 2,443 1,028 365 390 7 Seasonal .................................................... 134 146 82 75 96 152 156 64 12 5 Large banks in New York City 8 Reserves held ............................................... 7,120 6,913 7,401 7,758 7,168 7,276 7,603 7,596 7,482 7,272 9 Required .................................................. 7,243 6,932 7,326 7,760 7,205 7,194 7,655 7,662 7,600 7,278 10 Excess ...................................................... -123 -19 75 -2 -37 82 -52 -66 -118 -6 11 Borrowings2.................................................. 99 143 66 26 125 60 81 31 18 54 Large banks in Chicago 12 Reserves held ............................................... 1,907 1,940 2,036 2,051 1,968 1,886 2,150 1,922 1,868 1,785 13 Required .................................................. 1,900 1,950 2,005 2,063 1,941 1,961 2,173 1,906 1,868 1,866 14 Excess ...................................................... 7 -10 31 -12 27 -75 -23 16 0 -81 15 Borrowings2.................................................. 10 122 90 60 97 137 60 28 1 20 Other large banks 16 Reserves held ............................................... 16,446 16,970 17,426 18,078 17,246 17,029 17,644 17,379 17,049 16,642 17 Required .................................................. 16,342 17,004 17,390 18,065 17,265 17,135 17,991 17,545 17,199 16,815 18 Excess ...................................................... 104 -34 36 13 -19 -106 -347 -166 -150 -173 19 Borrowings2.................................................. 276 803 707 647 729 1,479 1,287 808 319 296 All other banks 20 Reserves held ............................................... 16,099 16,582 16,734 16,904 16,403 16,261 16,314 16,271 16,248 16,285 21 Required .................................................. 15,962 16,398 16,536 16,692 16,229 16,233 16,367 16,234 16,186 16,137 22 Excess ...................................................... 137 184 198 212 174 28 -53 37 62 148 23 Borrowings2.................................................. 489 838 610 508 704 1,152 1,015 161 27 20 Edge corporations 24 Reserves held ............................................... n.a. 308 336 339 328 317 339 335 374 379 25 Required .................................................. n.a. 288 303 323 303 300 299 295 332 354 26 Excess ...................................................... n.a. 20 33 16 25 17 40 40 42 25 U.S. agencies and branches 27 Reserves held ............................................... n.a. 195 39 40 43 90 198 162 106 64 28 Required .................................................. n.a. 181 18 25 23 84 193 151 97 59 29 Excess ...................................................... n.a. 14 21 15 20 6 5 11 9 5 Weekly averages of daily figures for week (in 1980) ending May 28p June 4p June \\p June 18p June 25p July 2p July 9p July 16 p July 23p July 30p All member banks Reserves 30 At Federal Reserve Banks........................ 32,486 32,871 31,504 31,815 32,383 32,633 31,339 32,247 33,030 29,014 31 Currency and coin .................................... 10,924 11,096 11,256 11,413 10,692 11,238 11,559 11,502 10,504 11,552 32 Total held1................................................. 43,619 44,174 42,967 43,435 43,284 44,065 43,089 43,936 43,726 40,748 33 Required ............................................... 43,614 43,706 42,877 43,271 43,082 43,794 42,583 43,596 43,742 40,184 34 Excess1 .................................................. 5 468 90 164 -202 111 506 340 -16 564 Borrowings at Reserve Banks2 35 Total ......................................................... 1,123 459 401 396 318 348 215 332 354 629 36 Seasonal .................................................... 29 21 15 11 8 7 5 5 5 7 Large banks in New York City 37 Reserves held ............................................... 7,351 8,152 7,258 7,499 7,362 7,525 7,510 7,605 7,081 6,734 38 Required .................................................. 7,664 8,005 7,542 7,619 7,352 7,680 7,328 7,706 7,334 6,732 39 Excess ...................................................... -313 147 -284 -120 10 -155 182 -101 -253 2 40 Borrowings2.................................................. 48 0 0 78 0 0 0 0 0 241 Large banks in Chicago 41 Reserves held ............................................... 1,813 1,828 1,791 2,062 1,591 1,927 1,972 1,849 1,958 1,604 42 Required .................................................. 1,859 1,873 1,858 1,902 1,825 1,891 1,858 2,009 2,005 1,629 43 Excess ...................................................... -46 -45 -67 160 -234 36 114 -160 -47 -25 44 Borrowings2.................................................. 108 11 0 0 0 21 0 64 0 5 Other large banks 45 Reserves held ............................................... 17,185 17,155 16,822 16,777 17,211 17,381 16,868 17,061 16,874 15,539 46 Required .................................................. 17,400 17,232 16,995 17,217 17,202 17,432 16,896 17,237 17,386 15,751 47 Excess ...................................................... -215 -77 -173 -440 9 -51 -28 -176 -512 -212 48 Borrowings2.................................................. 899 393 378 291 297 299 204 258 342 357 All other banks 49 Reserves held ............................................... 16,289 16,272 15,925 16,222 16,367 16,501 16,267 16,293 16,516 16,079 50 Required .................................................. 16,208 16,127 15,921 16,133 16,351 16,435 16,097 16,168 16,560 15,726 51 Excess ...................................................... 81 145 4 89 -16 66 170 125 -44 353 52 Borrowings2.................................................. 68 55 23 27 21 28 11 10 12 26 Edge corporations 53 Reserves held ............................................... 348 367 386 407 346 344 364 389 421 361 54 Required .................................................. 290 307 358 353 305 322 331 371 384 346 55 Excess ...................................................... 58 60 28 54 41 22 33 18 37 15 U.S. agencies and branches 56 Reserves held ............................................... 188 173 217 60 57 39 79 114 81 n.a. 57 Required .................................................. 193 162 205 47 47 34 73 105 73 n.a. 58 Excess ...................................................... -5 11 12 13 10 5 6 9 8 n.a. 1. Adjusted to include waivers of penalties for reserve deficiencies in accordance Reserve System. For weeks for which figures are preliminary, figures by class of with Board policy, effective Nov. 19, 1975, of permitting transitional relief on a bank do not add to total because adjusted data by class are not available, graduated basis over a 24-month period when a nonmember bank merged into an 2. Based on closing figures, existing member bank, or when a nonmember bank joins the Federal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics □ August 1980 1.13 FEDERAL FUNDS AND REPURCHASE AGREEMENTS Large Member Banks* Averages of daily figures, in millions of dollars 1980, week ending Wednesday June 4r June llr June 18r June 25r July 2r July 9r July 16r July 23' July 30 One day and continuing contract 1 Commercial banks in United States............................ 46,775 51,166 50,083 47,163 47,590 54,160 52,210 48,473 47,297 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 17,725 16,450 17,316 17,717 17,294 16,388 18,005 18,172 17,198 3 Nonbank securities dealers.......................................... 1,579 964 1,046 1,541 1,242 1,585 2,128 2,332 2,369 4 All other ................................................................... 14,582 13,599 13,394 14,979 15,568 14,992 16,030 16,640 16,119 All other maturities 5 Commercial banks in United States............................ 6,042 5,353 4,815 4,397 3,962 3,670 3,829 3,755 3,737 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 6,534 6,607 6,441 6,139 6,102 5,950 5,996 5,948 5,846 7 Nonbank securities dealers.......................................... 2,704 2,829 2,807 2,809 2,956 2,856 2,956 3,036 3,319 8 All other ................................................................... 9,325 10,592 9,106 9,470 9,164 9,444 10,067 9,637 10,921 Memo: Federal funds and resale agreement loans in ma­ turities of one day or continuing contract 9 Commercial banks in United States............................ 16,311 16,167 17,002 15,128 15,351 16,268 15,892 13,073 13,278 10 Nonbank securities dealers.......................................... 1,964 2,921 2,617 2,173 2,117 2,444 2,457 2,317 2,507 1. Banks witlf assets of $1 billion or more as of December 31, 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments Al 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per annum Current and previous levels Loans to member banks Loans to all others Under sec. 10(b)2 under sec. 13, last par.4 Federal Reserve Under secs. 13 and 13a1 Bank Regular rate Special rate3 Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous 7/31/80 date rate 7/31/80 date rate 7/31/80 date rate 7/31/80 date rate Boston ............... 10 7/29/80 11 101/2 7/29/80 IIV2 11 7/29/80 12 13 7/29/80 14 New York .......... 10 7/28/80 11 WYi 7/28/80 IIV2 11 7/28/80 12 13 7/28/80 14 Philadelphia ......... 10 7/29/80 11 \m 7/29/80 W/2 11 7/29/80 12 13 7/29/80 14 Cleveland ............ 10 7/28/80 11 10 Vi 7/28/80 11V2 11 7/28/80 12 13 7/28/80 14 Richmond............ 10 7/28/80 11 10 Vi 7/28/80 IIV2 11 7/28/80 12 13 7/28/80 14 Atlanta ............... 10 7/28/80 11 10 Vi 7/28/80 11 Vz 11 7/28/80 12 13 7/28/80 14 Chicago............... 10 7/28/80 11 10 Vi 7/28/80 11V2 11 7/28/80 12 13 7/28/80 14 M K St a . i n n L s n a e o s a u p C i o s i l . t i y . s . ... . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 10 0 0 7 7 7 / / /2 2 28 8 8 / / /8 8 8 0 0 0 1 1 1 1 1 1 1 1 1 0 0 0 V V V 2 i i 7 7 7 / / /2 2 2 8 8 8 / / / 8 8 80 0 0 1 1 11 1 V V V /2 2 i 1 1 1 1 1 1 7 7 7 / / /2 2 2 8 8 8 / / / 8 8 8 0 0 0 1 1 1 2 2 2 1 1 1 3 3 3 7 7 7 / / / 2 2 2 8 8 8 / / / 8 8 8 0 0 0 1 1 1 4 4 4 Dallas ................. 10 7/28/80 11 10V2 7/28/80 i\Vi 11 7/28/80 12 13 7/28/80 14 San Francisco .... 10 7/28/80 11 10V2 7/28/80 11 Vi 11 7/28/80 12 13 7/28/80 14 Range of rates in recent years5 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. Ba o n f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1970 ............ 5V2 5V2 1974— Apr. 25 .............. 7^-8 8 1978— Jan. 9 .............. 6-6 V2 6 Yi 1971— Jan. 8 ...................... 5V4-5V2 30 .............. 8 8 20 .............. 6 Vi 6V2 15 ....................... 5V4 5V4 Dec. 9 .............. 73/4-8 73/4 May 11 .............. 6V2-I 1 19 ...................... 5-5V4 5Va 16 .............. 73/4 73/4 12 .............. 7 1 22 ...................... 5-514 5V4 July 3 .............. 1-1V4 1V4 29 ...................... 5 5 1975— Jan. 6 .............. IV4 1V4 10 .............. 7l/4-73/4 1V4 Feb. 13 ...................... 43/4-5 5 10 .............. 1V4 1V4 Aug. 21 .............. 73/4 73/4 19 ....................... 43/4 5 24 .............. IV4 lY'4 Sept. 22 .............. 8 8 July 16 ...................... 43/4-5 43/4 Feb. 5 .............. 63/4-7V4 63/4 Oct. 16 .............. 8-8 m 23 ....................... 5 5 7 .............. 63/4 63/4 20 .............. 8V2 8 Vi Nov 11 ......... 43/V5 5 Mar. 10 .............. 6V4-63/4 6V4 Nov. 1 .............. 8V2-9V2 9V2 19 ....................... 43/4 5 14 .............. 6!/4 6V4 3 .............. 9V2 9Y2 Dec. 13 ....................... 4h-43/4 43/4 May 16 .............. 6-6V4 6 17 ....................... 4V2-43A 43/4 1979— July 20 .............. 10 10 24 ....................... 4V2 4 Vi 1976— Jan. 19 .............. 5V2-6 5V2 Aug. 17 .............. 10-10 V2 \m 1973— 4V2 23 .............. 5k> 5 Vi 20 .............. 10^ 10V2 Jan. 15 ....................... 5 Nov. 22 .............. 51/4-5^ 5V4 Sept. 19 .............. 10^-11 11 Feb. 26 ....................... 5-5 5 26 .............. 5V4 5V4 21 .............. 11 11 Mar. 2 ....................... 5 Vz 5V2 Oct. 8 .............. 11-12 12 Apr. 23 ....................... 5V2-53/4 5Y2 1977— Aug. 30 .............. 5V4-53/4 5V4 10 .............. 12 12 May 4 ....................... 53/4 5V2 31 .............. 5>/4-53/4 53/4 11 ....................... 53/4-6 53/4 Sept. 2 .............. 53/4 53/4 1980— Feb. 15 .............. 12-13 13 18 ....................... 6 6 Oct. 26 .............. 6 6 19 .............. 13 13 June 11 ....................... 6-6 Vi 6 May 29 .............. 12-13 13 15 ....................... 6Y2 6Y1 30 .............. 12 12 6V2 June 13 .............. 11-12 11 July 2 ....................... 1 June 16 .............. 11 11 Aug. 14 ...................... 7-7 Vi 1 July 28 .............. 10-11 10 23 ...................... IVi 1V2 July 29 .............. 10 10 IV2 In effect July 31, 1980 10 10 1. Discounts or eligible paper and advances secured by such paper or by U.S. 4. Advances to individuals, partnerships, or corporations other than member government obligations or any other obligations eligible for Federal Reserve Bank banks secured by direct obligations of, or obligations fully guaranteed as to prin­ purchase. cipal and interest by, the U.S. government or any agency thereof. 2. Advances secured to the satisfaction of the Federal Reserve Bank. Advances 5. Rates under secs. 13 and 13a (as described above). For description and earlier secured by mortgages on 1- to 4-family residential property are made at the section data, see the following publications of the Board of Governors: Banking and 13 rate. Monetary Statistics, 1914-1941 and 1941-1970; Annual Statistical Digest, 1971-1975, 3. Applicable to special advances described in section 201.2(e)(2) of Regulation 1972-1976, 1973-1977, and 1974-1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Financial Statistics □ August 1980 1.15 MEMBER BANK RESERVE REQUIREMENTS1 Percent of deposits Requirements in effect Previous requirements Type of deposit, and deposit interval July 31, 1980 in millions of dollars Percent Effective date Percent Effective date Net demand2 0-2 ....................................................................................................... 7 12/30/76 IVi 2/13/75 2-10 ...................................................................................................... 9 V2 12/30/76 10 2/13/75 10-100 .................................................................................................. 113/4 12/30/76 12 2/13/75 100-400 ................................................................................................. 123/4 12/30/76 13 2/13/75 Over 400 ............................................................................................... I6V4 12/30/76 16^ 2/13/75 Time and savings2-3-4 Savings .................................................................................................. 3 3/16/67 3 Vi 3/2/67 Time5 0-5, by maturity 3 1 0 80 -1 7 d 9 ay d s a t y o s 4 . .. y .. e .. a .. r .. s .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2Vi 3/ 1 1 / 6 8 / / 6 7 7 6 3 3 Vi 3/ 3 1 / 6 2 / / 6 6 7 7 4 years or more .............................................................................. 1 10/30/75 3 3/16/67 Over 5, by maturity 30-179 days .................................................................................... 6 12/12/74 5 10/1/70 180 days to 4 years......................................................................... 2Vi 1/8/76 3 12/12/74 4 years or more .............................................................................. 1 10/30/75 3 12/12/74 Legal limits Minimum Maximum Net demand Reserve city banks ............................................................................ 10 22 Other banks ...................................................................................... 7 14 Time...................................................................................................... 3 10 Borrowings from foreign banks.............................................................. 0 22 1. For changes in reserve requirements beginning 1963, see Board’s Annual 4. The average reserve requirement on savings and other time deposits must be Statistical Digest, 1971-1975 and for prior changes, see Board’s Annual Report for at least 3 percent, the minimum specified by law. 1976, table 13. 5. Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percent 2. (a) Requirement schedules are graduated, and each deposit interval applies was imposed on large time deposits of $100,000 or more, obligations of affiliates, to that part of the deposits of each bank. Demand deposits subject to reserve and ineligible acceptances. This supplementary requirement was eliminated with requirements are gross demand deposits minus cash items in process of collection the maintenance period beginning July 24, 1980. and demand balances due from domestic banks. Effective with the reserve maintenance period beginning Oct. 25, 1979, a mar­ (b) The Federal Reserve Act specifies different ranges of requirements for ginal reserve requirement of 8 percent was added to managed liabilities in excess reserve city banks and for other banks. Reserve cities are designated under a of a base amount. This marginal requirement was increased to 10 percent beginning criterion adopted effective Nov. 9, 1972, by which a bank having net demand April 3,1980, was decreased to 5 percent beginning June 12,1980, and was reduced deposits of more than $400 million is considered to have the character of business to zero beginning July 24, 1980. Managed liabilities are defined as large time of a reserve city bank. The presence of the head office of such a bank constitutes deposits, Eurodollar borrowings, repurchase agreements against U.S. government designation of that place as a reserve city. Cities in which there are Federal Reserve and federal agency securities, federal funds borrowings from nonmember insti­ Banks or branches are also reserve cities. Any banks having net demand deposits tutions, and certain other obligations. In general, the base for the marginal reserve of $400 million or less are considered to have the character of business of banks requirement was originally the greater of (a) $100 million or (b) the average outside of reserve cities and are permitted to maintain reserves at ratios set for amount of the managed liabilities held by a member bank, Edge corporation, or banks not in reserve cities. For details, see the Board’s Regulation D. family of U.S. branches and agencies of a foreign bank for the two statement (c) Effective Aug. 24, 1978, the Regulation M reserve requirements on net weeks ending Sept. 26, 1979. For the computation period beginning Mar. 20, 1980, balances due from domestic banks to their foreign branches and on deposits that the base was lowered by (a) 7 percent or (b) the decrease in an institution’s U.S. foreign branches lend to U.S residents were reduced to zero from 4 percent and office gross loans to foreigners and gross balances due from foreign offices of other 1 percent, respectively. The Regulation D reserve requirement on borrowings institutions between the base period (Sept. 13-26,1979) and the week ending Mar. from unrelated banks abroad was also reduced to zero from 4 percent. 12, 1980, whichever was greater. For the computation period beginning May (d) Effective with the reserve computation period beginning Nov. 16, 1978, 29,1980, the base was increased by iVi percent above the base used to calculate domestic deposits of Edge corporations are subject to the same reserve require­ the marginal reserve in the statement week of May 14-21, 1980. In addition, ments as deposits of member banks. beginning Mar. 19, 1980, the base was reduced to the extent that foreign loans 3. Negotiable order of withdrawal (NOW) accounts and time deposits such as and balances declined. Christmas and vacation club accounts are subject to the same requirements as savings deposits. Note. Required reserves must be held in the form of deposits with Federal Reserve banks or vault cash. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 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 July 31, 1980 Previous maximum In effect July 31, 1980 Previous maximum Percent Effective Percent Effective Percent Effective Percent Effective date date date date 1 Savings ..................................................................... 5V4 7/1/79 7/1/73 7/1/79 51/4 0) 2 Negotiable order of withdrawal accounts 2............... 5 1/1/74 (3) 1/1/74 (3) Time accounts 4 Fixed ceiling rates by maturity 3 30-89 days .............. ............................................. 5V4 8/1/79 5 7/1/73 (3) (3) 4 90 days to 1 year .................................................. 53/4 1/1/80 5Vi 7/1/73 6 1/1/80 53/4 0 5 6 2 1 t t o o 2 2 V y i e y ar e s a r 5 s . 5 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7/1/73 5 5 3 V /4 i 1 1 / / 2 2 1 1 / / 7 7 0 0 6Vz 0) 6 53/4 1 1 / / 2 2 1 1 / / 7 7 0 0 7 2Vi to 4 years 5...................................................... 6 Vi 7/1/73 53/4 1/21/70 0) 6 1/21/70 8 4 to 6 years 6......................................................... IVa 11/1/73 a0 , IVi 11/1/73 a 9 6 to 8 years 6......................................................... IVi 12/23/74 7V4 11/1/73 73/4 12/23/74 IVi 11/1/73 10 8 years or more 6................................................. 73/4 6/1/78 (3)I 6/1/78 (3)I 11 Issued to governmental units (all maturities)8....... 6/1/78 73/4 ' 12/23/74 6/1/78 73/4 ' 12/23/74 12 Individual retirement accounts and Keogh (H.R. 10) plans (3 years or more)8 9............................... 6/1/78 73/4 7/6/77 6/1/78 73/4 7/6/77 Special variable ceiling rates by maturity 13 6-month money market time deposits10................. nn 14 2Vi years or more.................................................. $ 1. July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loan as follows: July 3, 8.597; July 10, 8.614; July 17, 8.610; July 24, 8.406; July 31, associations. 8.776. Effective for all six-month money market certificates issued beginning June 2. For authorized states only, federally insured commercial banks, savings and 5, 1980, the interest rate ceilings will be determined by the discount rate (auction loan associations, cooperative banks, and mutual savings banks in Massachusetts average) of most recently issued six-month U.S. Treasury bills as follows: and New Hampshire were first permitted to offer negotiable order of withdrawal Bill rate Commercial bank ceiling Thrift ceiling (NOW) accounts on Jan. 1, 1974. Authorization to issue NOW accounts was 8.75 and above bill rate + Va percent bill rate + Va percent extended to similar institutions throughout New England on Feb. 27, 1976, and 8.50 to 8.75 bill rate + Va percent 9.00 in New York State on Nov. 10, 1978, and in New Jersey on Dec. 28, 1979. 7.50 to 8.50 bill rate -I- Va percent bill rate + Vi percent 3. No separate account category. 7.25 to 7.50 7.75 bill rate -I- Vi percent 4. For exceptions with respect to certain foreign time deposits see the Federal Below 7.25 7.75 7.75 Reserve Bulletin for October 1962 (p. 1279), August 1965 (p. 1084), and Feb­ The prohibition against compounding interest in these certificates continues. In ruary 1968 (p. 167). addition, during the period May 29, 1980, through Nov. 1, 1980, commercial banks 5. No minimum denomination. Until July 1, 1979, a minimum of $1,000 was may renew maturing six-month money market time deposits for the same depositor required for savings and loan associations, except in areas where mutual savings at the thrift institution ceiling interest rate. banks permitted lower minimum denominations. This restriction was removed for 12. Effective Jan. 1, 1980, commercial banks, savings and loan associations, and deposits maturing in less than 1 year, effective Nov. 1, 1973. mutual savings banks were authorized to offer variable-ceiling nonnegotiable time 6. No minimum denomination. Until July 1, 1979, minimum denomination was deposits with no required minimum denomination and with maturities of 2Vi years $1,000 except for deposits representing funds contributed to an Individual Retire­ or more. The maximum rate for commercial banks is 3/4 percentage point below ment Account (IRA) or a Keogh (H.R. 10) plan established pursuant to the the yield on 2Vi-year U.S. Treasury securities; the ceiling rate for thrift institutions Internal Revenue Code. The $1,000 minimum requirement was removed for such is Va percentage point higher than that for commercial banks. Effective Mar. 1, accounts in December 1975 and November 1976 respectively. 1980, a temporary ceiling of 113/a per cent was placed on these accounts at com­ 7. Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for certificates mercial banks; the temporary ceiling is 12 percent at savings and loan associations maturing in 4 years or more with minimum denominations of $1,000; however, and mutual savings banks. Effective for all variable ceiling nonnegotiable time the amount of such certificates that an institution could issue was limited to 5 deposits with maturities of IVi years or more issued beginning June 2, 1980, the percent of its total time and savings deposits. Sales in excess of that amount, as ceiling rates of interest will be determined as follows: well as certificates of less than $1,000, were limited to the 6Vi percent ceiling on Treasury yield Commercial bank ceiling Thrift ceiling time deposits maturing in 2Vi years or more. 12.00 and above 11.75 12.00 Effective Nov. 1, 1973, ceilings were reimposed on certificates maturing in 4 9.50 to 12.00 Treasury yield- Va percent Treasury yield years or more with minimum denomination of $1,000. There is no limitation on Below 9.50 9.25 9.50 the amount of these certificates that banks can issue. Interest may be compounded on these time deposits. The ceiling rates of interest 8. Accounts subject to fixed rate ceilings. See footnote 6 for minimum denom­ at which these accounts may be offered vary biweekly. Throughout July, the ination requirements. maximum allowable rate at commercial banks was 9.25, and at thrift institutions 9. Effective January 1, 1980, commercial banks are permitted to pay the same it was 9.50. rate as thrifts on IRA and Keogh accounts and accounts of governmental units 13. Between July 1, 1979, and Dec. 31, 1979, commercial banks, savings and when such deposits are placed in the new 2Vi-year or more variable ceiling cer­ loan associations, and mutual savings banks were authorized to offer variable tificates or in 26-week money market certificates regardless of the level of the ceiling accounts with no required minimum denomination and with maturities of Treasury bill rate. 4 years or more. The maximum rate for commercial banks was 1V4 percentage 10. Must have a maturity of exactly 26 weeks and a minimum denomination of points below the yield on 4-year U.S. Treasury securities; the ceiling rate for thrift $10,000, and must be nonnegotiable. institutions was Va percentage point higher than that for commercial banks. 11. Commercial banks, savings and loan associations, and mutual savings banks Note. Before Mar. 31, 1980, the maximum rates that could be paid by federally were authorized to offer money market time deposits effective June 1, 1978. The insured commercial banks, mutual savings banks, and savings and loan associations ceiling rate for commercial banks on money market time deposits entered into were established by the Board of Governors of the Federal Reserve System, the before June 5, 1980, is the discount rate (auction average) on most recently issued Board of Directors of the Federal Deposit Insurance Corporation, and the Federal six-month U.S. Treasury bills. Until Mar. 15, 1979, the ceiling rate for savings Home Loan Bank Board under the provisions of 12 CFR 217, 329, and 526, and loan associations and mutual savings banks was Va percentage point higher respectively. Title II of the Depository Institutions Deregulation and Monetary than the rate for commercial banks. Beginning March 15, 1979, the VVpercentage- Control Act of 1980 (P.L. 96-221) transferred the authority of the agencies to point interest differential is removed when the six-month Treasury bill rate is 9 establish maximum rates of interest payable on deposits to the Depository Insti­ percent or more. The full differential is in effect when the six-month bill rate is tutions Deregulation Committee. The maximum rates on time deposits in denom­ 8^4 per cent or less. Thrift institutions may pay a maximum 9 percent when the inations of $100,000 or more with maturities of 30-89 days were suspended in June six-month bill rate is between 83/4 and 9 percent. Also effective March 15, 1979, 1970; such deposits maturing in 90 days or more were suspended in May 1973. For interest compounding was prohibited on six-month money market time deposits information regarding previous interest rate ceilings on all types of accounts, see at all offering institutions. The maximum allowable rates in July for commercial earlier issues of the Federal Reserve Bulletin, the Federal Home Loan Bank banks were as follows: July 3, 8.347; July 10, 8.364; July 17, 8.360; July 24, 8.156; Board Journal, and the Annual Report of the Federal Deposit Insurance Corpo­ July 31, 8.526. The maximum .allowable rates in July for thrift institutions were ration. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Financial Statistics □ August 1980 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1979 1980 Type of transaction 1977 1978 1979 Dec. Jan. Feb. Mar. Apr. May June U.S. Government Securities Outright transactions (excluding matched salepurchase transactions) Treasury bills 1 Gross purchases ........................................................ 13,738 16,628 16,623 2,464 0 187 1,370 2,428 838 322 2 Gross sales ................................................................. 7,241 13,725 7,480 378 1,722 1,590 0 108 232 0 3 Exchange ...................................................................... 0 0 0 0 0 0 0 0 0 274 4 Redemptions ............................................................... 2,136 2,033 2,900 0 790 400 0 0 0 0 Others within 1 year1 5 Gross purchases ........................................................ 3,017 1,184 3,203 90 0 0 292 109 155 121 6 Gross sales ................................................................. 0 0 0 0 0 0 0 0 0 0 7 Maturity shift ............................................................. 4,499 -5,170 17,339 571 383 1,822 921 179 1,670 412 9 8 E R x e c d h e a m n p g t e i on .. s .. ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500 0 -11 2 , , 3 6 0 0 8 0 -727 0 -403 0 -2,177 0 -809 0 -459 0 -5,276 0 -1,479 0 1 to 5 years 10 Gross purchases ........................................................ 2,833 4,188 2,148 398 0 0 355 373 405 465 11 Gross sales ................................................................. 0 0 0 0 0 0 0 0 0 0 1 1 2 3 M Ex a c t h u a ri n t g y e sh .. i . f .. t . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6,649 -178 -12 7 , , 6 5 9 0 3 8 -5 7 7 2 1 7 -3 4 8 0 3 3 - 1 3 ,3 7 7 4 7 -9 8 2 0 1 9 -1 4 7 5 9 9 -1 3 ,3 ,0 0 0 2 0 - 1 4 ,4 1 7 2 9 5 to 10 years 14 Gross purchases ........................................................ 758 1,526 523 81 0 0 107 62 133 164 15 Gross sales ................................................................. 0 0 0 0 0 0 0 0 0 0 1 1 6 7 M Ex a c t h u a ri n t g y e sh .. i . f .. t . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 584 2,803 -4 2 , , 6 1 4 8 6 1 0 0 0 0 -1,3 4 6 5 4 0 0 0 0 0 1 - ,3 2 0 5 0 0 0 Over 10 years 18 Gross purchases ........................................................ 553 1,063 454 51 0 0 81 64 216 129 19 Gross sales ................................................................. 0 0 0 0 0 0 0 0 0 0 2 21 0 M Ex a c t h u a ri n t g y e sh .. i . f .. t . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,565 2,545 1,619 0 0 0 0 0 - 3 8 5 4 0 0 0 0 0 -3 9 4 7 2 6 0 0 All maturities' 22 Gross purchases ........................................................ 20,898 24,591 22,950 3,084 0 187 2,206 3,036 1,747 1,200 23 Gross sales ................................................................. 7,241 13,725 7,480 378 1,722 1,590 0 108 232 0 24 Redemptions ............................................................... 4,636 2,033 5,500 0 790 400 0 0 0 0 Matched sale-purchase transactions 25 Gross sales ................................................................. 425,214 511,126 626,403 53,681 53,025 54,541 55,658 57,316 49,934 50,590 26 Gross purchases ........................................................ 423,841 510,854 623,245 49,738 55,557 54,584 54,636 57,479 50,965 52,076 Repurchase agreements 27 Gross purchases ........................................................ 178,683 151,618 107,374 7,251 5,704 5,407 6,682 3,029 7,717 12,810 28 Gross sales ................................................................. 180,535 152,436 107,291 6,643 6,872 4,787 6,379 3,952 4,811 15,258 29Net change in U.S. government securities......... 5,798 7,743 6,896 -629 -1,148 -1,140 1,486 2,168 5,452 238 Federal Agency Obligations Outright transactions 30 Gross purchases ........................................................ 1,433 301 853 0 0 0 0 668 0 0 3 3 1 2 G Re r d os e s m p sa ti l o es n s ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223 0 2 1 3 7 5 3 3 1 9 3 9 4 0 5 0 0 0 * 0 5 0 2 0 0 0 2 Repurchase agreements 33 Gross purchases ........................................................ 13,811 40,567 37,321 2,383 3,049 2,403 1,883 483 1,611 3,035 34 Gross sales ................................................................. 13,638 40,885 36,960 2,863 3,543 2,372 1,834 563 1,258 3,351 35Net change in federal agency obligations.............. 1,383 -426 681 -485 -494 31 45 586 353 -318 Bankers Acceptances 36Outright transactions, net........................................... -196 0 0 0 0 0 0 0 0 0 37Repurchase agreements, net .................................... 159 -366 116 434 -704 205 -34 -171 366 7 38Net change in bankers acceptances......................... -37 -366 116 434 -704 205 -34 -171 366 7 39Total net change in System Open Market Account .................................................... 7,143 6,951 7,693 -679 -2,345 -903 1,497 2,582 6,171 -73 1. Both gross purchases and redemptions include special certificates created Note. Sales, redemptions, and negative figures reduce holdings of the System when the Treasury borrows directly from the Federal Reserve, as follows (millions Open Market Account; all other figures increase such holdings. Details may not of dollars): September 1977, 2,500; March 1979, 2,600. add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Reserve Banks A ll 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month July 2p July 9p July 16p July 23p July 30? MayP JuneP July? Consolidated condition statement Assets 1 Gold certificate account ........................................... 11,172 11,172 11,172 11,172 11,171 11,172 11,172 11,172 2 Special drawing rights certificate account................. 3,018 3,018 3,018 3,118 3,118 2,968 3,018 3,118 3 Coin ......................................................................... 393 383 389 391 391 401 408 399 Loans 4 Member bank borrowings...................................... 420 284 559 548 2,620 602 215 562 5 Other ................................................................... 0 0 0 0 0 0 0 0 Acceptances 6 Bought outright .................................................... 0 0 0 0 0 0 0 0 7 Held under repurchase agreements ...................... 0 0 173 478 0 366 373 310 Federal agency obligations 8 Bought outright .................................................... 8,875 8,875 8,873 8,873 8,873 8,877 8,875 8,873 9 Held under repurchase agreements ...................... 0 0 104 553 0 353 37 531 U.S. government securities Bought outright 10 Bills .................................................................. 48,801 46,141 48,520 46,998 45,300 47,972 49,781 44,220 11 Certificates—Special ......................................... 0 0 0 0 0 0 0 0 12 Notes ................................................................ 58,174 58,174 58,174 58,174 58,174 57,425 58,174 58,174 13 Bonds ................................................................ 16,103 16,103 16,103 16,103 16,103 15,974 16,103 16,103 14 Total1 ................................................................ 123,078 120,418 122,797 121,275 119,577 121,371 124,058 118,497 15 Held under repurchase agreements ...................... 0 0 722 3,111 0 2,906 457 1,066 16 Total U.S. government securities ............................. 123,078 120,418 123,519 124,386 119,577 124,277 124,515 119,563 17 Total loans and securities ......................................... 132,373 129,577 133,228 134,838 131,070 134,475 134,015 129,839 18 Cash items in process of collection............................ 11,281 13,636 14,813 10,365 9,923 8,386 9,375 8,312 19 Bank premises ......................................................... 441 443 446 447 445 448 441 445 Other assets 20 Denominated in foreign currencies2...................... 2,340 2,386 2,205 2,170 2,215 2,304 2,339 2,201 21 All other .............................................................. 2,877 2,644 2,870 3,020 3,264 2,403 2,779 3,022 22 Total assets .............................................................. 163,895 163,259 168,141 165,521 161,597 162,557 163,547 158,508 Liabilities 23 Federal Reserve notes............................................... 115,638 116,737 116,368 115,717 115,816 113,118 114,502 115,654 Deposits Reserve accounts 24 Member banks .................................................. 31,328 30,366 35,241 34,422 31,183 31,804 33,187 27,548 25 Edge Act corporations ...................................... 251 375 376 525 463 376 397 372 26 U.S. agencies and branches of foreign banks---- 26 63 117 60 0 202 28 0 27 Total .................................................................. 31,605 30,804 35,734 35,007 31,646 32,382 33,612 27,920 28 Special Deposits—Credit Restraint Program ......... 580 606 643 712 0 550 578 0 29 U.S. Treasury—General account .......................... 3,590 3,204 2,956 2,855 3,073 4,523 3,199 3,954 30 Foreign—Official accounts .................................... 257 301 294 246 301 380 691 436 31 Other ....................................................................... 604 408 460 466 415 610 754 500 32 Total deposits ........................................................... 36,636 35,323 40,087 39,286 35,435 38,445 38,834 32,810 33 Deferred availability cash items ............................... 6,795 6,619 7,123 5,948 5,898 5,911 5,208 5,504 34 Other liabilities and accrued dividends3..................... 2,239 2,007 1,991 2,002 1,880 2,389 2,250 1,957 35 Total liabilities ......................................................... 161,308 160,686 165,569 162,953 159,029 159,863 160,794 155,925 Capital Accounts 36 Capital paid in ......................................................... 1,170 1,170 1,172 1,174 1,175 1,164 1,169 1,175 37 Surplus ..................................................................... 1,145 1,145 1,145 1,145 1,145 1,145 1,145 1,145 38 Other capital accounts ............................................. 272 258 255 249 248 385 439 263 39 Total liabilities and capital accounts.......................... 163,895 163,259 168,141 165,521 161,597 162,557 163,547 158,508 40 Memo: Marketable U.S. government securities held in custody for foreign and international account---- 82,071 82,298 82,267 81,860 82,246 75,691 82,226 82,862 Federal Reserve note statement 41 Federal Reserve notes outstanding (issued to Bank) . 133,159 133,475 133,650 134,119 134,469 131,334 132,861 134,545 Collateral held, against notes outstanding 42 Gold certificate account ........................................ 11,172 11,172 11,172 11,172 11,172 11,172 11,172 11,172 43 Special drawing rights certificate account .............. 3,018 3,018 3,018 3,118 3,118 2,968 3,018 3,118 44 Eligible paper ....................................................... 120 13 8 12 1,056 42 29 86 45 U.S. government and agency securities................. 118,849 119,272 119,452 119,817 119,123 117,152 118,642 120,169 46 Total collateral ......................................................... 133,159 133,475 133,650 134,119 134,469 131,334 132,861 134,545 1. Includes securities loaned—fully guaranteed by U.S. government securities 2. Beginning Dec. 29,1978, such assets are revalued monthly at market exchange pledged with Federal Reserve Banks—and excludes (if any) securities sold and rates. scheduled to be bought back under matched sale-purchase transactions. 3. Includes exchange-translation account reflecting, beginning Dec. 29, 1978, the monthly revaluation at market exchange rates of foreign-exchange commit­ ments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Financial Statistics □ August 1980 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month Type and maturity groupings 1980 1980 July 2 July 9 July 16 July 23 July 30 May 31 June 30 July 31 1Loans—Total ............................................................. 420 284 559 548 2,620 602 215 562 2 Within 15 days........................................................ 416 281 559 547 2,618 594 211 560 3 16 days to 90 days.................................................. 4 3 0 1 2 8 4 2 4 91 days to 1 year .................................................... 0 0 0 0 0 0 0 0 5Acceptances—Total .................................................... 0 0 173 478 0 366 373 310 6 Within 15 days ....................................................... 0 0 173 478 0 366 373 310 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 9U.S. Government securities—Total ............................ 123,078 120,418 123,519 124,386 119,577 124,277 124,515 119,563 10 Within 15 days1 ...................................................... 3,772 3,566 6,201 6,710 3,312 4,821 3,633 4,693 11 16 days to 90 days.................................................. 27,352 24,909 26,522 26,285 25,461 28,363 28,039 21,908 12 91 days to 1 year .................................................... 30,797 30,786 29,639 30,234 29,647 31,349 31,686 31,328 13 Over 1 year to 5 years........................................... 33,418 33,418 33,418 33,418 33,418 32,298 33,418 33,895 14 Over 5 years to 10 years.......................................... 13,601 13,601 13,601 13,601 13,601 13,437 13,601 13,601 15 Over 10 years......................................................... 14,138 14,138 14,138 14,138 14,138 14,009 14,138 14,138 16Federal Agency obligations—Total............................. 8,875 8,875 8,977 9,426 8,873 9,230 8,912 9,404 17 Within 15 days1 ...................................................... 62 100 141 637 83 528 223 615 18 16 days to 90 days.................................................. 518 714 715 761 761 417 518 761 19 91 days to 1 year .................................................... 1,584 1,351 1,353 1,269 1,310 1,612 1,499 1,310 20 Over 1 year to 5 years........................................... 4,702 4,701 4,774 4,765 4,724 4,670 4,663 4,770 21 Over 5 years to 10 years.......................................... 1,265 1,265 1,250 1,250 1,251 1,259 1,265 1,204 22 Over 10 years......................................................... 744 744 744 744 744 744 744 744 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. 1980' Bank group, or type of customer 1977' 1978' 1979' Feb. Mar. Apr. May June Debits to demand deposits1 (seasonally adjusted) 1 All commercial banks ................................................. 34,322.8 40,297.8 49,750.7 59,422.0 59,257.1 57,876.9 61,354.5 61.574.7 2 Major New York City banks...................................... 13,860.6 15,008.7 18,512.2 23,035.7 22,936.8 23,792.6 25,508.0 24,788.9 3 Other banks .............................................................. 20,462.2 25,289.1 31,238.5 36,386.3 36,320.3 34,084.2 35,846.4 36.785.7 Debits to savings deposits2 (not seasonally adjusted) 4 ATS/NOW3 ................................................................ 5.5 17.1 83.3 118.0 125.4 167.7 137.8 158.7 5 Business4 ................................................................... 21.7 56.7 77.4 79.3 84.8 86.8 79.0 80.2 6 Others5....................................................................... 152.3 359.7 557.6 616.6 679.0 720.7 604.8 587.5 7 All accounts .............................................................. 179.5 432.9 718.2 813.9 889.2 975.2 821.6 826.4 Demand deposit turnovisr1 (seasonallyf adjusted) 8 All commercial banks......... 129.2 139.4 163.4 190.2 190.4 196.2 202.9 201.5 9 Major New York City banks 503.0 541.9 646.2 741.2 738.0 805.9 871.8 817.1 10 Other banks ...................... 85.9 96.8 113.2 129.3 129.6 128.4 131.2 133.7 Savings deposit turnover2 (not seasonally adjusted) 11 ATS/NOW3 ................................................................ 6.5 7.0 7.8 8.8 9.1 12.1 9.9 10.2 12 Business4 ................................................................... 4.1 5.1 7.2 8.3 9.4 10.2 8.9 8.6 13 Others5....................................................................... 1.5 1.7 2.9 3.5 3.9 4.2 3.6 3.4 14 All accounts .............................................................. 1.7 1.9 3.3 4.1 4.5 5.1 4.3 4.2 1. Represents accounts of individuals, partnerships, and corporations, and of Note: Historical data for the period 1970 through June 1977 have been esti­ states and political subdivisions. mated; these estimates are based in part on the debits series for 233 SMSA’S, 2. Excludes special club accounts, such as Christmas and vacation clubs. which were available through June 1977. Back data are available from Publications 3. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts Services, Division of Administrative Services, Board of Governors of the Federal authorized for automatic transfer to demand deposits (ATS). ATS data availability Reserve System, Washington, D.C. 20551. Debits and turnover data for savings starts with December 1978. deposits are not available before July 1977. 4. Represents corporations and other profit-seeking organizations (excluding commercial banks but including savings and loan associations, mutual savings banks, credit unions, the Export-Import Bank, and federally sponsored lending agencies). 5. Savings accounts other than NOW; business; and, from December 1978, ATS. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Aggregates A13 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures Item D 19 e 7 c 6 . D 19 e 7 c 7 . D 19 e 7 c 8 . D 19 e 7 c 9 . Feb. Apr. May Seasonally adjusted Measures1 1 M-1A ...................................................... 305.0 328.4 351.6 369.7 370.8 373.7 373.1 367.6 367.8 371.3 2 M-1B ...................................................... 307.7 332.5 359.9 386.4 388.1 391.3 391.2 386.6 386.1' 390.9 3 M-2 .......................................................... 1.166.7 1,294.1 1,401.5' 1,525.5 1,534.5' 1,546.7' 1,553.1' 1,549.8' 1,562.4' 1,585.2 4 M-3 .......................................................... 1.299.7 1,460.3 1.623.6 1,775.5' 1,786.9' 1,804.5' 1,811.1' 1,811.1' 1,824.5' 1,843.9 5 L2 ............................................... 1,523.5 1,715.5 1.927.7 2,141.1' 2,155.2' 2,175.9' 2,190.2' 2,200.4' 2,216.8' Components 6 Currency .................................... 80.7 88.7 97.6 106.3 107.3 108.1 108.9 109.0 110.1 111.0 7 Demand deposits ........................ 224.4 239.7 253.9 263.4 263.5 265.6 264.2 258.6 257.6' 260.3 8 Savings deposits .......................... 447.7 486.5 476.1 416.7' 411.8' 403.1 391.9' 377.3 372.7' 380.6 9 Small-denomination time deposits3 396.6 454.9 533.8 656.5 661.8' 671.4' 687.6' 708.3 718.4 719.8 10 Large-denomination time deposits4 118.0 145.2 194.7 219.4 222.5 228.6 230.7' 234.2' 235.0' 230.7 Not seasonally adjusted Measures1 11 M-1A ................................................ 313.5 337.2 360.9 379.2 375.6 365.5 366.3 370.9 362.1 370.1 12 M-1B ................................................ 316.1 341.3 369.3 396.0 392.9 383.0 384.4 389.9 380.5 389.7 13 M-2 .................................................... 1,169.1 1,295.9 1,403.7 1,527.3' 1,537.8' 1,538.6' 1,550.0' 1,558.0' 1,559.5' 1,587.0 14 M-3 .................................................... 1,303.8 1,464.5 1,629.2 1,780.8' 1,792.2' 1,796.6' 1,808.8' 1,817.2' 1,820.4' 1,843.3 15 L2 ...................................................... 1,527.1 1,718.5 1,931.1 2,143.6' 2,161.8' 2,173.3' 2,190.8' 2,208.4' 2,210.6' n.a. Components 16 Currency ........................................... 82.1 90.3 99.4 108.2 106.5 106.8 107.9 108.7 109.9 111.1 17 Demand deposits ............................... 231.3 247.0 261.5 271.0 269.1 258.7 258.4 262.2 252.2 259.0 18 Other checkable deposits5 ................. 2.7 4.1 8.3 16.7 17.3 17.6 18.0 19.0 18.4 19.6 19 Overnight RPs and Eurodollars6......... 13.6 18.6 23.9 25.3 26.7' 27.1 24.6 20.3 21.4' 22.6 20 Money market mutual funds .............. 3.4 3.8 10.3 43.6 49.1 56.7 60.9' 60.4' 66.8' 74.2 21 Savings deposits ................................. 444.9 483.2 472.9 413.8 409.2 400.0 392.2 379.7 374.4' 382.8 22 Small-denomination time deposits3 .... 393.5 451.3 529.8 651.5 662.9' 674.6' 690.9 710.9 719.4' 720.6 23 Large-denomination time deposits4 .... 119.7 147.7 198.2 223.0 224.4 228.8 231.6' 232.1' 233.8' 228.3 1. Composition of the money stock measures is as follows: 2. L: M-3 plus other liquid assets such as term Eurodollars held by U.S. residents M-l A: Averages of daily figures for (1) demand deposits at all commercial banks other than banks, bankers acceptances, commercial paper, Treasury bills and other other than those due to domestic banks, the U.S. government, and foreign banks liquid Treasury securities, and U.S. savings bonds. and official institutions less cash items in the process of collection and Federal 3. Small-denomination time deposits are those issued in amounts of less than Reserve float; and (2) currency outside the Treasury, Federal Reserve Banks, and $100,000. the vaults of commercial banks. 4. Large-denomination time deposits are those issued in amounts of $100,000 M-1B: M-1A plus negotiable order of withdrawal and automatic transfer service or more and are net of the holdings of domestic banks, thrift institutions, the U.S. accounts at banks and thrift institutions, credit union share draft accounts, and government, money market mutual funds, and foreign banks and official institu­ demand deposits at mutual savings banks. tions. M-2: M-1B plus savings and small-denomination time deposits at all depositary 5. Includes ATS and NOW balances at all institutions, credit union share draft institutions, overnight repurchase agreements at commercial banks, overnight balances, and demand deposits at mutual savings banks. Eurodollars held by U.S. residents other than banks at Caribbean branches of 6. Overnight (and continuing contract) RPs are those issued by commercial member banks, and money market mutual fund shares. banks to the nonbank public, and overnight Eurodollars are those issued by Ca­ M-3: M-2 plus large-denomination time deposits at all depositary institutions ribbean branches of member banks to U.S. nonbank customers. and term RPs at commercial banks and savings and loan associations. Note. Latest monthly and weekly figures are available from the Board’s H.6(508) release. Back data are available from the Banking Section, Division of Research and Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Financial Statistics □ August 1980 1.22 AGGREGATE RESERVES AND DEPOSITS Member Banks Billions of dollars, averages of daily figures 1979' 1980 Item 1977 1978 1979 Dec. Dec. Dec. Nov. Dec. Jan. Feb. Mar. Apr. May June Seasonally adjusted 1 Reserves1............................................................................ 36.00 41.16 43.57 43.06 43.57 43.44 43.35 43.68 44.91 44.46 43.98 2 Nonborrowed ..................................................................... 35.43 40.29 42.10 41.15 42.10 42.20 41.70 40.85 . 42.45 43.44 43.60 3 Required............................................................................ 35.81 40.93 43.13 42.81 43.13 43.19 43.14 43.47 44.64 44.28 43.77 4 Monetary base2 .................................................................. 127.6 142.2 153.8 152.8 153.8 154.7 155.6 156.6 157.9 158.5 158.9 5 Deposits subject to reserve requirements3............................ 567.6 616.1 644.4 641.9 644.4 643.7 647.2 649.1 655.4 656.8 658.2 6 Time and savings................................................................ 385.6 428.8 451.1 450.1 451.1 451.9 454.4 457.9 464.2 467.7 467.8 Demand 7 Private ............................................................................ 178.5 185.1 191.5 190.0 191.5 189.5 190.9 189.4 188.7 187.3 188.7 8 U.S. government............................................................ 3.5 2.2 1.8 1.9 1.8 2.3 1.9 1.8 2.4 1.8 1.7 Not seasonally adjusted 9 Monetary base2 .................................................................. 129.8 144.6 156.3 153.5 156.3 155.9 154.0 154.9 157.6 157.8 158.5 10 Deposits subject to reserve requirements3............................ 575.3 624.0 652.6 642.2 652.6 652.1 643.9 648.0 657.7 651.5 657.1 11 Time and savings................................................................ 386.4 429.6 452.0 449.2 452.0 454.6 455.8 460.6 464.7 467.7 467.4 Demand 12 Private ............................................................................ 185.1 191.9 198.6 191.3 198.6 195.4 186.2 185.5 190.4 182.1 187.5 13 U.S. government............................................................ 3.8 2.5 2.0 1.7 2.0 2.1 1.8 1.9 2.6 1.7 2.2 1. Member bank reserve series reflect actual reserve requirement percentages 2. Includes total reserves (member bank reserve balances in the current week with no adjustment to eliminate the effect of changes in Regulations D and M. plus vault cash held two weeks earlier); currency outside the U.S. Treasury, Federal Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percentage Reserve Banks, and the vaults of commercial banks; and vault cash of nonmember points was imposed on time deposits of $100,000 or more. This action increased banks. required reserves approximately $3.0 billion in the week beginning Nov. 16, 1978. 3. Includes total time and savings deposits and net demand deposits as defined Effective Oct. 11, 1979, an 8 percentage point marginal reserve requirement was by Regulation D. Private demand deposits include all demand deposits except imposed on “managed liabilities” (liabilities that have been actively used to finance those due to the U.S. government, less cash items in process of collection and rapid expansion in bank credit). On Oct. 25, 1979, reserves of Edge Act corpo­ demand balances due from domestic commercial banks. rations were included in member bank reserves. This action raised required re­ serves $318 million. Effective Mar. 12, 1980, the marginal reserve requirement of Note. Latest monthly and weekly figures are available from the Board’s 8 percentage points was raised to 10 percentage points. In addition the base upon H.3(502) statistical release. Back data and estimates of the impact on required which the marginal reserve requirement is calculated was reduced. This action reserves and changes in reserve requirements are available from the Banking increased required reserves about $1,693 million in the week ending April 2, 1980. Section, Division of Research and Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Aggregates A15 1.23 LOANS AND SECURITIES All Commercial Banksi Billions of dollars; averages of Wednesday figures 1980 1980 Category 1977 1978 1979 1977 1978 1979 Dec. Dec. Dec. Dec. Dec. Dec. May June May June Seasonally adjusted Not seasonally adjusted 1 Total loans and securities2........................ 891.1 1,014.33 1,132.54 1,155.1 1,152.1 899.1 1,023.83 1,143.04 1,152.1 1,155.7 2 U.S. Treasury securities .......................... 99.5 93.4 93.8 94.6 97.0 100.7 94.6 95.0 95.2 97.3 3 Other securities ...................................... 159.6 173.13 191.5 199.7 201.5 160.2 173.93 192.3 200.1 202.1 4 Total loans and leases2 ............................ 632.1 747.83 847.24 860.7 853.6 638.3 755.43 855.74 856.8 856.3 5 Commercial and industrial loans.......... 211.25 246.5 6 290.54 297.8 296.4 212.65 248.26 292.44 298.5 298.1 6 Real estate loans ................................. 175.25 210.5 242.44 250.6 250.2 175.55 210.9 242.94 249.6 250.0 7 Loans to individuals............................. 138.2 164.9 182.7 178.3c 174.5 139.0 165.9 183.8 176.9C 174.0 8 Security loans ...................................... 20.6 19.4 18.3 15.8 15.7 22.0 20.7 19.6 15.0 15.8 9 Loans to nonbank financial institutions . 25.85 27.17 30.34 29.1 27.7 26.35 27.67 30.84 28.9 28.0 10 Agricultural loans................................. 25.8 28.2 31.0 32.3 32.4 25.7 28.1 30.8 32.2 32.6 11 Lease financing receivables ................. 5.8 7.4 9.5 10.3 10.5 5.8 7.4 9.5 10.3 10.5 12 All other loans .................................... 29.5 43.63 42.6 46.6C 46.1 31.5 46.63 45.9 45.4C 47.4 Memo: 13 Total loans and securities plus loans sold2’9 895.9 1,018.I3 1,135.34’8 1,157.7 1,155.0 903.9 1,027.63 1,145.74’8 1154.8 1,158.6 14 Total loans plus loans sold2 9................... 636.9 751.63 850.004’8 863.3 856.5 643.0 759.23 858.44’8 859.4 859.1 15 Total loans sold to affiliates9................... 4.8 3.8 2.88 2.6 2.8 4.8 3.8 2.88 2.6 2.8 16 Commercial and industrial loans plus loans sold9 ................................................ 213.95 248.56’10 292.3 4’8 299.5 298.3 215.35 250.16’10 294.24’8 300.2 299.9 17 Commercial and industrial loans sold9 .. 2.7 1.9!° 1.88 1.7 1.9 2.7 1.910 1.88 1.7 1.9 18 Acceptances held ................................. 7.5 6.8 8.5 8.4 8.5 8.6 7.5 9.4 8.0 8.4 19 Other commercial and industrial loans .. 203.75 239.7 282.0 289.4 287.9 203.95 240.9 283.1 290.5 289.7 20 To U.S. addressees11 ........................ 193.85 226.6 263.2 269.4 268.0 193.75 226.5 263.2 270.5 269.8 21 To non-U.S. addressees ................... 9.95 13.1 18.8 20.0 19.9 10.35 14.4 19.8 19.9 19.9 22 Loans to foreign banks............................ 13.5 21.2 18.7 21.1 20.0 14.6 23.0 20.1 20.3 20.7 23 Loans to commercial banks in the United States................................. 54.1 57.3 77.8 92.4 94.7 56.9 60.3 81.9 88.2 93.4 1. Includes domestic chartered banks; U.S. branches, agencies, and New York 7. As of Dec. 1, 1978, nonbank financial loans were reduced $0.1 billion as the investment company subsidiaries of foreign banks; and Edge Act corporations. result of reclassification. 2. Excludes loans to commercial banks in the United States. 8. As of Dec. 1, 1979, loans sold to affiliates were reduced $800 million and 3. As of Dec. 31, 1978, total loans and securities were reduced by $0.1 billion. commercial and industrial loans sold were reduced $700 million due to corrections “Other securities” were increased by $1.5 billion and total loans were reduced by of two banks in New York City. $1.6 billion largely as the result of reclassifications of certain tax-exempt obliga­ 9. Loans sold are those sold outright to a bank’s own foreign branches, non­ tions. Most of the loan reduction was in “all other loans.” consolidated nonbank affiliates of the bank, the bank’s holding company (if not 4. As of Jan. 3, 1979, as the result of reclassifications, total loans and securities a bank), and nonconsolidated nonbank subsidiaries of the holding company. and total loans were increased by $0.6 billion. Business loans were increased by 10. As of Dec. 31, 1978, commercial and industrial loans sold outright were $0.4 billion and real estate loans by $0.5 billion. Nonbank financial loans were increased $0.7 billion as the result of reclassifications, but $0.1 billion of this reduced by $0.3 billion. amount was offset by a balance sheet reduction of $0.1 billion as noted above. 5. As of Dec. 31, 1977, as the result of loan reclassifications, business loans 11. United States includes the 50 states and the District of Columbia. were reduced $0.2 billion and nonbank financial loans $0.1 billion; real estate loans were increased $0.3 billion. Note. Data are prorated averages of Wednesday data for domestic chartered 6. As of Dec. 31, 1978, commercial and industrial loans were reduced $0.1 banks, and averages of current and previous month-end data for foreign-related billion as a result of reclassifications. institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics □ August 1980 1.24 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1979 1980 Account Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Mayr June July Domestically Chartered Commercial Banks1 1 Loans and investments ............................. 1,112.1 1,118.4 1,118.0 1,143.3 1,133.4 1,143.6 1,142.8 1,151.9 1,150.5 1,153.3 1,158.3 2 Loans, gross ................................................. 833.8 839.0 836.7 860.1 849.7 857.0 854.6 861.2 857.1 857.1 857.4 3 Interbank .................................................... 53.6 54.0 52.6 62.9 57.2 58.0 55.6 62.4 67.4 66.6 66.8 4 Commercial and industrial .................. 249.4 249.8 248.0 253.4 252.6 256.2 . 258.3 259.2 256.0 256.7 256.4 5 Other .......................................................... 530.9 535.3 536.1 543.7 540.0 542.9 540.7 539.6 533.7 533.8 534.1 6 U.S. Treasury securities ........................... 91.9 91.5 92.1 92.5 92.4 93.6 94.2 93.5 93.9 95.1 97.6 7 Other securities ........................................... 186.4 187.8 189.3 190.7 191.2 192.9 193.9 197.2 199.5 201.0 203.3 8 Cash assets, total ......................................... 148.5 160.7 158.1 146.4 148.4 149.9 153.8 168.2 172.4 150.5 154.1 9 Currency and coin .................................. 16.7 16.6 18.2 17.9 17.3 17.1 16.8 16.8 17.8 17.4 17.7 10 Reserves with Federal Reserve Banks 31.6 34.1 34.7 28.4 28.3 30.7 34.2 33.2 37.9 29.5 32.1 11 Balances with depository institutions 40.7 45.5 43.7 37.7 43.7 43.4 43.1 49.7 47.9 45.5 44.7 12 Cash items in process of collection .. 59.5 64.6 61.5 62.4 59.0 58.7 59.8 68.6 68.9 58.0 59.6 13 Other assets.................................................... 57.5 57.8 59.3 61.2 63.1 65.0 66.1 73.3 72.7 77.1 77.0 14 Total assets/total liabilities and capital . 1,318.2 1,336.9 1,335.4 1,351.0 1,344.9 1,358.4 1,362.7 1,393.5 1,395.7 1,380.9 1,389.4 15 Deposits ............................................. 996.6 1,023.6 1,017.6 1,030.6 1,022.5 1,028.9 1,032.1 1,060.0 1,057.3 1,044.7 1,050.1 16 Demand ...................................................... 358.7 376.6 365.1 377.6 362.4 358.7 354.5 377.4 370.2 358.1 363.6 17 Savings ........................................................ 213.4 207.6 205.0 203.4 200.6 199.9 196.5 189.3 192.3 197.8 205.7 18 Time ............................................................. 424.5 439.4 447.4 449.7 459.6 470.3 481.1 493.4 494.8 488.8 480.8 19 Borrowings .................................................... 147.0 137.4 135.6 140.5 143.1 145.1 142.1 147.0 154.1 152.5 158.6 20 Other liabilities............................................. 71.2 74.0 78.5 74.1 77.5 81.6 84.2 81.2 78.5 76.6 74.8 21 Residual (assets less liabilities) ............. 103.3 101.9 103.7 105.8 101.8 102.9 104.2 105.2 105.7 107.1 106.0 Memo: 22 U.S. Treasury note balances included in borrowing............................................... 17.8 8.4 5.0 12.8 15.0 8.1 9.4 14.3 5.1 13.1 7.6 23 Number of banks............................... 14,616 14,605 14,608 14,610 14,594 14,609 14,626 14,629 14,639 14,646 14,658 All Commercial Banking Institutions2 24 Loans and investments ...................... 1,197.7 1,200.3 1,200.9 1,229.8 1,217.7 1,230.8 1,231.8 1,240.9 1,239.2 25 Loans, gross ...................................... 915.9 917.6 916.2 943.1 930.7 941.0 940.2 946.8 942.4 26 Interbank ........................................ 69.2 71.6 71.8 80.5 75.4 78.3 75.2 82.1 88.0 27 Commercial and industrial .............. 288.1 288.3 287.9 295.0 295.1 298.5 301.7 302.0 298.1 28 Other ............................................. 558.6 557.7 556.6 567.6 560.1 564.2 563.4 562.7 556.2 29 U.S. Treasury securities ..................... 93.5 93.1 93.7 94.5 94.3 95.5 96.2 95.5 95.9 30 Other securities ................................. 188.3 189.5 190.9 192.2 192.7 194.4 195.4 198.6 201.0 31 Cash assets, total ............................... 172.2 179.9 176.7 169.5 166.5 168.8 174.0 187.3 190.7 32 Currency and coin .......................... 16.7 16.6 18.2 17.9 17.3 17.1 16.8 16.8 17.8 33 Reserves with Federal Reserve Banks 32.5 34.9 35.6 29.0 28.9 31.3 35.0 33.9 38.7 34 Balances with depository institutions 62.4 62.5 60.0 59.0 59.8 60.5 61.1 66.6 63.8 35 Cash items in process of collection .. 60.6 65.9 62.9 63.7 60.4 60.0 61.2 69.9 70.4 36 Other assets........................................ 76.7 76.5 78.5 81.0 83.7 86.8 91.6 99.0 98.1 37 Total assets/total liabilities and capital . 1,446.5 1,456.7 1,456.1 1,480.3 1,468.0 1,486.5 1,497.5 1,527.2 1,528.0 n.a. n.a. 38 Deposits ............................................. 1,043.6 1,062.6 1,058.5 1,076.3 1,063.1 1,070.0 1,073.5 1,101.1 1,097.1 39 Demand ......................................... 383.2 394.2 384.9 400.5 380.5 376.8 373.6 396.6 387.7 40 Savings ........................................... 214.2 208.3 205.9 204.3 201.3 200.3 196.7 189.5 192.6 41 Time ............................................................ 446.2 460.1 467.7 471.5 481.3 492.9 503.2 515.0 516.9 42 Borrowings .................................................... 182.1 171.6 169.5 180.5 179.5 182.9 186.5 190.8 196.3 43 Other liabilities............................................. 115.2 118.5 122.2 115.4 121.1 128.4 130.9 127.8 126.6 44 Residual (assets less liabilities) .............. 105.6 104.0 105.8 108.1 104.2 105.2 106.5 107.4 108.1 Memo: 45 U.S. Treasury note balances included in borrowing............................................... 17.8 8.4 5.0 12.8 15.0 8.1 9.4 14.3 5.1 46 Number of banks ............................... 14,972 14,963 14,969 14,975 14,962 14,978 14,995 15,004 15,016 1. Domestically chartered commercial banks include all commercial banks in the Note. Figures are partly estimated. They include all bank-premises subsidiaries United States except branches of foreign banks; included are member and non- and other significant majority-owned domestic subsidiaries. Data for domestically member banks, stock savings banks, and nondeposit trust companies. chartered commercial banks are for the last Wednesday of the month; data for 2. Commercial banking institutions include domestically chartered commercial other banking institutions are for last Wednesday except at end of quarter, when banks, branches and agencies of foreign banks, Edge Act and Agreement cor­ they are for the last day of the month. porations, and New York state foreign investment corporations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A17 1.25 COMMERCIAL BANK ASSETS AND LIABILITIES Call-Date Series Millions of dollars, except for number of banks 1976 1977 1978 1976 1977 1978 Account Dec. 31 June 30 Dec. 31 June 30 Dec. 31 June 30 Dec. 31 June 30 Total insured National (all insured) 1 Loans and investments, gross .................................... 827,696 854,733 914,779 956,431 476,610 488,240 523,000 542,218 Loans 2 Gross ..................................................................... 578,734 601,122 657,509 695,443 340,691 351,311 384,722 403,812 3 Net ......................................................................... 560,077 581,143 636,318 672,207 329,971 339,955 372,702 390,630 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 80,583 86,033 87,886 6 Cash assets ............................................................. 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 8 Deposits..................................................................... 825,003 847,372 922,657 945,874 469,377 476,381 520,167 526,932 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 ..................................................................... 285,200 284,544 319,873 312,707 163,346 161,358 181,821 176,025 Time and savings 12 Interbank ................................................................ 8,248 7,721 8,731 8,987 4,907 4,599 5,730 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 investment, gross...................................... 144,000 144,597 152,514 157,464 207,085 221,896 239,265 256,749 Loans 18 Gross ..................................................................... 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 22 Cash assets ............................................................. 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 24 Deposits..................................................................... 149,491 152,472 163,436 167,403 206,134 218,519 239,053 251,539 Demand 25 U.S. government .................................................... 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 2,275 956 988 973 920 29 Other ..................................................................... 75,178 76,827 80,216 85,301 132,993 144,581 153,887 165,502 30 Borrowings ................................................................ 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 32 Memo: Number of banks........................................... 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 38 Cash assets ............................................................. 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 40 Deposits..................................................................... 13,325 14,658 16,844 19,924 219,460 233,177 255,898 271,463 Demand 41 U.S. government .................................................... 4 8 10 8 921 822 1,907 2,323 42 Interbank ................................................................ 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 44 Interbank................................................................ 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 46 Borrowings ................................................................ 4,842 7,056 6,908 8,413 8,401 11,212 11,293 14,649 47 Total capital accounts ................................................ 818 893 917 962 18,360 19,812 20,823 22,346 48 Memo: Number of banks........................................... 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 Financial Statistics □ August 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 Total All other banks1 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 31Less: 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 1,438 1,665 1,554 42 FHA-insured..................................................................... 399 340 132 27 88 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 depository 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 55Loans 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 71Investment 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 banks1 Insured Non­ Liability or capital account commerical Large banks member banks Total All other banks1 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 93 Savings deposits .......................................................................... 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 .............................................................................. 85,540 63,174 12,871 2,947 21,177 26,178 22,380 111 Preferred stock........................................................................ 88 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 52 337 661 538 116 Total liabilities and equity capital................................................ 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 agreements to resell ................................................................................... 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 34,284 127 Certificates of deposit.............................................................. 160,227 129,667 27,950 11,590 56,383 33,743 30,560 128 Other time deposits.................................................................. 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 trust Note. Data include consolidated reports, including figures for all bank-premises companies that are members of the Federal Reserve System. subsidiaries and other significant majority-owned domestic subsidiaries. Securities 2. Demand deposits adjusted are demand deposits other than domestic com­ are reported on a gross basis before deductions of valuation reserves. Back data mercial interbank and U.S. government, less cash items reported as in process of in lesser detail were shown in previous issues of the Bulletin. collection. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics □ August 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 Account June 4 June 11 June 18 June 25 July 2p July 9p July 16^ July 23p July 30p 1 Cash items in process of collection........................ 53,685 51,339 53,888 48,142 57,210 51,437 58,997 48,650 49,044 2 Demand deposits due from banks in the United States ............................................................. 17,641 17,855 18,834 17,932 18,728 19,389 18,093 17,490 17,720 3 All other cash and due from depository institutions 33,903 32,363 33,803 31,203 33,843 33,266 37,000 35,298 33,412 4 Total loans and securities.................................................. 519,227 516,434 517,866 515,343 522,621 518,630 516,300 512,736 514,441 Securities 5 U.S. Treasury securities ........................................ 37,413 37,455 36,332 36,545 36,958 37,483 37,434 37,863 38,141 6 Trading account ................................................. 6,240 5,382 4,045 4,194 4,098 4,466 4,592 4,749 4,911 7 Investment account, by maturity........................ 31,173 32,072 32,287 32,351 32,861 33,016 32,842 33,113 33,230 8 One year or less............................................. 6,437 6,453 6,151 6,210 6,190 6,226 6,308 6,554 6,697 9 Over one through five years .......................... 20,104 20,759 21,148 21,116 21,752 21,882 21,694 21,745 21,718 10 Over five years............................................... 4,632 4,861 4,988 5,024 4,918 4,908 4,840 4,814 4,815 11 Other securities .................................................... 75,053 75,894 74,973 75,345 75,590 75,786 75,471 75,411 75,533 12 Trading account ................................................ 3,468 4,108 3,218 3,537 3,934 3,957 3,495 3,092 3,052 13 Investment account ........................................... 71,584 71,786 71,755 71,808 71,656 71,829 71,977 72,318 72,481 14 U.S. government agencies ............................. 16,632 16,672 16,627 16,562 16,501 16,443 16,416 16,400 16,387 15 States and political subdivision, by maturity ... 52,460 52,612 52,594 52,646 52,526 52,734 52,944 53,290 53,449 16 One year or less.......................................... 6,540 6,623 6,553 6,492 6,382 6,437 6,534 6,590 6,605 17 Over one year............................................. 45,920 45,989 46,042 46,153 46,145 46,297 46,409 46,700 46,844 18 Other bonds, corporate stocks and securities .. 2,493 2,501 2,533 2,601 2,628 2,652 2,616 2,629 2,645 Loans 19 Federal funds sold1 ............................................... 26,800 24,898 26,688 23,613 26,923 25,556 23,854 21,526 21,772 20 To commercial banks ........................................ 22,676 20,369 22,162 19,305 22,585 20,508 19,498 16,911 17,397 21 To nonbank brokers and dealers in securities .... 3,348 3,681 3,667 3,459 3,298 3,945 3,438 3,494 3,358 22 To others........................................................... 775 848 859 848 1,040 1,103 918 1,120 1,017 23 Other loans, gross ................................................ 392,787 391,056 392,760 392,660 395,836 392,530 392,308 390,750 391,774 24 Commercial and industrial ................................. 158,279 157,416 158,198 158,102 159,557 158,880 158,310 158,213 158,111 25 Bankers acceptances and commercial paper ... 5,519 5,186 5,056 5,063 5,337 5,068 4,980 4,988 5,257 26 All other ....................................................... 152,760 152,229 153,142 153,040 154,220 153,813 153,330 153,225 152,853 27 U.S. addressees .......................................... 147,006 146,409 147,365 147,393 148,585 148,233 147,742 147,598 147,212 28 Non-U.S. addressees ................................... 5,754 5,820 5,777 5,647 5,635 5,580 5,588 5,627 5,642 29 Real estate ........................................................... 104,870 104,963 105,076 105,251 105,217 105,276 105,575 105,790 105,946 30 To individuals for personal expenditures............ 70,960 70,779 70,725 70,811 70,794 70,528 70,444 70,435 70,515 To financial institutions 31 Commercial banks in the United States.......... 3,632 3,335 3,608 3,948 3,971 3,552 3,455 3,330 3,543 32 Banks in foreign countries ............................. 6,533 6,367 6,208 6,513 7,546 7,232 7,035 6,707 6,783 33 Sales finance, personal finance companies, etc . 8,432 8,353 8,376 8,183 8,552 8,384 8,668 8,352 8,515 34 Other financial institutions............................. 14,776 14,619 14,555 14,363 14,409 14,474 14,627 14,487 14,632 35 To nonbank brokers and dealers in securities .... 6,034 6,768 6,788 6,359 5,794 4,903 4,797 4,431 4,396 36 To others for purchasing and carrying securities2 2,057 2,070 2,041 2,044 2,071 2,036 2,027 2,056 2,055 37 To finance agricultural production ..................... 5,102 5,102 5,111 5,146 5,188 5,188 5,234 5,336 5,387 38 All other ........................................................... 12,110 11,283 12,075 11,939 12,736 12,077 12,137 11,613 11,890 39 Less: Unearned income ........................................ 7,241 7,262 7,282 7,256 7,168 7,198 7,222 7,255 7,230 40 Loan loss reserve ........................................ 5,585 5,607 5,606 5,564 5,518 5,528 5,546 5,559 5,549 41 Other loans, net.................................................... 379,961 378,187 379,872 379,840 383,149 379,805 379,540 377,937 378,995 42 Lease financing receivables ................................... 8,583 8,589 8,646 8,663 8,692 8,718 8,737 8,745 8,757 43 All other assets...................................................... 74,005 75,637 75,304 75,120 80,267 77,578 75,174 77,071 74,863 44 Total assets ............................................................................ 707,043 702,219 708,340 696,403 721,362 709,018 714,301 699,989 698,237 Deposits 45 Demand deposits .................................................. 196,122 191,550 195,094 187,063 208,631 196,456 203,881 187,652 187,740 46 Mutual savings banks ........................................ 689 604 583 546 769 819 657 601 681 47 Individuals, partnerships, and corporations......... 133,359 132,367 134,547 129,364 141,960 134,957 139,172 130,459 131,339 48 States and political subdivisions ........................ 4,787 4,405 4,664 4,805 5,008 4,535 4,923 4,316 4,930 49 U.S. government ............................................... 3,580 1,894 3,629 2,466 1,061 1,243 873 702 828 50 Commercial banks in the United States.............. 33,745 32,970 33,558 32,445 39,637 36,204 38,591 33,536 30,486 51 Banks in foreign countries ................................. 8,378 8,723 7,927 8,337 8,232 8,818 8,381 7,873 8,218 52 Foreign governments and official institutions .... 1,557 1,461 1,426 1,452 1,959 1,506 1,655 1,236 2,042 53 Certified and officers’ checks............................. 10,027 9,125 8,759 7,647 10,005 8,375 9,629 8,929 9,216 54 Time and savings deposits .................................... 278,177 278,396 277,894 277,446 276,789 275,381 275,157 275,503 273,712 55 Savings .............................................................. 70,796 71,162 71,760 71,876 73,377 74,167 74,324 74,491 74,540 56 Individuals and nonprofit organizations.......... 66,595 66,842 67,374 67,405 68,835 69,560 69,759 69,826 69,833 57 Partnerships and corporations operated for profit....................................................... 3,532 3,641 3,641 3,726 3,762 3,862 3,847 3,958 4,026 58 Domestic governmental units.......................... 658 669 729 731 764 727 704 690 666 59 All other ....................................................... 12 11 16 14 16 19 14 17 15 60 Time .................................................................. 207,381 207,233 206,135 205,570 203,412 201,213 200,832 201,012 199,172 61 Individuals, partnerships, and corporations---- 174,832 175,254 174,456 174,123 172,887 170,946 170,674 170,573 168,696 62 States and political subdivisions ..................... 20,370 19,991 19,703 19,546 18,764 18,739 18,733 18,977 19,026 63 U.S. government ........................................... 336 307 297 284 269 243 255 242 275 64 Commercial banks in the United States.......... 5,805 5,718 5,699 5,656 5,519 5,324 5,236 5,199 5,153 65 Foreign governments, official institutions, and banks ...................................................... 6,038 5,962 5,980 5,960 5,973 5,961 5,934 6,021 6,022 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks.......... 221 315 758 336 397 270 556 546 2,556 67 Treasury tax-and-loan notes............................... 765 985 7,240 9,142 4,678 1,415 3,245 3,839 4,352 68 All other liabilities for borrowed money3.......... 121,337 120,390 117,994 113,557 120,889 126,824 123,887 124,078 122,419 69 Other liabilities and subordinated note and debentures ...................................................... 63,039 62,944 61,973 61,444 62,179 60,749 59,758 60,506 59,654 70 Total liabilities ...................................................................... 659,663 654,580 660,953 648,988 673,564 661,094 666,484 652,124 650,432 71 Residual (total assets minus total liabilities)4......... 47,380 47,638 47,387 47,415 47,797 47,924 47,817 47,865 47,805 1. Includes securities purchased under agreements to resell. 4. This is not a measure of equity capital for use in capital adequacy analysis 2. Other than financial institutions and brokers and dealers. or for other analytic uses. 3. Includes federal funds purchased and securities sold under agreements to repurchase; for information on these liabilities at banks with assets of $1 billion or more on Dec. 31, 1977, see table 1.13. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A21 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 June 4 June 11 June 18 June 25 July 2p July 9p July 16p July 23p July 30p 1 Cash items in process of collection................................... 51,061 48,950 51,268 45,661 54,496 49,020 56,429 46,341 46,822 2 Demand deposits due from banks in the United States ... 16,933 17,172 18,204 17,322 18,065 18,668 17,376 16,986 17,098 3 All other cash and due from depository institutions......... 31,936 30,490 31,529 29,184 32,056 31,568 34,806 33,056 31,170 4 Total loans and securities................................................ 484,539 481,681 481,083 479,702 Securities 5 U.S. Treasury securities .................................................. 34,943 34,968 33,848 34,079 34,424 34,935 34,882 35,299 35,575 6 Trading account ........................................................... 6,170 5,310 3,988 4,155 4,045 4,416 4,548 4,700 4,870 7 Investment account, by maturity................................... 28,773 29,659 29,859 29,924 30.379 30,520 30,335 30,599 30.705 8 One year or less....................................................... 6,016 6,036 5,747 5,812 5,796 5,817 5,886 6,112 6,251 9 Over one through five years.................................... 18,514 19,157 19,566 19,530 20,074 20,204 20,023 20,088 20,033 10 Over five years......................................................... 4,244 4,465 4,547 4,582 4,509 4,498 4,426 4,399 4,420 11 Other securities .............................................................. 69,097 69,902 69,001 69,367 69,610 69,787 69,419 69,374 69,426 12 Trading account ........................................................... 3,337 3,969 3,079 3,392 3,805 3,858 3,375 2,996 2,934 13 Investment account ...................................................... 65,760 65,933 65,922 65,974 65,805 65,929 66,044 66,378 66,492 14 U.S.government agencies ......................................... 15,493 15,525 15,504 15,448 15.379 15,305 15,271 15,249 15,230 15 States and political subdivision, by maturity.............. 47,940 48,074 48,054 48,095 47,967 48,140 48,324 48,666 48,785 16 One year or less.................................................... 5,924 6,003 5,937 5,877 5,746 5,789 5,884 5,942 5,947 17 Over one year....................................................... 42,016 42,070 42,117 42,217 42,221 42,351 42,440 42,724 42,838 18 Other bonds, corporate stocks and securities............ 2,326 2,335 2,364 2,432 2,459 2,483 2,449 2,462 2,477 Loans 19 Federal funds sold1 ......................................................... 23,976 22,087 23,940 21,291 24,104 22,461 21,135 19,035 19,211 20 To commercial banks .................................................. 20,173 17,876 19,692 17,369 20,017 17,828 17,114 14,799 15,248 21 To nonbank brokers and dealers in securities.............. 3,044 3,377 3,404 3,092 3,060 3,543 3,162 3,129 2,966 22 To others..................................................................... 759 834 844 829 1,028 1,090 860 1,106 996 23 Other loans, gross ........................................................... 368,399 366,641 368,314 368,213 371,303 368,145 367,880 366,327 367,319 24 Commercial and industrial........................................... 150,185 149,326 150,061 149,984 151,407 150,769 150,207 150,133 150,030 25 Bankers’ acceptances and commercial paper ............ 5,412 5,085 4,952 4,953 5,232 4,961 4,882 4,893 5,157 26 All other .................................................................. 144,773 144,240 145,108 145,031 146,174 145,808 145,325 145,239 144,872 27 U.S. addressees .................................................... 139,071 138,472 139,385 139,438 140,598 140,288 139,798 139,677 139,302 28 Non-U.S. addressees ............................................. 5,702 5,769 5,723 5,593 5,576 5,520 5,527 5,562 5,570 29 Real estate .................................................................. 98,621 98,725 98,808 98,986 98,957 99,043 99,322 99,539 99,694 30 To individuals for personal expenditures...................... 62,640 62,473 62,430 62,512 62,489 62,251 62,167 62,148 62,223 To financial institutions 31 Commercial banks in the United States..................... 3,542 3,248 3,514 3,852 3,888 3,468 3,368 3,237 3,455 32 Banks in foreign countries........................................ 6,476 6,270 6,106 6,423 7,457 7,140 6,933 6,580 6,641 33 Sales finance, personal finance companies, etc......... 8,268 8,197 8,214 8,017 8,384 8,210 8,506 8,187 8,352 34 Other financial institutions........................................ 14,430 14,268 14,208 14,014 14,058 14,113 14,263 14,113 14,238 35 To nonbank brokers and dealers in securities.............. 5,984 6,716 6,737 6,301 5,740 4,832 4,726 4,372 4,342. 36 To others for purchasing and carrying securities2......... 1,832 1,836 1,818 1,815 1,840 1,818 1,819 1,837 1,836 37 To finance agricultural production ............................... 4,943 4,946 4,949 4,983 5,026 5,026 5,070 5,171 5,217 38 All other ..................................................................... 11,476 10,636 11,469 11,324 12,056 11,474 11,499 11,010 11,291 39 Less: Unearned income .................................................. 6,619 6,637 6,656 6,628 6,552 6,578 6,598 6,616 6,608 40 Loan loss reserve.................................................. 5,258 5,281 5,280 5,238 5,193 5,201 5,219 5,234 5,222 41 Other loans, net.............................................................. 356,522 354,723 356,378 356,347 359,558 356,366 356,063 354,477 355,489 42 Lease financing receivables ............................................. 8,342 8,349 8,403 8,420 8,448 8,475 8,494 8,501 8,512 43 All other assets .............................................................. 71,997 73,638 73,281 73,058 78,249 75,532 73,157 75,047 72,804 44 Total assets ..................................................................... 664,808 660,280 665,852 654,729 679,012 666,813 671,762 658,116 656,109 Deposits 45 Demand deposits ............................................................. 184,063 179,913 183,073 175,674 196,383 184,404 191,808 176,236 176.231 46 Mutual savings banks .................................................. 659 581 559 525 735 788 628 575 655 47 Individuals, partnerships, and corporations ................. 123,868 123,052 125,251 120.474 132,300 125,386 129,506 121,311 122,173 48 States and political subdivisions ................................... 4,217 3,911 3,976 4,221 4,404 4,007 4,348 3,745 4,324 49 U.S. government ......................................................... 3,328 1,700 3,289 2,072 951 1,085 782 615 757 50 Commercial banks in the United States........................ 32,392 31,689 32,254 31,259 38,220 34,804 37,247 32,283 29,213 51 Banks in foreign countries........................................... 8,320 8,668 7,864 8,282 8,137 8,757 8,311 7,805 8,152 52 Foreign governments and official institutions................ 1,554 1,460 1,425 1,444 1,954 1,503 1,652 1,233 2,033 53 Certified and officer’s checks........................................ 9,725 8,851 8,454 7,396 9,683 8,074 9,334 8,669 8,923 54 Time and savings deposits ............................................... 258,632 258,911 258,434 258,044 257,412 256,020 255,857 256,224 254,549 55 Savings......................................................................... 65,450 65,784 66,345 66,470 67,840 68,589 68,716 68,867 68,904 56 Individuals and nonprofit organizations..................... 61,562 61,793 62,282 62,335 63,658 64,320 64,510 64,571 64,573 57 Partnerships and corporations operated for profit 3,274 3,378 3,378 3,451 3,486 3,580 3,563 3,671 3,733 58 Domestic governmental units ................................... 603 602 669 670 680 671 628 608 584 59 All other .................................................................. 12 11 16 14 16 18 14 17 15 60 Time ............................................................................ 193,182 193,127 192,089 191,574 189,571 187,431 187,141 187,357 185,645 61 Individuals, partnerships, and corporations .............. 162,751 163,258 162,509 162,196 161,088 159,196 158,995 158,982 157.231 62 States and political subdivisions ............................... 18,561 18,184 17,906 17,773 16,994 16,977 16,988 17,172 17,217 63 U.S. government ...................................................... 323 293 283 270 254 228 240 227 260 64 Commercial banks in the United States..................... 5,509 5,430 5,411 5,374 5,262 5,068 4,985 4,954 4,915 65 Foreign governments, official institutions, and banks . 6,038 5,962 5,980 5,960 5,973 5,961 5,934 6,021 6,022 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks ..................... 221 315 758 336 397 270 552 542 2,552 67 Treasury tax-and-loan notes.......................................... 690 891 6,820 8,542 4,352 1,298 2,983 3,537 4,030 68 All other liabilities for borrowed money3..................... 115,304 114,241 111,926 107,796 115,046 120,666 117,521 117,717 115,836 69 Other liabilities and subordinated note and debentures . 61,670 61,532 60,612 60,083 60,776 59,387 58,365 59,157 58,295 70 Total liabilities ................................................................ 620,581 615,803 621,624 610.475 634,366 622,046 627,087 613,413 611,493 71 Residual (total assets minus total liabilities)4................... 44,227 44,476 44,229 44,254 44,646 44,766 44,676 44,703 44,616 1. Includes securities purchased under agreements to resell. 4. This is not a measure of equity capital for use in capital adequacy analysis 2. Other than financial institutions and brokers and dealers. or for other analytic uses. 3. Includes federal funds purchased and securities sold under agreement to repurchase; for information on these liabilities at banks with assets of $1 billion or more on Dec. 31, 1977, see table 1.13. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Financial Statistics □ August 1980 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1980 June 4 June 11 June 18 June 25 July 2p July 9p July 16 p July 23 July 30p 1 Cash items in process of collection........................................ 20,722 20,339 21,232 19,238 22,429 19,963 25,206 18,766 19,062 2 Demand deposits due from banks in the United States......... 12,114 12,935 13,851 13,039 13,702 14,185 12,507 12,806 12,903 3 All other cash and due from depository institutions.............. 10,934 10,031 8,970 6,678 9,606 9,689 10,868 8,465 8,794 4 Total loans and securities1 .................................................... 113,967 111,880 113,489 113,036 115,351 112,765 112,570 111,391 111,634 Securities 6 Trading account2 .............................................................. 7 Investment account, by maturity........................................ 6,892 7,066 7,280 7,282 7,648 7,670 7,657 7,823 7,952 8 One year or less............................................................. 703 657 531 472 440 436 540 735 793 9 Over one through five years ......................................... 5,410 5,532 5,790 5,795 6,273 6,282 6,219 6,194 6,239 10 Over five years.............................................................. 779 877 959 1,014 936 951 898 894 920 11 Other securities2 .................................................................. 12 Trading account2 .............................................................. 13 Investment account ........................................................... 13,317 13,419 13,368 13,374 13,302 13,321 13,324 13,407 13,445 14 U.S. government agencies ............................................. 2,803 2,821 2,749 2,698 2,626 2,587 2,608 2,584 2,584 15 States and political subdivision, by maturity................... 9,926 10,003 10,042 10,049 10,074 10,120 10,100 10,216 10,248 16 One year or less......................................................... 1,651 1,667 1,700 1,685 1,624 1,645 1,616 1,638 1,649 17 Over one year............................................................. 8,275 8,336 8,342 8,364 8,450 8,475 8,485 8,578 8,599 18 Other bonds, corporate stocks and securities................. 588 595 576 627 603 613 615 607 613 Loans 19 Federal funds sold3 .............................................................. 6,731 5,211 6,160 6,550 7,038 6,035 6,146 5,606 4,879 20 To commercial banks ....................................................... 5,005 3,393 4,246 5,054 5,265 3,862 4,228 3,681 3,083 21 To nonbank brokers and dealers in securities................... 1,466 1,547 1,744 1,288 1,464 1,643 1,559 1,444 1,359 22 To others.......................................................................... 261 271 171 208 310 530 359 481 436 23 Other loans, gross ................................................................ 89,812 88,981 89,480 88,609 90,092 88,490 88,200 87,352 88,158 24 Commercial and industrial................................................ 47,228 46,557 46,941 46,398 47,429 47,447 46,889 46,898 47,208 25 Bankers’ acceptances and commercial paper ................. 2,527 2,195 2,174 2,010 2,265 2,065 1,931 1,986 2,079 26 All other ....................................................................... 44,701 44,362 44,767 44,388 45,164 45,382 44,958 44,912 45,129 27 U.S. addressees ......................................................... 42,842 42,481 42,872 42,551 43,263 43,545 43,137 43,107 43,308 28 Non-U.S. addressees .................................................. 1,859 1,882 1,894 1,836 1,901 1,837 1,822 1,804 1,821 29 Real estate ....................................................................... 13,175 13,214 13,276 13,328 13,291 13,283 13,338 13,378 13,470 30 To individuals for personal expenditures............................ 8,828 8,825 8,832 8,832 8,826 8,818 8,806 8,800 8,817 To financial institutions 31 Commercial banks in the United States.......................... 1,738 1,541 1,432 1,540 1,426 1,182 1,088 1,059 1,129 32 Banks in foreign countries............................................. 3,037 2,917 2,670 2,857 3,599 3,216 3,125 2,954 2,968 33 Sales finance, personal finance companies, etc................ 3,525 3,466 3,519 3,452 3,457 3,390 3,508 3,455 3,539 34 Other financial institutions............................................. 4,781 4,708 4,686 4,468 4,462 4,508 4,563 4,411 4,462 35 To nonbank brokers and dealers in securities................... 3,344 4,220 4,104 3,800 3,207 2,651 2,753 2,584 2,565 36 To others for purchasing and carrying securities4.............. 346 346 338 343 352 333 329 345 350 37 To finance agricultural production .................................... 284 273 253 256 246 257 273 377 396 38 All other .......................................................................... 3,525 2,913 3,429 3,334 3,797 3,405 3,528 3,092 3,253 39 Less: Unearned income ....................................................... 1,052 1,053 1,058 1,065 1,040 1,055 1,057 1,084 1,092 40 Loan loss reserve....................................................... 1,734 1,743 1,742 1,713 1,690 1,696 1,701 1,714 1,709 41 Other loans, net.................................................................... 87,026 86,185 86,681 85,831 87,362 85,740 85,442 84,555 85,358 42 Lease financing receivables .................................................. 1,661 1,658 1,662 1,653 1,660 1,686 1,690 1,691 1,673 43 All other assets5.................................................................... 32,768 33,004 31,768 31,461 35,518 33,339 30,202 31,778 29,721 44 Total assets .......................................................................... 192,166 189,848 190,972 185,107 198,265 191,627 193,043 184,897 183,786 Deposits 45 Demand deposits .................................................................. 66,334 65,321 65,806 63,990 75,241 66,588 70,880 63,066 61,387 46 Mutual savings banks ....................................................... 339 302 263 265 396 462 288 279 309 47 Individuals, partnerships, and corporations ...................... 31,789 30,887 32,195 31,488 35,823 31,627 33,050 30,142 30,318 48 States and political subdivisions ........................................ 512 455 501 613 556 474 722 399 505 49 U.S. government .............................................................. 860 417 1,054 507 136 306 124 119 123 50 Commercial banks in the United States............................. 19,146 20,071 20,043 19,789 25,096 21,572 23,922 20,479 17,259 51 Banks in foreign countries................................................ 6,550 6,766 5,859 6,526' 6,378 7,092 6,480 5,997 6,282 52 Foreign governments and official institutions..................... 1,314 1,226 1,174 1,122 1,624 1,099 1,331 926 1,645 53 Certified and officers’ checks............................................. 5,824 5,196 4,717 3,678 5,231 3,955 4,963 4,724 4,946 54 Time and savings deposits .................................................... 48,838 49,159 49,067 48,592 48,492 47,875 48,117 47,590 46,765 55 Savings .............................................................................. 9,210 9,339 9,496 9,454 9,641 9,752 9,788 9,750 9,752 56 Individuals and nonprofit organizations.......................... 8,776 8,886 8,986 8,959 9,150 9,271 9,313 9,272 9,282 57 Partnerships and corporations operated for profit.......... 302 314 323 323 327 333 329 338 341 58 Domestic governmental units ........................................ 127 135 179 166 159 143 140 133 125 59 All other ....................................................................... 5 4 7 5 5 5 5 7 5 60 Time ................................................................................. 39,629 39,820 39,571 39,138 38,851 38,123 38,329 37,839 37,012 61 Individuals, partnerships, and corporations ................... 33,550 33,900 33,693 33,314 33,193 32,400 32,515 31,976 31,143 62 States and political subdivisions .................................... 1,616 1,531 1,482 1,405 1,191 1,249 1,318 1,361 1,386 63 U.S. government ........................................................... 66 35 35 34 45 47 48 41 41 64 Commercial banks in the United States.......................... 1,471 1,460 1,465 1,512 1,552 1,571 1,606 1,580 1,565 65 Foreign governments, official institutions, and banks__ 2,926 2,895 2,896 2,873 2,870 2,856 2,843 2,882 2,876 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks .......................... 549 1,685 67 Treasury tax-and-loan notes............................................... 72 151 2,410 2,671 1,201 268 772 918 1,063 68 All other liabilities for borrowed money6.......................... 39,610 37,252 35,446 33,446 36,449 39,788 36,069 36,215 36,345 69 Other liabilities and subordinated note and debentures......... 22,730 23,320 23,126 21,894 22,215 22,358 22,476 22,394 21,930 70 Total liabilities ..................................................................... 177,585 175,203 176,405 170,593 183,598 176,878 178,314 170,183 169,175 71 Residual (total assets minus total liabilities)7........................ 14,581 14,646 14,568 14,514 14,667 14,748 j 14,729 14,714 14,611 1. Excludes trading account securities. 5. Includes trading account securities. 2. Not available due to confidentiality. 6. Includes federal funds purchased and securities sold under agreements to 3. Includes securities purchased under agreements to resell. repurchase. 4. Other than financial institutions and brokers and dealers. 7. This is not a measure of equity capital for use in capital adequacy analysis or for other analytic uses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A23 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions of dollars, Wednesday figures 1980 June 4 June 11 June 18 June 25 July 2p July 9p July 16^ July 23p July 3QP Banks with Assets of $750 Million or More 1 Total loans (gross) and securities adjusted1 .................................. 505,744 505,599 504,984 504,909 508,750 507,295 506,115 505,308 506,280 2 Total loans (gross) adjusted1 ............................................................... 393,279 392,250 393,679 393,019 396,202 394,026 393,209 392,035 392,606 3 Demand deposits adjusted2 ................................................................. 105,113 105,347 104,019 104,010 110,723 107,572 105,420 104,764 107,382 4 Time deposits in accounts of $100,000 or more........................... 132,190 132,036 130,820 130,417 128,468 126,638 126,328 126,714 125,230 5 Negotiable CDs ................................................................................... 93,628 93,952 93,149 93,100 91,794 90,196 90,044 90,263 88,999 6 Other time deposits............................................................................ 38,562 38,084 37,671 37,317 36,674 36,442 36,284 36,451 36,231 7 Loans sold outright to affiliates3........................................................ 2,738 2,774 2,871 2,843 2,788 2,817 2,831 2,736 2,809 8 Commercial and industrial ............................................................... 1,780 1,813 1,899 1,903 1,843 1,899 1,836 1,826 1,894 9 Other ....................................................................................................... 957 961 972 940 945 919 995 911 915 Banks with Assets of $1 Billion or More 10 Total loans (gross) and securities adjusted1 ................................. 472,700 472,475 471,897 471,728 475,537 474,033 472,834 471,999 472,829 11 Total loans (gross) adjusted1 ............................................................... 368,660 367,604 369,048 368,282 371,503 369,311 368,533 367,326 367,827 12 Demand deposits adjusted2 ................................................................. 97,282 97,574 96,262 96,681 102,715 99,494 97,349 96,997 99,438 13 Time deposits in accounts of $100,000 or more........................... 123,933 123,862 122,711 122,355 120,540 118,770 118,537 118,954 117,577 14 Negotiable CDs ................................................................................... 87,605 88,008 87,281 87,266 86,086 84,523 84,403 84,681 83,532 15 Other time deposits............................................................................ 36,328 35,855 35,429 35,089 34,454 34,246 34,134 34,273 34,045 16 Loans sold outright to affiliates3........................................................ 2,699 2,734 2,831 2,806 2,755 2,781 2,794 2,698 2,771 17 Commercial and industrial ............................................................... 1,755 1,786 1,876 1,881 1,822 1,875 1,812 1,800 1,868 18 Other ....................................................................................................... 944 947 955 924 933 906 982 898 903 Banks in New York City 19 Total loans (gross) and securities adjusted1-4 ............................... 110,010 109,743 110,610 109,221 111,390 110,471 110,012 109,448 110,221 20 Total loans (gross) adjusted1 ............................................................... 89,801 89,258 89,963 88,566 90.440 89,481 89,031 88,218 88,824 21 Demand deposits adjusted2 ................................................................. 25,606 24,494 23,477 24,455 27,580 24,746 21,628 23,702 24,943 22 Time deposits in accounts of $100,000 or more........................... 30,467 30,609 30,248 29,868 29,547 28,888 29,143 28,862 28,119 23 Negotiable CDs ................................................................................... 22,258 22,488 22,324 22,116 21,844 21,180 21,370 21,034 20,319 24 Other time deposits............................................................................ 8,209 8,121 7,924 7,752 7,702 7,709 7,773 7,829 7,800 1. Exclusive of loans and federal funds transactions with domestic commercial 3. Loans sold are those sold outright to a bank’s own foreign branches, non­ banks. consolidated nonbank affiliates of the bank, the bank’s holding company (if not 2. All demand deposits except U.S. government and domestic banks less cash a bank), and nonconsolidated nonbank subsidiaries of the holding company. items in process of collection. 4. Excludes trading account securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Financial Statistics □ August 1980 1.31 LARGE WEEKLY REPORTING COMMERCIAL BANKS Domestic Classified Commercial and Industrial Loans Millions of dollars Outstanding Net change during Adjust­ Industry classification 1980 1979 1980 ment bank Mar. 26 Apr. 30 May 28 June 25 July 30p Ql Q2 May June JulyP 1 Durable goods manufacturing ............ 25,061 24,081 22,939 22,729 22,485 1,422 -2,332 -1,142 -210 -244 46 2 Nondurable goods manufacturing....... 19,824 18,683 18,075 18,344 18,546 580 -1,480 -608 269 202 39 3 Food, liquor, and tobacco................ 4,923 4,176 3,859 3,701 3,900 -302 -1,222 -317 -158 198 6 4 Textiles, apparel, and leather ......... 4,480 4,614 4,668 4,934 5,065 132 454 53 267 131 6 5 Petroleum refining .......................... 3,139 2,611 2,490 2,715 2,615 461 -424 -122 225 -99 1 6 Chemicals and rubber ..................... 3,911 3,903 3,761 3,710 3,717 61 -202 -142 -51 7 14 7 Other nondurable goods................. 3,370 3,379 3,299 3,284 3,248 229 -86 -80 -15 -35 12 8 Mining (including crude petroleum and natural gas) .......................... 12,596 13,272 13,588 13,758 13,649 585 1,162 316 170 -108 14 9 Trade ................................................ 25,456 25,406 24,833 24,593 24,329 450 -863 -572 -240 -264 121 10 Commodity dealers ........................ 1,816 1,784 1,639 1,531 1,666 -323 -285 -144 -108 135 6 11 Other wholesale ............................. 12,097 12,050 11,645 11,673 11,585 71 -424 -405 28 -88 34 12 Retail ............................................. 11,543 11,572 11,549 11,389 11,078 702 -154 -23 -160 -311 82 13 Transportation, communication, and other public utilities.............. 18,292 18,832 18,507 18,745 18,999 448 453 -325 238 254 14 14 Transportation ............................... 7,516 7,692 7,543 7,600 7,754 376 83 -150 57 154 7 15 Communication............................... 2,747 2,846 2,800 2,839 2,883 224 92 -46 39 44 1 16 Other public utilities ...................... 8,028 8,293 8,164 8,306 8,362 -152 278 -130 142 56 5 17 Construction ...................................... 5,874 5,902 5,832 5,970 5,781 73 96 -70 138 -189 23 18 Services ............................................. 20,211 20,444 19,977 20,299 20,612 715 89 -468 323 313 96 19 All other1........................................... 15,655 15,640 15,125 14,999 14,900 550 -656 -515 -126 -99 288 20 Total domestic loans.................................... 142,969 142,260 138,876 139,438 139,302 4,823 -3,531 -3,384 561 -135 641 21 Memo: Term loans (original maturity more than 1 year) included in do­ mestic loans ................................. 75,997 76,192 74,862 74,295 74,832 3,514 -1,702 -1,330 -567 537 33 1. Includes commercial and industrial loans at a few banks with assets of $1 Note. New series. The 134 large weekly reporting commercial banks with dobillion or more that do not classify their loans. mestic assets of $1 billion or more as of December 31, 1977, are included in this series. The revised series is on a last-Wednesday-of-the-month basis. 1.31.1 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS' Monthly averages, billions of dollars December outstanding Outstanding in1979 and 1980 Source 1976 1977 1978 Nov. Dec. Jan. Feb. Mar. Apr. May June Total nondeposit funds 1 Seasonally adjusted2 ......................................................... 54.7 61.8 85.4 124.0 118.8 122.5 129.2 133.4 124.2 120.1 110.9 2 Not seasonally adjusted .................................................... 53.3 60.4 84.4 126.8 117.4 121.2 125.9 130.4 121.2 123.2 111.0 Federal funds, RPs, and other borrowings from nonbanks 3 Seasonally adjusted3 ......................................................... 47.1 58.4 74.8 85.9 88.0 92.0 97.2 97.9 94.8 94.2 93.1 4 Not seasonally adjusted .................................................... 45.8 57.0 73.8 88.6 86.5 90.6 93.9 94.8 91.7 97.4 93.1 5 Net Eurodollar borrowings, not seasonally adjusted.............. 3.7 -1.3 6.8 34.6 28.1 27.9 29.4 32.9 26.8' 23.2 15.1 6 Loans sold to affiliates, not seasonally adjusted4-5 ............... 3.8 4.8 3.8 3.6 2.8 2.7 2.6 2.6 2.6 2.6 2.8 Memo 7 Domestic chartered banks net positions with own foreign branches, not seasonally adjusted6................................. -6.0 -12.5 -10.2 11.4 6.4 5.9 6.6 9.3 6.0' 2.7 -5.2 8 Gross due from balances .................................................. 12.8 21.1 24.9 21.7 22.9 23.0 23.4 23.6 24.4 27.3 29.7 9 Gross due to balances....................................................... 6.8 8.6 14.7 33.0 29.3 28.9 29.8 32.9 30.4 30.0 24.7 10 Foreign-related institutions net positions with directly related institutions, not seasonally adjusted7 ............................. 9.7 11.1 17.0 23.2 21.7 22.0 22.8 23.6 20.9 20.5 20.2 11 Gross due from balances .................................................. 8.3 10.3 14.2 26.5 28.9 29.6 30.4 31.9' 28.5 27.9 28.4 12 Gross due to balances....................................................... 18.1 21.4 31.2 49.7 50.5 51.6 53.2 55.6 49.4 48.3 48.6 13 Security RP borrowings, seasonally adjusted8 ...................... 27.9 36.3 44.8 46.5 49.2 51.0 49.5 45.0' 41.5 40.1' 45.0 14 Not seasonally adjusted .................................................... 27.0 35.1 43.6 48.1 47.9 48.3' 48.2 44.1' 40.6' 42.1' 44.7 15 U.S. Treasury demand balances, seasonally adjusted9.......... 3.9 4.4 8.7 5.8 8.1 12.7 11.3 7.5 8.6 9.4 8.6 16 Not seasonally adjusted .................................................... 4.4 5.1 10.3C 5.6 9.6 12.7 11.7 7.8 9.0 8.4 10.0 17 Time deposits, $100,000 or more, seasonally adjusted10....... 137.7 162.0 213.0 228.5 227.7 229.1 235.6 237.1 240.3 242.0 237.0 18 Not seasonally adjusted .................................................... 140.0 165.4 217.9 229.9 233.0 233.0 236.8 239.2 238.4 240.1 234.9 1. Commercial banks are those in the 50 states and the District of Columbia 4. Loans initially booked by the bank and later sold to affiliates that are still with national or state charters plus U.S. branches, agencies, and New York in­ held by affiliates. Averages of Wednesday data. vestment company subsidiaries of foreign banks and Edge Act corporations. 5. As of Dec. 1, 1979, loans sold to affiliates were reduced $800 million due to 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from corrections of two New York City banks. nonbanks and not seasonally adjusted net Eurodollars and loans to affiliates. 6. Includes averages of daily figures for member banks and quarterly call report Includes averages of Wednesday data for domestic chartered banks and averages figures for nonmember banks. of current and previous month-end data for foreign-related institutions. 7. Includes averages of current and previous month-end data until August 1979; 3. Other borrowings are borrowings on any instrument, such as a promissory beginning September 1979 averages of daily data. note or due bill, given for the purpose of borrowing money for the banking business. 8. Based on daily average data reported by 122 large banks beginning February This includes borrowings from Federal Reserve Banks and from foreign banks, 1980 and 46 banks before February 1980. term federal funds, overdrawn due from bank balances, loan RPs, and partici­ 9. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at pations in pooled loans. Includes averages of daily figures for member banks and commercial banks. Averages of daily data. averages of current and previous month-end data for foreign-related institutions. 10. Averages of Wednesday figures. 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 Type of holder 1978 19792 1980 1975 1976 1977 Dec. Dec. Dec. Dec. Mar. June Sept. Dec. Mar. June 1 AH holders—Individuals, partnerships, and corporations.................................................. 236.9 250.1 274.4 294.6 270.4 285.6 292.4 302.2 288.4 288.6 2 Financial business ............................................... 20.1 22.3 25.0 27.8 24.4 25.4 26.7 27.1 28.4 27.7 3 Nonfinancial business .......................................... 125.1 130.2 142.9 152.7 135.9 145.1 148.8 157.7 144.9 145.3 4 Consumer ........................................................... 78.0 82.6 91.0 97.4 93.9 98.6 99.2 99.2 97.6 97.9 5 Foreign................................................................ 2.4 2.7 2.5 2.7 2.7 2.8 2.8 3.1 3.1 3.3 6 Other .................................................................. 11.3 12.4 12.9 14.1 13.5 13.7 14.9 15.1 14.4 14.4 Weekly reporting banks 1978 19793 1980 1975 1976 1977 Dec. Dec. Dec. Dec. Mar. June Sept. Dec. Mar. June 7 All holders—Individuals, partnerships, and corporations.................................................. 124.4 128.5 139.1 147.0 121.9 128.8 132.7 139.3 133.6 133.9 8 Financial business ............................................... 15.6 17.5 18.5 19.8 16.9 18.4 19.7 20.1 20.1 20.2 9 Nonfinancial business .......................................... 69.9 69.7 76.3 79.0 64.6 68.1 69.1 74.1 69.1 69.2 10 Consumer ........................................................... 29.9 31.7 34.6 38.2 31.1 33.0 33.7 34.3 34.2 33.9 11 Foreign................................................................ 2.3 2.6 2.4 2.5 2.6 2.7 2.8 3.0 3.0 3.1 12 Other .................................................................. 6.6 7.1 7.4 7.5 6.7 6.6 7.4 7.8 7.2 7.5 1. Figures include cash items in process of collection. Estimates of gross deposits 3. After the end of 1978 the large weekly reporting bank panel was changed to are based on reports supplied by a sample of commercial banks. Types of depositors 170 large commercial banks, each of which had total assets in domestic offices in each category are described in the June 1971 Bulletin, p. 466. exceeding $750 million as of Dec. 31, 1977. See “Announcements,” p. 408 in the 2. Beginning with the March 1979 survey, the demand deposit ownership survey May 1978 Bulletin. Beginning in March 1979, demand deposit ownership esti­ sample was reduced to 232 banks from 349 banks, and the estimation procedure mates for these large banks are constructed quarterly on the basis of 97 sample was modified slightly. To aid in comparing estimates based on the old and new banks and are not comparable with earlier data. The following estimates in billions reporting sample, the following estimates in billions of dollars for December 1978 of dollars for December 1978 have been constructed for the new large-bank panel; have been constructed using the new smaller sample; financial business, 27.0; financial business, 18.2; nonfinancial business, 67.2; consumer, 32.8; foreign, 2.5; nonfinancial business, 146.9; consumer, 98.3; foreign, 2.8; and other, 15.1 other, 6.8. 1.33 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1980 Instrument 1976 1977 1978 19791 Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June Commercial paper (seasonally adjusted) 1 A11 issuers ........................................................... 53,010 65.036 83,420 112,803 116,718 116,446 119,893 120,865 121,011 123,937 Financial companies2 Dealer-placed paper3 2 Total ................................................................ 7,263 8,888 12,300 17,579 17,768 17,308 18,254 18,881 18,526 19,100 3 Bank-related .................................................... 1,900 2,132 3,521 2,784 3,034 3,010 3,142 3,467 3,591 3,188 Directly placed paper4 4 Total ................................................................ 32,622 40,612 51,755 64,931 66,342 65,368 64,440 66,088 63,792 62,623 5 Bank-related .................................................... 5,959 7,102 12,314 17,598 19,221 19,922 19,338 19,143 18,824 19,436 6 Nonfinancial companies5...................................... 13,125 15,536 19,365 30,293 32,608 33,770 37,199 35,896 38,693 42,214 Bankers dollar acceptances (not seasonally adjusted) 7 Total .................................................................... 22,523 25,450 33,700 45,321 47,780 50,269 49,317 50,177 52,636 54,356 Holder 8 Accepting banks.................................................. 10,442 10,434 8,579 9,865 8,578 9,343 8,159 8,159 9,262 10,051 9 Own bills ......................................................... 8,769 8,915 7,653 8,327 7,692 8,565 7,560 7,488 8,768 9,113 10 Bills bought...................................................... 1,673 1,519 927 1,538 886 778 598 670 493 939 Federal Reserve Banks 11 Own account.................................................... 991 954 1 704 0 205 171 0 366 373 12 Foreign correspondents.................................... 375 362 664 1,382 1,431 1,417 1,373 1,555 1,718 1,784 13 Others ................................................................ 10,715 13,700 24,456 33,370' 37,771 39,303' 39,614 40,463 41,290 43,929 Basis 14. Imports into United States................................... 4,992 6,378 8,574 10,270 11,217 11,393 10,926 10,946 11,651 11,536 15 Exports from United States................................. 4,818 5,863 7,586 9,640 10,248 11,102 11,001 11,221 11,347 11,339 16 All other ............................................................. 12,713 13,209 17,540 25,411 26,315 27,774 27,389 28,010 29,637 31,480 1. A change in reporting instructions results in offsetting shifts in the dealer- 3. Includes all financial company paper sold by dealers in the open market. placed and directly placed financial company paper in October 1979. 4. As reported by financial companies that place their paper directly with inves­ 2. Institutions engaged primarily in activities such as, but not limited to, com­ tors. mercial, savings, and mortgage banking; sales, personal, and mortgage financing; 5. Includes public utilities and firms engaged primarily in such activities, as factoring, finance leasing, and other business lending; insurance underwriting; and communications, construction, manufacturing, mining, wholesale and retail trade, other investment activities. transportation, and reserves. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Financial Statistics □ August 1980 1.35 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per annum Effective date Rate Effective Date Rate Month Average Month Average rate rate 1980—Mar. 4 .............. 17^4 1980—May 7 ............... HVi 1979—Jan........................ 11.75 1979—Oct........................ 14.39 7 .............. 173/4 16 ............... 16 Vz Feb....................... 11.75 Nov....................... 15.55 14 .............. 181/2 23 ............... 14 Vz Mar....................... 11.75 Dec....................... 15.30 19 .............. 19 30 ............... 14 Apr....................... 11.75 1980—Jan........................ 15.25 28 .............. 19 Vi June 6 ............... 13 May ..................... 11.75 Feb....................... 15.63 Apr. 2 .............. 20 13............... 12-12 VS June..................... 11.65 Mar....................... 18.31 18 .............. 19 Vz 20............... 12 July ..................... 11.54 Apr....................... 19.77 May 1 18V4-19 July 7 ............... 11.50 Aug....................... 11.91 May ..................... 16.57 2 ............... 18 Vi 25 ............... 11.00 Sept....................... 12.90 June..................... 12.63 July ..................... 11.48 1.35 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 5-10, 1980 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)......................... 11,316,521 885,614 518,102 697,310 2,159,297 720,502 6,335,696 2 Number of loans .................................................................... 164,323.18 123,866 15,129 10,596 11,950 1,134 1,625.66 3 Weighted-average maturity (months) ............................. 3.2 4.0 3.4 2.7 3.0 4 Weighted-average interest rate (percent per annum) 17.75 17.90 18.78 18.95 18.49 19.13 17.10 5 Interquartile range1 ........................................................... 15.62-19.82 15.12-20.23 17.72-20.28 17.50-20.99 17.50-19.82 18.50-20.39 14.09-19.59 Percentage of amount of loans 6 With floating rate.................................................................... 43.8 23.0 33.2 44.2 33.4 64.5 48.8 78 Made under commitment .................................................... 50.3 26.0 34.7 48.5 47.9 60.6 54.9 With no stated maturity ...................................................... 19.0 13.9 10.7 32.2 14.1 34.5 18.8 Long-Term Commercial and Industrial Loans 9 Amount of loans (thousands of dollars)......................... 1,339,749 171,216 181,145 105,761 881,627 10 Number of loans ................................................................... 15,243 13,992 845 152 254 11 Weighted-average maturity (months) ............................. 42.8 33.9 44.6 42.4 44.2 12 Weighted-average interest rate (percent per annum) 18.37 18.26 18.64 18.62 18.30 13 Interquartile range1 ........................................................... 17.50-20.00 15.00-21.34 17.75-20.50 18.00-20.06 17.51-19.75 Percentage of amount of loans 14 With floating rate................................................................... 74.0 30.1 7668..76 69.4 82.5 15 Made under commitment .................................................... 71.1 29.4 71.8 79.7 Construction and Land Development Loans 16 Amount of loans (thousands of dollars)......................... 1,110,511 91,724 114,305 199,312 494,589 210,581 17 Number of loans ................................................................... 16,924 8,317 3,208 2,904 2,289.20 203 18 Weighted-average maturity (months) ............................. 7.4 3.7 4.3 7.3 9.5 19 Weighted-average interest rate (percent per annum) 18.32 17.14 15.68 18.69 19.56 16.99 20 Interquartile range1 ........................................................... 17.50-20.40 14.75-19.56 13.10-18.00 18.00-20.48 20.00-20.32 13.00-19.66 Percentage of amount of loans 21 With floating rate................................................................... 71.0 23.2 35.8 48.3 92.4 82.3 22 Secured by real estate........................................................... 94.4 82.0 96.9 97.9 97.5 87.7 23 Made under commitment .................................................... 45.1 7141..30 6140..40 39:7 25.9 72.2 24 With no stated maturity ...................................................... 11.9 7.2 7.8 27.1 Type of construction 86.0 25 1- to 4-family .......................................................................... 35.5 77.0 70.9 8.7 19.5 26 Multifamily ............................................................................... 5.5 211..19 3.3 4.4 5.5 9.5 27 Nonresidential ........................................................................ 58.9 10.7 24.7 85.8 70.9 All 250 sizes 1-9 10-24 25-49 50-99 100-249 and over Loans to Farmers 28 Amount of loans (thousands of dollars)......................... 1,211,479 163,850 168,002 168,990 133,979 241,236 335,423 2 3 9 0 N W u e m ig b h e t r e d o -a f ve lo r a a n g s e m .... a .. t . u ... r . i .. t . y .. ... ( . m .... o .. n .. t .. h .. s .. ) .. ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,6 6 5 .6 2 44,1 6 7 . 7 4 11,364.10 5,2 7 5 . 7 0 1,9 5 3 . 1 7 1,6 5 0 .2 0 3 8 4 .7 7 31 Weighted-average interest rate (percent per annum) 17.38 16.46 16.98 17.10 17.38 17.40 18.14 32 Interquartile range1 ........................................................... 16.64-18.50 14.84-17.81 15.79-18.67 15.56-18.40 16.54-18.68 16.60-18.27 17.24-18.64 By purpose of loan 33 Feeder livestock ...................................................................... 17.67 16.35 17.01 17.63 17.74 17.56 17.98 34 Other livestock ........................................................................ 16.64 16.54 14.89 16.62 17.37 (2) 35 Other current operating expenses.................................... 17.49 16.54 17.20 17.45 18.48 .7$ 18.61 36 Farm machinery and equipment ...................................... 16.44 16.23 16.41 16.64 (2) (2) 37 Other .......................................................................................... 17.15 16.36 17.28 15.31 15.35 nS 18.02 1. Interest rate range that covers the middle 50 percent of the total dollar amount Note. For more detail, see the Board’s E.2(416) statistical release, of loans made. 2. Fewer than 10 sample loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets A ll 1.36 INTEREST RATES Money and Capital Markets Averages, percent per annum 1980 1980, week ending Instrument 1977 1978 1979 Apr. May June July July 4 July 11 July 18 July 25 Aug. 1 Money market rates 1 Federal funds1 ...................................... 5.54 11.20 10.98 Commercial paper2 3 2 1-month ............................................. 5.42 7.76 10.86 16.10 9.60 8.56 8.53 8.75 8.52 8.58 8.39 8.75 3 3-month ............................................. 5.54 7.94 10.97 15.78 9.49 8.27 8.41 8.44 8.36 8.43 8.35 8.68 4 6-month ............................................. 5.60 7.99 10.91 14.93 9.29 8.03 8.29 8.26 8.21 8.30 8.26 8.61 Finance paper, directly placed2'3 5 1-month ............................................. 5.38 7.73 10.78 15.70 9.30 8.01 8.37 8.12 8.35 8.50 8.31 8.55 6 3-month ............................................. 5.49 7.80 10.47 14.05 9.09 7.59 8.03 7.60 7.95 8.13 8.10 8.25 7 6-month ............................................. 5.50 7.78 10.25 13.68 9.01 7.42 8.03 7.60 7.92 8.14 8.10 8.25 8 Prime bankers acceptances, 90-day3 4 ... 5.59 8.11 11.04 15.63 9.60 8.31 8.58 8.66 8.58 8.55 8.44 8.97 Certificates of deposit, secondary market5 9 1-month ............................................. 5.48 7.88 11.03 16.23 9.77 8.53 8.59 8.69 8.58 8.65 8.45 8.78 10 3-month ............................................. 5.64 8.22 11.22 16.14 9.79 8.49 8.65 8.70 8.63 8.70 8.50 8.93 11 6-month ............................................. 5.92 8.61 11.44 15.80 9.78 8.33 8.73 8.85 8.61 8.79 8.56 9.11 12 Eurodollar deposits, 3-month6 .............. 6.05 8.74 11.96 17.81 11.20 9.41 9.33 9.61 9.23 9.43 9.16 9.30 U.S. Treasury bills3 7 Secondary market 13 3-month .......................................... 5.27 7.19 10.07 13.20 8.58 7.07 8.06 7.92 7.98 7.93 8.44 14 6-month .......................................... 5.53 7.58 10.06 12.88 8.65 7.30 8.06 7.88 8.03 7.99 7.99 8.49 15 1-year ............................................. 5.71 7.74 9.75 11.97 8.66 7.54 8.00 7.86 7.91 7.93 7.94 8.43 Auction average8 16 3-month .......................................... 5.265 7.221 10.041 14.003 9.150 6.995 8.126 8.149 8.209 8.169 7.880 8.221 17 6-month .......................................... 5.510 7.572 10.017 13.618 9.149 7.218 8.101 8.097 8.114 8.110 7.906 8.276 Capital market rates U.S. Treasury Notes and Bonds Constant maturities9 18 1-year ............................................... 6.09 8.34 10.67 13.30 9.39 8.16 8.65 8.51 8.54 8.57 8.58 9.13 19 2-year............................................... 6.45 8.34 10.12 12.50 9.45 8.73 9.03 8.94 8.89 8.95 9.02 9.47 20 2Vi-year10 ........................................ 11.25 9.05 9.05 9.05 9.70 21 3-year ............................................... 6.69 ’ 8.29 ’ 9.71 ‘ 12.02 9.44 8.91 ‘ 9.27 ’ 9.15 ‘ 9.16 9.19 9.23 ’ 9.72 22 5-year............................................... 6.99 8.32 9.52 11.84 9.95 9.21 9.53 9.47 9.46 9.44 9.46 9.92 23 7-year............................................... 7.23 8.36 9.48 11.49 10.09 9.45 9.84 9.74 9.78 9.76 9.76 10.20 24 10-year ............................................. 7.42 8.41 9.44 11.47 10.18 9.78 10.25 10.11 10.18 10.20 10.20 10.59 25 20-year ............................................. 7.67 8.48 9.33 11.42 10.44 9.89 10.32 10.15 10.26 10.29 10.29 10.64 26 30-year ............................................. 8.49 9.29 11.40 10.36 9.81 10.24 10.06 10.19 10.19 10.20 10.58 Composite11 27 3 to 5 years12 ................................... 6.85 8.30 9.58 28 Over 10 years (long-term) ............... 7.06 7.89 8.74 10.83 9.82 9.40 9.83 9.69 9.77 10.13 State and Local Notes and Bonds Moody’s series13 29 Aaa .................................................... 5.20 5.52 5.92 7.95 6.80 7.11 7.51 7.00 7.40 7.50 7.50 8.15 30 Baa...................................................... 6.12 6.27 6.73 9.19 8.02 7.98 8.63 8.25 8.50 8.60 8.50 9.30 31 Bond Buyer series14 ............................ 5.68 6.03 6.52 8.63 7.59 7.63 8.13 7.88 7.95 8.03 8.19 8.59 Corporate Bonds 32 Seasoned issues, all industries15 .......... 8.43 9.07 10.12 13.21 12.11 11.64 11.77 11.67 11.68 11.78 11.80 11.94 By rating group 33 Aaa ................................................ 8.02 8.73 9.63 12.04 10.99 10.58 11.07 10.84 10.94 11.09 11.11 11.33 34 Aa .................................................. 8.24 8.92 9.94 13.06 11.91 11.39 11.43 11.29 11.30 11.45 11.50 11.61 35 A .................................................... 8.49 9.12 10.20 13.55 12.35 11.89 11.95 11.90 11.88 11.94 11.94 12.09 36 Baa .................................................. 8.97 9.45 10.69 14.19 13.17 12.71 12.67 12.66 12.61 12.66 12.65 12.70 Aaa utility bonds16 37 New issue ........................................ 8.19 8.96 10.03 12.90 11.53 10.96 11.60 11.50 11.48 11.54 11.65 11.92 38 Recently offered issues..................... 8.19 8.97 10.02 12.91 11.64 11.00 11.41 11.18 11.26 11.33 11.44 12.00 Memo: Dividend/price ratio17 39 Preferred stocks............................... 7.60 8.25 9.07 11.06 10.20 9.78 9.81 9.79 9.95 9.82 9.77 9.70 40 Common stocks ............................... 4.56 5.28 5.46 6.05 5.77 5.39 5.20 5.36 5.26 5.17 5.10 5.10 1. Weekly figures are seven-day averages of daily effective rates for the week 2, 1980. Each weekly figure shown is calculated on a biweekly basis and is the ending Wednesday; the daily effective rate is an average of the rates on a given average of five business days ending on the Monday following the calendar week. day weighted by the volume of transactions at these rates. Beginning June 2, the biweekly rate is used to determine the maximum interest 2. Beginning November 1977, unweighted average of offering rates quoted by rate payable in the following two-week period on small saver certificates. (See at least five dealers (in the case of commercial paper), or finance companies (in table 1.16.) the case of finance paper). Previously, most representative rate quoted by those 11. Unweighted averages for all outstanding notes and bonds in maturity ranges dealers and finance companies. Before November 1979, maturities for data shown shown, based on daily closing bid prices. “Long-term” includes all bonds neither are 30-59 days, 90-119 days, and 120-179 days for commercial paper; and 30-59 due nor callable in less than 10 years, including several very low yielding “flower” days, 90-119 days, and 150-179 days for finance paper. bonds. 3. Yields are quoted on a bank-discount basis. 12. The three- to five-year series has been discontinued. 4. Average of the midpoint of the range of daily dealer closing rates offered for 13. General obligations only, based on figures for Thursday, from Moody’s domestic issues. Investors Service. 5. Five-day average of rates quoted by five dealers (three-month series was 14. Twenty issues of mixed quality. previously a seven-day average). 15. Averages of daily figures from Moody’s Investors Service. 6. Averages of daily quotations for the week ending Wednesday. 16. Compilation of the Board of Governors of the Federal Reserve System. 7. Except for auction averages, yields are computed from daily closing bid prices. Issues included are long-term (20 years or more). New-issue yields are based on 8. Rates are recorded in the week in which, bills are issued. quotations on date of offering; those on recently offered issues (included only for 9. Yield on the more actively traded issues adjusted to constant maturities by first 4 weeks after termination of underwriter price restrictions), on Friday closethe U.S. Treasury, based on daily closing bid prices. of-business quotations. 10. Each monthly figure is an average of only five business days near the end 17. Standard and Poor’s corporate series. Preferred stock ratio based on a sample of the month. The rate for each month was used to determine the maximum of ten issues: four public utilities, four industrials, one financial, and one trans­ Digitized for FinRteAreSstE raRte payable in the following month on small saver certificates, until June portation. Common stock ratios on the 500 stocks in the price index. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics □ August 1980 1.37 STOCK MARKET Selected Statistics 1980 Indicator 1977 1978 1979' Jan. Feb. Mar. Apr. May June July 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 63.74 66.05 59.52 58.47 61.38 65.43 68.56 2 Industrial ................................................ 57.84 58.30 61.82 72.67 76.42 68.71 66.31 69.39 74.47 78.67 3 Transportation ...................................... 41.07 43.25 45.20 52.61 57.92 51.77 48.62 51.07 54.04 59.14 4 Utility ...................................................... 40.91 39.23 36.46 37.08 36.22 33.38 35.29 37.31 38.50 38.77 5 Finance .................................................. 55.23 56.74 58.65 64.22 61.84 54.71 57.32 61.47 65.16 66.76 6 Standard & Poor’s Corporation (1941-43 = 10)1 . 98.18 96.11 98.34 110.87 115.34 104.69 102.97 107.69 114.55 119.83 7 American Stock Exchange (Aug. 31, 1973 = 100) 116.18 144.56 186.56 259.54 288.99 259.79 242.60 258.45 286.21 310.29 Volume of trading (thousands of shares) 8 New York Stock Exchange ...................... 20,936 28,591 32,233 52,647 47,827 41,736 32,102 36,425 39,518 46,444 9 American Stock Exchange .......................... 2,514 3,622 4,182 9,363 6,903 5,947 3,428 3,799 5,240 6,195 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers/dealers2 11,035 11,615 11,987' 12,638 11,914 11,309 11,441 11,370 11 Margin stock3 ........................................... 9,740 10,830 11,450 11,820 12,460 11,740 11,140 11,270 11,200 12 Convertible bonds .................................... 250 205 164 165' 175 171 167 167 166 13 Subscription issues .................................... 3 1 1 2' 3 3 2 4 4 Free credit balances at brokers4 14 Margin-account .......................................... 640 835 1,050 1,180 1,320 1,365 1,290 1,270 1,345 15 Cash-account............................................. 2,060 2,510 4,060 4,680 4,755 5,000 4,790 4,750 4,790 Margin-account debt at brokers (percentage distribution, end of period) 16 Total .................................................................... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 By equity class (in percent)5 17 Under 40 ............................................................. 18.0 33.0 16.0 13.0 16.0 45.0 28.0 19.0 17.0 18 40-49 .................................................................. 36.0 28.0 26.0 29.0 29.0 22.0 31.0 32.0 31.0 19 50-59 .................................................................. 23.0 18.0 24.0 25.0 25.0 13.0 18.0 22.0 23.0 n.a. 20 60-69 .................................................................. 11.0 10.0 14.0 16.0 14.0 9.0 10.0 12.0 13.0 1 21 70-79 .................................................................. 6.0 6.0 8.0 9.0 9.0 6.0 7.0 7.0 8.0 22 80 or more........................................................... 5.0 5.0 7.0 8.0 7.0 5.0 6.0 7.0 7.0 1 Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)6 9,910 13,092 16,303 16,498 16,687 16,339 16,543 16,920 Distribution by equity status (percent) 24 Net credit status............................. Debt status, equity of 25 60 percent or more ................... 44.9 45.1 47.0 49.0 47.4 41.9 44.0 43.6 43.4 26 Less than 60 percent ................... 11.7 13.6 8.8 8.2 8.4 12.4 11.7 10.6 9.0 Margin requirements (percent of market value and effective date)7 Mar. 11, 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 insurance 5. Each customer’s equity in his collateral (market value of collateral less net companies. With this change the index includes 400 industrial stocks (formerly debit balance) is expressed as a percentage of current collateral values. 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 6. Balances that may be used by customers as the margin deposit required for financial. additional purchases. Balances may arise as transfers based on loan values of other 2. Margin credit includes all credit extended to purchase or carry stocks or collateral in the customer's margin account or deposits of cash (usually sales pro­ related equity instruments and secured at least in part by stock. Credit extended ceeds) occur. is end-of-month data for member firms of the New York Stock Exchange. 7. Regulations G, T, and U of the Federal Reserve Board of Governors, pre­ In addition to assigning a current loan value to margin stock generally. Regu­ scribed in accordance with the Securities Exchange Act of 1934, limit the amount lations T and U permit special loan values for convertible bonds and stock acquired of credit to purchase and carry margin stocks that may be extended on securities through exercise of subscription rights. as collateral by prescribing a maximum loan value, which is a specified percentage 3. A distribution of this total by equity class is shown on lines 17-22. of the market value of the collateral at the time the credit is extended. Margin 4. Free credit balances are in accounts with no unfulfilled commitments to the requirements are the difference between the market value (100 percent) and the brokers and are subject to withdrawal by customers on demand. 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 1980 Account 1977 1978 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June/7 Savings and loan associations 1 Assets .......................................... 459,241 523,542 570,479 576,251 578,922 579,307 582,252 585,685 589,498 591,108 593,321 594,733 2 Mortgages ................................... 381,163 432,808 468,307 472,198 474,678 475,797 476,448 477,303 479,078 480,165 480,092 481,149 3 Cash and investment securities1 ... 39,150 44,884 49,3013 49,220 48,180 46,541 48,473 50,168 50,899 50,576 52,670 52,616 4 Other .......................................... 38,928 45,850 52,871 54,833 56,064 56,969 57,331 58,214 59,521 60,367 60,559 60,968 5 Liabilities and net worth.............. 459,241 523,542 566,493 576,251 578,922 579,307 582,252 585,685 589,498 591,108 593,321 594,733 6 Savings capital.............................. 386,800 430,953 462,626 464,489 465,646 470,171 472,236 473,862 478,265 478,591 481,613 486,821 7 Borrowed money ........................ 27,840 42,907 52,738 54,268 54,433 55,375 55,233 55,276 57,346 57,407 55,353 54,923 8 FHLBB ................................... 19,945 31,990 37,620 39,223 39,638 40,441 40,364 40,337 42,413 42,724 41,529 40,658 9 Other ...................................... 7,895 10,917 15,118 15,045 14,795 14,934 14,869 14,939 14,933 14,683 13,824 14,265 10 Loans in process.......................... 9,911 10,721 10,909 10,766 10,159 9,511 8,735 8,269 8,079 7,660 7,126 6,990 11 Other .......................................... 9,506 9,904 12,497 14,673 16,324 11,684 13,315 15,385 12,683 14,260 16,246 13,079 12 Net worth2................................... 25,184 29,057 31,709 32,055 32,360 32,566 32,733 32,893 33,125 33,190 32,983 32,920 13 Memo: Mortgage loan com­ mitments outstanding3 .......... 19,875 18,911 22,397 20,930 18,029 16,007 15,559 16,744 15,844 14,193 13,929 15,426 Mutual savings banks4 14 Assets .......................................... 14,287 158,174 163,431 163,133 163,205 163,405 163,252 164,270 165,107 165,366 166,340 Loans 15 Mortgage ................................. 88,195 95,157 97,973 98,304 98,610 98,908 98,940 99,220 99,151 99,045 99,163 16 Other ...................................... 6,210 7,195 9,982 9,510 9,449 9,253 9,804 10,044 10,131 10,187 10,543 Securities 17 U.S. government5..................... 5,895 4,959 7,891 7,750 7,754 7,658 7,387 7,436 7,629 7,548 7,527 18 State and local government .... 2,828 3,333 3,150 3,100 3,003 2,930 2,887 2,853 2,824 2,791 2,727 19 Corporate and other6................ 37,918 39,732 37,076 37,210 37,036 37,086 37,114 37,223 37,493 37,801 38,246 20 Cash ........................................... 2,401 3,665 3,020 2,909 3,010 3,156 2,703 3,012 3,361 3,405 3,588 21 Other assets................................. 3,839 4,131 4,339 4,351 4,343 4,412 4,417 4,481 4,518 4,588 4,547 22 Liabilities .................................... 147,287 158,174 163,431 163,133 163,205 163,405 163,252 164,270 165,107 165,366 166,340 n.a. 23 Deposits ...................................... 134,017 142,701 146,252 145,096 144,828 146,006 145,044 145,171 146,328 145,821 146,637 24 Regular7 ................................... 132,744 141,170 144,258 143,263 143,064 144,070 143,143 143,284 144,214 143,765 144,646 25 Ordinary savings................... 78,005 71,816 65,676 62,672 61,156 61,123 59,252 58,234 56,948 54,247 54,669 26 Time and other..................... 54,739 69,354 78,572 80,591 81,908 82,947 83,891 85,050 87,266 89,517 89,977 27 Other ...................................... 1,272 1,531 2,003 1,834 1,764 1,936 1,901 1,887 2,115 2,056 1,990 28 Other liabilities............................ 3,292 4,565 5,790 6,600 6,872 5,873c 6,665c 7,485c 7,135^ 7,916c 8,161 29 General reserve accounts ............ 9,978 10,907 11,388 11,437 11,504 11,525^ 11,544 11,615 11,643 11,629 11,542 30 Memo: Mortgage loan com­ mitments outstanding8 .......... 4,066 4,400 4,123 3,749 3,619 3,182 2,919 2,618 2,397 2,097 1,883 Life insurance companies 31Assets .......................................... 351,722 389,924 421,660 423,760 427,496 431,453 436,226' 438,638' 439,733' 442,932' 447,020 Securities 32 Government ............................ 19,553 20,009 20,379 20,429 20,486 20,294 20,378' 20,438' 20,545' 20,470' 20,529 33 United States9....................... 5,315 4,822 5,067 5,075 5,122 4,984 4,878' 4,898' 5,004' 5,059' 5,107 34 State and local ..................... 6,051 6,402 6,295 6,339 6,354 6,392 6,433' 6,488' 6,454' 6,351' 6,352 35 Foreign10 .............................. 8,187 8,785 9,017 9,015 9,010 8,918 9,067' 9,052' 9,087' 9,060' 9,070 n.a. 36 Business ................................... 175,654 198,105 216,500 216,183 217,856 218,284 222,332' 223,423' 221,214' 222,175' 223,556 37 Bonds ................................... 141,891 162,587 177,698 178,633 179,158 178,828 181,820' 182,521' 182,536' 182,750' 183,356 38 Stocks ................................... 33,763 35,518 38,802 37,550 38,698 39,456 40,512' 40,902' 38,678' 39,425' 40,200 39Mortgages ................................... 96,848 106,167 114,368 115,991 117,253 118,784 119,885' 120,926' 122,314' 123,587' 124,563 40Real estate................................... 11,060 11,764 12,740 12,816 12,906 13,047 13,083' 13,201' 13,512' 13,696' 13,981 41Policy loans ................................. 27,556 30,146 33,046 33,574 34,220 34,761 35,302' 35,839' 36,901' 38,166' 38,890 42Other assets................................. 21,051 23,733 24,627 24,767 24,775 26,283 25,246' 24,811' 25,247' 24,838' 25,501 Credit unions 43 Total assets/liabilities and capital ................................... 53,755 62,348 66,280 65,063 65,419 65,854 64,506 64,857 65,678 65,190 66,103 68,102 44 Federal ........................................ 29,564 34,760 36,151 35,537 35,670 35,934 35,228 35,425 36,091 35,834 36,341 37,555 45 State ........................................... 24,191 27,588 30,129 29,526 29,749 29,920 29,278 29,432 29,587 29,356 29,762 30,547 46 Loans outstanding ....................... 41,845 50,269 53,545 53,533 56,267 53,125 52,089 51,626 51,337 50,344 49,469 48,172 47 Federal .................................... 22,634 27,687 29,129 29,020 30,613 28,698 28,053 27,783 27,685 27,119 26,550 25,773 48 State ........................................ 19,211 22,582 24,416 24,513 25,654 24,426 24,036 23,843 23,652 23,225 22,919 22,399 49 Savings ........................................ 46,516 53,517 57,255 55,739 55,797 56,232 55,447 55,790 56,743 56,338 57,197 59,310 50 Federal (shares) ....................... 25,576 29,802 31,097 30,366 30,399 35,530 30,040 32,256 30,948 30,851 31,403 32,764 51 State (shares and deposits)....... 20,940 23,715 26,158 25,373 25,398 25,702 25,407 25,534 25,795 25,487 25,794 26,546 For notes see bottom of page A30. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Financial Statistics □ August 1980 1.39 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year Type of account or operation year year year 1979 1980 1980 1977 1978 1979 HI H2 HI Apr. May June U.S. budget 1 Receipts1 ............................................... 357,762 401.997 465.940 246.574 233,952 270.864 61.097 36.071 59.055 2 Outlays' ................................................ 402,725 450,836 493.673 245,616 263,044 289.899 51.237 50.198 46.702 3 Surplus, or deficit( -) ............................ -44,963 -48,839 -27.733 958 -29.093 - 19,035 9.860 - 14.127 12.353 4 Trust funds ........................................ 9,497 12.693 18.335 4.041 9.679 4.383 - 153 6.463 1.361 5 Federal funds2.................................... -54,460 -61,532 -46.069 -3,083' -38.773 -23.418 10.013 -20.590 10.992 Off-budget entities (surplus, or deficit (-)) 6 Federal Financing Bank outlays ............ -8,415 - 10.661 - 13,261 -7.712 -5.909 -7.735 - 1.848' - 1.827' -511 7 Other3 .................................................. -269 334 832 -447 805 -528 24 - 364' 121 U.S. budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (-) ......................... -53.647 -59.166 -40.162 -7.201 -34.197 -27.298 8.036 - 16,318' 11.963 Source or financing 9 Borrowing from the public................. 53.516 59.106 33.641 6.039 31.320 24.435 4.631 5.350 -4.615 10 Cash and monetary assets (decrease, or increase ( - ))4............................. -2.247 -3,023 -408 -8.878 3.059 -3.482 - 13,542 9.841 -7,135 11 Other5 ............................................... 2.378 3.083 6.929 10.040 - 182 6,345 875 -1,127' -213 Mlmo: 12 Treasury operating balance (level, end of period) ........................................... 19.104 22.444 24.176 17.485 15.924 14,092 18.430 10.662 14.092 13 Federal Reserve Banks ...................... 15,740 16.647 6.489 3.290 4.075 3.199 4.561 4.523 3.199 14 Tax and loan accounts........................ 3,364 5.797 17.687 14.195 11.849 10.893 13.869 6.139 10,893 1. Effective June 1978, earned income credit payments in excess of an indi­ 5. Includes accrued interest payable to the public; deposit funds; miscellaneous vidual's tax liability, formerly treated as income tax refunds, arc classified as liability (including checks outstanding) and asset accounts; seignorage; increment outlays retroactive to January 1976. on gold; net gain/loss for U.S. currency valuation adjustment; net gain/loss for 2. Half-year figures are calculated as a residual (total surplus/deficit less trust IMF valuation adjustment; and profit on the sale of gold. fund surplus/deficit). 3. Includes Pension Benefit Guaranty Corporation; Postal Service Fund; Rural Sourcli. "Monthly Treasury Statement of Receipts and Outlays of the U.S. Electrification and Telephone Revolving Fund; and Rural Telephone Bank. Government, " Treasury Bulletin, and the Budget of the United States Government, 4. Includes U.S. Treasury operating cash accounts; special drawing rights; gold Fiscal Year 1981. 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 ‘'other 10. Issues of foreign governments and their subdivisions and bonds of the In­ assets.” ternational Bank for Reconstruction and Development. 2. Includes net undistributed income, which is accrued by most, but not all. ass 3 o . c E ia x ti c o l n u s d . es figures for loans in process, which arc shown as a liability. tio N nso iin l . t h S e a v U in n g it s e d a n S d t a l t o e a s n . D as a s t o a c i a a r t c io b n a s s : ed E s o ti n m m at o e n s th b l y y t r h e e p o F r H ts L o B f B fe d fo e r r a a ll l y l a i s n s s o u c r i e a d ­ 4. The NAMSB reports that, effective April 1979. balance sheet data are not associations and annual reports of other associations. Even when revised, data for strictly comparable with previous months. Beginning April 1979, data arc reported current and preceding year are subject to further revision. on a net-of-valuation-reserves basis. Prior to that date, data were reported on a Mutual savings banks: Estimates of National Association of Mutual Savings gross-of-valuation-rcserves basis. Banks for all savings banks in the United States. 5. Beginning April 1979, includes obligations of U.S. government agencies. Life insurance companies: Estimates of the American Council of Life Insurance Before that date, this item was included in "‘Corporate and other." for all life insurance companies in the United States. Annual figures arc annual- 6. Includes securities of foreign governments and international organizations statement asset values, with bonds carried on an amortized basis and stocks at and. prior to April 1979, nonguarantecd issues of U.S. government agencies. year-end market value. Adjustments for interest due and accrued and for differ­ 7. Excludes checking, club, and school accounts. ences between market and book values are not made on each item separately but 8. Commitments outstanding (including loans in process) of banks in New York are included, in total, in “other assets." State as reported to the Savings Banks Association of the state of New York. Credit unions: Estimates bv the National Credit Union Administration for a 9. Direct and guaranteed obligations. Excludes federal agency issues not guar­ group of federal and state-chartered credit unions that account for about 30 percent anteed, which are shown in the table under “Business" securities. of credit union assets. Figures are preliminary and revised annually to incorporate recent benchmark data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A31 1.40 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year Fiscal Fiscal Fiscal Source or type year year year 1979 1980 1980 1977 1978 1979 HI H2 HI Apr. May June Receipts 1 All sources1 ........................................... 357,762 401,997 465,940 246,574 233,952 270,864 61,097 36,071 59,055 2 Individual income taxes, net ................. 157,626 180,988 217,841 111,603 115,488 119,988 31,488 9,275 27,791 3 Withheld ........................................... 144,820 165,215 195,295 98,683 105,764 110,394 17,136 18,104 19,791 4 Presidential Election Campaign Fund . 37 39 36 32 3 34 7 7 4 5 Nonwithheld ...................................... 42,062 47,804 56,215 44,116 12,355 49,707 24,937 2,101 9,380 6 Refunds1 ........................................... 29,293 32,070 33,705 31,228 2,634 40,147 10,592 10,937 1,385 Corporation income taxes 7 Gross receipts .................................... 60,057 65,380 71,448 42,427 29,169 43,434 10,244 1,866 16,251 8 Refunds ............................................. 5,164 5,428 5,771 2,889 3,306 4,064 1,073 635 447 9 Social insurance taxes and contributions, net .................................................. 108,683 123,410 141,591 75,609 71,031 86,597 15,886 20,787 10,793 10 Payroll employment taxes and contributions2 ............................. 88,196 99,626 115,041 59,298 60,562 69,077 10,122 15,376 9,702 11 Self-employment taxes and contributions3 ............................. 4,014 4,267 5,034 4,616 417 5,535 3,545 376 395 12 Unemployment insurance ................... 11,312 13,850 15,387 8,623 6,899 8,690 1,646 4,495 177 13 Other net receipts4............................. 5,162 5,668 6,130 3,072 3,149 3,294 573 540 519 14 Excise taxes........................................... 17,548 18,376 18,745 8,984 9,675 11,383 2,269 2,502 2,497 15 Customs deposits ................................... 5,150 6,573 7,439 3,682 3,741 3,443 559 557 611 16 Estate and gift taxes ............................. 7,327 5,285 5,411 2,657 2,900 3,091 459 623 502 17 Miscellaneous receipts5 .......................... 6,536 7,413 9,237 4,501 5,254 6,993 1,265 1,098 1,057 Outlays 18 All types1 ............................................... 402,725 450,836 493,673 245,616 263,044 289,899 51,237 50,198 46,702 19 National defense.................................... 97,501 105,186 117,681 57,643 62,002 69,132 11,593 11,543 11,885 20 International affairs ............................... 4,813 5,922 6,091 3,538 4,617 4,602 837 648 325 21 General science, space, and technology .. 4,677 4„742 5,041 2,461 3,299 3,150 508 516 527 22 Energy .................................................. 4,172 5,861 6,856 4,417 3,281 3,126 625 624 657 23 Natural resources and environment ....... 10,000 10,925 12,091 5,672 7,350 6,668 1,123 1,130 1,159 24 Agriculture ........................................... 5,532 7,731 6,238 3,020 1,709 3,193 156 478 623 25 Commerce and housing credit................ -44 3,324 2,565 60 3,002 3,878 696 1,133 924 26 Transportation ...................................... 14,636 15,445 17,459 7,688 10,298 9,582 1,655 1,419 1,846 27 Community and regional development ... 6,348 11,039 9,482 4,499 4,855 5,302 718 836 966 28 Education, training, employment, social services ........................................... 20,985 26,463 29,685 14,467 14,579 16,686 2,861 2,521 2,560 29 Health ................................................... 38,785 43,676 49,614 24,860 26,492 29,299 5,094 4,970 4,948 30 Income security1 .................................... 137,915 146,212 160,198 81,173 86,007 94,600 16,456 16,115 15,150 31 Veterans benefits and services................ 18,038 18,974 19,928 10,127 10,113 9,758 2,006 2,795 632 32 Administration of justice ...................... 3,600 3,802 4,153 2,096 2,174 2,291 417 397 363 33 General government ............................. 3,312 3,737 4,153 2,291 2,103 2,422 229 382 426 34 General-purpose fiscal assistance .......... 9,499 9,601 8,372 3,890 4,286 3,940 1,739 238 53 35 Interest6 ................................................. 38,009 43,966 52,556 26,934 29,045 32,658 5,177 5,299 9,565 36 Undistributed offsetting receipts6-7......... -15,053 -15,772 -18,489 -8,999 -12,164 -10,387 -654 -845c -5,905 1. Effective June 1978, earned income credit payments in excess of an indi­ 6. Effective September 1976, “Interest” and “Undistributed offsetting receipts” vidual’s tax liability, formerly treated as income tax refunds, are classified as reflect the accounting conversion for the interest on special issues for U.S. gov­ outlays retroactive to January 1976. ernment accounts from an accrual basis to a cash basis. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. 7. Consists of interest received by trust funds, rents and royalties on the Outer 3. Old-age, disability, and hospital insurance. Continental Shelf, and U.S. government contributions for 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 U.S. 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous re­ Government” and the Budget of the U.S. Government, Fiscal Year 1981. ceipts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Financial Statistics □ August 1980 1.41 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1977 1978 1979 1980 Item Dec. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31. Mar. 31 1 Federal debt outstanding............................................. 729.2 758.8 780.4 797.7 804.6 812.2 833.8 852.2 870.4 2 Public debt securities.................................................. 718.9 749.0 771.5 789.2 796.8 804.9 826.5 845.1 863.5 3 Held by public ....................................................... 564.1 587.9 603.6 619.2 630.5 626.4 638.8 658.0 677.1 4 Held by agencies .................................................... 154.8 161.1 168.0 170.0 166.3 178.5 187.7 187.1 186.3 5 Agency securities ....................................................... 10.2 9.8 8.9 8.5 7.8 7.3 7.2 7.1 7.0 6 Held by public ....................................................... 8.4 8.0 7.4 7.0 6.3 5.9 5.8 5.6 5.5 7 Held by agencies .................................................... 1.8 1.8 1.5 1.5 1.5 1.5 1.5 1.5 1.5 8 Debt subject to statutory limit ................................... 720.1 750.2 772.7 790.3 797.9 806.0 827.6 846.2 864.5 9 Public debt securities.................................................. 718.3 748.4 770.9 788.6 796.2 804.3 825.9 844.5 862.8 10 Other debt1 ................................................................ 1.7 1.8 1.8 1.7 1.7 1.7 1.7 1.7 1.7 11 Memo. Statutory debt limit ........................................ 752.0 752.0 798.0 798.0 798.0 830.0 830.0 879.0 879.0 1. Includes guaranteed debt of government agencies, specified participation Notl. Data from Treasury Bulletin (U.S. Treasury Department), 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 1980 Type and holder 1976 1977 1978 1979 Mar. Apr. May June July 1 Total gross public debt ............................................... 653.5 718.9 789.2 845.1 863.5 870.0 877.9 877.6 881.7 By type 2 Interest-bearing debt .................................................. 652.5 715.2 782.4 844.0 862.2 868.9 873.5 876.3 880.4 3 Marketable ................................................................ 363.2 459.9 487.5 530.7 557.5 564.9 567.6 566.7 576.1 4 Bills ....................................................................... 164.0 161.1 161.7 172.6 190.8 195.3 195.4 184.7 191.5 5 Notes ..................................................................... 216.7 251.8 265.8 283.4 290.4 291.8 291.5 301.5 302.6 6 Bonds ..................................................................... 40.6 47.0 60.0 74.7 76.3 77.7 80.6 80.6 82.0 7 Nonmarketable1 ......................................................... 231.2 255.3 294.8 313.2 304.7 304.0 306.0 309.5 304.3 8 Convertible bonds2 ................................................ 2.3 2.2 2.2 2.2 2.2 — — — __ 9 State and local government series............................ 4.5 13*9 24.3 24.6 23.9 23.7 23.6 23.6 23.5 10 Foreign issues3 ....................................................... 22.3 22 2 29.6 28.8 26.9 26.3 25.9 25.5' 25.8 11 Government ....................................................... 22.3 22.2 28.0 23.6 20.5 19.8 19.5 19.0' 19.3 12 Public .................................................................. 0 0 1.6 5.3 6.4 6.4 6.4 6.4' 6.4 13 Savings bonds and notes.......................................... 72.3 77.0 80.9 79.9 76.0 74.2 73.6 73.4 73.3 14 Government account series4.................................... 129.7 139.8 157.5 177.5 175.5 179.7 182.6 186.8 181.5 15 Non-interest-bearing debt........................................... 1.1 3.7 6.8 1.2 1.2 1.1 4.4 1.3 1.3 By holder5 16 U.S. government agencies and trust funds................. 147.1 154.8 170.0 187.1 186.2 188.2 190.7 17 Federal Reserve Banks............................................... 97.0 102.5 109.6 117.5 116.7 118.8 124.0 18 Private investors......................................................... 409.5 461.3 508.6 540.5 560.5 563.0 562.9 19 Commercial banks ...................................................... 103.8 101.4 94.7' 97.0 99.3 99.2 100.0 20 Mutual savings banks ................................................. 5.9 5.9 5.0' 4.2 4.2 4.1 4.1 21 Insurance companies .................................................. 12.7 15.5 14.9' 14.4 14.5 14.2 13.7 22 Other companies ....................................................... 27.7 22.7 20.5' 23.9 25.7 25.7 25.0 n.a. n.a. 23 State and local governments ...................................... 41.6 54.8' 70.1' 68.2 74.6 73.9 74.8 Individuals 24 Savings bonds ......................................................... 72.0 76.7 80.7' 79.9 76.0 74.2 73.4 25 Other securities ...................................................... 28.8 28.6 30.1' 34.2 40.7 43.8 43.0 26 Foreign and international6 ......................................... 78.1 109.6 137.8' 123.8 119.8 116.4 117.2 27 Other miscellaneous investors7 ................................... 38.9 46.0' 54.9' 94.8 105.7 111.5 111.7 1. Includes (not shown separately): Securities issued to the Rural Electrification 6. Consists of the investments of foreign balances and international accounts in Administration, depository bonds, retirement plan bonds, and individual retire­ the United States. Beginning with July 1974, the figures exclude non-interestment bonds. bearing notes issued to the International Monetary Fund. 2. These nonmarketable bonds, also known as Investment Series B Bonds, may 7. Includes savings and loan associations, nonprofit institutions, corporate pen­ be exchanged (or converted) at the owner’s option for l'/2 percent, 5-year mar­ sion trust funds, dealers and brokers, certain government deposit accounts, and ketable Treasury notes. Convertible bonds that have been so exchanged are re­ government sponsored agencies. moved from this category and recorded in the notes category (line 5). 3. Nonmarketable dollar-denominated and foreign currency-denominated series Note. Gross public debt excludes guaranteed agency securities and, beginning held by foreigners. in July 1974, includes Federal Financing Bank security issues. 4. Held almost entirely by U.S. government agencies and trust funds. Data by type of security from Monthly Statement of the Public Debt of the United 5. Data for Federal Reserve Banks and U.S. government agencies and trust States (U.S. Treasury Department); data by holder from Treasury Bulletin. 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 A33 1.43 U.S. GOVERNMENT MARKETABLE SECURITIES Ownership, by maturity Par value; millions of dollars, end of period 1980 1980 Type of holder 1978 1979 1978 1979 Apr. May Apr. May All maturities 1 to 5years 1 All holders................................................................................ 487,546 530,731 564,869 567,560 162,886 164,198 178,231 176,354 2 U.S. government agencies and trust funds............................... 12,695 11,047 10,760 10,382 3,310 2,555 2,241 2,558 3 Federal Reserve Banks............................................................. 109,616 117,458 118,825 124,003 31,283 28,469 31,036 32,962 4 Private investors....................................................................... 365,235 402,226 435,284 433,175 128,293 133,173 144,954 140,835 5 Commercial banks ................................................................ 68,890 69,076 67,715 68,366 38,390 38,346 39,019 38,490 6 Mutual savings banks ..................................................... 3,499 3,204 3,121 3,083 1,918 1,668 1,609 1,523 7 Insurance companies ............................................................. 11,635 11,496 11,425 11,029 4,664 4,518 4,340 4,217 8 Nonfinancial corporations .................................................... 8,272 8,433 8,327 7,972 3,635 2,844 2,880 2,795 9 Savings and loan associations ............................................... 3,835 3,209 3,049 3,198 2,255 1,763 1,770 1,859 10 State and local governments ................................................ 18,815 15,735 17,695 18,088 3,997 3,487 4,181 4,186 11 All others ............................................................................ 250,288 291,072 323,950 321,438 73,433 80,546 91,154 87,765 Total, within 1 year 5 to 10 years 12 All holders................................................................................ 228,516 255,252 268,964 274,175 50,400 50,440 53,790 51,460 13 U.S. government agencies and trust funds............................... 1,488 1,629 1,363 1,086 1,989 871 1,650 1,398 14 Federal Reserve Banks............................................................. 52,801 63,219 62,601 63,190 14,809 12,977 12,029 13,745 15 Private investors....................................................................... 174,227 190,403 205,000 209,899 33,601 36,592 40,111 36,317 16 Commercial banks ................................................................ 20,608 20,171 18,752 20,636 7,490 8,086 7,451 6,745 17 Mutual savings banks ........................................................... 817 836 786 868 496 459 485 458 18 Insurance companies ............................................................. 1,838 2,016 1,730 1,714 2,899 2,815 3,170 2,956 19 Nonfinancial corporations .................................................... 4,048 4,933 4,126 4,032 369 308 393 348 20 Savings and loan associations ............................................... 1,414 1,301 1,051 1,204 89 69 160 68 21 State and local governments ................................................ 8,194 5,607 6,145 6,640 1,588 1,540 1,959 1,749 22 All others ............................................................................ 137,309 155,539 172,409 174,806 20,671 23,314 26,493 23,993 Bills, within 1 year 10 to 20 years 23 All holders................................................................................ 161,747 172,644 195,296 195,387 19,800 27,588 30,754 29,454 24 U.S. government agencies and trust funds............................... 2 0 1 1 3,876 4,520 3,772 3,608 25 Federal Reserve Banks............................................................. 42,397 45,337 46,335 49,195 2,088 3,272 3,842 3,577 26 Private investors....................................................................... 119,348 127,306 148,960 146,191 13,836 19,796 23,140 22,270 27 Commercial banks ................................................................ 5,707 5,938 6,693 7,057 956 993 1,139 1,049 28 Mutual savings banks ........................................................... 150 262 182 176 143 127 172 161 29 Insurance companies ............................................................ 753 473 379 386 1,460 1,305 1,259 1,228 30 Nonfinancial corporations .................................................... 12 2,793 2,294 1,906 86 218 380 306 31 Savings and loan associations ............................................... 262 219 211 273 60 58 54 53 32 State and local governments ................................................ 5,524 3,100 4,007 4,378 1,420 1,762 2,231 2,259 33 All others ............................................................................ 105,161 114,522 135,195 132,016 9,711 15,332 17,907 17,215 Other, within 1 year Over 20 years 34 All holders................................................................................ 66,769 82,608 73,668 78,788 25,944 33,254 33,130 36,117 35 U.S. government agencies and trust funds............................... 1,487 1,629 1,362 1,085 2,031 1,472 1,734 1,734 36 Federal Reserve Banks............................................................. 10,404 17,882 16,266 13,996 8,635 9,520 9,318 10,529 37 Private investors....................................................................... 54,879 63,097 56,040 63,707 15,278 22,262 22,079 23,855 38 Commercial banks ................................................................ 14,901 14,233 12,059 13,579 1,446 1,470 1,354 1,445 39 Mutual savings banks ........................................................... 667 574 604 692 126 113 69 73 40 Insurance companies ............................................................. 1,084 1,543 1,351 1,328 774 842 927 914 41 Nonfinancial corporations .................................................... 2,256 2,140 1,833 2,126 135 130 548 492 42 Savings and loan associations ............................................... 1,152 1,081 841 931 17 19 13 15 43 State and local governments ................................................ 2,670 2,508 2,138 2,262 3,616 3,339 3,180 3,254 44 All others ............................................................................ 32,149 41,017 37,214 42,790 9,164 16,340 15,988 17,660 Note. Direct public issues only. Based on Treasury Survey of Ownership from 460 mutual savings banks, and 725 insurance companies, each about 80 percent; Treasury Bulletin (U.S. Treasury Department). (2) 415 nonfinancial corporations and 481 savings and loan associations, each about Data complete for U.S. government agencies and trust funds and Federal Re­ 50 percent; and (3) 492 state and local governments, about 40 percent. serve Banks, but data for other groups include only holdings of those institutions “All others,” a residual, includes holdings of all those not reporting in the that report. The following figures show, for each category, the number and pro­ Treasury Survey, including investor groups not listed separately. portion reporting as of May 31, 1980: (1) 5,362 commercial banks, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Financial Statistics □ August 1980 1.44 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1980 1980, week ending Wednesday Mar. Apr, May Apr. 2 Apr. 9 Apr. 16 Apr. 23 Apr. 30 May 7 1 U.S. government securities 10,838 10,285 13,182 17,352 18,569 20,698 By maturity 2 Bills........................ 6,746 6,173 7,915 11,723 12,885 11,652 15,264 12,360 11,435 13,032 12,995 13,487 3 Other within 1 year . 237 392 454 380 372 498 493 340 399 323 429 557 4 1-5 years ............... 2,320 1,889 2,417 2,780 3,610 3,965 3,059 3,034 3,599 4,339 3,846 5,563 5 5-10 years ............. 1,148 965 1,121 1,339 1,138 1,392 899 1,190 1,309 1,301 847 1,174 6 Over 10 years ........ 388 867 1,276 1,130 1,720 1,844 1,112 2,099 1,827 1,703 1,503 1,887 By type of customer 7 U.S. government securities dealers ..................... 1,268 1,607 1,437 1,637 1,466 1,493 1,562 1,647 8 U.S. government securities brokers ..................... 3,709 3,838 5,170 6,934 8,128 8,240 7,949 7,868 7,831 8.579 8,221 10,004 9 Commercial banks .......... 2,294 1,804 1,904 2,313 2,875 2,820 3,052 2,750 2,900 2,852 3,044 3,763 10 All others1 ...................... 3,567 3,508 4,660 6,614 7,115 6,856 8,190 6,938 6,344 7.580 6,793 7,255 11 Federal agency securities . 1,729' 1,894' 2,723' 2,923 4,351 5,034 4,334 6,360 1. Includes, among others, all other dealers and brokers in commodities and Transactions are market purchases and sales of U.S. government securities deal­ securities, foreign banking agencies, and the Federal Reserve System. ers reporting to the Federal Reserve Bank of New York. The figures exclude allotments of, and exchanges for, new U.S. government securities, redemptions Note. Averages for transactions are based on number of trading days in the of called or matured securities, or purchases or sales of securities under repurchase, period. 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 1980 1979 and 1980, week ending Wednesday Item 1979 Mar. Apr May Mar. 12 Mar. 19 Mar. 26 Apr. 2 Apr. 9 Apr. 16 Positions1 1 U.S. government securities 5,172 2,656 3,223 2,341 8,036 5,400 2,794 875 2,117 4,923 8,002 8,765 2 Bills................................. 4,772 2,452 3,813 3,000 7,870 4,028 3,778 2,005 2,509 4,886 7,769 8,864 3 Other within 1 year......... 99 260 -325 -764 -1,082' -843 -672 -773 -826 -970 -1,028 -1,051 4 1-5 years ........................ 60 -92 -455 -518 683 726 -995 -1,046 -156 799 614 318 5 5-10 years ...................... 92 40 160 336 61 361 390 354 287 39 31 87 6 Over 10 years ................. 149 -4 30 286 505 1,128 292 335 302 170 616 546 7 Federal agency securities .. 693 606 1,471 284 1,207 1,254 -36 311 396 699 907 1,067 Financing2 8 All sources ............................... 9,877 10,204 16,003 14,236 19,829 19,358 16,953 13,375 12,624 12,971 17,801 21,376 Commercial banks 9 New York City..................... 1,313 599 1,396 -297 574 851 520 -474 -902 -1,044 588 1,021 10 Outside New York City......... 1,987 2,174 2,868 3,414 4,215 3,266 3,752 3,267 3,256 3,405 3,622 4,417 11 Corporations3 .......................... 2,358 2,379 3,373 3,205 4,387 4,651 3,690 2,827 3,008 3,196 3,793 5,112 12 All others................................. 4,158 5,052 4,104 7,913 10,653 10,590 8,991 7,754 7,262 7,414 9,798 10,827 1. Net amounts (in terms of par values) of securities owned by nonbank dealer agency securities (through both collateral loans and sales under agreements to firms and dealer departments of commercial banks on a commitment, that is, repurchase), plus internal funds used by bank dealer departments to finance po­ trade-date basis, including any such securities that have been sold under agree­ sitions in such securities. Borrowings against securities held under agreeement to ments to repurchase. The maturities of some repurchase agreements are sufficiently resell are excluded when the borrowing contract and the agreement to resell are long, however, to suggest that the securities involved are not available for trading equal in amount and maturity, that is, a matched agreement. purposes. Securities owned, and hence dealer positions, do not include securities 3.All business corporations except commercial banks and insurance companies. purchased under agreement to resell. 2.Total amounts outstanding of funds borrowed by nonbank dealer firms and Note. Averages for positions are based on number of trading days in the period; dealer departments of commercial banks against U.S. government and federal those for financing, on the number of calendar days in the period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A35 1.46 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt outstanding Millions of dollars, end of period 1979 1980 Agency 1976 1977 1978 Nov. Dec. Jan. Feb. Mar. Apr. 1 Federal and federally sponsored agencies1 ................... 103,848 112,472 137,063 161,653 163,290 165,819 167,813 173,216 176,880 2 Federal agencies......................................................... 22,419 22,760 23,488 24,224 24,715 24,883 25,013 25,583 25,776 3 Defense Department2 ............................................. 1,113 983 968 748 738 729 719 709 688 4 Export-import Bank3-4 ........................................... 8,574 8,671 8,711 8,812 9,191 9,176 9,144 9,627 9,615 5 Federal Housing Administration5 ............................ 575 581 588 545 537 539 546 550 537 6 Government National Mortgage Association participation certificates6 ................................. 4,120 3,743 3.141 3.004 2,979 2,979 2,979 2,979 2,937 7 Postal Service7 ....................................................... 2,998 2,431 2,364 1,837 1,837 1,837 1,837 1,837 1,837 8 Tennessee Valley Authority.................................... 4,935 6,015 7,460 8,825 8,997 9,182 9,347 9,440 9,695 9 United States Railway Association7 ........................ 104 336 356 453 436 441 441 441 467 10 Federally sponsored agencies1 .................................... 81,429 89,712 113,575 137,429 138,575 140,936 142,800 147,633 151,104 11 Federal Home Loan Banks .................................... 16,811 18,345 27,563 33,296 33,330 33,122 33,102 35,309 36,352 12 Federal Home Loan Mortgage Corporation ............ 1,690 1,686 2,262 2,621 2,771 2,769 2,764 2,644 2,643 13 Federal National Mortgage Association................... 30,565 31,890 41,080 47,278 48,486 49,031 50,139 51,614 52,456 14 Federal Land Banks ............................................... 17,127 19,118 20,360 16,006 16,006 15,106 15,106 15,106 13,940 15 Federal Intermediate Credit Banks ........................ 10,494 11,174 11,469 2,676 2,676 2,144 2,144 2,144 2,144 16 Banks for Cooperatives .......................................... 4,330 4,434 4,843 584 584 584 584 584 584 17 Farm Credit Banks1 ............................ 2,548 5,081 33,547 33,216 36,584 37,240 38,446 41 039 18 Student Loan Marketing Association8..................... 410 515 915 1,420 1,505 1,595 1,720 1,785 1,945 19 Other ..................................................................... 2 2 2 1 1 1 1 1 1 Memo: 20 Federal Financing Bank debt7’9................................... 28,711 38,580 51,298 66,281 67,383 68,294 69,268 71,885 74,009 Lending to federal and federally sponsored agencies 21 Export-import Bank4 ................................................ 5,208 5,834 6,898 7,953 8,353 8,353 8,353 8,849 8,849 22 Postal Service7 ........................................................... 2,748 2,181 2,114 1,587 1,587 1,587 1,587 1,587 1,587 23 Student Loan Marketing Association8 ........................ 410 515 915 1,420 1,505 1,595 1,720 1,785 1,945 24 Tennessee Valley Authority........................................ 3,110 4,190 5,635 7,100 7,272 7,457 7,622 7,715 7,970 25 United States Railway Association7............................ 104 336 356 453 436 441 441 441 467 Other Lending10 26 Farmers Home Administration ................................... 10,750 16,095 23,825 31,950 32,050 32,145 32,565 33,410 34,755 27 Rural Electrification Administration .......................... 1,415 2,647 4,604 6,272 6,484 6,701 6,874 7,039 7,155 28 Other ......................................................................... 4,966 6,782 6,951 9,546 9,696 10,015 10,106 11,059 11,281 1. In September 1977 the Farm Credit Banks issued their first consolidated of Housing and Urban Development; Small Business Administration; and the bonds, and in January 1979 they began issuing these bonds on a regular basis to Veterans Administration. replace the financing activities of the Federal Land Banks, the Federal Interme­ 7. Off-budget. diate Credit Banks, and the Banks for Cooperatives. Line 17 represents those 8. Unlike other federally sponsored agencies, the Student Loan Marketing As­ consolidated bonds outstanding, as well as any discount notes that have been sociation may borrow from the Federal Financing Bank (FFB) since its obligations issued. Lines 1 and 10 reflect the addition of this item. are guaranteed by the Department of Health, Education, and Welfare. 2. Consists of mortgages assumed by the Defense Department between 1957 9. The FFB. which began operations in 1974, is authorized to purchase or sell and 1963 under family housing and homeowners assistance programs. obligations issued, sold, or guaranteed by other federal agencies. Since FFB incurs 3. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. debt solely for the purpose of lending to other agencies, its debt is not included 4. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter. in the main portion of the table in order to avoid double counting. 5. Consists of debentures issued in payment of Federal Housing Administration 10. Includes FFB purchases of agency assets and guaranteed loans; the latter insurance claims. Once issued, these securities may be sold privately on the se­ contain loans guaranteed by numerous agencies with the guarantees of any par­ curities market. ticular agency being generally small. The Farmers Home Administration item 6. Certificates of participation issued prior to fiscal 1969 by the Government consists exclusively of agency assets, while the Rural Electrification Administration National Mortgage Association acting as trustee for the Farmers Home Admin­ entry contains both agency assets and guaranteed loans. istration; Department of Health, Education, and Welfare; Department Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Financial Statistics □ August 1980 1.47 NEW SECURITY ISSUES of State and Local Governments Millions of dollars Type of issue or issuer, 1979 1980 1977 1978 1979 Dec. Jan. Feb. Mar .p Apr.P May p 1 All issues, new and refunding1............................................... 46,769 48,607 43,490 3,583 3,049 2,390 2,385 4,833 4,570 Type of issue 2 General obligation................................................................ 18,042 17,854 12,109 855 1,166 935 731 1,662 1,534 3 Revenue .............................................................................. 28,655 30,658 31,256 2,712 1,875 1,445 1,648 3,170 3,032 4 5 U Ho .S u . s i g n o g v e A rn ss m is e ta n n t c l e o a A n d s m .. i .. n . i . s .. t . r . a .. t . i . o .. n .. 2 . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 95 125 16 8 10 6 1 4 Type of issuer 7 6 8 S M S p ta u e t n c e i i c al i . p .. d a .. l i . i s . t t . i r . e i . s c .. , t . . c . a . o n .. u d .. n . t . s i . t e . a . s . t . , u .. t t . o o .. r w . y .. n .. s a . h u .. i t . p h .. s o . , . r . i . s t . c y .. h .. o . . o . .. . l . . . . . . d . . . . i . . s . . . . t . . r . . . . i . . c . . . . t . . s . . . . .. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . .. . . 2 1 6 1 8 , , , 7 3 6 1 5 23 7 4 2 1 4 6 7 , , , 1 6 7 3 5 1 2 6 8 2 1 4 3 5 , , , 3 4 6 1 3 1 4 4 7 2,15 8 06 9 29 6 1,3 6 9 9 9 51 2 9 1,2 3 8 2 2 3 7 4 0 1,23 7 90 8 30 6 2 2 , , 1 1 4 7 9 6 5 2 6 2 1 , , 2 5 7 7 3 4 6 9 9 9 Issues for new capital, total.................................................. 36,189 37,629 41,505 3,186 3,022 2,357 2,379 4,704 4,501 Use of proceeds 10 Education ............................................................................ 5,076 5,003 5,130 408 231 356 191 488 297 1 1 1 1 1 1 5 2 3 4 T U S I O n o r t t d a i c h l u n i i e a t s s r i l t p e r p o w s ia r u e l a t r a l n f p t a d a i o i o r d e c s n e o . . s n . . . . . . . . s . . . . . . e . . . . . . . . . . . r . . . . . . v . . . . . . . . . a . . . . . . . . . . t . . . . . i . . . . o . . . . . . . . . . . n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2 8 8 7 , , , , , 9 6 0 1 2 5 7 9 1 7 1 3 6 9 4 1 6 3 9 3 0 , , , , , 1 4 0 5 4 2 6 2 2 9 0 0 6 6 4 1 2 8 3 5 5 , , , , , 4 8 5 5 9 4 3 3 9 6 1 6 6 4 8 1,7 2 4 2 1 2 1 0 7 5 4 4 9 4 7 1,2 5 7 1 9 5 1 6 7 0 2 4 3 2 1,03 3 1 1 26 3 7 0 10 9 8 3 1,1 4 2 2 1 31 4 4 5 31 8 0 6 2,0 2 6 3 9 6 0 1 3 9 2 5 3 7 9 1 1 , , 8 0 6 4 1 0 3 8 8 9 1 8 38 4 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 contri­ butions to the local authority. 1.48 NEW SECURITY ISSUES of Corporations Millions of dollars 1979 1980 Type of i o s r s u u e s e or issuer, 1977 1978 1979 Oct. Nov. Dec. Jan/ Feb. Mar. Apr. 1 All issues1 ........................................................... 53,792 47,230 51,464 4,601 3,831 3,801 6,210 4,452 4,353 5,646 2 Bonds .................................................................. 42,015 36,872 40,139 3,572 2,612 2,475 4,834 2,856 2,771 4,744 Type of offering 3 Public .................................................................. 24,072 19,815 25,814 2,669 1,583 1,500 2,450 1,426 1,985 3,828 4 Private placement ............................................... 17,943 17,057 14,325 903 1,029 975 2,384 1,430 786 916 Industry group 5 Manufacturing .................................................... 12,204 9,572 9,667 1,336 319 308 943 960 693 1,718 6 Commercial and miscellaneous ............................ 6,234 5,246 3,941 221 207 375 634 262 215 429 7 Transportation .................................................... 1,996 2,007 3,102 295 289 194 431 227 94 158 8 Public utility ....................................................... 8,262 7,092 8,118 1,124 658 763 1,338 635 1,423 596 9 Communication .................................................. 3,063 3,373 4,219 435 854 74 483 533 196 590 10 Real estate and financial...................................... 10,258 9,586 11,095 161 287 762 1,006 238 152 1,252 11 Stocks .................................................................. 11,777 10,358 11,325 1,029 1,219 1,326 1,376 1,596 1,582 902 Type 12 Preferred ............................................................. 3,916 2,832 3,574 195 443 282 287 88 525 223 13 Common ............................................................. 7,861 7,526 7,751 834 776 1,044 1,089 1,508 1,057 679 Industry group 14 Manufacturing .................................................... 1,189 1,241 1,679 151 158 224 333 380 598 81 15 Commercial and miscellaneous ............................ 1,834 1,816 2,623 98 286 430 313 426 404 374 16 Transportation .................................................... 456 263 255 2 59 58 36 9 17 Public utility ....................................................... 5,865 5,140 5,171 662 607 365 535 627 408 319 18 Communication .................................................. 1,379 264 303 47 2 1 39 27 53 19 Real estate and financial...................................... 1,049 1,631 1,293 70 165 306 135 65 109 67 1. Figures, which represent gross proceeds of issues maturing in more than one 1933, employee stock plans, investment companies other than closed-end, intra­ year, sold for cash in the United States, are principal amount or number of units corporate transactions, and sales to foreigners, multiplied by offering price. Excludes offerings of less than $100,000, secondary offerings, undefined or exempted issues as defined in the Securities Act of Source. Securities and Exchange Commission. 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 1980 Item 1978 1979 Nov. Dec. Jan. Feb. Mar. Apr. May June Investment Companies1 1 Sales of own shares2........................................... 6,645 7,495 690 748 957 773 723 1,010 1,175 1,772 2 Redemptions of own shares3 ............................... 7,231 8,393 579 743 776 882 892 762 647 775 3 Net sales ............................................................. -586 -898 111 5 181 -109 -169 248 528 997 4 Assets4 ................................................................ 44,980 49,493 48,613 49,277 51,278 49,512 44,581 47,270 50,539 52,946 5 Cash position5.................................................. 4,507 4,983 4,984 4,983 5,702 5,895 5,644 5,862 6,209' 6,495 6 Other .............................................................. 40,473 44,510 43,629 44,294 45,576 43,617 38,937 41,708 44,330' 46,451 1. Excluding money market funds. 5. Also includes all U.S. government securities and other short-term debt se­ 2. Includes reinvestment of investment income dividends. Excludes reinvest­ curities. ment 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 members, which 3. Excludes share redemption resulting from conversions from one fund to an­ comprise substantially all open-end investment companies registered with the Se­ other in the same group. curities and Exchange Commission. Data reflect newly formed companies after 4. Market value at end of period, less current liabilities. 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 1980 Account 1977 1978 1979 Q3 Q4 Ql Q2 Q3 Q4 Ql' 1 Profits before tax ................................................. 177.1 206.0 236.6 212.0 227.4 233.3 227.9 242.3 243.0 260.4 2 Profits tax liability............................................... 72.6 84.5 92.5 87.5 95.1 91.3 88.7 94.0 96.1 102.4 3 Profits after tax .................................................. 104.5 121.5 144.1 124.5 132.3 142.0 139.3 148.3 146.9 158.0 4 Dividends ........................................................ 42.1 47.2 52.7' 47.8 49.7 51.5 52.3 52.8 54.4 56.7 5 Undistributed profits ........................................ 62.4 74.4' 91.4 76.7' 82.6 90.5 86.9' 95.5 92.5 101.3 6 Capital consumption allowances .......................... 109.3 119.8 131.0 120.5' 123.0' 125.4' 130.4 132.8 135.2 137.4 7 Net cash flow ...................................................... 171.7 194.1 222.3' 197.2' 205.6' 215.9' 217.3 228.3 227.7 238.7 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 Financial Statistics □ August 1980 1.51 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1978 1979 1980 Account 1975 1976 1977 Q3 Q4 Ql' Q2r Q3' Q4r Ql 1 Current assets...................................................... 759.0 826.3 900.9 992.6 1,028.0 1,079.1 1,106.7 1,165.3 1,197.7 1,233.2 2 Cash ................................................................... 82.1 87.3 94.3 91.7 103.7 102.1 99.7 103.3 115.8 110.5 3 U.S. government securities ................................. 19.0 23.6 18.7 16.1 17.8 19.1 20.7 17.7 17.6 17.2 4 Notes and accounts receivable............................. 272.1 293.3 325.0 376.4 381.9 405.6 418.1 447.8 451.8 465.9 5 Inventories ......................................................... 315.9 342.9 375.6 415.5 428.3 453.0 466.9 490.3 503.0 521.2 6 Other .................................................................. 69.9 79.2 87.3 92.9 96.3 99.3 101.3 106.1 109.5 118.4 7 Current liabilities ................................................ 451.6 492.7 546.8 626.0 661.9 701.3 720.4 770.0 801.7 831.4 8 Notes and accounts payable................................. 264.2 282.0 313.7 356.2 375.1 393.4 409.2 441.6 460.5 473.3 9 Other .................................................................. 187.4 210.6 233.1 269.7 286.8 307.9 311.2 328.3 341.2 358.1 10 Net working capital ............................................. 307.4 333.6 354.1 366.6 366.1 377.8 386.3 395.3 396.0 401.8 11 Memo: Current ratio 1 ........................................ 1.681 1.677 1.648 1.586 1.553 1.539 1.536 1.513 1.494 1.483 1. Ratio of total current assets to total current liabilities. All data in this table reflect the most current benchmarks. Complete data are available upon request from the Flow of Funds Section, Division of Research and Note: For a description of this series, see “Working Capital of Nonfinancial Statistics. 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. 1979 1980 Industry 1978 1979 Ql Q2 Q3 Q4 Ql Q22 Q32 Q42 1 AH industries....................................................... 153.82 177.09 165.94 173.48 179.33 186.95 191.36 191.00 195.54 199.41 Manufacturing 2 Durable goods industries .................................... 31.66 38.23 34.00 36.86 39.72 41.30 42.30 42.18 43.70 44.06 3 Nondurable goods industries ............................... 35.96 40.69 37.56 39.56 40.50 43.88 45.01 44.64 47.28 48.07 Nonmanufacturing 4 Mining ................................................................ 4.78 5.56 5.46 5.31 5.42 6.06 6.02 6.72 5.88 6.14 Transportation 5 Railroad ........................................................... 3.32 3.93 4.02 3.66 4.03 4.20 4.40 3.80 3.58 4.16 6 Air .................................................................. 2.30 3.24 3.35 3.26 3.10 3.39 2.98 4.33 4.23 3.47 7 Other .............................................................. 2.43 2.95 2.71 2.79 3.16 3.15 2.94 3.03 3.17 3.58 Public utilities 8 Electric............................................................ 29.48 32.56 27.70 28.06 28.32 26.02 28.78 27.43 27.02 25.98 9 Gas and other.................................................. 4.70 5.07 4.66 5.18 5.01 5.50 5.57 5.44 5.69 6.19 1 1 1 0 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 o .. t . h .. e .. r . 1 . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1 5 8 . . 7 1 1 6 2 2 0 9. . 3 5 5 6 2 1 7 8 . . 7 75 3 2 2 8 0 . . 5 2 1 9 2 2 0 9 . . 4 6 1 6 2 3 2 0 . . 7 7 1 2 2 3 2 0 . . 4 8 8 6 \> 53.43 V 55.00 | 57.76 1. Includes trade, service, construction, finance, and insurance. ture; real estate operators; medical, legal, educational, and cultural service; and 2. Anticipated by business. nonprofit organizations. Note: Estimates for corporate and noncorporate business, excluding agricul- 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 1979 1980 Account 1974 1975 1976 1977 1978 01 Q2 Q3 Q4 Ql Assets Accounts receivable, gross 1 Consumer ............................................................................ 36.1 36.0 38.6 44.0 52.6 54.9 58.7 62.3 65.7 67.7 2 Business ................................................................................. 37.2 39.3 44.7 55.2 63.3 66.7 70.1 68.1 70.3 70.6 3 Total ................................................................................... 73.3 75.3 83.4 99.2 116.0 121.6 128.8 130.4 136.0 138.4 4 Less: Reserves for unearned income and losses ... 9.0 9.4 10.5 12.7 15.6 16.5 17.7 18.7 20.0 20.4 5 Accounts receivable, net.................................................. 64.2 65.9 72.9 86.5 100.4 105.1 111.1 111.7 116.0 118.0 6 Cash and bank deposits .................................................. 3.0 2.9 2.6 2.6 3.5 7 Securities ............................................................................... .4 1.0 1.1 .9 1.3 23.81 24.6 25.8 24.9 23.7 8 All other ............................................................................... 12.0 11.8 12.6 14.3 17.3 9 Total assets ......................................................... 79.6 81.6 89.2 104.3 122.4 128.9 135.8 137.4 140.9 141.7 Liabilities 10 Bank loans .......................................................................... 9.7 8.0 6.3 5.9 6.5 6.5 7.3 7.8 8.5 9.7 11 Commercial paper ............................................................. 20.7 22.2 23.7 29.6 34.5 38.1 41.0 39.2 43.3 40.8 Debt 12 Short-term, n.e.c.............................................................. 4.9 4.5 5.4 6.2 8.1 6.7 8.8 9.1 8.2 7.4 13 Long-term n.e.c............................................................... 26.5 27.6 32.3 36.0 43.6 44.5 46.0 47.5 46.7 48.9 14 Other ................................................................................. 5.5 6.8 8.1 11.5 12.6 15.1 14.4 15.4 14.2 15.7 15 Capital, surplus, and undivided profits.................... 12.4 12.5 13.4 15.1 17.2 18.0 18.2 18.4 19.9 19.2 16 Total liabilities and capital ................................... 79.6 81.6 89.2 104.3 122.4 128.9 135.8 137.4 140.9 141.7 1. Beginning Ql 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 Accounts receivable receivable Type ou M ts a ta y n 3 d 1 in , g 1980 1980 1980 19801 Mar. Apr. May Mar. Apr. May Mar. Apr. May 1 Total ............................................................. 70,534 -5 277 -507 17,370 14,754 14,422 17,375 14,477 14,929 2 Retail automotive (commercial vehicles)....... 14,149 -250 -364 -491 952 844 699 1,202 1,208 1,190 3 Wholesale automotive ................................... 12,685 -415 39 -136 4,917 4,502 3,846 5,332 4,463 3,982 4 Retail paper on business, industrial and farm equipment .................................... 19,947 680 403 -13 1,614 1,304 1,267 934 901 1,280 5 Loans on commercial accounts receivable and factored commercial accounts receivable . 7,413 153 -233 88 7,908 6,269 6,814 7,755 6,502 6,766 6 All other business credit............................... 16,340 -173 432 45 1,979 1,835 1,796 2,152 1,403 1,751 1. Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Financial Statistics □ August 1980 1.55 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1980 Item 1976 1977 1978 Jan. Feb. Mar. Apr. May June 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 76.9 79.8 77.7 83.1 88.0 81.3 2 Amount of loan (thousands of dollars) . . . 35.9 40.5 45.9 54.4 56.6 55.1 59.4 61.3 58.0 3 Loan/price ratio (percent) ...................... 74.2 76.3 75.3 73.0 72.5 72.0 73.6 72.4 74.1 4 Maturity (years) ...................................... 27.2 27.9 28.0 28.1 28.8 27.4 28.3 28.8 28.4 5 Fees and charges (percent of loan amount)1 1.44 1.33 1.39 2.11 1.79 1.98 2.04 2.17 2.21 6 Contract rate (percent per annum).......... 8.76 8.80 9.30 11.48 11.60 12.25 12.64 13.26 12.24 Yield (percent per annum) 7 FHLBB series3 ........................................ 8.99 9.01 9.54 11.87 11.93 12.62 13.03 13.68 12.66 8 HUD series4 ........................................... 8.99 8.95 9.68 12.80 14.10 16.05 15.55 13.20 12.45 Secondary Markets Yield (percent per annum) 9 FHA mortgages (HUD series)5............... 8.82 8.68 9.70 12.60 n.a. 14.63 13.45 11.99 11.85 10 GNMA securities6 ................................... 8.17 8.04 8.98 11.94 13.16 13.79 12.55 11.30 11.04 FNMA auctions7 11 Government-underwritten loans .......... 8.99 8.73 9.77 12.90 14.48 15.64 14.61 12.87 12.35 12 Conventional loans ............................. 9.11 8.98 10.01 13.20 14.12 16.62 16.29 13.54 12.93 Activity in secondary markets Federal National Mortgage Association Mortgage holdings (end of period) 13 Total .......................................................................................... 32,904 34.370 43.311 52.106 53.063 53,990 54.843 55,328 55.419 14 FHA-insured ...................................................................... 18,916 18.457 21.243 24.906 25.146 n.a. n.a. n.a. n.a. 15 VA-guaranteed ................................................................. 9,212 9.315 10,544 10.653 10.885 n.a. n.a. n.a. n.a. 16 Conventional ...................................................................... 4,776 6.597 11.524 16.546 16.853 17.079 17.453 17,858 18,001 Mortgage transactions (during period) 17 Purchases ................................................................................. 3,606 4,780 12.303 1,163 1.087' 1.063 1.021 589 206 18 Sales .......................................................................................... 86 67 5 0 0 0 0 0 0 Mortgage commitments8 19 Contracted (during period) ............................................. 6,247 9.729 18.960 508 999 825 507 391 441 20 Outstanding (end of period) ........................................... 3,398 4.698 9,201 5,671 5,504 5.078 4.371 4,064 4,215 Auction of 4-month commitments to buy Government-underwritten loans 21 Offered9 .............................................................................. 4.929.8 7.974.1 12,978 516.0 1.169.4 1.267.3 493.7 608.7 602.5 22 Accepted ............................................................................ 2.787.2 4.846.2 6,747.2 213.8 563.7 426.1 199.4 214.1 266.5 Conventional loans ) 23 Offered9 ............................................................................... 2.595.7 5.675.2 9,933.0 443.1 412.1 918.6 135.2 279.7 169.7 24 Accepted ............................................................................ 1.879.2 3.917.8 5,110.9 247.2 147.8 239.9 65.8 109.1 76.0 Federal Home Loan Mortgage Corporation Mortgage holdings (end of period)10 25 Total .......................................................................................... 4,269 3.276 3.064 4.124 4.145 4.235 4.255 4,031 4,014 26 FHA/VA ............................................................................ 1,618 1.395 1.243 1,098 1.092 1.086 1.080 1,076 1,072 27 Conventional ...................................................................... 2,651 1.881 1.822 3,026 3.052 3.149 3.175 2,955 2,942 Mortgage transactions (during period) 28 Purchases ................................................................................. 1,175 3,900 6.524 280 248 193 231 176 225 29 Sales .......................................................................................... 1,396 4.131 6.211 180 207 106 199 391 232 Mortgage commitments11 30 Contracted (during period) ............................................. 1,477 5.546 7,451 296 197 186 189 491 577 31 Outstanding (end of period) ........................................... 333 1.063 1,410 779 726 700 643 932 1,246 1. Weighted averages based on sample surveys of mortgages originated by major securities, assuming prepayment in 12 years on pools of 30-year FHA/VA mort­ institutional lender groups. Compiled by the Federal Home Loan Bank Board in gages carrying the prevailing ceiling rate. Monthly figures are unweighted averages cooperation with the Federal Deposit Insurance Corporation. of Monday quotations for the month. 2. Includes all fees, commissions, discounts, and "points" paid (by the borrower 7. Average gross yields (before deduction of 38 basis points for mortgage or the seller) in order to obtain a loan. servicing) on accepted bids in Federal National Mortgage Association's auctions 3. Average effective interest rates on loans closed, assuming prepayment at the of 4-month commitments to purchase home mortgages, assuming prepayment in end of 10 years. 12 years for 30-year mortgages. No adjustments are made for FNMA commitment 4. Average contract rates on new commitments for conventional first mortgages, fees or stock related requirements. Monthly figures are unweighted averages for rounded to the nearest 5 basis points; from Department of Housing and Urban auctions conducted within the month. Development. 8. Includes some multifamily and nonprofit hospital loan commitments in ad­ 5. Average gross yields on 30-year, minimum-downpayment, Federal Housing dition to 1- to 4-family loan commitments accepted in FNMA’s free market auction Administration-insured first mortgages for immediate delivery in the private sec­ system, and through the FNMA-GNMA tandem plans. ondary market. Any gaps in data are due to periods of adjustment to changes in 9. Mortgage amounts offered by bidders are total bids received. maximum permissible contract rates. 10. Includes participation as well as whole loans. 6. Average net yields to investors on Government National Mortgage Associ­ 11. Includes conventional and government-underwritten loans. ation guaranteed, mortgage-backed, fully modified pass-through Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate Debt A41 1.56 MORTGAGE DEBT OUTSTANDING Millions of dollars, end of period 1979 1980 Type of holder, and type of property 1977 1978 1979 Q2 03 04 Ql Q2 p 1All holders.................................................................. 1,023,505 1,172,754 l,333,550r 1,252,426 1,295,935 1,333,550 1,362,802 1,385,310 21- to 4-family ............................................................. 656,566 761,843 872,068' 816,940 846,287 872,068 890,189 903,326 3Multifamily ................................................................ 111,841 121,972 130,713' 125,916 128,270 130,713 132,795 134,603 4Commercial ................................................................ 189,274 212,746 238,412' 224,499 232,208 238,412 243,839 247,275 5Farm.......................................................................... 65,824 76,193 92,357' 85,071 89,170 92,357 95,979 100,106 6Major financial institutions ........................................ 745,011 848,095 939,487' 894,385 920,231 939,487 951,898 959,294 7 Commercial banks1 ................................................. 178,979 213,963 245,998' 229,564 239,627 245,998 251,198 253,098 8 1- to 4-family ...................................................... 105,115 126,966 145,975' 136,223 142,195 145,975 149,061 150,188 9 Multifamily ......................................................... 9,215 10,912 12,546' 11,708 12,221 12,546 12,811 12,908 10 Commercial ......................................................... 56,898 67,056 77,096' 71,945 75,099 77,096 78,725 79,321 11 Farm.................................................................... 7,751 9,029 10,381' 9,688 10,112 10,381 10,601 10,681 12 Mutual savings banks ............................................. 88,104 95,157 98,908' 97,155 97,929 98,908 99,151 99,101 13 1- to 4-family ...................................................... 57,637 62,252 64,706' 63,559 64,065 64,706 64,865 64,832 14 Multifamily ......................................................... 15,304 16,529 17,180' 16,876 17,010 17,180 17,223 17,214 15 Commercial ......................................................... 15,110 16,319 16,963' 16,662 16,795 16,963 17,004 16,996 16 Farm.................................................................... 53 57 59 58 59 59 59 59 17 Savings and loan associations................................... 381,163 432,808 475,797 456,543 468,307 475,797 479,078 481,149 18 1- to 4-family ...................................................... 310,686 356,114 394,436 377,516 387,992 394,436 397,156 398,872 19 Multifamily ......................................................... 32,513 36,053 37,588 37,071 37,277 37,588 37,847 38,011 20 Commmercial ...................................................... 37,964 40,641 43,773 41,956 43,038 43,773 44,075 44,266 21 Life insurance companies ........................................ 96,765 106,167 118,784 111,123 114,368 118,784 122,471 125,946 22 1- to 4-family ...................................................... 14,727 14,436 16,193 14,489 14,884 16,193 16,850 17,879 23 Multifamily ......................................................... 18,807 19,000 19,274 19,102 19,107 19,274 19,590 19,722 24 Commercial ......................................................... 54,388 62,232 71,137 66,055 68,513 71,137 73,618 75,682 25 Farm.................................................................... 8,843 10,499 12,180 11,477 11,864 12,180 12,413 12,663 26Federal and related agencies...................................... 70,006 81,853 97,293 90,095 93,143 97,293 104,045 108,658 27 Government National Mortgage Association .......... 3,660 3,509 3,852 3,425 3,382 3,852 3,919 4,500 28 1- to 4-family ...................................................... 1,548 877 763 800 780 763 749 860 29 Multifamily ......................................................... 2,112 2,632 3,089 2,625 2,602 3,089 3,170 3,640 30 Farmers Home Administration ............................... 1,353 926 1,274 1,200 1,383 1,274 2,757 3,257 31 1- to 4-family ...................................................... 626 288 417 363 163 417 1,139 1,345 32 Multifamily ......................................................... 275 320 71 75 299 71 408 482 33 Commercial ......................................................... 149 101 174 278 262 174 409 483 34 Farm.................................................................... 303 217 612 484 659 612 801 947 35 Federal Housing and Veterans Administration....... 5,212 5,419 5,764 5,597 5,672 5,764 5,833 5,894 36 1- to 4-family ...................................................... 1,627 1,641 1,863 1,744 1,795 1,863 1,908 1,953 37 Multifamily ......................................................... 3,585 3,778 3,901 3,853 3,877 3,901 3,925 3,941 38 Federal National Mortgage Association................... 34,369 43,311 51,091 48,206 49,173 51,091 53,990 55,419 39 1- to 4-family ...................................................... 28,504 37,579 45,488 42,543 43,534 45,488 48,394 49,837 40 Multifamily ......................................................... 5,865 5,732 5,603 5,663 5,639 5,603 5,596 5,582 41 Federal Land Banks ............................................... 22,136 25,624 31,277 28,459 29,804 31,277 33,311 35,574 42 1- to 4-family ...................................................... 670 927 1,552 1,198 1,374 1,552 1,708 1,893 43 Farm.................................................................... 21,466 24,697 29,725 27,261 28,430 29,725 31,603 33,681 44 Federal Home Loan Mortgage Corporation............ 3,276 3,064 4,035 3,208 3,729 4,035 4,235 4,014 45 1- to 4-family ...................................................... 2,738 2,407 3,059 2,489 2,850 3,059 3,210 3,037 46 Multifamily ......................................................... 538 657 976 719 879 976 1,025 977 47Mortgage pools or trusts2........................................... 70,289 88,633 119,278 102,259 110,648 119,278 124,097 128,740 48 Government National Mortgage Association .......... 44,896 54,347 76,401 63,000 69,357 76,401 80,905 84,282 49 1- to 4-family ...................................................... 43,555 52,732 74,546 61,246 67,535 74,546 78,934 82,209 50 Multifamily ......................................................... 1,341 1,615 1,855 1,754 1,822 1,855 1,971 2,073 51 Federal Home Loan Mortgage Corporation............ 6,610 11,892 15,180 13,708 14,421 15,180 15,454 16,120 52 1- to 4-family ...................................................... 5,621 9,657 12,149 11,096 11,568 12,149 12,359 12,886 53 Multifamily ......................................................... 989 2,235 3,031 2,612 2,853 3,031 3,095 3,234 54 Farmers Home Administration ............................... 18,783 22,394 27,697 25,551 26,870 27,697 27,738 28,338 55 1- to 4-family ...................................................... 11,397 13,400 14,884 14,329 14,972 14,884 14,926 15,248 56 Multifamily ......................................................... 759 1,116 2,163 1,764 1,763 2,163 2,159 2,205 57 Commercial ......................................................... 2,945 3,560 4,328 3,833 4,054 4,328 4,495 4,594 58 Farm.................................................................... 3,682 4,318 6,322 5,625 6,081 6,322 6,158 6,291 59Individual and others3................................................. 138,199 154,173 177,492' 165,687 171,913 177,492 182,762 188,618 60 1- to 4-family ......................................................... 72,115 82,567 96,037' 89,345 92,580 96,037 98,930 102,287 61 Multifamily ............................................................. 20,538 21,393 23,436' 22,094 22,921 23,436 23,975 24,614 62 Commerical ............................................................. 21,820 22,837 24,941' 23,770 24,447 24,941 25,513 25,933 63 Farm....................................................................... 23,726 27,376 33,078' 30,478 31,965 33,078 34,344 35,784 1. Includes loans held by nondeposit trust companies but not bank trust depart­ Note. Based on data from various institutional and governmental sources, with ments. some quarters estimated in part by the Federal Reserve in conjunction with the 2.Outstanding principal balances of mortgages backing securities insured or Federal Home Loan Bank Board and the Department of Commerce. Separation guaranteed by the agency indicated. of nonfarm mortgage debt by type of property, if not reported directly, and in­ 3.Other holders include mortgage companies, real estate investment trusts, state terpolations and extrapolations when required, are estimated mainly by the Federal and local credit agencies, state and local retirement funds, noninsured pension Reserve. Multifamily debt refers to loans on structures of five or more units. funds, credit unions, and U.S. agencies for which amounts are small or separate data are not readily available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Financial Statistics □ August 1980 1.57 CONSUMER INSTALLMENT CREDIT* Total Outstanding, and Net Change Millions of dollars 1980 Holder, and type of credit 1977 1978 Apr. May Amounts outstanding (end of period) 1 Total .................................. 311,122 311,122 308,984 308,190 307,621 306,131 303,759 301,378 By major holder 2 Commercial banks .... 112,373 136,189 149,604 149,604 148,868 148,249 147,315 145,405 143,174 140,922 3 Finance companies .... 44,868 54,298 68,318 68,318 68,724 69,545 70,421 71,545 72,101 73,118 4 Credit unions ............ 37,605 45,939 48,186 48,186 47,270 46,707 46,521 45,731 44,907 43,740 5 Retailers2 ................... 23,490 24,876 27,916 27,916 26,985 26,309 25,841 25,746 25,792 25,724 6 Savings and loans....... 7,354 8,394 10,361 10,361 10,320 10,543 10,755 10,887 10,930 10,995 7 Gasoline companies ... 2,963 3,240 4,316 4,316 4,433 4,467 4,421 4,503 4,581 4,664 8 Mutual savings banks .. 2,176 2,693 2,421 2,421 2,384 2,370 2,347 2,314 2,274 2,215 By major type of credit 9 Automobile ............... 82,911 102,468 115,022 115,022 114,761 115,007 115,281 115,014 114,318 113,174 10 Commercial banks .. 49,577 60,564 65,229 65,229 64,824 64,544 64,047 62,978 61,928 60,584 11 Indirect paper 27,379 33,850 37,209 37,209 37,020 36,949 36,821 36,325 35,791 34,929 12 Direct loans......... 22,198 26,714 28,020 28,020 27,804 27,595 27,226 26,653 26,137 25.655 13 Credit unions.......... 18,099 21,967 23,042 23,042 22,604 22,335 22,246 21,868 21,474 20,916 14 Finance companies .. 15,235 19,937 26,751 26,751 27,333 28,128 28,988 30,168 30,916 31,674 15 Revolving................... 39,274 47,051 55,330 55,330 54,420 53,522 52,662 52,217 51,823 51,246 16 Commercial banks .. 18,374 24,434 28,954 28,954 28,841 28,575 28,241 27,889 27,456 26,926 17 Retailers................. 17,937 19,377 22,060 22,060 21,146 20,480 20,000 19,825 19,786 19.656 18 Gasoline companies . 2,963 3,240 4,316 4,316 4,433 4,467 4,421 4,503 4,581 4,664 19 Mobile home .............. 15,141 16,042 17,409 17,409 17,387 17,476 17,596 17,668 17,642 17,779 20 Commercial banks .. 9,124 9,553 9,991 9,991 9,968 9,974 9,978 9,965 9,927 10,039 21 Finance companies .. 3,077 3,152 3,390 3,390 3,415 3,428 3,475 3,523 3,529 3,544 22 Savings and loans ... 2,538 2,848 3,516 3,516 3,502 3,578 3,650 3,694 3,709 3,731 23 Credit unions.......... 402 489 512 512 502 496 494 486 477 465 24 Other ........................ 93,503 110,068 123,361 123,361 122,416 122,185 122,082 121,232 119,976 119,179 25 Commercial banks .. 35,298 41,638 45,430 45,430 45,235 45,156 45,049 44,573 43,863 43,373 26 Finance companies .. 26,556 31,209 38,177 38,177 37,976 37,989 37,958 37,854 37,656 37,900 27 Credit unions.......... 19,104 23,483 24,632 24,632 24,164 23,876 23,781 23,377 22,956 22,359 28 Retailers................. 5,553 5,499 5,856 5,856 5,839 5,829 5,841 5,921 6,006 6,068 29 Savings and loans ... 4,816 5,546 6,845 6,845 6,818 6,965 7,106 7,193 7,221 7,264 30 Mutual savings banks 2,176 2,693 2,421 2,421 2,384 2,370 2,347 2,314 2,274 2,215 Net change (during period)3 31 Total .................................................. 35,278 44,810 35,491 1,349 1,372 2,295 1,437 -1,985 -3,434 -3,463 By major holder 32 Commercial banks .............................. 18,645 23,813 13,414 218 433 783 17 -2,237 -2,495 -2,659 33 Finance companies.............................. 5,948 9,430 14,020 1,087 1,096 1,376 1,174 984 105 625 34 Credit unions .................................... 6,436 8,334 2,247 -455 -324 -373 -215 -743 -977 -1,362 35 Retailers2 ........................................... 2,654 1,386 3,040 282 120 53 243 -65 -58 -108 36 Savings and loans............................... 1,111 1,041 1,967 165 7 306 204 83 75 89 37 Gasoline companies ............................ 132 276 1,076 115 50 166 48 14 -42 8 38 Mutual savings banks.......................... 352 530 -273 -63 -10 -16 -34 -21 -42 -56 By major type of credit 39 Automobile ........................................ 15,204 19,557 12,554 682 972 881 395 -645 -1,343 -1,738 40 Commercial banks .......................... 9,956 10,987 4,665 122 83 22 -412 -1,335 -1,246 -1,519 41 Indirect paper ............................. 5,307 6,471 3,359 260 72 48 -86 -698 -626 -945 42 Direct loans................................. 4,649 4,516 1,306 -138 11 -26 -326 -637 -620 -574 43 Credit unions................................... 2,861 3,868 1,075 -213 -134 -177 -82 -373 -482 -660 44 Finance companies.......................... 2,387 4,702 6,814 773 1,023 1,036 889 1,063 385 441 45 Revolving........................................... 6,248 7,776 8,279 432 289 575 611 -388 -488 -748 46 Commercial banks .......................... 4,015 6,060 4,520 24 109 383 395 -260 -308 -562 47 Retailers......................................... 2,101 1,440 2,683 293 130 26 168 -142 -138 -194 48 Gasoline companies ........................ 132 276 1,076 115 50 166 48 14 -42 8 49 Mobile home...................................... 565 897 1,366 108 120 198 128 36 -33 97 50 Commercial banks .......................... 387 426 437 -22 68 57 17 -30 -54 74 51 Finance companies .......................... -189 74 238 84 48 32 57 41 5 13 52 Savings and loans............................ 297 310 668 51 10 115 57 33 23 23 53 Credit unions................................... 70 87 23 -5 -6 -6 -3 -8 -7 -13 54 Other ................................................ 13,261 16,580 13,292 127 -9 641 303 -988 -1,570 -1,074 55 Commercial banks .......................... 4,287 6,340 3,792 94 173 321 17 -612 -887 -652 56 Finance companies.......................... 3,750 4,654 6,968 230 25 308 228 -120 -285 171 57 Credit unions................................... 3,505 4,379 1,149 -237 -184 -190 -130 -362 -488 -689 58 Retailers......................................... 553 -54 357 -11 -10 27 75 77 80 86 59 Savings and loans............................ 814 731 1,299 114 -3 191 147 50 52 66 60 Mutual savings banks....................... 352 530 -273 -63 -10 -16 -34 -21 -42 -56 1. The Board’s series cover most short- and intermediate-term credit extended Note. Total consumer noninstallment credit outstanding—credit scheduled to to individuals through regular business channels, usually to finance the purchase be repaid in a lump sum, including single-payment loans, charge accounts, and of consumer goods and services or to refinance debts incurred for such purposes, service credit—amounted to $70.9 billion at the end of 1979, $64.7 billion at the and scheduled to be repaid (or with the option of repayment) in two or more end of 1978, $58.6 billion at the end of 1977, and $55.4 billion at the end of 1976. installments. 2. Includes auto dealers and excludes 30-day charge credit held by travel and entertainment companies. 3. Net change equals extensions minus liquidations (repayments, charge-offs, and other credit); 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; monthly data are seasonally adjusted. 1979 1980 Holder, and type of credit 1977 1978 1979 Dec. Jan. Feb. Mar. Apr. May June Extensions 1 Total .................................................................... 254,071 298,351 322,558 25,671 26,702 27,076 26,620 22,548 21,239 20,698 By major holder 2 Commercial banks ............................................... 117,896 142,720 149,599 11,370 12,126 12,004 11,315 9,338 8,812 8,574 3 Finance companies............................................... 41,989 50,505 61,518 5,249 5,540 5,639 5,700 4,841 4,304 4,324 4 Credit unions ...................................................... 34,028 40,023 36,778 2,396 2,527 2,495 2,501 1,865 1,615 1,302 5 Retailers1 ............................................................. 39,133 41,619 46,092 4,054 4,010 4,042 4,358 3,870 3,880 3,881 6 Savings and loans................................................. 4,485 5,050 7,333 632 485 775 665 555 536 576 7 Gasoline companies............................................. 14,617 16,125 19,607 1,895 1,889 2,004 1,987 1,978 2,011 1,971 8 Mutual savings banks .......................................... 1,923 2,309 1,631 75 125 117 94 101 81 70 By major type of credit 9 Automobile ......................................................... 75,641 88,987 91,847 7,131 7,780 7,659 7,240 5,725 5,192 4,770 10 Commercial banks ........................................... 46,363 53,028 50,596 3,808 4,026 3,936 3,394 2,398 2,354 2,160 11 Indirect paper............................................... 25,149 29,336 28,183 2,181 2,154 2,096 1,978 1,433 1,353 1,092 12 Direct loans.................................................. 21,214 23,692 22,413 1,627 1,872 1,840 1,416 965 1,001 1,068 13 Credit unions .................................................. 16,616 19,486 18,301 1,223 1,348 1,338 1,306 962 838 708 14 Finance companies........................................... 12,662 16,473 22,950 2,100 2,406 2,385 2,540 2,365 2,000 1,902 15 Revolving ........................................................... 86,756 104,587 120,728 10,196 10,475 10,458 11,038 10,293 10,089 9,635 16 Commercial banks ........................................... 38,256 51,531 60,406 4,683 5,030 4,920 5,200 4,929 4,745 4,342 17 Retailers ......................................................... 33,883 36,931 40,715 3,618 3,556 3,534 3,851 3,386 3,333 3,322 18 Gasoline companies.......................................... 14,617 16,125 19,607 1,895 1,889 2,004 1,987 1,978 2,011 1,971 19 Mobile home....................................................... 5,425 6,067 6,395 490 558 597 506 436 324 464 20 Commercial banks ........................................... 3,466 3,704 3,720 245 351 304 263 220 166 302 21 Finance companies........................................... 643 886 797 97 87 80 90 84 52 53 22 Savings and loans............................................. 1,120 1,239 1,687 140 112 207 143 128 103 110 23 Credit unions .................................................. 196 238 191 8 8 6 10 4 3 -1 24 Other .................................................................. 86,249 98,710 103,588 7,854 7,889 8,362 7,836 6,094 5,634 5,829 25 Commercial banks ........................................... 29,811 34,457 34,877 2,634 2,719 2,844 2,458 1,791 1,547 1,770 26 Finance companies........................................... 28,684 33,146 37,771 3,052 3,047 3,174 3,070 2,392 2,252 2,369 27 Credit unions .................................................. 17,216 20,299 18,286 1,165 1,171 1,151 1,185 899 774 595 28 Retailers ......................................................... 5,250 4,688 5,377 436 454 508 507 484 547 559 29 Savings and loans............................................. 3,365 3,811 5,646 492 373 568 522 427 433 466 30 Mutual savings banks ...................................... 1,923 2,309 1,631 75 125 117 94 101 81 70 Liquidations 31 Total .................................................................... 218,793 253,541 287,067 24,322 25,330 24,781 25,183 24,533 24,673 24,161 By major holder 32 Commercial banks ............................................... 99,251 118,907 136,185 11,152 11,693 11,221 11,298 11,575 11,307 11,233 33 Finance companies............................................... 36,041 41,075 47,498 4,162 4,444 4,263 4,526 3,857 4,199 3,699 34 Credit unions ...................................................... 27,592 31,689 34,531 2,851 2,851 2,868 2,716 2,608 2,592 2,664 35 Retailers1 ............................................................. 36,479 40,233 43,052 3,772 3,890 3,989 4,115 3,935 3,938 3,989 36 Savings and loans................................................. 3,374 4,009 5,366 467 478 469 461 472 461 487 37 Gasoline companies............................................. 14,485 15,849 18,531 1,780 1,839 1,838 1,939 1,964 2,053 1,963 38 Mutual savings banks .......................................... 1,571 1,779 1,904 138 135 133 128 122 123 126 By major type of credit 39 Automobile ......................................................... 60,437 69,430 79,293 6,449 6,808 6,778 6,845 6,370 6,535 6,508 40 Commercial banks ........................................... 36,407 42,041 45,931 3,686 3,943 3,914 3,806 3,733 3,600 3,679 41 Indirect paper............................................... 19,842 22,865 24,824 1,921 2,082 2,048 2,064 2,131 1,979 2,037 42 Direct loans.................................................. 16,565 19,176 21,107 1,765 1,861 1,866 1,742 1,602 1,621 1,642 43 Credit unions .................................................. 13,755 15,618 17,226 1,436 1,482 1,515 1,388 1,335 1,320 1,368 44 Finance companies........................................... 10,275 11,771 16,136 1,327 1,383 1,349 1,651 1,302 1,615 1,461 45 Revolving ........................................................... 80,508 96,811 112,449 9,764 10,186 9,883 10,427 10,681 10,577 10,383 46 Commercial banks ........................................... 34,241 45,471 55,886 4,659 4,921 4,537 4,805 5,189 5,053 4,904 47 Retailers ......................................................... 31,782 35,491 38,032 3,325 3,426 3,508 3,683 3,528 3,471 3,516 48 Gasoline companies.......................................... 14,485 15,849 18,531 1,780 1,839 1,838 1,939 1,964 2,053 1,963 49 Mobile home....................................................... 4,860 5,170 5,029 382 438 399 378 400 357 367 50 Commercial banks ........................................... 3,079 3,278 3,283 267 283 247 246 250 220 228 51 Finance companies........................................... 832 812 559 13 39 48 33 43 47 40 52 Savings and loans............................................. 823 929 1,019 89 102 92 86 95 80 87 53 Credit unions .................................................. 126 151 168 13 14 12 13 12 10 12 54 Other .................................................................. 72,988 82,130 90,296 7,727 7,898 7,721 7,533 7,082 7,204 6,903 55 Commercial banks ........................................... 25,524 28,117 31,085 2,540 2,546 2,523 2,441 2,403 2,434 2,422 56 Finance companies........................................... 24,934 28,492 30,803 2,822 3,022 2,866 2,842 2,512 2,537 2,198 57 Credit unions .................................................. 13,711 15,920 17,137 1,402 1,355 1,341 1,315 1,261 1,262 1,284 58 Retailers ......................................................... 4,697 4,742 5,020 447 464 481 432 407 467 473 59 Savings and loans............................................. 2,551 3,080 4,347 378 376 377 375 377 381 400 60 Mutual savings banks ...................................... 1,571 1,779 1,904 138 135 133 128 122 123 126 1. 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 Financial Statistics □ August 1980 1.59 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1977 1978 1979 Transaction category, sector 1974 1975 1976 1977 1978 1979 HI H2 HI H2 HI H2 Nonfinancial sectors 1Total funds raised............................................................... 191.3 210.8 271.9 338.5 400.3 395.2 298.1 378.9 384.5 416.1 383.2 408.5 2 Excluding equities ............................................... 187.4 200.7 261.1 335.4 398.2 390.9 296.9 373.8 387.1 409.3 380.5 402.5 By sector and instrument 3 U.S. government ................................................ 11.8 85.4 69.0 56.8 53.7 37.4 46.1 67.4 61.4 46.0 27.3 47.4 4 Treasury securities........................................... 12.0 85.8 69.1 57.6 55.1 38.8 46.7 68.6 62.3 47.9 29.6 47.9 5 Agency issues and mortgages............................ -.2 -.4 -.1 -.9 -1.4 -1.4 -.6 -1.2 -.9 -1.9 -2.3 -.5 6 All other nonfinancial sectors ............................. 179.5 125.4 202.9 281.8 346.6 357.9 252.0 311.5 323.1 370.2 355.9 361.2 7 Corporate equities ........................................... 3.8 10.1 10.8 3.1 2.1 4.4 1.2 5.1 -2.6 6.8 2.7 6.0 8 Debt instruments ............................................. 175.6 115.3 192.0 278.6 344.5 353.5 250.8 306.4 325.7 363.4 353.2 355.2 9 Private domestic nonfinancial sectors............... 164.1 112.1 182.0 267.9 314.4 335.9 241.5 294.2 302.5 326.3 340.2 333.1 10 Corporate equities ........................................ 4.1 9.9 10.5 2.7 2.6 3.5 .5 4.9 -1.8 7.0 2.8 4.1 11 Debt instruments .......................................... 160.0 102.1 171.5 265.1 311.8 332.4 241.0 289.3 304.3 319.2 337.4 329.0 12 Debt capital instruments............................ 98.0 98.4 123.5 175.6 196.6 201.9 158.7 192.5 188.0 205.1 202.6 201.5 13 State and local obligations ..................... 16.5 16.1 15.7 23.7 28.3 21.4 22.3 25.0 27.8 28.7 17.4 25.3 14 Corporate bonds.................................... 19.7 27.2 22.8 21.0 20.1 21.2 16.6 25.4 20.6 19.6 23.2 19.4 15 Home ................................................ 34.8 39.5 63.7 96.4 104.5 110.2 89.7 103.1 99.8 109.2 111.0 109.4 16 Multifamily residential ...................... 6.9 * 1.8 7.4 10.2 8.9 6.4 8.4 9.3 11.2 8.1 9.8 17 Commercial ........................................ 15.1 11.0 13.4 18.4 23.3 25.2 14.8 21.9 21.2 25.4 25.7 24.7 18 Farm .................................................. 5.0 4.6 6.1 8.8 10.2 15.0 9.0 8.7 9.3 11.1 17.1 13.0 19 Other debt instruments............................. 62.0 3.8 48.0 89.5 115.2 130.5 82.3 96.7 116.3 114.1 134.8 127.4 20 Consumer credit .................................... 9.9 9.7 25.6 40.6 50.6 42.3 36.6 44.5 50.1 51.0 47.3 37.2 21 Bank loans n.e.c..................................... 31.7 -12.3 4.0 27.0 37.3 50.0 27.3 26.7 43.1 31.4 47.7 53.5 22 Open market paper ..................... ....... 6.6 -2.6 4.0 2.9 5.2 10.9 3.4 2.4 5.3 5.1 10.8 10.9 23 Other .................................................... 13.7 9.0 14.4 19.0 22.2 27.3 14.9 23.2 17.8 26.5 29.0 25.8 24 By borrowing sector .................................... 164.1 112.1 182.0 267.9 314.4 335.9 241.5 294.2 302.5 326.3 340.2 333.1 25 State and local governments...................... 15.5 13.7 15.2 20.4 23.6 18.0 15.7 25.0 21.0 26.1 14.4 21.6 26 Households ............................................... 51.2 49.5 90.7 139.9 162.6 164.2 129.4 150.4 156.1 169.1 167.7 160.5 27 Farm ......................................................... 8.0 8.8 10.9 14.7 18.1 24.6 15.7 13.8 15.3 20.8 23.4 25.8 28 Nonfarm noncorporate ............................. 7.7 2.0 5.4 12.5 15.4 15.5 13.4 12.5 16.3 14.5 15.0 16.1 29 Corporate ................................................ 81.7 38.1 59.8 80.3 94.7 113.6 67.3 92.4 93.7 95.8 119.6 109.2 30 Foreign............................................................ 15.4 13.3 20.8 13.9 32.3 22.0 10.5 17.3 20.6 43.9 15.7 28.1 31 Corporate equities ........................................ -.2 .2 .3 .4 -.5 .9 .6 .2 -.8 -.2 -.1 1.9 32 Debt instruments ......................................... 15.7 13.2 20.5 13.5 32.8 21.1 9.9 17.1 21.4 44.1 15.8 26.2 33 Bonds ....................................................... 2.1 6.2 8.6 5.1 4.0 4.1 4.4 5.7 5.0 3.0 3.5 4.7 34 Bank loans n.e.c......................................... 4.7 3.9 6.8 3.1 18.3 2.9 -.4 6.5 9.3 27.3 3.1 2.3 35 Open market paper ................................... 7.3 .3 1.9 2.4 6.6 11.2 2.7 2.2 3.6 9.6 6.1 16.3 36 U.S. government loans ............................. 1.6 2.8 3.3 3.0 3.9 3.0 3.1 2.9 3.6 4.2 3.1 2.8 Financial sectors 37Total funds raised............................................................... 39.2 12.7 24.1 54.0 81.4 86.2 47.7 60.3 80.7 82.1 87.9 84.5 By instrument 38U.S. government related .................................... 23.1 13.5 18.6 26.3 41.4 52.4 22.6 29.9 38.5 44.3 45.9 58.9 39 Sponsored credit agency securities ................... 16.6 2.3 3.3 7.0 23.1 24.3 7.1 6.8 21.9 24.3 21.7 26.8 40 Mortgage pool securities................................... 5.8 10.3 15.7 20.5 18.3 28.1 17.9 23.1 16.6 20.1 24.2 32.0 41 Loans from U.S. government .......................... .7 .9 -.4 -1.2 0 0 -2.3 0 0 0 0 0 42Private financial sectors ...................................... 16.2 -.8 5.5 27.7 40.0 33.8 25.1 30.4 42.2 37.8 41.9 25.7 43 Corporate equities ........................................... .3 .6 1.0 .9 1.7 .9 .9 .8 2.2 1.1 2.7 -1.0 44 Debt instruments ............................................. 15.9 -1.4 4.4 26.9 38.3 32.9 24.2 29.6 40.0 36.7 39.2 26.7 45 Corporate bonds........................................... 2.1 2.9 5.8 10.1 7.5 6.9 10.2 10.1 8.5 6.4 8.9 5.0 46 Mortgages .................................................... -1.3 2.3 2.1 3.1 .9 -1.2 3.1 3.0 2.1 -.3 -.4 -1.9 47 Bank loans n.e.c............................................ 4.6 -3.7 -3.7 -.3 2.8 -.4 -1.8 1.2 2.5 3.1 -1.4 .5 48 Open market paper and repurchase 3.8 1.1 2.2 9.6 14.6 18.4 9.8 9.5 13.5 15.7 24.4 12.4 49 Loans from Federal Home Loan Banks......... 6.7 -4.0 -2.0 4.3 12.5 9.2 2.9 5.8 13.2 11.8 7.7 10.6 By sector 50Sponsored credit agencies.................................... 17.3 3.2 2.6 5.8 23.1 24.3 4.7 6.8 21.9 24.3 21.7 26.8 51Mortgage pools.................................................... 5.8 10.3 15.7 20.5 18.3 28.1 17.9 23.1 16.6 20.1 24.2 32.0 52Private financial sectors ...................................... 16.2 -.8 5.5 27.7 40.0 33.8 25.1 30.4 42.2 37.8 41.9 25.7 53 Commercial banks ........................................... 1.2 1.2 2.3 1.1 1.3 1.6 .8 1.5 1.5 1.1 1.3 1.8 54 Bank affiliates.................................................. 3.5 .3 -.8 1.3 6.7 4.5 1.3 1.2 5.8 7.6 6.2 2.9 55 Savings and loan associations............................ 4.8 -2.3 .1 9.9 14.3 9.8 8.3 11.5 16.4 12.2 9.9 9.7 56 Other insurance companies ............................. .9 1.0 .9 .9 1.1 1.0 .9 1.0 1.0 1.1 1.0 .9 57 Finance companies........................................... 6.0 .5 6.4 17.6 18.6 19.2 16.7 18.5 18.9 18.2 24.3 14.2 58 REITs ............................................................ .6 -1.4 -2.4 -2.2 -1.0 -.2 -2.4 -2.0 -1.0 -1.0 -.5 .1 59 Open-end investment companies...................... -.7 -.1 -1.0 -.9 -1.0 -2.1 -.6 -1.3 -.5 -1.5 -.3 -3.9 All sectors 60Total funds raised, by instrument................................ 230.5 223.5 296.0 392.5 481.7 481.4 345.8 439.2 465.2 498.3 471.0 493.1 61 Investment company shares ................................. -.7 -.1 -1.0 -.9 -1.0 -2.1 -.6 -1.3 -.5 -1.5 -.3 -.3.9 62Other corporate equities...................................... 4.8 10.8 12.9 4.9 4.7 7.3 2.6 7.2 .1 9.4 5.7 8.9 63Debt instruments ................................................ 226.4 212.8 284.1 388.5 478.0 476.2 343.8 433.3 465.5 490.4 465.6 488.1 64 U.S. government securities ............................. 34.3 98.2 88.1 84.3 95.2 89.9 71.2 97.4 100.0 90.4 73.4 106.3 65 State and local obligations ............................... 16.5 16.1 15.7 23.7 28.3 21.4 22.3 25.0 27.8 28.7 17.4 25.3 66 Corporate and foreign bonds............................ 23.9 36.4 37.2 36.1 31.6 32.2 31.2 41.1 34.2 29.1 35.5 29.1 67 Mortgages ....................................................... 60.5 57.2 87.1 134.0 149.0 158.1 122.9 145.1 141.6 156.4 161.4 154.8 68 Consumer credit ............................................... 9.9 9.7 25.6 40.6 50.6 42.3 36.6 44.5 50.1 51.0 47.3 37.2 69 Bank loans n.e.c................................................ 41.0 -12.2 7.0 29.8 58.4 52.5 25.1 34.4 54.9 61.8 49.5 56.3 70 Open market paper and RPs............................ 17.7 -1.2 8.1 15.0 26.4 40.5 15.9 14.0 22.4 30.4 41.3 39.7 71 Other loans ...................................................... 22.7 8.7 15.3 25.2 38.6 39.5 18.5 31.8 34.6 42.5 39.8 39.2 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 1977 1978 1979 Transaction category, or sector 1974 1975 1976 1977 1978 1979 HI H2 HI H2 HI H2 1 Total funds advanced in credit markets to nonfinancial sectors ................................................................ 187.4 200.7 261.1 355.4 398.2 390.9 296.9 373.8 387.1 409.3 380.5 402.5 By public agencies and foreign 2 Total net advances...................................................... 53.7 44.6 54.3 85.1 109.7 80.3 66.1 104.2 102.8 116.6 43.6 117.6 3 U.S. government securities .................................... 11.9 22.5 26.8 40.2 43.9 2.2 27.1 53.3 43.7 44.0 -27.5 32.1 4 Residential mortgages ............................................. 14.7 16.2 12.8 20.4 26.5 36.1 18.9 22.0 22.2 30.7 33.7 38.5 5 FHLB advances to savings and loans...................... 6.7 -4.0 -2.0 4.3 12.5 9.2 2.9 5.8 13.2 11.8 7.7 10.6 6 Other loans and securities ...................................... 20.5 9.8 16.6 20.2 26.9 32.8 17.2 23.1 23.7 30.1 29.7 36.4 Total advanced, by sector 7 U.S. government ....................................................... 9.8 15.1 8.9 11.8 20.4 22.6 5.9 17.8 19.4 21.4 24.3 20.9 8 Sponsored credit agencies .......................................... 26.5 14.8 20.3 26.8 44.6 57.7 21.6 32.0 39.4 49.8 50.6 64.9 9 Monetary authorities .................................................. 6.2 8.5 9.8 7.1 7.0 7.7 10.2 4.0 13.4 .5 -.8 16.4 10 Foreign ..................................................................... 11.2 6.1 15.2 39.4 37.7 -7.7 28.3 50.4 30.6 44.9 -30.4 15.4 11 Agency borrowing not included in line 1 ..................... 23.1 13.5 18.6 26.3 41.4 52.4 22.6 29.9 38.5 44.3 45.9 58.9 Private domestic funds advanced 12 Total net advances...................................................... 156.8 169.7 225.4 276.5 330.0 363.0 253.5 299.6 322.8 337.1 382.8 343.8 13 U.S. government securities .................................... 22.4 75.7 61.3 44.1 51.3 87.6 44.1 44.1 56.3 46.4 100.9 74.2 14 State and local obligations ...................................... 16.5 16.1 15.7 23.7 28.3 21.4 22.3 25.0 27.8 28.7 17.4 25.3 15 Corporate and foreign bonds................................... 20.9 32.8 30.5 22.5 22.5 25.8 18.0 27.0 24.1 20.9 28.3 23.6 16 Residential mortgages ............................................. 26.9 23.2 52.7 83.3 88.2 82.9 77.1 89.4 86.7 89.6 85.3 80.5 17 Other mortgages and loans .................................... 76.8 17.9 63.3 107.3 152.2 154.4 94.9 119.7 141.1 163.3 158.6 150.7 18 Less: Federal Home Loan Bank advances.............. 6.7 -4.0 -2.0 4.3 12.5 9.2 2.9 5.8 13.2 11.8 7.7 10.6 Private financial intermediation 19 Credit market funds advanced by private financial institutions ........................................................... 125.5 122.5 190.3 255.9 296.9 293.0 249.1 265.0 301.7 292.0 314.4 272.9 20 Commercial banking ............................................... 66.6 29.4 59.6 87.6 128.7 121.1 84.6 90.7 132.5 125.0 128.7 115.0 21 Savings institutions ................................................. 24.2 53.5 70.8 82.0 75.9 54.6 81.4 82.6 75.8 75.9 57.8 51.4 22 Insurance and pension funds ................................... 29.8 40.6 49.9 67.9 73.5 72.9 65.2 70.6 76.9 70.2 75.4 70.5 23 Other finance ......................................................... 4.8 -1.0 10.0 18.4 18.7 44.3 18.0 21.2 16.6 20.8 52.5 36.1 24 Sources of funds......................................................... 125.5 122.5 190.3 255.9 296.9 293.0 249.1 265.0 301.7 292.0 314.4 272.9 25 Private domestic deposits ........................................ 67.5 92.0 124.6 141.2 142.5 135.5 138.6 143.8 138.3 146.7 118.4 152.0 26 Credit market borrowing ........................................ 15.9 -1.4 4.4 26.9 38.3 32.9 24.2 29.6 40.0 36.7 39.2 26.7 27 Other sources ......................................................... 42.1 32.0 61.3 87.8 116.0 124.5 86.2 91.7 123.5 108.6 156.8 94.3 28 Foreign funds ...................................................... 10.3 -8.7 -4.6 1.2 6.3 26.3 1.6 .8 5.7 6.9 53.2 -.6 29 Treasury balances ............................................... -5.1 -1.7 -.1 4.3 6.8 .4 .1 8.5 1.9 11.6 5.5 -4.7 30 Insurance and pension reserves............................ 26.2 29.7 34.5 49.4 62.7 54.0 45.3 53.4 66.2 59.2 55.9 52.1 31 Other, net ........................................................... 10.6 12.7 31.4 32.9 40.3 43.8 39.3 29.0 49.6 31.0 42.2 47.4 Private domestic nonfinancial investors 32 Direct lending in credit markets................................. 47.2 45.8 39.5 47.5 71.4 102.9 28.6 64.1 61.1 81.7 107.6 97.5 33 U.S. government securities .................................... 18.9 24.1 16.1 23.0 33.2 56.2 11.9 34.2 32.1 34.4 64.4 47.5 34 State and local obligations...................................... 9.3 8.4 3.8 2.6 4.5 * -.5 5.7 7.0 2.0 * -.1 35 Corporate and foreign bonds................................... 5.1 8.4 5.8 -3.3 -1.4 9.3 -.1 -6.5 -3.7 1.0 8.2 10.6 36 Commercial paper .................................................. 5.8 -1.3 1.9 9.5 16.3 10.7 8.2 10.8 8.2 24.4 10.4 10.6 37 Other ..................................................................... 8.0 6.2 11.8 15.7 18.7 26.7 9.2 19.9 17.5 20.0 24.6 28.9 38 Deposits and currency................................................. 73.8 98.1 131.9 149.5 151.8 143.5 144.5 154.5 148.7 154.8 128.4 157.9 39 Security RPs ........................................................... -2.2 .2 2.3 2.2 7.5 6.6 4.3 .2 9.8 5.1 18.5 -5.3 40 Money market fund shares...................................... 2.4 1.3 * .2 6.9 34.4 -.5 .9 6.1 7.7 30.2 38.6 41 Time and savings accounts...................................... 65.4 84.0 113.5 121.0 115.2 83.3 115.3 126.7 110.7 119.8 73.7 92.6 42 Large at commercial banks ................................. 18.4 -14.3 -13.6 9.0 10.8 -.7 -4.5 22.6 10.1 11.4 -25.5 24.2 43 Other at commercial banks ................................. 25.3 38.8 57.9 43.0 43.3 39.3 47.5 38.4 42.1 44.5 43.7 34.7 44 At savings institutions.......................................... 21.8 59.4 69.1 69.0 61.1 44.7 72.3 65.7 58.5 63.8 55.5 33.7 45 Money .................................................................... 8.2 12.6 16.1 26.1 22.2 19.1 25.4 26.8 22.1 22.3 6.0 32.0 46 Demand deposits ................................................. 1.9 6.4 8.8 17.8 12.9 11.2 19.6 16.1 11.6 14.2 -4.0 26.1 47 Currency ............................................................. 6.3 6.2 7.3 8.3 9.3 7.9 5.8 10.8 10.5 8.1 10.0 5.9 48 Total of credit market instruments, deposits and currency .............................................................. 121.0 143.9 171.4 197.0 223.2 246.4 173.1 218.6 209.8 236.6 236.0 255.4 49 Public support rate (in percent) ............................. 28.7 22.2 20.8 25.4 27.5 20.5 22.2 27.9 26.5 28.5 11.5 29.2 50 Private financial intermediation (in percent) .......... 80.0 72.2 84.4 92.5 90.0 80.7 98.2 88.5 93.5 86.6 82.1 79.4 51 Total foreign funds ................................................ 21.5 -2.6 10.6 40.5 44.0 18.7 29.9 51.2 36.3 51.8 22.8 14.9 Memo: Corporate equities not included above 52 Total net issues........................................................... 4.1 10.7 11.9 4.0 3.7 5.2 2.1 5.9 -.4 7.9 5.4 5.0 53 Mutual fund shares ................................................ -.7 -.1 -1.0 -.9 -1.0 .-2.1 -.6 -1.3 -.5 -1.5 -.3 -3.9 54 Other equities......................................................... 4.8 10.8 12.9 4.9 4.7 7.3 2.6 7.2 .1 9.4 5.7 8.9 55 Acquisitions by financial institutions .......................... 5.8 9.6 12.3 7.4 7.6 16.6 6.8 8.1 .4 14.7 14.5 18.7 56 Other net purchases .................................................. -1.7 1.1 -.4 -3.4 -3.8 -11.4 -4.7 -2.2 -.8 -6.8 -9.1 -13.6 Notes by line number. 30. Excludes net investment of these reserves in corporate equities. 1. Line 2 of p. A-44. 31. Mainly retained earnings and net miscellaneous liabilities. 2. Sum of lines 3-6 or 7-10. 32. Line 12 less line 19 plus line 26. 6. Includes farm and commercial mortgages. 33-37. Lines 13-17 less amounts acquired by private finance. Line 37 includes 11. Credit market funds raised by federally sponsored credit agencies, and net mortgages. issues of federally related mortgage pool securities. Included below in lines 47. Mainly an offset to line 9. 3, 13, 33. 48. Lines 32 plus 38, or line 12 less line 27 plus 45. 12. Line 1 less line 2 plus line 11. Also line 19 less line 26 plus line 32. Also sum 49. Line 2/line 1. of lines 27, 32, 39, 40, 41, and 46. 50. Line 19/line 12. 17. Includes farm and commercial mortgages. 51. Sum of lines 10 and 28. 25. Sum of lines 39, 40, 41, and 46. 52. 54. Includes issues by financial institutions. 26. Excludes equity issues and investment company shares. Includes line 18. Note. Full statements for sectors and transaction types quarterly, and annually 28. Foreign deposits at commercial banks, bank borrowings from foreign branches, for flows and for amounts outstanding, may be obtained from Flow of Funds and liabilities of foreign banking agencies to foreign affiliates. Section, Division of Research and Statistics, Board of Governors of the Federal 29. Demand deposits at commercial banks. Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics □ August 1980 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1979 1980 Measure 1977 1978 1979 Dec. Jan. Feb. Mar. Apr. May June? July* 1 Industrial production1.................................................. 138.2 146.1 152.2 152.2 152.6 152.3 151.7 148.2 144.3 141.0 138.8 Market groupings 2 Products, total ............................................................. 137.9 144.8 149.7 149.7 150.0 149.9 149.3 146.4 143.8 141.7 140.0 3 Final, total .............................................................. 135.9 142.2 147.0 147.0 147.0 147.4 147.1 145.1 143.1 141.2 139.6 4 Consumer goods .................................................. 145.3 149.1 150.5 148.5 148.2 148.5 147.8 144.8 142.4 141.0 139.4 5 Equipment ........................................................... 123.0 132.8 142.2 145.0 145.4 146.0 146.1 145.4 143.9 141.5 139.9 6 Intermediate ............................................................. 145.1 154.1 160.0 159.9 160.8 159.3 157.7 151.4 146.7 143.4 141.7 7 Materials ..................................................................... 138.6 148.3 156.0 156.2 156.7 155.9 155.4 151.1 145.0 139.9 137.0 Industry groupings 8 Manufacturing ............................................................. 138.4 146.8 153.2 152.8 153.4 152.7 151.9 147.9 143.5 139.8 137.2 Capacity utilization (percent)1-2 9 Manufacturing ......................................................... 81.9 84.4 85.7 84.3 84.4 83.8 83.1 80.7 78.1 75.8 74.2 10 Industrial materials industries ................................... 82.7 85.6 87.2 87.2 86.0 85.4 84.9 82.3 78.7 75.7 74.0 11 Construction contracts3 .............................................. 160.5 174.3 183.0 183.0 190.0 171.0 155.0 130.0 125.0 145.0 n.a. 12 Nonagricultural employment, total4............................. 125.3 131.4 136.0 137.8 138.3 138.6 138.5 138.2 137.5' 136.7' 136.4 13 Goods-producing, total............................................. 104.5 109.8 114.0 114.1 114.6 114.2 113.6 112.1 110.5' 109.0' 107.6 14 Manufacturing, total ............................................. 101.2 105.3 107.9 107.9 107.8 107.8 107.7 106.1 104.3' 102.8' 101.5 15 Manufacturing, production-worker........................ 98.8 102.8 104.9 104.5 104.2 103.9 103.8 101.7 99.1' 97.3' 95.9 16 Service-producing .................................................... 136.7 143.2 148.1 150.8 151.3 151.9 152.2 152.6 152.3' 152.0' 152.2 17 Personal income, total5 ............................................... 244.4 274.1 307.1 323.7 326.6 328.1 330.4 330.6' 331.6' 332.9 n.a. 18 Wages and salary disbursements ............................. 230.2 258.1 287.2 300.1 302.5 305.1 307.4 306.2' 306.2' 306.4 n.a. 19 Manufacturing ...................................................... 198.3 222.4 246.8 254.7 256.7 259.2 260.8 257.8' 254.4' 251.6 n.a. 20 Disposable personal income ........................................ 194.8 217.7 242.5 259.4 261.9 21 Retail sales6 ................................................................ 229.8 253.8 280.9 294.8 303.6 301.8 292.4 286.6 285.0 288.9 294.7 Prices7 22 Consumer ................................................................ 181.5 195.4 217.4 229.9 233.2 236.4 239.8 242.5 244.9 247.6 n.a. 23 Producer finished goods........................................... 180.6 194.6 216.1 228.1 232.4 235.7 238.2 240.0 241.0 242.6 246.6 1. The industrial production and capacity utilization series have been revised. 5. Based on data in Survey of Current Business (U.S. Department of Commerce). For a description of the changes see the August 1979 Bulletin, pp. 603-07. Series for disposable income is quarterly. 2. Ratios of indexes of production to indexes of capacity. Based on data from 6. Based on Bureau of Census data published in Survey of Current Business. Federal Reserve, McGraw-Hill Economics Department, and Department of Com­ 7. Data without seasonal adjustment, as published in Monthly Labor Review. merce. Seasonally adjusted data for changes in the price indexes may be obtained from 3. Index of dollar value of total construction contracts, including residential, the Bureau of Labor Statistics, U.S. Department of Labor. nonresidential, and heavy engineering, from McGraw-Hill Information Systems Company, F. W. Dodge Division. Note: Basic data (not index numbers) for series mentioned in notes 4, 5, and 4. Based on data in Employment and Earnings (U.S. Department of Labor). 6, and indexes for series mentioned in notes 3 and 7 may also be found in the Series covers employees only, excluding personnel in the Armed Forces. Survey of Current Business. Monthly data for lines 12 throuth 16 reflect March 1979 benchmarks; only sea­ Figures for industrial production for the last two months are preliminary and sonally adjusted data are presently available. estimated, respectively. 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION* Seasonally adjusted 1979 1980 1979 1980 1979 1980 Series Q3 Q4 01 02' 03 Q4 01 Q2' 03 Q4 01 Q2' Output (167 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Manufacturing ............................................. 152.9 153.0 152.7 143.7 179.5 180.8 182.3 183.8 84.6 84.6 83.8 78.2 2 Primary processing........................................ 161.8 161.8 160.1 145.2 185.7 187.2 188.7 190.2 86.5 86.4 84.9 76.4 3 Advanced processing .................................... 148.1 148.2 148.7 142.8 176.2 177.4 178.8 180.4 83.5 83.6 83.1 79.2 4 Materials ...................................................... 156.3 156.3 156.0 145.3 179.5 181.0 182.5 184.1 86.3 86.3 85.4 78.9 5 Durable goods ............................................. 156.1 156.3 155.2 141.7 184.5 186.0 187.7 189.3 83.9 84.0 82.7 74.8 6 Metal materials.......................................... 119.5 119.5 117.2 100.4 140.7 141.1 141.5 141.3 84.7 84.7 82.9 71.1 7 Nondurable goods ........................................ 178.2 178.3 178.5 165.8 195.3 197.3 199.1 201.3 90.3 90.4 89.6 82.4 8 Textile, paper, and chemical ..................... 187.0 186.9 186.2 172.1 203.2 205.3 207.3 209.6 91.1 91.0 89.8 82.1 9 Textile .................................................. 123.7 123.7 121.5 114.6 137.7 138.1 138.5 139.1 89.6 89.6 87.7 82.4 10 Paper .................................................... 148.4 148.4 142.7 139.5 150.6 151.6 152.9 154.5 97.9 97.9 93.3 90.3 11 Chemical ............................................... 230.4 230.2 232.1 210.4 253.3 256.3 259.4 262.6 89.8 89.8 89.5 80.2 12 Energy ......................................................... 129.9 129.1 129.9 128.8 148.3 149.2 149.8 150.5 86.8 86.6 86.7 85.6 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. 1980 Category 1977 1978 1979 Jan. Feb. Mar. Apr. May' Juner July Household Survey Data 1 Noninstitutional population1 ................... 158,559 161,058 163,620 165,101 165,298 165,506 165,693 165,886 166,105 166,391 2 Labor force (including Armed Forces)1 .. 99,534 102,537 104,996 106,310 106,346 106,184 106,511 107,230 106,634 107,302 3 Civilian labor force ............................ 97,401 100,420 102,908 104,229 104,260 104,094 104,419 105,142 104,542 105,203 Employment 4 Nonagricultural industries2 .............. 87,302 91,031 93,648 94,534 94,626 94,298 93,912 93,609 93,346 93,739 5 Agriculture .................................... 3,244 3,342 3,297 3,270 3,326 3,358 3,242 3,379 3,191 3,257 Unemployment 6 Number .......................................... 6,855 6,047 5,963 6,425 6,307 6,438 7,265 8,154 8,006 8,207 7 Rate (percent of civilian labor force) 7.0 6.0 5.8 6.2 6.0 6.2 7.0 7.8 7.7 7.8 8 Not in labor force................................... 59,025 58,521 58,623 58,791 58,951 59,322 59,182 58,657 59,471 59,091 Establishment Survey Data 9 Nonagricultural payroll employment3 .... 82,423 86,446 89,497 91,031 91,186 91,144 90,951 90,468 89,973 89,735 10 Manufacturing........................................ 19,682 20.476 20,979 20,971 20,957 20,938 20,642 20,286 19,999 19,742 11 Mining .................................................. 813 851 958 999 1,007 1,009 1,012 1,023 1,026 1,013 12 Contract construction ............................ 3,851 4,271 4,642 4,745 4,659 4,529 4,467 4,436 4,371 4,320 13 Transportation and public utilities ......... 4,713 4,927 5,154 5,202 5,198 5,202 5,178 5,167 5,134 5,121 14 Trade .................................................... 18,516 19,499 20,140 20,529 20,637 20,610 20,531 20,487 20,437 20,496 15 Finance .................................................. 4,467 4,727 4,964 5,091 5,101 5,115 5,119 5,137 5,150 5,158 16 Service .................................................. 15,303 16,220 17,047 17,462 17,540 17,580 17,618 17,659 17,631 17,716 17 Government .......................................... 15,079 15.476 15,613 16,032 16,087 16,161 16,384 16,273 16,225 16,169 1. Persons 16 years of age and over. Monthly figures, which are based on sample 3. Data include all full- and part-time employees who worked during, or data, relate to the calendar week that contains the 12th day; annual data are received pay for, the pay period that includes the 12th day of the month, and averages of monthly figures. By definition, seasonality does not exist in population exclude proprietors, self-employed persons, domestic servants, unpaid family figures. Based on data from Employment and Earnings (U.S. Department of La­ workers, and members of the Armed Forces. Data are adjusted to the March 1979 bor). benchmark and only seasonally adjusted data are available at this time. Based on 2. Includes self-employed, unpaid family, and domestic service workers. data from Employment and Earnings (U.S. Department of Labor). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics □ August 1980 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value' Monthly data are seasonally adjusted. Grouping 1 p 9 r 6 o 7 ­ 1979 1979 1980 por­ tion age July Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr/ May JuneP July" Index (1967 = 100) Major Market 1 Total index........................................................... 100.00 152.2 152.8 152.4 152.2 152.1 152.2 152.6 152.3 151.7 148.2 144.3 141.0 138.8 2 Products ................................................. 60.71 149.7 149.7 149.9 149.6 149.4 149.7 150.0 149.9 149.3 146.4 143.8 141.7 140.0 3 Final products .................................... 47.82 147.0 147.1 147.2 146.8 146.6 147.0 147.0 147.4 147.1 145.1 143.1 141.2 139.6 4 Consumer goods ............................. 27.68 150.5 150.8 149.7 149.7 148.9 148.5 148.2 148.5 147.8 144.8 142.4 141.0 139.4 5 Equipment ...................................... 20.14 142.2 142.1 143.9 142.9 143.6 145.0 145.4 146.0 146.1 145.4 143.9 141.5 139.9 6 Intermediate products ........................ 12.89 160.0 159.4 159.8 159.8 159.8 159.9 160.8 159.3 157.7 151.4 146.7 143.4 141.7 7 Materials ............................................... 39.29 156.0 157.6 156.3 156.3 156.4 156.2 156.7 155.9 155.4 151.1 145.0 139.9 137.0 Consumer goods 7.89 155.5 157.2 151.8 152.6 149.2 146.6 142.4 144.5 144.0 136 4 129.1 128.7 128.0 9 Automotive products .......................... 2.83 167.7 170.3 157.6 159.2 150.6 141.8 131.3 142.1 141.0 126.3 119.0 121.4 127.6 10 Autos and utility vehicles................ 2.03 154.3 155.6 139.7 142.4 131.0 121.4 108.7 124.6 122.0 102.3 92.6 97.0 106.1 11 Autos ......................................... 1.90 136.7 141.8 128.0 129.0 118.3 110.2 98.0 116.8 114.9 97.1 88.4 95.7 105.1 80 201.6 207.8 203.0 202.1 200.3 193.6 188.5 186.7 189.1 187.4 186.0 183.1 182.1 13 Home goods ...................................... 5.06 148.7 149.8 148.5 148.8 148.4 149.3 148.6 145.8 145.7 142.0 134.8 132.8 128.2 14 Appliances, A/C, and TV................ 1.40 127.5 129.7 129.6 128.0 129.7 134.2 128.9 122.4 122.1 114.8 102.8 105.1 100.6 15 Appliances and TV ..................... 1.33 129.3 131.6 132.2 130.2 132.4 136.5 130.0 124.4 125.0 117.5 106.0 108.1 16 Carpeting and furniture................... 1.07 170.6 171.9 169.7 169.2 169.1 168.8 171.2 168.6 169.1 166.0 156.3 148.7 2.59 151.1 151.6 150.0 151.7 150.0 149.4 149.9 149.1 148.8 146.8 143.3 141.2 137.0 18 Nondurable consumer goods ................. 19.79 148.5 148.2 148.9 148.6 148.7 149.2 150.5 150.1 149.3 148.2 147.7 145.9 143.9 19 Clothing ............................................. 4.29 129.1 126.9 129.0 127.7 129.1 129.1 128.3 126.8 126.2 125.0 125.8 20 Consumer staples ............................... 15.50 153.8 154.1 154.3 154.3 154.2 154.8 156.7 156.5 155.6 154.7 153.8 151.6 149.7 21 Consumer foods and tobacco.......... 8.33 145.4 147.0 146.5 146.7 145.9 146.8 148.4 148.3 147.9 147.0 146.7 143.7 22 Nonfood staples ............................. 7.17 163.6 162.4 163.5 163.2 163.8 164.2 166.4 166.1 164.6 163.5 162.1 160.9 160.2 23 Consumer chemical products ....... 2.63 205.5 206.1 207.2 206.4 207.9 207.8 210.5 210.7 208.9 206.9 203.8 199.7 24 Consumer paper products............ 1.92 120.8 119.9 121.1 121.6 119.3 121.0 123.7 122.3 121.5 120.4 118.5 119.1 25 Consumer energy products.......... 2.62 153.0 149.8 150.8 150.5 152.2 152.2 153.4 153.3 151.8 151.6 152.2 152.5 26 Residential utilities................... 1.45 165.2 158.5 162.2 164.2 166.7 166.3 164.6 165.9 Equipment 27 Business ................................................ 12.63 171.3 171.4 173.6 172.0 172.5 174.1 175.0 175.8 175.9 174.4 172.3 168.6 166.2 28 Industrial ........................................... 6.77 152.1 151.3 153.5 151.2 153.3 153.1 157.4 158.8 159.0 159.5 157.9 154.2 152.4 29 Building and mining........................ 1.44 206.1 207.4 212.0 200.6 204.4 204.4 222.9 230.2 235.2 239.5 241.6 239.5 242.1 30 Manufacturing ................................. 3.85 130.3 130.3 130.4 130.8 132.5 132.1 132.6 132.8 132.4 131.9 129.5 125.3 123.0 31 Power ............................................. 1.47 156.3 151.0 156.3 156.3 157.6 157.8 158.1 156.7 153.7 153.0 149.9 146.2 141.6 32 Commercial transit, farm ................... 5.86 193.4 194.6 196.8 195.9 194.6 198.4 195.3 195.4 195.5 191.7 189.1 185.1 182.1 33 Commercial .................................... 3.26 227.8 227.0 231.4 234.2 232.2 236.9 237.8 237.7 239.9 235.6 233.1 225.9 221.2 34 Transit ........................................... 1.93 152.2 155.2 156.3 154.9 150.3 153.3 143.8 146.6 143.3 143.7 137.1 138.3 138.3 35 Farm ............................................... 67 144.9 151.0 145.3 128.0 139.5 141.0 137.1 129.9 129.6 116.4 124.6 121.4 36 Defense and space ................................. 7.51 93.2 92.8 94.0 94.0 95.0 95.9 95.8 96.0 96.1 96.6 96.1 96.1 95.8 Intermediate products 37 Construction supplies............................. 6.42 156.9 156.4 156.3 156.8 156.7 156.0 156.4 154.3 152.4 140.9 134.1 127.7 126.4 38 Business supplies ................................... 6.47 163.1 162.4 163.2 162.7 162.9 163.8 165.0 164.2 163.0 161.9 159.2 158.9 39 Commercial energy products .............. 1.14 172.3 167.8 169.8 172.2 174.4 175.7 172.3 169.0 171.3 173.7 174.7 Materials 40 Durable goods materials........................ 20.35 157.8 160.7 157.6 157.2 156.0 155.6 156.3 154.9 154.5 148.5 141.7 134.8 131.0 41 Durable consumer parts ..................... 4.58 137.1 138.5 132.2 132.0 126.8 123.8 122.2 120.9 121.0 110.9 101.7 97.2 94.1 42 Equipment parts................................. 5.44 189.9 192.1 192.0 192.7 195.1 196.6 199.8 199.3 199.9 196.1 191.2 183.3 181.7 43 Durable materials n.e.c........................ 10.34 150.0 154.0 150.7 149.6 148.3 148.0 148.6 146.6 145.5 140.1 133.2 125.9 120.7 44 Basic metal materials...................... 5.57 124.0 130.5 124.8 121.4 119.9 117.7 118.8 116.5 116.8 108.9 101.3 94.4 45 Nondurable goods materials................... 10.47 174.9 174.6 176.7 177.2 178.3 179.5 180.8 178.3 176.5 173.7 164.7 158.9 154.5 46 Textile, paper, and chemical materials . 7.62 182.9 182.8 185.9 186.1 186.7 187.8 188.6 185.7 184.3 181.3 171.0 163.9 159.1 47 Textile materials............................. 1.85 121.0 122.2 124.4 124.3 123.2 123.7 122.3 122.5 119.8 118.0 114.6 111.3 48 Paper materials............................... 1.62 143.2 146.2 148.1 148.6 148.4 148.2 146.3 139.9 141.8 141.2 138.4 138.9 49 Chemical materials.......................... 4.15 226.1 224.1 228.2 228.4 230.2 232.0 234.8 231.8 229.8 225.3 208.9 197.1 50 Containers, nondurable ...................... 1.70 164.5 163.1 161.8 166.1 168.1 169.6 174.1 172.6 167.7 165.8 156.4 152.8 51 Nondurable materials n.e.c.................. 1.14 136.7 137.5 136.9 134.4 137.4 138.8 138.5 137.2 137.2 135.0 135.1 135.1 52 Energy materials ................................... 8.48 128.4 129.1 128.1 128.5 130.1 128.7 127.7 130.5 131.6 129.4 128.5 128.4 129.9 53 Primary energy ................................... 4.65 113.0 112.8 113.6 114.6 114.9 113.5 113.1 113.5 115.6 116.4 116.1 116.5 54 Converted fuel materials..................... 3.82 147.2 148.8 145.7 145.3 148.7 147.3 145.3 151.3 151.1 145.3 143.6 142.8 Supplementary groups 55 Home goods and clothing...................... 9.35 139.7 139.3 139.5 139.1 139.5 140.0 139.3 137.1 136.7 134.2 130.7 129.2 125.8 56 Energy, total .......................................... 12.23 137.8 137.1 136.8 137.2 139.0 138.1 137.3 139.0 139.6 138.3 137.9 138.0 139.3 57 Products ............................................. 3.76 158.8 155.2 156.5 157.1 159.0 159.3 159.1 158.1 157.7 158.3 159.0 159.7 58 Materials ........................................... 8.48 128.4 129.1 128.1 128.5 130.1 128.7 127.7 130.5 131.6 129.4 128.5 128.4 129.9’ For notes see opposite page. 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Output A49 2.13 Continued 1967 1979 1980 Grouping pro­ 1979 SIC por­ code tion July Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June^ July* Index (1967 = 100) Major Industry 1 Mining and utilities ................. 12.05 144.5 143.7 144.5 146.0 147.7 148.3 147.4 148.6 150.2 149.2 149.7 150.0 150.7 2 Mining ................................. 6.36 125.3 124.7 125.8 128.1 130.0 131.6 132.6 132.8 132.9 133.0 133.2 133.1 131.9 3 Utilities................................. 5.69 166.1 164.8 165.3 166.1 167.4 167.0 163.9 166.1 169.6 167.2 168.0 168.8 171.6 4 Electric ............................. 3.88 185.8 182.2 184.1 184.3 185.7 186.0 183.0 185.0 5 Manufacturing .......................... 87.95 153.2 154.1 153.5 153.2 153.0 152.8 153.4 152.7 151.9 147.9 143.5 139.8 137.2 6 Nondurable .......................... 35.97 163.3 164.1 164.6 164.0 164.5 164.7 166.1 165.1 164.4 161.6 157.9 154.1 151.2 7 Durable ............................... 51.98 146.3 147.2 145.9 145.7 145.0 144.5 144.7 144.1 143.3 138.5 133.5 129.9 127.5 Mining 8 Metal ...................................... 10 .51 126.8 128.6 122.1 124.1 132.0 136.8 137.6 136.6 132.7 122.4 119.8 117.0 9 Coal ........................................ 11,12 .69 133.6 137.1 142.6 144.7 141.9 145.0 141.0 136.0 137.2 143.4 145.0 150.0 149.6 10 Oil and gas extraction.............. 13 4.40 121.7 120.4 121.6 124.2 126.0 127.2 128.5 130.3 131.6 132.5 133.8 134.0 134.5 11 Stone and earth minerals ......... 14 .75 137.6 136.4 137.5 138.2 141.2 141.0 145.3 142.0 136.8 133.1 128.3 123.6 Nondurable manufactures 12 Foods ...................................... 20 8.75 147.9 149.4 148.8 148.6 148.3 148.9 150.0 150.2 150.3 148.7 149.5 146.2 13 Tobacco products ..................... 21 .67 117.1 118.9 115.6 115.6 113.0 116.6 118.7 120.0 123.1 120.4 117.2 14 Textile mill products ................ 22 2.68 143.8 143.0 146.9 146.0 147.9 147.1 147.8 143.7 141.9 140.2 135.1 129.9 15 Apparel products ..................... 23 3.31 130.7 129.7 131.2 128.5 128.8 128.3 127.2 128.0 128.0 127.1 126.9 16 Paper and products ................. 26 3.21 150.8 154.0 155.3 154.1 153.3 154.7 156.0 150.5 151.6 147.3 144.6 144.8 17 Printing and publishing............ 27 4.72 136.9 135.6 137.1 137.2 136.2 137.8 138.9 139.9 139.2 136.5 135.0 133.8 132.7 18 Chemicals and products............ 28 7.74 210.4 210.5 212.0 211.4 215.1 216.5 217.7 216.0 214.5 209.4 199.8 191.7 19 Petroleum products ................. 29 1.79 143.6 143.9 143.1 141.1 142.1 142.6 146.7 144.4 141.6 137.9 133.7 132.5 132.0 20 Rubber and plastic products .... 30 2.24 270.0 278.0 272.9 274.5 271.3 262.3 266.9 267.9 264.8 263.5 251.0 241.6 21 Leather and products................ 31 .86 71.3 69.7 70.8 70.1 70.4 71.2 73.2 71.9 71.7 69.8 70.3 69.3 Durable manufactures 22 Ordnance, private and government ....................... 19,91 3.64 75.5 74.6 75.3 75.3 77.0 77.0 76.6 76.7 76.9 77.3 77.1 76.5 76.5 23 Lumber and products................ 24 1.64 136.9 135.2 138.6 138.7 136.1 131.7 131.6 130.2 125.4 105.2 103.6 103.1 24 Furniture and fixtures .............. 25 1.37 161.4 159.5 162.0 163.3 162.9 161.0 161.0 159.2 159.5 158.2 151.7 146.2 25 Clay, glass, stone products....... 32 2.74 163.3 163.3 160.6 162.3 162.8 164.4 165.1 162.6 156.5 149.3 142.9 138.2 26 Primary metals ........................ 33 6.57 121.2 127.1 121.7 118.0 117.2 115.4 116.4 111.9 113.6 106.5 96.5 89.5 83.9 27 Iron and steel ....................... 331.2 4.21 113.2 119.0 115.0 108.2 108.0 106.6 107.2 103.4 106.0 97.4 84.2 74.8 28 Fabricated metal products......... 34 5.93 148.5 149.3 146.5 147.5 146.9 146.1 145.0 145.3 144.7 141.8 134.5 128.5 123.5 29 Nonelectrical machinery .......... 35 9.15 163.6 165.3 165.1 162.3 162.8 162.9 166.9 166.1 166.0 163.2 162.0 157.1 154.2 30 Electrical machinery ................ 36 8.05 175.0 174.4 176.7 177.3 179.5 181.2 181.7 179.7 179.5 177.2 171.4 166.9 164.0 31 Transportation equipment......... 37 9.27 135.3 135.5 131.7 133.7 128.2 125.9 122.4 126.2 124.3 114.7 109.5 110.1 110.6 32 Motor vehicles and parts....... 371 4.50 160.0 160.2 150.6 150.6 139.9 135.4 127.6 135.4 131.7 114.9 106.3 107.9 108.9 33 Aerospace and miscellaneous transportation equipment 372-9 4.77 112.0 112.2 113.9 117.7 117.1 117.0 117.5 117.5 117.2 114.5 112.4 112.1 112.2 34 Instruments ............................. 38 2.11 174.9 174.0 172.9 175.0 173.3 175.0 175.8 175.0 173.8 173.8 171.0 169.3 166.5 35 Miscellaneous manufactures .... 39 1.51 153.7 155.7 153.6 154.5 155.3 153.7 154.0 152.0 152.0 151.2 146.3 142.7 141.7 Gross value (billions of 1972 dollars, annual rates) Major Market 36 Products, total.................................. 507.4 624.1 622.7 622.6 621.6 617.8 619.0 617.1 620.8 615.5 599.4 589.3 581.5 575.4 37 Final ........................................ 390.92 479.9 479.6 478.8 477.6 474.4 475.2 472.7 477.5 473.9 463.8 457.5 452.9 448.1 38 Consumer goods ................... 277.52 326.3 326.0 323.6 324.6 321.9 321.6 319.6 321.8 320.0 312.1 307.3 304.2 302.3 39 Equipment ............................ 113.42 153.7 153.6 155.2 153.0 152.5 153.6 153.1 155.7 153.8 151.7 150.2 148.7 145.9 40 Intermediate ............................ 116.62 144.2 143.2 143.8 144.0 143.4 143.8 144.5 143.3 141.7 135.6 131.8 128.6 127.2 1. The industrial production series has been revised. For a description of the Note. Published groupings include some series and subtotals not shown sepachanges, see “Revision of Industrial Production Index” in the August 1979 Bul- rately. For description and historical data, see Industrial Production—1976 Revision letin, pp. 603-05. (Board of Governors of the Federal Reserve System: Washington, D.C.), Decem- 2. 1972 dollars. ber 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics □ August 1980 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1979' 1980 Item 1977 1978 1979' Nov. Dec. Jan. Feb. Mar. Apr. May' June Private residential real estate activity (thousands of units) New Units 1 Permits authorized ............................ 1,677 1,801 1,552 1,287 1,247 1,271 1,168 968 789 825 1,059 2 1-family ........................................ 1,125 1,183 981 773 776 780 708 556 473 495 622 3 2-or-more-family ............................ 551 618 570 514 471 491 460 412 316 330 437 4 Started ............................................. 1,987 2,020 1,745 1,522 1,548 1,419 1,330 1,041 1,030 913 1,191 5 1-family ........................................ 1,451 1,433 1,194 980 1,055 1,002 786 617 628 628 747 6 2-or-more-family ............................ 536 587 551 542 493 417 544 424 402 285 444 7 Under construction, end of period1 .. 1,208 1,310 1,140 1,160 1,163 1,095 1,062' 984 921 8 1-family ........................................ 730 765 639 687 662 669 622 589' 538 500 9 2-or-more-family ............................ 478 546 501 501 498 494 473 473' 446 421 n.a. 10 Completed ........................................ 1,656 1,868 1,855 1,831 1,880 1,787 1,832 1,669' 1,891 1,535 n.a. 11 1-family ........................................ 1,258 1,369 1,286 1,240 1,328 1,276 1,230 1,093' 1,124 959 12 2-or-more-family ............................ 399 499r 570 591 552 511 602 576' 767 576 13 Mobile homes shipped...................... 277 276 277 251 241 276 226 201 162 Merchant builder activity in 1-family units 14 Number sold .................................... 820 818 709 617 571 584 548 458 343 461 535 15 Number for sale, end of period1 ....... 419 402 399 398 396 384 377' 365 352 343 Price (thousand of dollars)2 Median 16 Units sold .................................... 49.0 55.8 62.7 63.9 61.5 63.2 64.8 62.3 62.9 63.5 66.8 Average 17 Units sold .................................... 54.4 62.7 71.9 74.2 72.6 72.5 76.6 71.1' 73.9 73.8 77.9 Existing Units (1-family) 18 Number sold .................................... 3,905 3,450 3,350 3,210 2,990 2,750 2,310 2,480 Price of units sold (thous. of dollars)2 19 Median ............................................. 42.8 48.7 55.5 55.6 56.5 57.9 59.0 59.5 60.4 61.2 63.4 20 Average ........................................... 47.1 55.1 64.0 64.6 65.2 68.2 69.4 69.4 70.6 71.2 74.1 Value of new construction3 (millions of dollars) Construction 21Total put in place............................... 173,969' 205,457' 228,948' 239,372' 244,045' 259,580' 248,756' 237,132' 226,529' 220,060 214,975 22Private ............................................... 135,799' 159,555' 179,948' 187,394' 191,191' 198,097' 191,732' 180,616 172,362' 166,101 162,821 23 Residential...................................... 80,957' 93,423' 99,029' 101,812' 102,127' 105,814' 101,519' 93,991 84,495' 78,420 75,250 24 Nonresidential, total ....................... 54,842' 66,132' 80,919' 85,582' 89,064' 92,283' 90,213' 86,625 87,867' 87,681 87,571 Buildings 25 Industrial ................................. 7,713 10,993 14,953' 15,790' 15,879' 15,810' 15,690' 13,916 13,611 14,197' 14,851 26 Commercial ............................. 14,789 18,568 24,924' 27,743' 29,422' 31,614' 30,727' 29,911 30,878 30,149 29,352 27 Other ...................................... 6,200 6,739 7,427' 7,857' 8,274' 9,207' 8,508' 8,515 8,220 8,571 8,017 28 Public utilities and other.............. 26,140 29,832 33,615' 34,192' 35,489' 35,652' 35,288' 34,283 35,158' 34,764 35,351 29Public ................................................ 38,172 45,901 49,001' 51,978' 52,855' 61,483' 57,023' 56,516 54,167 53,959 52,154 30 Military ......................................... 1,428 1,501 1,641' 1,749' 1,743' 1,773' 1,530' 1,895 1,931 1,551 1,600 31 Highway ......................................... 9,380 10,713 11,915' 12,170' 12,858' 16,892' 15,693' 13,606kr 14,393 12,470 n.a. 32 Conservation and development....... 3,862 4,457 4,586' 4,950' 5,121' 5,141' 5,325' 5,686' 5,000 6,147 n.a. 33 Other4............................................. 23,502 29,230 30,859' 33,109' 33,133' 37,677' 34,475' 35,329' 32,843 33,791 n.a. 1. Not at annual rates. Note. Census Bureau estimates for all series except (a) mobile homes, which 2. Not seasonally adjusted. are private, domestic shipments as reported by the Manufactured Housing Institute 3. Value of new construction data in recent periods may not be strictly com­ and seasonally adjusted by the Census Bureau, and (b) sales and prices of existing parable with data in prior periods due to changes by the Bureau of the Census in units, which are published by the National Association of Realtors. All back and its estimating techniques. For a description of these changes see Construction current figures are available from originating agency. Permit authorizations are Reports (C-30-76-5), issued by the Bureau in July 1976. those reported to the Census Bureau from 14,000 jurisdictions through 1977, and 4. Beginning January 1977 “Highway” imputations are included in “Other”. 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 Index level June Item 1979 1980 1980 1980 1979 1980 (1967 June June = 100)! Sept. Dec. Mar. June Feb. Mar. Apr. May June Consumer Prices2 1 All items................................................. 10.9 14.3 13.8 13.1 18.1 11.6 1.4 1.4 .9 .9 1.0 247.6 2 Commodities .......................................... 11.1 11.7 13.3 12.5 16.1 5.0 1.2 1.2 .5 .3 .3 232.8 3 Food .................................................. 10.1 7.1 6.5 12.1 3.8 5.6 0.0 1.0 .5 .3 .5 252.0 4 Commodities less food ....................... 11.6 13.7 16.4 12.7 22.1 4.7 1.7 1.3 .5 .4 .3 221.4 5 Durable .......................................... 9.9 9.2 9.1 13.2 7.6 6.8 .5 .2 .5 .6 .5 208.6 6 Nondurable .................................... 13.8 19.6 25.2 12.8 39.8 3.5 3.0 2.4 .6 .2 .1 236.3 7 Services ................................................. 10.6 18.1 14.3 15.8 20.9 21.6 1.5 1.9 1.5 1.6 1.8 274.2 8 Rent .................................................. 6.8 9.4 10.2 9.0 8.3 10.0 .8 .5 .2 1.0 1.2 191.1 9 Services less rent ............................... 11.1 19.5 14.9 16.9 22.8 23.3 1.7 2.0 1.7 1.7 1.9 290.0 Other groupings 10 All items less food................................. 11.1 15.9 13.4 14.2 21.7 13.0 1.6 1.5 1.1 1.0 1.1 245.5 11 All items less food and energy............... 9.5 13.6 10.9 13.9 15.7 13.5 1.1 1.2 1.1 1.0 1.1 233.7 12 Homeownership .................................... 14.9 23.8 19.5 25.6 24.1 26.6 1.5 2.1 1.9 1.8 2.3 320.4 Producer Prices 13 Finished goods ...................................... 9.9 13.5 16.1 13.3 19.3' 6.0 1.4 1.3 .5 .3 .8 242.6 14 Consumer .......................................... 10.2 15.0 20.7 14.6 21.6' 4.0 1.7 1.5 .0 .4 .7 244.5 15 Foods ............................................. 6.7 3.3 15.3 8.6 -1.2' 7.8 -.4 1.0 -2.8 .1 .7 231.0 16 Excluding foods ............................. 12.2 21.2 23.4 17.9 34.8' 10.1 2.8 1.7 1.4 .4 .7 248.8 17 Capital equipment ............................. 8.9 10.1 5.9 10.0 13.4' 10.9 .7 .7 1.9 .0 .9 237.5 18 Materials ............................................... 12.5 13.3 19.7 15.8 16.4' 2.8 2.0 -.1 -.6 .6 .7 282.0 19 Intermediate3 .................................... 11.8 16.0 19.4 17.0 24.0' 4.4 1.8 .5 .3 .1 .8 279.9 Crude 20 Nonfood .......................................... 21.9 17.0 25.1 27.8 21.9' -3.9 3.3 -1.5 -.5 .1 -.5 407.9 21 Food ............................................... 11.0 -2.3 16.4 5.7 -16.7' -10.5 2.2 -2.7 -6.1 2.4 1.1 242.5 1. Not seasonally adjusted. 3. Excludes intermediate materials for food manufacturing and manufactured 2. Figures for consumer prices are those for all urban consumers. animal feeds. Source. Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics □ August 1980 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1979 1980 Account 1977 1978 1979 Ql Q2 Q3 Q4 Ql Q2 p Gross National Product 1 Total ............................................................................................ 1,899.5 2,127.6 2,368.8 2,292.1 2,329.8 2,396.5 2,456.9C 2,520.8 2,523.4 By source 2 Personal consumption expenditures ............................... 1,210.0 1,350.8 1,509.8 1,454.2 1,475.9 1,528.6 1,580.4 1,629.5 1,628.2 3 Durable goods ................................................................... 178.8 200.3 213.0 213.8 208.7 213.4 216.2 220.2 197.0 4 Nondurable goods ............................................................. 481.3 530.6 596.9 571.1 581.2 604.7 630.7 652.0 654.4 5 Services ................................................................................. 549.8 619.8 699.8 669.3 686.0 710.6 733.5 757.3 776.8 6 Gross private domestic investment.................................. 303.3 351.5 387.2 373.8 395.4 392.3 387.2 387.7 366.9 7 Fixed investment ............................................................... 281.3 329.1 369.0 354.6 361.9 377.8 381.7 383.0 355.2 8 Nonresidential ............................................................... 189.4 221.1 254.9 243.4 249.1 261.8 265.2 272.6 265.9 9 Structures ...................................................................... 62.6 76.5 92.6 84.9 90.5 95.0 100.2 103.3 102.7 10 Producers’ durable equipment............................. 126.8 144.6 162.2 158.5 158.6 166.7 165.1 169.4 163.2 11 Residential structures .................................................. 91.9 108.0 114.1 111.2 112.9 116.0 116.4 110.4 89.3 12 Nonfarm........................................................................ 88.8 104.4 110.2 107.8 109.1 112.0 112.1 105.9 85.7 13 Change in business inventories .................................... 21.9 22.3 18.2 19.1 33.4 14.5 5.6 4.7 11.7 14 Nonfarm .......................................................................... 20.7 21.3 16.5 18.8 32.6 12.6 2.1 4.4 12.4 15 Net exports of goods and services.................................... -9.9 -10.3 -4.6 4.0 -8.1 -2.3 -11.9 -13.6 1.3 16 Exports ................................................................................. 175.9 207.2 257.5 238.5 243.7 267.3 280.4 308.1 307.3 17 Imports ................................................................................. 185.8 217.5 262.1 234.4 251.9 269.5 292.4 321.7 306.0 18 Government purchases of goods and services............. 396.2 435.6 476.4 460.1 466.6 477.8 501.2 517.2 527.0 19 Federal ................................................................................... 144.4 152.6 166.6 163.6 161.7 162.9 178.4 186.2 192.5 20 State and local ................................................................... 251.8 283.0 309.8 296.5 304.9 314.9 322.8 331.0 334.5 By major type of product 21 Final sales, total...................................................................... 1,877.6 2,105.2 2,350.6 2,272.9 2,296.4 2.381.9 2,451.4 2,516.1 2,511.7 22 Goods..................................................................................... 842.2 930.0 1,030.5 1,011.8 1,018.1 1,036.0 1,056.3 1,086.2 1,080.8 23 Durable ............................................................................ 345.9 380.4 423.1 425.5 422.4 424.4 420.2 421.5 416.3 24 Nondurable ...................................................................... 496.3 549.6 607.4 586.2 595.7 611.6 636.1 664.8 664.5 25 Services ................................................................................. 866.4 969.3 1,085.1 1,041.4 1,064.2 1,100.6 1,134.0 1,169.5 1,201.3 26 Structures ............................................................................. 190.9 228.2 253.2 238.9 247.5 259.8 266.6 265.1 241.3 27 Change in business inventories ......................................... 21.9 22.3 18.2 19.1 33.4 14.5 5.6 4.7 11.7 28 Durable goods .................................................................... 11.9 13.9 13.0 18.4 24.3 7.3 1.8 -9.3 8.3 29 Nondurable goods ............................................................. 10.0 8.4 5.2 .7 9.1 7.2 3.8 14.0 3.4 30 Memo: Total GNP in 1972 dollars.................................. 1,340.5 1,399.2 1,431.6 1,430.6 1,422.3 1,433.3 1,440.3 1,444.7 1,410.8 National Income 31 Total ............................................................................................ 1,525.8 1,724.3 1,924.8' 1,869.0 1,897.9 1,941.9 1,990.4 2,035.4 n.a. 32 Compensation of employees ............................................. 1,156.9 1,304.5 1,459.2' 1,411.2 1,439.7 1,472.9 1,513.2 1,555.2 1,566.1 33 Wages and salaries............................................................. 984.0 1,103.5 1,227.4' 1,189.4 1,211.5 1,238.0 1,270.7 1,303.6 1,309.3 34 Government and government enterprises........... 201.3 218.0 233.5 228.1 231.2 234.4 240.2 243.5 247.3 35 Other ................................................................................. 782.7 885.5 993.9 961.3 980.3 1,003.6 1,030.5 1,060.1 1,062.0 36 Supplement to wages and salaries............................... 172.9 201.0 231.8 221.8 228.2 234.8 242.5 251.6 256.8 37 Employer contributions for social insurance .... 81.2 94.6 109.1 105.8 107.9 109.9 113.0 117.2 118.0 38 Other labor income ...................................................... 91.8 106.5 122.7 116.0 120.3 124.9 129.6 134.4 138.8 39 Proprietors’ income1 ............................................................. 100.2 116.8 130.8 129.0 129.3 130.3 134.5 130.0 119.2 40 Business and professional1 ............................................. 80.5 89.1 98.0 94.8 95.5 99.4 102.1 102.3 97.1 41 Farm1 ..................................................................................... 19.6 27.7 32.8 34.2 33.7 30.9 32.5 27.7 22.2 42 Rental income of persons2................................................. 24.7 25.9 26.9 27.3 26.8 26.6 27.0 27.0 27.3 43 Corporate profits1 ................................................................. 150.0 167.7 178.2' 178.9 176.6 180.8 176.4 175.0 n.a. 44 Profits before tax3 ............................................................. 177.1 206.0 236.6' 233.3 227.9 242.3 243.0 260.4 n.a. 45 Inventory valuation adjustment.................................... -15.2 -25.2 -41.8 -39.9 -36.6 -44.0 -46.5 -63.2 -27.8 46 Capital consumption adjustment.................................. -12.0 -13.1 -16.7 -14.5 -14.7 -17.6 -20.1 -22.2 -24.6 47 Net interest .............................................................................. 94.0 109.5 129.7 122.6 125.6 131.5 139.2 148.1 156.8 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. 1979 1980 Account 1977 1978 1979 Ql Q2 Q3 Q4 Ql Q2p Personal Income and Saving 1 Total personal income............................................. 1,531.6 1,717.4 1,924.2 1,852.6 1,892.5 1,946.6 2,005.0 2,057.4 2,078.3 2 Wage and salary disbursements........................................ 984.0 1,103.3 1,227.6 1,189.3 1,212.4 1,238.1 1,270.5 1,303.7 1,309.3 3 Commodity-producing industries.................................. 343.1 387.4 435.2 423.0 431.7 438.3 447.8 460.0 453.7 4 Manufacturing................................................................. 266.0 298.3 330.9 324.8 328.5 331.9 338.3 347.2 341.4 56 Distributive industries ...................................................... 239.1 269.4 300.8 291.1 295.8 304.0 312.4 320.1 320.8 Service industries ............................................................... 200.5 228.7 257.9 247.2 252.8 261.3 270.2 280.0 287.5 7 Government and government enterprises................ 201.3 217.8 233.7 228.0 232.1 234.5 240.1 243.6 247.3 8 Other labor income ............................................................... 19010..82 106.5 122.7 116.0 120.3 124.9 129.6 134.4 138.8 116.8 130.8 129.0 129.3 130.3 113024..15 130.0 119.2 10 Business and professional1 ............................................. 80.5 89.1 98.0 94.8 95.5 99.4 102.3 9272..12 19.6 27.7 32.8 34.2 33.7 30.9 32.5 27.7 12 Rental income of persons2 ................................................. 24.7 25.9 26.9 27.3 26.8 26.6 27.0 27.0 27.3 42.1 47.2 52.7 51.5 52.3 52.8 54.4 56.7 58.6 141.7 163.3 192.1 181.0 187.6 194.4 205.5 217.2 229.3 208.4 224.1 252.0 237.3 243.6 260.8 266.5 274.9 282.2 16 Old-age survivors, disability, and health insurance 105.0 116.3 132.4 123.8 127.1 138.7 140.0 142.0 143.6 86.6 17 Less: Personal contributions for social insurance .. 61.3 69.6 80.7 78.7 79.8 81.2 82.9 86.4 18 Equals- Personal income ................................................. 1,531.6 1,717.4 1,924.2 1,852.6 1,892.5 1,946.6 2,005.0 2,057.4 2,078.3 19 Less: Personal tax and nontax payments.................. 226.4 259.0 299.9 280.4 290.7 306.6 321.9 320.0 324.3 20 Equals: Disposable personal income ........................... 1,305.1 1,458.4 1,624.3 1,572.2 1,601.7 1,640.0 1,683.1 1,737.4 1,754.0 21 Less: Personal outlays...................................................... 1,240.2 1,386.4 1,550.5 1,493.0 1,515.8 1,569.7 1,623.4 1,672.9 1,671.1 22 Equals: Personal saving .................................................... 65.0 72.0 73.8 79.2 85.9 70.3 59.7 64.4 82.9 Memo: Per capita (1972 dollars) 23 Gross national product .................................................... 6,181 6,402 6,494 6,514 6,459 6,494 6,509 6,514 6,346 24 Personal consumption expenditures ........................... 3,974 4,121 4,194 4,197 4,155 4,195 4,227 4,222 4,110 25 Disposable personal income........................................... 4,285 4,449 4,512 4,536 4,510 4,501 4,502 4,502 4,428 26 Saving rate (percent)............................................................. 5.0 4.9 4.5 5.0 5.4 4.3 3.5 3.7 4.7 Gross Saving 27 Gross saving ........................................................... 276.1 324.6 363.9 362.2 374.3 367.3 351.9 346.6 n.a. 28 Gross private saving ............................................................. 295.6 324.9 349.6 345.2 360.5 352.1 340.7 343.7 n.a. 29 Personal saving ...................................................................... 65.0 72.0 73.8 79.2 85.9 70.3 59.7 64.4 82.9 30 Undistributed corporate profits1 ...................................... 35.2 36.0 32.9 36.1 35.6 34.0 25.9 15.9 n.a. 31 Corporate inventory valuation adjustment .................. -15.2 -25.2 -41.8 -39.9 -36.6 -44.0 -46.5 -63.2 -27.8 Capital consumption allowances 32 Corporate ................................................................................. 121.3 132.9 147.7 139.9 145.1 150.4 155.3 159.6 163.9 33 Noncorporate .......................................................................... 74.1 84.0 95.3 89.9 93.9 97.5 99.8 103.7 107.1 34 Wage accruals less disbursements ...................... 35 Government surplus, or deficit (-), national income 10.0 and product accounts.................................................... -19.5 - .3 13.2 15.8 12.7 14.0 1.7 36 Federal ................................................................................... -46.3 -27.7 -11.4 -11.7 -7.0 -11.3 -15.7 -22.9 n.a. 37 State and local ................................................................... 26.8 27.4 24.6 27.6 19.7 25.3 25.8 24.6 n.a. 1.1 1.1 1.1 1.1 1.1 1.2 1.2 38 Capital grants received by the United States, net ... 39 Gross investment .................................................... 283.6 327.9 367.6 362.8 373.1 375.6 359.1 357.5 352.5 40 Gross private domestic........................................................ 303.3 351.5 387.2 373.8 395.4 392.3 387.2 387.7 366.9 41 Net foreign ............................................................................... -19.6 -23.5 -19.5 -11.0 -22.3 -16.7 -28.1 -30.2 -14.4 42 Statistical discrepancy ............................................. 7.5 3.3 2.9 .6 -1.3 8.3 7.2 11.0 n.a. 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

A54 International Statistics □ August 1980 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1979 1980 Item credits or debits 1977 1978 1979 Ql Q2 Q3 Q4 Ql 1 Balance on current account ............................................. -14,068 -14,259 -788 1,408 -1,493 1,099 -1,802 -2,567 2 Not seasonally adjusted................................................ 1,697 -61 -2,909 486 -2,405 3 Merchandise trade balance2 ......................................... -30,873 -33,759 -29,469 -5,114 -8,070 -7,060 -9,225 -10,875 4 Merchandise exports ................................................ 120,816 142,054 182,055 41,805 42,815 47,198 50,237 54,708 5 Merchandise imports ................................................ -151,689 -175,813 -211,524 -46,919 -50,885 -54,258 -59,462 -65,583 6 Military transactions, net ............................................. 1,628 886 -1,274 -29 -102 -443 -700 -700 7 Investment income, net3 ............................................... 17,988 20,899 32,509 7,038 7,271 9,319 8,883 10,123 8 Other service transactions, net...................................... 1,794 2,769 3,112 837 791 690 792 761 9 Memo: Balance on goods and services3 4...................... -9,464 -9,204 4,878 2,732 -110 2,506 -250 -691 10 Remittances, pensions, and other transfers................... -1,830 -1,884 -2,142 -464 -484 -529 -665 -564 11 U.S. government grants (excluding military)................. -2,775 -3,171 -3,524 -860 -899 -878 -887 -1,312 12 Change in U.S. government assets, other than official re­ serve assets, net (increase, -).................................. -3,693 -4,644 -3,783 -1,102 -991 -766 -925 -1,461 13 Change in U.S. official reserve assets (increase, -)........ -375 732 -1,106 -3,585 343 2,779 -644 -3,246 14 Gold ............................................................................ -118 -65 -65 0 0 0 -65 0 15 Special drawing rights (SDRs) ...................................... -121 1,249 -1,136 -1,142 6 0 0 -1,152 16 Reserve position in International Monetary Fund........ -294 4,231 -189 -86 -78 -52 27 -34 17 Foreign currencies ....................................................... 158 -4,683 283 -2,357 415 2,831 -606 -2,060 18 Change in U.S. private assets abroad (increase, -)3 .... -31,725 -57,279 -56,858 -3,081 -14,631 -27,228 -11,918 -7,110 19 Bank-reported claims.................................................... -11,427 -33,631 -25,868 6,181 -7,839 -16,997 -7,213 -978 20 Nonbank-reported claims ............................................. -1,940 -3,853 -2,029 -2,442 935 -932 410 n.a. 21 U.S. purchase of foreign securities, net........................ -5,460 -3,450 -4,643 -1,001 -513 -2,143 -986 -787 22 U.S. direct investments abroad, net3 ............................ -12,898 -16,345 -24,318 -5,819 -7,214 -7,156 -4,129 -5,345 23 Change in foreign official assets in the United States (increase, +) ............................................................. 36,574 33,292 -14,270 -8,744 -10,095 5,789 -1,221 -7,765 24 U.S. Treasury securities ............................................... 30,230 23,523 -22,356 -8,752 -12,859 5,024 -5,769 -5,503 25 Other U.S. government obligations ............................. 2,308 666 465 -5 94 335 41 801 26 Other U.S. government liabilities5 ............................... 1,159 2,220 -714 -128 122 216 -924 -43 27 Other U.S. liabilities reported by U.S. banks............... 773 5,488 7,219 -72 2,354 56 4,881 -3,365 28 Other foreign official assets6 ........................................ 2,105 1,395 1,116 213 195 158 550 345 29 Change in foreign private assets in the United States (increase, + )3 ........................................................... 14,167 30,804 51,845 10,945 16,502 19,152 5,246 12,781 30 U.S. bank-reported liabilities........................................ 6,719 16,259 32,668 7,001 12,082 13,185 400 5,902 31 U.S. nonbank-reported liabilities................................... 473 1,640 1,692 -543 579 606 1,050 n.a. 32 Foreign private purchases of U.S. Treasury securities, net ......................................................................... 534 2,197 4,830 2,564 -120 1,466 920 3,279 33 Foreign purchases of other U.S. securities, net............ 2,713 2,811 2,942 803 1,149 677 313 2,477 34 Foreign direct investments in the United States, net3 ... 3,728 7,896 9,713 1,120 2,812 3,217 2,564 1,123 35 Allocation of SDRs ......................................................... 0 0 1,139 1,139 0 0 0 1,152 36 Discrepancy ..................................................................... -880 11,354 23,822 3,020 10,364 -825 11,264 8,215 37 Owing to seasonal adjustments .................................... 74 1,167 -3,641 2,400 -115 38 Statistical discrepancy in recorded data before seasonal adjustment ............................................................. -880 11,354 23,822 2,946 9,197 2,816 8,864 8,330 Memo: Changes in official assets 39 U.S. official reserve assets (increase, -)...................... -375 732 -1,106 -3,585 343 2,779 -644 -3,246 40 Foreign official assets in the United States (increase, + ) ......................................................... 35,416 31,072 -13,556 -8,616 -10,216 5,573 -297 -7,722 41 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 23 above) ....................................................................... 6,351 -1,137 5,508 -1,361 238 1,676 4,955 2,721 42 Transfers under military grant programs (excluded from lines 4, 6, and 11 above)........................................... 204 236 305 29 49 88 139 91 1. Seasonal factors are no longer calculated for lines 13 through 42. 5. Primarily associated with military sales contracts and other transactions ar­ 2. Data are on an international accounts (IA) basis. Differs from the census ranged with or through foreign official agencies. basis primarily because the IA basis includes imports into the U.S. Virgin Islands, 6. Consists of investments in U.S. corporate stocks and in debt securities of and it excludes military exports, which are part of line 6. 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 the Note. Data are from Bureau of Economic Analysis, Survey of Current Business national income and product (GNP) account. The GNP definition makes various (U.S. Department of Commerce). adjustments to merchandise trade and service transactions. 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 1980 Item 1977 1978 1979 Dec. Jan. Feb. Mar. Apr. May June 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments .................................... 121,150 143,578 181,637 16,742 17,348 17,233 18,534 18,468 17,678 18,642 2 GENERAL IMPORTS including mer­ chandise for immediate consump­ tion plus entries into bonded warehouses ................................. 147,685 171,978 206,326 19,665 20,945 21,640 20,607 19,308 20,528 19,893 3 Trade balance .................................... -26,535 -28,400 -24,690 -2,923 -3,597 -4,407 -2,073 -840 -2,850 -1,251 Note. Bureau of Census data reported on a free-alongside-ship (f.a.s.) value On the import side, the largest single adjustment is the addition of imports into basis. Effective January 1978, major changes were made in coverage, reporting, the Virgin Islands (largely oil for a refinery on St. Croix), which are not included and compiling procedures. The international-accounts-basis data adjust the Census in Census statistics. basis data for reasons of coverage and timing. On the export side, the largest adjustments are: (a) the addition of exports to Canada not covered in Census Source. FT 900 “Summary of U.S. Export and Import Merchandise Trade” statistics, and (b) the exclusion of military exports (which are combined with other (U.S. Department of Commerce, Bureau of the Census). military transactions and are reported separately in the “service account”). 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1980 Type 1977 1978 1979 Jan. Feb. Mar. Apr. May June JulyP 1 Total1 ................................................ 19,312 18,650 18,928 20,962 20,840 21,448 21,521 21,794 21,921 21,828 2 Gold stock, including Exchange Stabili­ zation Fund1 ............................... 11,719 11,671 11,172 11,172 11,172 11,172 11,172 11,172 11,172 11,172 3 Special drawing rights2-3 ..................... 2,629 1,558 2,724 3,871 3,836 3,681 3,697 3,744 3,782 3,842 4 Reserve position in International Mone­ tary Fund2 ................................... 4,946 1,047 1,253 1,251 1,287 1,222 1,094 1,157 1,385 1,410 5 Foreign currencies4 ............................ 18 4,374 3,779 4,668 4,545 5,373 5,558 5,721 5,582 5,404 1. Gold held under earmark at Federal Reserve Banks for foreign and inter­ 3. Includes allocations by the International Monetary Fund of SDRs as follows: national accounts is not included in the gold stock of the United States; see table $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 3.22. 1, 1972; $1,139 million on Jan. 1, 1979; and $1,152 million Jan. 1, 1980; plus net 2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based transactions in SDRs. on a weighted average of exchange rates for the currencies of 16 member countries. 4. Beginning November 1978, valued at current market exchange rates. 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

A56 International Statistics □ August 1980 3.13 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1979 1980 Asset account 1976 1977 19781 Nov. Dec. Jan. Feb. Mar. Apr. MayP All foreign countries 1 Total, all currencies............................ 219,420 258,897 306,795 365,587 364,166 360,373 372,099 371,483 375,861 378,582 2 Claims on United States..................... 7,889 11,623 17,340 37,606 32,302' 31,603' 39,736' 35,656' 34,156 35,575 3 Parent bank.................................... 4,323 7,806 12,811 31,133 25,929 24,788 32,192 28,224 26,266 26,116 4 Other ............................................. 3,566 3,817 4,529 6,473 6,373' 6,815' 7,544' 7,432' 7,890 9,459 5 Claims on foreigners .......................... 204,486 238,848 278,135 313,409 317,109' 313,816' 316,993' 319,748' 325,367 326,150 6 Other branches of parent bank....... 45,955 55,772 70,338 79,076 79,661 75,419 78,185 80,574 79,541 76,329 7 Banks ............................................. 83,765 91,883 103,111 122,004 123,344' 125,070' 124,417' 125,983' 130,067 130,201 8 Public borrowers2 ............................ 10,613 14,634 23,737 25,568 26,060 25,797' 26,045' 25,473' 25,202 25,412 9 Nonbank foreigners ........................ 64,153 76,560 80,949 86,761 88,044' 87,530' 88,346' 87,718' 90,557 94,208 10 Other assets........................................ 7,045 8,425 11,320 14,572 14,755' 14,954' 15,370 16,079 16,338 16,857 11 Total payable in U.S. dollars.............. 167,695 193,764 224,940 266,544 267,645 265,157 276,017 276,711 277,613 277,415 12 Claims on United States..................... 7,595 11,049 16,382 36,362 31,171' 30,518' 38,519' 34,476' 32,872 34,330 13 Parent bank.................................... 4,264 7,692 12,625 30,652 25,632 24,516 31,812 27,872 25,896 25,796 14 Other ............................................. 3,332 3,357 3,757 5,710 5,539' 6,002' 6,707' 6,604' 6,976 8,534 15 Claims on foreigners .......................... 156,896 178,896 203,498 223,201 229,053' 226,781' 229,013' 233,717' 235,804 234,069 16 Other branches of parent bank....... 37,909 44,256 55,408 60,397 61,525 58,084' 60,217 63,434' 61,787 58,898 17 Banks ............................................. 66,331 70,786 78,686 92,730 96,192' 97,905' 97,188' 99,318' 103,148 102,631 18 Public borrowers2............................ 9,022 12,632 19,567 21,160 21,618' 21,536' 21,790' 21,369' 20,985 21,208 19 Nonbank foreigners ........................ 43,634 51,222 49,837 48,914 49,718' 49,256' 49,818' 49,596' 49,884 51,332 20 Other assets........................................ 3,204 3,820 5,060 6,981 7,421' 7,858 8,485 8,518 8,937 9,016 United Kingdom 21 Total, all currencies............................ 81,466 90,933 106,593 131,959 130,873 128,417 133,793 136,654 138,915 138,930 22 Claims on United States..................... 3,354 4,341 5,370 11,841 11,117 10,147 10,697 11,990 11,533 11,399 23 Parent bank.................................... 2,376 3,518 4,448 9,892 9,338 8,207 8,584 9,838 9,300 9,140 24 Other ............................................. 978 823 922 1,949 1,779 1,940 2,113 2,152 2,233 2,259 25 Claims on foreigners .......................... 75,859 84.016 98,137 115,656 115,123 113,617 118,212 119,290 122,105 121,851 26 Other branches of parent bank....... 19,753 22.017 27,830 33,487 34,291 31,995 35,187 35,536 36,015 34,312 27 Banks ............................................. 38,089 39,899 45,013 52,580 51,343 52,177 53,127 52,509 54,020 54,069 28 Public borrowers2 ............................ 1,274 2,206 4,522 4,868 4,919 4,559 4,499 5,860 5,578 5,591 29 Nonbank foreigners ........................ 16,743 19,895 20,772 24,721 24,570 24,886 25,399 25,385 26,492 27,879 30 Other assets........................................ 2,253 2,576 3,086 4,462 4,633 4,653 4,884 5,374 5,277 5,680 31 Total payable in U.S. dollars.............. 61,587 66,635 75,860 93,502 94,287 91,760 96,228 99,711 100,628 98,809 32 Claims on United States..................... 3,275 4,100 5,113 11,352 10,746 9,820 10,285 11,620 11,071 10,988 33 Parent bank.................................... 2,374 3,431 4,386 9,697 9,297 8,161 8,467 9,778 9,179 9,059 34 Other ............................................. 902 669 727 1,655 1,449 1,659 1,818 1,842 1,892 1,929 35 Claims on foreigners .......................... 57,488 61,408 69,416 80,127 81,294 79,740 83,603 85,452 86,818 85,013 36 Other branches of parent bank....... 17,249 18,947 22,838 27,993 28,928 26,842 29,907 30,204 29,980 28,466 37 Banks ............................................. 28,983 28,530 31,482 36,604 36,760 37,487 38,185 37,768 39,159 38,594 38 Public borrowers2 ............................ 846 1,669 3,317 3,311 3,319 3,274 3,253 4,589 4,277 4,277 39 Nonbank foreigners ........................ 10,410 .12,263 11,779 12,219 12,287 12,137 12,258 12,891 13,402 13,676 40 Other assets........................................ 824 1,126 1,331 2,023 2,247 2,200 2,340 2,639 2,739 2,808 Bahamas and Caymans 41 Total, all currencies............................ 66,774 79,052 91,735 108,872 108,910 110,946 117,839 114,748 115,742 116,465 42 Claims on United States..................... 3,508 5,782 9,635 23,856 19,124' 19,680' 27,154' 21,806' 20,057 21,408 43 Parent bank.................................... 1,141 3,051 6,429 19,868 15,196 15,366 22,414 17,298 15,269 15,338 44 Other ............................................. 2,367 2,731 3,206 3,988 3,928' 4,314' 4,740' 4,508' 4,788 6,070 45 Claims on foreigners .......................... 62,048 71,671 79,774 81,959 86,652' 87,838' 86,829' 89,279' 91,590 90,962 46 Other branches of parent bank....... 8,144 11,120 12,904 8,854 9,689 10,242 10,265 13,659 13,438 12,454 47 Banks ............................................. 25,354 27,939 33.677 40,050 43,120' 44,062' 42,435' 44,450' 47,131 46,720 48 Public borrowers2 ............................ 7,105 9,109 11,514 12,658 12,893 12,908' 13,121' 11,324' 11,345 11,626 49 Nonbank foreigners ........................ 21,445 23,503 21,679 20,397 20,950' 20,626' 21,008' 19,846' 19,676 20,162 50 Other assets........................................ 1,217 1,599 2,326 3,057 3,134' 3,428 3,856 3,663 4,095 4,095 51 Total payable in U.S. dollars.............. 62,705 73,987 85,417 101,932 102,302 105,013 111,504 108,550 109,631 110,841 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 1980 Liability account 1976 1977 19781 Nov. Dec. Jan. Feb. Mar. Apr. MayP All foreign countries 52 Total, all currencies ............................ 219,420 258,897 306,795 365,587 364,166 360,373 372,099 371,483 375,861 378,582 53 To United States ............................... 32,719 44,154 57,948 62,179 66,573' 70,341' 71,118' 67,624' 69,463 72,792 54 Parent bank.................................... 19,773 24,542 28,464 19,274 24,275 24,763' 22,866 22,383 24,241 26,518 5 5 5 6 O N t o h n e b r a b n a k nk s. s . . i . n .. .. U .. n .. i . t . e .. d .. . S ... t . a .. t . e .. s .. . . . . . . . . . . . . . . . . . . . . } 12,946 19,613 1 1 2 7 , , 3 1 3 4 8 6 2 1 9 3 , , 0 8 0 9 8 7 2 1 7 5 , , 1 1 6 3 6 2 ' ' 3 1 2 3, , 1 4 7 0 5 3' 3 1 3 4 , , 3 8 6 8 3 9' ' 3 12 2 , , 3 8 5 9 1 0' 3 1 2 2 , , 3 83 9 2 0 3 1 3 3 , , 1 09 8 1 3 57 To foreigners...................................... 179,954 206,579 238,912 289,555 283,324' 276,189' 286,262' 289,466' 290,944 289,959 58 Other branches of parent bank....... 44,370 53,244 67,496 77,188 77,601 72,846 73,602' 76,709 75,041 72,499 59 Banks ............................................. 83,880 94,140 97,711 128,024 122,829' 122,044' 130,252' 129,306 130,701 130,769 60 Official institutions.......................... 25,829 28,110 31,936 34,958 35,664 33,073' 34,221 34,806 35,007 34,838 61 Nonbank foreigners ........................ 25,877 31,085 41,769 49,385 47,230' 48,226' 48,187' 48,645' 50,195 51,853 62 Other liabilities................................... 6,747 8,163 9,935 13,853 14,269 13,843' 14,719' 14,393' 15,454 15,831 63 Total payable in U.S. dollars.............. 173,071 198,572 230,810 272,166 273,752 270,597' 282,200 282,666 283,616 284,819 64 To United States ............................... 31,932 42,881 55,811 59,889 64,485' 67,957' 68,599' 65,363' 67,109 70,306 65 Parent bank.................................... 19,599 24,213 27,393 18,089 23,216 23,624' 21,636 21,195 22,996 25,195 6 6 6 7 O N t o h n e b r a b n a k nk s. s . .. in .. .. U .. n .. i . t . e .. d .. . S ... t . a .. t . e .. s .. . . . . . . . . . . . . . . . . . . . . | 12,373 18,669 1 1 2 6 , , 0 3 8 3 4 4 2 1 8 3 , , 1 6 0 9 2 8 2 1 6 4 , , 3 9 3 3 4 5 ' ' 3 12 1 , , 8 4 4 8 5 8' 3 1 2 4 , , 4 4 8 8 1 2 ' ' 3 1 2 2, , 0 1 0 6 4 4' 3 1 1 2 , ,5 5 8 3 3 0 3 1 2 2 , , 3 7 3 7 4 7 68 To foreigners...................................... 137,612 151,363 169,927 204,654 201,456' 195,229' 205,511' 209,157' 207,742 205,463 69 Other branches of parent bank....... 37,098 43,268 53,396 59,429 60,513 56,779 57,714 61,249 59,375 56,528 70 Banks ............................................. 60,619 64,872 63,000 83,605 80,671' 80,988' 89,238' 88,055 87,622 86,945 71 Official institutions.......................... 22,878 23,972 26,404 28,521 29,048 26,691' 27,727 28,321 28,612 28,316 72 Nonbank foreigners ........................ 17,017 19,251 27,127 33,099 31,224' 30,771' 30,832 31,532' 32,133 33,674 73 Other liabilities................................... 3,527 4,328 5,072 7,623 7,811 7,411' 8,090 8,146' 8,765 9,050 United Kingdom 74 Total, all currencies ............................ 81,466 90,933 106,593 131,959 130,873 128,417 133,793 136,654 138,915 138,930 75 To United States ............................... 5,997 7,753 9,730 19,612 20,986 20,378 20,808 19,921 20,838 19,877 76 Parent bank.................................... 1,198 1,451 1,887 2,516 3,104 3,014 2,758 2,140 2,301 2,118 7 7 7 8 N Ot o h n e b r a b n a k n s k . s . .. i . n . .. U .. n .. i . t . e .. d .. . S ... t . a .. t . e .. s .. . . . . . . . . . . . . . . . . . . . . | 4,798 6,302 4 3, , 6 2 1 3 1 2 7 9 , , 3 7 8 1 1 5 9 8 , ,7 1 1 6 5 7 7 9 , , 6 7 3 3 1 3 1 7 0 , , 6 4 2 2 7 3 1 6 1 , , 5 2 0 7 2 9 1 6 2 , , 3 1 8 5 2 5 1 6 1 , , 2 4 6 9 5 4 79 To foreigners...................................... 73,228 80,736 93,202 106,766 104,032 102,117 106,524 110,473 111,375 111,770 80 Other branches of parent bank....... 7,092 9,376 12,786 12,463 12,567 11,458 11,099 14,799 14,268 13,801 81 Banks ............................................. 36,259 37,893 39,917 49,299 47,620 48,872 53,031 53,204 53,955 54,314 82 Official institutions.......................... 17,273 18,318 20,963 23,060 24,202 21,822' 22,890 23,303 23,453 23,628 83 Nonbank foreigners ........................ 12,605 15,149 19,536 21,944 19,643 19,965' 19,504 19,167 19,699 20,027 84 Other liabilities................................... 2,241 2,445 3,661 5,581 5,855 5,922 6,461 6,260 6,702 7,283 85 Total payable in U.S. dollars.............. 63,174 67,573 77,030 94,983 95,449 92,771 97,391 101,293 101,629 101,170 86 To United States ............................... 5,849 7,480 9,328 19,138 20,552 19,827 20,206 19,381 20,337 19,284 87 Parent bank.................................... 1,182 1,416 1,836 2,467 3,054 2,968 2,724 2,089 2,252 2,060 88 Other banks in United States.......... | 4,667 6,064 4,144 7,338 8,673 7,569 7,467 6,351 6,318 6,210 89 Nonbanks........................................ 3,348 9,333 8,825 9,290 10,015 10,941 11,767 11,014 90 To foreigners...................................... 56,372 58,977 66,216 73,542 72,397 70,597 74,705 79,251 78,296 78,279 91 Other branches of parent bank....... 5,874 7,505 9,635 8,337 8,446 7,793 7,322 10,894 10,468 9,998 92 Banks ............................................. 25,527 25,608 25,287 29,424 29,424 30,988 34,694 35,300 34,485 34,509 93 Official institutions.......................... 15,423 15,482 17,091 19,139 20,192 17,995' 18,923 19,255 19,554 19,558 94 Nonbank foreigners ........................ 9,547 10,382 14,203 16,642 14,335 13,821' 13,766 13,802 13,789 14,214 95 Other liabilities................................... 953 1,116 1,486 2,303 2,500 2,347 2,480 2,661 2,996 3,607 Bahamas and Caymans 96 Total, all currencies............................ 66,774 79,052 91,735 108,872 108,910 110,946 117,839 114,748 115,742 116,465 97 To United States ............................... 22,721 32,176 39,431 34,995 37,674' 43,092' 43,580' 40,896' 41,841 45,561 98 Parent bank.................................... 16,161 20,956 20,356 10,937 15,080 16,801 15,099 15,341 16,989 19,114 1 9 0 9 0 N Ot o h n e b r a b n a k n s k . s . .. i . n . .. U .. n .. i . t . e .. d .. . S ... t . a .. t . e .. s .. . . . . . . . . . . . . . . . . . . . . | 6,560 11,220 1 6 2 , , 1 8 9 7 9 6 1 5 8 , , 5 5 4 1 5 3 1 5 7 , , 3 2 4 4 6 8' ' 2 4 1 , , 6 6 0 8 9 2' 2 6 2 , , 3 1 5 3 1 0 ' ' 2 4 0 , , 7 7 7 7 8 7' 1 5 9 , , 4 4 1 35 7 2 5 0, ,7 72 2 7 0 101 To foreigners...................................... 42,899 45,292 50,447 71,259 68,578' 65,229' 71,132' 70,804' 70,583 67,957 102 Other branches of parent bank....... 13,801 12,816 16,094 21,078 20,875 20,559 22,150 22,401 22,470 20,041 103 Banks ............................................. 21,760 24,717 23,104 36,498 33,611' 30,504' 34,701' 33,760 33,028 32,128 104 Official institutions.......................... 3,573 3,000 4,208 5,176 4,866 5,020 5,016 4,958 5,435 5,461 105 Nonbank foreigners ........................ 3,765 4,759 7,041 8,507 9,226' 9,146' 9,265' 9,685' 9,650 10,327 106 Other liabilities................................... 1,154 1,584 1,857 2,618 2,658 2,625' 3,127 3,048' 3,318 2,947 107 Total payable in U.S. dollars.............. 63,417 74,463 87,014 103,339 103,393 105,997 112,929 110,074 111,389 112,387 1. In May 1978 the exemption level for branches required to report was in- rowers, including corporations that are majority owned by foreign governments, creased, which reduced the number of reporting branches. replaced the previous, more narrowly defined claims on foreign official institutions. 2. In May 1978 a broader category of claims on foreign public bor- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics □ August 1980 3.14 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1979 1980 Item 1977 ' 1978' 1979' Dec.' Jan.' Feb.' Mar.' Apr.' Mayf Jun&p 1 Total1 .................................................................. 131,097 162,589 149,466 149,466 145,999 145,037 142,069 140,500 143,390 148,821 By type 2 Liabilities reported by banks in the United States2 18,003 23,290 30,411 30,411 24,739 24,491 27,226 27,923 28,416 28,750 3 U.S. Treasury bills and certificates3..................... 47,820 67,671 47,666 47,666 48,864 48,234 42,797 40,527 42,371 45,907 U.S. Treasury bonds and notes 4 Marketable ...................................................... 32,164 35,894 37,669 37,669 38,152 37,888 37,785 37,718 38,104 39,821 56 U. N S. o n se m cu ar r k it e ie ta s b o le th 4 er . . t . h .. a .. n . .. U .. . . S .. . . .. T .. r . e .. a .. s . u .. r . y .. . s .. e . c .. u .. r . i . t . i . e .. s . 5 . 2 1 0 2 , , 4 6 4 6 3 7 2 1 0 4 , , 9 7 7 6 0 4 1 16 7 , , 3 3 3 8 3 7 1 16 7 , , 3 3 3 8 3 7 1 1 7 6 , , 4 8 3 1 4 0 1 1 7 7 , , 3 0 8 4 4 0 1 1 6 7 , , 7 4 8 77 4 1 1 6 7 , , 3 9 8 4 4 8 1 1 6 7, , 9 1 5 8 5 4 1 1 5 8 , , 9 3 5 8 4 9 By area 78 C W a e n s a te d r a n . E ... u .. r . o .. p .. e .. 1 ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 2, , 3 7 3 4 4 8 9 2 3 , , 4 0 8 8 6 9 85 1 , , 6 8 0 9 2 8 85 1 , , 6 8 0 9 2 8 82 1 , , 6 9 2 22 8 79 2, , 3 8 4 5 7 2 77 1 , , 1 6 1 4 9 4 74 1 , , 1 90 5 3 4 7 2 4 , , 1 0 3 8 4 9 7 2 5 , , 1 1 5 9 7 5 9 Latin America and Caribbean............................. 4,649 5,046 6,371 6,371 4,780 4,916 6,099 5,979 6,034 5,989 10 Asia ................................................................... 50,693 58,817 52,697 52,697 53,456 54,602 53,997 54,403 57,317 61,921 11 Africa .................................................................. 1,742 2,408 2,412 2,412 2,480 2,392 2,419 3,316 2,889 2,694 12 Other countries6.................................................. 931 743 486 486 733 928 791 745 927 865 1. Includes the Bank for International Settlements. 5. Debt securities of U.S. government corporations and federally sponsored 2. Principally demand deposits, time deposits, bankers acceptances, commercial agencies, and U.S. corporate stocks and bonds. paper, negotiable time certificates of deposit, and borrowings under repurchase 6. Includes countries in Oceania and Eastern Europe. agreements. 3. Includes nonmarketable certificates of indebtedness (including those payable Note: Based on Treasury Department data and on data reported to the Treasury in foreign currencies through 1974) and Treasury bills issued to official institutions Department by banks (including Federal Reserve Banks) and securities dealers of foreign countries. 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 1980 Item 1976 1977 Dec.' June' Sept.' Dec.' Mar.' 1 Banks’ own liabilities ..................................................................... 781 925 2,347 1,978 2,393 1,870 2,237 2 Banks’ own claims1 ......................................................................... 1,834 2,356 3,663 2,559 2,700 2,438 2,812 3 Deposits ..................................................................................... 1,103 941 1,798 1,371 1,356 1,032 1,212 4 Other claims ............................................................................... 731 1,415 1,864 1,189 1,344 1,406 1,600 5 Claims of banks’ domestic customers2............................................. 367 573 616 592 1,056 1. Includes claims of banks’ domestic customers through March 1978. Note: Data on claims exclude foreign currencies held by U.S. monetary au- 2. Assets owned by customers of the reporting bank located in the United States thorities. 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

Bank-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 Holder and type of liability Dec. Feb. Mar. Apr. May June/> 1 All foreigners ............................................. 110,657 166,796' 187,339' 184,844' 193,998' 185,977 180,552' 182,847 185,841 2 Banks’ own liabilities ................................. 78,699' 117,146' 113,543' 122,689' 119,118 115,586' 116,323 116,711 3 Demand deposits .................................... 16,803 18,996 19,211 23,308' 20,791' 22,520' 22,678 22,319' 22,541 25,969 4 Time deposits1 ........................................ 11,347 11,521 12,441 13,671' 12,504' 12,741' 12,877 12,627' 12,668 12,748 5 Other2 .................................................... 9,693' 16,277' 12,692' 12,471' 14,611 15,020' 15,914 16,682 6 Own foreign offices3 ............................... 37,353' 63,890' 67,556' 74,957' 68,951 65,620 65,200 61,313 7 Banks’ custody liabilities4............................ 70,193' 71,301' 71,309 66,859 64,966' 66,524 69,129 8 U.S. Treasury bills and certificates5......... 40,744 48,906 68,202 48,573 49,860' 49,360 44,408 42,232 44,088 47,173 9 Other negotiable and readily transferable instruments6 .................................... 17,396 19,270 18,931 19,407 19,701 19,944' 19,643 19,429 10 Other ...................................................... 2,499' 2,350' 2,509 2,542 2,750 2,790' 2,793 2,527 11 Nonmonetary international and regional organizations7 ...................................... 5,714 3,274 2,607 2,351' 1,227 1,758 1,968' 1,845 12 Banks’ own liabilities ................................. 906 709' 444 393 383 648' 447 842 13 Demand deposits .................................... 290 231 330 260 164 153 160 241 144 99 14 Time deposits1 ........................................ 205 139 84 151' 89 78 79 93 92 15 Other2 .................................................... 492 298 191 162 144 314' 652 16 Banks’ custody liabilities4............................ 1,701 1,643 783 1,319 1,376 1,320 1,398 1,637 17 U.S. Treasury bills and certificates.......... 2,701 201 102 102 114 157 87 82 18 Other negotiable and readily transferable instruments6 .................................... 1,499 1,538 681 1,206 1,218 1,233 1,317 1,551 19 Other ...................................................... 1 2 0 0 0 0 0 0 20 Official institutions8 .................................... 54,956 65,822 90,706' 78,077' 73,603' 72,725 70,023 68,450' 71,147 74,657 21 Banks’ own liabilities ................................. 12,129' 18,163' 12,347' 12,151 14,527 14,547' 15,293 16,216 22 Demand deposits .................................... 3,394 3,528 3,390 4,704' 3,725' 3,680 3,928 4,734 4,484 5,007 23 Time deposits1 ........................................ 2,321 1,797 2,550 3,041' 2,309' 2,367 2,397 2,392 2,581 2,646 24 Other2 .................................................... 6,189' 10,418' 6,313' 6,104 8,202 7,421' 8,227 8,564 25 Banks’ custody liabilities4............................ 78,577 59,914 61,256 60,575 55,497 53,903 55,854 58,441 26 U.S. Treasury bills and certificates5......... 37,725 47,820 67,415 47,666 48,234 42,797 40,527 42,731 45,907 27 Other negotiable and readily transferable instruments6 .................................... 10,992 12,196 12,357 12,303 12,668 13,341 13,084 12,485 28 Other ...................................................... 170 52 35 37 32 35 40 48 29 Banks9 ....................................................... 37,174 57,464' 88,384' 91,389' 100,450' 95,162 92,013' 92,106 89,734 30 Banks’ own liabilities ................................. 52,674' 83,383' 86,007' 94,974' 89,381 86,198' 86,279 84,270 31 Unaffiliated foreign banks ...................... 15,320' 19,493' 18,451' 20,017' 20,430 20,578' 21,079 22,958 32 Demand deposits ................................. 9,104 10,933 11,249 13,257' 11,820' 13,345 13,371 12,681' 13,033 15,025 33 Time deposits1 .................................... 2,297 2,040 1,453 1,724' 1,278' 1,304' 1,574 1,498' 1,423 1,443 34 Other2 ................................................ 2,618' 4,512' 5,353 5,369' 5,485 6,399' 6,623 6,490 35 Own foreign offices3 ............................... 37,353' 63,890' 67,556' 74,957' 68,951 65,620 65,200 61,313 36 Banks’ custody liabilities4............................ 4,790' 5,000' 5,382 5,475 5,781 5,815 5,828 5,463 37 U.S. Treasury and certificates................. 119 300 422 533 566 675 771 764 594 38 Other negotiable and readily transferable instruments6 .................................... 2,425 2,405 2,573 2,559 2,559 2,462 2,491 2,593 39 Other ...................................................... 2,065' 2,173' 2,276 2,350 2,547 2,582 2,574 2,277 40 Other foreigners .......................................... 12,814 14,736 16,020 18,526' 19,110' 19,033 17,748 18,971 41 Banks’ own liabilities ................................. 12,990 14,890' 14,746' 15,171' 14,828 14,193' 14,305 15,383 42 Demand deposits .................................... 4,015 4,304 4,242 5,087' 5,082' 5,343' 5,219 4,663 4,880 5,839 43 Time deposits ......................................... 6,524 7,546 8,353 8,755 8,992 8,827 8,645' 8,576 8,568 44 Other2 .................................................... 394 1,048 836 781 849 977 45 Banks’ custody liabilities4............................ 3,030 3,636 3,939 4,205 3,928' 3,443 46 U.S. Treasury bills and certificates.......... 198 285 382 446 111 847 511 586 47 Other negotiable and readily transferable instruments6 .................................... 2,481 3,131 3,320 3,339 3,256 2,752 48 Other ...................................................... 264 123 199 154 111 173' 180 49 Memo: Negotiable time certificates of deposit in custody for foreigners...................... 10,906 11,395 11,236 11,670 11,685 11,773 1. Excludes negotiable time certificates of deposit, which are included in “Other 5. Includes nonmarketable certificates of indebtedness and Treasury bills issued negotiable and readily transferable instruments.” Data for time deposits before to official institutions of foreign countries. April 1978 represent short-term only. 6. Principally bankers acceptances, commercial paper, and negotiable time cer­ 2. Includes borrowing under repurchase agreements. tificates of deposit. 3. U.S. banks: includes amounts due to own foreign branches and foreign sub­ 7. Principally the International Bank for Reconstruction and Development, and sidiaries consolidated in “Consolidated Report of Condition” filed with bank reg­ the Inter-American and Asian Development Banks. ulatory agencies. Agencies, branches, and majority-owned subsidiaries of foreign 8. Foreign central banks and foreign central governments and the Bank for banks: principally amounts due to head office or parent foreign bank, and foreign International Settlements. branches, agencies or wholly owned subsidiaries of head office or parent foreign 9. Excludes central banks, which are included in “Official institutions.” bank. 4. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics □ August 1980 3.16 LIABILITIES TO FOREIGNERS Continued 1979 1980 Area and country 1976 1977 1978 Dec. Jan. Feb. Mar. Apr. May June? 1 110,657 126,168 166,796' 187,339' 184,844' 193,998' 185,977 180,552' 182,847 185,841 2 Foreign countries ................................................ 104,943 122,893 164,190' 184,987' 183,617' 192,285' 184,218 178,584' 181,002 183,362 3 Europe ................................................................ 47,076 60,295 85,159' 90,904' 86,731' 85,753' 85,278 82,806 82,656 82,908 4 Austria ............................................................. 346 318 513 413 378 379 335 444 352 383 5 Belgium-Luxembourg ...................................... 2,187 2,531 2,552 2,375' 2,109' 2,407' 2,365 2,369 2,795 4,097 6 Denmark ......................................................... 356 770 1,946 1,092 955 587 613 615 588 553 7 Finland ............................................................. 416 323 346 398 455 5444 484 522 435 438 8 France ............................................................. 4,876 5,269 9,208 10,401 10,534 11,247 11,004 11,303 10,839 11,199 9 Germany ......................................................... 6,241 7,239 17,286 12,935 10,345 8,960 8,618 5,320 5,427 6,951 10 Greece ............................................................. 403 603 826 635 832 627 618 617 610 626 11 Italy ................................................................ 3,182 6,857 7,739 7,782 7,825 7,394 7,399 7,429 6,942 5,778 12 Netherlands ...................................................... 3,003 2,869 2,402 2,327 2,529 2,485 2,377 2,022 2,128 2,676 13 Norway ........................................................... 782 944 1,271 1,267 1,229 1,156 1,500 1,391 1,221 1,282 14 Portugal ........................................................... 239 273 330 557 550 438 314 537 339 390 15 Spain .............................................................. 559 619 870 1,259 1,192 1,146 1,242 1,418 1,386 1,364 16 Sweden............................................................. 1,692 2,712 3,121 2,005 1,845 1,978 1,692 1,847 1,632 1,998 17 Switzerland ...................................................... 9,460 12,343 18,225' 17,954' 16,745' 16,950' 15,625 14,859 14,517 14,734 18 Turkey ............................................................. 166 130 157 120 232 118 138 136 136 153 19 United Kingdom............................................... 10,018 14,125 14,265 24,694' 25,083' 25,300' 26,810 27,187 27,247 24,164 20 Yugoslavia....................................................... 189 232 254 266 157 149 115 122 144 254 21 Other Western Europe1 ................................... 2,673 1,804 3,440' 4,070 3,474 3,455 3,693 4,301 5,521 5,453 22 U.S.S.R............................................................. 51 98 82 52 46 41 37 33 40 49 23 Other Eastern Europe2.................................... 236 236 325 302 217 390 300 334 354 366 24Canada ................................................................ 4,659 4,607 6,969 7,379 9,541 9,556 8,507 8,048 8,201 8,868 25 Latin America and Caribbean ............................. 19,132 23,670 31,606 49,633' 50,843' 57,933' 51,583 48,874' 48,953 46,939 26 Argentina ....................................................... 1,534 1,416 1,484 1,582 1,635 1,632 1,582 1,679 1,903 1,705 27 Bahamas ......................................................... 2,770 3,596 6,752 15,354' 16,629' 22,288' 16,352 14,454 16,535 13,034 28 Bermuda ......................................................... 218 321 428 430 447 560 534 479 512 576 29 Brazil .............................................................. 1,438 1,396 1,125 1,005 1,405 1,156 1,367 1,645 1,527 1,445 30 British West Indies .......................................... 1,877 3,998 5,991 11,074' 11,908 12,958' 11,812 11,585 9,571 10,216 31 Chile ................................................................ 337 360 399 469 396 471 445 444 416 450 32 Colombia ......................................................... 1,021 1,221 1,756 2,617 2,882 2,840 2,825 2,905 2,780 2,854 33 Cuba................................................................ 6 6 13 13 10 5 6 23 7 6 34 Ecuador ........................................................... 320 330 322 425 386 412 459 357 337 455 35 Guatemala3 ...................................................... 416 414 394 391 426 403 350 360 36 Jamaica3........................................................... 52 76 96 90 97 132 138 91 37 Mexico ............................................................. 2,870 2,876 3,417 4,096 3,980 3,973 4,001 4,302 4,111 3,918 38 Netherlands Antilles ........................................ 158 196 308 499 344 524 419 411 335 250 39 Panama ........................................................... 1,167 2,331 2,968 4,483 4,770 4,663' 4,418 4,505 4,082 4,173 40 Peru ................................................................ 257 287 363 383 376 388 363 392 412 346 41 Uruguay ........................................................... 245 243 231 202 216 210 240 216 208 232 42 Venezuela ....................................................... 3,118 2,929 3,821 4,192 3,083 3,518 4,075 3,104' 3,953 4,688 43 Other Latin America and Carribbean .............. 1,797 2,167 1760 2,318 1,886 1,856' 2,161 1,837 1,775 2,140 44 Asia ................................................................... 29,766 30,488 36,492' 32,928' 32,056' 34,510' 34,222 33,519 35,984 39,660 China 45 Mainland ...................................................... 48 53 67 49 46 32 34 35 30 44 46 Taiwan ......................................................... 990 1,013 502 1,393 1,386 1,567 1,888 1,076 1,632 1,534 47 Hong Kong ...................................................... 894 1,094 1,256 1,672 1,694 1,776 1,897 1,857 1,708 2,256 48 India ................................................................ 638 961 790 527 544 579 558 576 740 633 49 Indonesia ......................................................... 340 410 449 504 743 693 658 935 670 807 50 Israel .............................................................. 392 559 688 707 517 507' 759 560' 570 579 51 Japan .............................................................. 14,363 14,616 21,927 8,907' 9,434' 10,663' 9,651 9,383' 10,792 12,712 52 Korea .............................................................. 438 602 795 993 959 1,019 1,069 1,008 988 1,087 53 Philippines ....................................................... 628 687 644 800 729 772 669 789 885 883 54 Thailand........................................................... 277 264 427 277' 408 284 414 407 472 405 55 Middle-East oil-exporting countries4 ................ 9,360 8,979 7,534' 15,217' 14,089' 14,992 15,686 15,189 15,724 16,711 56 Other Asia ...................................................... 1,398 1,250 1,414 1,881' 1,506 1,625' 1,638 1,704 1,771 2,010 57Africa .................................................................. 2,298 2,535 2,886 3,239 3,332' 3,170 3,325 4,203 3,810 3,708 58 Egypt .............................................................. 333 404 404 475 449 332 318 438 376 346 59 Morocco........................................................... 87 66 32 33 50 33 31 41 31 35 60 South Africa .................................................... 141 174 168 184 270' 195 313 294 316 325 61 Zaire................................................................ 36 39 43 110 128 93 102 84 86 107 62 Oil-exporting countries5 ................................... 1,116 1,155 1,525 1,635 1,503 1,665 1,660 2,462 2,231 2,100 63 Other Africa.................................................... 585 698 715 804 932 852 901 885 768 796 64 Other countries .................................................. 2,012 1,297 1076 904 1,114 1,363 1,304 1,133 1,397 1,279 65 Australia ......................................................... 1,905 1,140 838 684 853 1,054 992 881 1,150 1,008 66 All other ......................................................... 107 158 239 220 261 309 312 252 247 271 67 Nonmonetary international and regional organizations ................................................ 5,714 3,274 2,607 2,351' 1,227 1,712 1,758 1,968' 1,845 2,479 68 International .................................................... 5,157 2,752 1,485 1,238' 829' 618 652 863' 766 1,375 69 Latin American regional................................... 267 278 808 806' 84' 780 746 813 790 802 70 Other regional6................................................ 290 245 314 308 314 315 361 292 289 302 1. Includes the Bank for International Settlements. Beginning April 1978, also 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and includes Eastern European countries not listed in line 23. United Arab Emirates (Trucial States). 2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German Dem­ 5. Comprises Algeria, Gabon, Libya, and Nigeria. ocratic Republic, Hungary, Poland, and Romania. 6. Asian, African, Middle Eastern, and European regional organizations, except 3. Included in “Other Latin America and Caribbean” through March 1978. the Bank for International Settlements, which is included in “Other Western Europe.” Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-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 1980 Area and country 1976 1977 1978 Dec. Jan. Feb. Mar. Apr. May June/* 1 Total .................................................................... 79,301 90,206 115,479' 133,762' 127,614' 131,088' 130,775 133,331' 139,504 148,331 2 Foreign countries ................................................. 79,261 90,163 115,423' 133,730' 127,579' 131,055' 130,739 133,298' 139,471 148,298 3 Europe ................................................................ 14,776 18,114 24,232' 28,389' 24,906' 25,592' 25,810 24,525' 26,157 29,811 4 Austria ............................................................. 63 65 140 284 258 315 331 337' 291 306 5 Belgium-Luxembourg ...................................... 482 561 1,200' 1,339' 1,416 1,524 1,631 1,590' 1,471 1,987 6 Denmark ......................................................... 133 173 254 147 126 156 207 203 168 167 7 Finland ............................................................. 199 172 305 202 262 237 188 223 273 306 8 France ............................................................. 1,549 2,082 3,735 3,302 3,086 3,197 2,984 2,811 2,740 2,689 9 Germany ......................................................... 509 644 845 1,159 921 1,209 1,308 1,153' 1,104 1,132 10 Greece ............................................................. 279 206 164 154 136 141 191 244 329 346 11 Italy ................................................................ 993 1,134 1,523 1,631' 1,390' 1,407' 1,488 1,462' 1,748 1,938 12 Netherlands ...................................................... 315 338 677 514 472 610 535 480' 457 591 13 Norway ........................................................... 136 162 299 276 177 175 254 170 172 218 14 Portugal ........................................................... 88 175 171 330 288 213 227 247 246 300 15 Spain .............................................................. 745 722 1,120' 1,051 948 1,015 914 1,020 1,106 1,195 16 Sweden............................................................. 206 218 537 542 747 702 593 618 661 683 17 Switzerland ...................................................... 379 564 1,283 1,166' 939' 1,363' 1,356 826' 916 1,247 18 Turkey ............................................................. 249 360 300 149 128 131 123 132 151 143 19 United Kingdom............................................... 7,033 8,964 10,172 13,789 11,370' 10,886' 10,950 10,462 11,803 13,973 20 Yugoslavia ........................................................ 234 311 363 611 569 565 598 593 614 656 21 Other Western Europe1 ................................... 85 86 122 175 203 227 225 330 266 208 22 U.S.S.R............................................................. 485 413 366 290 263 265 253 257 247 291 23 Other Eastern Europe2.................................... 613 566 657 1,277 1,205 1,254' 1,453 1,366 1,394 1,433 24 Canada ................................................................ 3,319 3,355 5,152 4,143' 4,023' 4,142 4,186 3,923' 4,283 5,017 25 Latin America and Caribbean............................. 38,879 45,850 57,443' 67,925' 65,600' 66,251' 65,152 68,257' 71,476 73,583 26 Argentina ........................................................ 1,192 1,478 2,281 4,417' 4,683 4,899 4,969 4,992 5,117 5,190 27 Bahamas ......................................................... 15,464 19,858 21,428' 18,828' 20,743' 19,214' 19,262 21,045 23,177 24,940 28 Bermuda ......................................................... 150 232 184 496 434 314 313 321 296 198 29 Brazil .............................................................. 4,901 4,629 6,251 7,731' 7,555 7,618 8,010 8,112 8,064 8,317 30 British West Indies .......................................... 5,082 6,481 9,692 9,762 7,819' 10,136 7,364 8,584 8,985 8,534 31 Chile ................................................................ 597 675 972 1,442' 1,376 1,430 1,367 1,334' 1,355 1,323 32 Colombia ......................................................... 675 671 1,012 1,614 1,655 1,698 1,526 1,539 1,408 1,426 33 Cuba................................................................ 13 10 0 4 4 4 4 5 4 4 34 Ecuador ........................................................... 375 517 705 1,025 1,001 1,025 1,023 1,011 1,007 1,053 35 Guatemala3 ...................................................... 94 134 114 105 109 108 107 120 36 Jamaica3........................................................... 40 47 51 44 42 43 43 36 37 Mexico ............................................................. 4,822 4,909 5,479' 9,095' 8,957' 9,021' 9,231 9,191 9,724 10,045 38 Netherlands Antilles ........................................ 140 224 273 248 325 397 513 663 696 825 39 Panama .......................................................... 1,372 1,410 3,098' 6,031' 4,432 3,919 4,652 4,643' 4,538 4,939 40 Peru ................................................................ 933 962 918 652 585 634 701 654 628 695 41 Uruguay ........................................................... 42 80 52 105 100 82 90 84 154 102 42 Venezuela ........................................................ 1,828 2,318 3,474 4,695' 4,246' 4,196' 4,457 4,231' 4,528 4,274 43 Other Latin America and Caribbean................ 1,293 1,394 1,490' 1,598 1,518 1,515 1,520 1,696' 1,646 1,562 44Asia .................................................................... 19,204 19,236 25,386' 30,625' 30,173' 32,337 32,827 33,912' 34,902 36,815 China 45 Mainland ...................................................... 3 10 4 35 28 51 49 48 40 75 46 Taiwan ......................................................... 1,344 1,719 1,499 1,821 1,700 1,691 1,524 1,626' 1,889 2,113 47 Hong Kong ...................................................... 316 543 1,479' 1,804 1,804 2,127 1,888 2,001 2,362 2,279 48 India ................................................................ 69 53 54 92 136 90 120 87 61 81 49 Indonesia ......................................................... 218 232 143 131 117 128 132 166 128 154 50 Israel .............................................................. 755 584 888 990 812 787 734 829 828 1,023 51 Japan .............................................................. 11,040 9,839 12,671' 16,921' 17,027 18,899 19,433 20,311' 20,394 21,256 52 Korea .............................................................. 1,978 2,336 2,282 3,796 4,080 4,356 4,726 4,853 5,057 5,333 53 Philippines ........................................................ 719 594 680 737 649 645 696 693 717 780 54 Thailand........................................................... 442 633 758 935 971 993 877 857 918 918 55 Middle East oil-exporting countries4 ............... 1,459 1,746 3,125' 1,548' 1,400' 1,211 1,437 1,178' 978 1,257 56 Other Asia ...................................................... 863 947 1,804 1,813 1,448 1,359 1,211 1,263 1,530 1,546 57 Africa .................................................................. 2,311 2,518 2,221 1,795' 1,899 1,775 1,729 1,800 1,770 2,029 58 Egypt .............................................................. 126 119 107 112 130 154 128 135 134 93 59 Morocco........................................................... 27 43 82 103 106 109 118 128 107 121 60 South Africa .................................................... 957 1,066 860 445 412 342 337 362 465 617 61 Zaire................................................................ 112 98 164 144' 146 144 143 143' 108 107 62 Oil-exporting countries5 ................................... 524 510 452 391 507 451 353 443 325 364 63 Other .............................................................. 565 682 556 600' 599 574 649 588 632 727 64 Other countries .................................................. 772 1,090 988 855' 978 958 1,035 880 883 1,044 65 Australia ......................................................... 597 905 877 673 803 789 803 713 695 847 66 All other ......................................................... 175 186 111 182' 175 170 232 167 187 196 67 Nonmonetary international and regional organizations6 ............................................... 40 43 56 32 35 33 36 33 34 33 1. Includes the Bank for International Settlements. Beginning April 1978, also 5. Comprises Algeria, Gabon, Libya, and Nigeria. includes Eastern European countries not listed in line 23. 6. Excludes the Bank for International Settlements, which is included in “Other 2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German Dem­ Western Europe.” ocratic Republic, Hungary, Poland, and Romania. 3. Included in “Other Latin America and Caribbean” through March 1978. Note. Data for period prior to April 1978 include claims of banks’ domestic 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and customers on foreigners. United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics □ August 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 1980 Type of claim Jan. Feb. Mar. Apr. May June/7 1 Total ................................................................................... 79,301 126,698' 153,710' 153,147 2 Banks’ own claims on foreigners...................... 115,479' 133,762' 127,614' 131,088' 130,775 133,331' 139,504 148,331 3 Foreign public borrowers ................................. 10,263' 15,434' 14,932' 15,052' 15,428 15,151' 15,090 15,817 4 Own foreign offices1 ........................................ 41,502' 47,305' 46,414' 47,003' 45,248 46,163 49,940 55,900 5 Unaffiliated foreign banks ............................... 40,538' 41,016' 36,281' 39,018' 39,692' 40,990' 42,838 43,621 6 Deposits ........................................................ 5,480' 6,253' 4,933' 5,153' 5,479 6,093' 6,486 6,518 7 Other ........................................................... 35,058' 34,762' 31,349' 33,864' 34,213 34,897' 36,353 37,102 8 All other foreigners.......................................... 23,176' 30,007' 29,986' 30,015' 30,407 31,027' 31,635 32,994 9 Claims of banks’ domestic customers2.............. 11,219 19,948 22,372 10 Deposits........................................................... 480 955 1,208 11 Negotiable and readily transferable instruments3 5,385 12,974 14,559 12 Outstanding collections and other claims4......... 5,756 6,176 5,353 6,019 6,605 13 Memo: Customer liability on acceptances......... 14,969' 18,044' 20,095 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 ....................................................... 12,924 21,259 23,900 25,509 24,874 24,131 24,905 1. U.S. banks: includes amounts due from own foreign branches and foreign 4. Data for March 1978 and for period prior to that are outstanding collections subsidiaries consolidated in “Consolidated Report of Condition” filed with bank only. regulatory agencies. Agencies, branches, and majority-owned subsidiaries of foreign 5. Includes demand and time deposits and negotiable and nonnegotiable certif­ banks: principally amounts due from head office or parent foreign bank, and icates of deposit denominated in U.S. dollars issued by banks abroad. For de­ foreign branches, agencies, or wholly owned subsidiaries of head office or parent scription of changes in data reported by nonbanks, see July 1979 Bulletin, p. 550. foreign bank. 2. Assets owned by customers of the reporting bank located in the United States Note: Beginning April 1978, data for banks’ own claims are given on a monthly that represent claims on foreigners held by reporting banks for the account of their basis, but the data for claims of banks’ own domestic customers are available on domestic customers. a quarterly basis only. 3. Principally negotiable time certificates of deposit and bankers 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 1980 Maturity; by borrower and area Sept. Dec. Mar. June Sept. Dec. Mar. 1 Total........................................................................................... 60,105r 73,773' 71,638' 77,738' 87,571' 86,209' 85,265 By borrower 2 Maturity of 1 year or less1 ........................................................... 47,239' 58,481' 55,459' 60,069' 68,390' 65,195' 63,901 3 Foreign public borrowers......................................................... 3,711 4,583 4,627 4,604 6,062' 7,033' 6,843 4 All other foreigners.................................................................. 43,528' 53,898' 50,832' 55,465' 62,329' 58,162' 57,058 5 Maturity of over 1 year1 .............................................................. 12,866' 15,291' 16,179 17,669' 19,181' 21,014' 21,364 6 Foreign public borrowers ......................................................... 4,245' 5,361' 5,948' 6,433' 7,652' 8,103' 8,419 7 All other foreigners.................................................................. 8,620' 9,930' 10,231' 11,236' 11,529' 12,911' 12,945 By area Maturity of 1 year or less1 8 Europe..................................................................................... 10,518' 15,176' 12,396' 14,028' 16,794' 15,209' 13,850 9 Canada ..................................................................................... 1,953 2,670 2,514 2,703 2,471 1,777' 1,818 10 Latin America and Caribbean.................................................. 18,632' 20,990' 21,724' 23,144' 25,687' 24,964' 23,177 11 Asia ........................................................................................ 14,010 17,579 16,992 18,191 21,515' 21,673' 23,386 12 Africa...................................................................................... 1,535 1,496 1,290 1,438 1,399 1,078 1,043 13 All other2 ............................................................................... 591 569 541 565 524 493 627 Maturity of over 1 year1 14 Europe ..................................................................................... 3,102 3,142 3,103 3,488' 3,658' 4,145' 4,253 15 Canada..................................................................................... 794 1,426 1,456 1,221 1,364 1,317' 1,214 16 Latin America and Caribbean.................................................. 6,877 8,466' 9,325 10,279' 11,771' 12,821' 13,397 17 Asia ........................................................................................ 1,303 1,407 1,486 1,884' 1,578' 1,911' 1,729 18 Africa...................................................................................... 580 637 629 614 623 652 620 19 All other2 ............................................................................... 211 214 180 183 188 169 152 1. Remaining time to maturity. 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 Banks1 Billions of dollars, end of period 1978 1979 1980 Area or country 1976 1977 Mar. June2 Sept. Dec. Mar. June Sept. Dec. Mari’ 1 206.8 240.0' 244.7 247.1 247.6 266.4' 263.8 275.5' 293.8' 303.6' 307.7 2G-10 countries and Switzerland ............................................... 100.3 116.4 116.9 112.6' 113.5' 124.8' 119.0' 125.3 135.8 138.1' 140.5 3 Belgium-Luxembourg ........................................................... 6.1 8.4 8.3 8.3 8.4 9.0 9.4 9.7 10.7 11.1 10.8 4 France ................................................................................. 10.0 11.0 11.4 11.4 11.7 12.2 11.7 12.7 12.0 11.6 12.0 5 Germany .............................................................................. 8.7 9.6 9.0 9.1 9.7 11.3' 10.5 10.8 12.8' 12.2' 11.4 6 Italy ..................................................................................... 5.8 6.5 6.0 6.4 6.1 6.7' 5.7 6.1 6.1 6.3 6.2 7 Netherlands........................................................................... 2.8 3.5 3.4 3.4 3.5 4.4 3.9 4.0 4.7 4.8 4.3 8 Sweden ................................................................................ 1.2 1.9 2.0 2.1 2.2 2.1 2.0 2.0 2.3 2.4 2.4 9 Switzerland ........................................................................... 3.0 3.6 4.0 4.1 4.3 5.4 4.5 4.8 5.0 4.8 4.4 10 United Kingdom .................................................................. 41.7 46.5 46.7 44.9' 44.2' 47.3 46.4' 50.3' 53.7' 56.0' 57.4 11 Canada ................................................................................. 5.1 6.4 7.0 5.1 4.9' 6.0 5.9 5.5 6.0 6.5' 6.8 12 Japan ................................................................................... 15.9 18.8 19.1 17.9 18.5' 20.6 19.0 19.6' 22.4' 22.4 25.0 13Other developed countries....................................................... 15.0 18.6 19.7 19.4 18.6 19.4 18.2 18.2 19.7 19.9 18.8 14 Austria................................................................................. 1.2 1.3 1.5 1.5 1.5 1.7 1.7 1.8 2.0 2.0 1.7 15 Denmark .............................................................................. 1.0 1.6 1.8 1.7 1.9 2.0 2.0 1.9 2.0 2.2 2.2 16 Finland................................................................................. 1.1 1.2 1.2 1.1 1.0 1.2 1.2 1.1 1.2 1.2 1.1 17 Greece .................................................................................. 1.7 2.2 2.1 2.3 2.2 2.3 2.3 2.2 2.3 2.4 2.4 18 Norway ................................................................................ 1.5 1.9 1.9 2.1 2.1 2.1 2.1 2.1 2.3 2.3 2.4 19 Portugal ................................................................................ .4 .6 .7 .6 .5 .6 .6 .5 .7 .7 .6 20 Spain ................................................................................... 2.8 3.6 3.6 3.6 3.5 3.4 3.0 3.0 3.3 3.5 3.5 21 Turkey ................................................................................. 1.3 1.5 1.4 1.4 1.5 1.5 1.4 1.4 1.4 1.4 1.4 22 Other Western Europe......................................................... .7 .9 1.5 1.2 .9 1.3 1.1 .9' 1.3' 1.4 1.4 23 South Africa......................................................................... 2.2 2.4 2.5 2.4 2.2 2.0 1.7 1.8 1.7 1.3 1.1 24 Australia .............................................................................. 1.2 1.4 1.5 1.4 1.3 1.4 1.3 1.4 1.3 1.3 1.1 25Oil-exporting countries3 ........................................................... 12.6 17.6 19.2 19.2 20.4 22.7 22.6 22.7 23.4 22.9' 21.9 26 Ecuador ................................................................................ .7 1.1 1.3 1.4 1.6 1.6 1.5 1.6 1.6 1.7 1.8 27 Venezuela ............................................................................ 4.1 5.5 5.5 5.6 6.2 7.2 7.2 7.6 7.9 8.7 7.9 28 Indonesia.............................................................................. 2.2 2.2 2.1 1.9 1.9 2.0 1.9 1.9 1.9 1.9 1.9 29 Middle East countries........................................................... 4.2 6.9 8.3 8.4 8.7 9.5 9.4 9.0 9.2 8.0 7.8 30 African countries .................................................................. 1.4 1.9 2.0 1.9 2.0 2.5 2.6 2.6 2.8 2.6 2.5 31Non-oil developing countries.................................................... 44.2 48.7 49.7 49.1 49.6 52.5 53.8 55.8' 58.7' 62.7' 64.0 Latin America 32 Argentina ............................................................................ 1.9 2.9 3.0 3.0 2.9 3.0 3.1 3.5 4.1 5.1 5.6 33 Brazil ................................................................................... 11.1 12.7 13.0 13.3 14.0 14.9 14.9 15.1 15.1 15.3 15.1 34 Chile..................................................................................... .8 .9 1.1 1.3 1.3 1.6 1.7 1.8 2.2 2.5 2.5 35 Colombia.............................................................................. 1.3 1.3 1.2 1.3 1.3 1.4 1.5 1.5 1.7 2.2 2.2 36 Mexico .................................................................................. 11.7 11.9 11.2 11.0 10.7 10.7' 10.9 10.7' 11.3' 11.9' 12.2 37 Peru ..................................................................................... 1.8 1.9 1.7 1.8 1.8 1.7 1.6 1.4 1.4 1.5 1.2 38 Other Latin America ........................................................... 2.8 2.6 3.4 3.3 3.4 3.6 3.5 3.3 3.6 3.7 3.7 Asia China 39 Mainland ........................................................................... .0 .0 .0 .0 .0 .0 .1 .1 .1 .1 .1 40 Taiwan .............................................................................. 2.4 3.1 3.1 2.5 2.4 2.9 3.1 3.3 3.5 3.4' 3.6 41 India..................................................................................... .2 .3 .3 .2 .3 .2 .2 .2 .2 .2 .2 42 Israel ................................................................................... 1.0 .9 .8 .7 .7 1.0 1.0 .9 1.0 1.3 .9 43 Korea (South) ..................................................................... 3.1 3.9 3.6 3.6 3.5 3.9 4.2 5.0 5.3 5.5 6.4 44 Malaysia4 .............................................................................. .5 .7 .7 .6 .6 .6 .6 .7 .7 .9 .8 45 Philippines............................................................................ 2.2 2.5 2.6 2.7 2.8 2.8 3.2 3.7 3.7 4.2' 4.4 46 Thailand .............................................................................. .7 1.1 1.1 1.1 1.1 1.2 1.2 1.4 1.6 1.6 1.4 47 Other Asia ........................................................................... .5 .4 .4 .3 .3 .2 .3 .4 .3 .4 .4 Africa 48 Egypt ................................................................................... .4 .3 .3 .3 .4 .4 .5 .7 .6 .6 .7 49 Morocco .............................................................................. .3 .5 .4 .5 .5 .6 .6 .5 .5 .6 .5 50 Zaire ................................................................................... .2 .3 .3 .2 .2 .2 .2 .2 .2 .2 .2 51 Other Africa5 ....................................................................... 1.2 .7 1.4 1.2 1.3 1.4 1.4 1.5 1.6 1.7 1.8 52Eastern Europe ....................................................................... 5.2 6.3 6.3 6.4 6.6 6.9 6.7 6.7 7.2 7.6' 7.3 53 U.S.S.R.................................................................................. 1.5 1.6 1.4 1.4 1.4 1.3 1.1 .9 .9 1.0 .6 54 Yugoslavia............................................................................ .8 1.1 1.2 1.3 1.3 1.5 1.6 1.7 1.8 1.8 1.9 55 Other ................................................................................... 2.9 3.7 3.7 3.7 3.9 4.1 4.0 4.1 4.6 4.8' 4.9 56Offshore banking centers......................................................... 24.7 26.1 28.8 32.4' 30.2' 31.1' 33.7' 36.9' 38.5' 40.4' 42.2 57 Bahamas .............................................................................. 10.1 9.8 11.3 12.1' 11.6' 10.3' 12.1' 14.3' 12.9' 13.5 13.6 58 Bermuda .............................................................................. .5 .6 .6 .7 .7 .7 .6 .7 .7 .8' .6 59 Cayman Islands and other British West Indies ..................... 3.8 3.8 4.6 7.2' 6.8' 7.4' 7.2' 7.5' 9.5' 9.5 11.2 60 Netherlands Antilles ............................................................. .6 .7 .7 .6 .6 .8 .8 1.0 1.1 1.2 .9 61 Panama6 .............................................................................. 3.0 3.1 3.1 3.3 3.1 3.0 3.4 3.8' 3.4' 4.3' 4.9 62 Lebanon .............................................................................. .1 .2 .2 .1 .1 .1 .1 .1 .2 .2 .2 63 Hong Kong........................................................................... 2.2 3.7 4.1 4.1 4.0 4.4' 4.8 4.9 5.5 6.0 5.7 64 Singapore ............................................................................ 4.4 3.7 3.9 3.8 2.9 3.9 4.2 4.2 4.9 4.5 4.7 65 Others7 ................................................................................ .0 .5 .3 .5 .5 .5 .4 .4 .4 .4 .4 66Miscellaneous and unallocated8................................................ 5.0 5.3 5.9 8.1 8.6 9.1 9.5 9.9 10.6 11.7' 13.1 1. The banking offices covered by these data are the U.S. offices and foreign in this table include only banks’ own claims payable in dollars. For earlier dates branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. the claims of the U.S. offices also include customer claims and foreign currency Offices not covered include (1) U.S. agencies and branches of foreign banks, and claims (amounting in June 1978 to $10 billion). (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are 3. Includes Algeria, Bahrain, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Oman, adjusted to exclude the claims on foreign branches held by a U.S. office or another Qatar, Saudi Arabia, and United Arab Emirates in addition to countries shown foreign branch of the same banking institution. The data in this table combine individually. foreign branch claims in table 3.13 (the sum of lines 7 through 10) with the claims 4. Foreign branch claims only through December 1976. of U.S. offices in table 3.17 (excluding those held by agencies and branches of 5. Excludes Liberia. foreign banks and those constituting claims on own foreign branches). However, 6. Includes Canal Zone beginning December 1979. see also footnote 2. 7. Foreign branch claims only. 2. For June 1978 and subsequent dates, the claims of the U.S. offices 8. Includes New Zealand, Liberia, and international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics □ August 1980 3.21 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars Country or area 1978 1979 Jan.- JuneP Dec. Jan. Feb. Mar. Apr. May Holdings (end of period)1 44,938 50,307' 50,307' 52,831' 53,202' 52,997' 52,091' 51,371 53,131 39,817 44,875 44,875 46,780' 46,557' 46,534' 46,430' 46,907 48,727 17,072 23,705 23,705 25,353' 24,902' 24,611' 24,008' 24,075 24,377 19 60 60 60 55 27 28 28 28 8,705 12,937 12,937 14,081 13,797 13,489 13,207' 13,225 12,976 1,358 1,466 1,466 1,407 1,414 1,453 1,473 1,412 1,437 285 647 647 640 636 633 642 653 647 977 1,868 1,868 1,894 1,564 1,534 1,528 1,574 1,731 5,373 6,236 6,236 6,757' 6,923' 6,995' 6,603' 6,665 7,001 10 Other Western Europe .................................... 354 491 491 514 512 478 527 519 556 11 Eastern Europe ............................................... 12 Canada ................................................................ 152 232 232 231 389 394 381 385 423 13 Latin America and Caribbean............................. 416 546 546 546 547 552 581 592 696 14 Venezuela ........................................................ 144 183 183 183 183 183 183 183 280 15 Other Latin American and Caribbean.............. 110 200 200 200 201 206 199 209 215 16 Netherlands Antilles ........................................ 162 163 163 163 164 164 199 200 200 17 Asia .................................................................... 21,488 19,804 19,804 20,061 20,130 20,390 20,872 21,269 22,751 18 Japan .............................................................. 11,528 11,175 11,175 10,844 10,420 9,631 9,533 9,543 9,545 19 Africa .................................................................. 691 591 591 591 591 591 593 593 492 20 All other ........................................................... -3 -3 -3 -3 -3 -3 -6 -7 -11 21 Nonmonetary international and regional organizations ................................................. 5,121 5,432' 5,432' 6,051 6,645' 6,463 5,661 4,464 4,404 22 International .................................................... 5,089 5,388 5,388 6,016 6,592 6,407 5,606 4,401 4,338 23 Latin American regional................................... 33 40 40 35 53 53 53 63 63 Transactions (net purchases,or sales (--), during period) 24 Total2 .................................................................. 6,297 5,368 2,824 527 2,527' 371 -207 -906' -717 1,757 25 Foreign countries2 ............................................... 5,921 5,059 3,852 600 1,904' -223 -22 -105' 478 1,820 26 Official institutions........................................... 3,729' 1,776' 2,152 547 483' -264 -103 -67 386 1,717 27 Other foreign2.................................................. 2,193' 3,284' 1,699 53 1,421' 41 79 -37' 92 103 28 Nonmonetary international and regional organizations ................................................. 375 311 -1,027 -73 624 594 -185 -802 -1,195 -63 Memo: Oil-exporting countries 29 Middle East3 ....................................................... -1,785 -1,015 4,424 168 550 500 1,014 471 462 1,427 30 Africa4 ................................................................ 329 -100 -100 -100 1. Estimated official and private holdings of marketable U.S. Treasury securities 2. Beginning December 1978, includes U.S. Treasury notes publicly issued to with an original maturity of more than 1 year. Data are based on a benchmark private foreign residents denominated in foreign currencies. survey of holdings as of Jan. 31, 1971, and monthly transactions reports. Excludes 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and nonmarketable U.S. Treasury bonds and notes held by official institutions of for­ United Arab Emirates (Trucial States). eign countries. 4. Comprises Algeria, Gabon, Libya, and Nigeria. 3.22 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS Millions of dollars, end of period 1980 Assets 1977 1978 1979 Jan. Feb. Mar. Apr. May June July/7 1 Deposits.............................................................. 424 367 429 439 450 468 618 380 691 436 Assets held in custody 2 U.S. Treasury securities1 .................................... 91,962 117,126 95,075 97,116 96,200 89,290 85,717 88,489 93,661 95,525 3 Earmarked gold2 ................................................ 15,988 15,463 15,169 15,138 15,109 15,087 15,057 15,037 15,034 15,034 1. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S. Note. Excludes deposits and U.S. Treasury securities held for international and Treasury securities payable in dollars and in foreign currencies. regional organizations. Earmarked gold is gold held for foreign and international 2. The value of earmarked gold increased because of the changes in par value accounts and is not included in the gold stock of the United States, of the U.S. dollar in May 1972 and in October 1973. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Investment Transactions A65 3.23 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1980 1979 1980 Transactions, and area or country 1978 1979 Jan.- June/7 Dec. Jan. Feb. Mar. Apr. May June/7 U.S. corporate securities Stocks 1 Foreign purchases ............................................... 20,145' 22.643' 16,803 2,376' 3,128' 4,477' 2,724 1,985 1,940 2,550 2 Foreign sales ....................................................... 17.723 21,017' 14,241 2,202' 2.439' 3,355' 2,380 1,719 1,958 2,390 3 Net purchases, or sales (-) ................................. 2,423' 1,627' 2,563 173' 689' 1,121' 344 266 -17 160 4 Foreign countries ................................................ 2,469' 1,610' 2,558 169' 688' 1,124' 342 263 -19 162 5 Europe ................................................................ 1,283 217' 1,870 75 506 856' 156 129 105 118 6 France ............................................................ 47 122 200 8 71 133 -49 14 23 9 7 Germany ......................................................... 620 -221 73 -10 35 52' -25 3 14 -5 8 Netherlands ...................................................... -22 -71 -134 -25 8 -41 -6 -30 -40 -25 9 Switzerland ...................................................... -585 -519 382 -68 153 375 -36 -75 -17 -19 10 United Kingdom............................................... 1,230 964 1,285 155 215 333' 277 194 106 160 11 Canada ................................................................ 74 552' 349 44' 42 130' 130 66 -42 24 12 Latin America and Caribbean ............................. 151 -19' 106 40 92 34' -49 6 -4 27 13 Middle East1 ....................................................... 781 656 206 32 15 50 97 145 -60 -42 14 Other Asia ......................................................... 189' 211' 23 -21 30 58 8 -81 -21 28 15 Africa .................................................................. -13 -14 - 1 -3 0 -1 2 0 0 -2 16 Other countries .................................................. 3 7 6 2 2 -3 -2 -2 3 8 17 Nonmonetary international and regional organizations ................................................ -46 17 4 4 1 -2 2 3 2 -2 Bonds2 18 Foreign purchases ............................................... 7,975 8,826' 7,992 963' 1,149 934 1,237 1,654 1,280 1,737 19 Foreign sales ....................................................... 5,681' 7,575' 5.486 546' 548' 594 838 1,137 1,217 1,152 20 Net purchases, or sales (-) ................................. 2,294' 1,251' 2,507 417' 601' 340 399 518 63 586 21 Foreign countries ................................................ 1,885' 1,351' 2,538 431' 469' 275 407 568 289 529 22 Europe ................................................................ 744' 639' 996 33 151' 42 315 251 132 105 23 France ............................................................. 30 11 90 1 8 1 15 7 47 12 24 Germany ......................................................... 6' 72' 207 2 -5 6 11 104 104 -14 25 Netherlands ...................................................... 12 -202 -56 -20 -3 -30 0 -14 -14 6 26 Switzerland ...................................................... -202' -118' 96 7 6 8 3 79 11 -10 27 United Kingdom............................................... 930 814' 643 36 195 71 265 36 -34 110 28 Canada ................................................................ 102 89' 77 -16 25 28 8 2 9 5 29 Latin America and Caribbean............................. 98 109' 97 15 14 10 9 13 25 27 30 Middle East1 ....................................................... 810 424 1.324 406 280 181 79 295 104 383 31 Other Asia ......................................................... 131 88' 28 -6' -1' 3 -4 7 17 5 32 Africa .................................................................. -1 1 4 0 0 2 0 0 1 0 33 Other countries .................................................. 1 1 12 0 0 8 0 0 0 4 34 Nonmonetary international and regional organizations ................................................ 409 -101' -31 -14 132 65 -8 -50 -226 57 Foreign securities 35 Stocks, net purchases, or sales (-) ..................... 527 -786 -1,086 -130 -233 -425' -2 -40 -241 -146 36 Foreign purchases ........................................... 3,666 4,615 3,439 406 625' 805' 665 402 450 491 37 Foreign sales .................................................... 3,139 5,401 4,525 536 858 1,230 667 442 691 637 38 Bonds, net purchases, or sales (-) ..................... -4,054' -3,970' -1,072 -320' -48' -74' 17 - 12 -251 -704 39 Foreign purchases ........................................... 11,043 12,375' 8,014 1,124 1,264' 1,379 1,181 1,072 1,479 1,638 40 Foreign sales .................................................... 15,096' 16,345' 9,086 1,444' 1,313' 1,453' 1,164 1,084 1,730 2,342 41 Net purchases, or sales ( —), of stocks and bonds . . -3,527' -4,756' -2,158 -451' -281' -499' 15 -52 -491 -849 42 Foreign countries ................................................ -3,340' -4,006' -2,330 -588' -359' -500' -33 -72 -498 -868 43 Europe ................................................................ -65' -1,640' -734 -282 176 -126' 54 -80 -214 -543 44 Canada................................................................ -3,238 -2,609' -1,442 -142 -330 -415 -161 3 -256 -283 45 Latin America and Caribbean ............................. 201 348' 171 -39' 5 101 29 14 45 -23 46 Asia ................................................................... 349' - 108' -361 -128 -204' -46' 49 -12 -82 -65 47 Africa .................................................................. -441 -23' 7 2 -2 -1 0 3 4 3 48 Other countries .................................................. -146 25 28 3 -4 -13 -3 0 5 44 49 Nonmonetary international and regional organizations ................................................ -187 -750' 172 138 78 1 48 20 7 19 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, 2. Includes state and local government securities, and securities of U.S. gov- Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). ernment agencies and corporations. Also includes issues of new debt 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

A66 International Statistics □ August 1980 3.24 LIABILITIES TO UN AFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1978 1979 1980 Type, and area or country 1978 Sept. Mar. June Sept. Dec. Mar .p 1 Total ........................................................... 10,099 11,085 14,808 12,786 14,418 15,305 15,490 16,905' 17,245 2 Payable in dollars...................................... 9,390 10,284 11,500 11,955 11,497 12,528 12,578 13,911r 14,351 3 Payable in foreign currencies2................. 709 801 3,308 831 2,921 2,777 2,912 2,994 2,894 By type 4 Financial liabilities .................................... 6,253 5,995 5,890 5,951 7,281 7,739 5 Payable in dollars.................................. 3,844 3,793 3,822 3,790 5,078 5,583 6 Payable in foreign currencies............... 2,409 2,202 2,068 2,161 2,203 2,156 7 Commercial liabilities .............................. 8,555 8,423 9,415 9,539 9,624' 9,506 8 Trade payables ...................................... 4.062 3,569 4,317 4,084 4,369' 4,104 9 Advance receipts and other liabilities . 4.493 4,854 5,098 5,455 5,255' 5,401 10 Payable in dollars.................................. 7,656 7,703 8,706 8,788 8,834' 8,768 11 Payable in foreign currencies............... 899 719 709 750 790 738 By area or country Financial liabilities 12 Europe ................................................... 3,855 3,601 3,429 3,553 4,549 4,764 13 Belgium-Luxembourg ....................... 289 266 315 277 345 303 14 France ............................................... 167 139 134 126 168 188 15 Germany ........................................... 366 311 283 381 497 520 16 Netherlands ........................................ 389 422 401 520 834 858 17 Switzerland ........................................ 248 244 235 190 168 172 18 United Kingdom................................ 2,063 2,007 1,842 1,860 2,342 2,519 19 Canada ................................................... 244 252 290 300 445 368 20 Latin America and Caribbean ............. 1,353 1,343 1,389 1,330 1,483 1,770 21 Bahamas ........................................... 426 411 442 345 347 436 22 Bermuda ............................................ 56 41 37 37 109 106 23 Brazil ................................................. 10 13 19 14 18 22 24 British West Indies .......................... 190 197 185 194 514 693 25 Mexico ............................................... 102 101 131 122 121 108 26 Venezuela .......................................... 49 55 68 71 72 70 27 Asia ....................................................... 791 790 772 757 795 816 28 Japan ................................................. 714 714 706 700 723 732 29 Middle East oil-exporting countries3 32 23 25 19 31 26 30 Africa ..................................................... 5 5 6 5 4 12 31 Oil-exporting countries4 ................. 2 1 2 1 1 1 32 All other5 ............................................ 5 5 5 5 4 10 Commercial liabilities 33 Europe ................................................. 3,033 3,003 3,306 3,395 3,625' 3,683 34 Belgium-Luxembourg ..................... 75 70 81 103 137 118 35 France ............................................. 321 350 353 394 467' 503 36 Germany .......................................... 529 395 471 539 534' 532 37 Netherlands ...................................... 246 224 230 206 227' 288 38 Switzerland ...................................... 302 329 439 348 310 382 39 United Kingdom.............................. 824 870 997 1,015 1,078' 995 40 Canada ................................................. 667 614 645 709 852 686 41 Latin America .................................... 997 1,168 1,322 1,387 1,323' 1,257 42 Bahamas .......................................... 25 16 65 89 69 4 43 Bermuda .......................................... 97 42 82 48 32 47 44 Brazil ............................................... 74 61 165 186 203 228 45 British West Indies ......................... 53 89 121 21 21 20 46 Mexico ............................................. 106 236 203 256 257' 235 47 Venezuela ........................................ 303 356 323 359 301 211 48 Asia ..................................................... 2,912 2,622 3,007 2,985 2,859' 2,875 49 Japan ............................................... 429 401 489 506 481 568 50 Middle East oil-exporting countries3 1,523 1,122 1,225 1,070 1,021' 878 51 Africa ................................................... 743 779 891 775 728 742 52 Oil-exporting countries4 ................. 312 343 410 370 384 382 53 All other5 ........................................... 203 237 243 287 237 263 1. For a description of the changes in the International Statistics tables, see July 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and 1979 Bulletin, p. 550. United Arab Emirates (Trucial States). 2. Before December 1978, foreign currency data include only liabilities denom­ 4. Comprises Algeria, Gabon, Libya, and Nigeria. inated in foreign currencies with an original maturity of less than one year. 5. Includes nonmonetary international and regional organizations. 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 States1 Millions of dollars, end of period Type, and area or country Sept. June Sept 1 Total ........................................................... 21,298 27,655 23,260 30,117 29,522 31,617 2 Payable in dollars...................................... 18,300 19,880 24,600 21,292 27,307 26,627 27,407 27,098' 28,857 3 Payable in foreign currencies2................. 1,050 1,418 2,994 1,968 2,811 2,895 2,665 3,044' 2,760 By type 4 Financial claims ........................................ 16,323 19,400 18,534 18,296 17,456 18,928 5 Deposits................................................. 10,847 13,933 12,905 12,886 11,810 13,257 6 Payable in dollars.............................. 9,785 13,013 11,967 11,987 10,927 12,496 7 Payable in foreign currencies........... 1,062 920 938 899 883 761 8 Other financial claims........................... 5,476 5,467 5,629 5,410 5,646 5,671 9 Payable in dollars.............................. 3,880 3,920 4,042 4,013 3,883 4,108 10 Payable in foreign currencies........... 1,597 1,547 1,587 1,397 1,763 1,563 11 Commercial claims.................................... 11,332 10,718 10,988 11,776 12,685' 12,689 12 Trade receivables .................................. 10,744 10,012 10,330 11,016 11,997' 12,000 13 Advance payments and other claims .. 706 658 760 689 14 Payable in dollars.................................. 10,995 10,374 10,618 11,407 12,287' 12,253 15 Payable in foreign currencies............... 336 344 370 369 398' 436 By area or country Financial claims 16 Europe ................................................... 5,050 5,180 5,475 6,403 6,066 5,827 17 Belgium-Luxembourg ....................... 48 63 54 33 32 19 18 France ............................................... 178 171 183 191 177 290 19 Germany ............................................ 510 266 361 391 401 296 20 Netherlands ........................................ 103 85 62 51 53 39 21 Switzerland ........................................ 98 96 81 85 73 89 22 United Kingdom................................ 3,856 4,261 4,488 5,365 5,009 4,779 23 Canada ................................................... 4,521 5,196 5,132 4,736 4,777 4,735 24 Latin America and Carribbean........... 5,594 7,939 6,839 5,993 5,624 7,382 25 Bahamas ............................................ 2,902 4,148 3,216 2,831 2,294 3,325 26 Bermuda ............................................ 80 63 57 31 30 34 27 Brazil ................................................. 151 156 141 133 163 128 28 British West Indies ........................... 1,280 2,443 2,281 1,717 1,851 2,591 29 Mexico ............................................... 162 160 158 155 158 161 30 Venezuela .......................................... 150 142 151 139 133 132 31 Asia ....................................................... 922 829 818 693 675 32 Japan ................................................. 307 207 216 222 190 205 33 Middle East oil-exporting countries3 16 17 21 16 18 34 Africa ..................................................... 181 204 227 277 253 265 35 Oil-exporting countries4 ................... 10 26 23 41 49 40 36 All other5 ............................................. 52 Commercial claims 37 Europe ................................................... 3,979 3,805 3,827 4,121 4,891' 4,748 38 Belgium-Luxembourg ....................... 144 173 170 179 203 209 39 France ............................................. 609 490 470 518 * 727' 703 40 Germany ............................................ 399 504 421 448 580 513 41 Netherlands ........................................ 267 275 307 262 298 345 42 Switzerland ........................................ 198 230 232 224 269 348 43 United Kingdom................................ 827 676 731 818 905 923 44 Canada ................................................... 1,094 1,109 1,104 1,171 840' 851 45 Latin America and Caribbean............. 2,547 2,395 2,406 2,598 2,859 2,999 46 Bahamas ............................................ 109 117 98 16 21 30 47 Bermuda ............................................ 215 241 118 154 197 135 48 Brazil ................................................. 629 495 503 568 647 655 49 British West Indies ........................... 9 10 25 13 16 11 50 Mexico ............................................... 506 489 584 650 704 832 51 Venezuela .......................................... 292 274 296 346 342 349 52 Asia ....................................................... 3,085 2,765 2,970 3,116 3,299' 3,346 53 Japan ................................................. 979 896 1,005 1,128 1,127 1,242 54 Middle East oil-exporting countries3 717 682 685 701 700' 657 55 Africa ..................................................... 447 443 487 549 556 519 56 Oil-exporting countries4 ................... 136 131 139 140 133 114 57 All other5 .............................................. 200 194 220 240' 1. For a description of the changes in the International Statistics tables, see July 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and 1979 Bulletin, p. 550. United Arab Emirates (Trucial States). 2. Prior to December 1978, foreign currency data include only liabilities de­ 4. Comprises Algeria, Gabon, Libya, and Nigeria. nominated in foreign currencies with an original maturity of less than one year. 5. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics □ August 1980 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on July 31, 1980 Rate on July 31, 1980 Rate on July 31, 1980 Country Country Country Per­ Month Per­ Month Per­ Month cent effective cent effective cent effective Austria ............................ 6.75 Mar. 1980 Germany, Fed. Rep. of .. 7.5 May 1980 Sweden ............................ 10.0 Jan. 1980 Belgium .......................... 12.0 July 1980 Italy.................................. 15.0 Dec. 1979 Switzerland ..................... 3.0 Feb. 1980 Brazil .............................. 33.0 Nov. 1978 Japan .............................. 9.0 Mar. 1980 United Kingdom ............. 16.0 July 1979 Canada ............................ 10.18 July 1980 Mexico ............................ 4.5 June 1942 Venezuela ....................... 8.5 May 1979 Denmark ........................ 13.0 Feb. 1980 Netherlands ..................... 9.5 June 1980 France .............................. 9.5 Aug. 1977 Norway ............................ 9.0 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 1980 Country, or type 1977 1978 1979 Jan. Feb. Mar. Apr. May June July 1 Eurodollars ........................................... 6.03 8.74 11.96 14.33 15.33 18.72 17.81 11.20 9.41 9.33 2 United Kingdom.................................... 8.07 9.18 13.60 17.30 17.72 18.07 17.70 16.97 16.68 15.82 3 Canada ................................................... 7.47 8.52 11.91 13.93 13.96 14.72 16.31 13.23 11.73 10.91 4 Germany ............................................... 4.30 3.67 6.64 8.79 8.94 9.51 10.12 10.18 10.00 9.59 5 Switzerland ........................................... 2.56 0.74 2.04 5.45 5.19 6.57 6.87 5.85 5.64 5.29 6 Netherlands ........................................... 4.73 6.53 9.33 11.85 11.99 11.48 10.76 11.18 10.72 10.06 7 France ................................................... 9.20 8.10 9.44 12.31 12.63 13.94 12.84 12.62 12.37 11.87 8 Italy ....................................................... 14.26 11.40 11.85 17.00 17.88 18.12 16.91 17.20 17.25 17.49 9 Belgium ................................................. 6.95 7.14 10.48 14.38 14.45 16.23 17.10 16.31 14.69 13.30 10 Japan ..................................................... 6.22 4.75 6.10 8.44 9.10 12.37 13.51 13.63 13.51 12.89 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 1980 Country/currency 1977 1978 1979 Jan. Feb. Mar. Apr. May June July 1 Australia/dollar ....................... 110.82 114.41 111.77 110.97 110.41 109.03 109.10 113.02 115.29 115.85 2 Austria/schilling ..................... 6.0494 6.8958 7.4799 8.0689 7.9815 7.5539 7.4513 7.8112 7.9421 8.0578 3 Belgium/franc ........................ 2.7911 3.1809 3.4098 3.5688 3.5221 3.3395 3.3156 3.4759 3.5335 3.5766 4 Canada/dollar ........................ 94.112 87.729 85.386 85.912 86.546 85.255 84.311 85.178 86.836 86.783 5 Denmark/krone ....................... 16.658 18.156 19.010 18.568 18.326 17.325 17.104 17.859 18.215 18.487 6 Finland/markka ....................... 24.913 24.337 27.732 27.082 26.912 25.998 26.158 27.084 27.448 27.699 7 France/franc............................ 20.344 22.218 23.504 24.750 24.413 23.188 22.985 23.920 24.310 24.657 8 Germany/deutsche mark ........ 43.079 49.867 54.561 57.986 57.203 54.039 53.310 55.828 56.584 57.245 9 India/rupee ............................ 11.406 12.207 12.265 12.519 12.529 12.270 12.395 12.727 12.751 12.875 10 Ireland/pound ........................ 174.49 191.84 204.65 214.31 211.59 202.25 198.98 207.41 211.16 214.74 11 ItalyAira .................................. .11328 .11782 .12035 .12427 .12346 .11635 .11417 .11860 .11973 .12026 12 Japan/yen ................................ .37342 .47981 .45834 .42041 .40934 .40246 .39980 .43766 .45894 .45232 13 Malaysia/ringgit....................... 40.620 43.210 45.720 45.868 45.896 44.956 43.817 45.691 46.625 46.658 14 Mexico/peso............................ 4.4239 4.3896 4.3826 4.3780 4.3789 4.3739 4.3779 4.3763 4.3684 4.3511 15 Netherlands/guilder ............... 40.752 46.284 49.843 52.527 51.886 49.270 48.570 50.673 51.578 52.337 16 New Zealand/dollar ............... 96.893 103.64 102.23 98.690 97.960 95.451 94.704 97.641 98.729 98.643 17 Norway/krone ........................ 18.789 19.079 19.747 20.373 20.483 19.815 19.739 20.377 20.608 20.762 18 Portugal/escudo....................... 2.6234 2.2782 2.0437 2.0051 2.0634 2.0116 1.9798 2.0298 2.0422 2.0466 19 South Africa/rand................... 114.99 115.01 118.72 121.64 122.90 123.59 123.88 126.43 129.00 130.79 20 Spain/peseta............................ 1.3287 1.3073 1.4896 1.5124 1.5006 1.4446 1.3918 1.4104 1.4280 1.4122 21 Sri Lanka/rupee ..................... 11.964 6.3834 6.4226 6.4323 6.4350 6.4098 6.1500 6.1900 6.2186 6.3288 22 Sweden/krona ........................ 22.383 22.139 23.323 24.112 23.974 23.008 22.872 23.731 23.995 24.238 23 Switzerland/franc ................... 41.714 56.283 60.121 62.693 60.966 56.710 56.857 60.131 61.207 62.203 24 United Kingdom/pound......... 174.49 191.84 212.24 226.41 228.91 220.45 220.94 230.20 233.59 237.32 Memo: 25 United States/dollar1 ............. 103.31 92.39 88.09 85.52 86.37 90.26 91.09 86.96 85.29 84.65 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 page rencies of other G-10 countries plus Switzerland. March 1973 = 100. 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

Time and Savings Deposits A69 4.10 TIME AND SAVINGS DEPOSITS Held by Insured Commercial Banks on Recent Survey Dates Deposits Types of deposits, denomination, Number of issuing banks Millions of dollars Percentage change and original maturity Oct. 31, Jan. 30, Apr. 30, Oct. 31, Jan. 30, Apr. 30, Oct. 31- Jan. 30- 1979 1980 1980 1979 1980 1980 Jan. 30 Apr. 30 Total time and savings deposits........................................ 14,375 14,231 14,209 650,160 667,613 686,683 2.7 2.9 Savings................................................................................ 14,375 14,227 14,209 207,983 202,397 190,192 -2.7 -6.0 Holder Individuals and nonprofit organizations....................... 14,375 14,227 14,209 194,249 188,550 177,648 -2.9 -5.8 Partnerships and corporations operated for profit (other than commercial banks) ............................ 10,055 10,390 10,242 9,758 9,309 8,118 -4.6 -12.8 Domestic governmental units ...................................... 8,462 8,712 8,849 3,600 4,079 3,939 13.3 -3.4 All other ........................................................................ 1,594 1,981 1,431 377 460 486 22.0 5.7 Interest-bearing time deposits, less than $100,000 ......... 14,276 14,119 14,094 233,219 248,681 272,316 6.6 9.5 Holder Domestic governmental units1 ...................................... 10,156 10,577 9,680 2,506 2,290 1,792 -8.6 -21.8 30 up to 90 days......................................................... 4,556 4,508 4,050 403 368 464 -8.8 26.3 90 up to 180 days....................................................... 6,210 6,450 5,920 925 819 449 -11.5 -45.2 180 days up to 1 year............................................... 3,736 4,371 4,278 372 389 371 4.5 -4.5 1 year and over ......................................................... 8,177 8,500 7,608 806 715 507 -11.3 -29.1 Other than domestic governmental units1 ................... 14,189 14,006 14,012 134,012 119,622 98,009 -10.7 -18.1 30 up to 90 days......................................................... 4,605 4,666 4,357 2,664 2,143 1,750 -19.5 -18.3 90 up to 180 days....................................................... 10,670 10,679 10,528 21,442 19,798 16,706 -7.7 -15.6 180 days up to 1 year............................................... 7,943 7,395 7,405 2,808 2,360 2,179 -16.0 -7.7 1 up to 2 Yi years....................................................... 13,907 13,536 13,392 20,838 17,676 13,552 -15.2 -23.3 2Vz up to 4 years....................................................... 12,869 12,631 12,773 14,106 11,960 9,323 -15.2 -22.0 4 up to 6 years........................................................... 13,629 13,564 13,412 44,842 40,129 33,237 -10.5 -17.2 6 up to 8 years........................................................... 11,534 11,568 11,443 23,652 22,419 18,832 -5.2 -16.0 8 years and over......................................................... 8,265 8,650 8,310 3,661 3,138 2,430 -14.3 -22.6 IRA and Keogh Plan time deposits, 3 years or more . 10,232 10,347 10,284 4,642 5,012 5,077 8.0 1.3 Money market certificates, $10,000 or more, exactly 6 months .................................................................... 13,109 13,548 13,666 92,059 117,816 158,647 28.0 34.7 Variable interest rate ceiling time deposits of less than $100,000 with maturities of 2Yi years or more2 .. 11,606 12,612 3,940 8,792 123.2 Interest-bearing time deposits, $100,000 or more ......... 12,863 12,711 12,519 203,187 211,016 218,617 3.9 3.6 Non-interest-bearing time deposits.................................. 1,464 1,340 1,463 4,566 4,632 3,966 1.4 -14.4 Less than $100,000 ......................................................... 1,175 1,015 1,166 965 931 940 -3.5 .9 $100,000 or more ........................................................... 606 611 607 3,601 3,701 3,027 2.8 -18.2 Club accounts (Christmas savings, vacation, and the like) ............................................................................ 8,551 8,931 8,968 1,206 889 1,593 -26.2 79.1 1. Excludes all money market certificates, IRAs, and Keogh Plan accounts. Note: All banks that had either discontinued offering or never offered certain 2. Effective Jan. 1, 1980, commercial banks, savings and loan associations, and types of deposits as of the survey date are not counted as issuing banks. However, mutual savings banks are authorized to offer variable ceiling accounts with no small amounts of deposits held at banks that had discontinued issuing certain types required minimum denomination and with maturities of 2Vi years or more. The of deposits are included in the amounts outstanding. maximum rate for commercial banks is 3A percentage points below the yield on Details may not add to totals because of rounding. 2^-year U.S. Treasury securities: the ceiling rate for thrift institutions is V4 per­ centage point higher than that for commercial banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables □ August 1980 4.11 SMALL-DENOMINATION TIME AND SAVINGS DEPOSITS Held by Insured Commercial Banks on January 30, 1980, and April 30, 1980, Compared with Previous Survey, by Type of Deposit, by Most Common Rate Paid on New Deposits in Each Category, and by Size of Bank Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) Deposit group, original maturity, ana distribu­ Less than 100 Less than 100 tion of deposits by most common rate Apr. 30, Jan. 30, Apr. 30, Jan. 30, Apr. 30, Jan. 30, Apr. 30, Jan. 30, Apr. 30, Jan. 30, Apr. 30, Jan. 30, 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 Amount of deposits (in millions of dollars) Number of banks, or percentage distribution or percentage distribution Savings deposits Individuals and nonprofit organizations Issuing banks............................ 14,209 14,119 12,994 12,908 1,215 1,211 177,648 188,120 64,052 68,303 113,596 119,818 Distribution, total................. 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............................ 4.7 2.1 4.7 1.8 4.2 5.8 5.3 4.7 6.3 3.7 4.8 5.3 4.51-5.00 8.1 8.4 8.2 8.7 6.4 4.8 6.2 5.9 6.8 6.5 5.9 5.5 5.01-5.25 87.3 89.5 87.1 89.5 89.4 89.4 88.4 89.4 87.0 89.8 89.2 89.2 Memo: Paying ceiling rate1 .... 87.3 89.5 87.1 89.5 89.4 89.4 88.4 89.4 87.0 89.8 89.2 89.2 Partnerships and corporations Issuing banks............................ 10,242 10,360 9,057 9,176 1,185 1,184 8,118 9,307 2,253 2,640 5,865 6,667 Distribution, total..................... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............................ 1.3 .9 1.3 1.0 1.0 .8 .6 .4 .9 .9 4.51-5.00 ................ 6.5 7.4 6.6 7.5 5.7 6.3 8.4 7.6 12.8 8.1 6.7 7.5 5.01-5.25 92.2 91.8 92.0 91.6 93.3 92.7 90.8 91.6 86.6 91.6 92.4 91.6 Memo: Paying ceiling rate1 92.2 91.8 92.0 91.6 93.3 92.7 90.8 91.6 86.6 91.6 92.4 91.6 Domestic governmental units Issuing banks............................ 8,830 8,660 7,964 7,782 866 879 3,939 3,i 2,419 2,189 1,520 1,691 Distribution, total..................... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............................ 3.2 1.0 3.5 .9 1.2 1.6 .6 .2 .6 (2) .4 .5 4.51-5.00 6.4 5.7 6.5 5.5 5.5 6.7 7.3 9.5 6.4 11.0 7.6 5.01-5.25 90.4 93.4 90.0 93.6 93.3 91.6 92.1 90.3 92.9 89.0 90.1 91.9 Memo: Paying ceiling rate1 90.4 93.4 90.0 93.6 93.3 91.6 92.1 90.3 92.9 89.0 90.1 91.9 All other Issuing banks............................ 1,422 1,958 1,194 1,753 228 205 481 451 300 268 181 183 Distribution, total..................... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less ............................ 9.8 4.0 9.5 3.6 11.0 7.3 3.5 2.7 1.5 1.6 6.7 4.2 4.51-5.00 5.6 6.2 6.0 6.6 3.4 2.3 18.2 13.5 27.2 17.7 3.3 7.4 5.01-5.25 84.7 89.9 84.5 89.8 85.6 90.4 78.3 83.8 71.3 80.7 90.0 88.4 Memo: Paying ceiling rate1 84.7 89.9 84.5 85.6 90.4 78.3 83.8 71.3 80.7 90.0 88.4 Time deposits less than $100,000 Domestic governmental units 30 up to 90 days Issuing banks......................... 4,043 4,480 3,429 3,853 614 626 450 367 164 238 286 129 Distribution, total................. 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less........................ 26.0 27.1 28.1 28.1 14.1 20.9 11.4 23.0 25.5 27.9 3.2 14.0 5.01-5.50 30.0 31.8 25.8 29.2 53.5 48.1 15.2 17.9 10.6 12.0 17.9 28.8 5.51-8.00 44.0 41.1 46.1 42.7 32.4 30.9 73.4 59.1 63.9 60.1 78.9 57.2 Memo: Paying ceiling rate1 38.2 30.6 40.3 31.3 26.5 26.5 33.4 50.0 54.8 47.5 21.1 54.5 90 up to 180 days Issuing banks........................ 5,915 6,450 5,176 5,700 739 750 448 819 290 641 158 178 Distribution, total................. 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less........................ 6.9 3.3 7.6 3.5 2.0 1.2 3.3 1 4.2 1.8 1.6 2.0 5.01-5.50 28.0 44.6 27.4 45.3 32.8 39.7 43.4 34.7 41.5 31.3 46.8 46.7 5.51-8.00 65.0 52.1 65.0 51.2 65.2 59.0 53.3 63.5 54.3 66.9 51.5 51.3 Memo: Paying ceiling rate1 20.9 13.4 20.8 12.3 21.9 21.8 16.7 42.6 15.3 49.1 19.4 19.2 180 days up to 1 year Issuing banks........................ 4,271 4,279 3,744 3,725 527 554 371 352 223 206 148 147 Distribution, total................. 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less........................ 4.4 2.8 5.1 3.2 (2) .2 .1 .1 2 .1 (2) (2) 5.01-5.50 40.4 39.8 42.8 40.9 23.3 32.8 25.3 36.8 33’4 49.0 12.9 19.7 5.51-8.00 55.1 57.3 52.1 55.9 76.7 67.0 74.6 63.1 66.4 50.9 87.1 80.2 Memo: Paying ceiling rate1 23.4 28.4 23.6 29.1 21.4 24.2 32.5 31.1 38.5 35.2 23.5 25.4 1 year and over Issuing banks........................ 7,599 8,499 6,877 7,767 722 732 507 715 424 615 82 100 Distribution, total................. 100 100 100 100 100 100 100 100 100 100 100 100 5.50 or less........................ 6.1 6.9 6.2 7.1 4.6 5.2 13.8 8.8 14.7 9.2 9.4 6.6 5.51-6.00 48.7 55.0 47.7 54.7 57.9 59.1 42.9 54.3 42.8 56.5 43.4 40.6 6.01-8.00 45.2 38.0 46.0 38.3 37.6 35.7 43.2 36.9 42.5 34.3 47.2 52.7 Memo: Paying ceiling rate1 11.9 11.4 11.2 11.1 18.8 14.0 16.3 13.2 13.0 10.3 33.2 31.1 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Time and Savings Deposits A ll 4.11 SMALL-DENOMINATION TIME AND SAVINGS DEPOSITS Continued Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) All banks All banks Deposit group, original maturity, and distribu­ Less than 100 100 and over Less than 100 100 and over tion of deposits by Apr. 30, Jan. 30, Apr. 30, Jan. 30, Apr. 30, Jan. 30, Apr. 30, Jan. 30, Apr. 30, Jan. 30, Apr. 30, Jan. 30, 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 Amount of deposits (in millions of dollars) Number of banks or percentage distribution or percentage distribution Time deposits less than $100,000 (cont.) Other than domestic governmental units 30 up to 90 days Issuing banks.......................................... 4,355 4,576 3,499 3,711 855 865 1,732 2,142 387 396 1,345 1,746 Distribution, total.................................. 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less ........................................ 29.4 28.2 32.3 28.0 17.3 29.0 13.9 19.8 8.0 4.1 15.6 23.4 5.01-5.25 ............................................ 70.6 71.8 67.7 72.0 82.7 71.0 86.1 80.2 92.0 95.9 84.4 76.6 Memo: Paying ceiling rate1 ..................... 70.6 71.8 67.7 72.0 82.7 71.0 86.1 80.2 92.0 95.9 84.4 76.6 90 up to 180 days Issuing banks.......................................... 10,528 10,679 9,323 9,474 1,205 1,205 16,706 19,798 6,351 7,506 10,355 12,293 Distribution, total.................................. 100 100 100 100 100 100 100 100 100 100 100 100 4.99 or less ........................................ (2) (2) (2) (2) (2) 5.00-5.50 ............................................ 3$ 5$ 39.6 56.7 34^ 45.9 46.6 3$ 33.5 4$ £ 5.51-5.75 ............................................ 61.0 44.5 60.4 43.3 66.0 54.1 63.0 53.4 69.3 66.5 59.1 45.5 Memo: Paying ceiling rate1 ..................... 61.0 44.4 60.4 43.3 66.0 53.3 63.0 53.2 69.3 66.5 59.1 45.1 180 days up to 1 year Issuing banks.......................................... 7,398 7,202 6,555 6,315 843 887 2,172 2,179 763 818 1,409 1,361 Distribution, total.................................. 100 100 100 100 100 100 100 100 100 100 100 100 4.99 or less ........................................ 2.2 .5 2.4 .6 .5 .5 .1 (2) .2 (2) .1 (2) 5.00-5.50 ............................................ 52.5 63.5 55.2 66.9 31.9 39.5 35.0 55.3 49.4 60.1 27.3 52.4 5.51-5.75 ............................................ 45.3 36.0 42.5 32.6 67.6 60.1 64.8 44.6 50.5 39.9 72.6 47.5 Memo: Paying ceiling rate1 ..................... 45.3 35.8 42.5 32.6 67.6 59.0 64.8 44.6 50.5 39.9 72.6 47.5 1 up to 2Yi years Issuing banks.......................................... 13,391 13,536 12,187 12,331 1,204 1,205 13,527 17,676 8,524 11,336 5,003 6,340 Distribution, total.................................. 100 100 100 100 100 100 100 100 100 100 100 100 5.50 or less ........................................ .6 .1 .4 1.9 1.4 .6 .6 .1 1.3 1.7 5.51-6.00 ............................................ 99.4 99.9 99.6 .0$ 98.1 98.6 99.4 99.4 99.9 10$ 98.7 98.3 Memo: Paying ceiling rate1 ..................... 99.0 99.0 99.2 99.1 97.7 97.6 99.1 99.0 99.8 99.8 97.9 97.7 2 Yi years up to 4 years Issuing banks.......................................... 12,727 12,549 11,543 11,360 1,184 1,189 9,295 11,908 5,389 6,957 3,906 4,951 Distribution, total.................................. 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less ........................................ 2.8 .8 2.8 .6 2.7 2.2 2.8 .7 3.9 (2) 1.4 1.6 6.01-6.50 ............................................ 97.2 99.2 97.2 99.4 97.3 97.8 97.2 99.3 96.1 100.0 98.6 98.4 Memo: Paying ceiling rate1 ..................... 96.9 99.2 96.9 99.4 97.0 97.3 96.9 94.0 96.0 100.0 98.2 85.6 4 up to 6 years Issuing banks.......................................... 13,407 13,322 12,213 12,131 1,195 1,191 33,133 39,808 18,589 22,099 14,544 17,709 Distribution, total.................................. 100 100 100 100 100 100 100 100 100 100 100 100 7.00 or less ........................................ 5.8 5.7 5.9 5.9 4.2 3.5 3.5 3.7 4.6 4.3 2.0 3.1 7.01-7.25 ............................................ 94.2 94.3 94.1 94.1 95.8 96.5 96.5 96.3 95.4 95.7 98.0 96.9 Memo: Paying ceiling rate13 ................... 93.2 94.2 93.0 94.1 95.1 95.7 96.0 96.2 94.7 95.7 97.8 96.7 6 up to 8 years Issuing banks.......................................... 11,440 11,453 10,289 10,307 1,150 1,146 18,794 22,369 8,369 9,847 10,425 12,522 Distribution, total.................................. 100 100 100 100 100 100 100 100 100 100 100 100 7.25 or less ........................................ 2.7 1.7 2.8 1.7 1.9 2.0 1.1 4.1 .4 1.1 1.7 6.5 7.26-7.50 ............................................ 97.3 98.3 97.2 98.3 98.1 98.0 98.9 95.9 99.6 98.9 98.3 93.5 Memo. Paying ceiling rate1 3..................... 96.9 97.9 96.9 98.0 97.4 97.2 98.8 95.8 99.5 98.8 98.3 93.5 8 years and over Issuing banks.......................................... 8,304 8,594 7,277 7,538 1,027 1,055 2,424 3,121 926 1,291 1,498 1,830 Distribution, total.................................. 100 100 100 100 100 100 100 100 100 100 100 100 7.50 or less ....................................... 3.0 2.8 2.7 2.5 5.8 4.8 14.9 10.9 2.0 .1 22.8 18.6 7.51-7.75 ............................................ 97.0 97.2 97.3 97.5 94.2 95.2 85.1 89.1 98.0 99.9 77.2 81.4 Memo: Paying ceiling rate13................... 96.8 97.2 97.3 97.5 93.3 95.2 85.1 89.1 98.0 99.9 77.2 81.4 IRA and Keogh Plan time deposits, 3 years or more Issuing banks.............................................. 10,156 10,347 9,039 9,227 1,117 1,119 5,051 5,012 1,915 1,873 3,136 3,138 Distribution, total .................................... 100 100 100 100 100 100 100 100 100 100 100 100 7.50 or less ............................................ 22.4 24.5 24.0 26.2 9.2 11.2 7.9 8.9 12.5 13.0 5.1 6.5 7.51-8.00 ............................................... 45.6 59.1 43.7 56.5 61.0 80.2 56.6 77.5 44.0 68.0 64.3 83.2 8.01-12.00 .............................................. 32.0 16.4 32.3 17.3 29.8 8.6 35.5 13.6 43.5 19 0 30.6 10 3 Memo: Paying ceiling rate1 ..................... 6.8 (2) 6.3 (2) 10.5 (2) 12.9 (2) 13.5 (2) 12.5 (2) Money market certificates, $10,000 or more, 6 months Issuing banks............................................. 13,666 13,548 12,452 12,338 1,214 1,210 158.647 117,816 72,861 53,684 85,786 64,132 Distribution, total .................................... 100 100 100 100 100 100 100 100 100 100 100 100 9.99 or less ............................................ .3 .8 .3 .9 .1 .1 .4 .7 .1 10.00-10.99 6.1 (2) 6.6 1.4 (2) 1.5 2.3 (2) 11.00-11.49 (2) .1 (2) 8 (2) .9 (2) 2 1 .5 11.50-11.89 ............................................ 93.6 99.1 93.1 99.1 98.5 99.0 98.1 99.1 9$ 100.0 i 99.5 Memo: paying ceiling rate1....................... 93.5 96.8 93.1 96.7 97.5 97.6 97.7 98.9 97.0 99.3 98.2 98.5 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A ll Special Tables □ August 1980 4.11 SMALL-DENOMINATION TIME AND SAVINGS DEPOSITS Continued Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) Deposit group, original All banks All banks maturity, ana distribu­ tion of deposits by Less than 100 100 and over Less than 100 100 and over most common rate Apr. 30, Jan. 30, Apr. 30, Jan. 30, Apr. 30, Jan. 30, Apr. 30, Jan. 30, Apr. 30, Jan. 30, Apr. 30, Jan. 30, 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 Time deposits less than $100,000 (cont.) Number of banks, or percentage distribution Amount of deposits (in millions of dollars) Variable interest rate ceiling time de­ orpercentage distribution posits of less than $100,000 with maturities of 2!/2 years or more Issuing banks............................................. 12,611 11,601 11,428 10,434 1,183 1,168 8,787 3,939 4,813 2,253 3,974 1,687 Distribution, total .................................... 100 100 100 100 100 100 100 100 100 100 100 100 9.99 or less ............................................ (2) .3 (2) (2) .2 2.5 .1 .5 (2) (2) .2 1.1 10.00-10.99 ............................................ 7.5 99.7 7.7 100.0 5.3 97.5 4.9 99.5 6.3 100.0 3.3 98.9 11.00-11.49 ............................................ 1.2 i2) 1.3 .9 .9 (2) 1.1 (2) .7 (2) 11.50-11.75 ............................................ 91.3 (2) 91.0 (2) 93.6 (2) 94.1 (2) 92.6 (2) 95.8 (2) Memo: Paying ceiling rate1 ..................... 90.3 97.4 90.0 97.4 93.2 97.1 93.9 91.3 92.6 85.4 95.5 98.9 Club accounts Issuing banks............................................. 6,297 6,385 5,849 5,932 448 453 979 562 541 307 438 255 Distribution, total .................................... 100 100 100 100 100 100 100 100 100 100 100 100 0.00 ......................................................... 51.9 60.2 52.9 62.0 39.2 36.1 25.3 25.5 29.7 32.5 20.0 17.0 O.Ol-^.OO ............................................... 23.6 18.9 23.5 17.9 25.6 31.7 26.7 28.0 28.5 26.4 24.5 30.0 4.01-4.50 ............................................... 8.1 8.0 8.0 8.0 9.8 8.2 17.3 19.2 12.6 15.2 23.2 24.0 4.51-5.50 ............................................... 16.4 12.9 15.7 12.1 25.3 24.1 30.6 27.3 29.2 25.9 32.4 29.0 1. See Bulletin table A8 for the ceiling rates that existed at the time of each Note. All banks that either had discontinued offering or had never offered survey. particular types of deposits as of the survey date are not counted as issuing banks. 2. Less than .05 percent. Moreover, the small amounts of deposits held at banks that had discontinued 3. In October 1979 these deposit categories included the variable ceiling rate issuing deposits are not included in the amounts outstanding. Therefore, the deposit account of 4 years and over issued since July 1, 1979; the ceiling rate on such amounts shown in table 4.10 may exceed the deposit amounts shown in the table. accounts was 7.60 percent in October. In January 1980 all variable ceiling accounts The most common interest rate for each instrument refers to the stated rate per were excluded from these categories and hence the fixed rate ceilings that apply annum (before compounding) that banks paid on the largest dollar volume of to each maturity category are shown in the table. deposit inflows during the 2-week period immediately preceding the survey date. Details may not add to totals because of rounding. 4.12 AVERAGE OF MOST COMMON INTEREST RATES PAID on Various Categories of Time and Savings Deposits at Insured Commercial Banks, April 30, 1980 Bank size (total deposit in million of dollars) A/pv ui u^pwaii, nuiuti, cuiu original maturity All size Less 20 up 50 up 100 up 500 up 1,000 groups than 20 to 50 to 100 to 500 to 1,000 and over Savings and small-denomination time deposits......................................... 7.97 8.21 8.31 8.06 7.94 7.57 7.72 Savings, total .............................................................................................. 5.18 5.18 5.18 5.11 5.21 5.15 5.19 Individuals and nonprofit organizations................................................. 5.18 5.18 5.17 5.10 5.21 5.15 5.19 Partnerships and corporations................................................................ 5.22 5.18 5.22 5.22 5.23 5.17 5.24 Domestic governmental units ................................................................ 5.22 5.22 5.23 5.22 5.22 5.19 5.23 All other .................................................................................................. 5.08 5.25 5.20 4.92 4.77 5.25 5.20 Other time deposits in denominations of less than $100,000, total....... 6.69 6.61 6.78 6.79 6.71 6.63 6.58 Domestic governmental units, total ....................................................... 6.22 6.28 6.36 6.29 5.85 6.83 6.56 30 up to 90 days................................................................................... 6.14 6.98 6.43 6.45 5.57 6.81 6.62 90 up to 180 days................................................................................. 5.94 5.59 6.28 5.68 5.83 7.01 6.19 180 days up to 1 year .......................................................................... 6.42 6.66 6.11 6.55 6.00 6.80 6.82 1 year and over ................................................................................... 6.38 6.12 6.52 6.74 6.83 6.62 6.61 Other than domestic government units, total....................................... 6.70 6.63 6.79 6.80 6.73 6.63 6.58 30 up to 90 days................................................................................... 5.14 5.22 5.18 5.23 5.22 4.58 5.22 90 up to 180 days................................................................................. 5.65 5.70 5.69 5.61 5.64 5.69 5.63 180 days up to 1 year.......................................................................... 5.65 5.58 5.66 5.50 5.68 5.62 5.67 1 up to 2Yi years................................................................................. 5.98 6.00 6.00 6.00 5.98 5.98 5.93 2Yi up to 4 years................................................................................. 6.47 6.45 6.44 6.50 6.47 6.40 6.49 4 up to 6 years..................................................................................... 7.22 7.23 7.24 7.24 7.23 7.17 7.15 6 up to 8 years..................................................................................... 7.48 7.50 7.50 7.50 7.49 7.45 7.45 8 years or more ................................................................................... 7.68 7.71 7.75 7.75 7.73 7.51 7.61 IRA and Keogh Plan time deposits, 3 years or more.......................... 9.24 9.59 9.78 9.36 9.09 8.92 9.02 Money market certificates, exactly 6 months....................................... 11.86 11.81 11.84 11.89 11.87 11.83 11.88 Variable interest rate ceiling time deposits of less than $100,000 with maturities of 2Yi years or more* ..................................................... 11.68 11.69 11.63 11.73 11.68 11.67 11.68 Club accounts2 ............................................................................................. 4.01 2.46 3.63 3.86 4.38 4.12 4.58 1. See note 2 in table 4.10. reported on each type of deposit at each bank by the amount of that type of deposit 2. Club accounts are excluded from all of the other categories. outstanding. All banks that had either discontinued offering or never offered particular types of deposit as of the survey date were excluded from the calculations Note. The average rates were calculated by weighting the most common rate for those specific types of deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A73 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 mil­ lions) 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 periodic releases ......................................................... August 1980 A-80 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Board of Governors Paul A. Volcker, Chairman Henry C. Wallich Frederick H. Schultz, Vice Chairman J. Charles Partee 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 Normand 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 Michael J. Prell, Associate Director Robert A. Eisenbeis, Senior Deputy Associate Director tJoHN J. Mingo, Senior Deputy Associate Director Office of the Secretary Eleanor J. Stockwell, Senior Deputy Associate Director Jared J. Enzler, Deputy Associate Director Theodore E. Allison, Secretary J. Cortland G. Peret, Deputy Associate Director Griffith L. Garwood, Deputy Secretary Helmut F. Wendel, Deputy Associate Director Barbara R. Lowrey, Assistant Secretary Martha Bethea, Assistant Director *Cathy L. Petryshyn, Assistant Secretary 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 Glenn E. Loney, Assistant Director Robert F. Gemmill, Associate Director Dolores S. Smith, Assistant Director George B. Henry, Associate Director Charles J. Siegman, Associate Director Samuel Pizer, Staff Adviser Division of Banking Jeffrey R. Shafer, Deputy Associate Director Dale W. Henderson, Assistant Director Supervision and Regulation Larry J. Promisel, Assistant Director John E. Ryan, Director Ralph W. Smith, Jr., Assistant Director Frederick R. Dahl, Associate Director William Taylor, Associate 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

A75 and Official Staff Nancy H. Teeters Lyle E. Gramley Emmett J. Rice 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 Lorin S. Meeder, Assistant Director P. D. Ring, Assistant Director David L. Robinson, 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 Robert E. Frazier, Assistant Director Walter W. Kreimann, Associate Director *On loan from the Federal Reserve Bank of Cleveland. tOn leave of absence. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Bulletin □ August 1980 FOMC and Advisory Councils Federal Open Market Committee Paul A. Volcker, Chairman Anthony M. Solomon, Vice Chairman Lyle E. Gramley J. Charles Partee Nancy H. Teeters Roger Guffey Emmett J. Rice Henry C. Wallich Frank E. Morris Lawrence K. Roos Willis J. Winn Frederick H. Schultz Murray Altmann, Secretary Richard G. Davis, Associate Economist NormandR. V. Bernard, Assistant Secretary Thomas Davis, Associate Economist Neal L. Petersen, General Counsel Robert Eisenmenger, Associate Economist James H. Oltman, Deputy General Counsel Edward C. Ettin, Associate Economist Robert E. Mannion, Assistant General Counsel George B. Henry, Associate Economist Stephen H. Axilrod, Economist Peter M. Keir, Associate Economist Alan R. Holmes , Adviser for Market Operations James L. Kichline, Associate Economist Anatol Balbach, Associate Economist Edwin M. Truman, Associate Economist John 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 Clarence C. Barksdale, Eighth District, President James D. Berry, Eleventh District, Vice President Henry S. Woodbridge, Jr., First District Robert Strickland, Sixth District Donald C. Platten, Second District Roger E. Anderson, Seventh District William B. Eagleson, Jr., Third District Clarence G. Frame, Ninth District Merle E. Gilliand, Fourth District Gordon E. Wells, Tenth District J. Owen Cole, Fifth 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 The Rev. 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 ll Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK, Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* .................. 02106 Robert M. Solow Frank E. Morris Robert P. Henderson James A. McIntosh NEW YORK* ............. 10045 Robert H. Knight, Esq. Anthony M. Solomon Boris Yavitz Thomas M. Timlen Buffalo........................14240 Frederick D. Berkeley, III JohnT. Keane PHILADELPHIA 19105 John W. Eckman David P. Eastburn Werner C. Brown Richard L. Smoot CLEVELAND* .......... 44101 Robert E. Kirby Willis J. Winn J. L. Jackson Walter H. MacDonald Cincinnati.................. 45201 Lawrence H. Rogers, II Robert E. Showaiter Pittsburgh.................. 15230 William H. Knoell Robert D. Duggan RICHMOND* ..............23261 Maceo A. Sloan Robert P. Black Steven Muller Jimmie R. Monhollon Baltimore...................21203 Catherine Byrne Doehler Robert D. McTeer, Jr. Charlotte ...................28230 Robert E. Elberson Stuart P. Fishburne Culpeper Communications and Records Center 22701 Albert D. Tinkelenberg ATLANTA .................. 30301 William A. Fickling, Jr. William F. Ford John H. Weitnauer, Jr. Robert P. Forrestal Birmingham ............. 35202 Harold B. Blach, Jr. Hiram J. Honea Jacksonville ............. 32231 Joan W. Stein Charles D. East Miami ....................... .33152 David G. Robinson F. J. Craven, Jr. Nashville .................. 37203 Robert C. H. Mathews, Jr. Jeffrey J. Wells New Orleans............. 70161 George C. Cortright, Jr. Pierre M.Viguerie CHICAGO*.................. 60690 John Sagan Robert P. Mayo Stanton R. Cook Daniel M. Doyle Detroit....................... 48231 Howard F. Sims William C. Conrad ST. LOUIS .................. 63166 Armand C. Stalnaker Lawrence K. Roos William B. Walton Donald W. Moriarty, Jr. Little Rock............... ,72203 E. Ray Kemp, Jr. John F. Breen Louisville .................. 40232 Richard O. Donegan Donald L. Henry Memphis .................. 38101 Charles S. Youngblood Robert E. Matthews MINNEAPOLIS.......... 55480 Stephen F. Keating E. Gerald Corrigan William G. Phillips Thomas E. Gainor Helena.......................,59601 Patricia P. Douglas Betty J. Lindstrom KANSAS CITY .......... 64198 Joseph H. Williams Roger Guffey Paul H. Henson Henry R. Czerwinski Denver....................... 80217 Caleb B. Hurtt Wayne W. Martin Oklahoma City.......... 73125 Christine H. Anthony William G. Evans Omaha....................... 68102 Robert G. Lueder Robert D. Hamilton DALLAS .................... 75222 Irving A. Mathews Ernest T. Baughman Gerald D. Hines Robert H. Boykin El Paso....................... 79999 Chester J. Kesey Joel L. Koonce, Jr. Houston.................... 77001 Gene M. Woodfin J. Z. Rowe San Antonio ............. 78295 Carlos A. Zuniga Carl H. Moore SAN FRANCISCO ..... 94120 Cornell C. Maier John J. Balles Caroline L. Ahmanson John B. Williams Los Angeles .............,90051 Harvey A. Proctor Richard C. Dunn Portland.................... 97208 Loran L. Stewart Angelo S. Carella Salt Lake City.......... 84125 Wendell J. Ashton A. Grant Holman Seattle....................... 98124 Vacancy 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

A78 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. each. Reappraisal of the Federal Reserve Discount Mecha­ 1972-76. 1977. 377 pp. $10.00 per copy. nism. Vol. I. 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. da, and Mexico; 10 or more of same issue to one address, 1976. 43 pp. $1.00 each; 10 or more to one address, $.85 $13.50 per year or $.35 each. Elsewhere, $20.00 per year each. or $.50 each. Annual Percentage Rate Tables (Truth in Lending— Regulation Z) Vol. I (Regular Transactions). 1969. 100 Selected Interest and Exchange Rates—Weekly Se­ pp. 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 ad­ the 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 The Federal Reserve Act, as amended through December Utilization. 1978. 40 pp. $1.75 each; 10 or more to one 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 Accounts. 1949-1978. 1979. 171 pp. each; 10 or more to one address, $4.00 each. $1.75 each; 10 or more to one address, $1.50 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 Consumer Education Pamphlets Measurement of Capacity Utilization: Problems and Short pamphlets suitable for classroom use. Multiple Tasks, by Frank de Leeuw, Lawrence R. Forest, Jr., copies available without charge. Richard D. Raddock, and Zoltan E. Kenessey. July 1979. 264 pp. Alice in Debitland The Market for Federal Funds and Repurchase The Board of Governors of the Federal Reserve System Agreements, by Thomas D. Simpson. July 1979. 106 pp. Consumer Handbook To Credit Protection Laws Impact of Bank Holding Companies on Competition The Equal Credit Opportunity Act and . . . Age and Performance in Banking Markets, by Stephen The Equal Credit Opportunity Act and . . . Credit Rights in A. Rhoades and Roger D. Rutz. Aug. 1979. 30 pp. Housing The GNMA-Guaranteed Passthrough Security: Mar­ The Equal Credit Opportunity Act and . . . Doctors, ket Development and Implications for the Growth Lawyers, Small Retailers, and Others Who May Provide and Stability of Home Mortgage Lending, by Incidental Credit David F. Seiders. Dec. 1979. 65 pp. The Equal Credit Opportunity Act and . . . Women Foreign Ownership and The Performance of U.S. Fair Credit Billing Banks, by James V. Houpt. July 1980. 27 pp. The Federal Open Market Committee Federal Reserve Bank Board of Directors Federal Reserve Banks Printed in Full in the Bulletin Federal Reserve Glossary An Assessment of Bank Holding Companies, by How to File A Consumer Credit Complaint Robert J. Lawrence and Samuel H. Talley. January 1976. If You Borrow To Buy Stock If You Use A Credit Card Truth in Leasing U.S. Currency Reprints What Truth in Lending Means to You Most of the articles reprinted do not exceed 12 pages. Measures of Security Credit. 12/70. Staff Studies Revision of Bank Credit Series. 12/71. Studies and papers on economic and financial subjects that Assets and Liabilities of Foreign Branches of U.S. Banks. are of general interest. 2/72. Bank Debits, Deposits, and Deposit Turnover—Revised Summaries Only Printed in the Bulletin Series. 7/72. Requests to obtain single copies of the full text or to be Yields on Newly Issued Corporate Bonds. 9/72. added to the mailing list for the series may be sent to Pub­ Yields on Recently Offered Corporate Bonds. 5/73. lications Services. Rates on Consumer Instalment Loans. 9/73. New Series for Large Manufacturing Corporations. 10/73. The Relationship Between Reserve Ratios and the The Structure of Margin Credit. 4/75. Monetary Aggregates Under Reserves and Fed­ Industrial Electric Power Use. 1/76. eral Funds Rate Operating Targets, by Kenneth J. Revision of Money Stock Measures. 2/76. Kopecky. Dec. 1978. 58 pp. Revised Series for Member Bank Deposits and Aggregate Re­ Tie-ins Between the Granting of Credit and Sales of serves. 4/76. Insurance by Bank Holding Companies and Other Industrial Production— 1976 Revision. 6/76. Lenders, by Robert A. Eisenbeis and Paul R. Schweitzer. Federal Reserve Operations in Payment Mechanisms: A Feb. 1979. 75 pp. Summary. 6/76. Geographic Expansion of Banks and Changes in Bank­ New Estimates of Capacity Utilization: Manufacturing and ing Structure, by Stephen A. Rhoades. Mar. 1979. 40 Materials. 11/76. pp. The Commercial Paper Market. 6/77. Impact of the Dollar Depreciation on the U.S. Price The Federal Budget in the 1970’s. 9/78. Level: An Analytical Survey of Empirical Esti­ Redefining the Monetary Aggregates. 1/79. mates, by Peter Hooper and Barbara R. Lowrey. Apr. Implementation of the International Banking Act. 10/79. 1979. 53 pp. Changes in Bank Lending Practices, 1977-79. 10/79. Innovations in Bank Loan Contracting: Recent Evi­ U.S. International Transactions in 1979: Another Round of dence by Paul W. Boltz and Tim S. Campbell. May 1979. Oil Price Increases. 4/80. 40 pp. Perspectives on Personal Saving. 8/80. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Anticipated Schedule of Release Dates for Periodic Releases- Board of Governors of the Federal Reserve System1 Date or Period Approximate to which Data Weekly Release Release Day2 Refer Aggregate Reserves and Member Bank Deposits. H.3 (502) Monday Week ended previous Wednesday Actions of the Board; Applications and Reports H.2 (501) Friday Week ended previous Saturday Assets and Liabilities of Domestically Chartered Commercial Banks Wednesday Wednesday, 2 weeks H.8 (510) earlier Changes in State Member Banks. K.3 (615) Tuesday Week ended previous Saturday Factors Affecting Bank Reserves and Condition Statement of Federal Friday Week ended previous Reserve Banks. H.4.1 (503) Wednesday Foreign Exchange Rates. H.10 (512) Monday Week ended previous Friday Money Stock Measures. H.6 (508) Friday Week ended Wednes­ day of previous week Selected Borrowings in Immediately Available Funds of Large Member Wednesday Week ended Thursday Banks. H.5 (507) of previous week Selected Interest Rates. H. 15 (519) Monday Week ended previous Saturday Weekly Consolidated Condition Report of Large Commercial Banks Friday Wednesday, 1 week and Domestic Subsidiaries. H.4.2 (504) earlier Weekly Summary of Banking and Credit Measures. H.9 (511) Friday Week ended previous Wednesday; and week ended Wednes­ day of previous week Monthly Releases Capacity Utilization: Manufacturing and Materials. G.3 (402) Mid-month Previous month Changes in Status of Banks and Branches. G.4.5 (404) 25th of month Previous month Commercial and Industrial Loans to U.S. Addresses Excluding Bank­ 1st Wednesday of Last Wednesday of pre­ ers’ Acceptances and Commercial Paper by Industry. G.27 (429) month vious month Consumer Installment Credit. G. 19 (421) 3rd working day of 2nd month previous month Debits and Deposit Turnover at Commercial Banks. G.6 (406) 25th of month Previous month Federal Reserve System Memorandum on Exchange Charges. K.14 5th of month Period since last release (628) Finance Companies. G.20 (422) 5th working day of 2nd month previous month Foreign Exchange Rates. G.5 (405) 1st of month Previous month Release dates are those anticipated or usually met. However, it should be noted that for some releases there is normally a certain variability because of reporting or processing procedures. Moreover, for all series unusual circumstances may, from time to time, result in a release date being later than anticipated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A81 Date or Period Approximate to which Data Release Day Refer Industrial Production. G.12.3 (414) Mid-month Previous month Loan Commitments at Selected Large Commercial Banks. G.21 (423) 20th of month 2nd month previous Loans and Investments at all Commerical Banks. G.7 (407) 20th of month Previous month Major Nondeposit Funds of Commercial Banks. G. 10 (411) 20th of month Previous month Maturity Distribution of Outstanding Negotiable Time Certificates of 24th of month Last Wednesday of pre­ Deposit. G.9(410) vious month Monthly Report of Condition for U.S. Agencies, Branches, and Domes­ 15th of month 2nd month previous tic Banking Subsidiaries of Foreign Banks. G.ll (412) Research Library—Recent Acquisitions. G.15 (417) 1st of the month Previous month Selected Interest Rates. G. 13 (415) 6th of month Previous month Summary of Equity Security Transactions. G. 16 (418) Last week of month Release date Quarterly Releases Automobile Credit E .4 (114) 14th of April, July, Previous quarter October, and Jan­ uary Finance Rates and Other Terms on Selected Types of Consumer Install- 25 th of January, 2nd month previous ment Credit Extended by Major Finance Companies. E. 10 (120) April, July, and October Flow of Funds: Seasonally adjusted and unadjusted. Z. 1 (780) 15th of February, Previous quarter May, August, and November Geographical Distribution of Assets and Liabilities of Major Foreign 15th of March, Previous quarter Branches of U.S. Banks. E.ll (121) June, September, and December Finance Rates on Selected Consumer Installment Loans at Reporting 15th of March, February, May, Au­ Commercial Banks. E. 12 (122) June, September, gust, and November and December Survey of Terms of Bank Lending. E.2 (111) 15th of March, February, May, Au­ June, September, gust, and November and December Semiannual Releases Assets and Liabilities of Commercial Banks, by Class of Bank. E.3.4 May and November End of previous De­ (113) cember and June Check Collection Services—Federal Reserve System. (E.9) 119 February and July Previous 6 months List of OTC Margin Stocks. E.7 (117) April and October Release date Assets, Liabilities, and Capital Accounts of Commercial and Mutual May and November End of previous De­ Savings Banks—Reports of Call (Joint Release of the Federal Deposit cember and June Insurance Corporation, the Board of Governors of the Federal Re­ serve System, and Office of the Comptroller of the Currency. Pub­ lished and distributed by FDIC.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A82 Date or Period Approximate to which Data Release Day Refer Annual Releases Aggregate Summaries of Annual Surveys of Security Credit Extension. February End of previous June C.2 (101) Bank Holding Companies and Subsidiary Banks. C.6 (105) March Previous year Insured Bank Income by Size of Bank. C.4 (103) End of May Previous year State Member Banks of Federal Reserve System and Nonmember 1st quarter of year End of previous year Banks that Maintain Clearing Accounts with Federal Reserve Banks G.4(403) (Supplements issued monthly) 15th of month Previous month Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A83 Index to Statistical Tables References are to pages A-3 through A-72 although the prefix “A” is omitted in this index ACCEPTANCES, bankers, 10, 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, 69-72 Assets and liabilities {See also Foreigners) Federal Reserve Banks, 4, 11 Banks, by classes, 16, 17, 18,20-23,29 Subject to reserve requirements, 14 Domestic finance companies, 39 Turnover, 12 Federal Reserve Banks, 11 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, 10, 11, 12, 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, 11 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, 11 Weekly reporting banks, 20, 21, 22, 23, 24 Discount rates (See Interest rates) Commercial banks U.S. government securities held, 4, 11, 12, 32, 33 Assets and liabilities, 3, 15-19, 20-23, 69-72 Federal Reserve credit, 4, 5, 11, 12 Business loans, 26 Federal Reserve notes, 11 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, 11 Consumption expenditures, 52, 53 Deposits in U.S. banks, 4, 11, 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, 13 GOLD Customer credit, stock market, 28 Certificates, 11 Stock,4,55 DEBITS to deposit accounts, 12 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, 12, 15, 19 HOUSING, new and existing units, 50 Banks, by classes, 16, 17, 19, 20-23, 69-72 Ownership by individuals, partnerships, and INCOME, personal and national, 46, 52, 53 corporations, 25 Industrial production, 46,48 Subject to reserve requirements, 14 Installment loans, 42,43 Turnover, 12 Insurance companies, 29, 32, 33,41 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 Insured commercial banks, 17, 18, 19, 69-72 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 Repurchase agreements and federal funds, 6 Federal Reserve Banks, 3, 7 Reserve requirements, member banks, 8 Foreign countries, 68 Money and capital markets, 3, 27 Commercial banks, 16, 18, 20,21, 22 Mortgages, 3, 40 Federal Reserve Banks, 11 Prime rate, commercial banks, 26 Member banks, 3, 4, 5, 14, 16, 18 Time and savings deposits, 9, 72 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, 9, 29, 33, 41, 44 Federal Reserve Banks, 11, 12 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, 11, 54, 55 Commercial banks, 3, 15-18, 20-23, 24, 26 State and local governments Federal Reserve Banks, 3, 4, 5, 7, 11, 12 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, 11 TAX receipts, federal, 31 Federal funds and repurchase agreements, 6 Time deposits, 3, 9, 12, 14, 16, 17, 19, 20, 21, 22, 23, 69-72 Number, by classes, 16, 17, 19 Trade, foreign, 55 Reserve requirements, 8 Treasury currency, Treasury cash, 4 Reserves and related items, 3, 4, 5, 14 Treasury deposits, 4, 11, 30 Mining production, 49 Treasury operating balance, 30 Mobile home shipments, 50 Monetary aggregates, 3, 14 UNEMPLOYMENT, 47 Money and capital market rates (See Interest rates) U.S. balance of payments, 54 Money stock measures and components, 3, 13 U.S. government balances Mortgages (See Real estate loans) Commercial bank holdings, 19, 20, 21, 22 Mutual funds (See Investment companies) Member bank holdings, 14 Mutual savings banks, 3, 9, 20-22, 29, 32, 33, 41 Treasury deposits at Reserve Banks, 4, 11, 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, 11, 12, 32, 33 Nonmember banks, 17, 18, 19 Foreign and international holdings and transactions, 11, 32, 64 OPEN market transactions, 10 Open market transactions, 10 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

A85 The Federal Reserve System B o u n d a rie s o f F e d e ra l R e s e rv e D is tric ts a n d T h e ir B ra n c h T e rrito rie s Helena Minneapolis Detroit Chicago \SaltLake City Louisville Kansas t. Louis ZarlotV Oklahoma City Houston! tan Antonio January 1978 ALASKA HAWAII 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