Federal Reserve Bulletin, 1981-03

Volume 67 □ Number 3 □ March 1981 FEDERAL RESERVE BULLETIN Board of Governors of the Federal Reserve System Washington, D.C. Publications Committee Joseph R. Coyne, Chairman □ Stephen H. Axilrod □ John M. Denkler Janet O. Hart □ James L. Kichline □ Neal L. Petersen □ Edwin M. Truman Naomi P. Salus, Coordinator 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 195 Monetary Policy Report to 235 Nancy H. Teeters, Member, Board of Gov­ Congress ernors, testifies on the proposed “Cash Discount Act” and says that the Board Submitted pursuant to the Full Employ­ favors encouraging such discounts, before ment and Balanced Growth Act of 1978, the the Subcommittee on Consumer Affairs of Board’s report states that the policy of the Senate Committee on Banking, Hous­ monetary restraint adopted by the Federal ing, and Urban Affairs, February 18, 1981. Reserve is intended to contribute to the process of breaking the momentum of infla­ 237 Paul A. Volcker, Chairman, Board of Gov­ tion. ernors, discusses the Monetary Policy Re­ port (see article, pages 195-208) and empha­ 209 TREASUR Y AND FEDERAL RESERVE sizes the importance of restraint on money Foreign Exchange Operations and credit combined with control of federal spending, before the Senate Committee on The underlying strength of the dollar in Banking, Housing, and Urban Affairs, Feb­ foreign exchange markets over the period ruary 25, 1981. (Chairman Volcker gave a from August 1980 through January 1981 similar statement before the House Com­ reflected the relatively favorable currentmittee on Banking, Finance, and Urban account position of the United States. Affairs, February 26, 1981.) 229 Staff Studies 241 J. Charles Partee, Member, Board of Gov­ ernors, discusses H.R. 1294, a bill to extend “Banking Structure and Performance at the margin credit regulations to the acquisition State Level during the 1970s” examines the of U.S. corporations by foreigners using levels and trends in state banking structure credit obtained from foreign lenders, and and analyzes statewide banking perform­ House Concurrent Resolution 59, which ance during the 1970s. calls for a study of the effects of such foreign acquisitions on our economy, be­ 231 Industrial Production fore the Subcommittee on Telecommunica­ tions, Consumer Protection and Finance of Output declined about 0.5 percent in Febru­ the House Committee on Energy and Com­ ary. merce, February 26, 1981. 233 Statements to Congress 243 Chairman Volcker discusses economic poli­ cy and its relationship to monetary policy Henry C. Wallich, Member, Board of Gov­ and says that the linchpin of the whole ernors, testifies on S. 144, a bill that would economic program is massive progress in facilitate the establishment and operation of cutting back the upward surge in federal export trading companies, and focuses on expenditures, before the House Committee the provisions of the bill relating to bank on Ways and Means, March 3, 1981. ownership of export trading companies, be­ fore the Subcommittee on International Fi­ 247 Announcements nance and Monetary Policy of the Senate Committee on Banking, Housing, and Ur­ Publication of Capital Formation and Pub­ ban Affairs, February 17, 1981. lic Policy. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Establishment of procedures for adminis­ A67 Guide to Tabular Presentation, tration of clearing balances, service Statistical Releases, and Special charges, and interim price and service Tables charges. All BOARD OF GOVERNORS AND STAFF Amendment to Regulation P. Admission of one state bank to membership A74 FEDERAL OPEN MARKET COMMITTEE in the Federal Reserve System. AND STAFF; ADVISORY COUNCILS 253 Legal Developments A75 Federal Reserve Banks, Branches, and Offices Various bank holding company and bank merger orders, and pending cases. A76 Federal Reserve Board Publica­ tions Al Financial and Business Statistics A3 Domestic Financial Statistics A78 Index to Statistical Tables A44 Domestic Nonfinancial Statistics A52 International Statistics A80 Map of Federal Reserve System A Special Tables 68 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress Report submitted to the Congress pursuant to the longer run to a restoration of reasonable the Full Employment and Monetary Growth Act stability in the general price level. of 1978 on February 25, 1981. The basic premise of the System’s policy is the broadly accepted notion that inflation can persist over appreciable spans of time only if it is A Review of Developments in 1980 accommodated by monetary expansion. The strategy to which the System has committed Monetary Policy and the Performance itself is to hold monetary growth to rates that fall of the Economy in 1980 short of such accommodation and thus encour­ age adjustments consistent with a return to price The past year was marked by considerable turbu­ stability over time. To be sure, the relationships lence in the nation’s economy and credit mar­ between the growth of money and the behavior kets. Output and employment experienced ex­ of the economic variables of ultimate concern— traordinarily sharp swings—generally confound­ such as production, employment, and inflation— ing forecasters inside and outside government— are not in practice absolutely stable or predict­ and so, too, did interest rates and financial flows. able, especially in the short run. But the crucial On balance, the level of the aggregate output of fact is that rates of monetary expansion in the goods and services at the end of 1980 was little vicinity of those specified by the Federal Open changed from that at the beginning of the year, Market Committee (FOMC) last February im­ and with a growing labor force, unemployment plied a substantial degree of restraint on the was appreciably higher. At the same time, infla­ growth of nominal gross national product—that tion continued at about the same unacceptably is, the combined result of inflation and real high rate as in 1979. growth. Put differently, the FOMC’s ranges for Many factors—some of them beyond the realm monetary growth implied that, if inflation did not of the purely economic—combined to produce abate, there would in all likelihood be strong this distressing performance. At bottom, howev­ financial restraint on economic activity reflected er, the behavior of the economy demonstrated in an easing of pressures on markets for goods rather vividly the difficulties of overcoming a and services and thence on productive capacity, deeply entrenched inflation and, particularly, the factors that in turn would help to contain the stresses that arise when necessary monetary momentum of inflation. This stabilizing influence restraint is not adequately supported by other was especially critical in a circumstance in which instruments of public policy. the impulse of a price hike by the Organization of As 1980 began, the underlying trend of price Petroleum Exporting Countries could easily have increase was approaching a double-digit pace, led to a ratcheting upward of the trend rate of and a recent further jump in international oil inflation. prices has threatened to worsen that trend. There In any event, inflation did not abate in 1980. was broad consensus that fighting inflation must But neither did it gain new momentum as many be the top priority for national economic policy. feared it might. Rather, the increases in most The Federal Reserve shaped its policy'for 1980 aggregate price indexes were about the same as with the objective of reining in inflationary forces were recorded in 1979. The fixed-weight price in the economy and establishing a framework index for GNP rose 9V percent last year, a little 2 within which decisionmakers in both the public more than in 1979, while the consumer price and the private sectors could look forward over index rose 12V2 percent, somewhat less than in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

196 Federal Reserve Bulletin □ March 1981 1979. Such rates of inflation themselves result in The financial pressures on the private sector of a substantial increase in the amount of money the economy last year were intensified by the needed to finance transactions. Thus, even competition of the federal government for the though the monetary aggregates generally ex­ limited supply of credit. The federal deficit (uni­ panded at rates near or a bit above the upper fied basis, including off-budget agencies) grew ends of the FOMC’s announced ranges, the steep from $41 billion in calendar year 1979 to $83 rise in prices resulted in marked pressures in the billion in calendar year 1980. During 1980, more­ credit markets that exerted restraint on econom­ over, the massive federal deficit and repeated ic activity and kept inflationary pressures from upward revisions in spending forecasts added to worsening. the prevailing mood of uncertainty and weak­ These developments did not occur evenly ened public confidence in the government’s will­ throughout the year. During the opening months, ingness and ability to mount a successful anti­ the late-1979 boost in imported oil prices com­ inflation effort. bined with other factors—including strife in Af­ In 1980, as in most periods of financial tension, ghanistan, unsettlement in the Middle East gen­ those types of purchases that involve longererally, and attendant fears that an escalation of term investments of large sums were hardest hit. defense spending might greatly enlarge already The residential construction sector, especially, sizable federal deficits—to aggravate inflationary was squeezed by high interest rates and, particu­ expectations. These expectations contributed larly in the first half of the year, by reduced importantly to the upward pressures on interest credit availability. Housing starts fell from an rates that were associated with the Federal Re­ annual rate of million units in the fourth 1.6 serve’s efforts to contain growth in the monetary quarter of 1979 to a rate of 1.1 million units in the and credit aggregates. Then, in March, President second quarter of 1980; starts then snapped back Carter announced an anti-inflation program that sharply to just over 1.5 million units by the end of included the application by the Federal Reserve the summer, leveling off as interest rates moved of special restraints on credit growth by utilizing upward again in the final months of the year. The the powers of the Credit Control Act of 1969. mortgage markets have seen remarkably rapid The tightening of credit markets and the psy­ institutional change in the past year, reflecting an chological impact of the credit restraint program adaptation to recurrent cyclical pressures on key on consumers contributed to the sharpness of the lenders and to the difficulties potential homeeconomic decline that occurred in the first half of buyers face with traditional mortgage instru­ the year, although a decline at some point had ments. Still, these changes have not insulated the long been anticipated in the light of strong pres­ real estate market from the effects of inflated sures on financial positions and other factors. home prices and of high mortgage rates on the The drop in real GNP during the second quarter willingness and ability of people to borrow and far exceeded the expectations of forecasters; in buy houses. fact, it was the sharpest of the postwar period. Credit conditions also played a role in dampen­ However, with the slump in activity came a ing personal consumption expenditures in 1980— pronounced weakening of demands for money particularly outlays on big-ticket durable goods. and credit and a steep decline in interest rates. However, several other influences militated The lowering of credit costs, coupled with re­ against a robust pattern of consumer spending. moval of the special credit restraints, in turn was The period leading up to 1980 had been marked instrumental in bringing about a rebound in eco­ by weakness in real disposable personal income nomic activity in the second half of the year, and by an erosion of the financial flexibility of which turned out to be unexpectedly early and households. Faced with budgetary strains caused strong and restored real GNP almost to its year- by relatively rapid increases in the prices of such end 1979 level. During this period of recovery, basic necessities as food and energy, many the public’s demands on financial markets grew American families had sought to maintain cus­ and interest rates rose as the System attempted tomary consumption patterns—and in some cas­ to hold monetary expansion within bounds. es to finance extra purchases in anticipation of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 197 inflation—by borrowing. A declining trend in the petroleum imports, the impact of decreased eco­ personal saving rate suggested that consumers nomic activity was reinforced by the incentive were becoming overextended and that some for conservation provided by a sharply increased weakening in spending relative to income was relative price of oil and other energy products. quite likely; indeed, the saving rate rose from 4.7 At the same time, U.S. exports—including both percent in the fourth quarter of 1979 (a 28-year agricultural commodities and other products— low) to 6.2 percent in the second quarter of 1980. rose appreciably in real terms. Net exports thus Automobile purchases, which tend to be defer­ registered a noticeable increase during 1980, and able in the short run, bore the brunt of the the U.S. current account moved into sizable consumer retrenchment. Although credit condi­ surplus in the second half of the year. The trade tions discouraged dealers from financing large and current-account developments contrasted inventories and to some extent were a depressant sharply with those of some other major industrial on demand for autos more generally, the steep countries and contributed to a substantial appre­ increases in the prices of cars and gasoline ciation of the dollar relative to continental Euro­ appear to have been more decisive elements in pean currencies over the course of the year. the picture. Employment traced a path similar to that of Business firms, like households, entered 1980 output in 1980—that is, down substantially in the in a weakened financial condition. The preceding first half and up substantially in the second, with years of expansion had seen a substantial dete­ little net change. There was some alteration in rioration in aggregate measures of corporate li­ the composition of employment over the course quidity; many enterprises were heavily burdened of the year, however, with jobs in manufacturing with short-term debt, and they thus were ex­ and construction decreasing and those in service posed to severe cash-flow pressures when inter­ industries increasing. The combination of this est rates rose. The combination of deteriorating change in employment mix and a tendency for balance sheets, a high cost of capital, and slack­ employers to lag in adjusting their work forces to ening demands for final products resulted in a 5 lower levels of production contributed to a con­ percent drop in real business fixed investment tinued disappointing performance of labor pro­ during 1980. Some industries—particularly in the ductivity—output per hour worked—which defense, energy, and high-technology sectors— showed no gain for the year. did register gains in capital outlays, but those With no moderating influence from the pro­ elements of strength were more than offset by ductivity side, the rise in unit labor costs reflect­ declines in most cyclical manufacturing indus­ ed directly the behavior of wages and other labor tries. Plant construction spending was especially expenses during 1980. In the nonfarm business weak. Meanwhile, businesses kept a tight rein on sector, average hourly compensation—which in­ inventories, encouraged by the high costs of cludes employer contributions for social insur­ carrying stocks; a moderate accumulation during ance and the cost of fringe benefits—rose 10 the first-half recession—concentrated in the percent, a bit more than in 1979. However, this automotive and related industries—was largely measure, because it does not account for eliminated in the subsequent rebound. changes in the mix of employment or in over­ In the government sector, purchases of goods time, probably understates the acceleration in and services by the federal government rose wage rates. For example, the index of average moderately in real terms during 1980, reflecting hourly earnings for production and nonsuperviin part a pickup in defense outlays. At the state sory personnel, which does include adjustments and local level, real purchases were about un­ for such factors, increased 9V percent in 1980 2 changed, owing to fiscal strains associated with a compared with percent in 1979. 8 slowing of growth in tax revenues and cutbacks Wages typically are slow in responding to in federal grants as well as to political pressures economic slack, and given the large increases in for spending restraint. consumer prices in 1979 and 1980, there were The slackening of domestic aggregate demand strong tendencies toward sizable catch-up wage worked to hold down imports; in the case of hikes even in the face of an unemployment rate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

198 Federal Reserve Bulletin □ March 1981 that reached 7V percent last spring. This tenden­ money and credit slowed markedly. Indeed, the 2 cy manifests itself in a direct way when formal narrow monetary aggregates, M-l A and M-1B, cost-of-living escalator clauses exist. Such which are measures of the public’s transaction clauses are most common in the manufacturing balances, actually contracted significantly in the sector, especially when there is collective bar­ second quarter. This decline, occurring as it did gaining by large industrial unions, and the accel­ at the same time that interest rates were falling eration of wage rates was in fact relatively pro­ sharply, was considerably greater than would nounced in that sector. have been expected on the basis of historical relationships among money, income, and interest rates. The weakness in the M-l measures tended The Growth of Money and Credit in 1980 to restrain the growth of the broader monetary aggregates. Bank credit meanwhile contracted In its report to the Congress last February, the slightly. Board of Governors indicated the plans of the At midyear, when the FOMC reassessed the FOMC regarding the growth of money and credit monetary growth ranges for 1980, there were in 1980. As in previous years, the FOMC set few, if any, signs of the then-incipient economic desired ranges for the growth of several mone­ recovery. The monetary aggregates, though tary aggregates and of commercial bank credit. again on the rise, were either below or in the Measured from the fourth quarter of 1979 to the lower portion of the previously announced fourth quarter of 1980, the growth ranges were as ranges. The Depository Institutions Deregulation follows: M-1A, 3V to percent; M-1B, 4 to V and Monetary Control Act of 1980 had been 2 6 6 2 percent; M-2, to 9 percent; M-3, V to 9V signed into law by the end of March, but there 6 6 2 2 percent; and bank credit, to 9 percent It was was no clear evidence yet of significant impact 6 .1 recognized that legislative initiatives then pend­ on the behavior of the monetary aggregates. In ing in the area of financial regulation could alter these circumstances, the FOMC reaffirmed the the desired rates of increase, as could any other ranges for money and bank credit that it had unanticipated developments that indicated the adopted in February, but it did indicate that, if prescribed growth rates were inconsistent with the public continued to economize on the use of the basic objectives of policy. As stated, howev­ cash as strongly as in the second quarter, M-l A er, the ranges suggested a clear deceleration of and M-1B might well finish the year near the money and credit growth from the pace of 1979— lower end of their respective ranges Such a .2 a specification that appeared appropriate in proviso was called for because a sustained down­ terms of both the near-term and long-term re­ ward shift in the demand for money implies that a quirements of anti-inflation policy. given rate of monetary growth is more expan­ As noted in the preceding section, the mone­ sionary in its impact on the economy than would tary and credit aggregates grew quite rapidly in otherwise be the case. the opening part of the year. Then, as economic Over the second half of the year, however, the activity began to fall rapidly, the growth of monetary aggregates and bank credit grew very rapidly. There was a surprisingly swift and strong turnaround in economic activity. And 1. M-l A is currency plus private demand deposits at simultaneously the public’s demand for money commercial banks net of deposits due to foreign commercial banks and official institutions. M-1B is M-l A plus other retraced most of the evident downward shift of checkable deposits (that is, negotiable order of withdrawal the first half. Both of these developments may accounts, accounts subject to automatic transfer service, have been associated with the phasing out of the credit union share draft balances, and demand deposits at mutual savings banks). M-2 is M-lB plus savings and small- extraordinary credit restraint program at the end denomination time deposits at all depository institutions, shares in money market mutual funds, overnight repurchase agreements (RPs) issued by commercial banks, and overnight Eurodollar deposits held by U.S. residents at Caribbean 2. Previous episodes had occurred, particularly in the midbranches of U.S. banks. M-3 is M-2 plus large time deposits 1970s, of lasting downward shifts in the demand for M-l at all depository institutions and term RPs issued by commer­ balances following rises in interest rates to new record levels. cial banks and savings and loan associations. Bank credit is Such interest rate movements evidently encouraged greater total loans and investments of commercial banks. efforts to economize on holdings of noneaming assets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 199 of the second quarter. In retrospect, this pro­ in assessing policy. For that reason, table 1 offers gram seems to have played a greater role than measurements of annual growth on several was apparent at midyear in influencing the par­ bases. Owing to the particular monthly patterns ticular patterns of spending and financial flows over the past two years, the fourth-quarter-tothat developed in the spring and summer. fourth-quarter calculations show a lesser tenden­ Although the Federal Reserve resisted the cy toward deceleration in the growth of M-l A accelerating growth in money and credit—and and M-1B than do other measurements of the did succeed in bringing about a clear deceleration 1980 experience. in the latter months of the year—the growth of the monetary aggregates on a fourth-quarter-to- 1. Growth of money and bank credit1 fourth-quarter basis in 1980 was generally near or Percentage changes a bit above the upper ends of the ranges an­ nounced by the System. Bank credit growth was Item M-1A M-1B M-2 M-3 Bank credit within the range specified by the FOMC. Fourth quarter to Considerable care must be exercised in assess­ fourth quarter ing the behavior of M-l A and M-1B. Last Febru­ 1978.................................. 7.4 8.2 8.4 11.3 13.3 (7.9) (8.0) ary when the ranges for the aggregates were set, 1979.................................. 5.0 7.7 9.0 9.8 12.3 (6.7) (6.8) it was assumed that the growth rates of the two 1980.................................. 5.0 7.3 9.8 9.9 7.9 aggregates would differ only by V percentage (6.3) (6.7) 2 December to point based on an expectation that, under pre­ December 1978.................................. 7.1 8.2 8.3 11.2 13.6 vailing statute, growth in automatic transfer (7.8) (7.9) 1979.................................. 5.2 7.5 8.9 9.4 11.5 service (ATS) and negotiable order of withdraw­ (6.6) (6.8) al (NOW) accounts would draw few funds from 1980.................................. 4.1 6.5 9.7 10.3 8.9 (5.2) (5.8) demand deposits (depressing M-l A) and savings Annual average to annual average deposits (boosting M-1B). With the passage of 1978.................................. 7.7 8.2 8.9 11.7 12.3 the Monetary Control Act, however, which au­ (8.0) (8.0) 1979.................................. 5.2 7.8 8.9 10.3 13.4 thorized NOW accounts on a nationwide basis as (6.8) (7.0) 1980.................................. 4.6 6.4 9.1 8.6 8.3 of December 31, 1980, commercial banks began (5.6) (5.9) to promote ATS accounts more vigorously. As a 1. Numbers in parentheses are adjusted for the estimated impact of result, actual growth of ATS and NOW accounts shifting to ATS and NOW accounts from other assets and should give substantially exceeded the amount allowed for in a better indication of the underlying trend of monetary expansion. the FOMC ranges for M-l A and M- B. 1 M-l A increased 5 percent over the year ended The effects on M-2 of shifting into ATS and in the fourth quarter of 1980, close to the mid­ NOW accounts likely are minor, since nearly all point of the FOMC’s range for that aggregate. the inflows to those instruments appear to be Meanwhile, growth in M-lB was 7V percent, from assets within this broad aggregate. For the 4 3/4 of a percentage point above the upper end of its year as a whole, M-2 grew about 9 percent, 3/4 3/4 longer-run range. But if the FOMC’s ranges are of a percentage point above the upper end of the adjusted for current estimates of the actual im­ FOMC’s range. All of the growth in the non­ pact of shifting into ATS and NOW accounts, the transaction component of M-2 occurred in those increases in both narrow aggregates are close to assets offering market-related yields—primarily the upper bounds of the FOMC’s ranges for -month “money market certificates,” V- 6 2 2 1980. year “small-saver certificates,” and shares of Although, conventionally, fourth-quarter aver­ money market mutual funds. As of December, ages have been adopted as the basis for measur­ these assets accounted for 45 percent of the ing annual growth in the money and credit aggre­ nontransactional component of M-2, compared gates, the choice is somewhat arbitrary and is with 28 percent a year earlier. In earlier periods only one of many possible approaches. More­ of high interest rates, when such instruments did over, citing figures for any particular calendar not exist, M-2 tended to decelerate markedly as period does not necessarily give a clear sense of disintermediation occurred, with savers shifting the longer-term trends, which are more relevant funds into market instruments. In 1980, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

200 Federal Reserve Bulletin □ March 1981 2. Net funds raised and supplied in credit and equity markets Billions of dollars 19801 Sector 1978 1979 1980p Qi Q2 Q3 Q4P ’ Net Funds Raised Total, all sectors.......................................................... 482 483 434 497 253 454 534 U.S. government.................................................... 54 37 79 62 67 99 89 State and local government.................................. 24 16 21 21 12 24 27 Foreign...................................................................... 32 21 30 24 35 27 33 Private domestic nonfinancial.............................. 291 321 234 303 119 231 281 Business................................................................ 128 156 133 163 79 133 155 Household............................................................ 163 165 101 140 40 98 126 Domestic financial.................................................. 81 88 70 87 20 73 104 Private intermediaries........................................ 40 36 23 32 -16 33 44 Sponsored credit agencies................................ 23 24 24 34 16 12 36 Mortgage pool securities .................................. 18 28 23 21 20 28 24 Net Funds Supplied Total, all sectors.......................................................... 482 484 435 498 253 456 534 U.S. government.................................................... 20 23 26 29 30 24 21 State and local government.................................. 15 13 20 18 2 36 23 Foreign...................................................................... 40 -6 22 -8 47 22 27 Private domestic nonfinancial.............................. 51 81 29 74 -51 55 39 Business................................................................ -1 10 10 8 -10 22 22 Household............................................................ 52 71 19 66 -41 33 17 Domestic financial.................................................. 356 373 338 385 225 319 424 Private intermediaries........................................ 305 308 285 315 179 293 353 Commercial banking...................................... 129 121 104 117 -2 129 Thrift institutions............................................ 76 56 57 35 27 74 94 Insurance and pension funds........................ 84 90 98 103 108 93 86 Other2................................................................ 16 41 26 60 46 -3 2 Sponsored credit agencies................................ 26 29 25 40 6 24 32 Mortgage pool securities .................................. 18 28 23 21 20 28 24 Federal Reserve System.................................... 7 8 5 9 20 -26 15 1. Seasonally adjusted annual rates. investment trusts, open-end investment companies, and security 2. Includes finance companies, money market funds, real estate brokers and dealers, p. Preliminary. growing popularity of these relatively new assets turned instead to the commercial banks for may well have drawn some funds into M-2 from funds. In fact, they appear to have borrowed market securities such as Treasury bills, causing beyond their immediate needs in anticipation of M-2 to grow somewhat more rapidly than in the greater credit stringency. During the second preceding two years and also faster relative to quarter, as bond rates dropped sharply and as M-1B. banks tightened their lending policies in response M-3 grew almost 10 percent over the four to the special credit restraint program, corpora­ quarters of 1980, percentage point above the tions issued an unprecedented volume of long­ ‘/2 upper end of its longer-run range. Large-denomi- term securities and repaid outstanding bank nation time deposits expanded moderately at loans. During the summer months as interest commercial banks and thrift institutions during rates began to rise, the pattern of financing began the year; in the case of banks, which issue the to reverse again, and in the fourth quarter, bulk of these instruments, the borrowing was businesses again deferred long-term borrowing offset by a reduction of net liabilities to foreign and tapped their banks for credit. branches. Broader measures of credit flows in the econo­ Bank credit grew about percent in 1980. my also exhibited a considerable cyclical fluctu­ 8 Fluctuations in this measure followed the general ation in 1980 (table 2). Total funds raised by all pattern of aggregate credit flows in the economy, sectors of the economy in credit and equity but they were exaggerated by changes in the markets fell by almost one-half in the second composition of business borrowing. During the quarter, then retraced most of that decline in the first quarter, nonfinancial firms avoided long­ third quarter. For the year as a whole, aggregate term borrowing at record high interest rates and funds raised were substantially less than in 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 201 and 1979. Commercial banks provided about the As a prelude to discussing the key points same share of total credit flowing to all sectors as raised by the staff work, it is useful to describe in in 1979, while the share of thrift institutions rose broad outline the general approach of the Federal somewhat. Reserve to monetary policy. For a number of years, monetary aggregates have played a key role as intermediate targets for policy, that is, as Issues in Monetary Control variables standing midway in an economic chain linking the proximate instruments of the Federal Monetary growth in 1980 was, on balance, fairly Reserve—open market operations, the discount close to the ranges specified by the FOMC. And, window, and reserve requirements—to the varia­ more important, the Federal Reserve’s actions bles of ultimate concern, such as production, clearly imposed a significant—and essential— employment, and prices. Economists have de­ degree of restraint on the aggregate demand for bated extensively the question of the optimal goods and services in the economy. Nonethe­ intermediate target variable, with the controver­ less, particularly in view of the magnitude of the sy centering on the virtues of monetary aggre­ short-run swings in interest rates and financial gates versus interest rates. The System histori­ flows in the past year, questions have been cally has, in effect, taken an eclectic view, raised—inside as well as outside the Federal believing that it would be remiss in ignoring the Reserve—about the techniques of implementing information provided by the movements of any monetary policy and, especially, about the effi­ financial or economic variable. However, it has cacy of the new operating procedures adopted in perceived a clear value in focusing special atten­ October 1979. These questions have been ad­ tion on the behavior of the money stock, espe­ dressed in an intensive study of the recent peri­ cially in an environment in which inflation is od. A staff memorandum presenting an overview such a prominent concern. A special role for the of the findings of that study and an evaluation of monetary aggregates is, furthermore, dictated by the new operating procedures is appended to this the requirement of the Humphrey-Hawkins act report that the Federal Reserve report to the Congress .3 on its objectives for monetary expansion. Analysts of all schools agree that, over the 3. The charts, appendixes, including “Staff Study of the long run, inflation cannot persist without mone­ New Monetary Control Procedure: Overview of Findings and tary accommodation. Thus, careful attention to Evaluation,” by Stephen H. Axilrod, and staff papers for this report are available on request from Publications Services, the trend of monetary expansion is an absolutely Board of Governors of the Federal Reserve System, Wash­ essential feature of responsible monetary policy. ington, D.C. 20551. In addition, however, in a shorter-run context, The monetary control project staff papers are as follows: Richard Davis, “Monetary Aggregates and the Use of ‘Inter­ monetary aggregates are attractive as intermedi­ mediate Targets’ in Monetary Policy;” Jared Enzler, “Eco­ ate targets because they provide a mechanism of nomic Disturbances and Monetary Policy Responses;” Jared “automatic stabilization.” When the economy Enzler and Lewis Johnson, “Cycles Resulting from Money Stock Targeting;” Margaret Greene, “The New Approach to begins to expand too rapidly, the associated Monetary Policy—A View From the Foreign Exchange Trad­ increase in the quantity of money demanded for ing Desk;” Dana Johnson and others, “Interest Rate Vari­ transaction purposes comes into conflict with the ability Under the New Operating Procedures and the Initial Response in Financial Markets;” Peter Keir, “Impact of monetary target, and this results in a rise in Discount Policy Procedures on the Effectiveness of Reserve market rates of interest; the rise in interest rates, Targeting;” Fred Levin and Paul Meek, “Implementing the in turn, damps the aggregate demand for goods New Procedures: The View From the Trading Desk;” David Lindsey and others, “Monetary Control Experience Under and services. Similarly, if there is a recessionary the New Operating Procedures;” David Pierce, “Trend and impulse to the economy, the associated reduc­ Noise in the Monetary Aggregates;” Lawrence Slifman and tion in the demand for cash balances leads to an Edward McKelvey, “The New Operating Procedures and Economic Activity since October 1979;” Peter Tinsley and easing of credit conditions that moderates the others, “Money Market Impacts of Alternative Operating impact of that impulse. Pursuit of an interest rate Procedures;” and Edwin M. Truman and others, “The New target carries with it a greater danger that an Federal Reserve Operating Procedures: An External Per­ spective.” unanticipated impulse to the economy will tend Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

202 Federal Reserve Bulletin □ March 1981 to be fully accommodated, with greater inflation­ aggregates deviate from their prescribed growth ary or recessionary consequence. rates, the resultant movement in required re­ Open market operations are the major tool of serves is reflected in an increase or decrease in monetary control. Before October 1979, the ba­ borrowing at the discount window. Owing to sic approach employed by the System was to administrative limitations imposed by the Feder­ supply or absorb reserves through open market al Reserve on the frequency, amount, and pur­ operations with an eye to holding short-term poses of borrowing, an increase in borrowing interest rates—most immediately, the federal puts upward pressure on the federal funds rate as funds rate—within a relatively narrow but chang­ individual depository institutions bid more ag­ ing band thought consistent with the desired gressively in the market for the available supply growth of the money stock. This method placed of nonborrowed reserves in an effort to shift the considerable importance on the System’s ability need to borrow to other institutions. A decline in to predict the quantity of money the public would borrowing has the opposite effect. The resultant wish to hold at given interest rates. This never movements in short-term interest rates induce was an easy matter, but in 1979, as the advance portfolio adjustments by depository institutions of prices accelerated and inflationary expecta­ and the public that tend to move the money stock tions became a more significant and volatile back toward the targeted level. If it appears that factor affecting economic and financial behavior, these automatic effects are not going to be predicting the public’s desired money holdings at prompt enough or strong enough—as evidenced given levels of nominal interest rates became in part by sustained deviations in total reserves exceedingly difficult. As a consequence, in Octo­ from their path—the System can reinforce them ber the FOMC altered its technique of monetary by making adjustments in the path for nonbor­ control, substituting the volume of bank reserves rowed reserves that increase the upward or for interest rates as the day-to-day guide in downward pressures on money market interest conducting open market operations. rates. Similar effects can be achieved through Under the approach adopted in October 1979, changes in the discount rate, given the nonbor­ the FOMC sets short-run targets for monetary rowed reserves path. expansion, as it did previously, to guide oper­ The workings of this mechanism of monetary ations between meetings. The staff then calcu­ control are illustrated clearly by the movements lates corresponding paths for various reserve in reserves and interest rates during 1980. During aggregates. A path for total reserves is calculated the early part of the year, when the money stock based on the expected relationship between re­ was running above the FOMC’s short-run target, serves and the money stock—the so-called re- the volume of adjustment credit provided by the serves-money multiplier. This relationship is discount window increased substantially while variable and not known with certainty because of the amount of nonborrowed reserves provided the differences in reserve requirements on var­ through open market operations declined, partly ious components of the monetary aggregates, as a consequence of reductions in the nonbor­ which shift in relative importance from week to rowed reserves path to hold down total reserves week; moreover, in addition to required re­ and restrain the growth of money over time. serves, depository institutions also hold a vary­ During this period the federal funds rate rose ing amount of excess reserves. A path for non­ sharply. Restraint was intensified by increases in borrowed reserves then is calculated by making the basic discount rate and the introduction in an allowance for the portion of total reserves mid-March of a surcharge on frequent borrowing expected to be provided through borrowings at by large banks. the Federal Reserve Bank discount windows. As the monetary aggregates weakened in the Between meetings of the FOMC, the Open spring, the pattern of the first quarter was re­ Market Desk focuses on achieving a given level versed. The System countered the weakness of of nonborrowed reserves, the reserve measure the aggregates by maintaining the supply of total that is controllable through open market oper­ reserves; this required substantial injections of ations on a day-to-day basis. If the monetary nonborrowed reserves to offset the impact of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 203 repayment of discount window borrowings. The 1980 in considerable detail in an effort to assess federal funds rate fell sharply. the causes of the extreme variability of money The sharp plunge in interest rates, even though and interest rates in 1980 and the efficacy of the it occurred against a backdrop of marked mone­ new reserves-oriented operating procedure in tary weakness and steep recession, did arouse achieving the objectives of policy. Certain key concerns in some circles about the System’s conclusions of the study may be highlighted. commitment to anti-inflationary restraint. This 1. The year 1980 was one of extraordinary nervousness was evident not only in domestic variability in money and nominal interest rates. financial markets but in foreign exchange mar­ In the case of money, however, it is important to kets too. By and large, the foreign exchange note that comparisons with past years are com­ value of the dollar had fluctuated in a way that plicated by the fact that monetary data for those represented a fairly direct response to the pro­ periods have been considerably smoothed as nounced relative movement of interest rates on additional information has been obtained on assets denominated in dollars or foreign curren­ changes in seasonal patterns. If the 1980 figures cies. But as U.S. interest rates reached compara­ are compared with the initial figures for earlier tively low levels, there was a sense of a growing years, the difference in monetary variability is risk that downward pressures on the dollar might substantially reduced. Still, after making such cumulate. allowances, it appears that money has been In a way, the Federal Reserve was caught in an somewhat more variable over the past year, expectational crossfire. On the one side, those especially on a monthly or quarterly basis— who concentrate on the money stock in assessing though, as far as can be judged from available policy feared that the System was being too data, remaining within the range of foreign expe­ restrictive because the various measures of mon­ rience with money-stock variability. ey were slowing sharply or contracting; on the 2. Much of the variability—certainly the other, some of those in the financial markets and broad swings—in money and interest rates since elsewhere who view interest rates as the indica­ October 1979 was attributable to an unusual tor of policy feared that the System was being combination of economic circumstances and not inflationary because rates were falling sharply. to the new operating procedures per se. The The FOMC, in weighing the risks, decided to “real” and financial sectors of the economy exercise some caution in the latter part of the were subjected to unusual disturbances in 1980. spring by setting its short-run monetary growth The imposition and subsequent removal of credit targets with a view to a gradual rather than an controls, especially, appear to have had a major immediate return to the longer-range path for the impact on the demands for money and credit and year. to have strongly affected the behavior of money The picture soon changed dramatically, how­ and interest rates in the second and third quar­ ever, for by midsummer the monetary aggre­ ters. gates—buoyed by the surprisingly strong turn­ 3. Simulation exercises utilizing several mod­ around in economic activity—were rising els of the money market provided no clear evi­ rapidly. And as required reserves began to ex­ dence that, under present institutional arrange­ ceed nonborrowed reserves, borrowing and in­ ments, alternative operating techniques—using, terest rates climbed. As in the first quarter, for example, total reserves or the monetary base pressures on money market interest rates were instead of nonborrowed reserves as an operating reinforced by reductions in the path for nonbor­ target—would improve short-run monetary con­ rowed reserves and by increases in the discount trol. rate and imposition of surcharges on frequent 4. Clearly, efforts to limit severely deviations borrowing. Borrowing and the federal funds rate in money from its longer-run growth path would continued to rise until mid-December when a require acceptance of much more variable short­ drop in the money stock relieved some of the term interest rates. pressure on reserve positions. 5. Short-run variability in the monetary aggre­ The staff study has examined the experience of gates does not appear to involve significant im­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

204 Federal Reserve Bulletin □ March 1981 pacts on the behavior of the economy. Weekly in money, the levels of borrowing and, conse­ and monthly changes in the monetary aggregates quently, of total reserves are running persistently are inherently quite “noisy.” Moreover, avail­ stronger or weaker than projected. In addition, able models suggest that, because of the relative­ the Board has already indicated its inclination to ly long response lags involved, sizable quarterly switch from the present system of lagged reserve (or even semiannual) fluctuations in monetary accounting to a system in which required re­ growth—if offsetting—do not leave an apprecia­ serves are posted essentially at the same time as ble imprint on movements in output and prices. deposits; it is continuing to study the practical . The federal funds rate has been more vari­ merits of such a system to ensure that the 6 able since October 1979, as would be expected operating problems created for depository insti­ with use of a reserves operating target, but in tutions and the Federal Reserve and the poten­ addition very short-run fluctuations in other mar­ tially increased volatility of the federal funds rate ket rates—both short- and long-term—also have would not outweigh the possible benefits in been larger in magnitude than formerly. These terms of tighter short-run monetary control. rates of interest have exhibited higher correla­ The FOMC has continued to set broad ranges tions than previously with movements in the of tolerance for money market interest rates— federal funds rate. The reasons for this closer generally specified in terms of the federal funds correlation between the federal funds and other rate. These ranges, however, should not be rates in the very short run are not entirely clear, viewed as rigid constraints on the Open Market and it is not certain that such a pattern will Desk in its pursuit of reserve paths set to achieve prevail in the future. But, in any event, there are targeted rates of monetary growth. They have few signs that the resulting variability has im­ not, in practice, served as true constraints in the posed appreciable costs in terms of reduced period since October 1979, as the FOMC typical­ efficiency of financial markets or of increased ly has altered the ranges when they have become costs of capital in the period analyzed by the binding. But, in a world of uncertainty about study. Considerable difficulties arise in separat­ economic and financial relationships, the ranges ing the effects of the new operating technique for interest rates have served as a useful trigger­ from those of other factors. However, it does ing mechanism for discussion of the implications appear that much of the strain on financial insti­ of current developments for policy. tutions and many of the changes in financial The reserves operating procedure—or any practices observed in the past year were related modification of it—needs to be viewed in the to the broad cyclical pressures on interest rates context of a number of practical considerations during the year, caused by accelerated inflation that affect the basic targets for the monetary and heightened inflationary expectations, and to aggregates and the process of attaining them. the changes in credit demands associated with First, targets need to recognize the lags in the the behavior of economic activity. adjustment of wages and prices that may limit the The FOMC has reviewed the staff’s work. speed with which noninflationary rates of mone­ Fundamentally, the research suggests that the tary expansion can be attained without unduly basic operating procedure represents a sound restraining economic activity. Second, the po­ approach to attaining the longer-run objectives tential for costly disturbances in domestic finan­ set for the monetary aggregates. However, the cial or foreign exchange markets may occasional­ FOMC and the Board of Governors will be ly require short-run departures from longer-run considering the practicability of modifications monetary targets. Third, precise month-bythat might reduce slippages between reserves month control of money is not possible, nor is it and money, without unduly increasing the risk of necessary in terms of achieving desirable eco­ an unnecessarily heightened variability of inter­ nomic performance. Finally, uncertainties about est rates. These modifications include the possi­ the relationship between money and economic bility of prompter adjustment of nonborrowed performance suggest the desirability of a degree reserve paths or of the discount rate at times of flexibility in the targets—including the use of when, in association with undesired movements ranges for more than one measure of money— Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 205 and the potential need to alter previously estab­ natural lags in the adjustment process, that rate lished targets. will have to be approached over a period of years if severe contractionary pressures on output and employment are to be avoided. Monetar y Policy and the Prospects The ranges of monetary expansion specified for the Economy in 1981 this month by the FOMC for the year ending in the fourth quarter of 1981 reflect these consider­ The Federal Reserve's Objectives ations. They imply a significant deceleration of for the Growth of Money and Credit growth in the monetary aggregates from the rates observed in 1980 and other recent years. The In its midyear report last July, the Federal Re­ ranges are as follows: for M-1A, 3 to 5l/2 percent; serve indicated to the Congress that its policy in for M-1B, 3V to percent; for M-2, to 9 2 6 6 1981 would be designed to maintain restraint on percent; 'and for M-3, to 9l/2 percent. It 61/2 the expansion of money and credit. Nothing has should be emphasized that, owing to the intro­ occurred in the intervening months to suggest the duction of NOW accounts on a nationwide basis desirability of a change in that basic direction. at the end of 1980, the monetary ranges have Events have only served to underscore the im­ been specified on a basis that abstracts from the portance of such a policy—and of complemen­ impact of the shifting of funds into interesttary restraint in the fiscal dimension of federal bearing checkable deposits; only by adjusting for policy as well. the distorting effects of such shifts can one obtain Few would question today the virulence of the a meaningful measure of monetary growth. The inflation that is afflicting the economy or the FOMC also adopted a corresponding range of 6 urgency of mounting an effective attack on the to 9 percent for commercial bank credit. forces that are sustaining inflation. The rapid rise The ranges for M-l A and M-1B are V percent­ 2 of prices is the single greatest barrier to the age point less than those the Federal Reserve achievement of balanced economic growth, high sought in 1980. Since realized growth last year, employment, domestic and international finan­ after adjustment for the impact of shifting into cial stability, and sustained prosperity. The interest-bearing checkable deposits, was close to experience of the past year—the stresses and the upper ends of the stated ranges for the dislocations that have occurred—attests to the period, the new ranges are consistent with a difficulty of dealing with inflationary trends that deceleration of considerably more than V2 per­ have been many years in the making, but it does centage point. not indicate that there is any less need to do so. The actual observed changes in M-l A and Indeed, the need has become more urgent, for as M-1B will differ by a wide margin; in fact, it is price increases continue, the public’s expecta­ quite possible that, because of the movement of tions of inflation become more and more firmly funds from demand deposits to NOW accounts, embedded, and those expectations in turn con­ M-l A could contract this year, while M-1B could tribute to the stubborn upward momentum of grow more rapidly in reflection of funds moving wages and prices. into NOW accounts from savings deposits and Persistent monetary discipline is a necessary other assets. It must be stressed that valid com­ ingredient in any effort to restore stability in the parison of actual year-to-year growth has to general price level. To be sure, other areas of allow for this institutional change. policy are also important, but it is essential that The behavior of M-1A and M-1B thus far this monetary policy exert continuing resistance to year has reflected this pattern, but in an exagger­ inflationary forces. The growth of money and ated degree because of the large initial transfer of credit will have to be slowed to a rate consistent funds to NOW accounts. The next section dis­ with the long-range growth of the nation’s capac­ cusses in some detail the distortions caused by ity to produce at reasonably stable prices. Realis­ shifting to NOW accounts and the expected tically, given the structure of the economy, with behavior of M-1A and M-1B. As the discussion the rigidities of contractual relationships and the indicates, any estimates of the extent and charac­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

206 Federal Reserve Bulletin □ March 1981 ter of the prospective shift into NOW accounts damped for a time last year by credit controls. must be tentative. The Federal Reserve will be However, nonfinancial firms likely will wish to monitoring the shifting into interest-bearing rely less heavily on bank borrowing than they did checkable deposits as the year progresses and in 1980, in light of the deterioration of balancewill be assessing its impact on the expansion of sheet liquidity that they have already exper­ the monetary aggregates. From time to time, the ienced. Indeed, should credit market conditions System will report its estimates of the adjusted be such as to encourage a substantial funding of growth of M-l A and M-1B so that the public and short-term debt by corporations, commercial the Congress can better assess the consistency of banks might play a lesser role in the overall monetary expansion with the FOMC’s stated supply of credit and M-3 could be damped by objectives. reduced bank reliance on large time deposits. On The 1981 range for M-2 is the same as that in the other hand, if conditions in the bond markets 1980; however, the upper end of the range is are not conducive to long-term financing, then roughly percentage point less than the actual bank credit and M-3 could be relatively strong. 3/4 growth recorded in 1980. A reduction in the range does not appear appropriate at this time in light of what is known about the relationships Impact of Nationwide NOW Accounts among the various monetary measures, as affect­ on Monetary Growth in 1981 ed by public preferences for various types of assets and by expected economic and institution­ As noted in the preceding section, the behavior al circumstances. In fact, there is a distinct of M-l A and M-1B will be greatly affected this likelihood that, consistent with the planned de­ year by the advent, under the Monetary Control cline in the growth of the narrower aggregates, Act of 1980, of nationwide availability of NOW growth in M-2 in 1981 will be in the upper half of accounts and other interest-bearing checkable its to 9 percent range. With the changes in deposits. The phenomenon is qualitatively simi­ 6 regulatory ceilings that have made small-denomi­ lar to what occurred in 1980 when growth in nation time deposits more attractive in compari­ M-l A was depressed and growth in M-1B en­ son to market instruments and with the growing hanced by the shifting of funds into ATS ac­ popularity of money market mutual funds, the counts—but the distortions in 1981 will be quan­ nontransactional component of M-2 is likely to titatively much greater. continue growing quite briskly. Moreover, if the With the introduction of a new financial instru­ tax cuts proposed by the President result in a ment like the NOW account, a broad adjustment marked increase in the proportion of income of the public’s asset portfolios may occur. Under saved, this saving may contribute to relatively the present circumstances, however, it seems robust growth in M-2, which has, in any event, reasonable as a practical matter to expect that tended in recent years to approximate the in­ the major impact will be a shifting of funds into crease in nominal GNP. the new accounts from existing nonearning de­ The range for M-3 in 1981 is the same as that mand deposits and from the interest-earning as­ for 1980, but again is below the actual growth sets included in M-2 (especially highly liquid, experienced last year. The deceleration would relatively low-yielding savings deposits). The reflect the slower expansion specified for M-2, analysis of experience in past years with NOW which accounts for more than three-quarters of accounts in the northeastern part of the country the broader aggregate. Large-denomination time and with ATS accounts throughout the nation deposits at commercial banks—the other major indicates that flows from demand and savings component of M-3—likely will expand moderate­ deposits have accounted for the great bulk of the ly again this year, but much will depend on the growth of interest-bearing accounts. Further­ patterns of credit flows that emerge. The growth more, various surveys and other analyses have of bank credit is now expected to be about the indicated that in the past roughly two-thirds of same as in 1980. Household borrowing at banks the funds flowing into ATS and NOW accounts could increase, especially in the consumer in­ have come from demand deposits and roughly stallment area, where use of credit was severely one-third from savings deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 207 During January, a somewhat larger share of Outlook for the Economy the funds flowing into interest-bearing checking deposits appears to have come from demand The economy entered 1981 on an upward trajec­ deposits—perhaps about 75 to 80 percent, with tory, extending the recovery in activity from last only about 20 to 25 percent coming from savings year’s brief but sharp recession. January saw deposits (or, to a very limited extent, other further large gains in retail sales, employment, sources). This change from past patterns appears and industrial production. On the whole, the to reflect a relatively fast adjustment on the part demand for goods and services has continued to of holders of large-denomination demand deposit prove more buoyant than most analysts had balances at commercial banks. The sources of expected. Unfortunately, at the same time infla­ subsequent growth in interest-bearing checkable tion has not abated. deposits are expected to be more along the lines The persistence of intense inflationary pres­ of the past two-thirds-one-third break. sures jeopardizes the continuity of economic Depository institutions have marketed the new expansion over the remainder of the year. More­ accounts very aggressively, many of them lining over, unless the rise of prices slows, there can be up a sizable number of customers before the end little hope of an appreciable, sustained easing of of 1980. Since December 30, the net growth of interest rates or of a substantial improvement in interest-bearing checkable deposits already has the balance sheets of the many units of the totaled more than $22 billion. Obviously it is economy that already have experienced a dete­ extremely difficult to forecast the further growth rioration in their financial condition. of interest-bearing checkable deposits over the The near-term prospects for prices are not remainder of the year. A working assumption favorable. In the months immediately ahead, the would be that the net increase in such deposits major price indexes will reflect the effect of poor this year will amount to somewhere between $35 agricultural supply conditions on food prices and billion to $45 billion, which would mean that half, the impact of higher OPEC charges and domestic or a little more than half, of the funds already decontrol on energy prices. Increases in the have been shifted. If the shares of funds coming consumer price index, furthermore, will reflect— from demand and savings deposits move prompt­ in a way that exaggerates the true change in the ly to a two-thirds-one-third proportion, the re­ average cost of living—the rise in mortgage inter­ sult will be a depressing effect on M-1A growth est rates that occurred in the latter part of 1980. of 7 to percentage points and an increase of 2 to Aside from these special factors, the basic 8 3 percentage points in M-lB growth. Taking the trend of prices is linked closely to the behavior of midpoints of these estimates and applying them unit labor costs, which constitute the largest to the basic ranges specified by the FOMC for element in costs of production. As noted earlier, monetary growth this year, the observed change poor productivity performance has contributed in M-l A from the fourth quarter of 1980 to the to rising costs. It is also quite clear that wage fourth quarter of 1981 would be -4 l/2 to -2 demands have been sizable. Despite the accel­ percent and that in M-1B would be to V eration in wage increases that has occurred, the 6 8 2 percent. wages of many workers have failed to keep pace As already indicated, the growth of interest- with the upward movement of prices in the past bearing checkable deposits in January was ex­ few years. This development was virtually inevi­ traordinarily rapid and resulted in an extreme table in light of the decline in productivity and divergence of M-1A and M-1B movements. Ob­ the adverse terms-of-trade effects of the tremen­ served M-l A contracted at a 37 V2 percent annual dous increase in foreign oil prices. So long as rate in January, while M-1B increased at a I V those conditions continue, the average worker 2 4 percent annual rate. On the assumption that cannot anticipate a rising standard of living, and three-quarters to four-fifths of the funds flowing attempts to “make up” losses in real income will into interest-bearing checkable deposits came be reflected in strong cost and price pressures. from demand deposits, both M-1A and M-1B, on The condition of labor markets is, of course, a an adjusted basis, showed only small growth in factor affecting wage decisions. Despite the fact the early weeks of this year. that the overall unemployment rate stands at 7 J/2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

208 Federal Reserve Bulletin □ March 1981 percent, scarcities of skilled workers have oc­ 3. Economic projections for 1981 curred in some sectors of the economy. But, Projected 1981 even when slack in labor demand does exist, its Actual impact on wages is rather slow in emerging; Item 1980 FOMC A t d r m ati i o n n is­ wages appear to have a strong momentum rooted Changes from fourth in inflationary expectations, which are based to a quarter to fourth quarter, percent great extent on past experience as well as on Nominal GNP.............. 9.5 9 to 12 11.0 attempts to maintain real income. Workers’ wage Real GNP.................... -.3 -m tom 1.4 GNP deflator................ 9.8 9 to 10‘/2 9.5 demands are influenced by expectations about Average level in fourth quarter, percent prices, as well as by patterns established in Unemployment rate... 7.5 8 to 8»/2 7.7 previous wage bargaining. Meanwhile, employ­ ers condition their wage offers in good measure Cuts in federal taxes potentially can help to by their own sense of the prospects for inflation invigorate private capital formation and thereby and of whether they will be able to pass along enhance productivity, reduce costs, and pave the higher compensation costs by increasing prices. way for faster economic growth. But it is impor­ This momentum must be turned in a favorable tant that government spending be held firmly in direction. To do so will require a commitment to check at the same time so that aggregate demand monetary and fiscal restraint that is firm and does not become excessive and so that the credible, and a direction of other governmental pressures of government demands on the credit policies toward fighting inflation. Labor and markets do not impede the financing of private management must be persuaded that the infla­ investment. tionary process will not be accommodated—that The members of the FOMC, in assessing the wage and price decisions based on an anticipa­ economic outlook, have recognized the possibil­ tion of rapid inflation will prove inimical to their ity of some reduction this year in business and ability to maintain employment and sales vol­ personal income taxes and some initial steps in ume. Put more positively, they have to be con­ the longer-range effort toward slowing the vinced that moderation in their individual wage growth of federal expenditures. Given these and price actions will not put them at a relative working assumptions, the individual members of disadvantage and will in fact produce a better the FOMC have formulated projections for eco­ economic environment for everyone. nomic performance in the current year that gen­ Such an alteration of the expectational climate erally fall within the ranges indicated in table 3. will not be easy to achieve. But it is important to As may be seen, the FOMC members’ projec­ do so. For, to the extent that those attitudes can tions for output and inflation encompass those be changed, the short-run costs of restraint on that underlie the administration’s recent budget aggregate demand, in the form of economic proposal. slack, will be ameliorated. Conversely, prolonga­ The members of the FOMC see inflation as tion of high wage and price demands would come remaining rapid in 1981, although not so rapid into conflict with needed monetary and fiscal throughout the year as seems likely to be the restraint, aggravating economic difficulties. In case early in the period. The failure of inflation to any event, once expectations are turned, further slow more quickly and the large budgetary defi­ progress toward price stability should come cits in prospect for the year are seen as resulting more easily so long as excessive pressures on in continued strong demands for money and productive capacity are avoided. credit and in the maintenance of relatively high The policy of monetary restraint adopted by interest rates. Against this backdrop, economic the Federal Reserve is intended to contribute to activity is likely to show only intermittent the process of breaking the momentum of infla­ strength, and unemployment probably will rise tion. Fiscal policy also has a crucial role to play. between now and the end of the year. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

209 Treasury and Federal Reserve Foreign Exchange Operations This 38th joint report reflects the Treasury-Fed­ United States were bid up once again to new eral Reserve policy of making available addition­ peak levels. Meanwhile, the economies of most al information on foreign exchange operations other major countries were showing slower from time to time. The Federal Reserve Bank of growth than before or even moving into reces­ New York acts as agent for both the Treasury sion, with marked increases in unemployment. and the Federal Open Market Committee of the This development generated strong pressures on Federal Reserve System in the conduct of foreign the authorities to ease up on policies, including exchange operations. monetary policies, even as inflation rates and, in This report was prepared by Scott E. Pardee, most cases, current-account deficits still showed Manager of Foreign Operations of the System little sign of improving. The authorities were Open Market Account and Senior Vice President reluctant to have their interest rates rise in pace in the Foreign Function of the Federal Reserve with those in the United States. Consequently, Bank of New York. It covers the period August as interest differentials opened up in favor of the 1980 through January 1981. Previous reports dollar, increasing volumes of funds moved into have been published in the March and Septem­ dollar-denominated assets. ber Bulletins of each year beginning with Through late 1980, the selling pressures were September 1962. mainly on Western European currencies, in par­ ticular the German mark. In Europe, current- During the six-month period under review, the account deficits continued to be large and inter- U.S. dollar came into heavy demand in the exchange markets and advanced sharply against many major currencies. 1. Federal Reserve The dollar’s underlying strength reflected the reciprocal currency arrangements relatively favorable current-account position of Millions of dollars the United States. The current account had swung from substantial deficit in the first half of Amount of facility Institution 1980 to surplus in the second half of the year. By Jan. 1, 1980 Jan. 31, 1981 contrast, many other major industrial countries Austrian National Bank.................... 250 250 continued to record massive current-account National Bank of Belgium .............. 1,000 1,000 Bank of Canada ................................ 2,000 2,000 deficits, swollen by the increase in their oil National Bank of Denmark.............. 250 250 import bills following the runup of international Bank of England ................................ 3,000 3,000 Bank of France .................................. 2,000 2,000 oil prices in 1979-80. German Federal Bank ...................... 6,000 6,000 In addition, the dollar proved increasingly Bank of Italy ...................................... 3,000 3,000 attractive as an investment medium. As the U.S. Bank of Japan .................................... 5,000 5,000 Bank of Mexico ................................ 700 700 economy snapped back from the sharp recession Netherlands Bank.............................. 500 500 Bank of Norway ................................ 250 250 of early 1980, the demand for money and credit Bank of Sweden ................................ 300 5001 Swiss National Bank ........................ 4,000 4,000 in the United States also rebounded strongly. With the Federal Reserve continuing to adhere to Bank for International Settlements Swiss francs/dollars ...................... 600 600 its approach—adopted in October 1979—of plac­ Other authorized European currencies/dollars .................. 1,250 1,250 ing primary emphasis on bank reserves rather than on interest rates to control the growth of the 30,100 30,300 money and credit aggregates, interest rates in the 1. Increased by $200 million effective May 23, 1980. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

210 Federal Reserve Bulletin □ March 1981 2. Drawings and repayments under reciprocal currency arrangements, August 1, 1980-January 31, 19811 Millions of dollars equivalent; drawings, or repayments (-) Activity by the Federal Reserve System 1980 Commitments, January Commitments, Transactions with Jan. 1, 1980 1981 Jan. 31, 1981 Ql Q2 Q3 Q4 r 60.61 Bank of France2........................ 0 0 100.2 -110.5 0 0 { -54.6} r 316.0 996.1 265.71 German Federal Bank2........... 3,150.4 -260.3 0 0 \ - 3,489.2 -132.4 -876.2/ Swiss National Bank............... 0 { —.} 0 0 0 0 227 { -ni} r 338.7 1,096.2 337.5i Total............................................. 3,150.4 -370.8 0 0 (-3,511.9 -132.4 -942.1/ Activity by the BIS and foreign central banks 1980 Outstanding, January Outstanding, Bank drawing on System Jan. 1, 1980 1981 Jan. 31, 1981 Ql Q2 Q3 Q4 Bank of Sweden............... 200.0 200.0 Bank for International Settlements (against German marks)3___ 192.0 50.01 0 0 -97.0 -145.0f Total..................................... 192.0 50.01 200.0 200.0 -97.0 -145.0/ 1. Because of rounding, figures may not add to totals. Data are on a France and the German Federal Bank include revaluation adjustments value-date basis. of $34.3 million for swap renewals during 1980. 2. Data on repayments of swap commitments with the Bank of 3. BIS drawings and repayments of dollars against European cur­ rencies other than Swiss francs to meet temporary cash requirements. est rates, while high relative to inflation rates, Over the six-month period ending January 31, were generally below those in the United States. the dollar had risen 19 percent against the Ger­ The pound sterling was an exception; the United man mark and 16 to 20 percent against other Kingdom moved into a strong current-account currencies within the joint float of the European position and maintained high interest rates that Monetary System (EMS). Sterling, which had proved attractive to investment flows. The Japa­ risen 51/: percent, had dropped back for a net gain nese yen advanced sharply, on a substantial of IV2 percent on balance. The yen also eased improvement in Japan’s current-account position back from its highs but still rose 10 percent for and on heavy demands for yen-denominated the six-month period. The Canadian dollar, assets. which had dropped to a 40-year low in Decem­ In early 1981 the dollar’s advance became ber, was steadier after the year-end on signs of more generalized, even though U.S. interest an improvement in Canada’s external position rates had edged off from their peaks. The release and on the sharp rise in interest rates that had of the U.S. hostages by Iran lifted one element of occurred in December. uncertainty for the dollar, while the unfreezing of In foreign currency operations, U.S. authori­ a part of Iran’s assets took place without disrupt­ ties were active throughout the period, mainly as ing the exchanges. Moreover, the market reacted buyers of currencies. As the dollar firmed against positively to the sense of determination shown the German mark in August, the Federal Reserve by the Reagan administration to deal with infla­ and the Treasury began to acquire, in the market tion and to revitalize the U.S. economy. By late and through correspondents, the currencies January, market sentiment became extremely needed by the System to repay swap debt and by bullish toward the dollar. At the same time, the Treasury to cover its short position under its market participants were inclined to interpret medium-term mark obligations. These oper­ developments affecting other major currencies in ations continued in substantial volume through a pessimistic light. In this atmosphere, markets the fall. became increasingly one way, with the dollar By the end of October, the System had repaid rising virtually every day. in full the remaining $879.7 million equivalent of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 211 3. U.S. Treasury securities, foreign exchange operations. The U.S. Trea­ foreign currency denominated1 sury’s Exchange Stabilization Fund realized Millions of dollars equivalent; issues, or redemptions (-) losses of $3.7 million on its operations in the market. Also, the Treasury’s general account Commit­ 1980 Commit­ incurred losses of $170.2 million, reflecting annu­ Issues ments ments Ja 1 n 9 . 8 0 1, Ql Q2 Q3 Q4 J 1 a 98 n 1 . Ja 1 n 9 . 81 31, al renewals at current market rates of the agree­ ment to warehouse with the Federal Reserve Public series proceeds of Treasury securities denominated in Germany............... 4,065.7 1,168.0 0 0 0 0 5,233.6 Switzerland........... 1,203.0 0 0 0 0 0 1,203.0 marks and Swiss francs. These losses will be Total........................ 5,268.6 1,168.0 0 0 0 0 6,436.6 recovered by the Treasury’s general account when it reacquires these currencies for the re­ 1. Data are on a value-date basis. Because of rounding, figures may not add to totals. demption of the securities. As of the end of the period, with the dollar having risen sharply, the Federal Reserve showed valuation losses of swap debt to the German Federal Bank and $150.6 million on its foreign exchange assets $166.3 million of swap drawings on the Bank of while the Exchange Stabilization Fund showed France outstanding as of July 31, 1980. By early valuation losses of $826.3 million on its foreign December the Treasury had acquired sufficient exchange assets. The Treasury’s general account marks to cover its medium-term notes in that showed valuation profits of $781.1 million related currency. Thereafter, with the dollar still in to the outstanding issues of securities denominat­ strong demand, the U.S. authorities continued ed in foreign currencies of $6,436.6 million equiv­ on balance to acquire currencies. Operations alent. were conducted on days in which the exchange During the period under review, U.S. authori­ rates were particularly volatile, and on some ties changed certain provisions of swap agree­ occasions the Trading Desk placed simultaneous ments with foreign central banks. Since July 1973 bid-and-asked prices to settle the market. Never­ the exchange risk on drawings by the Federal theless, with the one-way movement into dollars Reserve or the U.S. Treasury had been shared that developed, by late January the U.S. authori­ evenly with the foreign central bank on which the ties were again purchasing marks virtually every drawing was being made. This risk-sharing pro­ day. cedure did not apply to drawings by other central To summarize, over the six months, the U.S. banks. In addition, since the inception of the authorities operated in German marks, French swap agreements in 1962, the interest rates paid francs, Swiss francs, and Japanese yen. In on any drawings, either by the Federal Reserve marks, the Federal Reserve and Treasury pur­ or the Treasury or by the foreign central banks, chased a total of $7,569.5 million equivalent in were based on the current rates for U.S. Trea­ the market and from correspondents and sold sury bills. Under procedures beginning this year, $368.2 million in the market. In French francs, the Federal Reserve purchased $158.6 million in 4. U.S. Treasury and Federal Reserve foreign the market and from correspondents to repay the exchange operations1 swap debt. In Swiss francs, the Federal Reserve Net profits or losses (-) in millions of dollars and the Treasury bought $192.2 million equiv­ alent, which was added to balances. In yen, the U.S. Treasury Federal Reserve sold $50.0 million equivalent as Period R Fe e d se e r r v a e l Exchange part of a coordinated intervention operation ear­ Stabilization General Fund account ly in January. Finally, in January the central bank of Sweden drew $200 million under its swap 1980—Q l......................................... 14.1 0 64.9 Q2......................................... 7.7 42.0 0 line with the Federal Reserve. U.S. foreign cur­ Q3......................................... -1.1 3.9 6.3 Q4......................................... 6.2 -3.1 -25.9 rency reserves stood at $10.7 billion at the end of January 1981................................... 6.2 -.7 -144.3 Valuation profits and losses on January, up from $5.4 billion at the end of July. outstanding assets and liabil­ From August through January, the Federal ities as of January 31, 1981 -150.6 -826.3 781.1 Reserve realized profits of $18.6 million on its 1. Data are on a value-date basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

212 Federal Reserve Bulletin □ March 1981 the Federal Reserve and the U.S. Treasury, like In the exchanges, the German mark had their counterparts in the swap arrangements, will moved up from its lows of last April in the wake take the full exchange risk on their swap draw­ of declining U.S. interest rates. On occasion ings. They will also pay a rate of interest based during August the mark still came into bursts of on the creditor country’s Treasury bill rate or the demand amid concerns about the outlook for nearest equivalent market rate. inflation in the United States. As in preceding months, the authorities in the United States acted to settle these pressures. The Federal German Mark Reserve and U.S. Treasury together sold $69.6 million equivalent of marks during the month. By mid-1980 the German authorities were con­ But the mark’s rebound had lost momentum as a fronted with an emerging policy dilemma. Eco­ renewed upturn in U.S. interest rates began to nomic activity was contracting as recessionary provide support for the dollar. Also, tensions in trends abroad led to a sharp slowdown in export Poland were generating uncertainties about Ger­ growth at the same time that domestic demand many’s strategic and economic exposure to de­ faltered. Unemployment was rising. Inflation, velopments in Eastern Europe. Consequently, after peaking at 6 percent, began to recede and the mark was vulnerable from time to time to re­ the growth of central bank money had slowed to newed capital outflows. On days when the spot the lower end of the 5 to 8 percent annual target rate weakened, the Federal Reserve and the U.S. range. These developments had permitted the Treasury were able to acquire $481.1 million German Federal Bank to begin cautiously to ease equivalent of marks and $312.8 million equiv­ money market conditions by providing some alent of marks respectively in the market and liquidity on a temporary basis over the summer from correspondents. These marks were used to months. But the central bank resisted domestic rebuild balances and to reduce the Federal Re­ pressures to reduce official interest rates out of serve’s swap debt with the German Federal Bank concern that a relaxation of the overall restric­ from $879.7 million at the end of July to $437.9 tive stance of monetary policy before inflation­ million by the end of August. ary expectations were firmly laid to rest would The stalling of the mark’s recovery during undercut the progress already under way in August contributed to the perception in the mar­ bringing inflation under control. ket that a deepening conflict between domestic Moreover, the current-account deficit, running and external objectives had left the German in excess of DM 25 billion at an annual rate, was authorities with little room to maneuver. Follow­ in deeper deficit than had been projected earlier. ing up their actions of the summer, the German German interest rates, though high by domestic Federal Bank acted to nudge money market rates standards, remained low relative to interest rates lower while aiming to keep an overall, tight grip elsewhere. As a result, the goal of financing the on liquidity. On September 1 the authorities cut current-account deficit with a combination of minimum reserve requirements by 10 percent on private and public inflows of capital, and thereby domestic and foreign liabilities. To reduce fur­ avoiding a drain on Germany’s foreign exchange ther the cost of funds to the banks, the authori­ reserves, had met with only limited success. ties acted on September 19 to lower the Lombard Despite substantial foreign official placements rate from 9x/2 to 9 percent, while also supplying with the German Federal Bank and revaluation additional mark liquidity via repurchase agree­ adjustments to its gold and foreign currency ments against government securities and via for­ holdings with the European Monetary Fund, eign exchange swaps of marks against dollars. In Germany’s gross foreign exchange reserves de­ fact, however, German money market rates did clined $1.6 billion in the first seven months of not ease much because the commercial banks, 1980 to stand at $45.7 billion at the end of July.1 against European currency units (ECUs) done with the European Monetary Fund. Foreign exchange reserve num­ 1. Foreign exchange reserves for Germany and other bers used in the report are drawn from International Mone­ members of the EMS, including the United Kingdom, incor­ tary Fund data published in International Financial Statis­ porate adjustments for gold and foreign exchange swaps tics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 213 expecting a further drop in official lending rates, the German Federal Bank expand the growth of bid aggressively for funds in the market rather the money supply, reduce official lending rates, than approach the central bank for longer-term and accept a temporary depreciation of the mark loans. Around the time of the International Mon­ if necessary to prevent the downturn of the etary Fund (IMF)-World Bank meetings in late economy from deepening further. In the foreign September and early October, expectations of a exchange market, sentiment toward the mark more meaningful relaxation of policy became turned bearish. Interest-sensitive capital flowed widespread amid spirited public discussion of the even more heavily from Germany amid portfolio need for a cut in the discount rate. shifts into the dollar, sterling, and higher-yielding Meanwhile, in contrast to the pattern of declin­ currencies in the EMS. Meanwhile, official and ing production and rising unemployment in Ger­ commercial borrowers with financing needs in many, economic activity in the United States other currencies borrowed marks and converted was picking up. In the face of renewed demands the proceeds in the exchanges. The pressure of for money and credit, the Federal Reserve had these outflows triggered a fall in bond prices, acted to constrain the growth of bank reserves in thus prompting the German Federal Bank to order to control the growth of the monetary support the capital market through open market aggregates. Market interest rates climbed sharp­ operations, while also pushing the mark to the ly, and on September 26 the Federal Reserve floor of the joint float vis-a-vis the French franc raised the discount rate 1 percentage point to 11 and occasionally also vis-a-vis the Netherlands percent. Strong demand for money and credit guilder. persisted, putting additional upward pressure on As speculative selling pressures mounted, re­ U.S. money market rates. With interest differen­ ports of a temporary withdrawal of the mark tials adverse to the mark thus widening and with from the joint float or of a widening in interven­ market participants looking for still larger differ­ tion limits began circulating through the market. entials in the weeks ahead, capital began to flow But high-ranking German officials denied that heavily out of mark-denominated assets. As a such measures were under consideration and result, the mark, already weighed down by the reaffirmed their commitment to maintain the large current-account deficit, came under in­ mark’s strength and thereby its attractiveness to creasing selling pressure in the foreign exchange foreign investors. The German Federal Bank, market. The Trading Desk continued to buy which had gradually increased its intervention marks in response to the emergence of one-way sales of dollars, was by late October operating pressures, acquiring $395.9 million equivalent of heavily in French francs and on a smaller scale in marks on behalf of the Federal Reserve and Dutch guilders to preserve exchange rate limits $283.6 million equivalent of marks, including within the EMS. Even so, by early November $36.9 million on a forward basis, on behalf of the the mark had declined 10 percent from levels U.S. Treasury through October 15. These pur­ prevailing around mid-September to a low of DM chases in the market and from correspondents 1.96 against the dollar. enabled the Federal Reserve to liquidate in full To support the mark further, the German its remaining swap debt with the German Federal Federal Bank allowed the heavy intervention Bank and the Treasury to continue covering its within the EMS to tighten the German money outstanding mark-denominated, medium-term market. Moreover, the French authorities adopt­ notes. ed measures on November 7 to ease their money At its Council meeting on October 20 the market interest rates and to discourage capital German Federal Bank provided the banks with inflows. These actions alleviated the pressures additional rediscount quotas at preferential rates on the mark. As concerns over realignment of and otherwise acted to increase bank liquidity EMS parities began to fade, the immediate focus but decided not to lower official interest rates. of market attention shifted to interest rate devel­ Demands that greater priority be given to restor­ opments among the industrial countries. In this ing economic growth nevertheless continued. respect, traders were unsure about the dollar’s Indeed, a report of the five leading German prospects if U.S. interest rates should suddenly economic research institutes recommended that drop off once the near-term run-up in rates Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

214 Federal Reserve Bulletin □ March 1981 topped out. Consequently, when signs of the spot rate to as low as DM 2.0325 in European beginning of deceleration in the growth of the trading on December 12 despite substantial pur­ U.S. monetary aggregates set off expectations chases of marks by the Trading Desk both in that U.S. interest rates might decline, the dollar New York and through the agency of the German came suddenly on offer. As funds flowed out of Federal Bank in Frankfurt. dollars back into mark-denominated assets, the In the weeks between mid-October and midspot rate soared about 4 percent against the December, the U.S. authorities intervened force­ dollar to a high of DM 1.8860 in less than two fully at times to counter one-way pressures on trading days between November 7 and 10. In the mark. The Federal Reserve acquired $1,472.8 response, the U.S. authorities intervened as a million equivalent of marks in the market and seller of marks, while the German Federal Bank from correspondents, adding these to balances. also purchased dollars in Frankfurt. For its part the U.S. Treasury bought $3,101.7 But, contrary to expectations, U.S. interest million equivalent, including $196 million on a rates continued their advance in the weeks that forward basis, enabling it to cover entirely its followed. With the economy expanding, the mark-denominated securities. On occasions growth of the monetary aggregates resumed and when the markets were particularly volatile, the U.S. interest rates began to advance once again. authorities also intervened to sell $170.3 million The Federal Reserve followed by raising the equivalent of marks, financed out of balances. discount rate successively by 1 percentage point After mid-December as U.S. interest rates each on November 17 and on December 5 to 13 slipped back from their highs, the mark began to percent and introduced a surcharge on frequent recover. Even so, a sustained surge of buying did use of the discount window by large borrowers. not materialize. Some evidence had accumulated Short-term domestic and Eurodollar rates by this time that the decline in U.S. interest rates climbed sharply higher through mid-December, would be more gradual than had been originally reaching new peaks of 22 percent and opening up thought. In particular, the U.S. economy, though interest differentials adverse to the mark of as generally expected to weaken in the first half of much as 12V2 percentage points. 1981, appeared fairly robust despite the de­ Once again private capital flowed out of Ger­ pressed state of the auto and housing sectors. many as investors locked in high dollar interest Moreover, further declines in German industrial yields at the expense of mark-denominated as­ production and rising unemployment were taken sets and as foreign governments, corporations, to suggest that the German authorities would and individuals continued to borrow marks to follow by lowering their interest rates. But, in take advantage of relatively low interest costs view of the considerable uncertainties surround­ and prospective further declines of the spot rate ing the movement in interest differentials, few in the exchanges. Such outflows were of major traders were willing to take on new positions, concern to the German authorities. They added particularly before the year-end. to huge funding needs imposed by the current- Coming into the new year, market participants account deficit as well as by the continuing tried to assess the outlook for economic and deficit on long-term private direct investment. financial developments for 1981. Traders were Increased foreign borrowings by German public impressed by the large swing in the U.S. current authorities, mainly from members of the Organi­ account from deficit in the first half of 1980 to zation of Petroleum Exporting Countries, were surplus in the second half of the year. Indeed, the not proving sufficient to prevent the mark from importance of the increasingly favorable U.S. weakening further or to stem the erosion of current-account position for the dollar-mark re­ Germany’s foreign exchange reserves. Accord­ lationship was underscored at the onset of trad­ ingly, the German Federal Bank acted to curtail ing in January when the mark, after initially further capital outflows and in December negoti­ rising to as high as DM 1.9280 on January 6, ated a “gentleman’s agreement” with large com­ dropped back amid a stream of commercially mercial banks that temporarily stopped new based orders for dollars. By contrast, the outlook mark-denominated loans to foreigners. Never­ for Germany’s current account worsened. Most theless, selling pressure on the mark pushed the forecasters were looking for nearly as large a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 215 deficit this year as the shortfall of DM 28 billion early January to DM 2.1300 by January 31, for a recorded in 1980, despite projections of contin­ net decline of 19 percent over the six months ued stagnation and even recession in the German under review. economy. The prospect of a sizable and pro­ In view of the continuing volatility of the longed deficit partly reflected the adverse impact exchanges after mid-December, the U.S. au­ on Germany’s terms of trade of the sharp depre­ thorities intervened frequently both to settle the ciation of the mark and of higher oil prices. But market and toward the end of January to counter underlying the tenaciousness of the deficit were the strong one-way pressures building up in favor structural problems as well, such as the chal­ of the dollar. From mid-December, purchases of lenge to manufactured exports by overseas com­ marks by the Federal Reserve and the U.S. petitors and Germany’s continued heavy depen­ Treasury amounted to $719.0 million equivalent dence on foreign energy resources. and $802.6 million equivalent respectively. Over Within Germany the ongoing policy debate that time, intervention sales by the U.S. authori­ intensified amid heightened disagreement over ties amounted to $128.4 million equivalent. the appropriate adjustment to the change in In summary, during the six-month period the Germany’s external situation. In the exchange Federal Reserve purchased $2,106.9 million market, sentiment toward the mark turned ex­ equivalent of marks in the market and $961.8 ceedingly bearish during January as market par­ million equivalent of marks from correspon­ ticipants focused on the ambivalence of German dents, while intervening to sell $215.9 million policy. While holding to a firm monetary stance equivalent. At the same time, the U.S. Treasury in the face of internal pressures to stimulate the acquired $3,865.2 million equivalent in the mar­ economy, the central bank had nonetheless ket and another $635.8 million equivalent from avoided overt steps toward tightening, and mar­ correspondents and sold $152.4 million equiv­ ket participants began to question the resolve of alent of marks. Meanwhile, reflecting sizable the authorities to support the mark. Moreover, intervention purchases of marks within the EMS the determined tone of the Reagan administra­ and the repayment of swap debt by the Federal tion in seeking to strengthen the U.S. posture Reserve, Germany’s foreign exchange reserves both at home and abroad contrasted sharply with declined $3.3 billion over the six-month period to the sense of policy frustration in Germany, add­ stand at $42.4 billion on January 31, 1981. ing to the market’s pessimism toward the mark. In these circumstances, the selling of marks gathered force as concerns about a sharp drop in Swiss Franc U.S. interest rates evaporated and as the Iranian hostage crisis and the unfreezing of blocked The economy in Switzerland, in contrast to that Iranian dollar assets were resolved without ma­ in Germany, remained strong through the early jor incident, thereby removing uncertainties summer of last year. Bolstered by consumer and about the dollar. Downward pressures on the investment demand, the Swiss gross national mark were also aggravated by the possibility of product was expanding at an annual rate of 3 Soviet military intervention in Poland, in view of percent while employment advanced to its high­ Germany’s strategic exposure and its extensive est level in five years. But international develop­ trade and investment relationships with Eastern ments were impinging on this otherwise favor­ Europe. By late January the mark was dropping able economic performance. Even though the more rapidly in the exchanges against the dollar Swiss inflation rate was still the lowest in the than other EMS currencies and was again at the industrialized world, domestic prices were being floor of the EMS vis-a-vis the French franc. In pulled up sharply by rising oil prices and the response, the German Federal Bank intervened higher prices of other imported goods. in dollars and, together with the Bank of France, The deterioration in the terms of trade, reces­ in francs to preserve the EMS intervention lim­ sions in foreign markets, and the strength of the its. For their part, the U.S. authorities also domestic economy had opened up a trade gap of acquired substantial amounts of marks. Even so, around $6 billion, about twice the 1979 deficit the mark plummeted 10 percent from its highs in and sufficiently large to push the current account Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

216 Federal Reserve Bulletin □ March 1981 into deficit for the first time in 15 years. More­ with recessions spreading across other European over, since the larger industrialized countries countries, especially Germany, the sluggishness were relying heavily on restrictive monetary of monetary growth suggested that the Swiss policies to combat high inflation, interest rates economy might also be slowing down. The mar­ abroad had risen, reaching historic highs in a kets came to expect a decline in interest rates. number of countries and moving interest differ­ Nevertheless, the authorities remained deter­ entials sharply against Switzerland in early 1980. mined to combat inflation, which at 4 percent per These differentials, especially against the United year remained historically high for Switzerland. States, were widening again by early August. Therefore, the Swiss National Bank provided The relatively low nominal interest rates in liquidity at now relatively unfavorable interest Switzerland left the franc vulnerable to down­ rates, thereby signaling to the market its refusal ward pressures that, if they intensified, threat­ to accommodate lower interest rates. ened to increase inflationary pressures within By mid-October, the steep rise in U.S. interest Switzerland. In response, the Swiss authorities rates opened up a large gap between U.S. and had begun to dismantle exchange controls limit­ Swiss rates. Funds flowed heavily out of the ing capital inflows, actions that helped the franc franc into the dollar and the rate fell sharply with rebound strongly against the dollar in the late other continental currencies, dropping some 5V2 spring and early summer. But in late July when percent to SF 1.7425 in early November before the dollar began to recover, the franc fell back leveling off with the mark around midmonth. from its highs to trade around SF 1.65 in early Nevertheless, during this same period the some­ August. Later in the month as U.S. interest rates what tighter money market conditions had continued to advance, the franc eased further, helped stabilize the franc vis-a-vis the mark. slipping at times against the mark as well as the With the franc benefiting from the return of funds dollar. In response, the Swiss authorities has­ that had been invested earlier in the year in tened to complete the abolition of all remaining Germany, the franc did not fall as fast as the restrictions against capital inflows. In addition, mark and the Swiss National Bank did not have regulations governing borrowings in Swiss francs to intervene in the exchange market. Between were changed to make it easier for central banks early September and mid-November the Federal and monetary authorities to invest in private Reserve bought an additional $5 million equiv­ Swiss franc placements. During this period the alent of francs in the market and $102.2 million U.S. authorities supplemented their operations equivalent from correspondents. For its part the in marks by operating in Swiss francs as well. By Exchange Stabilization Fund bought $29.8 mil­ the end of August, they had bought $20 million lion equivalent from correspondents. equivalent of francs in the market and $15.2 In December, U.S. interest rates rose even million equivalent from correspondents, of higher and the differential between U.S. and which $22.6 million was for the Federal Reserve Swiss interest rates widened to more than 14 and $12.6 million was for the Treasury. percent. Investment portfolio managers reacted Meanwhile, since the Swiss National Bank had swiftly by moving large amounts of funds out of intervened only occasionally to buy dollars in the franc into higher-yielding dollar assets. 1980, the authorities were relying on other oper­ Moreover, seeing little possibility of a near-term ations to provide the liquidity banks needed on a recovery in the franc, many corporate entities, short- and medium-term basis to maintain re­ governments, and official agencies borrowed serve requirements. These operations included francs domestically or in the Euro-Swiss franc arranging foreign exchange swaps for short- and market where in many cases borrowers simply medium-term maturities and placing government exercised options to allow them to switch loan deposits with commercial banks. Even so, the currency denominations on rollover dates. As a Swiss monetary base, which is used as a target result, the franc fell even more sharply against by the authorities, was falling just below the the dollar, while also relinquishing some of its desired growth rate of 4 percent per year. In part, gains against the mark. By mid-December, it this reflected reduced holdings of bank notes dropped another 5V2 percent to SF 1.8365 before following the removal of exchange controls. But, recovering to SF 1.7800 at the month-end in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 217 response to the decline in U.S. interest rates and payments. This shift occurred initially in the a sharp year-end rise in Swiss interest rates. capital account, where heavy inflows first into Coming into 1981, participants remained wary the banking sector and later into stocks and over the outlook for the franc. Its steep decline bonds had provided more than adequate financ­ against the dollar was seen as undercutting the ing for a current-account deficit still running at fight against inflation in Switzerland. At the same an annual rate of $20 billion through the first half time, the Swiss economy was expanding more of the year. By midsummer, however, the cur­ slowly in the face of deepening recessions in rent account was itself moving out of deficit at an Germany and elsewhere in Europe. In many unexpectedly rapid pace. A major reason for this financial centers around the world the concern improvement was a large reduction of the vol­ over Germany’s economic outlook tended to ume of oil imports, reflecting energy conserva­ include Switzerland, and as a result many inves­ tion efforts and major investments in energytors viewed the Swiss franc as a less attractive saving production processes by Japanese medium for investment funds. Against this back­ companies. In addition, following the adoption of ground, once it became clear in early January more restrictive fiscal and monetary policies to that U.S. interest rates were not giving up much stabilize the Japanese yen last March, private ground, the franc came heavily on offer with the consumption flattened out and inventories were other continental currencies, plummeting 8 per­ cut back sharply. This reduction of domestic cent against the dollar over the month. This demand also contributed to lower import vol­ further steep decline in the rate prompted the ume, while at the same time it encouraged Japa­ Swiss National Bank to sell modest amounts of nese companies to expand their overseas sales. dollars in the exchange market. Also on January As a result, the Japanese yen advanced from its 29 the Federal Reserve and the Treasury each early-April lows to ¥ 227.28 by the opening of purchased $10 million equivalent of francs in the the period, while Japan’s foreign exchange re­ market to supplement intervention in marks. The serves rose to $18.8 billion. franc closed on January 30 at a three-year low of This sharp recovery in the yen, together with SF 1.9270, to end the six-month period 16V4 the improved balance of payments performance, percent lower against the dollar. Also, the franc touched off a debate within Japan on whether or eased back from its highs against the mark, not to lower domestic interest rates. Earlier in having received much less intervention support. the summer, the Bank of Japan had resisted It therefore closed the six-month period little pressures for easing monetary policy in view of changed on balance against the mark. the continued strength of inflationary pressures Over the period, Federal Reserve market and and the size of the current-account deficit. But correspondent purchases of francs totaled $30 by mid-August evidence emerged of the substan­ million equivalent and $109.8 million equivalent tial improvement in the current account and of a respectively. Treasury acquisitions of francs for lowering in the inflation rate. Moreover, eco­ the Exchange Stabilization Fund totaled $15 mil­ nomic growth was slowing down both at home lion equivalent and $37.4 million equivalent re­ and abroad. As a result, on August 20 the Bank spectively. of Japan lowered its discount rate 3/4 percentage During the six-month period, Switzerland’s point to 8V4 percent. In addition, on September 5 foreign currency reserves fluctuated from month the government announced a modest fiscal to month in response to foreign exchange swap stimulus, featuring a restoration of some pro­ operations undertaken for domestic monetary grams cut earlier in the year. purposes. On balance, the reserves declined $200 In the exchange market, this slight relaxation million to $12.1 billion as of January 31. in fiscal and monetary policy had little impact on the performance of the yen. The market had become increasingly aware that, despite its Japanese Yen heavy dependence on oil imports, Japan—by comparison with most other industrialized coun­ By the third quarter of 1980, Japan was exper­ tries—was achieving a rapid adjustment to higher iencing a dramatic turnaround in its balance of world oil prices. The yen was remarkably resil­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

218 Federal Reserve Bulletin □ March 1981 ient in the face of a prospective shortfall in oil market participants came to expect another wave production resulting from the outbreak of hostil­ of investment flows into Japan. As the market ities between Iran and Iraq. This resiliency im­ turned more bullish toward the yen, commercial pressed the market and the yen continued to be leads and lags moved in its favor, pushing the buoyed by capital inflows, including funds from rate up to as high as ¥ 198.00 on January 5. This OPEC countries to purchase stocks of Japanese abrupt rise prompted the Bank of Japan to inter­ companies as well as government and corporate vene in the exchanges. At that time, the dollar bonds. These inflows, together with the virtual was coming generally on offer and, as part of a elimination of the current-account deficit by ear­ joint effort with the Bank of Japan to prevent the ly autumn, propelled the yen 7V4 percent above disorderly conditions in the yen market from early-August levels to ¥ 210.65 by September 19 spilling over into the other currency markets, the and a further 2 percent to ¥ 206.20 on October Federal Reserve sold $50 million equivalent of 14. At this level the yen was at its highest in yen in New York, financed out of System bal­ nearly two years before easing back against a ances. This intervention helped bring the market strengthening dollar to ¥ 211.05 at the month- into balance and, as concern over a possible end. Meanwhile, with the yen in heavy demand sharp drop in U.S. interest rates faded, the yen in late September and early October, the Bank of rate settled back to around ¥ 202.50 by mid­ Japan intervened in the exchange market to month. Thereafter, the yen traded quietly, de­ moderate its rise. These operations contributed clining somewhat against the dollar but rising to an increase of $2.2 billion in foreign exchange against the continental European currencies. reserves to $21.0 billion as of October 31. Market sentiment remained generally positive In early November the strength of the yen, for the yen, which closed on January 30 at further evidence of moderating inflation, and a ¥ 206.10, up some 9V2 percent over the sixmoderation of monetary growth provided the month period. Meanwhile, the Bank of Japan’s Bank of Japan with an opportunity to cut its interventions during the last three months of the discount rate another 1 percentage point to 7V4 period contributed to a rise of $1.7 billion in percent. In addition, the authorities lowered re­ foreign exchange reserves to $22.7 billion as of serve requirement ratios for bank deposits. This January 31, for an overall rise of $3.9 billion for move was largely anticipated in the exchange the six-month period. market, and the yen continued to fluctuate around ¥ 212. Around the month-end, however, the Japanese yen dropped to as low as ¥ 216.75 Sterling on expectations of higher interest rates in the United States coinciding with the implementa­ Coming into the period under review, sterling tion of a new exchange control law on December had been buoyant relative to other European 1, liberalizing the movement of funds in and out currencies. Britain’s rising production of oil from of the country. But effective the same day the the North Sea left its economy well protected Ministry of Finance announced increases in the against possible cutoffs in oil supplies and further quotas available to Japanese and foreign banks increases in energy prices. A deepening reces­ for swapping dollar borrowing into yen, thereby sion at home was dampening import demand so providing more scope for capital inflows. The as to help push the current account from deficit market soon came into better balance, and the into substantial surplus. The British authorities yen recovered to fluctuate around ¥ 210 through remained determined to curb the entrenched midmonth. inflationary pressures in the domestic economy. In late December, exchange market sentiment Toward that end, the Bank of England kept became more favorable for the yen. Continued short-term British interest rates close to the strength of export and investment demand was recent record levels as long as the demand for expected to give the economy a boost in Japan credit appeared to remain strong. As a result, that contrasted with the spreading slowdown in British interest rates stayed high by international most other industrialized countries. With U.S. standards and, in a world dominated by fears interest rates also drifting lower at the time, over the vulnerability of national economies to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 219 rising oil prices, sterling remained an attractive during the late summer and fall. During August, investment medium, especially in view of the both the exchange market and the money market depth, diversity, and breadth of the London were further influenced by efforts of the major oil money and capital markets. companies to acquire sterling to make sizable As a result, the pound had led the advance of petroleum revenue tax payments. In late Sep­ the European currencies against the dollar during tember the pound was bid up further in reaction the spring and summer to trade by early August to the outbreak of hostilities between Iraq and at $2.34 against the dollar and around 74.5 on a Iran, rekindling concerns over the global avail­ trade-weighted basis as a percentage of Smith­ ability of oil supplies. By mid-October, release of sonian parities. Moreover, Britain’s reserve po­ figures revealing a further gain in Britain’s trade sition had become so strong that the government surplus underscored the magnitude of the favor­ had announced during July its decision to prepay able shift in the country’s balance of payments during 1980 an official Eurodollar borrowing of position. Thus, sterling was ratcheted up against $1.5 billion due to mature during 1985-88. Even the dollar 3 percent in the two and a half months after some of these repayments, Britain’s official to mid-October to $2.4108, even as most other foreign currency holdings at the end of July were European currencies were fluctuating rather nar­ close to an all-time high at $20.4 billion. rowly, albeit somewhat lower, against the dollar. Sterling’s strength in the exchange market, Later that month when a renewed rise in U.S. while acting to slow domestic price increases, interest rates started to draw funds out of many was creating a dilemma for British policymakers, continental European currencies, the still rela­ since the pound’s steep and persistent rise tively high yields available in London shielded against nearly all other currencies posed an ever- the pound from these pressures. Indeed, with increasing threat to the competitiveness of Brit­ sizable amounts of OPEC and other investment ish goods. As the pound advanced, British indus­ funds on the move, some funds went into ster­ trialists complained bitterly over narrowing ling, and this influx helped push the exchange profit margins and declining product market rate up even higher. By late October the pound shares. As Britain’s company sector came under was advancing against virtually all currencies, increasing liquidity strains, unemployment rose hitting a six-year high of $2.4565 against the to more than 2 million, stocks were run down, dollar. Against the continental EMS currencies, and investment was cut back. The corporate the pound rose 10 percent above levels in early bond market remained inactive, and bank bor­ August to four-year highs in early November. rowing was the major source of finance. The The Bank of England continued to intervene only continued high level of borrowing by the private to smooth out wide movements in the rate. Net sector, as well as the large public-sector borrow­ official dollar purchases in the exchange market ing requirement, kept monetary growth well were more than offset by other operations, so the above target despite substantial sales of govern­ United Kingdom’s currency reserves declined ment stock. Thus, market participants eagerly somewhat over the three months. awaited any evidence that might point to a decel­ Meanwhile, however, credit demand, although eration in monetary growth sufficient to permit still strong, was on the verge of slackening for the authorities to lower interest rates or, alterna­ several reasons. The government deficit, al­ tively, any development that might prompt the though running ahead of forecast levels, was authorities once more to engage in heavy ex­ expected to decline as a result of planned reduc­ change market intervention to moderate the tions in expenditures, the approach of the taxpound’s rise. pay ment season, an anticipated rebate from the Instead, money market conditions in London European Community (EC), and sales of governremained tight almost continuously from August ment-owned companies. Also, as the recession to October. Statistics on the growth of the mone­ became more protracted and industry cut its tary and credit aggregates gave the market little employment rolls while also pruning financial hope that the time had come for the Bank of commitments, the demand for bank credit was England to reduce its official minimum lending expected to taper off. In the exchange market, rate. As a result, sterling continued to be well bid expectations therefore hardened that the authori­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

220 Federal Reserve Bulletin □ March 1981 ties would announce a reduction of interest rates French Franc when a new parliamentary session opened in mid-November. A sharp sell-off suddenly devel­ For France the recent sharp increase in oil prices oped, and the pound fell 43/4 percent from its served to aggravate domestic inflationary pres­ highs to $2.3385 on November 24. On that day sures, lower real incomes, and impose a sharp the Bank of England’s minimum lending rate was reversal in the country’s current-account posi­ reduced 2 percentage points to 14 percent. Chan­ tion, thereby eroding the benefits of years of cellor Howe also announced a series of measures stabilization policies. By mid-1980, the rate of designed to lower the public-sector borrowing consumer price inflation had jumped up to 13V2 requirement, including a proposal for a supple­ percent. The current-account surplus of preced­ mentary tax on oil production at a rate of 20 ing years had given way to a deficit that was to percent of gross revenues and an increase in amount to $7 billion for the full year. Moreover, employee national insurance contributions the economy had lost its upward momentum in (effective from April 1981). On balance, this the face of weakening consumer and investment package was well received in the exchange mar­ demand and, with little opportunity to absorb a ket, and the pound steadied to trade around $2.34 growing labor force, the rate of unemployment through mid-December. rose to more than 6 percent. Coming into the new year, sterling was again In response, the French government had al­ buoyant in the exchange market. Underpinned ready begun to provide limited fiscal stimulus to by a further widening in the current-account the economy and followed up with some further surplus, a rebate from the EC, and occasional modest measures when it announced its 1981 large investment orders, the pound was bid up to budget early in September. In particular, certain as high as $2.4320 on January 21. Nevertheless, social benefits were increased, more low-interest with U.S. interest rates unexpectedly firm and loans were made available to export firms and to with the dollar strong in the exchanges, the pace finance housing, and some tax relief was pro­ of capital flows into the pound began to slow. As vided to encourage new investment. But the a result, a diversification of investment portfolios French authorities, remaining committed to the by British residents into other currencies, which combined goal of curbing inflation and maintain­ had proceeded ever since abolition of exchange ing the strength of the French franc, resisted controls a year before, now began to show pressure to ease the Bank of France’s restrictive through. Around the month-end, sterling monetary policy as the economy weakened. In­ dropped back from its highs to close at $2.3630 deed, tight limits on banks’ credit ceilings were on January 30. The pound was, however, still up maintained. The growth of money, which had ll/2 percent on balance against the dollar and run near 11 percent—the top of the target for nearly 21 percent higher against the mark since M-2—at times during the summer, was back well the end of July. On a trade-weighted effective within the targeted range by early fall. In addi­ basis, the rate rose 7 percentage points to 81.2 tion, short-term rates had resumed a gradual rise percent of its Smithsonian parity over the six- after the summer, so that interest rates for most month period. maturities were yielding a positive return even Meanwhile, the Bank of England continued to after taking inflation into account. intervene on both sides of the market to smooth In the exchange markets, the French franc was fluctuations in the pound. These operations had trading firmly as the six-month period under little impact on external reserves, which were review opened. It was benefiting then, as it had affected more by repayments of foreign currency through much of the year, partly from the rela­ debts and periodic revaluations of Britain’s hold­ tively high French interest rates that attracted ings in the European Monetary Fund. As a result investment flows into franc-denominated assets of these considerations, the United Kingdom’s and partly from the domestic credit ceilings that foreign currency reserves declined $1.7 billion provided an incentive to French banks and cor­ over the six-month period to $18.7 billion as of porations to borrow in foreign currencies to meet January 31. local financing needs. In addition, the market’s Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 221 attitude toward the franc remained more positive reaffirmed its commitment to a restrictive mone­ than for other European currencies. The current- tary policy stance at a time when the authorities account deficit, while a source of concern, was of other European countries were becoming in­ considerably smaller than that for Germany, its creasingly concerned about slower economic principal trading partner. France’s traditionally growth and the prospect of recession. The good relations with Middle Eastern countries French central bank announced that its growth were generally thought in the market to help target for M-2 for 1981 would be reduced to 10 cushion France from any shortfall of oil supplies percent and intervened in the Paris money mar­ that might result from either the Iranian crisis or ket to maintain interest rates at a fairly high the outbreak of hostilities between Iran and Iraq. level. With the German mark coming under Moreover, some investors, looking to diversify increasing selling pressure, the still relatively their holdings, were attracted by the opportuni­ high level of interest rates in France attracted ties afforded in either the domestic or the Euro- funds from abroad and kept the French franc franc markets. Thus, capital inflows were more from declining as rapidly as the mark against the than sufficient to finance France’s current-account dollar. The relationship between these two cur­ deficit. The French franc had recovered from its rencies within the EMS, therefore, became in­ spring lows to trade around FF 4.15 early in creasingly strained. On a number of occasions in August. Bank of France intervention within the late October and early November, the franc was context of the EMS had contributed to a rise in at its upper intervention limit against the mark. France’s foreign currency reserves to $25.3 bil­ The central banks of both countries were obliged lion by the end of July. Also, in view of the to intervene in the market to buy large amounts franc’s relative strength, the Federal Reserve of marks against francs. At times the Bank of had included the French currency in its interven­ France supplemented these operations by buying tion operations earlier in the year, leaving a net small amounts of dollars as well. Despite these $166.3 million of indebtedness outstanding under purchases, which were partially reflected in a the System’s swap line with the Bank of France $874 million increase in official foreign currency as of that same date. holdings for the month of October, the franc had Against this background, with the currency risen to a high of FF 2.3002 against the mark by markets reasonably well balanced during August October 31. and September, the franc fluctuated narrowly On November 7, the Bank of France an­ against the dollar while remaining comfortably nounced a number of measures to relieve the near the top of the EMS 2/^-percent band. Al­ upward pressure on the franc within the EMS. though the Bank of France continued to buy The money market intervention point was re­ modest amounts of EMS currencies, there was duced 3/4 percentage point to 103/4 percent, and a little further increase in French official foreign reserve requirement of 5 percent was imposed on exchange reserves. Later on, however, the deposits of nonresidents to discourage interest- French franc became caught up in the tug of war sensitive short-term capital inflows from abroad. between a generally rising dollar and a declining But, to offset the effects of the recent interven­ German mark. As the dollar strengthened after tion activity on domestic liquidity, the Bank of mid-October, the French franc started a decline, France also increased reserve requirements on which was to proceed almost without interrup­ commercial bank sight and time deposits. After tion, to FF 4.4750 against the dollar by early these measures, the pressures in the EMS sub­ November. Meanwhile, the Federal Reserve stantially subsided. The franc eased from its limit took advantage of the opportunity to begin to against the German mark, although at times buy French francs both from correspondents and during November and December the Bank of in the market and covered all its outstanding France bought modest amounts of marks, while swap debt by the end of October. also acquiring Belgian francs when that currency Within the EMS by contrast, upward pressure was low within the EMS. For a time the EMS on the French franc intensified after mid-Octo- currencies also steadied against the dollar. ber. The Bank of France had just, in effect, When, however, the EMS as a group declined, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

222 Federal Reserve Bulletin □ March 1981 the French franc dropped further against the relatively high, proceeding at a pace of more than dollar, easing as much as 4 percent below early- 20 percent on a year-over-year basis. Since November levels before recovering some in ad­ spring, fiscal policy had been at the center of an vance of the year-end. intense domestic debate that focused on the need During January, as prospects of a resolution to to control inflation, to reduce the government the Iranian hostage issue improved, the market debt, and to spur export growth. But, with no for French francs began to react to the possibility fiscal measures yet in place, the burden of fight­ that any move to unfreeze Iranian assets would ing inflation fell entirely on monetary policy, set off new and possibly massive flows of funds. which remained restrictive. Those U.S. banks with liabilities vis-a-vis Iran In this context, the Italian lira had come under were presumed to have to bid for funds in the increasing pressure. In the exchanges, as the Eurodollar market to meet these liabilities, and growing current-account deficit weighed increas­ as Eurodollar rates were bid up, the European ingly on the lira, the spot rate had not risen as the currencies generally weakened against the dol­ dollar declined and, consequently, had fallen lar. At the same time, market participants antici­ from the top to the bottom of the EMS band. At pated that Iran, once its assets were unfrozen, home, exporters had pressed strongly for devalu­ might try to switch a substantial amount of its ation to restore their competitive position. Gov­ funds into French francs. As a result, the franc ernment officials publicly denied that devalua­ declined less against the dollar than the other tion was a viable alternative in Italy where prices EMS currencies as the dollar continued to ad­ and wages are highly indexed. Even so, commer­ vance around midmonth. Although in fact no cial leads and lags moved sharply against the lira, such flow of funds materialized, the relatively and Italian residents sought increasingly to repay high interest rates in France continued to attract their foreign currency borrowings, thereby add­ funds from abroad. By the end of January, the ing to pressure on the lira and keeping the franc was again firmly against the upper EMS devaluation rumors alive. By early summer the band even as it eased to FF 4.9000 against the Bank of Italy had intervened heavily in the dollar. The Bank of France was once more exchanges to steady the lira within the EMS intervening with other central banks to support band. the German mark and Belgian franc. France’s Early in July the government implemented a official foreign currency reserves increased fur­ package of austerity measures aimed at control­ ther to stand at $26.5 billion by the end of ling inflation, supporting the lira in the ex­ January, up $1.2 billion over the six-months. changes, spurring exports, and cutting the pub- Over the period under review, the French franc, lic-sector borrowing requirement as a share of frequently caught between the rising dollar and gross domestic product. The measures, which the weakening German mark, moved down 18y2 became effective immediately but required par­ percent on balance against the dollar and up V2 liamentary ratification within 60 days, included percent on balance against the mark. consolidation of value-added tax brackets; high­ er taxes on spirits, gasoline, and stamps; and a special tax on wages to be used in support of Italian Lira weak industries. At the same time, the Bank of Italy further tightened restrictions on domestic By mid-1980, the sharp increase in energy prices credit expansion. The exchange markets re­ of the past two years, together with a rapid sponded favorably to these measures, rumors of deterioration in Italy’s non-oil trade position, lira devaluation subsided, and the lira firmed had swung Italy’s current account sharply into temporarily in the exchanges. As capital began to deficit, reversing the sizable surplus position of flow back into Italy and the normal tourist- 1979. The Italian domestic economy continued to related inflows began to gather pace, the Bank of expand strongly into 1980, even at a time when a Italy was able to rebuild its foreign currency slackening of other economies was being reflect­ reserves to $22.0 billion by the end of July. ed in a slowing of foreign demand for Italian Meanwhile, the lira stabilized within the EMS products. Moreover, inflation in Italy remained band about lx/2 percent below the top and partici­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 223 pated with the rise of other currencies against the restrictions on domestic credit demand, still en­ U.S. dollar. By early August it was trading above couraged inflows of short-term capital, and com­ its lows at LIT 838.80. mercial leads and lags turned in favor of the lira. But downward pressures on the lira developed Moreover, the Italian oil companies that normal­ again by mid-August. Although the domestic ly enter the exchange markets to acquire foreign economy had itself begun to slow by this time, currency balances in early December for regular Italy’s current account continued to deteriorate, import payments instead borrowed heavily in the and there was little evidence of improvement on Eurocurrency markets in the hope that the dollar the inflation front. Market participants continued would be cheaper in the future. With the lira thus to question how long the lira could be held within holding steady within the EMS, the Bank of Italy its EMS band in view of the much lower inflation took advantage of opportunities to acquire for­ rates in most other EMS countries. Also, the eign currencies through mid-December and re­ time for ratifying the July package of economic laxed somewhat the October regulation relating measures was running out. When the coalition to short-term export financing abroad. government of Sig. Cossiga lost a parliamentary Meanwhile, Italy’s current-account gap had vote of confidence and resigned over the week­ widened to bring the deficit for 1980 as a whole to end of September 27-28, the July government about $10 billion-^a figure that was much larger austerity measures were allowed to lapse. than anticipated only a few months earlier and At this juncture, the Bank of Italy stepped in to overshadowed news of a modest improvement in stem any buildup of speculative pressure against the trade account late in the year. Industrial the lira. It immediately raised the discount rate production was beginning to show signs of a ll/2 percentage points to 16l/2 percent, required possible recovery, even before much progress exporters to finance 50 percent of their short­ had been achieved in improving price or trade term credit needs in foreign currency borrow­ performance. Public expenditures and borrowing ings, and tightened regulations dealing with lead­ turned higher late in the year, and monetary ing and lagging of payments and receipts. The growth accelerated, clouding the outlook for a Bank of Italy also intervened forcefully in the near-term reduction of inflationary pressures all exchange markets. Meanwhile, a new govern­ the more. The Bank of Italy continued its strong ment under Sig. Forlani was soon formed. New anti-inflationary stance, and Italian interest rates fiscal measures were put into place to control the remained high. Furthermore, just as the period budget and slow the growth of personal con­ closed, the Bank of Italy sought to strengthen its sumption. Though similar to those contained in grip on credit expansion by extending the appli­ the July policy package, the new measures pro­ cation of its ceilings to all bank loans in lire and, vided for additional acceleration of personal in­ for the first time, to most loans in foreign curren­ come tax payments and expanded support for cies, leaving only export loans exempt from the ailing industries. These actions combined to re­ ceilings. assure the exchange markets, and by mid-Octo­ Nevertheless, funds had begun to flow out of ber the lira stabilized around LIT 865 and at a Italy in late December, as export financings were level of about 3l/2 percent below the top of the repaid and those Italian oil companies that had EMS band. previously borrowed abroad to finance their im­ Over the next two months, the lira traded port deliveries took advantage of a brief soften­ comfortably within the EMS, while declining ing of dollar rates to repay these loans. The against the U.S. dollar no more rapidly than the pressures against the lira continued through Jan­ other currencies involved in the joint float ar­ uary, prompting the Bank of Italy to intervene at rangement. Interest rates in Italy remained high­ times quite heavily to maintain the lira’s position er than those abroad; and though the climbing of within the EMS band. As the entire joint float U.S. rates narrowed some of the differentials declined sharply against the dollar through Janu­ favorable to the lira, the Italian currency was ary, the lira fell to record lows, closing the sixshielded more than most currencies from the month period at LIT 1,004.50 or down a net 193/4 growing flows of funds into U.S. dollar assets. percent. At the same time, Italian reserves stood Indeed, interest rate considerations, as well as at $20.5 billion, down $1.5 billion for the period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

224 Federal Reserve Bulletin □ March 1981 European Monetary System reduce interest rates, with four cuts in official rates totaling 2 percentage points between June Last spring and early summer, the currencies and October. The French franc was also strong linked together in the joint float arrangement within the EMS, alternatively at the top with the within the EMS rebounded against the dollar, guilder, as France attracted capital inflows in largely in response to the sharp decline in U.S. excess of its current-account deficit. In Ireland, interest rates while interest rates in EMS mem­ foreign borrowings by the public sector were ber countries generally remained firm. This ad­ being used to finance the current-account deficit. vance halted in July, and EMS currencies gener­ Conversions in the market of the proceeds of ally eased somewhat against the dollar in August these borrowings and some favorable leads and and in early September as U.S. interest rates lags in sterling payments kept the Irish pound began to turn upward while interest rates in near the top of the band. At the same time, several EMS countries declined slightly. Denmark was financing its current-account defi­ For the most part, these broad movements cit by borrowing abroad, enabling the Danish took place without much strain on the EMS joint krone to fluctuate around the middle of the joint float mechanism itself. Member countries faced float. The Italian lira, which is allowed a wider the common problem of having to adjust to the trading band than the other currencies in the sharp runup of oil prices of 1979 and early 1980, arrangement, also moved widely but without which had generated unusually large current- need for intervention at the outer limits. account deficits for all of them and had aggravat­ The Belgian franc traded near the bottom of ed domestic inflationary pressures. The authori­ the 2l/4 percent band. Belgium’s problems—a ties were seeking to develop a coordinated policy large current-account deficit, a large fiscal defi­ response in the monetary and fiscal areas as well cit, and a stagnating economy—were viewed as as on energy questions. Monetary policy, in particularly serious by the market. To finance particular, had been tightened to combat infla­ the current-account and fiscal deficits, the Bel­ tion at home and to attract funds, which could gian government borrowed heavily in interna­ help finance the current-account deficits, or at tional markets. Political wrangling hampered the least to stem an outflow of interest-sensitive taking of effective adjustment measures, and the funds that would complicate the effort. In gener­ Belgian franc remained under selling pressure, al, interest rates were higher in countries with with the result that the National Bank was high rates of inflation, so interest differentials obliged to maintain interest rates high enough to roughly compensated for inflation differentials. avoid funds moving out of the franc and to give By late summer it was clear that industrial pro­ support from time to time to keep the franc duction had dropped back from early in the year within the 2% percent EMS band. and, with unemployment rates rising, pressures The German mark was also near the bottom of were building up for an easing of earlier restric­ the band. Germany had the largest current-active policies. But the central banks resisted pres­ count deficit to finance among the EMS mem­ sures to ease, in view of the continuing high rates bers. Although Germany’s inflation performance of inflation and the need to finance the current- continued to be as good or better than the others, account deficits, with the result that any move­ German interest rates were well below those in ment in the direction of ease was modest, if at all. other EMS member countries. Moreover, Ger­ Within the band of currencies, the Dutch guild­ many had no official restrictions on capital out­ er was firm on the Netherlands’ relatively favor­ flows and still refrained from removing all con­ able external position and on the high interest trols on inflows. The result was that funds could rates prevailing in the Amsterdam money mar­ readily move out of Germany into other EMS ket. The guilder, after having traded in the upper currencies, and official and private entities with­ half of the EMS band during the first seven in other EMS countries could readily use marks months of the year, moved toward the top of the in international borrowings. band in August and remained there over the rest By October, strains began to build up within of the year. The guilder’s relative strength en­ the EMS. In part these came from outside, as abled the Dutch authorities to move cautiously to heavy flows of funds moved into the U.S. dollar, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 225 the pound sterling, and the Japanese yen—cur­ before, the brunt of the immediate selling pres­ rencies in which interest rates remained very sures fell on the German mark, and that currency high or, as in the U.S. case, were rising. But the touched its lower intervention limit. The Belgian interest rate disparities within the EMS and the franc also came under selling pressure, and both relative freedom of funds to move also played a the mark and the franc required official support role. With the exchange markets turning general­ within the EMS. ly bearish over the outlook for the German mark, funds moved out of the mark and into other EMS currencies. To the extent that these funds gravi­ Canadian Dollar tated to the currencies at the top of the EMS band—the French franc and Dutch guilder—the In the summer of 1980, the Canadian dollar was EMS intervention mechanisms were soon trig­ underpinned by a favorable shift in Canada’s gered. trade and current-account position, by a reversal Intervention mounted quickly, and talk began of the previous adverse interest rate differentials circulating of a possible widening in the interven­ vis-a-vis the United States, and by Canada’s tion limits or of a temporary withdrawal of the status as a major oil and gas producer. The mark from the joint float arrangement. Such improvement in the trade account stemmed from approaches were openly rejected by the authori­ a slowdown in the domestic economy, the ability ties of the respective EMS member countries. In of Canadian exporters to take advantage of the early November, the French took measures to sharp depreciation of the Canadian dollar in ease money market conditions, making explicit previous years, and the market’s perception of their intention to reduce the selling pressures on sustained efforts to curb cost and price pressures the German mark. Meanwhile, the German Fed­ at home through monetary policy. As a result, eral Bank was allowing the heavy intervention exports to markets like Europe, where activity within the EMS to tighten its own money market. had not yet slackened so sharply as in North The market sensed the resolve of the authorities America, continued to increase. With the trade to maintain existing parities, and the tension account heading to a surplus of $7 billion for the gradually eased. Even so, the EMS joint float year, the current-account deficit was narrowing continued to decline against the major currencies to a size that could comfortably be financed by outside the group, including the dollar, the pound private capital inflows. sterling, the Japanese yen, and to a small degree The reemergence of favorable interest differ­ the Swiss franc. Apart from a rise in the Danish entials reflected the sharper drop of interest rates krone, reflecting a 1980 current-account deficit in the United States than in Canada. Restoration for Denmark that was lower than expected, and a of the traditionally favorable interest rate gap for downward movement in the Irish pound from its Canada had once again provided an incentive for temporarily high position in the band, the config­ investors to shift funds into higher-yielding uration of currencies hardly changed within the Canadian dollar assets, while also prompting EMS. Canadian borrowers to tap U.S. and other for­ The currencies in the group at first recovered eign capital markets and to convert the proceeds slightly against the dollar when U.S. interest in the exchanges. Canada’s potential for increas­ rates were receding from their mid-December ing energy production in the future for both highs. But it soon became apparent that U.S. domestic and export use was underscored early interest rates would not drop off as sharply as in the year with reports of new oil discoveries. At some market participants had originally be­ a time of rapidly rising world energy prices and lieved. Moreover, the market remained con­ uncertainty over the adequacy of aggregate oil cerned about the prospects for EMS member supplies, this factor added to the attractiveness countries in reversing their current-account defi­ of the Canadian dollar as an investment medium. cits and dealing with domestic policy dilemmas. In this environment, the Canadian dollar had As market sentiment toward the dollar became been bid up to its high for the year of increasingly bullish, the dollar came into demand Can.$1.1406 in early July, and by the month-end against the currencies in the EMS band. As Canada’s foreign currency reserves stood at $1.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

226 Federal Reserve Bulletin □ March 1981 billion after repayment in May and June of $600 national oil company. These measures were seen million borrowed early in the year under the in the market as discouraging foreign investment revolving standby credit facility with Canadian and as possibly complicating constitutional is­ banks. sues. Indeed, a number of provinces objected to During August and September the Canadian the proposed oil-pricing arrangements, and Al­ dollar was beginning to lose some of its buoyan­ berta announced its intention to cut its oil pro­ cy. In part, this reflected a narrowing of the duction by 15 percent. These developments con­ positive interest differential as Canadian interest tributed to a substantial self-off of Canadian rates continued to ease for a while even after dollars in the exchange market and the rate interest rates in the United States resumed an declined to Can.$ 1.1899 on November 6. By midupward trend. The exchange market had also November the market had come back into bal­ become concerned about the continued debate ance with the spot rate fluctuating around over domestic energy pricing and development Can.$1.1860. policy, which had important implications for the Meanwhile, the Canadian economy, spurred distribution of income as well as the outlook for by strengthening retail sales and industrial pro­ containing inflationary pressures at home. The duction, had picked up in the third quarter and western provinces had called for a larger share of posted its first gain in real output for the year. At oil revenues to be returned to provincial govern­ the same time, the inflation rate began to acceler­ ments and for a more rapid increase in domestic ate as increases in food and energy prices and energy prices to world market levels. When higher labor costs worked their way through the these calls were resisted at the federal level, the economy. The money supply moved toward the market became concerned that a fundamental upper end of its target range, and the Bank of constitutional conflict might emerge over the Canada, operating within a system of establish­ relationship between the federal and provincial ing its official bank rate in accordance with the governments. Thus, the Canadian dollar settled weekly Treasury bill tender rate, entered the back to trade around Can.$1.1575 during much of money market to push up short-term interest August and September. It came on offer in early rates. The discount rate then climbed to nearly September around the time of a meeting between 14 percent in mid-November, compared with Prime Minister Trudeau and the provincial pre­ about 10V2 percent in mid-August. But an even miers and then again later in the month when no more rapid surge in interest rates was under way visible progress was made on the constitutional in the United States—one which the Canadian issue. By October 2, the rate had declined to authorities were initially reluctant to match. Can.$1.1734 with the Bank of Canada continuing As a result, interest rates in Canada increas­ to operate on both sides of the market to smooth ingly fell behind those in the United States, and short-run rate fluctuations. the adverse differentials that first had emerged at The Canadian dollar firmed briefly after early the end of August had widened sharply by No- October as a number of developments, including vember-December. Several announced bond is­ the outbreak of hostilities between Iran and Iraq, sues planned by Canadian entities for the New reinforced the market’s positive views about York market were postponed in response to the Canada’s basic strength in its natural resources. rise in interest rates here, cutting off a potential Late in the month, however, the Canadian dollar source of demand for Canadian dollars in the was again coming under some selling pressure as exchanges. Also, dealers and corporate treasur­ the market anticipated and then reacted to mea­ ers became increasingly unsure about the will­ sures contained in the October 28 federal budget. ingness of the authorities to foster increas­ The budget called for cuts in the federal deficit es in interest rates to match those in the and included a national energy policy that, in United States. The Canadian dollar therefore turn, provided for specific measures to increase came heavily on offer, plunging through the domestic wellhead oil prices, imposed a refinery Can.$1.20 benchmark by December 11 to a low levy to pay for oil import subsidies, and in­ of Can.$1.2122 on December 16, 4V2 percent creased Canadian ownership of oil and gas pro­ below levels in early August. duction with an increase in the share of the At the same time, the Bank of Canada contin­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 227 ued to act forcefully in the money market, raising of the period, down $558 million net over the six the official discount rate to 17.4 percent by months. December 19, as well as in the exchange markets, selling sizable amounts of dollars on a number of occasions. These actions were reinforced by Swedish Krona Governor Bouey’s speech to provincial ministers of finance restating the commitment of the Bank Last year, the Swedish authorities were con­ of Canada to a firm anti-inflation policy and a fronted with several economic problems at once. stable currency in the exchanges. As a result, the The current-account deficit deepened, to nearly Canadian dollar steadied and began to recover, $5 billion, as the latest rise in world oil prices helped by an easing in U.S. interest rates. Deal­ added to Sweden’s oil import bill and as export ers moved to cover their short positions, and growth slackened. The inflation rate accelerated corporations that had held off buying Canadian to nearly 14 percent for the year as a whole. A dollars in expectation of further rate declines surge in state and local spending contributed to a entered the market to cover their needs. The rate continuing increase in the government budget thus rebounded to Can.$1.1885 by December 30. deficit to about $10 billion, or more than 10 A more positive tone prevailed in the market percent of gross national product. Efforts to deal early in the new year, as market participants with these and other issues, such as the longtook note of the continuing improvement in festering debate over nuclear policy, were ham­ Canada’s trade position. Also, some easing of pered by the fact that Sweden was governed by a U.S. interest rates early in January led to a coalition of parties with only a slender majority narrowing of interest differentials vis-a-vis U.S. in Parliament. Consequently, as major adjust­ dollar assets, while wide favorable differentials ment policies were being hammered out, the for Canada remained against several major conti­ Bank of Sweden had little choice but to tighten nental currencies. As a result, the Canadian monetary policy, both to absorb the excess li­ dollar generally kept pace with the rising U.S. quidity generated by the fiscal deficit and to dollar until late in the period, thereby strengthen­ avoid outflows of interest-sensitive funds. ing considerably against the continental curren­ Meanwhile, the Bank of Sweden intervened as cies. Although announcement of decontrol of necessary to keep the krona within a reasonable domestic oil prices in the United States by Presi­ range against the index of a trade-weighted bas­ dent Reagan on January 27 refocused market ket of currencies, and the government continued attention on the still unresolved Canadian energy to arrange borrowings in the international capital policy controversy and sapped the Canadian markets to cover the current-account deficit and dollar of some of its strength, the spot rate was to avoid an excessive drain on reserves. On the trading about ll/2 percent above its December possibility that some bridge financing might oc­ lows at Can. $1.1948 by the close of the six- casionally be needed as longer-term loan pack­ month period. At this level, it had reduced its net ages were assembled, the Bank of Sweden decline against the U.S. dollar since July to moved to reinforce its short-term credit lines. In about 3 percent. Against the European curren­ this context, in May the Bank of Sweden and the cies, the Canadian dollar on balance had gained Federal Reserve agreed to increase the swap about 15 percent. arrangement $200 million to $500 million for one As the Canadian dollar had firmed in the first year, with the understanding that drawings could weeks of January, the Bank of Canada purchased be made, if needed, in connection with bridgesizable amounts of U.S. dollars. Also, after financing operations. having drawn $900 million in December on Through the spring and early summer, the standby credit facilities with Canadian and for­ exchange market for the Swedish krona was eign banks, the Bank of Canada repaid in Janu­ rather well balanced, and takedowns on the ary the $600 million drawing on Canadian banks, government’s international borrowings ran well leaving the $300 million drawing on foreign banks ahead of the Bank of Sweden’s intervention sales still outstanding. As a result, Canada’s foreign of dollars. By August, however, as the govern­ exchange reserves stood at $1.4 billion at the end ment prepared a new package of measures, ru­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

228 Federal Reserve Bulletin □ March 1981 mors of a possible devaluation generated heavy index. On January 20, the Bank of Sweden selling pressure on the krona, largely in the form followed up by announcing a series of forceful of adverse commercial leads and lags. The krona measures: hiking its discount rate 2 percentage declined V2 percent during the month, to as low points to 12 percent and its penalty lending rate as SK 4.2005 against the dollar but remained fully 4 percent to 17 percent, raising long-term around 100.8 in terms of the official index. For rates about 1 percentage point, doubling the their part, the authorities firmly rejected devalu­ bank’s cash reserve requirements from 2 to 4 ation on the grounds that it would exacerbate percent, and imposing a ceiling on commercial domestic inflationary pressures and do little to bank lending. solve Sweden’s structural problems. The Bank These actions led to a tightening of money of Sweden stepped up its exchange market inter­ market conditions aAd to a sharp rise in interest vention, and the government increased the pace rates, but market^rticipants continued to focus of its external borrowings to replenish reserves. on the need for Clear new measures on the fiscal Early in September the government convened side. Consequently, the krona remained under an extraordinary session of Parliament and heavy selling pressure. The Bank of Sweden’s gained approval of a package of fiscal measures, sizable intervention continued, and the govern­ which included a sizable hike in the value-added ment accelerated its pace of negotiating new tax and an increase in taxes on energy consump­ borrowings, including a $1 billion loan in the tion. The government followed up by announcing Euromarkets. Even so, the intervention had be­ cuts in planned expenditures to reduce the bud­ come so heavy that reserves were being drawn get deficit. These actions were seen in the mar­ down. Consequently, in late January the Bank of kets as positive first steps, and the krona im­ Sweden drew $200 million under the swap agree­ proved somewhat over October and November. ment with the Federal Reserve to be used as As some commercial leads and lags ran off, the bridge financing until new loans could be com­ krona gained V2 percentage point, in terms of its pleted. Against the dollar, the krona declined a official index, to 100.3, while declining some 5 further 5%. percent from November levels to SK percent against a strengthening U.S. dollar to SK 4.5900, while against the official index it slipped 4.36. At the end of November, Sweden’s foreign to as low as 101 before recovering to 100.3 on the currency reserves remained little changed from last trading day of the month. On balance, Swe­ the levels of last summer. den’s reserves declined $500 million in Decem­ Nevertheless, concerns over the outlook for ber and January to $2.5 billion as of January 31. Sweden’s fiscal and current-account deficits con­ After the turn of the month, however, the tinued to weigh on the exchange market, and the immediate selling pressures on the krona lifted. krona’s relative strengthening proved short On February 2, employers and trade unions lived. Devaluation talk revived toward the year- reached an agreement on a wage package that end, and commercial leads and lags turned scheduled much more modest percentage in­ against the krona once more. On January 12 the creases than in recent years and incorporated government announced its proposed budget for cost-of-living provisions that would make de­ the next fiscal year, beginning in July 1981. The valuation even more improbable. On February 3, deficit was again projected to be large, but the the government announced a far-reaching pack­ message lacked significant new measures to age of fiscal measures, designed to scale back the close the gap. The exchange market atmosphere size and cost of government and to stimulate deteriorated further, leading to strong selling private initiative. These developments were well pressure on the krona. The Bank of Sweden was received in the exchange market, and funds obliged to intervene in size to avoid a sharp began to flow back into the krona, enabling the deterioration of the krona against the official authorities to replenish external reserves. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

229 Staff Studies The staffs of the Board of Governors of the In all cases the analyses and conclusions set Federal Reserve System and of the Federal forth are those of the authors and do not neces­ Reserve Banks undertake studies that cover a sarily indicate concurrence by the Board of Gov­ wide range of economic and financial subjects. ernors, by the Federal Reserve Banks, or by the In some instances the Federal Reserve System members of their staffs. finances similar studies by members of the aca­ Single copies of the full text of each of the demic profession. studies or papers summarized in the B ulletin From time to time the results of studies that are available without charge. The list of Federal are of general interest to the professions and to Reserve Board publications at the back of each others are summarized—or they may be printed B ulletin includes a separate section entitled in full—in this section of the Federal Reserve “Staff Studies” that lists the studies that are B ulletin. currently available. Study Summary Banking Structure and Performance at the State Level during the 1970 s Stephen A. Rhoades—Staff, Board of Governors Prepared as a staff paper in late 1980. The increase in mergers and acquisitions that The data on state banking structure and per­ involved banks in different geographic markets formance during the 1970s indicate the following: during the 1970s has sparked a growing interest 1. Statewide concentration was substantially in the effect of bank mergers on statewide bank­ higher in statewide-branching states than in uniting structure. While no systematic theoretical banking states. framework provides a basis for analyzing 2. Concentration in standard metropolitan sta­ statewide banking structure, recent institutional tistical areas (SMSAs) was higher in statewidechanges and empirical evidence suggest that cer­ branching and limited-branching states than in tain facets of state banking structure will influ­ unit-banking states. ence bank conduct and performance. Moreover, 3. For both states and SMSAs, concentration since the operations of most banks are, to a large was higher within unit-banking and limitedextent, limited to a single state, the state may be branching states where the level of multibank an appropriate area for considering the issue of holding company activity was high. undue or aggregate concentration. 4. More banking organizations were located in This paper examines the levels and trends in unit-banking than in limited-branching states, state banking structure and analyzes statewide and more in limited-branching than in statewidebanking performance during the 1970s. The data branching states. are used in statistical tests to determine the 5. Multimarket links were relatively numerous relationship, if any, between (1) state banking in states with liberal branching laws and in those laws and trends in structure and (2) statewide with a considerable amount of multibank holding banking structure and performance. company activity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

230 Federal Reserve Bulletin □ March 1981 6. Population per banking office was relatively statewide structure and performance is evident. low in states with less restrictive branching laws. In view of these results, the implications of 7. Mergers and acquisitions were higher in statewide banking structure for bank perform­ states with a high degree of multibank holding ance deserve attention, both analytically and company activity than in other states. empirically. Whatever is learned about bank 8. More new bank charters were issued in structure and performance at the state level is states with restrictive branching laws than in likely to be relevant to banking structure at the other states. national level should interstate banking become Furthermore, a statistical relationship between prevalent. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

231 Industrial Production Released for publication March 17 Production of materials declined 0.3 percent in February. Output of durable goods materials was Industrial production declined an estimated 0.5 reduced 0.9 percent, after large increases in percent in February, after successively smaller earlier months; production of these materials monthly increases since October 1980. A rise of remained almost 4 percent less than that of a year 0.4 percent is now estimated for January (the earlier. Output of nondurable materials edged initial estimate of the advance, published last down slightly. Production of energy materials month, was 0.6 percent). In February, declines increased 0.8 percent, reflecting a surge in coal occurred in most major components of the index, output. with large decreases in durable goods for home Seasonally adjusted, ratio scale, 1967= 100 and construction supplies. At 150.8 percent of the 1967 average, the index was fractionally below the level of December 1980 and about 1 percent below that of a year earlier. Output of consumer goods declined 0.6 per­ cent in February; the reduction was limited by a moderate increase in automotive products as auto assemblies increased nearly ll/2 percent to an annual rate of 5.8 million units from the very low rate in January. Production of home goods declined sharply, and output of consumer nondu­ rable goods, such as clothing and consumer staples, was reduced moderately. Production of business equipment edged down in February; a sharp rise in building and mining equipment was offset by a drop of more than 3 percent in transit equipment and small declines in other compo­ nents. Output of construction supplies fell sharp­ ly, 2.6 percent, after an average rise of 1.5 Federal Reserve indexes, seasonally adjusted. Latest figures: Febru­ percent in each of the three preceding months. ary. Auto sales and stocks include imports. 1967 = 100 Percentage change from preceding month Percentage change Grouping 1981 1980 1981 Feb. 1980 to Feb. 1981 Jan.p Feb.6 Oct. Nov. Dec. Jan. Feb. Total industrial production............. 151.5 150.8 1.9 1.7 1.0 .4 -.5 -1.2 Products, total................................... 150.1 149.1 1.3 1.0 .8 .1 -.7 -.7 Final products................................. 148.3 147.6 1.3 1.2 .5 .1 -.5 -.1 Consumer goods........................ 147.4 146.5 1.6 1.0 -.2 -.2 -.6 -1.3 Durable ................................... 138.3 137.1 5.2 2.4 -1.3 -2.0 -.9 -5.1 Nondurable............................ 151.0 150.2 .3 .5 .2 .4 -.5 .1 Business equipment.................. 178.3 177.7 1.1 1.3 1.7 .5 -.3 1.0 Defense and space.................... 101.0 101.2 1.1 1.3 .9 .3 .2 4.1 Intermediate products.................. 156.9 154.7 1.2 .7 1.7 .5 -1.4 -2.8 Construction supplies............. 146.9 143.1 2.3 1.6 1.3 1.5 -2.6 -7.0 Materials.............................................. 153.8 153.3 2.8 2.8 1.3 .9 -.3 -2.0 p Preliminary. e Estimated. Note. Indexes are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

233 Statements to Congress Statement by Henry C. Wallich, Member, Board a broad range of domestic industries and firms. of Governors of the Federal Reserve System, Second, we are not faced with a crisis in our before the Subcommittee on International Fi­ trade position or an overall deterioration in inter­ nance and Monetary Policy of the Committee on national competitiveness, although particular in­ Banking, Housing, and Urban Affairs, U.S. Sen­ dustries certainly face strong foreign competi­ ate, February 17, 1981. tion. Our present position enables us to address issues of export policy from the perspective of I am pleased to testify on S. 144, a bill that would our long-term policy goals rather than as a reac­ facilitate the establishment and operation of ex­ tion to a crisis situation. In that context, I believe port trading companies. that a number of government policies could be When I submitted a statement on export trad­ amended in ways that would contribute material­ ing companies on behalf of the Board about 10 ly to the exploitation of export opportunities by months ago, the United States had experienced the private sector. Among impediments to our one of the largest quarterly trade deficits in our exports that have been cited are environmental history. At the time, this deficit was a cause of regulations, the absence of clear guidelines under some concern and comment, even though it was the Foreign Corrupt Practices Act, and require­ recognized as a temporary bulge associated with ments that certain U.S. exports be shipped in the sharp rise in the price of imported oil. Since American vessels. that time, our exports have remained strong, and The export trading company concept, properly as growth of imports has slowed, our trade circumscribed to avoid undue exposure of do­ deficit has moderated considerably—by about $3 mestic banks, could also be useful in developing billion in 1980 despite an increase of $20 billion in our export capacity. The bill under consider­ oil imports. And although we still have a sizable ation, however, has provisions relating to bank trade deficit—as do nearly all oil-importing coun­ ownership of export trading companies that the tries—unlike most other industrial countries, we Board finds troublesome. My statement will be have the benefit of large and rising net receipts confined to issues involving bank ownership. on investment income and other nontrade trans­ Our concern has been over the degree of bank actions, which more than outweigh our trade ownership and participation in management of deficit. In sum, the United States is one of the trading companies that can prudently be permit­ few industrial countries at this time with a sur­ ted, in light of the wide range of activities in plus on current account—goods, services (in­ which trading companies have traditionally en­ cluding investment income), and transfers. Our gaged. The Board believes its concerns would be position stands in sharp contrast with that of met by generally limiting banks to noncontrolling continental European countries and Japan, all of investments in trading companies. By contrast, which are recording deficits on current account. S. 144 would permit banks to make controlling Recognition of the underlying strength of the investments and to engage actively in the man­ U.S. external position evidenced by this current- agement of trading companies and would place account surplus has been one factor contributing on bank supervisory agencies the responsibility to the recent strength of the dollar in foreign for developing regulations for bank-owned trad­ exchange markets. ing companies that would hold down the risks to In providing this background, I mean to em­ banks to acceptable levels. phasize two points. First, it is important for the The issue of bank control of trading companies United States to continue to have a strong and goes to the heart of issues that have been long­ expanding export sector—one that encompasses standing in legislation and policy. The separation Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

234 Federal Reserve Bulletin □ March 1981 of banking and commerce has served this nation under the Bank Holding Company Act. In par­ well in promoting economic competition and a ticular, trading companies are likely to be highly strong banking system. A breach of that tradi­ leveraged; moreover, as commercial concerns tional separation in the case of trading companies they would operate outside the traditional finan­ could be an important precedent for other areas. cial areas where banks have developed exper­ This would adversely affect not only the safety tise. and soundness of our banks but also their role as The risks to banks from this exposure would impartial arbiters of credit. be especially large if particular banks became Control of an enterprise often implies a com­ identified with, and had a significant manage­ mitment by a bank to place its full resources ment interest in, trading companies. The bill behind the subsidiary. This is a generally accept­ provides that the name of a trading company ed corporate policy, and it is recognized in the shall not be similar to that of an investing bank. marketplace. Although a banking organization This precaution would help insulate the bank may judge that it can operate an international from the risks that attach to the operation of commercial banking business more efficiently trading companies, so long as the bank was and safely through controlling investments in similarly insulated from participation in manage­ affiliates, we believe that bank control and in­ ment and the ownership interest of the bank was volvement in management of nonfinancial affili­ relatively small. Otherwise, the market would ates would increase the potential financial risk to soon recognize the reality of control by the bank the owning banks, as I will detail later. For this and would associate the trading company with reason, the Board has recommended that, as a the bank regardless of differences in names. rule, bank ownership interest be limited to less Losses that might result from failure of trading than 20 percent of the stock of an export trading companies could be large, especially with high company. leveraging. One need not anticipate a loss as At the level of ownership interest of 20 per­ large as that experienced several years ago by a cent, a bank can include in its earnings a propor­ major Japanese bank—about $500 million—to tionate share of the earnings of a trading com­ recognize the potential threat to a single institu­ pany. Under this rule of equity accounting, a tion. If such a shock occurred in an uncertain bank may have an incentive to push a trading financial environment, there could develop a company into relatively risky types of operations general distrust of other banks engaged in similar in the hope of realizing immediate gains for the lines of activity and a threat to the banking bank’s earnings. Such risky operations could system as a whole. Thus, the issue of bank increase substantially the possibility that banks involvement with trading companies is related to would sustain losses from operation of trading the potential soundness of the banking system. companies. In the Board’s view it is appropriate The bill before this subcommittee, S. 144, to hold to a minimum the incentives for banks to seeks to limit these risks by providing that con­ seek to aim at short-term profits in trading com­ trolling investments by banks be subject to prior panies in which they hold investments, and we approval by bank supervisors and to certain believe that this result can best be achieved by statutory safeguards. These provisions would setting the level of bank ownership interest at inevitably involve the bank supervisors to a less than 20 percent. At this lower level of substantial degree in decisions regarding oper­ ownership, a bank could take into its earnings ations of export trading companies. Bank super­ only the dividends received from the trading visors are not likely to be able to anticipate all company. future eventualities in acting on applications. This recommendation is more conservative Even with a high level of supervisory effort, than the level of control specified in the Bank there will always be risks that cannot be foreseen Holding Company Act and used in S. 144 be­ because of the broad range of activities of trading cause the risks to banks from investments in companies. trading companies appear potentially much larg­ The detailed supervision of trading companies er than the risks associated with investments in that might be called for under S. 144 would be nonbanking activities that are now permissible contrary to the philosophy adopted by the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 235 in its recent amendments to Regulation K, which specialized purpose—for example, a particular sought to reduce the need for detailed supervi­ project—might require strong bank sponsorship. sory review and regulation of international bank In such a circumstance, the risks associated with operations. I would expect that U.S. export bank control of a trading company might be trading companies would be able to operate outweighed by the beneficial effect for U.S. much more effectively in competing with foreign exports from trading company operations, and companies if they were not subject to supervi­ the public interest might be served by permitting sory restraints arising from the fact that they one or more U.S. banks that have special exper­ were controlled by banks. A U.S. trading com­ tise to acquire ownership interests of more than pany might well have difficulty in competing with 20 percent, provided that the exposure of the foreign trading companies if the U.S. company trading company was reasonable in relation to its were subject to limitations on types of activities activities. I would expect that the number of or to capital ratios because it was controlled by a exceptions would be relatively few and would bank. Yet limitations clearly would be needed if not encompass large general or multipurpose banks owned trading companies. We can best export trading companies that would be capable unleash the entrepreneurial talents of our trading of standing on their own feet without bank spon­ companies if we avoid bank involvement in their sorship. Nor would an exception be available to ownership and management and rely on banks to banking organizations that did not possess the provide financing and related services. requisite expertise. I would stress, as I have on other occasions, In general, it would appear appropriate to that bank capital is a scarce resource. If we structure these exceptional cases so that the expect banks to play their part in financing the investing banking organization is a bank holding increased capital investment needed in this coun­ company rather than a bank. This approach try, we will need to resist the temptation to would be consistent with the general scheme of encourage banks to divert capital from its tradi­ federal banking laws under which nonbanking tional role as a support for lending activity— activities are performed by corporate entities which in my view is the way in which bank separate from banks. capital can be used most productively. If control of trading companies by banks were I recognize that there might be room for a permitted only when there was a clear need, the limited number of exceptions to this general purposes of the bill could be accomplished and at norm. There might, for example, be instances in the same time the banking system would not be which an export trading company designed for a exposed to undue risk. □ Statement by Nancy H. Teeters, Member, Board under the Truth in Lending Act. The bill would of Governors of the Federal Reserve System, also extend the current ban on the imposition of a before the Subcommittee on Consumer Affairs of credit-card surcharge for another three years. the Committee on Banking, Housing, and Urban The Board has testified earlier in favor of Affairs, U.S. Senate, February 18, 1981. omitting these discounts from the finance charge as a way of encouraging them, and I do so again this morning. Also, as I have done previously, I I am pleased to appear before you to present the must express the Board’s uncertainty about the views of the Board of Governors on the proposed wisdom of prohibiting surcharges in view of their “Cash Discount Act.” Unlike the current law, economic similarity to discounts. Their permissi­ the proposal provides that a discount—in what­ bility might in fact help assure that cash custom­ ever amount—that is offered by a seller to a ers are not forced to subsidize credit-card users. customer to induce payment by cash, check, or In our view, it is time to take a fresh look at the means other than an open-end credit plan or cash discount issue. During the six years since credit card is not a disclosable finance charge the Truth in Lending Act was first amended to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

236 Federal Reserve Bulletin □ March 1981 encourage the offering of cash discounts, the tive buyers”? Those who present credit cards, or Congress has repeatedly considered the dis- all those who enter the merchant’s door? What count-surcharge issue. Testimony has been de­ signs meet the test of “clear and conspicuous” livered at length. The Federal Reserve, mean­ disclosure when there are several store en­ while, has carefully constructed regulations to trances and numerous independent cash regis­ carry out the statutory provisions regarding ters? How do you disclose to customers who availability and notice to consumers of dis­ purchase by phone? May the discount be limited counts. Despite these congressional and regula­ to certain types of property? How about to tory efforts, we have not seen merchants offering certain branches of stores? We have sought to discounts—at least not to any appreciable de­ provide answers to these questions in our regula­ gree. If we believe that encouraging merchants to tions. reward cash buyers is a goal worthy of diligent Unfortunately, by issuing rules beyond the pursuit, then we must try to identify the impedi­ basic provision we have again probably made ments that have, in fact, discouraged the con­ simple things so complicated that the public cept. throws up its hands in frustration. Although in Our guess is that the current limit of 5 percent our current proposals to simplify Regulation Z on the size of the discount is not the culprit. we have proposed trimming back these regula­ Rather, it may, once again, be a case of govern­ tions, the obvious way for any merchant to avoid ment regulation creating part of the problem— regulatory burden is simply not to offer dis­ regulation that is grounded on a set of well- counts. And that, apparently, is what has hap­ intentioned arguments, but that introduces such pened. friction into otherwise simple transactions that I therefore would recommend for subcommit­ compliance is simply not worth the merchant’s tee consideration a very simple rule: that one­ risk or effort. time discounts or surcharges offered by the seller If this analysis is correct, two features in the for the purpose of inducing payment by cash, current regulation are probably most significant check, or means other than use of an open-end in discouraging the development of cash-paying credit-card plan shall not constitute a finance incentive plans. First is the obvious difficulty in charge and that the availability of the discount or drawing a clear economic distinction between a surcharge be disclosed to customers. This rule permitted discount and a prohibited surcharge. would leave out the specific requirement that Discounts and surcharges may not be as identical “all” customers be notified and that any disclo­ in practice as, say, a half-empty glass of water is sure be “clear and conspicuous”—not because to a half-full one. Nevertheless, it is difficult to we favor hidden plans but because of the uncer­ quarrel with the fact that the distinction is, at tainties this standard produces with the inevita­ best, uncertain. ble need for clarification. If a seller wants to impose a surcharge, it could Of course, it is possible that authorizing dis­ probably be done without running afoul of the counts and surcharges without calling them fi­ surcharge prohibition. The seller could simply nance charges opens up a potential loophole in raise the price of an item by the amount the seller the blanket embrace of Truth in Lending. Not wants to impose as a surcharge, making this new only are discounts essentially equivalent to sur­ price the “regular price,” and then offer a lower charges but both are essentially equivalent to price to cash customers as a permitted discount. finance charges. They do represent a cost of Second, the well-intentioned protections in the using credit. statute to insure equitable treatment of consum­ Therefore, if we are right that the 5 percent ers once again have led to seemingly complicated limit has not itself been the impediment to mer­ regulatory provisions. The current statute and chants offering discounts, this limit might be re­ the proposed bill specify that any discount must tained to insure that the exclusion of dis­ be offered to “all prospective buyers.” Its avail­ counts and surcharges does not become a vehicle ability must be disclosed to all of them “clearly that could be used to defeat the basic Truth and conspicuously in accordance with regula­ in Lending protections. In our view, the best tions of the Board.” But who are “all prospec­ chance of accomplishing the goals the Congress Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 237 began pursuing six years ago would be to retain tus of the civil liability provisions. The statute this limit, but to allow discounts and surcharges gives creditors the option of complying with the to be used with minimal further government new rules beginning on April 1, 1981, or waiting interference. until April 1, 1982, when compliance becomes Attached to my statement is an appendix dis­ mandatory. However, uncertainty has arisen as cussing certain technical problems that our staff to whether creditors are protected by the new has identified with the current language of the civil liability provisions of the statute if they elect bill.1 Although I have not referred to these issues to follow the new rules before April 1, 1982. Title in my testimony, we would of course be happy to III makes it clear that the civil liability provisions answer any questions you may have on these take effect this April. points. Without such protection, creditors will not With regard to title III, the technical amend­ have the incentive they otherwise would have to ment to the Truth in Lending Act, I have no comply with the new regulations at an early date. hesitation in recommending adoption. In the This outcome would seem to be contrary to what course of our efforts to revise and simplify Regu­ we believe was the intent of the Congress. Both lation Z to conform with the Truth in Lending consumers and creditors will benefit from the Simplification and Reform Act of 1980, we have new and simpler disclosure scheme. It would be received numerous questions regarding the sta- unfortunate if a technical problem turned out to be an impediment to voluntary early compliance with the new provisions during the transition 1. The appendix to this statement is available on request year. Thus, we wholeheartedly support this por­ from Publications Services, Board of Governors of the Feder­ al Reserve System, Washington, D.C. 20551. tion of the bill. □ Statement by Paul A. Volcker, Chairman, Board for the year as a whole, considerable volatility of Governors of the Federal Reserve System, occurred from month to month or quarter to before the Committee on Banking, Housing, and quarter. Moreover, interest rates moved through Urban Affairs, U.S. Senate, February 25, 1981. a sharp cycle and had considerable instability over shorter time spans. I am pleased to be here to discuss with you the In the light of these developments, I initiated Monetary Policy Report of the Board of Gover­ in September a detailed study by Federal Re­ nors that reviews economic and financial devel­ serve staff of the operating techniques adopted opments over the past year and sets forth appro­ by the Federal Open Market Committee in Octo­ priate ranges for growth of money and credit for ber 1979, looking, among other things, to the 1981.1 Because I have already reviewed recent question of whether the particular techniques we developments with the committee, my emphasis employed contributed importantly to the ob­ this morning will be on the present and future served volatility. Those techniques place empha­ concerns of monetary policy. In that connection, sis in the short run on following a path of I would like to touch first on some more techni­ nonborrowed reserves. cal considerations of Federal Reserve operating The study drew upon the substantial body of techniques. staff expertise both at the Board of Governors As you well know, 1980 was a tumultuous year and at the regional Federal Reserve Banks, thus for the economy and financial markets. While providing a variety of viewpoints and analytic most measures of the monetary and credit aggre­ approaches. The Federal Open Market Commit­ gates grew at or very close to our target ranges tee (FOMC) has had some discussion of the findings, and we are now at a point at which the work can be made available to interested outside experts. To assure full review, Board staff will be 1. See “Monetary Policy Report to Congress,” pp. 195-208 of this Bulletin. arranging “seminars,” as appropriate, with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

238 Federal Reserve Bulletin □ March 1981 economists having a close interest in these mat­ 3. Pursuing the closest possible short-run con­ ters. trol of the money supply by any technique entails Among the important questions at issue is a willingness to tolerate large changes over short whether alternative techniques would promise periods of time in short-term interest rates— significantly better short-run control over the greater than were experienced in 1980. The tech­ monetary and credit aggregates and whether nique actually employed, as expected, contribut­ such techniques would imply more interest rate ed to more day-to-day or week-to-week volatility instability. We also examined again the signifi­ than earlier procedures, but presumably not so cance for the economy and for basic policy much as other, more rigid reserve targeting ap­ objectives of monthly, quarterly, or longer devi­ proaches. Experience in 1980 also strongly sug­ ations of monetary growth from established tar­ gested that short-run changes in money market get ranges. rates became more highly correlated with fluctu­ For the convenience of the committee and ations in long-term interest rates, which may be others, I have listed in this text some of the of more significance to investment and financial technical findings that may be of more general planning. The degree to which that closer associ­ interest. ation reflected uncertainty and a learning process 1. The work confirms that the week-to-week unique to 1980 or is inherent in reserve-based money supply figures are subject to a consider­ targeting cannot be determined at this time. able amount of statistical “noise”—unpredict­ 4. Interest rate instability associated with the able short-run variations related to the inherent new techniques per se is extremely difficult to difficulty of computing reliable weekly seasonal distinguish from other sources of interest rate adjustment factors and other random distur­ fluctuation. However, the major swings in inter­ bances. One analysis suggests that the random est rates during the year—historic peaks in early element in the weekly M-l data, as first pub­ 1980, the sharp drop in the spring, and the return lished, is about $3 billion, plus or minus. While to historical highs—can be traced to disturbances those variations average out over time, they in the economy itself, to the imposition and could amount to $1V billion on a monthly aver­ removal of credit controls, to the budgetary 2 age basis, equivalent to a change of 4V2 percent situation, and to shifting inflationary expecta­ at an annual rate. tions. Indeed, while much compressed in time, 2. No clear evidence was found that, in the the broad interest rate fluctuations were, in rela­ present institutional setting, alternative ap­ tive magnitude, not out of keeping with earlier proaches to reserve (or monetary base) targeting cyclical experience. would increase the precision of monetary con­ 5. Money supply fluctuations last year over trol. Indeed, in current circumstances, some periods of a quarter or so were probably larger other approaches would appear to result in less than might have been expected on the basis of precision in the short run. Perhaps more signifi­ econometric analysis of reserve control tech­ cant, the linkage between any reserve measure niques. The inference from the study is that the and money in the short run was loose; economet­ credit control program and other external ric tests seem to suggest that, even assuming “shocks” could have been responsible. At the absolute precision in meeting a reserve target same time, the evidence is that the quarterly (which is not in fact possible), monthly M-l deviations in money growth from the trend for measures would be expected to deviate from the the year did not have an important influence on target by more than 8 to 10 percent, plus or economic activity. If money growth had some­ minus (at an annual rate), one-third of the time. how been held constant, short-run interest rate Those deviations should tend to average out over variability would have been still larger. time, so that much closer control could be In analyzing the results of the study and given achieved over a period of three to six months, the basic intent to control monetary and credit assuming no constraints on operations from in­ growth within target ranges over a period of terest rates or other factors. Those econometric time, the FOMC continues to believe present results are consistent with the actual experience operating techniques are broadly appropriate. of 1980. Assuming the present institutional structure, al­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 239 ternative reserve control approaches do not ap­ on other public policies and private attitudes and pear to promise more short-term precision. We behavior. do, however, have under consideration possible Abstracting from the impact of shifts into modifications and improvements. Without going negotiable order of withdrawal (NOW) accounts into technical detail, such matters as more fre­ and other interest-bearing transaction accounts, quent adjustment of the discount rate, more growth ranges for the narrower monetary aggre­ forceful adjustments in the “path” for nonbor­ gates—M-l A and M-1B—have been reduced by rowed reserves when the money supply is “off V2 percent to 3-5 V2 percent and 3V2-6 percent course,” and a return to contemporaneous re­ respectively. Growth last year from the fourth serve accounting are being actively reviewed. In quarter 1979 average to the fourth quarter 1980 each case, the possible advantages in terms of average (when adjusted for shifts into NOW closer control of the monetary aggregates need to accounts) approximated 6!/4 percent and 6% per­ be weighed against other considerations, includ­ cent, just about at the top of the target range.2 ing contributing to unnecessary short-run volatil­ Consequently, the new target ranges imply a ity of interest rates. significant reduction in the monetary growth As a personal observation, I would emphasize rates. that swings in the money and credit aggregates The FOMC did not change the targets for M-2 over a month, a quarter, or even longer should or M-3. In the case of M-2, the upper end of the not be disturbing (and indeed may in some situa­ range was exceeded by about 3/4 percent in 1980, tions be desirable), provided there is understand­ and M-2, which includes new forms of marketing and confidence in our intentions over more rate savings instruments and the popular money significant periods of time. A major part of the market mutual funds, has shown some recent rationale of present, or other reserve-based, tendency to grow more rapidly relative to the techniques is to assure better monetary control narrow aggregates. In the past few years, growth over time. I believe, but cannot “prove,” that of M-2 has been much closer to the growth of the money supply in 1980 was held under closer nominal GNP than has growth of M-l. Should control than if our operating emphasis had re­ those conditions prevail in 1981, actual results mained on interest rates. I hope 1980 was in­ may well lie in the upper part of the range structive in demonstrating that we do take the indicated. M-3, which includes instruments such targets seriously, as a means both of communi­ as certificates of deposit used by banks to fi­ cating our intentions to the public and of disci­ nance marginal loan growth, is influenced, as is plining ourselves. bank credit itself, by the amount of financing In that light, I would like to turn to the targets channeled through the banking system as op­ for 1981. Those targets were set with the inten­ posed to the open market. Changes in those tion of achieving further reduction in the growth aggregates must be assessed in that light. of money and credit—returning such growth I must emphasize that both M-l series, as over time to amounts consistent with the capaci­ actually reported, are currently distorted by the ty of the economy to grow at stable prices. shift into interest-bearing transaction accounts. Against the background of the strong inflationary Those shifts were particularly large in January, momentum in the economy, the targets are frankly when for the first time depository institutions in designed to be restrictive. They do imply restraint all parts of the country were permitted to offer on the potential growth of the nominal gross na­ such accounts. As the year progresses, we antici­ tional product. If inflation continues unabated or pate that the distortion will diminish as has rises, real activity is likely to be squeezed. As already been the case in February. However, inflation begins noticeably to abate, the stage will be set for stronger real growth. Monetary policy is, 2. Growth, as statistically recorded, was 5 percent for M-l A in 1980 and 7l/4 percent for M-1B. Available evidence of course, designed to encourage that disinflation­ suggests that about two-thirds of the transfer into interestary process. But the success of the policy and the bearing checking accounts in 1980 reflected shifts from extent to which it can be achieved without great M-l A, “artificially” depressing M-l A, and about one-third reflected shifts from savings or other accounts, “artificially” pressure on interest rates and stress on financial raising M-1B. The data and the targets cited are calculated as markets, already heavily strained, will also depend if such shifts did not take place. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

240 Federal Reserve Bulletin □ March 1981 any estimate of the shifts into NOW-type ac­ until we do so prospects for strong and sustained counts for 1981 as a whole and the source of economic growth will remain dim. In that con­ those funds must be tentative. nection, forecasts by both the administration and Survey results and other data available to us members of the FOMC anticipate continuing suggest that perhaps 80 percent of the initial economic difficulties and high inflation during shifts during January into NOW and related 1981. accounts were from demand deposits included in I have emphasized on a number of occasions M-1A, thus “artificially” depressing that statis­ that we now have a rare opportunity to deal with tic. The remaining 20 percent was apparently our economic malaise in a forceful, coordinated shifted from savings accounts (or other invest­ way. As things stand, the tax burden is rising; ment instruments), ‘4 artificially ’ ’ increasing yet, in principle the need for tax reduction—tax M-1B. More recent data suggest that the propor­ reduction aimed to the maximum extent at incen­ tion shifting from demand deposits, while still tives to invest, to save, and to work—has come preponderant, may be slowly falling. Making to be widely recognized. Regulatory and other allowance for these shifts, M-l A and M-1B government policies have tended to increase through mid-February of this year have remained costs excessively and damage the flexibility of near the average level of December. At intervals the economy; but realization of the need to we plan to publish further estimates of the shifts redress the balance of costs and benefits is now in accounts and their implications for assessing widespread. Despite efforts to cut back from actual growth relative to the targets. But I cannot time to time, government spending has gained a emphasize too strongly the need for caution in momentum of its own; now, the possibility of interpreting published data over the next few attacking the problem head on presents itself. months. We are all conscious of the high levels of interest Once these shifts are largely completed, we rates and strains in our financial system; yet, plan publication of a single M-l series. In that there is widespread understanding of the need for connection, I must note that the behavior of an monetary restraint. M-l series containing a large element of interest- The new administration is clearly aware of bearing deposits, with characteristics of savings these realities and has set forth a program of as well as transaction accounts, is likely to alter action. It has seized the initiative in moving from relationships between M-l and other economic opportunity to practical policy. variables. For that and other reasons, the signifi­ I know that the case is sometimes made that cance of trends in any monetary aggregate even monetary policy alone can deal with the inflation over long periods of time must be analyzed side of the equation. But not in the real world— carefully, and, if necessary, appropriate adjust­ not if other policies pull in other directions, ments in targets must be made. feeding inflationary expectations, propelling the Those technical considerations should not ob­ cost and wage structure upward, and placing scure the basic thrust of our policy posture. Our enormous burdens on financial markets with intent is not to accommodate inflationary forces; large budgetary deficits into the indefinite future. rather, we mean to exert continuing restraint on That is why it seems to me so critical—if growth in money and credit to squeeze out monetary policy is to do its job without unduly inflationary pressures. That posture should be straining the financial fabric—that the federal reflected in further deceleration in the monetary budget be brought into balance at the earliest aggregates in the years ahead and is an essential practical time. That objective cannot be achieved ingredient in any effective policy to restore price in a sluggish economy. Moreover, tax reduc­ stability. tion—emphasizing incentives—is important to During 1980 despite the pressures arising from help lay the base for renewed growth and pro­ sharply higher oil prices and the strong momen­ ductivity. For those reasons, the linchpin of any tum of large wage settlements and other factors, effective economic program today seems to me inflation did not increase. But the hard fact is early, and by past standards massive, progress in that we, as a nation, have not yet decisively cutting back the upward surge of expenditures, turned back the tide of inflation. In my judgment, on and off budget. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 241 We know the crucial importance of restraint combine that monetary restraint with spending on money and credit growth. When I am asked control. about the need for consistency among all the Cutting spending may appear to be the most elements of economic policy—a policy that can painful part of the job—but I am convinced that effectively deal with inflation and lay the ground­ the pain for all of us will ultimately be much work for growth—I must emphasize the need to greater if such cutting is not accomplished. □ Chairman Volcker gave a similar statement before the House Committee on Banking, Fi­ nance and Urban Affairs, February 26, 1981. Statement by J. Charles Partee, Member, Board beginning, however, we have faced the insolvof Governors of the Federal Reserve System, able problem that, because of the complexity and before the Subcommittee on Telecommunica­ flexibility of financial arrangements made outside tions, Consumer Protection and Finance of the the United States, it would be quite impossible to Committee on Energy and Commerce, U.S. monitor this source of credit with anything like House of Representatives, February 26, 1981. the same effectiveness expected of domestic margin regulation. I appreciate the opportunity to appear before this A prior attempt by the Board to regulate in the committee to discuss H.R. 1294, a bill to extend area of foreign securities credit transactions may margin credit regulations to the acquisition of serve to clarify some of the problems encoun­ U.S. corporations by foreign persons using cred­ tered, which still appear relevant in the context it obtained from foreign lenders, as well as of the proposed legislation. House Concurrent Resolution 59, which calls for In 1963 a special study of the securities mar­ a study by the Securities and Exchange Commis­ kets pointed to the problems created by the sion (SEC) and the Department of Commerce on availability of credit from foreign sources. The the effects of such foreign acquisitions on our study found that foreign credit sources were economy. significant sources of funds for large purchases of It is my understanding that H.R. 1294 and its securities. Prompted by the findings of this companion bill in the Senate, S. 289, would make study, the Board subsequently took the position it unlawful for a foreign lender to extend credit that when credit is used in connection with a and for a foreign national to obtain credit in securities purchase effected on a domestic ex­ excess of the margin requirements of the Federal change, or that otherwise had its impact in this Reserve Board when that credit would finance country, then that credit came within the pur­ certain acquisitions of U.S. securities. view of the Board’s responsibilities, and persons The Board recognizes that the purpose of H.R. subject to U.S. jurisdiction could be prohibited 1294 is to provide for equity between domestic from acting on behalf of the parties. The Board, and foreign interests in the area of corporate realizing that it was nearly impossible for a acquisition financing. But our experience in mar­ securities transaction originating abroad to be gin regulation leads us to the view that the executed in the United States without the help of proposed legislation would create many prob­ a domestic agent, proposed to amend its margin lems and that its costs would probably be well in regulations to forbid persons already subject to excess of its benefits. these regulations to perform services connected At the outset, I would like to point out that the with any credit associated with the transaction Board has been concerned with the possibilities unless the loan was in conformity with the appli­ for circumventing the margin regulations through cable margin requirements. The Board stated extensions of credit abroad ever since the regula­ that the so-called agency proposals were directed tions were first imposed in the 1930s. From the against excessive credit flowing into the securi­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

242 Federal Reserve Bulletin □ March 1981 ties markets in circumvention of the other provi­ borrower or his agent, where enforcement sanc­ sions of section 7 of the Exchange Act. tions were available. Adverse public comment on this proposal gen­ Our experience indicates to us that the benefits erally reflected strong representations that the derived from any wider reach of the margin rules application of credit regulations to foreign banks would not be justified by the costs. I see these could violate international law. Commentators costs as difficult and controversial enforcement feared that the proposed rule would be viewed issues, antagonism from foreign financial institu­ abroad by foreign financial institutions as an tions and governments, and, quite possibly, the unacceptable intrusion into their affairs and an retaliatory imposition abroad of new barriers to attempt by the Board to extend its influence and the free flow of capital, jurisdiction beyond the borders of the United I realize that corporate takeovers, both friend­ States. ly and unfriendly, often generate much notoriety Still another objection to the proposed agency and controversy. All takeovers, however, should provision was the difficulty in its application to not be viewed in a negative light. In fact, such the foreign financial community and the lack of acquisitions by foreign or domestic interests are any capability for insuring effective enforcement often welcomed by financially troubled Ameri­ abroad. Critics stated that a foreign bank could can corporations and can serve the important not comply with a regulation having no force of economic purpose of revitalizing inefficient law in its own country, without establishing firms. costly controls and procedural followups as a Even if it were determined that foreign take­ voluntary matter. The expectation that foreign overs were undesirable as a matter of public banks would do this and continue to uphold such policy, I believe that the imposition of margin procedures years after they were instituted was requirements on foreign credit transactions thought to be unrealistic, in the absence of any would not be the most effective vehicle in pre­ domestic supervisory authority. This is a rel­ venting such corporate activity. evant concern with respect to H.R. 1294 because First, the proposed legislation would not reach the Board’s margin rules apply not only when corporate takeovers in which credit is not used. credit is initially extended, that is, when the 13D Acquisitions financed with corporate earnings or or 14D filings are made, but throughout the life of through an exchange of shares are not subject to the loan. the margin regulations and would therefore re­ In 1968 these considerations caused the Board main unaffected. Also, a substantial foreign firm to modify its agency proposals to permit domes­ could usually assemble sufficient collateral or tic banks to act as agents for foreign banks in borrow on an unsecured basis to meet the rules, certain circumstances. The changed proposal at least for the time it would take to file and represented an important shift of position, away process the required 13D or 14D statement and from the attempt to control the flow of all foreign for the acquisition to be consummated. credit into the domestic securities markets to the Second, the proposed legislation would apply more limited objective of preserving the integrity to all acquisitions of 5 percent or more of compa­ of the Board’s margin regulations by preventing nies subject to registration under section 12—a evasions on the part of U.S. persons resulting percentage of ownership that does not necessar­ from the use of foreign credit sources. ily indicate that the acquirer intends to control This more limited objective was finally the corporation whose stock it purchases. In achieved when, in 1971, Regulation X was pro­ fact, such acquisitions often are made for invest­ mulgated by the Board with the stated purpose of ment purposes only, with no view to ultimate “preventing the infusion of unregulated credit corporate change. into U.S. securities markets.” The new regula­ Finally, the proposed legislation would apply tion was limited to U.S. borrowers and foreign only to acquisitions of corporations subject to nationals who were controlled by or otherwise registration under section 12 of the Securities acting on behalf of U.S. residents, and it shifted Exchange Act of 1934, and not to many impor­ focus from the foreign credit source—over which tant U.S. corporations that are closely held or our jurisdiction was questionable—to the U.S. otherwise are exempted from SEC coverage. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 243 You have also asked for Board comment on possible benefit, or possible damage, of the Concurrent Resolution 59, with respect to the change in ownership and management. Such a type of information that would throw light on the survey could provide a valuable supplement to impact on the U.S. economy and on U.S. securi­ the quantitative material that is already avail­ ties markets of the acquisition of U.S. companies able. The early history of foreign investment in by foreign nationals. Adequate statistical infor­ the United States shows many examples of for­ mation is available on such acquisitions; we have eign initiative here that significantly influenced just had the first results of a new annual reporting our own economic development; and even system developed by the Commerce Depart­ though the United States became the predomi­ ment, which provides a wealth of data on the nant exporter of industrial capital many years acquisitions made by foreigners in 1979. More­ ago, ample room still exists for us to benefit from over, data have been collected for many years in healthy injections of investment and ideas origi­ connection with the preparation of the U.S. nating elsewhere. international accounts. I would doubt, therefore, On the question of the effects on U.S. securi­ that anything more needs to be done along those ties markets, we at the Board are not aware of lines. any generalized adverse impacts from the acqui­ There are limits, however, to what can be sition activities of foreign investors. Last year learned from data stemming mainly from corpo­ there was unusually active foreign interest in rate accounts—balance sheets, profit and loss U.S. equity markets, with gross foreign pur­ statements, and related records. Such informa­ chases of U.S. stocks near $40 billion and net tion is extremely helpful in portraying the share purchases of about $5 billion. In fact, however, of various aspects of the U.S. economy—pro­ this activity is generally welcomed as a sign of duction, employment, earnings, and so forth—in the overall attractiveness of the U.S. economy. which foreign-owned U.S. firms, both old and Such purchases tend to make it easier for all U.S. new, participate. But the question of economic corporations to obtain equity financing in the impact on the economy is considerably broader market. and goes beyond such quantitative measure­ A remote possibility exists that specific foreign ments. Our national interest is concerned primar­ purchases aimed at acquiring substantial inter­ ily with finding ways to make the economy work ests in U.S. companies might disturb some sec­ more efficiently; to be more innovative in techni­ tor of the market, but it should be recognized cal and managerial techniques; and to reach into that any conceivable activity would still account areas of industry or commerce that are falling for only a tiny share of total transactions in our behind economically but may be revived with an markets. We are not aware of policies in foreign infusion of new capital, or new management, or countries aimed at stimulating foreign acquisi­ new ideas. When we look at the impact of tions of U.S. firms. Indeed, most countries corporate acquisitions on the U.S. economy, would probably envy the ability of the United whether foreign or domestic, these seem to be States to attract sizable capital inflows, especial­ the most relevant factors. ly in the current environment, in which sharply What this suggests is that it might be useful to higher oil prices have meant that almost all take a look at a cross section of acquisitions and industrial nations are facing large current-acattempt to develop a qualitative evaluation of the count deficits. □ Statement by Paul A. Volcker, Chairman, Board about economic policy. The Ways and Means of Governors of the Federal Reserve System, Committee of course carries the responsibility before the Committee on Ways and Means, U.S. for originating tax legislation and has large House of Representatives, March 3, 1981. spending programs under its immediate purview. The responsibilities of the Federal Reserve lie in I am pleased to be here to discuss with you some the area of monetary policy. Mutual understand­ considerations relevant to your deliberations ing of our purposes and policies seems to me Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

244 Federal Reserve Bulletin □ March 1981 critical to achieving more satisfactory economic are consistent with further reduction in the performance and to the success of the program growth of money and credit this year. Against outlined by the President. the background of the strong inflationary mo­ The economy entered 1981 on an upward mentum in the economy, the targets are frankly trajectory, extending the recovery in activity designed to be restrictive, as they must be if we from last year’s brief but sharp recession. Janu­ are to look toward a winding down of the infla­ ary saw further gains in retail sales, employment, tionary process. And, while we only look a year and industrial production and—despite high in­ ahead in setting out specific growth ranges for terest rates—continued stability in housing the various money and credit aggregates, further starts. On the whole, the demand for goods and reductions will be necessary in the years ahead services has continued to prove more buoyant to return monetary growth to amounts consistent than most analysts had expected. with the capacity of the economy to grow at However, as we all know, unemployment and stable prices. inflation remain at unacceptably high levels. The narrow money aggregates, M-l A and There have been strong pressures in financial M-1B, are currently distorted by rapid institu­ markets. Moreover, as things stand, the outlook tional change—the introduction of negotiable or­ is far from satisfactory. In particular, it is clear der of withdrawal (NOW) accounts and other that we will be unable to have sustained econom­ interest-bearing transaction accounts nation­ ic expansion unless we are successful in bringing wide. Abstracting from the impact of shifts into inflation down. Monetary policy is and will re­ those accounts, our intentions are reflected in a main directed toward that priority objective. reduction of targeted growth ranges by V2 per­ But, in my judgment, to continue to rely on cent (to 3 to 5V2 percent and 3l/2 to 6 percent) for monetary and credit restraint almost alone to M-l A and M-1B respectively. Growth last year deal with inflation would pose large and unneces­ from the fourth-quarter-1979 average to the sary risks—risks of financial strains and of exces­ fourth-quarter-1980 average (when adjusted for sive costs in terms of growth and investment. shifts into NOW accounts) approximated 6V4 Last year, monetary restraint was the key percent and 6% percent, just over the top of the factor in keeping inflation from accelerating in target range.1 Consequently, the new target the face of rising oil prices and other factors. ranges imply a significant reduction in the mone­ Important as it was, that “holding action” was tary growth rates. accomplished only at the expense of historically The Federal Open Market Committee did not high interest rates, impinging strongly on some change the targets for the broader M-2 or M-3 areas of the economy and on investment general­ aggregates, which include various types of sav­ ly. In these circumstances, the monetary re­ ings and time deposit accounts. The relationship straint essential to deal with inflation urgently between M-2, M-3, and the narrower aggregates needs to be combined with other effective ac­ has changed over recent years and this year’s tions to relieve pressures on financial markets, to targets are consistent with further restraint reduce costs, to spur investment and productiv­ across the entire range of monetary measures. ity, and to encourage risk-taking. In the best of Indeed, because actual growth in 1980 was 3/4 circumstances, it will take time to bring results, and the process of change almost inevitably will 1. Growth, as statistically recorded and published, was 5 involve some pain. But, with the new President percent for M-l A in 1980 and 7V4 percent for M-1B. Available seizing the initiative, I also believe we have a evidence suggests about two-thirds of the transfer into inter­ est-bearing checking accounts in 1980 reflected shifts from virtually unparalleled opportunity to achieve a M-1A, “artificially” depressing M-1A, and about one-third consensus for effective action in a number of reflected shifts from savings or other accounts, “artificially” directions. raising M-1B. The data and the targets cited in the text are calculated as if such shifts did not take place. As you know, I testified last week before the For 1981 the target ranges for growth of M-l A and M-1B banking committees of the House and Senate, before adjustment for these shifts are -4l/2 to -2 percent presenting the intentions of the Federal Reserve and 6 to SV2 percent respectively. See “Monetary Policy with respect to monetary and credit growth for Report to Congress,” pages 195-208 in this Bulletin for a complete discussion of the impact on the 1981 targets of 1981. Without repeating the details, those targets nationwide NOW account growth. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 245 percent or more above the upper end of the feed inflationary expectations, propel the cost indicated range, success in reaching the target and wage structure upward, add unnecessary range in 1981 implies significantly lower growth. regulatory costs, and fail to reduce and in time I cannot emphasize too strongly the need for eliminate deficit financing—then the danger of a care in interpreting the actual data for monetary kind of collision in financial markets between and credit growth as the year progresses. As I public and private borrowers will be intensified. indicated, both M-l series are currently distorted But that risk can be minimized in the short run by the shift into interest-bearing transaction ac­ and the groundwork laid for renewed prosperity counts. As the year progresses, we anticipate the in the 1980s by forceful, coordinated actions. distortion will diminish, and from time to time we Fortunately, there appears to be broad recogni­ will provide estimates of the effects of the shifts tion of the nature and urgency of our problems on the data. But beyond that particular source of and a willingness to bring to bear a new discipline distortion, the data are subject to considerable in fiscal and regulatory policy. volatility from month to month or quarter to To that end, the new administration has set quarter. What counts is the trend over a reason­ forth a sweeping new program of action encom­ able period of time. passing an array of spending cuts and tax reduc­ Those technical considerations should not ob­ tions. There will properly be debate about the scure the basic thrust of our policy posture. Our specific components of that program. Estimates intent is not to accommodate inflationary forces of its precise impact on the economy this year but rather to continue the restraint on growth in and next will vary, just as such estimates would money and credit that is necessary to squeeze be challenged for any program. The simple fact is out inflationary pressures. Whereas there can be that we have not been able to count on any debate about timing and degree, the need for that economic forecasting technique to provide con­ basic discipline is common to virtually all sistently reliable results in recent years in the schools of economic thought and is, of course, face of the virtually unprecedented nature of our recognized in the administration’s program for economic problems, severe energy shocks, and economic recovery. volatile expectations. In these circumstances, I Restraint on monetary expansion does place personally would be cautious in interpreting the broad limits on the potential growth of the nomi­ results of any economic model so far as the nal gross national product—that is, the combined precise timing and magnitude of future economic result of changes in real output and the price developments are concerned. But that does not level. It implies that all the demands for money mean that valid judgments cannot be reached and credit potentially generated by an economy about the general shape, size, and direction of both growing and inflating cannot be met. So needed policy changes. Economic analysis long as inflation continues unabated or rises, real seems to me to point clearly to the following activity is likely to be constrained. But as infla­ conclusions: tion begins noticeably to abate, the stage will be 1. Against the background of the federal tax set for stronger—and sustained—real growth. burden reaching the highest level in our history, Monetary policy is, of course, designed to en­ tax cuts are needed to encourage greater invest­ courage and speed that disinflationary process. ment, productivity, and work effort. But the success of such a policy—particularly 2. At the same time, a continued need to the extent to which it can be pursued without finance huge budgetary deficits in congested great pressure on interest rates and aggravating financial markets into the indefinite future would strains in financial markets—also will depend on threaten the availability of funds to private bor­ other public policies and private attitudes and rowers, including businesses that must under­ behavior. take the needed productive investment as well as I must emphasize the risks and difficulties of to the homebuilding industry and others heavily dealing with inflation entirely by monetary poli­ dependent on borrowed funds. cy—of failing to bring other policies into support 3. In these circumstances, the amount of tax of that objective. If budgetary and other policies reduction that can be prudently undertaken is pull in the opposite direction—if those policies dependent on cutting back the inexorable rise in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

246 Federal Reserve Bulletin □ March 1981 federal spending, on and off budget. The larger I must emphasize that, from the standpoint of the spending cuts, the greater the prospects for general economic policy, all the risks seem to me reducing the strains in financial markets and for on the side of not cutting back the rise in turning back inflation. spending enough. Every dollar of added savings 4. In the best of circumstances, there are can only help head off tensions in financial limits to the amount of revenues that, in the short markets, make room for more private invest­ run, can be foregone as a result of tax cuts. Thus, ment, and provide an appropriate setting for from the standpoint of general economic policy, prudent and needed tax reduction. In that con­ the emphasis in tax reduction should, to the nection, I would remind you that even the specif­ maximum extent feasible, be placed on measures ic cuts proposed by the administration, large as that promise to increase incentives to work, to they are, are only a kind of progress payment invest, and to save. toward what needs to be done to bring the budget 5. At a time when we are fighting inflation, into balance in reasonably prosperous economic other government policies that increase costs, conditions. Further very sizable reductions are inhibit competition, and impair the flexibility of indicated in the program for fiscal 1983 and the market economy need urgent review. Costs beyond. The sooner that process is started, the of regulatory policies must be assessed against better will be the prospects for changing public the benefits. Our markets must be open to com­ attitudes and economic performance. petition from home and abroad to spur innova­ I would like to make one last point before tion and productivity, and government should concluding. The need to reduce inflation as part reexamine policies that tend to place an exces­ of any effective economic program is now widely sively high and rising floor under certain costs recognized, and the Federal Reserve has an and prices. indispensable role to play in that process. How This committee is deeply involved in the cru­ soon our efforts in that direction succeed, and cial fiscal decisionmaking. I know that tax and how soon we can look forward to healthy growth spending cuts, by their very nature, involve and reduced unemployment, will depend in large difficult considerations of fairness as well as measure on how quickly attitudes toward infla­ economic efficiency. It is not appropriate for the tion change in the private sector, and how those Federal Reserve to intrude on the details of that new attitudes are reflected in pricing and wage decisionmaking process. But I would emphasize decisions. one point central to economic policy generally Strong upward momentum in wage contracts and the relationship to monetary policy in par­ and pricing policies will ultimately be inconsis­ ticular. tent with a commitment to monetary and fiscal To me, the linchpin of the whole economic restraint, and inimical to the interests of both the program is early and, by past standards, massive nation and the particular firms and workers in­ progress in cutting back the upward surge of volved. After years of inflation, attitudes and federal expenditures. Those spending cutbacks expectations are not likely to change easily. That are necessary to clear the way for sizable tax is why our commitment to restraint must be reduction and to permit early progress toward strong, visible, and sustained. the goal of a balanced budget. I believe the monetary targets of the Federal I know the difficulties and constraints—the Reserve are consistent with that need. Demon­ need to increase defense spending, to protect the strated progress on the fiscal side is also a truly needy, to pay interest, and to maintain necessary ingredient. And, in the end, we will strength and continuity in other essential pro­ need to see visible progress toward price stabil­ grams. But the budget is huge and has increased ity—an objective that for far too long has eluded by more than a third in real terms over the last us. All of this will inevitably require harsh decade. Surely there is ample room for cutting if choices. But I know of no feasible alternatives. there is the will, and the administration proposals And I am convinced that the difficulties for all of for specific cuts over a broad array of programs us will ultimately be much greater if these point the way. choices are not squarely confronted now. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

247 Announcements Publication of for example—are characterized by comparative­ Capital Formation Study ly high rates of capital formation. Although the most apparent policy tools for influencing saving Since the early seventies, increasing attention and investment are beyond the control of a has been focused on the adequacy of the rate of central bank, the policies of the Federal Reserve capital formation in the United States. To im­ can affect capital formation. prove its understanding of the economic issues The price of the publication is $13.50 a copy. underlying the discussion of capital adequacy, Copies may be obtained from Publications Serv­ the Board of Governors, through its Committee ices, Board of Governors of the Federal Reserve on Research and Statistics, directed the staff to System, Washington, D.C. 20551. study the determinants of capital formation and the public policy measures that might be institut­ ed to improve the prospects for real investment Supplemental Pricing Procedure in the economy. Public Policy and Capital Formation publishes The Federal Reserve Board on February 27, the results of that study. It contains 19 papers 1981, announced adoption of three sets of proce­ that focus on the various issues involved and dures designed to implement the service pricing were prepared by members of the research staffs requirements of the Monetary Control Act of within the Federal Reserve System. 1980. The procedures supplement the pricing The heightened interest in capital formation principles announced by the Board on December has likely resulted from a number of recent 31, 1980, and include the following: (1) proce­ trends and events. Productivity growth has been dures for the administration of clearing balances; slow throughout the 1970s, and some have (2) guidelines for billing cycles, service charge blamed this development on inadequate invest­ statements, and payments for service charges; ment in plant and equipment. The widespread and (3) interim procedures for initiation and shortages, particularly of basic materials, that review of changes in fees and services. appeared in 1973 and 1974 raised doubts about The new procedures are detailed below. whether the country’s productive capacity was as great as had been previously thought. The rapid rise in energy prices beginning in 1973 has Clearing Balances stirred speculation that many capital facilities are now obsolete because they use energy in what The Board of Governors has authorized Federal have become uneconomic quantities. Reserve Banks to establish clearing balances for During the cyclical upswing that began in 1975, eligible institutions with zero or small required business investment has been unusually weak at reserve balances in order to facilitate access to the same time that the labor force has been Federal Reserve services.1 Clearing balances growing rapidly, prompting questions about the ability of the economy to absorb the influx of 1. An institution may elect to settle the credits and debits new workers. Recurrent deficits in the balance of arising from its use of Federal Reserve services in one of the following ways: (1) through its own account at a Reserve trade and the decline of the international value of Bank that may consist of a reserve balance and/or a clearing the dollar have lent urgency to the question of balance; (2) by means of prior arrangements, through an capital formation particularly since the countries account maintained by a correspondent at a Reserve Bank; and (3) if it maintains reserves with a passthrough correspon­ that have enjoyed the largest trade surpluses and dent and has made prior arrangements through the pass­ currency appreciations—Germany and Japan, through reserve account maintained at a Reserve Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

248 Federal Reserve Bulletin □ March 1981 help to avoid account overdrafts and their associ­ Earnings credits. Earnings credits on clearing ated costs, and will earn credits that may be used balances may only be used to offset charges for to offset charges for Federal Reserve services. Federal Reserve services. The average federal Institutions that may establish a clearing balance funds rate for the weekly maintenance period include domestic depository institutions, U.S. will be the basis for calculating earnings credits. branches and agencies of foreign banks, Edge This rate is published v/eekly in Federal Reserve Act corporations, and Federal Home Loan statistical release H.15(519), “Selected Interest Banks. Rates.” Credits will be computed on the lesser of the Establishing and adjusting the clearing bal­ required clearing balance or the actual clearing ance level. In establishing the initial clearing balance maintained (after adjustments and “car­ balance a Reserve Bank will discuss with an ry-forwards”). The calculation of earnings cred­ institution its expected use of services. These its will be lagged two weeks beyond the close of discussions will focus on both the volume of the weekly maintenance period so as to minimize services and the type of services the institution the number of times when earnings credits must intends to use and the need to avoid account be recalculated because of “as-of ’ adjustments overdrafts. For example, use of the wire transfer to the base.2 If an as-of adjustment affects the service results in an irrevocable transaction that level of the clearing balance held during a period may require a greater clearing balance than an­ more than two weeks before the date that the other higher-volume service involving revocable adjustment is made, the Reserve Bank will ana­ transactions. lyze the effect on earnings credits calculated for Adjustments in the amount of an institution’s that period. Any correction will be made to clearing balance may result from changes in its earnings credits available in the current or a overdraft experience or in its use of services. future billing cycle. Satisfactory maintenance of the clearing balance If available earnings credits exceed the Feder­ with no overdrafts may, with Reserve Bank al Reserve charges incurred during a given approval, enable an institution to reduce its month, unused credits will be accumulated for clearing balance. Conversely, a pattern of re­ use in subsequent months. Credits will be re­ peated large overdrafts may be reason for a tained for a maximum of 52 weeks and will be Reserve Bank to require an increase in an institu­ applied against service charges using the first-in, tion’s clearing balance. Similarly, a decrease in first-out method. Earnings credits are not trans­ the use of Federal Reserve services may be ferable among accounts. reason to consider decreasing an institution’s clearing balances, whereas an increase in the use Account maintenance procedures. Account of services may be reason to consider increasing maintenance procedures generally will be the the clearing balance requirement. Adjustments in same whether balances in the account are clear­ the clearing balance level will be discussed in ing or reserve balances, or both, in order to aid in advance with the financial institution. Such ad­ account administration for both financial institu­ justments will be made no more than once a tions and the Reserve Banks. Similarities be­ month and will be effective with the maintenance tween administration of reserve and clearing period beginning the first Thursday of each accounts include the following: (1) weekly main­ month. tenance period (from Thursday through Wednes­ For monetary control purposes it is important day); (2) carry-forward provisions (for any ex­ that an institution’s clearing balance be main­ cess or deficiency that does not exceed 2 percent tained at its agreed-upon (required) level. The of the required account balance); (3) provisions Federal Reserve has developed procedures, in­ for “as-of’ adjustments; (4) provisions for moni­ cluding financial incentives, that are designed to encourage maintenance of a clearing balance at the required level. These procedures include 2. The term “as-of’ and other similar technical terms used in this document are best explained by direct contact with the earnings credits, account maintenance proce­ Federal Reserve office that serves the area in which an dures, and fees for deficiencies. institution is located. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 249 toring daylight overdrafts; (5) charges for over­ Reserve services directly from its Federal Re­ night overdrafts (overdrafts are penalized cur­ serve office without establishing a clearing bal­ rently by charging a fee of 10 percent per ance account. annum); (6) provisions for waiving charges for infrequent and small overdrafts. Fees for deficiencies. The notable exception If an institution meets its reserve requirements between the administration of reserve and clear­ with either vault cash or with a passthrough ing balances is that a deficiency in a required relationship with a correspondent, it may estab­ clearing balance is charged for a different rate lish its own account at a Reserve Bank through than a deficiency in a required reserve balance. which it settles the debits and credits arising A charge of 2 percent per year will apply to from its use of Federal Reserve services. Such an that portion of any clearing balance deficiency account would contain a clearing balance only (after application of carryover) that does not and would be administered independently of the exceed 20 percent of the required clearing bal­ institution’s required reserves. The account ance. Any remaining deficiency (above the maintenance procedures will apply to the ac­ amount equal to 20 percent of the required count maintained for clearing purposes, and the clearing balance) will be subject to a charge at 4 carry-forward provision will be 2 percent of the percent per year. required clearing balance. As in reserve administration, Reserve Banks If a depository institution has a reserve ac­ may waive the charge for infrequent clearing count with a Federal Reserve office and a re­ balance deficiencies when the charge is small and quired clearing balance is established for the the deficiency is not the result of negligence by institution, both the reserve balance and the the depository institution. Reserve Banks will clearing balance will be administered in a single monitor the incidence of deficiencies and will account. The depository institution will be ex­ meet with a depository institution that demon­ pected to maintain a daily average balance for strates a repeated inability to maintain the re­ the week equal to the sum of its required reserve quired level to discuss how to manage better its balance and its required clearing balance. At the total (reserve plus clearing) balance. end of each weekly maintenance period, the balance held with a Reserve office (after applica­ tion of any as-of adjustment and/or carry-for- Service Charges ward) will be allocated first to the required clearing balance and second to the required The Federal Reserve System has developed reserve balance. Thus, if the average balance guidelines for statements of charges incurred for held with a Reserve office during the weekly Federal Reserve services and for methods of maintenance period is less than the total required payment for those charges by the responsible balance—clearing plus required reserve—the de­ Reserve Bank customer. The guidelines include pository institution will be considered deficient the following: uniform billing cycles (the periods in its required reserve balance. A clearing bal­ over which service charges are incurred), uni­ ance deficiency will occur only when the defi­ form procedures for applying available earnings ciency in the average total balance exceeds the credits to offset service charges, a standard inter­ required reserve balance. If the average balance val between the end of the billing cycle and the exceeds the required total balance, the institu­ debiting of charges (not offset by earnings cred­ tion will be considered to be holding an excess its) to a designated account, and minimum stan­ reserve balance. The carry-forward provision for dards for descriptive information to be provided excesses or deficiencies will be 2 percent of the to customers about the services used and charges total required balance (clearing plus reserve). incurred. Neither excess nor required reserve balances These guidelines will be implemented with the will generate earnings credits. start of the pricing of, and full access to, Federal Of course, a depository institution that main­ Reserve check services now scheduled for Au­ tains its required reserves on a passthrough basis gust 1981. Until then, each Reserve Bank will or in vault cash may obtain available Federal use its own procedures on an interim basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

250 Federal Reserve Bulletin □ March 1981 The guidelines will provide procedural consis­ credits may be carried forward for up to 52 tency among Reserve Bank Districts. However, weeks and applied to service charges incurred in the Reserve Banks will retain flexibility in the subsequent billing cycles. If available earnings format of service charge statements and in the credits are insufficient to cover service charges, frequency of service charge notices to their cus­ the remaining service charges will be debited to a tomers. previously designated account at a Federal Re­ Before implementation, the Reserve Banks serve Bank. will provide Federal Reserve customers with at least two summary statements of services used Debit of service charges to the responsible and charges incurred to test these procedures. account. On the third Thursday following the close of each billing cycle (or on the next busi­ Uniform billing cycles. There will be twelve ness day if that Thursday is a holiday), the billing cycles per year over which charges for account of the user of Federal Reserve services Federal Reserve services will be accrued. Each or the designated account of the user’s corre­ billing cycle will end on the last Wednesday of spondent will be charged for the amount by the calendar month and will cover either a four- which service charges exceed available earnings or five-week period. credits. Minimum standards for statements of service charges. At minimum, a monthly summary state­ Interim Procedures for Pricing ment of service charges incurred over the cycle Administration will be provided directly or indirectly to Federal Reserve customers. The statement will be pro­ The pricing of financial services supplied by the vided by the Reserve Bank no later than the Federal Reserve System to financial institutions Wednesday following the close of the billing will have a significant impact on both the Federal cycle (that is, no later than the first Wednesday Reserve and the financial community. The Sys­ of the subsequent month). tem has a responsibility to adopt administrative It is the intent of the Federal Reserve System procedures for pricing that will meet the needs of to reflect in the statement the Federal Reserve Reserve Banks in adjusting to a new environ­ services used during the billing cycle by type of ment and to the needs of the financial community transaction with associated unit volume, unit for advance information about changes. price for the service, and total charges for the In its December 31, 1980, announcement of service. However, some Reserve Banks may not pricing decisions, the Board of Governors out­ be immediately in a position to provide this lined a procedure for pricing administration that minimum detail on the monthly statement but contemplated eventually placing primary respon­ will be able, during the interim, to provide ade­ sibility for initiation of price and service changes quate detail in some alternative form. with the Reserve Banks and review of certain Each Reserve Bank will provide its customers proposed changes by the Conference of First with a list of persons who can respond to ques­ Vice Presidents. During the initial phase of pric­ tions about each type of service charge. ing, however, the Board anticipated that major policy issues would arise and that the resolution Application of earnings credits. Earnings cred­ of those issues could affect both Federal Reserve its available at the end of the billing cycle will be Banks and private suppliers of interbank serv­ used immediately to offset service charges ac­ ices. To advise the Board on those major issues, crued. As of the end of the billing cycle in each a pricing policy committee consisting of repre­ calendar month, earnings credits available are sentatives from the Board and the Reserve defined as earnings credits imputed to clearing Banks has been established. balances maintained through the reserve-clearing The procedures outlined later are intended to statement period ending two weeks before the retain flexibility for the Reserve Banks to under­ end of the billing cycle. If available earnings take price and service changes in response to credits exceed service charges, excess earnings local conditions and, simultaneously, to develop Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 251 a common Systemwide framework for pricing all priced services; (2) review, before announce­ decisions. These interim procedures will be re­ ment, proposed significant changes in prices or viewed in 1982 after the System has gained services; (3) establish Reserve Bank reporting experience with pricing administration. procedures necessary to provide data needed to advise the Board of Governors on pricing issues Role of the Board of Governors. The Monetary and progress in matching revenues and costs. Control Act specifies that the Board must put The pricing policy committee is an interim into effect a set of pricing principles and a group that is expected to be phased out as the schedule of fees for Federal Reserve bank serv­ System gains experience with pricing. In the ices to depository institutions. The Board’s re­ longer run, the Reserve Banks and the Confer­ sponsibilities for pricing administration are as ence of First Vice Presidents will be given pri­ follows: (1) to establish the initial fee structure mary responsibility for changes in fees and serv­ for each service; (2) to approve proposed ices, subject to the traditional review by the changes in the fee structure for each service; (3) Board and its Committee on Reserve Bank Ac­ to issue guidelines for the use of pricing tech­ tivities. niques, such as peak-load pricing, designed to encourage efficient use of resources; (4) to deter­ Role of the Reserve Banks and the Conference mine annually the appropriateness of continuing of First Vice Presidents. Changes in fees and to price automated clearinghouse services at services will be initiated by the Reserve Banks their expected long-run average cost; (5) to ap­ for District-priced services; for nationally priced prove proposed changes in services that raise services, changes will be reviewed by the Con­ major policy issues; and (6) to provide oversight ference of First Vice Presidents. Although of the Reserve Bank implementation of access changes will be monitored by the pricing policy to, and pricing of, services in accordance with committee during the interim period, the Reserve the Board’s pricing principles. (The pricing prin­ Banks and the Conference will be responsible for ciples are contained in the Federal Reserve press ensuring that changes comply with the Board’s release of December 31, 1980.) pricing principles. Role of the pricing policy committee. The Announcements of changes in fees and serv­ pricing policy committee, as the principal pricing ices. The Federal Reserve intends to review all policy advisory group to the Board of Gover­ service fees at least annually and will announce nors, has the following three major responsibil­ adjustments to fee schedules that reflect current ities: (1) to advise the Board on all significant estimates of expenses and the private sector pricing issues, including operating procedures adjustment factor. Apart from the annual review, (such as billing and clearing balances), fee struc­ announcements will be made whenever new tures, and service structures; (2) to monitor services are introduced or when significant changes in fees and services—initiated either by changes are made in existing services. Some fee a Reserve Bank or through the Conference of changes may be announced between annual re­ First Vice Presidents, to ensure that the pricing views that are necessitated as a result of forecast principles previously announced by the Board errors or other unanticipated changes in either are interpreted consistently—and to submit to the service environment or the resources re­ the Board of Governors for its approval any quired for a service. It is the System’s intent to change that raises a major policy issue; (3) to give its customers reasonable advance notice of assist the Board of Governors in its implementa­ changes in its fees and significant changes in tion of pricing and in the oversight of progress service arrangements. When exceptional circum­ toward meeting the System goal of matching stances require, however, prices or services may revenues and costs for priced services. be changed on short notice. To fulfill these responsibilities, the pricing Generally speaking, changes in prices and policy committee will undertake the following services will be announced in advance in Re­ specific assignments: (1) review, before an­ serve Bank operating letters. Public comment nouncement, the proposed 1982 fee schedules for will be solicited on important pricing issues that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

252 Federal Reserve Bulletin □ March 1981 would have significant longer-run effects on the generally high current level of bank security have nation’s payments system. made this report unnecessary. Regulation P was also amended to eliminate the requirements that state member banks file Amendment to Regulation P with their District Reserve Bank a copy of their written security program and, when applicable, a The Federal Reserve Board has amended Regu­ copy of the bank’s statement explaining why the lation P (Minimum Security Devices and Proce­ bank’s security program does not meet the mini­ dures for Federal Reserve Banks and State Mem­ mum standards of the regulation. ber Banks) implementing the Bank Protection State member banks are required to continue Act to eliminate several reporting requirements. preparing these reports and to have them readily The actions lighten the regulatory reporting available for scrutiny by examiners. It has been burden of all state member banks and are expect­ found that examiners generally rely on bank ed to be of particular benefit to small banks. records and not Reserve Bank records in deter­ The Board amended Regulation P to eliminate mining compliance with the regulation. a requirement calling for reports (form P-l) to be filed by state member banks concerning security devices in use at their banking office. This action System Membership: had been recommended to the Board (and to Admission of State Bank other federal agencies supervising banks and thrift institutions) by the Federal Financial Insti­ The following bank was admitted to membership tutions Examination Council. In adopting the in the Federal Reserve System during the period Council’s recommendation, the Board said that it February 11 through March 10, 1981: has been found that regular, on-site examination Virginia of bank security by bank examiners and the Tazewell............. Citizens Bank of Tazewell Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

253 Legal Developments Bank Holding Company and Bank Merger fact in dispute that can only be resolved by means of Orders Issued by the Board of Governors such a proceeding. After considering the record of this application, the Orders Under Section 3 of Bank Holding Board has determined that there are no material factu­ Company Act al differences in the record which would warrant a hearing on this application. Rather, Protestants’ pri­ First National Boston Corporation, mary arguments concern the interpretation or signifi­ Boston, Massachusetts cance that should be accorded to certain facts in the record. Since the Board is charged by statute with Order Approving Acquisition of a Bank making such judgments, and in view of the fact that all parties have been afforded a full and fair opportunity First National Boston Corporation, Boston, Massa­ to present their arguments in written submissions to chusetts, a bank holding company within the meaning the record, including the opportunity to comment on of the Bank Holding Company Act of 1956 (the “BHC one anothers’ submissions, the Board has determined Act”), has applied for the Board’s approval under that a hearing would serve no useful purpose.1 Ac­ section 3(a)(3) of the BHC Act (12 U.S.C. § 1842(a)(3)) cordingly, Protestants’ request for a formal hearing is to acquire 100 percent (less directors’ qualifying hereby denied. Thus, the Board will consider the shares) of the shares of The Country Bank, National merits of the application, including the objections Association, Shelburne Falls, Massachusetts raised by Protestants. (“Bank”). Applicant, the largest commercial banking organiza­ Notice of the application, affording an opportunity tion in Massachusetts, controls nine domestic banking for interested persons to submit comments and views, subsidiaries with aggregate deposits of $4.2 billion, has been given in accordance with section 3(b) of the representing 22.5 percent of the total commercial bank BHC Act. The time for filing comments and views has deposits in the state.2 Acquisition of Bank, with de­ expired and the Board has considered the application posits of $14.9 million, would increase Applicant’s and all comments received, including those of the share of commercial bank deposits in Massachusetts Massachusetts Urban Reinvestment Advisory Group, by less than one-tenth of one percent. Thus, consum­ Inc., Jamaica Plain, Massachusetts, and the Rural mation of the proposal would not have any appreciable Development Corporation of Franklin County, Green­ effect upon the concentration of banking resources in field, Massachusetts (collectively referred to as “Prot­ Massachusetts. estants”), in light of the factors set forth in section 3(c) Bank, with four banking offices, is the third largest of the BHC Act. In addition to interposing numerous of four commercial banks in the Greenfield banking objections to the proposed acquisition, Protestants market,3 and holds 14.8 percent of the commercial have requested that the Board order a formal hearing to air the Community Reinvestment Act (“CRA”)related issues raised by this application. 1. In this regard, the Board notes that Protestants and Applicant With regard to Protestants’ request for a hearing, have had ample opportunity to resolve any material factual differences neither the CRA, nor section 3(b) of the BHC Act in a hearing conducted on September 25, 1980, by the Massachusetts Board of Bank Incorporation (“Massachusetts Board”) concerning requires the Board to hold a formal hearing concerning issues similar to those raised by Protestants in connection with the an application, except when the appropriate banking proposed acquisition. The hearing was attended by representatives of the Federal Reserve System, and the order of the Massachusetts authority makes a timely written recommendation of Board has been made a part of the record in this application. On denial of an application. In this case, no such recom­ January 20, 1981, the Massachusetts Board unanimously approved mendation has been received from the Comptroller of Applicant’s acquisition of Bank, and has recommended approval of this application. the Currency, and, thus, no formal hearing is required. 2. All banking data are as of June 30, 1980, unless otherwise Nevertheless, the Board could in its discretion order a indicated. formal or informal proceeding concerning the applica­ 3. The Greenfield banking market is approximated by Franklin County, Massachusetts, excluding the towns of Warrick, Orange, tion if it determines that there are material questions of New Salem, Whately, Sunderland, Leverett and Shutesbury. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

254 Federal Reserve Bulletin □ March 1981 bank deposits in the market. While Old Colony Bank credit; and, that Applicant’s subsidiary banks have not of Hampden County, N.A., (“OCB-Hampden”), Ap­ complied with the technical requirements of CRA or plicant’s nearest subsidiary bank, has an office located the Home Mortgage Disclosure Act of 1975 18 road miles southeast of Bank’s Conway office, (“HMDA”) (12 U.S.C. § 2803). OCB-Hampden operates in a separate and distinct In support of their objections, Protestants have banking market, and none of Applicant’s other bank­ submitted information to the Board regarding these ing subsidiaries operates in the Greenfield banking allegations. In addition, the proposed acquisition has market. Accordingly, the Board concludes that con­ been the subject of public hearings before the Massa­ summation of the proposal would not result in the chusetts Board during which Protestants presented elimination of any existing competition between Appli­ information concerning their allegations. The Board cant and Bank. While it appears that Applicant has the has examined the submissions offered by Protestants financial and managerial resources to enter the Green­ and Applicant regarding the issues raised by Protes­ field banking market de novo, based on the record the tants. The Board has also considered the conclusions Board regards that market as unattractive for de novo of the Office of the Comptroller of the Currency, entry and notes state law precludes Applicant from which conducted an examination of FNBB that includ­ branching into the market. Based on the foregoing, the ed an assessment of FNBB’s record of meeting the Board concludes that consummation of the proposal requirements of the CRA. Finally, the Board notes would not have any significantly adverse effects on that it has recently had occasion to consider many of existing or potential competition in any relevant area. the same issues raised by Protestants in acting to The financial and managerial resources and future approve an application by Applicant to acquire South­ prospects of Applicant, its banking subsidiaries and eastern Bank and Trust Company, New Bedford, Bank are regarded as satisfactory. Applicant has com­ Massachusetts.5 There the Board found that, on bal­ mitted to inject some additional capital into Bank upon ance, Applicant has a positive record of helping to consummation of the proposal, which would enhance meet the credit needs of its community, including the Bank’s future prospects. Accordingly, it is the Board’s low- to moderate-income areas. In considering Protes­ judgment that banking factors lend some weight to­ tants’ objections to this acquisition, the Board has paid ward approval of this application. particular attention to the record of performance of In considering the effects of the proposed acquisi­ FNBB and Applicant in helping to meet community tion on the convenience and needs of the community credit needs since approving Applicant’s acquisition of to be served, the Board has also considered the record Southeastern Bank and Trust Company. Accordingly, of Applicant’s banking subsidiaries in meeting the after considering the entire record, the Board makes credit needs of their communities as provided in CRA the following findings concerning Protestants’ allega­ (12 U.S.C. § 2901) and the Board’s Regulation BB, tions. (12 C.F.R. § 228).4 In so doing, the Board has exam­ With respect to Protestants’ claim of community ined the objections of Protestants relating to Appli­ disinvestment, the Protestants assert that a large per­ cant’s record of performance with respect to CRA centage of FNBB’s loans are made to out-of-state factors, and particularly the record of Applicant’s lead commercial borrowers, and that the percentage of bank, First National Bank of Boston (“FNBB”), FNBB investments in its CRA community has de­ Boston, Massachusetts. Specifically, Protestants al­ clined. The Board notes, however, that between 1978 lege that Applicant engages in community disinvest­ and 1979, FNBB substantially increased the number ment as evidenced by the decreasing percentage of and dollar volume of residential mortgage loans to loans made by FNBB in its CRA community as borrowers in its CRA community. In addition, during compared to its total domestic and international lend­ the past two years FNBB almost doubled the dollar ing operations; that FNBB’s efforts to ascertain com­ amount of its home improvement loans to its commu­ munity credit needs are ineffective; that FNBB’s par­ nity. Also, FNBB extended over $11 million in HELP ticipation in community development programs has Loans to its CRA community, Suffolk County, be­ been insufficient; that FNBB has failed to meet the tween January 1978 and September 1980. Moreover, credit needs of small businesses and small farmers; the Board has stressed that the CRA was not intended that Applicant’s subsidiary banks have failed to meet to establish fixed ratios between deposits and loans in the needs of CRA communities for housing-related particular neighborhoods, and cannot be read to re­ quire fixed proportions of retail or commercial depos­ 4. The CRA requires the Board to assess the record of Applicant’s banking subsidiaries in helping to meet the credit needs of their entire communities, including low- and moderate-income neighborhoods, consistent with safe and sound operation, and to take the record of those institutions into account in its evaluation of this application. 5. 66 Federal Reserve Bulletin 162 (January 1980). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 255 its to retail or commercial lending.6 Accordingly the Protestants allege that Applicant’s actual invest­ Board does not necessarily regard Applicant’s role as ment in community development programs to which it a large internationally-oriented commercial bank as has made commitments has been minimal. However, being inconsistent with helping to meet the credit the Board finds no evidence in the record that Appli­ needs of its local community. Thus, the Board finds cant or FNBB are unwilling to meet these commit­ the Protestants’ claim unsupported by the facts. ments and Applicant has reaffirmed to the Board its Protestants assert that Applicant’s efforts to ascer­ intention to fulfill all of its commitments. Moreover, tain the credit needs of its CRA community have been from the record it appears that Applicant has taken ineffective. In this regard, the Board notes that Appli­ steps to enhance its ability to participate in community cant and FNBB had previously committed to form a development programs. For example, Applicant has number of committees composed of individuals repre­ recently established a subsidiary, First National Bos­ senting broad community interests and specifically ton Mortgage Corporation, to provide a complete designed to help FNBB ascertain the credit needs of array of mortgage services, including V.A., F.H.A. its community. Protestants have complained that the and low-down-payment mortgages, thereby enabling current members of the board of directors serving on FNBB to fulfill its commitment to make loans avail­ FNBB’s Community Investment Committee are not able under the Boston Urban Housing Program. representative of the board; that FNBB has estab­ The Protestants contend that FNBB has failed to lished less than half of the 15 proposed neighborhood meet the credit needs of small businesses and small committees; and that the neighborhood committees farmers, and based on the record, the Board finds this which have been established have not led to a resolu­ contention to be without merit. As of August 11, 1980, tion of community issues. It appears from the record FNBB had 5,000 loans totalling $106 million under a that FNBB has within the past year taken a series of special small business index rate, which allows loans positive steps to communicate more effectively with to small businesses and nonprofit corporations at rates local groups in an effort to ascertain the credit needs of 1.25 percent below FNBB base rate. In addition, its local community. The Community Investment FNBB’s Urban Marketing Department, which helps Committee of FNBB’s board of directors, which moni­ meet the needs of Boston’s low income and minority tors FNBB compliance with CRA and reviews efforts entrepreneurs, has made more than $7 million in loans. made by FNBB to meet community credit needs, Moreover, in June 1980, FNBB agreed to provide $15 regularly reports its findings to FNBB’s full board of million to the Neighborhood Business Revitalization directors. From the record, it appears that member­ Program, which is designed to provide financial assist­ ship on FNBB’s Community Investment Committee is ance packages to small and medium size businesses in on a rotational basis involving all members of FNBB’s distressed neighborhoods. Finally, FNBB plays an board of directors. With respect to the neighborhood important role in making low cost loans available to committees, while FNBB concedes that during the farmers by maintaining a multi-million dollar credit past year it has not established all 15 of the proposed line to Farm Credit Bank of Springfield, Massachu­ neighborhood committees, FNBB expects that four setts, to support the Farm Credit Bank’s commercial more committees (for a total of 10 committees) will be paper borrowings. in operation shortly, and it has increased its efforts With respect to FNBB’s record of residential mort­ (including hiring additional staff) to hasten the forma­ gage lending, the Board recognizes that prior to 1978 tion of the remaining committees. Moreover, while FNBB was not primarily engaged in initiating residen­ formation of neighborhood committees has not had the tial mortgages. Nevertheless, FNBB has gradually but immediate result of FNBB returning to particular consistently increased its presence in the residential neighborhoods in loans as much as FNBB accepts in mortgage market. FNBB made more mortgage loans in deposits, the Board has repeatedly stressed that it is Suffolk County during the first six months of 1980 than concerned more with the lender’s sensitivity to the it had during all of 1977, and the total dollar volume of needs of each area than with the ratio of loans to residential loans during the first six months of 1980 deposits in a particular area. Finally, the Board notes almost equalled the total dollar volume of 1979. In that FNBB advertises its services through major me­ addition, there has been little difference between dia sources as well as in 11 local and trade newspa­ FNBB’s acceptance rate for mortgage loans between pers, and within the past year has increased its adver­ low- and moderate-income areas and other areas. With tising regarding the availability of residential respect to the home mortgage needs of low- and mortgages. moderate-income families, within the past year FNBB has arranged for private mortgage insurance to enable it to offer mortgages with low down payments. In 6. Manufacturers Hanover Trust Co., 66 Federal Reserve Bul­ letin 601 (1980). addition, FNBB is increasing from 50 percent to 80 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

256 Federal Reserve Bulletin □ March 1981 percent the amount of potential rental income which and Old Colony Bank of Norfolk County’s home may be counted toward monthly income in calculating mortgage disclosure statement was not made readily mortgage eligibility. Moreover, FNBB’s subsidiary, accessible to the public. However, Protestants indi­ First National Boston Mortgage Corporation, will pro­ cate that the Old Colony Banks of Essex County and vide new residential mortgage products and increased Norfolk County have subsequently prepared HMDA housing funds through access to the secondary mar­ statements. With respect to FNBB’s public comment kets. Finally, FNBB has recently initiated a Communi­ file, since comments from other organizations were ty Mortgage Program to promote the purchase of properly placed in FNBB’s comment files, the Board homes by low- and moderate-income families at below believes FNBB’s failure to place one letter in its file market rates, as well as a Community Home Improve­ was an isolated error in a generally good record of ment Program to provide home improvement loans at technical compliance. It is the Board’s view that such reduced interest rates for low- and moderate-income isolated errors are not a substantially adverse reflec­ residents. tion on the CRA record of FNBB or Applicant’s other Protestants have also challenged the adequacy of eight subsidiary banks. See e.g., AmeriTrust, 66 Fed­ the CRA records for several of Applicant’s other eral Reserve Bulletin 238 (1980). Thus, the Board subsidiary banks, in particular, Old Colony Bank of considers that Protestants’ allegations in this regard Middlesex County (“OCB-Middlesex”) and OCB- are without merit. Hampden in connection with their residential lending With respect to other convenience and needs con­ activities. With respect to OCB-Middlesex, the Board siderations, approval of the present application will notes that OCB-Middlesex has substantially increased assist Bank in serving a larger number of borrowers the number of mortgages booked and that over 55 and in extending larger loans through overline partici­ percent of these were in its CRA community. More­ pation with Applicant’s other banking affiliates. In over, both in number of loans and dollar value, OCB- addition, Applicant will introduce a number of new Middlesex was the largest lender in Middlesex County services through Bank, including 90 percent mort­ during the first six months of 1980. As a result, OCB- gages, cash management services, construction fi­ Middlesex was forced to briefly freeze its mortgage nancing, and trust and investment services to both lending activities, which out-paced the staff’s ability to businesses and individuals. Applicant also proposes to process home mortgage applications. With respect to raise the interest rate paid on passbook 90-day notice OCB-Hampden, the Board notes that it only began accounts and lower the minimum deposit required for residential lending during the fall of 1979. Neverthe­ these accounts. Thus, based on its review of the facts less, between 1979 and 1980 OCB-Hampden has made of record, including Applicant’s and FNBB’s perform­ a substantial number of home mortgage loans, of ance with respect to the factors to be considered under which 43 percent were in its CRA community. In CRA, the Board concludes that considerations relating addition, OCB-Hampden has approved more mort­ to convenience and needs lend some weight toward gages in the first six months of 1980 than it did in all of approval of the application. 1979. Furthermore, OCB-Hampden has granted mort­ Based on the record, it is the Board’s judgment that gages in 75 percent of the applications received from approval of the application would be in the public its CRA community between 1979 and 1980. OCB- interest and that the application should be approved Hampden has also made its services known to its local for the reasons summarized above. This transaction community, which has a significant Spanish-speaking shall not be made before the thirtieth calendar day population, through the use of bilingual tellers and following the effective date of this Order, or later than advertising in a Spanish-language newspaper called three months from the effective date of this Order The Voice. After reviewing these and other facts of unless such period is extended for good cause by the record, the Board finds the Protestants claim to be Board or the Federal Reserve Bank of Boston, pursu­ unsupported by the facts. ant to delegated authority. Protestants allege that certain of Applicant’s subsid­ By order of the Board of Governors, effective iary banks have not complied with technical require­ February 25, 1981. ments of the CRA or the HMDA. These requirements are designed to acquaint the community with each bank’s lending policies and to permit members of the Voting for this action: Chairman Volcker and Governors Schultz, Wallich, Partee, Rice, and Gramley. Absent and not community to comment on those policies. In particu­ voting: Governor Teeters. lar, Protestants assert that Old Colony Bank of Essex County had not compiled a required home mortgage disclosure statement; FNBB had one letter (unrelated (Signed) James McAfee, to CRA) missing from its CRA public comment file; [seal] Assistant Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 257 Heritage Wisconsin Corporation, mercial banking organization in the market. Applicant Wauwatosa, Wisconsin is the fifth largest banking organization in the Milwau­ kee market with 11 offices of four of its subsidiary Order Approving Acquisition of Banks banks holding aggregate deposits of $283.3 million, representing 4.3 percent of total deposits in commer­ Heritage Wisconsin Corporation, Wauwatosa, Wis­ cial banks in the relevant market. Consummation of consin, a bank holding company within the meaning of the transactions will increase Applicant’s share of the Bank Holding Company Act (“Act”), has applied market deposits by 0.7 percent and would not cause for the Board’s approval under section 3(a)(3) of the Applicant’s rank within the market to change. Al­ Act (12 U.S.C. § 1842(a)(3)) to acquire 100 percent of though acquisition of Banks will eliminate some com­ the voting shares (less directors’ qualifying shares) of petition, the Milwaukee market is not highly concen­ both Southridge Bank of Greendale, Greendale, Wis­ trated and there will remain a large number of consin (“Southridge Bank”), and Northridge Bank, independent banks as entry vehicles for banking orga­ Milwaukee, Wisconsin (“Northridge Bank”) (collec­ nizations not currently represented in the market. In tively “Banks”). view of all the facts of record including the structure of Notice of the applications, affording opportunity for the relevant market and the size of Banks, the Board is interested persons to submit comments and views, has of the view that consummation of the transactions will been given in accordance with section 3(b) of the Act. have only slightly adverse effects on competition in the The time for filing comments and views has expired Milwaukee market. and the Board has considered the applications and all The financial and managerial resources of Applicant comments received in light of the factors set forth in and its subsidiaries are considered generally satisfac­ section 3(c) of the Act (12 U.S.C. § 1842(c)). tory and its future prospects appear favorable. The Applicant, the seventh largest banking organization financial and managerial resources of Banks are satis­ in Wisconsin, controls seven commercial banks1 with factory and their future prospects as affiliates of Appli­ aggregate deposits of $386.4 million, representing ap­ cant appear favorable. Accordingly, banking factors proximately 1.9 percent of total deposits in commer­ are consistent with approval of the applications. Appli­ cial banks in the state.2 Acquisition of Banks, with cant proposes to expand banking hours at Banks and aggregate deposits of $45.2 million, would increase to institute a number of services not now available at Applicant’s share of commercial bank deposits in Banks, including automatic transfer services, trust Wisconsin by 0.2 percent and would cause Applicant services, investment management, leasing, and creditto become the sixth largest banking organization in the related insurance activities. In the Board’s view, the state. In view of the sizes of Banks, consummation of benefits to the public that may be expected from the proposal would not result in a significant increase consummation of the proposed transactions lend in the concentration of commercial banking resources weight sufficient to outweigh any adverse effects on in the state. competition that may result from consummation of the Banks are currently the only subsidiary banks of proposals. Therefore, it is the Board’s judgment that Ridge Bancorporation of Wisconsin, Greendale, Wis­ the proposed transaction would be in the public inter­ consin, a registered bank holding company. North­ est and that the applications should be approved. ridge Bank ($21.9 million in deposits) is the 36th On the basis of the record, the applications are largest of 56 banking organizations located in the approved for the reasons summarized above. The Milwaukee banking market and holds approximately transactions shall not be made before the thirtieth 0.3 percent of total market deposits in commercial calendar day following the effective date of this Order banks.3 Southridge Bank ($23.3 million in deposits) is or later than three months after that date, unless such the 35th largest commercial banking organization lo­ period is extended for good cause by the Board, or by cated in the relevant market and holds approximately the Federal Reserve Bank of Chicago pursuant to 0.4 percent of total market deposits in commercial delegated authority. banks. Together, Banks rank as the 19th largest com- By order of the Board of Governors, effective February 23, 1981. 1. Applicant also owns less than 25 percent of the shares of two Voting for this action: Chairman Volcker and Governors banks with aggregate deposits of $85.1 million, representing 0.4 Schultz, Wallich, Partee, Rice, and Gramley. Absent and not percent of deposits in commercial banks in Wisconsin. voting: Governor Teeters. 2. Banking data are as of December 31, 1979, and reflect bank holding company formations and acquisitions approved as of Decem­ ber 31, 1980. (Signed) James McAfee, 3. The relevant banking market is approximated by the Milwaukee Ranally Metropolitan Area. [seal] Assistant Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

258 Federal Reserve Bulletin □ March 1981 Orders Under Section 2 of Bank record, there is no evidence that VTS will be unable to Holding Company Act repay the remaining indebtedness in accordance with the terms of the note. Moreover, the indebtedness is Citicorp, not secured by the property of VTS, but rather by New York, New York personal guarantees of VTS’ shareholders and letters of credit. Finally, the requirements of the indebted­ Order Granting Determination Under ness are of the type normally imposed on a borrower the Bank Holding Company Act by a prudent institutional lender and are reasonably required to protect Citicorp’s interest. Citicorp, New York, New York, a bank holding com­ Although VTS will continue to provide travel serv­ pany within the meaning of section 2(a) of the Bank ices to employees of Citicorp and its subsidiary, Holding Company Act of 1956, as amended (12 U.S.C. Citibank, N.A., there is no requirement that they use § 1841 et seq.) (the “Act”), has requested a determi­ the services of VTS; Citicorp has represented that all nation pursuant to section 2(g)(3) of the Act that, with employees have been notified that they may use VTS respect to the sale by Citicorp of the assets of its travel or any other travel agency of their choice. In addition, agency business to VTS Travel Enterprises, Inc., New none of the shareholders of VTS has remained an York, New York (“VTS’), Citicorp is not in fact officer, director or employee of Citicorp or any of its capable of controlling VTS notwithstanding the fact subsidiaries, and no present officer, director or em­ that VTS is indebted to Citicorp in connection with the ployee of Citicorp or any of its subsidiaries is an sale. officer, director or employee of VTS. Under the provisions of section 2(g)(3) of the Act, Accordingly, it is ordered that the request of Citi­ shares1 transferred after January 1, 1966, by a bank corp for a determination pursuant to section 2(g)(3) is holding company to a transferee that is indebted to the granted. This determination is based on representa­ transferor are deemed to be indirectly owned or con­ tions made to the Board by Citicorp. In the event that trolled by the transferor unless the Board, after oppor­ the Board should hereafter determine that facts mate­ tunity for hearing, determines that the transferor is not rial to this determination are otherwise than as repre­ in fact capable of controlling the transferee. No such sented, or that Citicorp or VTS has failed to disclose to request for a hearing has been received by the Board. the Board other material facts, this determination may Citicorp has submitted to the Board evidence to show be revoked, and any change in the factors and circum­ that it is not in fact capable of controlling VTS, and the stances relied upon by the Board in making this Board has received no contradictory evidence. It is determination could result in the Board’s reconsider­ hereby determined that Citicorp is not in fact capable ation of this determination. of controlling VTS. This determination is based upon By order of the Board of Governors, acting through the evidence of record in this matter, including the its General Counsel, pursuant to delegated authority following facts. (12 C.F.R. § 265.2(b)(1)), effective February 5, 1981. On May 30, 1980, Citicorp transferred its entire interest in the travel agency business, consisting of (Signed) James M cAfee, inventory, accounts receivable, licenses, suppliers’ [seal] Assistant Secretary of the Board. warranties, and trademark and service mark rights, to VTS, a corporation owned by former employees of Citicorp’s travel agency business. Citicorp received as Certifications Pursuant to the Bank Holding its consideration cash and VTS’ promissory note for Company Tax Act of 1976 the remainder of the purchase price. The sale appears to have been the result of arm’s length negotiations, American General Corporation, and there is no evidence to indicate that the sale was Houston, Texas motivated by an intent to evade the requirements of the Act. A substantial portion of the initial indebted­ Final Certification Pursuant to the Bank Holding ness has been repaid by VTS, and, based on the Company Tax Act of 1976 American General Corporation (“Company”), Hous­ ton, Texas, the successor corporation to American 1. Although section 2(g)(3) refers to transfers of “shares,” the General Insurance Company, Houston, Texas Board has previously taken the position that a transfer of such a (“AG”), has requested a final certification pursuant to significant volume of assets that the transfer may in effect constitute section 1101(e) of the Internal Revenue Code (the the disposition of a separate activity of a company is deemed to involve a transfer of “shares” of that company. 12 C.F.R. § 225.139. “Code”), as amended by section 2(a) of the Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 259 Holding Company Act of 1976 (the “Tax Act”), that it ly, 25 percent or more of the voting shares of TCB or has (before the expiration of the period prohibited any of its subsidiaries. property is permitted to be held under the Bank 6. Company does not exercise any influence or Holding Company Act (12 U.S.C. § 1841 et seq.) control over TCB or any of its subsidiaries. (“BHC Act”) ceased to be a bank holding company. 7. Company does not directly or indirectly own, In connection with this request, the following infor­ control, or have power to vote 25 percent or more of mation is deemed relevant for purposes of issuing the any class of voting securities of any bank or any requested certification:1 company that controls a bank. 1. Effective June 23, 1977, the Board issued a prior 8. Company does not control in any manner the certification pursuant to section 1101(b) of the Code election of a majority of the directors, or exercise a with respect to the proposed divestiture by AG of controlling influence over the management or poli­ 2,632,042 shares of Class B nonvoting stock of cies of TCB or any bank or company that controls a Texas Commerce Bancshares, Inc. (“TCB”), then bank. held by AG, through the pro rata distribution of such shares to the holders of common stock of AG. On the basis of the foregoing information, it is 2. The Board’s Order certified that: hereby certified that Company has (before the expira­ A. AG is a qualified bank holding corporation, tion of the period prohibited property is permitted within the meaning of section 1103(b) of the Code, under the BHC Act to be held by a bank holding and satisfies the requirements of that subsection; company) ceased to be a bank holding company, and B. The shares of TCB that AG proposes to has disposed of all its banking property within the distribute to its shareholders are all or part of the meaning of section 1103(g) of the Tax Act. property by reason of which AG controls (within This certification is based upon the representations the meaning of section 2(a) of the BHC Act) a made to the Board by Company and upon the facts set bank or bank holding company ; and forth above. In the event the Board should determine C. The distribution of such shares of TCB is that facts material to this certification are otherwise necessary or appropriate to effectuate the pur­ than as represented by Company, or that Company poses of the BHC Act. has failed to disclose to the Board other material facts, 3. Following issuance of the prior tax certification in it may revoke this certification. the years 1977 through 1980, AG and Company took By order of the Board of Governors, acting through the following actions to divest all of the 2,632,042 its General Counsel, pursuant to delegated authority shares of TCB stock: (12 C.F.R. § 265.3(b)(3)), effective February 26, 1981. A. 1,328,950 TCB Class B shares were divested by AG through the conversion of debentures (Signed) James M cAfee, which had been issued in June of 1974; [seal] Assistant Secretary of the Board. B. 1,300,483 TCB Class B shares were divested by AG through annual pro rata dividend distribu­ tions to shareholders of AG; and C. 2,609 TCB Class B shares were sold by Com­ pany through sales in the open market on Aug­ Homewood Corporation, ust 8, 1980. Company does not currently hold Columbus, Ohio any interest in TCB. 4. Company has committed that no director, officer, Final Certification Pursuant to the Bank Holding or policymaking employee of Company serves or Company Tax Act of 1976 will serve in a similar capacity with TCB or any of its subsidiaries; Homewood Corporation (formerly Franklin Corp.), 5. Company has committed that no director, officer Columbus, Ohio (“Homewood”), has requested a or policymaking employee of Company, or a person final certification pursuant to section 6158 (c)(2) of the owning 25 percent or more of the shares of Compa­ Internal Revenue Code (“Code”), as added by section ny, or any combination of such persons, owns or 3(a) of the Bank Holding Company Tax Act of 1976, controls or will own or control, directly or indirect- that it has (before the expiration of the period prohibit­ ed property is permitted under the Bank Holding Company Act (12 U.S.C. § 1841 et seq.) (“BHC Act”) 1. This information derives from Company’s communications with to be held by a bank holding company) ceased to be a the Board concerning its request for this certification, Company’s bank holding company. Registration Statement filed with the Board pursuant to the BHC Act, and other records of the Board. In connection with this request, the following infor­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

260 Federal Reserve Bulletin □ March 1981 mation is deemed relevant for the purposes of issuing under the BHC Act to be held by a bank holding the requested certification:1 company) ceased to be a bank holding company. 1. Effective October 1, 1980, the Board issued a This certification is based upon the representations prior certification pursuant to section 6158(a) of the and commitments made to the Board by Homewood Code with respect to the proposed sale of 3,886 and upon the facts set out above. In the event the shares of common stock (“Bank Shares”) of The Board should hereafter determine that facts material to Franklin Bank, Grove City, Ohio (“Bank”), to this certification are otherwise than as represented by Centran Corporation, Cleveland, Ohio (“Centran”). Homewood, or that Homewood has failed to disclose The Board’s Order certified that: to the Board other material facts or to fulfill any of its A. Homewood is a qualified bank holding corpo­ commitments, the Board may revoke this certification. ration within the meaning of section 1103(b) of the By order of the Board of Governors, acting through Code, and satisfies the requirements of that sec­ its General Counsel pursuant to delegated authority tion; (12 C.F.R. § 265.2(b) (3)), effective February 12, 1981. B. 2,545 of Bank Shares, representing 63.6 per­ cent of the outstanding voting shares of Bank, that (Signed) James M cAfee, Homewood proposes to sell to Centran are all or [seal] Assistant Secretary of the Board. part of the property by reason of which Home­ wood controls within the meaning of section 2(a) of the BHC Act a bank or bank holding company; Strachan Construction Company, Inc., and Fort Walton Beach, Florida C. The sale of such shares of Bank is necessary or appropriate to effectuate the policies of the BHC Final Certification Pursuant to the Bank Holding Act. Company Tax Act of 1976 2. On October 1, 1980, following prior certification of the transaction by the Board of Governors, acting Strachan Construction Company, Inc., Fort Walton through its General Counsel, Homewood Corpora­ Beach, Florida (“Strachan”), has requested a final tion sold to Centran all of its interest in Bank. certification pursuant to section 1101(e) of the Internal 3. The prior certification issued on October 1, 1980, Revenue Code (“Code”), as amended by section 2(a) was granted upon the condition that no person of the Bank Holding Company Tax Act of 1976 (“Tax holding an office or position (including an advisory Act”), that it has (before the expiration of the period or honorary position) as a director or officer of prohibited property is permitted under the Bank Hold­ Homewood will serve in a similar capacity with ing Company Act (12 U.S.C. § 1841 et seq.) (“BHC Bank, Centran, or its subsidiaries. Effective Octo­ Act”) to be held by a bank holding company) ceased to ber 1, 1980, all such interlocking relationships be­ be a bank holding company. tween Homewood and Centran and their respective In connection with this request, the following infor­ subsidiaries were terminated. mation is deemed relevant for purposes of issuing the 4. Homewood has represented that it does not requested certification:1 exercise a controlling influence over the manage­ 1. Effective October 21, 1980, the Board issued a ment or policies of Bank, or any other bank or bank prior certification pursuant to section 1101(b) of the holding company. Code with respect to the proposed divestiture by 5. Homewood has represented that it does not Strachan of 11,966 shares of First City Bank of Fort control in any manner the election of a majority of Walton Beach, Fort Walton Beach, Florida the directors, or own or control, directly, or indi­ (“Bank”), then held by Strachan through the pro rectly, more than 5 percent of the outstanding shares rata distribution of such shares to Strachan’s three of any bank or bank holding company. shareholders. 2. The Board’s Order certified that: On the basis of the foregoing information, it is A. Strachan is a qualified bank holding corpora­ hereby certified that Homewood has (before the expi­ tion within the meaning of subsection (b) of sec­ ration of the period prohibited property is permitted tion 1103 of the Code and satisfies the require­ ments of that subsection; 1. This information derives from Homewood’s correspondence 1. This information derives from Strachan’s communications with with the Board concerning its request for this certification, Home­ the Board concerning its request for this certification, Strachan’s wood’s Registration Statement filed with the Board pursuant to the Registration Statement filed with the Board pursuant to the BHC Act, BHC Act, and other records of the Board. and other records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 261 B. The 11,966 shares of Bank that Strachan pro­ Order Approved Under Bank Merger Act poses to distribute to its shareholders are all or part of the property by reason of which Strachan American Bank of Commerce, controls (within the meaning of section 2(a) of the Albuquerque, New Mexico BHC Act) a bank or a bank holding company; and C. The distribution of such shares is necessary or Order Approving Merger of Bank appropriate to effectuate the policies of the BHC Act. American Bank of Commerce, Albuquerque, New 3. On December 10,1980, Strachan distributed to its Mexico (“Applicant”), a state member bank of the shareholders on a pro rata basis 13,751 shares of Federal Reserve System, is a wholly owned subsidiary Bank.2 of Bank Securities, Inc., Albuquerque, New Mexico 4. Strachan has represented to the Board that it no (“BSI”). Applicant has applied to the Board pursuant longer owns or controls voting shares of any bank or to the Bank Merger Act (12 U.S.C. § 1828(c)), for any company that controls a bank. approval to merge with Republic Bank, Albuquerque, 5. Strachan has represented to the Board that there New Mexico (“Bank”), under the charter and title of are no interlocking director, officer and management Applicant. As an incident to the proposed merger, the official positions between Strachan and Bank. Stra­ existing offices of Bank would become branch offices chan has represented that it does not control in any of the resulting bank. manner the election of a majority of directors or As required by the Bank Merger Act, notice of the exercise a controlling influence over the manage­ proposed transaction has been published and reports ment or policies of Bank, any other bank or any on competitive factors have been requested from the company that controls a bank. Attorney General, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation. The On the basis of the foregoing information, it is time for filing views and comments has expired and the hereby certified that Strachan has (before the expira­ application and all comments received have been tion of the period prohibited property is permitted considered in light of the factors set forth in the Act. under the BHC Act to be held by a bank holding Applicant’s parent, BSI, is the fourth largest bank­ company) ceased to be a bank holding company. ing organization in New Mexico and controls eight This certification is based upon representations and subsidiary banks with $364 million in deposits, repre­ commitments made to the Board by Strachan and senting 7.7 percent of the total state bank deposits.1 upon the facts set forth above. In the event the Board Bank is the 43rd largest bank in the state, with deposits should hereafter determine that facts material to this of $33 million, representing less that 1 percent of certification are otherwise than as represented by statewide commercial bank deposits, and its acquisi­ Strachan or that Strachan has failed to disclose to the tion by Applicant would not alter BSI’s or Applicant’s Board other material facts or to fulfill any commit­ statewide ranking or significantly increase their share ments made to the Board in connection herewith, it of deposits in the state. Accordingly, consummation of may revoke this certification. the proposal would not have an appreciable effect on By order of the Board of Governors, acting through the concentration of banking resources in New Mexico. its General Counsel, pursuant to delegated authority, Two of BSI’s subsidiary banks compete in the (12 C.F.R. § 265.2(b)(3)), effective February 6, 1981. relevant banking market.2 Applicant is the fourth largest bank in the Albuquerque banking market, with (Signed) James M cAfee, total deposits of $99.6 million, representing approxi­ [seal] Assistant Secretary of the Board. mately 5.6 percent of commercial bank deposits in the market. BSI’s other banking subsidiary, First State Bank, Rio Rancho, has total deposits of $33.4 million representing approximately 1.7 percent of commercial bank deposits and ranks as the 10th largest bank in the Albuquerque banking market. Therefore, BSI has ag­ gregate deposits in the relevant market totaling $133 million, representing 7.4 percent of commercial bank deposits and ranks as the fourth largest banking orga­ nization in the Albuquerque market. 2. Subsequent to July 7, 1970, Strachan acquired shares of Bank, 1. All banking data are as of December 31, 1979. representing 4.1 percent of Bank’s outstanding shares. Strachan did 2. The Albuquerque banking market is the relevant market and is Digitized for FnRotA rSeqEuRes t certification for such shares. approximated by the Albuquerque RMA. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

262 Federal Reserve Bulletin □ March 1981 Bank, with total deposits of $33 million, represent­ offer increased lending limits and other expanded ing 1.9 percent of the commercial bank deposits in the services to their customers. In particular, the resulting market, is the ninth largest of thirteen banks in the bank will offer trust services, the convenience of Albuquerque banking market and competes in no automatic teller machines and debit-card system, serv­ other markets. Upon consummation of the proposed ices previously unavailable from Bank. The Board transaction, BSI and Applicant would hold total mar­ believes that considerations relating to the conve­ ket deposits of $166 and $133 million, respectively, nience and needs of the communities to be served lend representing 9.3 and 7.5 percent of the market weight toward approval and are sufficient to outweigh deposits. any slightly adverse competitive effects that may be Approval of the proposal would eliminate some associated with this proposal. Accordingly, the Board existing competition within the Albuquerque banking finds that consummation of the proposal would be market. While the market shares of BSI and Applicant consistent with the public interest. On the basis of the would increase slightly, their respective ranks within record and for the reasons summarized above, the the market would be unchanged and they would re­ application to merge and, incident thereto, to establish main substantially smaller in absolute size and market branches, is hereby approved. share than the three larger banking organizations in the The transaction shall not be consummated before Albuquerque banking market. Moreover, numerous the thirtieth calendar day following the effective date independent banking alternatives would remain avail­ of this Order or later than three months after the able within the market. Consequently, it appears that effective date of this Order, unless such period is the effect of the merger on existing competition in the extended for good cause by the Board or by the Albuquerque banking market would not be significant. Federal Reserve Bank of Kansas City pursuant to After examining information of record concerning delegated authority. the financial and managerial resources of Applicant, By order of the Board of Governors, effective BSI and Bank, the Board concludes that the financial February 5, 1981. and managerial resources and future prospects of the institutions involved, as well as the banking factors, Voting for this action: Vice Chairman Schultz and Gover­ nors Partee, Rice, and Gramley. Absent and not voting: are consistent with approval. In fact, consummation of Chairman Volcker and Governors Wallich and Teeters. this merger would have a beneficial effect on Applicant and BSI. In addition, as a result of consummation of (Signed) James M cAfee, the proposed merger, the resulting bank will be able to [seal] Assistant Secretary of the Board. Orders Approving Applications Under the Bank Holding Company Act and Bank Merger Act By the Board of Governors During February 1981 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 Applicant Bank(s) (effective date) First City Bancorporation of Texas, Central Park Bank, February 4, 1981 Inc. San Antonio, Texas Houston, Texas First City Bancorporation of Texas, Windsor Park Bank, February 3, 1981 Inc., San Antonio, Texas Houston, Texas First Union Bancorporation and Columbia Union National Bank and February 2, 1981 Firstsub, Inc. Trust Company St. Louis, Missouri Kansas City, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 263 Section 3—continued Board action Applicant Bank(s) (effective date) Metropolitan Bancorporation, Inc. Metropolitan State Bank, February 25, 1981 Minneapolis, Minnesota Minneapolis, Minnesota Southwest Bancshares, Inc., Texas Bank of Beaumont February 6, 1981 Houston, Texas Beaumont, Texas By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date American City Bancorp, Inc., American City Bank, Atlanta February 3, 1981 Tullahoma, Tennessee Tullahoma, Tennessee Arapahoe Financial Corp., Citizens State Bank, Kansas City February 12, 1981 Arapahoe, Nebraska Arapahoe, Nebraska Avenue Bancorporation, Avenue Bank and Trust Company Chicago February 4, 1981 Chicago, Illinois of Oak Park, Oak Park, Illinois BancMidwest Corporation Goodhue State Bank Minneapolis February 12, 1981 St. Paul, Minnesota Goodhue, Minnesota Chisago County State Bank, Center City, Minnesota White Rock State Bank, White Rock, Minnesota Banc One Corporation, Lake National Bank, Cleveland February 5, 1981 Columbus, Ohio Painesville, Ohio Benz Holding Company, Melvin Savings Bank, Chicago February 20, 1981 Melvin, Iowa Melvin, Iowa Boatmen’s Bancshares, Inc., Plaza National Bancshares, Inc., St. Louis February 3, 1981 St. Louis, Missouri St. Louis County, Missouri Plaza Bank of Westport St. Louis County, Missouri Boelus Investment Co., Boelus State Bank, Kansas City February 2, 1981 Boelus, Nebraska Boelus, Nebraska Cass County State Company, The Cass County Bank, Kansas City February 13, 1981 Plattsmouth, Nebraska Plattsmouth, Nebraska Central Bancorporation, Inc., Blue Earth State Bank, Minneapolis February 11, 1981 Newport, Minnesota Blue Earth, Minnesota Chittenden Corporation, Mountain Trust Company Boston February 17, 1981 Burlington, Vermont Stowe, Vermont Cokato Bancshares, Inc., State Bank of Cokato, Minneapolis February 2, 1981 Cokato, Minnesota Cokato, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

264 Federal Reserve Bulletin □ March 1981 Section 3—continued Board action Applicant Bank(s) eserve (effective Bank , . . date) Commerce Southwest Inc., The Farmers & Merchants Na- Dallas February 2, 1981 Dallas, Texas tional Bank of Kaufman, Kaufman, Texas Daingerfield Bancshares, Inc., The National Bank of Dainger- Dallas January 30, 1981 Daingerfield, Texas field, Daingerfield, Texas Financial Growth Systems, Inc., Citizens First National Bank of Atlanta January 30, 1981 Inverness, Florida Citrus County, Inverness, Florida Citizens First National Bank of Crystal River, Crystal River, Florida Lake County Bank, Leesburg, Florida Finlay son Bancshares, Inc., First State Bank of Finlayson, Minneapolis February 12, 1981 Finlayson, Minnesota Finlayson, Minnesota First of Austin Bancshares, Inc., Western National Bank, Dallas January 30, 1981 Austin, Texas Austin, Texas First Bancorp, Inc., First Greenville Bancshares, Inc., Dallas February 9, 1981 Corsicana, Texas Greenville, Texas First Greenville National Bank, Greenville, Texas First Bancorp of War, Inc., The Bank of War, Richmond January 29, 1981 Welch, West Virginia War, West Virginia First Community Bancshares, First Community Bank of Lone Kansas City February 23, 1981 Inc., Grove, Lone Grove, Oklahoma Lone Grove, Oklahoma First Granbury Bancorporation, The First National Bank of Gran- Dallas January 29, 1981 Granbury, Texas bury, Granbury, Texas First New Mexico Bankshare Southwest National Bank, Kansas City February 17, 1981 Corporation, Hobbs, New Mexico Albuquerque, New Mexico First State Bancorporation, First State Bank and Trust Com- St. Louis February 13, 1981 Tiptonville, Tennessee pany, Tiptonville, Tennessee First Medicine Lodge Banc­ First National Bank of Medicine Kansas City January 30, 1981 shares, Inc., Lodge, Medicine Lodge, Kansas Medicine Lodge, Kansas First National Financial Corp. of First National Bank, Martinsville, Chicago February 5, 1981 Martinsville, Martinsville, Martinsville, Indiana Indiana First Peoples Bancorp, Inc., First Peoples Bank of Jefferson Atlanta January 30, 1981 Jefferson City, Tennessee County, Jefferson City, Tennessee Geneseo Bancshares, Inc., The Citizens State Bank, Kansas City February 12, 1981 Geneseo, Kansas Geneseo, Kansas Guardian Banks Financial Corp., Guardian Bank, Atlanta January 30, 1981 Seminole, Florida Seminole, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 265 Section 3—continued Board action Reserve Applicant Bank(s) (effective Bank date) Gulf Coast Bancshares, Inc., First National Bank of Alvin, Dallas February 19, 1981 Alvin, Texas Alvin, Texas Hawkeye Bancorporation, Cedar River Bancorporation, Chicago February 17, 1981 Des Moines, Iowa Cedar Rapids, Iowa The United State Bank, Cedar Rapids, Iowa Henry County Bancorp, Inc., Peoples Bank of Cambridge, Chicago February 17, 1981 Cambridge, Illinois Cambridge, Illinois Iowa-Grant Bankshares, Inc., Cobb State Bank, Chicago February 11, 1981 Cobb, Wisconsin Cobb, Wisconsin Merchants Financial Corporation, Merchants State Bank, Dallas February 13, 1981 Dallas, Texas Dallas, Texas Middle Georgia Corporation, Bank of Ellaville, Atlanta February 9, 1981 Ellaville, Georgia Ellaville, Georgia Montfort Bancorporation, Inc., Citizens State Bank, Chicago February 11, 1981 Platteville, Wisconsin Montfort, Wisconsin NBC Bancshares, Inc., National Bank of Commerce, Dallas February 19, 1981 Austin, Texas Austin, Texas National Bank of Commerce- South Austin, Texas Peoples Bancshares, Inc., Peoples Bank of Westville, Kansas City February 13, 1981 Colorado Springs, Colorado Westville, Oklahoma Security Bancorporation, Inc., Security State Bank, Minneapolis February 11, 1981 Newport, Minnesota Ladysmith, Wisconsin Southeast Capital Corporation, Southeast Mississippi Bank, Atlanta February 17, 1981 Quitman, Mississippi Quitman, Mississippi Southern Indiana Bancorp, Inc., Southern Indiana Bank and Trust St. Louis February 6, 1981 Newburgh, Indiana Company, Newburgh, Indiana United Banks of Wisconsin, Inc.. Farmers & Citizens Bank, Chicago February 12, 1981 Madison, Wisconsin Sauk City, Wisconsin Valley Bank Holding Company, The Bank of Fountain Valley, Kansas City February 12, 1981 Security, Colorado Security, Colorado Weldon Bancshares, Inc., Weldon State Bank, Chicago February 11, 1981 Weldon, Illinois Weldon, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

266 Federal Reserve Bulletin □ March 1981 Sections 3 and 4 Nonbanking Reserve Effective Applicant Bank(s) company Bank date (or activity) First Guthrie Banc­ First Union Corpora­ consumer finance ac­ Kansas City February 6, 1981 shares, Inc., tion, tivities and credit- Guthrie, Stillwater, related insurance Oklahoma Oklahoma sales The First National Bank and Trust Company of Still­ water, Stillwater, Oklahoma Lakeland Agency, Lakeland State Bank, to continue to engage Minneapolis February 10, 1981 Inc., Pequot Lakes, in general insurance Pequot Lakes, Minnesota activities in Pequot Minnesota Lakes, Minnesota, a town of less than 5,000 population Section 4 Nonbanking Effective Applicant company date (or activity) Deposit Guaranty Corp. to engage in the activity of servicing February 5, 1981 Jackson, Mississippi the loans and other extensions of credit acquired through an existing subsidiary Marsall & Ilsley Corporation, to continue to engage in leasing activi­ February 7, 1981 Milwaukee, Wisconsin ties through its subsidiary Morrill Bancshares, Inc., to engage in general insurance agency February 4, 1981 Sabetha, Kansas activities Southern Bancorporation, Inc. World Acceptance Corporation and February 6, 1981 World Finance Corporation of Georgia, Family Financial Services Inc., Fort Valley, Georgia Orders Approved Under Bank Merger Act By Federal Reserve Banks A . Reserve Effective Applicant Banks _ . Bank date The Carroll County Trust Com- Lafayette National Bank, Boston February 17, 1981 pany, Littleton, New Hampshire Conway, New Hampshire Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 267 Pending Cases Involving the Board of Governors This list of pending cases does not include suits U.S. League of Savings Associations v. Depository against the Federal Reserve Banks in which the Board Institutions Deregulation Committee, et al., filed of Governors is not named a party. June 1980, U.S.D.C. for the District of Columbia. Berkovitz, et al. v. Government of Iran, et al., filed Wilshire Oil Company of Texas v. Board of Gover­ June 1980, U.S.D.C. for the Northern District of nors, et al., filed U.S.D.C. for New Jersey. California. 9 to 5 Organization for Women Office Workers v. Mercantile Texas Corporation v. Board of Governors, Board of Governors, filed December 1980, filed May 1980, U.S.C.A. for the Fifth Circuit. U.S.D.C. for the District of Massachusetts. Corbin, Trustee v. United States, filed May 1980, Wilshire Oil Company of Texas v. Board of Gover­ United States Court of Claims. nors, filed December 1980, U.S.C.A. for the District Louis J. Roussel v. Board of Governors, filed April of Columbia. 1980, U.S.D.C. for the District of Columbia. Securities Industry Association v. Board of Gover­ Ulyssess S. Crockett v. United States et al., filed April nors, et al., filed October 1980, U.S.D.C. for the 1980, U.S.D.C. for the Eastern District of North District of Columbia. Carolina. Securities Industry Association v. Board of Gover­ County National Bancorporation and TGB Co. v. nors, et al., filed October 1980, U.S.C.A. for the Board of Governors, filed September 1979, District of Columbia. U.S.C.A. for the Eighth Circuit. A. G. Becker, Inc. v. Board of Governors, et al., filed Gregory v. Board of Governors, filed July 1979, October 1980, U.S.D.C. for the District of Colum­ U.S.D.C. for the District of Columbia. bia. Donald W. Riegel, Jr. v. Federal Open Market Com­ A. G. Becker, Inc. v. Board of Governors, et al., filed mittee, filed July 1979, U.S.D.C. for the District of October 1980, U.S.C.A. for the District of Colum­ Columbia. bia. Connecticut Bankers Association, et al., v. Board of Independent Insurance Agents of America and Inde­ Governors, filed May 1979, U.S.C.A. for the Dis­ pendent Insurance Agents of Missouri v. Board of trict of Columbia. Governors, filed September 1980, U.S.C.A. for the Independent Insurance Agents of America, et al., v. Eighth Circuit. Board of Governors, filed May 1979, U.S.C.A. for Independent Insurance Agents of America and Inde­ the District of Columbia. pendent Insurance Agents of Virginia v. Board of Independent Insurance Agents of America, et al., v. Governors, filed September 1980, U.S.C.A. for the Board of Governors, filed April 1979, U.S.C.A. for Fourth Circuit. the District of Columbia. Nebraska Bankers Association, et al. v. Board of Independent Insurance Agents of America, et al., v. Governors, et al., filed September 1980, U.S.D.C. Board of Governors, filed March 1979, U.S.C.A. for for the District of Nebraska. the District of Columbia. Republic of Texas Corporation v. Board of Governors, Security Bancorp and Security National Bank v. filed September 1980, U.S.C.A. for the Fifth Cir­ Board of Governors, filed March 1978, U.S.C.A. for cuit. the Ninth Circuit. Consumers Union of the United States, Inc., v. Board Investment Company Institute v. Board of Governors, of Governors et al., filed August 1980, U.S.D.C. for filed September 1977, U.S.D.C. for the District of the District of Columbia. Columbia. A. G. Becker Inc., v. Board of Governors, et al., filed Roberts Farms, Inc., v. Comptroller of the Currency, August 1980, U.S.D.C. for the District of Columbia. et al., filed November 1975, U.S.D.C. for the South­ Otero Savings and Loan Association v. Board of ern District of California. Governors, filed August 1980, U.S.D.C. for the David Merrill, et al. v. Federal Open Market Commit­ District of Columbia. tee, filed May 1975, U.S.D.C. for the District of Edwin F. Gordon v. Board of Governors, et al., filed Columbia. August 1980, U.S.C.A. for the Fifth Circuit. Martin-Trigona v. Board of Governors, filed July 1980, U.S.C.A. 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 Reserves of depository institutions, reserve, A18 All reporting banks bank credit A19 Banks with assets of $ 1 billion or more A5 Reserves and borrowings of depository A20 Banks in New York City institutions A21 Balance sheet memoranda A6 Federal funds and repurchase agreements of All Commercial and industrial loans large member banks A23 Gross demand deposits of individuals, partnerships, and corporations Policy Instruments Al Federal Reserve Bank interest rates Financial Markets A8 Depository institutions reserve requirements A9 Maximum interest rates payable on time and A23 Commercial paper and bankers dollar savings deposits at federally insured institutions acceptances outstanding A10 Federal Reserve open market transactions A24 Prime rate charged by banks on short-term business loans A24 Terms of lending at commercial banks Federal Reserve Banks A25 Interest rates in money and capital markets A26 Stock market—Selected statistics All Condition and Federal Reserve note statements A12 Maturity distribution of loan and security All Savings institutions—Selected assets and holdings liabilities Monetary and Credit Aggregates Federal Finance A12 Bank debits and deposit turnover A28 Federal fiscal and financing operations A13 Money stock measures and components A29 U.S. budget receipts and outlays A14 Aggregate reserves of depository institutions A30 Federal debt subject to statutory limitation and member bank deposits A30 Gross public debt of U.S. Treasury—Types and A15 Loans and securities of all commercial banks ownership A31 U.S. government marketable securities— Ownership, by maturity Commercial Banks A32 U.S. government securities dealers— Transactions, positions, and financing A16 Major nondeposit funds A33 Federal and federally sponsored credit A17 Assets and liabilities, last Wednesday-of-month agencies—Debt outstanding series Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A2 Federal Reserve Bulletin □ March 1981 Securities Markets and A53 U.S. reserve assets Corporate Finance A54 Foreign branches of U.S. banks—Balance sheet data A34 New security issues—State and local A56 Selected U.S. liabilities to foreign official governments and corporations institutions A35 Open-end investment companies—Net sales and asset position A35 Corporate profits and their distribution Reported by Banks in the United States A36 Nonfinancial corporations—Assets and liabilities A36 Total nonfarm business expenditures on new A56 Liabilities to and claims on foreigners plant and equipment A57 Liabilities to foreigners A37 Domestic finance companies—Assets and A59 Banks’ own claims on foreigners liabilities; business credit A60 Banks’ own and domestic customers’ claims on foreigners A60 Banks’ own claims on unaffiliated foreigners Real Estate A61 Claims on foreign countries—Combined domestic offices and foreign branches A38 Mortgage markets A39 Mortgage debt outstanding Securities Holdings and Transactions Consumer Installment Credit A62 Marketable U.S. Treasury bonds and notes— Foreign holdings and transactions A40 Total outstanding and net change A62 Foreign official assets held at Federal Reserve A41 Extensions and liquidations Banks A63 Foreign transactions in securities Flow of Funds Reported by N onbanking Business A42 Funds raised in U.S. credit markets Enterprises in the United States A43 Direct and indirect sources of funds to credit markets A64 Liabilities to unaffiliated foreigners A65 Claims on unaffiliated foreigners Domestic Nonfinancial Statistics Interest and Exchange Rates A44 Nonfinancial business activity—Selected measures A66 Discount rates of foreign central banks A44 Output, capacity, and capacity utilization A66 Foreign short-term interest rates A45 Labor force, employment, and unemployment A66 Foreign exchange rates A46 Industrial production—Indexes and gross value A48 Housing and construction A49 Consumer and producer prices A67 Guide to Tabular Presentation, A50 Gross national product and income Statistical Releases, and Special Tables A51 Personal income and saving Special Tables International Statistics A68 Assets and liabilities of U.S. branches and agen­ A52 U.S. international transactions—Summary cies of foreign banks, June 30, 1980 A53 U.S. foreign trade Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Statistics A3 1.10 MONETARY AGGREGATES AND INTEREST RATES 1980 1981 Ql Q2 03 04 Sept. Oct. Nov. Dec. Jan. Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)1 Reserves of depository institutions 1 Total ....................................................................... 4.3 0.4 6.7 16.5 21.3 5.2 35.9 1.6 -1.0 2 Required.................................................................. 5.1 0.7 5.8 15.2 22.9 6.8 27.0 0.0 -0.7 3 Nonborrowed........................................................... 3.3 7.4 12.4 7.2 0.7 5.4 13.2 13.4 8.2 4 Monetary base2 ....................................................... 7.8 5.2 9.9 11.2 9.7 10.1 15.0 4.9 2.7 Concepts of money and liquid assets3 5 M-1A ...................................................................... 4.6 -4.4 11.5 8.1 12.3 9.1 6.5 - 11.1 -37.4 6 M-1B........................................................................ 5.8 -2.6 14.6 10.8 15.8 11.8 8.7 -9.0 12.2 7 M-2.......................................................................... 7.3 5.6 16.0 9.1 8.7 10.4 1.9' 5.7 8 M-3.......................................................................... 8.0 5i 13.0 11.6 9.6 10.8 15.2 7.3' 12.7 9 L............................................................................... 8.6 7.8 9.7 11.2 12.5 6.6' 14.2' 13.8 Time and savings deposits Commercial banks 10 Total .................................................................... 8.2 10.0 4.9 15.0 12.5 11.7 23.2 18.3 18.1 11 Savings4................................................................ -19.8 -21.7 27.5 1.7 8.8 10.0 -8.7 -40.0 -54.9 12 Small-denomination time5 ................................ 28.9 33.1 0.7 17.1 6.6 11.3 31.6 39.6 36.3 13 Large-denomination time6................................ 11.1 10.6 -7.2 23.4 22.5 14.1 38.2 39.5 49.9 14 Thrift institutions7................................................... 2.6 4.8 9.9 11.5 10.2 11.7 12.7 10.8' -1.3 15 Total loans and securities at commercial banks8 9.5 -.5 7.0 14.8 14.1 13.3 16.6 12.6 16.2 Interest rates (levels, percent per annum) Short-term rates 16 Federal funds9........................................ 15.05 12.69 9.83 15.85 12.81 15.85 18.90 19.08 15.93 17 Discount window borrowing10 ............ 12.51 12.45 10.35 11.78 11.00 11.47 12.87 13.00 13.00 18 Treasury bills (3-month market yield)1 13.35 9.62 9.15 13.61 11.62 13.73 15.49 15.02 14.79 19 Commercial paper (3-month)1112 14.54 11.18 9.65 15.26 12.52 15.18 18.07 16.58 15.49 Long-term rates Bonds 20 U.S. government13 ............................ 11.78 10.58 10.95 12.23 11.75 12.44 12.49 12.29 12.98 21 State and local government14 .......... 8.23 7.95 8.58 9.59 9.11 9.56 10.11 9.66 10.10 22 Aaa utility (new issue)15 .................. 13.22 11.77 12.20 13.49 13.18 13.85 14.51 14.12 14.90 23 Conventional mortgages16.................... 14.32 12.70 13.12 14.62 14.10 14.70 15.05 14.95 15.10 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 or 2. Includes reserve balances at Federal Reserve Banks in the current week plus more. vault cash held two weeks earlier used to satisfy reserve requirements at all deposi­ 7. Savings and loan associations, mutual savings banks, and credit unions. tory institutions plus currency outside the U.S. Treasury, Federal Reserve Banks, 8. Changes calculated from figures shown in table 1.23. the vaults of depository institutions, and surplus vault cash at depository institu­ 9. Averages of daily effective rates (average of the rates on a given date weighted tions. by the volume of transactions at those rates). 3. M-l A: Averages of daily figures for (1) demand deposits at all commercial 10. Rate for the Federal Reserve Bank of New York. banks other than those due to domestic banks, the U.S. government, and foreign 11. Quoted on a bank-discount basis. banks and official institutions less cash items in the process of collection and Federal 12. Beginning Nov. 1977, unweighted average of offering rates quoted by at least Reserve float; and (2) currency outside the Treasury, Federal Reserve banks, and five dealers. Previously, most representative rate quoted by these dealers. Before the vaults of commercial banks. Nov. 1979, data shown are for 90- to 119-day maturity. M-1B: M-1A plus negotiable order of withdrawal and automated transfer service 13. Market yields adjusted to a 20-year maturity by the U.S. Treasury. accounts at banks and thrift institutions, credit union share draft accounts, and 14. Bond Buyer series for 20 issues of mixed quality. demand deposits at mutual savings banks. 15. Weighted averages of new publicly offered bonds rated Aaa, Aa, and A by M-2: M-1B plus savings and small-denomination time deposits at all depository Moody’s Investors Service and adjusted to an Aaa basis. Federal Reserve com­ institutions, overnight repurchase agreements at commercial banks, overnight Eu­ pilations. rodollars held by U.S. residents other than banks at Caribbean branches of member 16. Average rates on new commitments for conventional first mortgages on new banks, and money market mutual fund shares. homes in primary markets, unweighted and rounded to nearest 5 basis points, from M-3: M-2 plus large-denomination time deposits at all depository institutions Dept, of Housing and Urban Development. and term RPs at commercial banks and savings and loan associations. 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 □ March 1981 1.11 RESERVES OF DEPOSITORY INSTITUTIONS, RESERVE BANK CREDIT Millions of dollars Monthly averages of daily figures Weekly averages of daily figures for week-ending Factors 1980 1981 1981 Dec. Jan. Feb. Jan. 14 Jan. 21 Jan. 28 Feb. 4 Feb. 11 Feb. 18 Feb. 25 Supplying Reserve Funds 1 Reserve Bank credit outstanding ................ 143,250 142,819 140,373 143,691 143,002 140,192 139,632 139,545 141,281 140,696 2 U.S. government.securities1 ........................ 119,074 119,362 116.509 120.543 119,952 116.988 116.737 115.857 117.348 115.262 3 Bought outright.......................................... 118,548 118,795 116.509 120.543 119,753 116.988 116.737 115.857 117.348 115.262 526 567 199 5 Federal agency securities.............................. 8,821 8,812 8.739 8.739 8,754 8.739 8.739 8.739 8.739 8.739 6 Bought outright.......................................... 8,743 8,739 8.739 8.739 8,739 8.739 8.739 8.739 8.739 8.739 78 73 15 124 68 32 9 Loans................................................................ 1,617 1,405 1,278 1,332 1,419 1,793 1,201 1,113 1,145 1,713 10 Float ................................................................ 5,797 4,161 3,755 4,489 3,650 3,235 3,047 3,438 3,745 5,272 11 Other Federal Reserve assets ...................... 7,817 9,011 10,092 8,587 9,195 9,437 9,907 10,398 10,305 9,709 12 Gold stock ...................................................... 11,161 11,160 11,159 11,161 11,160 11,159 11,159 11,159 11,159 11,159 13 Special drawing rights certificate account .. 3,313 2,518 2,518 2,518 2,518 2,518 2,518 2,518 2,518 2,518 14 Treasury currency outstanding .................... 13.422 13,465 13,465 13,431 13,438 13,446 13,638 13,460 13,465 13,474 Absorbing Reserve Funds 15 Currency in circulation.................................. 135,676 133,443 131,846 134,479 132,811 131,370 131,139 131,721 132,431 131,989 16 Treasury cash holdings.................................. 446 440 452 440 437 443 445 445 450 450 Deposits, other than member bank reserves, with Federal Reserve Banks 17 Treasury...................................................... 2,722 3,172 3,297 3,085 3,109 3,498 3,288 3,926 2,832 3,376 18 Foreign ........................................................ 353 380 319 530 304 275 402 283 346 282 19 Other............................................................ 403 541 401 395 672 468 501 431 366 373 20 Other Federal Reserve liabilities and capital ...................................................... 4,881 4,872 4,609 4,971 4,973 4,753 4,600 4,532 4,635 4,610 21 Reserve accounts2.......................................... 26,664 27,114 26,591 26,900 27,809 26,508 26,571 25,344 27,364 26,765 End-of-month figures Wednesday figures 1980 1981 1981 Dec. Jan. Feb. Jan. 14 Jan. 21 Jan. 28 Feb. 4 Feb. 11 Feb. 18 Feb. 25 Supplying Reserve Funds 22 Reserve bank credit outstanding.................. 146,383 139,328 139,199 145,550 137,992 138,371 140,417 143,200 142,868 143,683 23 U.S. government securities1 ........................ 121,328 117.169 117.621 121.571 113.812 115.138 117.179 117.146 117.913 116,622 24 Bought outright.......................................... 119,299 117.169 117.621 121.571 113.812 115.138 117.179 117.146 117.913 116,622 25 Held under repurchase agreements ........ 2,029 26 Federal agency securities.............................. 9,264 8.739 8.737 8.739 8.739 8.739 8.739 8.739 8.739 8.737 27 Bought outright.......................................... 8,739 8.739 8.737 8.739 8.739 8.739 8.739 8.739 8.739 8.737 28 Held under repurchase agreements........ 525 29 Acceptances.................................................... 776 30 Loans................................................................ 1,809 1,304 1,249 2,539 1,349 1,553 752 1,037 875 5,192 31 Float ................................................................ 4,467 2,280 1,545 3,863 4,894 3,061 3,547 5,700 5,472 3,279 32 Other Federal Reserve assets ...................... 8,739 9,836 10,047 8,838 9,198 9,880 10,200 10,578 9,869 9,853 33 Gold stock ...................................................... 11,160 11,159 11,156 11,160 11,159 11,159 11,159 11,159 11,159 11,158 34 Special drawing rights certificate account .. 2,518 2,518 2,518 2,518 2,518 2,518 2,518 2,518 2,518 2,518 35 Treasury currency outstanding .................... 13,838 13,886 13,477 13,437 13,444 13,450 13,457 13,464 13,471 13,477 Absorbing Reserve Funds 36 Currency in circulation.................................. 137,244 131,113 131,375 134,042 132,325 131,372 131,424 132,461 132,846 132,006 37 Treasury cash holdings.................................. 437 451 460 440 440 440 441 445 450 450 Deposits, other than member bank reserves, with Federal Reserve Banks 38 Treasury...................................................... 3,062 3,038 2,284 2,814 3,013 2,974 4,069 3,468 3,729 3,433 39 Foreign ........................................................ 411 573 422 301 248 302 278 267 241 232 40 Other............................................................ 617 515 337 370 536 439 432 424 364 397 41 Other Federal Reserve liabilities and capital ...................................................... 4,671 4,579 4,737 4,891 4,701 4,649 4,431 4,708 4,486 4,449 42 Reserve accounts2.......................................... 27,456 26,621 26,734 29,807 23,850 25,323 26,476 28,568 27,900 29,869 1. Includes securities loaned—fully guaranteed by U.S. government securities 2. Includes reserve balances of all depository institutions, pledged with Federal Reserve Banks—and excludes (if any) securities sold and Note. For amounts of currency and coin held as reserves, see table 1.12. scheduled to be bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Member Banks A5 1.12 RESERVES AND BORROWINGS Depository Institutions Millions of dollars Monthly averages of daily figures Reserve classification 1979 1980 Dec. June July Aug. Sept. Oct. Nov. Dec. Feb jp 1 Reserve balances with Reserve Banks1___ 32,473 32,125 31,384 28,923 29,164 29,976 29,215 26,664 27,114 26,591 2 Total vault cash (estimated) ........................ 15,311 18,149 19,293 17,824 3 Vault cash at institutions with required reserve balances2................................ 11,344 11,141 11,287 11,262 11,811 11,678 11,876 12,602 13,587 12,187 4 Vault cash equal to required reserves at other institutions ................................ n.a. n.a. n.a. n.a. n.a. n.a. 439 704 700 763 5 Surplus vault cash at other institutions3 . n.a. n.a. n.a. n.a. n.a. n.a. 2,996 4,843 5,006 4,874 6 Reserve balances + total vault cash4 ........ 43,972 43,479 42,859 40,373 41,164 41,815 44,674 44.940 46,520 44,524 7 Reserve balances + total vault cash used to satisfy reserve requirements4 5........ n.a. n.a. n.a. n.a. n.a. n.a. 41,678 40,097 41,514 39,650 8 Required reserves (estimated) .................... 43,578 43,268 42,575 40,071 40,908 41,498 40,723 40,067 41,025 39,448 9 Excess reserve balances at Reserve Banks4 6 394 211 284 302 256 317 955 30 489 202 10 Total borrowings at Reserve Banks........ 1,473 380 395 659 1,311 1,335 2,156 1,617 1,405 1,278 11 Seasonal borrowings at Reserve Banks 82 12 7 10 26 67 99 116 120 148 Large commercial banks 12 Reserves held................................................... 24.940 26,267 24,874 13 Required....................................................... 25,819 26,605 25,328 14 Excess........................................................... -879 -338 -454 Small commercial banks 15 Reserves held................................................... 13,719 13,935 13,305 16 Required....................................................... 13,523 13,690 13,235 17 Excess........................................................... 196 245 70 U.S. agencies and branches 18 Reserves held................................................... 260 253 388 19 Required....................................................... 230 228 366 20 Excess........................................................... 30 25 22 All other institutions 21 Reserves held................................................... 494 513 502 22 Required....................................................... 495 502 519 23 Excess........................................................... -1 11 -17 Weekly averages of daily figures for week ending Dec. 24 Dec. 31 Jan. Ip Jan. 14p Jan. 21 p Jan. 28p Feb. 4p Feb. 11 p Feb. 18P Feb. 25p 24 Reserve balances with Reserve Banks1 .... 27,659 27,277 27,718 26,900 27,809 26,508 26,571 25,344 27,364 26,765 25 Total vault cash (estimated) ........................ 17,663 18,482 17,841 20,390 20,244 18,827 18,985 18,742 17,421 16,820 26 Vault cash at institutions with required reserve balances2................................ 12,345 12,954 12,498 14,268 14,066 13,736 13,067 12,942 11,886 11,464 27 Vault cash equal to required reserves at other institutions................................ 700 700 700 700 700 700 700 700 700 700 28 Surplus vault cash at other institutions3 . 4,618 4,828 4,643 5,422 5,478 4,391 5,218 5,100 4,835 4,656 29 Reserve balances + total vault cash4 ........ 45,456 45,882 45,681 47,403 48,165 45,442 45,667 44,196 44,893 43,693 30 Reserve balances + total vault cash used to satisfy reserve requirements4 5 ........ 40,838 41,054 41,038 41,981 42,687 41,051 40,449 39,096 40,058 39,037 31 Required reserves (estimated) .................... 40,029 40,558 40,374 41,240 42,180 40,651 40,221 38,926 39,760 39,202 32 Excess reserve balances at Reserve Banks4 6 809 496 664 741 507 400 228 170 298 -165 33 Total borrowings at Reserve Banks........ 1,649 1,627 1,117 1,332 1,419 1,793 1,201 1,113 1,145 1,713 34 Seasonal borrowings at Reserve Banks 119 116 112 105 123 137 125 131 154 160 Large commercial banks 35 Reserves held................................................... 25,757 25,700 25,897 26,698 27,380 25,881 25,526 24,830 25,241 23,669 36 Required....................................................... 25,773 26,163 26,050 26,797 27,629 26,222 25,955 25,031 25,573 25,041 37 Excess........................................................... -16 -463 -153 -99 -249 -341 -429 -201 -332 -1,372 Small commercial banks 38 Reserves held................................................... 13,828 13,955 13,832 13,889 14,185 13,929 13,674 13,159 13,336 13,180 39 Required....................................................... 13,551 13,643 13,598 13,693 13,825 13,698 13,554 13,126 13,184 13,226 40 Excess........................................................... 277 312 234 196 360 231 120 33 152 -46 U.S. agencies and branches 41 Reserves held................................................... 261 262 271 264 252 244 226 261 465 482 42 Required....................................................... 221 234 242 221 223 231 226 237 461 440 43 Excess........................................................... 40 28 29 43 29 13 0 24 4 42 All other institutions 44 Reserves held............................................. 463 527 565 529 496 473 495 479 510 485 45 Required....................................................... 484 518 484 529 503 500 486 532 542 495 46 Excess........................................................... -21 9 81 0 -7 -27 9 -53 -32 -10 1. Includes all reserve balances of depository institutions. existing member bank, or when a nonmember bank joins the Federal Reserve 2. Prior to Nov. 13, 1980, the figures shown reflect only the vault cash held by System. For weeks for which figures are preliminary, figures by class of bank do member banks. not add to total because adjusted data by class are not available. 3. Total vault cash at institutions without required reserve balances less vault 5. Reserve balances with Federal Reserve Banks plus vault cash at institutions cash equal to their required reserves. with required reserve balances plus vault cash equal to required reserves at other 4. Adjusted to include waivers of penalties for reserve deficiencies in accordance institutions. with Board policy, effective Nov. 19, 1975, of permitting transitional relief on a 6. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy graduated basis over a 24-month period when a nonmemBer bank merged into an reserve requirements less required reserves. (This measure of excess reserves is comparable to the old excess reserve concept published historically.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics □ March 1981 1.13 FEDERAL FUNDS AND REPURCHASE AGREEMENTS Large Member Banks' Averages of daily figures, in millions of dollars 1980 and 1981, week ending Wednesday By maturity and source Dec. 31 Jan. 7 Jan. 14 Jan. 21 Jan. 28 Feb. 4 Feb. 11 Feb. 18 Feb. 25 One day and continuing contract 1 Commercial banks in United States ................................ 45,865 50,819 52,180 48,688 44,416' 45,728 48,974 48,056 47,407 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 13,846 14,516 15,309 14,602 14,227 13,884 15,093 15,244 14,672 3 Nonbank securities dealers ................................................. 2,242 2,784 2,937 2,899 2,768 2,272 2,234 2,574 2,251 4 Allother................................................................................. 14,598 16,120 17,728 17,817 17,325' 17,846 17,143 17,153 19,187 All other maturities 5 Commercial banks in United States ................................ 5,266 4,606 4,181 3,993 4,196 4,095 4,582 4,935 3,958 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 7,738 7,112 7,138 7,058 7,302' 7,553 7,539 7,530 7,339 7 Nonbank securities dealers ................................................. 4,491 4,150 4,085 4,652 4,918' 5,014 4,868 4,751 4,390 8 Allother................................................................................. 13,847 12,062 11,356 11,865' 12,377 11,740 11,924 11,564 11,011 Memo: Federal funds and resale agreement loans in ma­ turities of one day or continuing contract 9 Commercial banks in United States ................................ 15,532 18,124 17,016 13,873' 11,356 13,967 14,038 17,221 14,409 10 Nonbank securities dealers ................................................ 2,772 3,614 3,724' 3,032 2,547 2,869 2,686 2,918 3,066 1. Banks with 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 Short-term Extended credit Emergency credit adjustment credit1 to all others Federal Reserve Seasonal credit Special circumstances2 under section 133 Bank Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous 2/28/81 date rate 2/28/81 date rate 2/28/81 date rate 2/28/81 date rate Boston.................... 13 12/8/80 12 13 12/8/80 12 14 12/8/80 13 16 12/8/80 15 New York.............. 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Philadelphia .......... 13 12/8/80 12 13 12/8/80 12 14 12/8/80 13 16 12/8/80 15 Cleveland .............. 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Richmond.............. 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Atlanta .................. 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Chicago.................. 13 12/8/80 12 13 12/8/80 12 14 12/8/80 13 16 12/8/80 15 St. Louis ................ 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Minneapolis .......... 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Kansas City .......... 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Dallas .................... 13 12/8/80 12 13 12/8/80 12 14 12/8/80 13 16 12/8/80 15 San Francisco........ 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Range of rates in recent years4-5 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. B o an 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 ................ 5Vi 5Yi 1974— Apr. 25.................. 7 Vi-8 8 1978— July 10.................. 71/4 1Y4 1971— Jan. 8 ............................ 514-5 Vi 5V4 30.................. 8 8 Aug. 21.................. 73/4 73/4 15............................ 5V4 51/4 Dec. 9.................. 73/4-8 73/4 Sept. 22.................. 8 8 19............................ 5-51/4 51/4 16.................. 73/4 73/4 Oct. 16.................. 8-8 Vi 8Vi 22............................ 5-51/4 5 20.................. 8Vi 8Vi 29............................ 5 5 1975— Jan. 6.................. 7V4 1Y4 Nov. 1.................. %Yb-9Yi 9Vi Feb. 13 ............................ 43A-5 5 10.................. 71/4 1Y\ 3.................. 9Vi 9Vi 19............................ 43/4 43/4 24.................. 71/4 IYa July 16............................ 43/4-5 5 Feb. 5 .................. 63/4^7V4 63/4 1979— July 20.................. 10 10 23............................ 5 5 7.................. 63/4 63/4 Aug. 17.................. lO-lOVi lOVi Nov. 11............................ 43/4-5 5 Mar. 10.................. 6Y4-63/4 6Y4 20.................. lOVi lOVi 19............................ 43/4 43/4 14.................. 61/4 6Y4 Sept. 19.................. 10Vi-ll 11 Dec. 13............................ 4]/2-43/4 43/4 May 16.................. 6-61/4 6 21.................. 11 11 17............................ 4l/2-43/4 4Yi Oct. 8.................. 11-12 12 24............................ 4 Yi 4 Vi 1976— Jan. 19.................. 5^2-6 5Vi 10.................. 12 12 23.................. 5Vi 5Vi 1973— Jan. 15............................ 5 5 Nov. 22.................. 5V4-5Vi 51/4 1980— Feb. 15.................. 12-13 13 Feb. 26 ............................. 5-5 Vi 5Yi 26.................. 51/4 51/4 19.................. 13 13 Mar. 2............................ 5Vi 5 Vi May 29.................. 12-13 13 Am. 23............................. 5Vi-53/4 5Vi 1977— Aug. 30.................. 5W53/4 5V4 30.................. 12 12 May 4............................ 53/4 53/4 31.................. 5V*-53/4 53/4 June 13 .................. 11-12 11 11............................ 53/4-6 6 Sept. 2.................. 53/4 53/4 16.................. 11 11 18............................ 6 6 Oct. 26.................. 6 6 July 28.................. 10-11 10 June 11 ............................ 6-6 Vi 6Vi 29.................. 10 10 15............................. 6 Vi 6Vi 1978— Jan. 9.................. 6-6 Vi 6Y2 Sept. 26.................. 11 11 July 2........................ 7 7 20.................. 6Vi 6Y1 Nov. 17.................. 12 12 Aug. 14............................. 1-1 Yi lYi May 11.................. 6 Vi-7 1 Dec. 5.................. 12-13 13 23............................ lYi lYi 12.................. 7 1 8.................. 13 13 July 3.................. 7-71/4 1Y4 In effect Feb. 28, 1981 13 13 1. Effective Dec. 5, 1980, a 3 percent surcharge was applied to short-term ad­ 4. Rates for short-term adjustment credit. For description and earlier data see justment credit borrowings by institutions with deposits of $500 million or more the following publications of the Board of Governors: Banking and Monetary who borrowed in successive weeks or in more than 4 weeks in a calendar quarter. Statistics, 1914-1941 and 1941-1970; Annual Statistical Digest, 1971-1975, 1972-1976, 2. Applicable to advances when exceptional circumstances or practices involve 1973-1977, and 1974-1978. only a particular depository institution as described in section 201.3(b) (2) of Reg­ 5. Twice in 1980, the Federal Reserve applied a surcharge to short-term ad­ ulation A. justment credit borrowings by institutions with deposits of $500 million or more 3. Applicable to emergency advances to individuals, partnerships, and corpo­ who had borrowed in successive weeks or in more than 4 weeks in a calendar rations as described in section 201.3(c) of Regulation A. quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, 1980. On Nov. 17,1980, a 2 percent surcharge was adopted which was subsequently raised to 3 percent on Dec. 5, 1980. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Financial Statistics □ March 1981 1.15 DEPOSITORY INSTITUTIONS RESERVE REQUIREMENTS^ Percent of deposits Member bank requirements Depository institution requirements before implementation of the after implementation of the Type of deposit, and deposit interval Monetary Control Act Type of deposit, and Monetary Control Act5 in millions of dollars deposit interval Effective date Effective date Net demand2 Net transaction accounts6 0-2................................. 7 12/30/76 $0-$25 million .................... 3 11/13/80 2 10 - - 1 1 0 0 . 0 ... ... . .. . ... . .. . ... . .. . ... . .. . ... . .. . ... . .. . ... . .. . ... . .. . .... 9Vi 12/30/76 Over $25 million ................ 12 11/13/80 ll3/4 12/30/76 100-400 .......................... 123/4 12/30/76 Nonpersonal time deposits7 Over 400 ...................... 161/4 12/30/76 By original maturity Less than 4 years............ 11/13/80 Time and savings2'3 4 years or more .............. 11/13/80 Savings ........................ 3/16/67 Eurocurrency liabilities Time4 All types.......................... 11/13/80 0-5, by maturity 30-179 days ........ 3 3/16/67 180 days to 4 years 2Vi 1/8/76 4 years or more .. 1 10/30/75 Over 5, by maturity 30-179 days ........ 6 12/12/74 180 days to 4 years 2 Vi 1/8/76 4 years or more .. 1 10/30/75 1. For changes in reserve requirements beginning 1963, see Board's Annual (b) Effective with the reserve maintenance period beginning Oct. 25, 1979, a Statistical Digest, 1971-1975 and for prior changes, see Board’s Annual Report for marginal reserve requirement of 8 percent was added to managed liabilities in 1976, table 13. Under provisions of the Monetary Control Act, depository insti­ excess of a base amount. This marginal requirement was increased to 10 percent tutions include commercial banks, mutual savings banks, savings and loan asso­ beginning April 3, 1980, was decreased to 5 percent beginning June 12, 1980, and ciations, credit unions, agencies and branches of foreign banks, and Edge Act was reduced to zero beginning July 24, 1980. Managed liabilities are defined as corporations. large time deposits, Eurodollar borrowings, repurchase agreements against U.S. 2. (a) Requirement schedules are graduated, and each deposit interval applies government and federal agency securities, feaeral funds borrowings from non­ to that part of the deposits of each bank. Demand deposits subject to reserve member institutions, and certain other obligations. In general, the base for the requirements are gross demand deposits minus cash items in process of collection marginal reserve requirement was originally the greater of (a) $100 million or (b) and demand balances due from domestic banks. the average amount of the managed liabilities held by a member bank, Edge (b) The Federal Reserve Act as amended through 1978 specified different ranges corporation, or family of U.S. branches and agencies of a foreign bank for the two of requirements for reserve city banks and for other banks. Reserve cities were statement weeks ending Sept. 26,1979. For the computation period beginning Mar. designated under a criterion adopted effective Nov. 9,1972, by which a bank having 20,1980, the base was lowered by (a) 7 percent or (b) the decrease in an institution’s net demand deposits of more than $400 million was considered to have the character U.S. office gross loans to foreigners and gross balances due from foreign offices of business of a reserve city bank. The presence of the head office of such a bank of other institutions between the base period (Sept. 13-26, 1979) and the week constituted designation of that place as a reserve city. Cities in which there were ending Mar. 12,1980, whichever was greater. For the computation period beginning Federal Reserve Banks or branches were also reserve cities. Any banks having net May 29,1980, the base was increased by IVi percent above the base used to calculate demand deposits of $400 million or less were considered to have the character of the marginal reserve in the statement week of May 14-21, 1980. In addition, business of banks outside of reserve cities and were permitted to maintain reserves beginning Mar. 19, 1980, the base was reduced to the extent that foreign loans and at ratios set for banks not in reserve cities. balances declined. (c) Effective Aug. 24, 1978, the Regulation M reserve requirements on net 5. For existing nonmember banks and thrift institutions, there is a phase-in balances due from domestic banks to their foreign branches and on deposits that period ending Sept. 3, 1987. For existing member banks the phase-in period is foreign branches lend to U.S residents were reduced to zero from 4 percent and about three years, depending on whether their new reserve requirements are greater 1 percent, respectively. The Regulation D reserve requirement on borrowings from or less than the old requirements. For existing agencies and branches of Foreign unrelated banks abroad was also reduced to zero from 4 percent. banks, the phase-in ends Aug. 12, 1982. All new institutions will have a two-year (d) Effective with the reserve computation period beginning Nov. 16, 1978, phase-in beginning with the date that they open for business. domestic deposits of Edge corporations were suoject to the same reserve require­ 6. Transaction accounts include all deposits on which the account holder is ments as deposits of member banks. permitted to make withdrawals by negotiable or transferable instruments, payment 3. (a) Negotiable order of withdrawal (NOW) accounts and time deposits such orders of withdrawal, telephone and preauthorized transfers (in excess of three per as Christmas and vacation club accounts were subject to the same requirements month), for the purpose of making payments to third persons or others. as savings deposits. 7. In general, nonpersonal time deposits are time deposits, including savings (b) The average reserve requirement on savings and other time deposits before deposits, that are not transaction accounts and in which the beneficial interest is implementation of the Monetary Control Act had to be at least 3 percent, the held by a depositor that is not a natural person. Also included are certain trans­ minimum specified by law. ferable time deposits held by natural persons, and certain Obligations issued to 4. (a) Effective Nov. 2,1978, a supplementary reserve requirement of 2 percent depository institution offices located outside the United States. For details, see was imposed on large time deposits of $100,000 or more, obligations of affiliates, section 204.2 of Regulation D. and ineligible acceptances. This supplementary requirement was eliminated with the maintenance period beginning July 24, 1980. Note. Required reserves must be held in the form of deposits with Federal Reserve Banks or vault cash. After implementation of the Monetary Control Act, nonmembers may maintain reserves on a pass-through basis with certain approved institutions. 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 Feb. 28, 1981 Previous maximum In effect Feb. 28, 1981 Previous maximum Effective Effective Effective Effective date date date date 1 Savings ................................................................................. 5V4 7/1/79 7/1/73 5 Yi 7/1/79 5Ya 0) 2 Negotiable order of withdrawal accounts 2 .................. SVa 12/31/80 1/1/74 5Va 12/31/80 5 1/1/74 Time accounts 3 Fixed ceiling rates by maturity 4 3 14-89 days 5..................................................................... 5Ya 8/1/79 5 7/1/73 (6) (6) 4 90 days to 1 year............................................................. 53/4 1/1/80 5Yi 7/1/73 6 1/1/80 53/4 0 5 6 7 2 2 1 Y t t i o o t 2 o 2 Y y 4 i e y y a e e rs a a r r s s ' 7 7 . .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Yi 7 7 / / 1 1 / / 7 7 3 3 5 5 5 Y 3 3 / / 4 4 i 1 1 1 / / / 2 2 2 1 1 1 / / / 7 7 7 0 0 0 6 6 Y 3/4 z 0 0 ) 6 6 53/4 1 1 1 / / / 2 2 2 1 1 1 / / / 7 7 7 0 0 0 8 4 to 6 years 8 ................................................................... IVa 11/1/73 <9l lYi 11/1/73 (9) 9 6 to 8 years 8 ................................................................... lYi 12/23/74 7V4 11/1/73 V/A 12/23/74 lYi 11/1/73 10 8 years or more 8 ........................................................... 73/4 6/1/78 (6)I 6/1/78 (6) 11 Issued to governmental units (all maturities) 10 .... 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) 1011 ................................ 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 deposits *2.................... (13) (13) (13) n3\ 14 2 Yi years or more ........................................................... f15) 1. July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loan or less. Thrift institutions may pay a maximum 9 percent when the six-month bill associations. rate is between 83/4 and 9 percent. Also effective March 15, 1979, interest com­ 2. For authorized states only, federally insured commercial banks, savings and pounding was prohibited on six-month money market time deposits at all offering loan associations, cooperative banks, and mutual savings banks in Massachusetts institutions. The maximum allowable rates in February for commercial banks and and New Hampshire were first permitted to offer negotiable order of withdrawal thrift institutions were as follows: Feb. 5, 13.985; Feb. 12, 14.680; Feb. 19,15.010; (NOW) accounts on Jan. 1, 1974. Authorization to issue NOW accounts was ex­ Feb. 26, 13.861. Effective for all six-month money market certificates issued be­ tended to similar institutions throughout New England on Feb. 27, 1976, and in ginning June 5, 1980, the interest rate ceilings will be determined by the discount New York State on Nov. 10, 1978, and in New Jersey on Dec. 28, 1979. Author­ rate (auction average) of most recently issued six-month U.S. Treasury bills as ization to issue NOW accounts was extended to similar institutions nationwide follows: effective Dec. 31, 1980. Bill rate Commercial bank ceiling Thrift ceiling 3. For exceptions with respect to certain foreign time deposits see the Federal 8.75 and above bill rate + Ya percent bill rate -I- Ya percent Reserve Bulletin for October 1962 (p. 1279), August 1965 (p. 1084), and Feb­ 8.50 to 8.75 bill rate + Ya percent 9.00 ruary 1968 (p. 167). 7.50 to 8.50 bill rate -I- Ya percent bill rate + Yi percent 4. Effective Nov. 10, 1980, the minimum notice period for public unit accounts 7.25 to 7.50 7.75 bill rate + Yi percent at savings and loan associations was decreased to 14 days and the minimum maturity Below 7.25 7.75 7.75 period for time deposits at savings and loan associations in excess of $100,000 was The prohibition against compounding interest in these certificates continues. decreased to 14 days. Effective Oct. 30, 1980, the minimum maturity or notice 14. Effective Jan. 1, 1980, commercial banks, savings and loan associations, and period for time deposits was decreased from 30 days to 14 days for mutual savings mutual savings banks were authorized to offer variable-ceiling nonnegotiable time banks. deposits with no required minimum denomination and with maturities of 2Yi years 5. Effective Oct. 30, 1980, the minimum maturity or notice period for time or more. The maximum rate for commercial banks is 3/4 percentage point below deposits was decreased from 30 days to 14 days for commercial banks. the yield on 2V^-year U.S. Treasury securities; the ceiling rate for thrift institutions 6. No separate account category. is Ya percentage point higher than that for commercial banks. Effective Mar. 1, 7. No minimum denomination. Until July 1, 1979, a minimum of $1,000 was 1980, a temporary ceiling of ll3/4 percent was placed on these accounts at com­ required for savings and loan associations, except in areas where mutual savings mercial banks; the temporary ceiling is 12 percent at savings and loan associations banks permitted lower minimum denominations. This restriction was removed for and mutual savings banks. Effective for all variable ceiling nonnegotiable time deposits maturing in less than 1 year, effective Nov. 1, 1973. deposits with maturities of 2Yi years or more issued beginning June 2, 1980, the 8. No minimum denomination. Until July 1, 1979, minimum denomination was ceiling rates of interest will be determined as follows: $1,000 except for deposits representing funds contributed to an Individual Retire­ Treasury yield Commercial bank ceiling Thrift ceiling ment Account (IRA) or a Keogh (H.R. 10) plan established pursuant to the Internal 12.00 and above 11.75 12.00 Revenue Code. The $1,000 minimum requirement was removed for such accounts 9.50 to 12.00 Treasury yield- Ya percent Treasury yield in December 1975 and November 1976 respectively. Below 9.50 9.25 9.50 9. Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for certificates Interest may be compounded on these time deposits. The ceiling rates of interest maturing in 4 years or more with minimum denominations of $1,000; however, the at which these accounts may be offered vary biweekly. The maximum allowable amount of such certificates that an institution could issue was limited to 5 percent rates in February for commercial banks were as follows: Feb. 5, 11.75; Feb. 19, of its total time and savings deposits. Sales in excess of that amount, as well as 11.75. The maximum allowable rates in February for thrift institutions were as certificates of less than $1,000, were limited to the 6 Yi percent ceiling on time follows: Feb. 5, 12.00; Feb. 19, 12.00. deposits maturing in 2Yi years or more. 15. Between July 1, 1979, and Dec. 31, 1979, commercial banks, savings and Effective Nov. 1, 1973, ceilings were reimposed on certificates maturing in 4 loan associations, and mutual savings banks were authorized to offer variable ceiling years or more with minimum denomination of $1,000. There is no limitation on accounts with no required minimum denomination and with maturities of 4 years the amount of these certificates that banks can issue. or more. The maximum rate for commercial banks was IYa percentage points below 10. Accounts subject to fixed rate ceilings. See footnote 8 for minimum denom­ the yield on 4-year U.S. Treasury securities; the ceiling rate for thrift institutions ination requirements. was Ya percentage point higher than that for commercial banks. 11. Effective January 1, 1980, commercial banks are permitted to pay the same Note. Before Mar. 31, 1980, the maximum rates that could be paid by federally rate as thrifts on IRA and Keogh accounts and accounts of governmental units insured commercial banks, mutual savings banks, and savings and loan associations when such deposits are placed in the new 2Vi-year or more variable ceiling certif­ were established by the Board of Governors of the Federal Reserve System, the icates or in 26-week money market certificates regardless of the level of the Treasury Board of Directors of the Federal Deposit Insurance Corporation, and the Federal bill rate. Home Loan Bank Board under the provisions of 12 CFR 217, 329, and 526, 12. Must have a maturity of exactly 26 weeks and a minimum denomination of respectively. Title II of the Depository Institutions Deregulation and Monetary $10,000, and must be nonnegotiable. Control Act of 1980 (P.L. 96-221) transferred the authority of the agencies to 13. Commercial banks, savings and loan associations, and mutual savings banks establish maximum rates of interest payable on deposits to the Depository Insti­ were authorized to offer money market time deposits effective June 1, 1978. The tutions Deregulation Committee. The maximum rates on time deposits in denom­ ceiling rate for commercial banks on money market time deposits entered into inations of $100,000 or more with maturities of 30-89 days were suspended in June before June 5,1980, is the discount rate (auction average) on most recently issued 1970; such deposits maturing in 90 days or more were suspended in May 1973. For six-month U.S. Treasury bills. Until Mar. 15,1979, the ceiling rate for savings and information regarding previous interest rate ceilings on all types of accounts, see loan associations and mutual savings banks was Va percentage point higher than earlier issues of the Federal Reserve Bulletin, the Federal Home Loan Bank the rate for commercial banks. Beginning March 15,1979, the V4-percentage-point Board Journal, and the Annual Report of the Federal Deposit Insurance Corpo­ interest differential is removed when the six-month Treasury bill rate is 9 percent ration. or more. The full differential is in effect when the six-month bill rate is 83/4 percent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Financial Statistics □ March 1981 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1980 1981 Type of transaction 1978 1979 1980 July Aug. Sept. Oct. Nov. Dec. Jan. U.S. Government Securities Outright transactions (excluding matched salepurchase transactions) Treasury bills 1 Gross purchases.......................................................... 16,628 15,998 7,668 0 0 200 991 0 1,331 1,100 2 Gross sales ................................................................... 13,725 6,855 7,331 2,264 47 237 531 600 0 3,865 3 Exchange ...................................................................... 0 0 0 0 0 0 0 0 0 0 4 Redemptions ............................................................... 2,033 2,900 3,389 950 0 0 700 500 49 1,000 Others within 1 year1 5 Gross purchases.......................................................... 1,184 3,203 912 0 137 0 0 0 100 0 6 Gross sales ................................................................... 0 0 0 0 0 0 0 0 0 0 7 Maturity shift.......................................................... -5,170 17,339 12,427 311 2,423 589 596 2,368 754 462 8 Exchange ...................................................................... -11,308 -18,251 -788 -3,134 -1,459 -420 -879 -967 0 9 Redemptions ............................................................... } 0 2,600 0 0 0 0 0 0 0 0 1 to 5 years 10 Gross purchases.......................................................... 4,188 2,148 2,138 0 541 0 0 0 0 0 11 Gross sales ................................................................... 0 0 0 0 0 0 0 0 0 0 1 13 2 M Ex a c t h u a ri n t g y e s h .. i .. f . t .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . } -178 -12 7 , , 6 5 9 0 3 8 -8 13 ,9 ,4 0 1 9 2 -3 7 1 8 1 8 - 1 7 ,7 2 5 0 0 - 1 5 ,4 8 5 9 9 -5 4 9 2 6 0 -2,3 5 6 0 8 0 -7 9 5 6 4 7 -462 0 5 to 10 years 14 Gross purchases........................................................... 1,526 523 703 0 236 0 0 0 0 0 15 Gross sales ................................................................... 0 0 0 0 0 0 0 0 0 0 1 1 7 6 E M x a c t h u a r n it g y e s h .. i . f .. t .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . } 2,803 -4 2 , , 6 1 4 8 6 1 -3 2 ,0 ,9 9 7 2 0 0 0 -1 1 ,7 ,0 0 0 3 0 0 0 0 0 220 0 0 0 0 0 Over 10 years 18 Gross purchases.......................................................... 1,063 454 811 0 320 0 0 0 0 0 19 Gross sales ................................................................... 0 0 0 0 0 0 0 0 0 0 20 Maturity shift............................................................... 0 -426 0 0 0 0 0 0 0 21 Exchange ..................................................................... } 2,545 1,619 1,869 0 384 0 0 159 0 0 All maturities1 22 Gross purchases.......................................................... 24,591 22,325 12,232 0 1,234 200 991 0 1,431 1,100 23 Gross sales ................................................................... 13,725 6,855 7,331 2,264 47 237 531 600 0 3,865 24 Redemptions ............................................................... 2,033 5,500 3,389 950 0 0 700 500 49 1,000 Matched transactions 25 Gross sales ................................................................... 511,126 627,350 674,000 48,370 72,315 55,766 55,787 40,944 79,754 61,427 26 Gross purchases........................................................... 510,854 624,192 675,496 46,023 71,645 56,207 56,462 41,129 78,734 63,062 Repurchase agreements 27 Gross purchases.......................................................... 151,618 107,051 113,902 10,719 2,783 3,203 20,145 24,169 11,534 6,108 28 Gross sales ................................................................... 152,436 106,968 113,040 10,110 3,016 2,743 19,808 23,924 11,381 8,137 29 Net change in U.S. government securities ........... 7,743 6,896 3,869 -4,952 284 863 771 -670 516 -4,159 Federal Agency Obligations Outright transactions 30 Gross purchases.......................................................... 301 853 668 0 0 0 0 0 0 0 31 Gross sales ................................................................... 173 399 0 0 0 0 0 0 0 0 32 Redemptions ............................................................... 235 134 145 2 91 21 0 22 0 Repurchase agreements 33 Gross purchases........................................................... 40,567 37,321 28,895 1,737 1,082 977 5,922 4,825 1,889 652 34 Gross sales ................................................................... 40,885 36,960 28,863 1,242 1,132 1,188 5,734 4,880 1,767 1,177 35 Net change in federal agency obligations .............. -426 681 555 492 -50 -302 167 -55 99 -525 Bankers Acceptances 36 Outright transactions, net ........................................... 0 0 0 0 0 0 0 0 0 0 37 Repurchase agreements, net...................................... -366 116 73 -64 -33 222 67 -43 253 -776 38 Net change in bankers acceptances ......................... -366 116 73 -64 -33 222 67 -43 253 -776 39 Total net change in System Open Market Account............................................................... 6,951 7,693 4,497 -4,523 202 784 1,005 -768 868 -5,460 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): 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 All 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month Account 1981 1980 1981 Jan. 28 Feb. 4 Feb. 11 Feb. 18 Feb. 25 Consolidated condition statement Assets 1 Gold certificate account.................................................... 11,159 11,159 11,159 11,159 11,158 11,161 11,159 11,156 2 Special drawing rights certificate account...................... 2,518 2,518 2.518 2,518 2,518 2,518 2,518 2,518 3 Coin...................................................................................... 447 465 477 479 486 397 468 495 Loans 4 To depository institutions ............................................ 1,553 752 1.037 875 5,192 1,809 1,304 1,249 5 Other................................................................................ 0 0 0 0 0 0 0 0 Acceptances 6 Held under repurchase agreements ............................ 0 0 0 0 0 776 0 0 Federal agency obligations 7 Bought outright............................................................... 8,739 8.739 8,739 8,739 8,737 8,739 8,739 8,737 8 Held under repurchase agreements ............................ 0 0 0 0 0 525 0 0 U.S. government securities Bought outright 9 Bills............................................................................... 39,527 41,568 41,535 42,325 41,034 43,688 41,558 42,033 10 Notes............................................................................ 58,718 58,718 58,718 58,370 58.370 58,718 58,718 58,370 11 Bonds ........................................................................... 16,893 16,893 16,893 17,218 17,218 16,893 16,893 17,218 12 Total1 ........................................................................... 115.138 117.179 117.146 117,913 116,622 119,299 117.169 117.621 13 Held under repurchase agreements ............................ 0 0 0 0 0 2,029 0 0 14 Total U.S. government securities.................................... 115.138 117.179 117.146 117.193 116,622 121,328 117.169 117.621 15 Total loans and securities.................................................. 125,430 126,670 126,922 127,527 130,551 133,177 127,212 127,607 16 Cash items in process of collection ................................ 8,654 9,570 11,325 14,004 9,220 12,554 7,865 7,473 17 Bank premises..................................................................... 458 458 458 459 461 457 458 461 Other assets 18 Denominated in foreign currencies2 .......................... 5,974 6,388 6,713 6.985 7,088 5,104 5,993 7,086 19 All other........................................................................... 3,448 3,354 3,407 2.425 2,304 3,177 3,385 2,500 20 Total assets........................................................................... 158,088 160,582 162,979 165,556 163,786 168,545 159,058 159,296 Liabilities 21 Federal Reserve notes ....................................................... 118,808 118,873 119.919 120.304 119,465 124,241 118,147 118,854 Deposits 22 Depository institutions................................................... 25,323 26,476 28.568 27,900 29,869 27,456 26,621 26,734 23 U.S. Treasury—General account................................ 2,974 4,069 3.468 3.729 3,433 3,062 3,034 2,284 24 Foreign—Official accounts ........................................... 302 278 267 241 232 411 573 422 25 Other................................................................................. 439 432 424 364 397 617 515 337 26 Total deposits....................................................................... 29,038 31,255 32,727 32,234 33,931 31,546 30,747 29,777 27 Deferred availability cash items ...................................... 5,593 6,023 5.625 8,532 5,941 8,087 5,585 5.928 28 Other liabilities and accrued dividends3 ........................ 2,017 1,878 2.038 1,811 1,755 2,265 1,957 1,958 29 Total liabilities..................................................................... 155,456 158,029 160,309 162,881 161,092 166,139 156,436 156,517 Capital Accounts 30 Capital paid in..................................................................... 1,208 1,209 1.210 1,212 1,221 1.203 1,208 1,222 31 Surplus ................................................................................. 1,203 1,203 1,203 1.203 1,203 1.203 1,203 1,203 32 Other capital accounts ...................................................... 221 141 257 260 270 0 211 354 33 Total liabilities and capital accounts .............................. 158,088 160,582 162,979 165,556 163,786 168,545 159,058 159,296 34 Memo: Marketable U.S. government securities held in custody for foreign and international account 93,027 93,081 93,445 94,084 93,977 91,795 92,756 94,658 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to bank) 140,843 140,767 141,028 141,128 141,361 140,184 140,717 141,297 36 Less-held by bank4 .............................................. 22,035 21,894 21,109 20,824 21,896 15,943 22,570 22,443 37 Federal Reserve notes, net ................................ 118,808 118,873 119.919 120,304 119,465 124,241 118,147 118,854 Collateral for Federal Reserve notes 38 Gold certificate account.......................................... 11,159 11,159 11.159 11,159 11,158 11,161 11,159 11,156 39 Special drawing rights certificate account............ 2,518 2,518 2.518 2,518 2,518 2,518 2,518 2,518 40 Other eligible assets ................................................ 0 0 0 0 0 0 0 0 41 U.S. government and agency securities .............. 105,131 105,196 106,242 106.627 105,789 110,562 104,470 105,180 42 Total collateral............................................................... 118,808 118,873 119,919 120,304 119,465 124,241 118,147 118,854 1. Includes securities loaned—fully guaranteed by U.S. government securities 3. Includes exchange-translation account reflecting the monthly revaluation at pledged with Federal Reserve Banks—and excludes (if any) securities sold and market exchange rates of foreign-exchange commitments. scheduled to be bought back under matched sale-purchase transactions. 4. Beginning September 1980, Federal Reserve notes held by the Reserve Bank 2. Includes U.S. government securities held under repurchase agreement against are exempt from the collateral requirement. receipt of foreign currencies and foreign currencies warehoused for the U.S. Treas­ ury. Assets shown in this line are revalued monthly at market exchange rates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Financial Statistics □ March 1981 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month Type and maturity groupings 1981 1980 1981 Jan. 28 Feb. 4 Feb. 11 Feb. 18 Feb. 25 Dec. 31 Jan. 31 Feb. 28 1 Loans—Total......................................................................... 1,553 752 1,037 875 5,192 1,809 1,304 1,249 2 Within 15 days................................................................... 1,505 685 964 839 5,163 1,757 1,255 1,199 3 16 days to 90 days............................................................. 48 67 73 36 29 52 49 50 4 91 days to 1 year............................................................... 0 0 0 0 0 0 0 0 5 Acceptances—Total ............................................................. 0 0 0 0 0 776 0 0 6 Within 15 days................................................................... 0 0 0 0 0 776 0 0 7 16 days to 90 days............................................................. 0 0 0 0 0 0 0 0 8 91 days to 1 year............................................................... 0 0 0 0 0 0 0 0 9 U.S. government securities—Total .................................. 115,138 117,179 117,146 117,913 116,622 121,328 117,169 117,621 10 Within 15 days1 ................................................................. 4,385 4,954 6,536 6,217 5,096 4,780 2,125 3,101 11 16 days to 90 days............................................................. 19,948 21,623 20,035 20,889 21,510 23.499 24,904 23,245 12 91 days to 1 year............................................................... 27,943 27,741 27,715 26,916 26,125 30.187 27,279 27,385 13 Over 1 year to 5 years ..................................................... 34,505 34,504 34,504 34,809 34,809 34,505 34,505 34,809 14 Over 5 years to 10 years ................................................. 13,355 13,355 13,354 13,755 13,755 13,355 13,354 13,754 15 Over 10 years..................................................................... 15,002 15,002 15,002 15,327 15,327 15.002 15,002 15,327 16 Federal agency obligations—Total.................................... 8,739 8,739 8,739 8,739 8,737 9,264 8,739 8,737 17 Within 15 days' ................................................................. 73 0 183 257 128 705 73 128 18 16 days to 90 days............................................................. 550 619 436 362 439 426 550 439 19 91 days to 1 year............................................................... 1,750 1,753 1,830 1,830 1,834 1,519 1,749 1,834 20 Over 1 year to 5 years ..................................................... 4,597 4,597 4,553 4,553 4,621 4.837 4,597 4,621 21 Over 5 years to 10 years ................................................. 1,085 1,085 1,052 1,052 1,030 1,092 1,085 1,030 22 Over 10 years..................................................................... 684 685 685 685 685 685 685 685 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' Aug/ Sept/ Oct.' Nov/ Dec. Debits to demand deposits1 (seasonally adjusted) 1 All commercial banks........................................................... 34,322.8 40,297.8 49,775.0 65,498.2 65.258.6 65.346.7 67,621.4 69.950.2 2 Major New York City banks ............................................. 13,860.6 15,008.7 18.512.7 26,708.4 26.104.7 26.035.0 26,821.8 27.352.2 3 Other banks........................................................................... 20,462.2 25,289.1 31,262.3 38,789.8 39,154.0 39.311.7 40,799.6 42,598.0 Debits to sa^/ings deposits2 (not seasonsilly adjusted) 4 ATS/NOW3 5.5 17.1 83.3 145.5 176.3 185.5 173.4 218.3 5 Business4 .. 21.7 56.7 77.3 87.4 95.8 100.1 95.6 119.2 6 Others5___ 152.3 359.7 515.2 560.3 649.0 688.2 573.7 704.2 7 All accounts 179.5 432.9 675.8 793.2 921.1 973.8 842.8 1,041.6 Demand deposit turnover1 (seasonally adjusted) 8 All commercial banks........................................................... 129.2 139.4 163.5 206.3 203.2 202.1 211.6 222.7 9 Major New York City banks ............................................ 503.0 541.9 646.2 859.7 818.6 799.5 842.2 865.8 10 Other banks........................................................................... 85.9 96.8 113.3 135.4 135.3 135.2 141.8 150.8 Savings deposit turnover2 (not seasonally adjusted) 11 ATS/NOW3 ........................................................................... 6.5 7.0 7.8 8.3 9.5 9.7 8.4 10.4 12 Business4 ............................................................................... 4.1 5.1 7.2 8.0 8.6 8.8 8.5 11.3 13 Others5................................................................................... 1.5 1.7 2.7 3.1 3.6 3.8 3.2 4.1 14 All accounts........................................................................... 1.7 1.9 3.1 3.8 4.4 4.6 4.0 5.1 1. Represents accounts of individuals, partnerships, and corporations, and of Note. Historical data for the period 1970 through June 1977 have been estimated; states and political subdivisions. these estimates are based in part on the debits series for 233 SMSAs, which were 2. Excludes special club accounts, such as Christmas and vacation clubs. available through June 1977. Back data are available from Publications Services, 3. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts Division of Administrative Services, Board of Governors of the Federal Reserve authorized for automatic transfer to demand deposits (ATS). ATS data availability System. Washington, D.C. 20551. Debits and turnover data for savings deposits starts with December 1978. 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 1980 Item D 19 e 7 c 7 . D 19 e 7 c 8 . D 19 e 7 c 9 . D 19 e 8 c 0 . Aug. Sept. Seasonally adjusted Measures1 1 M-1A.................................................. 328.4 351.6 369.8 384.8 379.5 383.4 386.3 388.4 384.8 372.8 2 M-1B................................................... 332.6 360.1 386.9 411.9 402.7 408.0 412.0 415.0 411.9 416.1 3 M-2 .................................................... 1.294.1 1.401.5 1,526.0 1,673.4' 1.632.5 1.644.4 1,656.5 1,670.8 1,673.4' 1,681.7 45 MU-3. ...................................................................................... 1 1 , .7 4 2 60 0 . . 3 2 1 1 . , 6 9 2 3 3 4 . . 6 9 2 1 , , 1 7 5 7 1 5 . .5 8 2 1 , , 3 9 7 5 3 7 . . 5 9' 2 1 , . 2 8 8 8 2 9 . .5 7 2 1 . , 3 9 0 0 6 4 . . 5 6 2 1 , ,9 3 2 1 1 9 . . 8 1' 2 1 , , 3 9 4 4 6 6 . . 5 1 2 1 , , 3 9 7 5 3 7 . . 5 9' 1,97 n 8 .a .2 . Components 6 Currency............................................ 88.7 97.6 106.3 116.4 113.5 113.9 115.1 115.8 116.4 116.6 7 Demand deposits.............................. 239.7 253.9 263.5 268.4 266.0 269.5 271.2 272.6 268.4 256.2 8 Savings deposits................................ 486.4 475.8 417.0 393.6' 408.1 412.1 414.2 407.9 393.6' 377.1 9 Small-denomination time deposits3 454.9 533.8 656.2 763.2' 712.6 716.4 723.6 741.6 763.2' 778.0 10 Large-denomination time deposits4 145.2 194.7 219.0 248.0' 223.3 226.8 229.8 238.8 248.0' 257.9 Not seasonally adjusted Measures1 11 M-1A........................................................... 337.2 360.9 379.4 394.7 377.3 382.6 388.0 391.1 394.7 377.3 12 M-1B........................................................... 341.4 369.5 396.4 421.8 400.5 407.2 413.7 417.7 421.8 420.7 13 M-2 ............................................................. 1,295.9 1,403.6 1,527.7 1,674.8' 1,629.5 1,642.3 1,656.9 1,665.7 1,674.8' 1,685.2 14 M-3 ............................................................. 1,464.5 1,629.2 1,780.8 1,962.8' 1,886.6 1,902.3 1,923.1' 1,942.1 1,962.8' 1,983.5 15 L2................................................................. 1,723.2 1,938.3 2,154.3 2,375.0 2,278.6 2,296.2' 2,318.0' 2,344.7 2,375.0 n.a. Components 16 Currency..................................................... 90.3 99.4 108.3 118.5 113.7 113.7 114.9 116.6 118.5 115.8 17 Demand deposits...................................... 247.0 261.5 271.2' 276.2 263.6 268.9 273.1 274.5 276.2 261.5 18 Other checkable deposits5...................... 4.2 8.6 17.0 27.1 23.2 24.6 25.7 26.6 27.1 43.3 19 Overnight RPs and Eurodollars6 .......... 18.6 23.9 25.3 32.2 31.6 32.9 32.5 32.6 32.2 32.9 20 Money market mutual funds.................. 3.8 10.3 43.6 75.8 80.7 78.2 77.4 77.0 75.8 80.7 21 Savings deposits......................................... 483.1 472.6 414.1 390.9' 408.8 412.4 412.9 405.8 390.9' 374.7 22 Small-denomination time deposits3 ___ 451.3 529.8 651.2 757.4' 711.1 714.9 723.7 735.9 757.4' 779.3 23 Large-denomination time deposits4 .... 147.7 198.2 222.6 251.5' 223.3 226.5 230.7' 240.0 251.5' 259.8 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-1A: 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 depository 5. Includes ATS and NOW balances at all institutions, credit union share draft institutions, overnight repurchase agreements at commercial banks, overnight Eu­ balances, and demand deposits at mutual savings banks. rodollars held by U.S. residents other than banks at Caribbean branches of member 6. Overnight (and continuing contract) RPs are those issued by commercial 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 depository 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 □ March 1981 1.22 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MEMBER BANK DEPOSITS Billions of dollars, averages of daily figures 1980 1981 Item D 19 e 7 c 8 . D 19 e 7 c 9 / D 19 e 8 c 0 . July Aug. Sept. Oct. Nov.2 Dec. Jan. Seasonally adjusted 1 Total reserves3................................................................................................. 41.16 43.46 40.13 42.78 40.75 41.52 41.73 41.23 40.13 40.10 2 Nonborrowed reserves................................................................................... 40.29 41.98 38.44 42.39 40.09 40.21 40.42 39.17 38.44 38.70 3 Required reserves........................................................................................... 40.93 43.13 39.58 42.50 40.45 41.26 41.52 40.73 39.58 39.56 4 Monetary base4............................................................................................... 142.2 153.7 159.8 158.8 158.2 159.5 160.9 160.7 159.8 160.1 5 Member bank deposits subject to reserve requirements5 ........................ 616.1 644.5 701.8 658.5 667.8 678.2 684.7 694.3 701.8 703.8 6 Time and savings............................................................................................. 428.7 451.2 485.6' 467.0 474.2 482.0 485.5' 475.4' 485.6' 517.4 Demand 7 Private........................................................................................................... 185.1 191.5 196.0 189.1 191.5 194.5 195.6 198.1 196.0 184.1 8 U.S. government......................................................................................... 2.2 1.8 1.9 2.5 2.1 1.8 2.4 2.2 1.9 2.3 Not seasonally adjusted 9 Monetary base4............................................................................................... 144.6 156.2 162.5 159.6 158.0 159.0 160.6 161.5 162.5 161.0 10 Member bank deposits subject to reserve requirements5 ........................ 624.0 652.7 710.3 658.2 662.5 675.6 684.2 694.6 710.3 712.6 11 Time and savings............................................................................................. 429.6 452.1 486.5' 466.0 471.8 479.6 484.5' 474.5' 486.5' 493.4 Demand 12 Private........................................................................................................... 191.9 198.6 203.2 190.0 189.0 193.9 196.4 199.6 203.2 189.9 13 U.S. government......................................................................................... 2.5 2.0 2.1 2.2 1.7 2.1 2.1 1.9 2.1 2.1 1. Reserves of depository institutions series reflect actual reserve requirement 2. Reserve measures for November reflect increases in required reserves asso­ rcentages with no adjustment to eliminate the effect of changes in Regulations ciated with the reduction of weekend avoidance activities of a rew large banks. The and M. Before Nov. 13, 1980, the date of implementation of the Monetary reduction in these activities lead to essentially a one-time increase in the average Control Act, only the reserves of commercial banks that were members of the level of required reserves that need to be held for a given level of deposits entering Federal Reserve System were included in the series. Since that date the series the money supply. In November, this increase in required reserves is estimated at include the reserves of all depository institutions. In conjunction with the imple­ $550 to $600 million. mentation of the act, required reserves of member banks were reduced about $4.3 3. Reserve balances with Federal Reserve Banks plus vault cash at institutions billion and required reserves of other depository institutions were increased about with required reserve balances plus vault cash equal to required reserves at other $1.4 billion. Effective Oct. 11, 1979, an 8 percentage point marginal reserve re­ institutions. quirement was imposed on “Managed Liabilities.” This action raised required 4. Includes reserve balances at Federal Reserve Banks in the current week plus reserves about $320 million. Effective Mar. 12, 1980, the 8 percentage point mar­ vault cash held two weeks earlier used to satisfy reserve requirements at all ginal reserve requirement was raised to 10 percentage points. In addition the base depository institutions plus currency outside the U.S. Treasury, Federal Reserve upon which the marginal reserve requirement was calculated was reduced. This Banks, the vaults of depository institutions, and surplus vault cash at depository action increased required reserves about $1.7 million in the week ending Apr. 2, institutions. 1980. Effective May 29, 1980 the marginal reserve requirement was reduced from 5. Includes total time and savings deposits and net demand deposits as defined 10 to 5 percentage points and the base upon which the marginal reserve requirement by Regulation D. Private demand deposits include all demand deposits except those was calculated was raised. This action reduced required reserves about $980 million due to the U.S. government, less cash items in process of collection and demand in the week ending June 18, 1980. Effective July 24, 1980, the 5 percent marginal balances due from domestic commercial banks. reserve requirement on managed liabilities and the 2 percent supplementary reserve requirement against large time deposits were removed. These actions reduced Note. Latest monthly and weekly figures are available from the Board’s H.3(502) required reserves about $3.2 billion. statistical release. Back data and estimates of the impact on required reserves and changes in reserve requirements are available from the Banking 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 Banks* Billions of dollars; averages of Wednesday figures 1980 1981 1980 1981 Category D 19 e 7 c 7 . D 19 e 7 c 8 . D 19 e 7 c 9 . D 19 e 7 c 7 . D 19 e 7 c 8 . D 19 e 7 c 9 . Dec. Jan. Dec. Jan. Seasonally adjusted Not seasonally adjusted 1 Total loans and securities2 ............................ 891.1 1,014.33 1,132.54 1,234.1 1,250.8 899.1 1,023.83 1,143.04 1,245.7 1,251.1 2 U.S. Treasury securities................................ 99.5 93.4 93.8 109.6 112.7 100.7 94.6 95.0 111.0 113.8 3 Other securities............................................... 159.6 173.I3 191.5 214.3 216.5 160.2 173.93 192.3 215.2 216.1 4 Total loans and leases2.................................. 632.1 747.83 847.24 910.1 921.5 638.3 755.43 855.74 919.5 921.2 5 Commercial and industrial loans ............ 211.25 246.56 290.54 323.1 327.9 212.65 248.26 292.44 325.3 327.0 6 Real estate loans........................................ 175.25 210.5 242.44 260.9 262.7 175.55 210.9 242.94 261.4 262.7 7 Loans to individuals ................................... 138.2 163.9 185.0 175.2 174.9 139.0 164.8 186.2 176.2 174.9 8 Security loans............................................... 20.6 19.4 18.3 17.9 19.0 22.0 20.7 19.6 19.1 19.3 9 Loans to nonbank financial institutions . 25.85 27.17 30.34 30.7 31.4 26.35 27.67 30.84 31.3 31.1 10 Agricultural loans ...................................... 25.8 28.2 31.0 34.2 34.5 25.7 28.1 30.8 34.1 34.2 11 Lease financing receivables...................... 5.8 7.4 9.5 11.1 11.5 5.8 7.4 9.5 11.1 11.5 12 All other loans............................................. 29.5 44.93 40.2 56.9 59.6 31.5 47.63 43.5 61.0 68.5 Memo: 13 Total loans and securities plus loans sold2*9 895.9 1,018.13 1,135.34’8 1,236.8 1,253.5 903.9 1,027.63 l,145.74-» 1,248.4 1,253.9 14 Total loans plus loans sold2 9 ...................... 636.9 751.63 850.004-8 912.8 924.3 643.0 759.23 858.44-8 922.2 924.0 15 Total loans sold to affiliates9 ...................... 4.8 3.8 2.8s 2.7 2.8 4.8 3.8 2.88 2.7 2.8 16 Commercial and industrial loans plus loans sold9........................................................... 213.95 248.56-10 292.34-8 324.9 329.8 215.35 250.l6.io 294.24-8 327.1 328.8 17 Commercial and industrial loans sold9 .. 2.7 1.9*0 1.8s 1.8 1.9 2.7 I.910 1.88 1.8 1.9 18 Acceptances held ...................................... 7.5 6.8 8.5 7.8 8.4 8.6 7.5 9.4 8.5 8.8 19 Other commercial and industrial loans .. 203.75 239.7 282.0 315.3 319.5 203.95 240.9 283.1 316.8 318.1 20 To U.S. addressees11 ............................ 193.85 226.6 263.2 293.5 295.6 193.75 226.5 263.2 293.5 293.6 21 To non-U.S. addressees........................ 9.95 13.1 18.8 21.8 23.9 10.35 14.4 19.8 23.3 24.5 22 Loans to foreign banks ................................ 13.5 21.2 18.7 24.0 24.7 14.6 23.0 20.1 25.8 25.7 23 Loans to commercial banks in the United States........................................... 54.1 57.3 77.8 n.a. n.a. 56.9 60.3 81.9 n.a. n.a. 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 Eage 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 obligations. 9. Loans sold are those sold outright to a bank’s own foreign branches, non­ 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 amount reduced by $0.3 billion. 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 were 11. United States includes the 50 states and the District of Columbia. 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 billion banks, and averages of current and previous montn-end data for foreign-related as a result of reclassifications. institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics □ March 1981 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars December outstanding Outstanding in 1980 and 1981 Source 1977 1978 1979 May June July Aug. Sept. Oct. Nov. Dec. Jan. Total nondeposit funds 1 Seasonally adjusted2................................................ 61.8 85.4 118.8 119.9 114.1 112.2 107.3 112.0 118.6 n.a. n.a. n.a. 2 Not seasonally adjusted .......................................... 60.4 84.4 117.4 123.0 114.2 116.4 110.3 112.5 119.6 n.a. n.a. n.a. Federal funds, RPs, and other borrowings from non­ banks 3 Seasonally adjusted3................................................ 58.4 74.8 88.0 94.2 96.7 98.5 94.0 100.2 104.4 n.a. n.a. n.a. 4 Not seasonally adjusted .......................................... 57.0 73.8 86.5 97.4 96.8 102.7 97.1 100.8 105.4 n.a. n.a. n.a. 5 Net Eurodollar borrowings, not seasonally adjusted -1.3 6.8 28.1 23.0 14.6 10.9 10.3 8.9 11.5 7.5 7.0 8.7 6 Loans sold to affiliates, not seasonally adjusted4 5 . 4.8 3.8 2.8 2.6 2.8 2.8 2.9 2.9 2.8 2.6 2.7 2.8 Memo 7 Domestic chartered banks net positions with own foreign branches, not seasonally adjusted6___ -12.5 -10.2 6.5 2.6 -5.4 -8.4 -10.3 -14.5 -12.9 -14.2 -14.7 -16.2 8 Gross due from balances ........................................ 21.1 24.9 22.8 27.3 30.1 32.7 35.8 38.2 38.3 37.2 37.5 37.4 9 Gross due to balances ............................................ 8.6 14.7 29.3 30.0 24.7 24.3 25.5 23.7 25.5 23.0 22.7 21.2 10 Foreign-related institutions net positions with di­ rectly related institutions, not seasonally adjusted7................................................................. 11.1 17.0 21.6 20.5 19.9 19.3 20.6 23.3 24.4 21.7 21.7 24.9 11 Gross due from balances ........................................ 10.3 14.2 28.9 28.4 28.5 30.8 30.9 30.3 30.8 32.3 33.7 31.2 12 Gross due to balances ............................................ 21.4 31.2 50.5 48.8 48.4 50.1 51.6 53.6 55.2 54.1 55.4 56.1 13 Security RP borrowings, seasonally adjusted8........ 36.3 44.8 49.2 43.7 49.0 55.0 57.5 56.2 59.7 58.8 63.4 68.7 14 Not seasonally adjusted .......................................... 35.1 43.6 47.9 46.0 48.8 54.7 59.1 58.7 59.5 60.9 61.7 65.0 15 U.S. Treasury demand balances, seasonally adjusted9................................................................ 4.4 8.7 8.1 9.5 8.6 10.9 11.8 126 14.0 6.9 7.6 8.0 16 Not seasonally adjusted .......................................... 5.1 10.3 9.7 8.5 10.0 9.3 9.3 14 2 12.7 6.6 9.0 7.9 17 Time deposits, $100,000 or more, seasonally adjusted10............................................................... 162.0 213.0 227.6 242.1 237.6 234.0 234.4 238.8 241.6 249.3 257.5 268.2 18 Not seasonally adjusted .......................................... 165.4 217.9 232.8 240.2 235.5 230.0 232.1 236.7 241.1 250.8 263.4 272.8 1. Commercial banks are those in the 50 states and the District of Columbia with 6. Includes averages of daily figures for member banks and quarterly call report national or state charters plus U.S. branches, agencies, and New York investment figures for nonmember banks. company subsidiaries of foreign banks and Edge Act corporations. 7. Includes averages of current and previous month-end data until August 1979; 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from beginning September 1979 averages of daily data. nonbanks and not seasonally adjusted net Eurodollars and loans to affiliates. In­ 8. Based on daily average data reported by 122 large banks beginning February cludes averages of Wednesday data for domestic chartered banks and averages of 1980 and 46 banks before February 1980. current and previous month-end data for foreign-related institutions. 9. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at 3. Other borrowings are borrowings on any instrument, such as a promissory commercial banks. Averages of daily data. note or due bill, given for the purpose of borrowing money for the banking business. 10. Averages of Wednesday figures. This includes borrowings from Federal Reserve Banks and from foreign banks, Note. Security RP borrowings, U.S. Treasury demand balances, and time de­ term federal funds, overdrawn due from bank balances, loan RPs, and participa­ posits in denominations of $100,000 or more have revised to reflect benchmark tions in pooled loans. Includes averages of daily figures for member banks and adjustments to call reports. averages of current and previous month-end data for foreign-related institutions. 4. Loans initially booked by the bank and later sold to affiliates that are still held by affiliates. Averages of Wednesday data. 5. As of Dec. 1, 1979, loans sold to affiliates were reduced $800 million due to corrections of two New York City banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A17 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1980 1981 Account Apr/ May' Juner July' Aug/ Sept/ Oct/ Nov/ Dec/ Jan/ Feb. Domestically Chartered Commercial Banks1 1 Loans and investments, excluding interbank ............................................... 1,093.5 1,087.0 1,090.5 1,095.3 1,108.5 1,117.9 1,134.8 1,150.8 1,177.1 1,166.0 1,167.0 2 Loans, excluding interbank ....................... 801.7 792.5 793.2 793.4 801.9 809.1 821.6 832.8 851.4 840.2 839.0 3 Commercial and industrial .................. 259.7 256.6 256.9 257.1 259.5 263.9 269.0 275.7 281.5 277.6 276.3 4 Other............................................................. 541.9 535.9 536.4 536.3 542.4 545.2 552.6 557.1 569.9 562.6 562.7 5 U.S. Treasury securities............................. 94.3 94.8 96.2 98.7 101.4 103.2 104.4 107.1 111.2 112.0 113.7 6 Other securities............................................. 197.6 199.8 201.1 203.3 205.2 205.6 208.9 210.9 214.6 213.8 214.3 7 Cash assets, total........................................... 168.5 172.7 150.6 154.3 148.8 156.6 155.9 175.6 194.2 159.3 165.9 8 Currency and coin.................................... 16.7 17.7 17.3 17.5 18.2 17.8 18.3 16.9 19.9 18.7 18.6 9 Reserves with Federal Reserve Banks 33.2 37.9 29.5 32.2 29.0 31.1 31.7 30.4 28.2 25.2 30.4 10 Balances with depository institutions 50.0 48.3 45.8 45.0 45.9 46.8 47.2 56.1 63.0 54.9 54.6 11 Cash items in process of collection .. 68.6 68.9 58.1 59.6 55.8 60.9 58.8 72.2 83.0 60.5 62.3 12 Other assets2 .................................................. 135.8 140.1 143.8 143.5 150.3 154.4 151.3 151.3 165.6 155.8 160.1 13 Total assets/total liabilities and capital .. 1,397.8 1,399.8 1,384.9 1393.1 1,407.7 1,428.9 1,442.1 1,477.7 1,537.0 1,481.0 1,493.0 14 Deposits ........................................................... 1,063.9 1,060.9 1,048.1 1,053.1 1,062.8 1,077.2 1,092.9 1,126.2 1,187.4 1,128.7 1,132.0 15 Demand ...................................................... 377.5 370.3 358.1 363.5 363.4 369.7 375.7 393.0 432.2 351.1 345.5 16 Savings ........................................................ 189.2 192.4 197.7 205.5 208.5 209.1 210.9 209.5 201.3 211.9 214.3 17 Time ............................................................. 497.2 498.2 492.4 484.2 490.9 498.5 506.2 523.7 553.8 565.7 572.3 18 Borrowings...................................................... 144.7 152.6 151.0 157.0 158.5 163.7 161.7 157.3 156.4 156.4 163.2 19 Other liabilities ............................................. 80.5 77.9 75.9 74.0 75.4 75.6 74.7 78.1 79.0 76.7 80.3 20 Residual (assets less liabilities)................ 108.7 108.5 109.8 109.0 111.0 112.3 112.7 116.1 114.2 119.3 117.5 Memo: 21 U.S. Treasury note balances included in borrowing............................................... 14.5 5.2 13.3 7.6 8.7 15.7 11.5 4.4 10.2 9.5 8.5 22 Number of banks ......................................... 14,629 14,639 14,646 14,658 14,666 14,678 14,760 14,692 14,693 14,689 14,696 All Commercial Banking Institutions3 23 Loans and investments, excluding interbank ............................................... 1,162.8 1,154.9 1,160.9 1,195.2 1,262.3 24 Loans, excluding interbank ....................... 867.5 856.9 860.2 882.5 932.5 25 Commercial and industrial .................. 302.5 298.7 297.6 308.1 330.6 26 Other............................................................. 565.0 558.3 562.5 574.4 601.9 27 U.S. Treasury securities............................. 96.2 96.7 98.3 105.6 113.7 28 Other securities............................................. 199.1 201.3 202.5 207.2 216.3 29 Cash assets, total........................................... 187.5 190.9 172.2 179.8 218.6 30 Currency and coin.................................... 16.7 17.7 17.3 17.8 20.7 31 Reserves with Federal Reserve Banks 34.0 38.7 30.3 31.7 28.2 32 Balances with depository institutions 66.9 64.0 65.0 n.a. n.a. 67.8 n.a. n.a. 84.9 n:a. n.a. 33 Cash items in process of collection .. 70.0 70.5 59.7 62.5 84.7 34 Other assets2 ................................................. 181.3 186.6 191.0 204.1 221.7 35 Total assets/total liabilities and capital .. 1,531.7 1,532.4 1,524.2 1,579.2 1,702.7 36 Deposits .......................................................... 1,105.1 1,101.1 1,091.9 1,124.5 1,239.9 37 Demand ...................................................... 396.9 388.1 379.0 390.9 453.6 38 Savings ........................................................ 189.5 192.7 198.1 209.5 201.6 39 Time ............................................................. 518.7 520.3 514.8 524.1 584.7 40 Borrowings...................................................... 188.5 194.7 197.6 211.0 211.5 41 Other liabilities ............................................. 127.1 125.8 123.3 129.8 135.5 42 Residual (assets less liabilities)................ 111.0 110.9 111.4 113.9 115.8 Memo: 43 U.S. Treasury note balances included in borrowing............................................... 14.5 5.2 13.3 15.7 10.2 44 Number of banks ........................................ 15,004 15,016 15,019 15,069 15,108 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. Other assets include loans to U.S. commercial banks. other banking institutions are for last Wednesday except at end of quarter, when 3. Commercial banking institutions include domestically chartered commercial they are for the last day of the month. banks, branches and agencies of foreign banks, Edge Act and Agreement corpo­ Revised data result from benchmarking to the March 1980 quarterly call. Revised rations, and New York State foreign investment corporations. data for 1979 and 1980 are available from the Banking Section of the Federal Reserve Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics □ March 1981 1.26 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 1980 1981 Adjust­ Account ment bank, Dec. 31 Jan. 7p JFaneb. . 144p JFaenb. . 2111p JFaenb. . 2I8SP Feb. 25p 1980 1 Cash items in process of collection .......................... 66,061 56,773 56,397 52,231 49,660 53,422 49,140 62,797 50,785 33 2 Demand deposits due from banks in the United States ...................................................................... 21,581 21,679 19,508 20,194 20,344 19,379 19,614 22,440 19,921 90 3 All other cash and due from depository institutions 34,261 31,202 35,746 29,750 30,979 31,517 33,940 33,511 35,058 -239 4 Total loans and securities............................................ 564,156 567,816 561,445 557,272 553,178 557,234 550,893 556,867 553,706 1,435 Securities 5 U.S. Treasury securities............................................... 39,604 40,659 40,449 40,325 39,769 41,122 40,209 40,572 40,816 148 6 4,362 6,390 6,608 6,544 6,331 7,504 6,477 6,723 7,089 7 Investment account, by maturity .......................... 35,242 34,268 33,841 33,780 33,438 33,618 33,732 33,849 33,726 148 8 One year or less .................................................. 10,269 9,591 9,353 9,331 9,178 9,342 9,442 9,192 9,207 71 9 Over one through five years .............................. 21,616 21,274 20,990 20,950 20,790 20,812 20,836 21,149 20,958 76 10 Over five years ..................................................... 3,357 3,403 3,498 3,500 3,469 3,463 3.453 3,508 3,561 1 11 Other securities............................................................ 78,460 78,638 77,742 77,405 77,569 78,251 77.169 76,988 77,374 106 1? 3,316 3,335 2,539 2,329 2,518 3,561 2.608 2,412 2,811 13 Investment account.................................................. 75,144 75,303 75,203 75,076 75,051 74,690 74.561 74,575 74,563 106 14 U.S. government agencies.................................. 16,229 16,348 16,214 16,132 16,124 16,143 16,125 16,165 16,111 50 15 States and political subdivision, by maturity .. 56,078 56,137 56,130 56,101 56,063 55,764 55,631 55,604 55,661 58 16 One year or less .............................................. 7,402 7,273 7,201 7,202 7,244 7,209 7,055 7,046 7,087 11 17 Over one year .................................................. 48,676 48,864 48,929 48,899 48,819 48,555 48,577 48,558 48,574 48 18 Other bonds, corporate stocks and securities . 2,837 2,818 2,858 2,843 2,864 2,784 2,804 2,806 2,790 -3 Loans 19 Federal funds sold1 ...................................................... 27,842 33,997 30,181 29,004 26,781 27,663 26,273 29,636 28,341 38 20 To commercial banks ............................................... 19,472 24,103 21,822 19,057 18,171 19,661 18,506 21,857 20,498 38 21 To nonbank brokers and dealers in securities ... 6,380 7,854 6,059 7,359 6,366 5,873 6,098 6,120 5,924 ?? 1,990 2,040 2,300 2,588 2,244 2,129 1,669 1,659 1,920 23 Other loans, gross........................................................ 430,569 426,958 425,570 423,054 421,559 422,691 419,782 422,263 419,755 1,192 24 Commercial and industrial .................................... 174,768 173.239 173,116 171,922 171,348 171,890 170,104 170,258 169,482 354 25 Bankers acceptances and commercial paper .. 4,206 4,218 4,632 3,957 4,191 4,213 3,566 4,171 3,691 26 Allother................................................................. 170,562 169,020 168,484 167,965 167,157 167,677 166,538 166,087 165,791 354 27 U.S. addressees................................................ 163,276 161,782 161,194 160,597 159,752 160,504 159,349 158,942 158,752 354 28 Non-IJ.S. addressees ........................................... 7,286 7,238 7,290 7,368 7,406 7,173 7,189 7,145 7,039 29 Real estate .................................................................... 111,775 112,212 112,534 112,631 112,866 113.155 113,369 113,591 113,681 448 30 To individuals for personal expenditures ............ 72,294 72,616 72,389 72,132 71,954 71,664 71,370 71,323 71,174 377 To financial institutions 31 Commercial banks in the United States .......... 5,356 4,544 4,679 4,099 4,220 3,899 4,351 4,638 4,383 -6 32 Banks in foreign countries.................................. 9,770 9,363 9,429 9,696 9,018 9,034 8,568 9,172 8,366 7 33 Sales finance, personal finance companies, etc 10,077 10,231 9,999 9,966 9,962 9,912 9,826 9,872 9,755 1 34 Other financial institutions ................................ 15,925 15,591 15,390 15,267 15,291 15,372 15,243 15,311 15,120 2 35 To nonbank brokers and dealers in securities ... 7,844 6,928 6,404 5,748 5,548 5,590 5,213 5,336 5,912 36 To others for purchasing and carrying securities2 2,146 2,103 2,170 2,140 2,198 2,207 2,222 2,273 2,270 37 To finance agricultural production........................ 5,413 5,358 5,332 5,306 5,335 5,338 5,295 5,326 5,374 6 38 Allother.................................................................... 15,200 14,773 14,126 14,147 13,817 14,628 14,219 15,162 14,237 3 39 Less: Unearned income............................................... 6,662 6,696 6,767 6,772 6,752 6,647 6,666 6,692 6,661 37 40 Loan loss reserve ............................................ 5,657 5,740 5,731 5,743 5,748 5,846 5,874 5,899 5,918 11 41 Other loans, net ........................................................... 418,250 414,522 413,072 410,539 409,060. 410,198 407,242 409,672 407,176 1,143 42 Lease financing receivables .......................... 9,323 9,309 9,500 9,518 9,595 9,909 9,935 9,940 9,986 43 All other assets ............................................................. 87,692 83,667 85,436 82,246 82,035 83,736 87,436 82,848 85,057 155 44 Total assets..................................................................... 783,074 770,447 768,033 751,211 745,791 755,198 750,959 768,403 754,513 1,475 Deposits 45 Demand deposits........................................................... 228,289 206,621 202,179 191,315 185,520 191,992 188,857 201,991 183,252 391 46 Mutual savings banks ................ 838 744 714 611 574 733 623 747 566 47 Individuals, partnerships, and corporations ........ 158,408 142,108 140,293 132,325 127,902 130,316 128,010 137,783 123,719 325 48 States and political subdivisions ............................ 5,835 5,126 4,817 5,177 4,846 5,282 4,696 4,755 4,714 17 49 U.S. government...................................................... 1,107 1,609 1,835 1,465 1,676 3,506 1,979 1,651 1,579 2 50 Commercial banks in the United States .............. 41,422 39,116 37,148 34,089 34,038 34,459 34,976 37,777 35,288 9 51 Banks in foreign countries...................................... 8,991 7,739 7,558 8,350 8,047 7,177 9,901 9,487 8,434 11 52 Foreign governments and official institutions ... 2,459 1,658 1,475 1,822 1,457 1,783 1,546 2,292 1,591 53 Certified and officers’ checks ................................ 9,229 8,519 8,338 7,474 6,980 8,736 7,126 7,499 7,360 26 54Time and savings deposits.......................................... 313,978 316,877 316,915 319,032 321,019 321,653 320,325 320,282 320,996 861 55 Savings ....................................................................... 72,570 75,671 75,626 75,482 74,493 75,642 75,538 75,860 75,072 296 56 Individuals and nonprofit organizations .......... 68,317 71,425 71,376 71,370 70,368 71,497 71,387 71,634 70,984 271 57 Partnerships and corporations operated for profit............................................................... 3,594 3,537 3,555 3,451 3,473 3,454 3,461 3,491 3,416 19 58 Domestic governmental units ............................ 636 689 673 637 631 671 670 715 655 5 59 All other................................................................ 23 20 22 23 21 20 19 20 18 60 Time ........................................................................... 241,408 241,206 241,290 243,550 246,526 246,011 244,788 244,422 245,924 565 61 Individuals, partnerships, and corporations ... 205,810 206,231 206,376 208,187 210,710 210,394 209,275 208,897 209,948 479 62 States and political subdivisions ........................ 20,185 19,935 19,976 20,207 20,718 20,567 20,755 20,789 21,207 79 63 U.S. government................................................... 300 301 314 297 309 298 298 310 306 5 64 Commercial banks in the United States .......... 8,422 8,169 8,227 8,557 8,448 8,416 8,085 8,009 8,108 2 65 Foreign governments, official institutions, and banks............................................................... 6,691 6,569 6,396 6,302 6,340 6,336 6,375 6,418 6,355 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks............ 1,055 316 1,950 582 467 119 375 202 4,412 67 Treasury tax-and-loan notes ................ 6,696 2,803 2,408 4,386 6,007 1,939 1,821 2,008 5,895 68 All other liabilities for borrowed money3............ 119,822 133,386 134,609 125,512 121,091 126,758 126,689 130,179 124,549 29 69 Other liabilities and subordinated notes and debentures ............................................................. 63,016 60,147 59,729 60,148 61,217 61,773 61,984 63,008 64,685 74 70 Total liabilities.............................................................. 732,857 720,149 717,790 700,975 695,321 704,235 700,052 717,670 703,790 1,354 71 Residual (total assets minus total liabilities)4 50,216 50,297 50,243 50,236 50,470 50,963 50,907 50,733 50,724 120 1. Includes securities purchased under agreements to resell. 4. This is not a measure of equity capital for use in capital adequacy analysis or 2. Other than financial institutions and brokers and dealers. 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 Digitized for FoRr AmSorEe oRn Dec. 31, 1977, see table 1.13. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A19 1.27 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 1980 1981 Adjust­ Account ment bank, Dec. 31 Jan. 7 Jan. 14 Jan. 21 Jan. 28p Feb. 4p Feb. IIP Feb. ISP Feb. 25p 1980 1Cash items in process of collection ...................................... 62,722 54,008 53,487 49,255 47,184 50,544 46,644 59,169 48,181 33 2Demand deposits due from banks in the United States ... 20,856 20,849 18,840 19,538 19,680 18,580 18,873 21,572 19,370 -19 3All other cash and due from depository institutions ........ 31,838 29,192 33,559 27,536 28,758 29,500 31,640 31,267 32,563 -241 4Total loans and securities......................................................... 526,068 529,522 523,956 520,106 516,504 520,140 514,146 519,922 517,070 1,368 Securities 5U.S. Treasury securities........................................................... 36,649 37,804 37,662 37,494 36,973 38,281 37,318 37,575 37,871 146 6 4,313 6,341 6,547 6,465 6,258 7,452 6,410 6,671 7,034 7 Investment account, by maturity ...................................... 32,337 31,463 31,115 31,029 30,715 30,829 30,908 30,904 30,838 146 8 One year or less ............................................................... 9,475 8,852 8,704 8,678 8,524 8,627 8,714 8,456 8,485 69 9 Over one through five years .......................................... 19,886 19,588 19,294 19,228 19,097 19,112 19,110 19,310 19,155 76 10 Over five years ................................................................. 2,976 3,022 3,117 3,124 3,094 3,091 3,084 3,138 3,198 1 11 Other securities......................................................................... 71,913 72,041 71,191 70,890 71,045 71,743 70,699 70,526 70,937 103 V 3,234 3,234 2,469 2,260 2,435 3,503 2,554 2,365 2,761 13 Investment account............................................................... 68,680 68,806 68,722 68,630 68,610 68,240 68,145 68,161 68,176 103 14 U.S. government agencies.............................................. 14,903 14,988 14,868 14,829 14,822 14,831 14,852 14,894 14,864 50 15 States and political subdivision, by maturity .............. 51,113 51,189 51,183 51,145 51,096 50,798 50,659 50,632 50,691 56 16 One year or less ........................................................... 6,592 6,489 6,407 6,404 6,442 6,416 6,272 6,264 6,316 8 17 Over one year ............................................................... 44,521 44,700 44,776 44,741 44,654 44,382 44,387 44,368 44,374 48 18 Other bonds, corporate stocks and securities ............ 2,663 2,629 2,671 2,656 2,692 2,611 2,633 2,635 2,620 -3 Loans 19Federal funds sold1 ................................................................... 24,330 30,163 26,912 25,935 24,058 24,497 23,312 26,554 25,461 37 20 To commercial banks ........................................................... 16,489 20,919 19,033 16,696 15,998 17,104 16,096 19,298 18,138 37 'M 5,882 7,233 5,606 6,677 5,839 5,284 5,566 5,633 5,435 99 1,959 7,011 2,273 2,563 2,221 2,108 1,650 1,623 1,889 23 Other loans, gross..................................................................... 404,526 400,974 399,711 397,322 395,953 397,138 394,380 396,882 394,406 1,128 24 Commercial and industrial ................................................. 165,826 164,358 164,253 163,142 162,636 163,215 161,488 161,655 160,853 339 25 Bankers acceptances and commercial paper .............. 4,006 4,015 4,435 3,767 4,008 4,047 3,395 4,001 3,516 26 Allother............................................................................. 161,820 160,343 159,818 159,375 158,628 159,168 158,093 157,655 157,337 339 27 U.S. addressees............................................................. 154,604 153,175 152,600 152,080 151,295 152,060 150,978 150,583 150,371 339 28 Non-U S addressees . .. ... 7,216 7,167 7,218 7,295 7,333 7,108 7,116 7,072 6,966 29 Real estate ............................................................................. 105,403 105,777 106,111 106,194 106,432 106,750 106,949 107,151 107,238 418 30 To individuals for personal expenditures ........................ 63,634 63,929 63,727 63,492 63,376 63,130 62,858 62,832 62,730 362 To financial institutions 31 Commercial banks in the United States ...................... 5,226 4,425 4,561 3,995 4,103 3,788 4,217 4,534 4,269 -6 32 Banks in foreign countries.............................................. 9,692 9,260 9,357 9,625 8,947 8,907 8,500 9,066 8,283 7 33 Sales finance, personal finance companies, etc .......... 9,911 10,069 9,836 9,806 9,805 9,758 9,680 9,734 9,613 1 34 Other financial institutions ............................................ 15,522 15,190 15,007 14,888 14,921 15,006 14,888 14,962 14,772 2 35 To nonbank brokers and dealers in securities .. 7,701 6,830 6,306 5,662 5,456 5,494 5,124 5,242 5,835 36 To others for purchasing and carrying securities2 .......... 1,909 1,866 1,944 1,902 1,965 1,977 1,991 2,047 2,050 37 To finance agricultural production.................................... 5,259 5,209 5,185 5,163 5,192 5,197 5,156 5,188 5,234 6 38 Allother................................................................................. 14,443 14,061 13,424 13,454 13,120 13,915 13,527 14,471 13,530 -1 39Less: Unearned income........................................................... 6,029 6,062 6,132 6,130 6,115 6,015 6,032 6,059 6,030 35 40 Loan loss reserve ......................................................... 5,322 5,398 5,387 5,406 5,410 5,504 5,531 5,556 5,575 11 41 Other loans, net ....................................................................... 393,175 389,514 388,191 385,786 384,427 385,619 382,816 385,267 382,800 1,081 42 Lease financing receivables..................................................... 9,050 9,038 9,230 9,246 9,324 9,635 9,660 9,665 9,711 43 All other assets ......................................................................... 85,194 81,474 83,233 79,998 79,787 81,396 85,156 80,517 82,587 153 44 Total assets................................................................................. 735,728 724,084 722,305 705,679 701,237 709,795 706,120 722,113 709,482 1,295 Deposits 45 Demand deposits....................................................................... 213,901 193,670 189,665 179,027 174,184 179,864 177,229 189,469 172,156 302 46 Mutual savings banks ........................................................... 806 712 688 581 551 700 599 716 544 47 Individuals, partnerships, and corporations .................... 147,106 131,862 130,481 122,873 119,046 121,057 118,882 128,027 115,062 240 48 States and political subdivisions ........................................ 5,192 4,560 4,190 4,437 4,227 4,612 4,066 4,204 4,096 15 49 U.S. government................................................................... 990 1,424 1,579 1,114 1,477 3,214 1,799 1,474 1,412 2 50 Commercial banks in the United States .......................... 39,769 37,623 35,770 32,740 32,764 33,002 33,691 36,171 33,977 9 51 Banks in foreign countries................................................... 8,877 7,662 7,480 8,273 7,954 7,105 9,830 9,418 8,369 11 52 Foreign governments and official institutions ................ 2,454 1,657 1,474 1,821 1,454 1,782 1,545 2,253 1,590 53 Certified and officers' checks ............................................ 8,708 8,170 8,002 7,188 6,709 8,392 6,817 7,207 7,106 26 54Time and savings deposits....................................................... 293,036 295,548 295,621 297,756 299,786 300,186 298,883 298,832 299,350 774 55 Savings ................................................................................... 67,133 69,939 69,841 69,743 68,821 69,902 69,814 70,105 69,358 238 56 Individuals and nonprofit organizations ...................... 63,227 66,030 65,921 65,959 65,034 66,081 65,991 66,206 65,588 214 57 Partnerships and corporations operated for profit ... 3,310 3,266 3,287 3,183 3,200 3,190 3,193 3,222 3,148 19 58 Domestic governmental units ........................................ 573 622 612 578 565 611 610 656 603 5 59 All other............................................................................. 23 20 22 23 21 20 19 20 18 60 Time ....................................................................................... 225,904 225,609 225,780 228,012 230,965 230,284 229,069 228,727 229,992 536 61 Individuals, partnerships, and corporations ................ 192,582 192,915 193,088 194,908 197,431 197,003 195,827 195,518 196,419 451 62 States and political subdivisions .................................... 18,249 17,995 18,086 18,286 18,782 18,569 18,827 18,812 19,169 79 63 U.S. government............................................................... 284 285 298 282 294 283 283 294 290 5 64 Commercial banks in the United States ...................... 8,097 7,846 7,912 8,234 8,118 8,093 7,757 7,685 7,759 2 65 Foreign governments, official institutions, and banks 6,691 6,569 6,396 6,302 6,340 6,336 6,375 6,418 6,355 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks........................ 972 211 1,816 540 368 72 375 97 4,272 67 Treasury tax-and-loan notes .............................................. 6,225 2,555 2,185 3,998 5,541 1,759 1,710 1,821 5,520 68 All other liabilities for borrowed money3........................ 113,095 126,522 127,823 118,656 114,368 119,898 119,792 122,922 117,570 27 69 Other liabilities and subordinated notes and debentures 61,554 58,576 58,249 58,750 59,827 60,319 60,526 61,526 63,206 73 70Total liabilities........................................................................... 688,784 677,083 675,359 658,727 654,072 662,098 658,515 674,668 662,075 1,176 71 Residual (total assets minus total liabilities)4 .................... 46,945 47,001 46,946 46,951 47,165 47,698 47,605 47,445 47,407 118 1. Includes securities purchased under agreements to resell. 4. This is not a measure of equity capital for use in capital adequacy analysis or 2. Other than financial institutions and brokers and dealers. for other analytic uses. 3. Includes federal funds purchased and securities sold under agreement to re­ purchase; 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

A20 Domestic Financial Statistics □ March 1981 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1980 1981 Account Dec. 31 Jan. 7 Jan. 14 Jan. 21 Jan. 28p Feb. 4p Feb. IIP Feb. 18P Feb. 25p 1 Cash items in process of collection ...................................... 24,782 20,614 21,628 18,696 18,644 18,772 17,906 19,549 18,827 2 Demand deposits due from banks in the United States ... 14,724 15,101 13,387 14,305 14,527 12,841 13,247 15,089 14,232 3 All other cash and due from depository institutions ........ 7,742 8,286 11,388 5,904 7,178 7,712 8,378 10,642 8,419 4 Total loans and securities1 ....................................................... 129,586 129,279 126,775 125,235 123,296 124,325 121,931 125,738 123,490 Securities 5 U.S. Treasury securities2......................................................... 6 Trading account2................................................................... 7 Investment account, by maturity ...................................... 8,418 8,238 7,990 7,990 7,985 8,004 7,975 8,266 8,120 8 One year or less ............................................................... 1,454 1,585 1,619 1,593 1,614 1,666 1,653 1,612 1,598 9 Over one through five years .......................................... 6,412 6,113 5,817 5,848 5,834 5,809 5,807 6,085 5,952 10 Over five years ................................................................. 551 539 554 549 537 529 515 570 570 11 1? Trading account2................................................................... 13 Investment account............................................................... 13,676 13,752 13,698 13,702 13,675 13,617 13,525 13,532 13,561 14 U.S. government agencies.............................................. 2,305 2,319 2,303 2,298 2,296 2,307 2,302 2,302 2,331 15 States and political subdivision, by maturity .............. 10,750 10,797 10,753 10,776 10,757 10,685 10,612 10,613 10,627 16 One year or less ........................................................... 1,664 1,668 1,562 1,562 1,554 1,482 1,387 1,378 1,380 17 Over one year ............................................................... 9,087 9,129 9,190 9,214 9,203 9,202 9,225 9,234 9,247 18 Other bonds, corporate stocks and securities ............ 620 636 642 627 622 626 611 618 602 Loans 19 Federal funds sold3................................................................... 7,284 9,819 7,994 7,780 7,254 6,979 6,112 8,738 7,823 20 To commercial banks ........................................................... 3,461 5,414 4,210 3,914 3,836 3,536 2,517 5,267 4,569 21 To nonbank brokers and dealers in securities ................ 3,061 3,605 2,678 2,890 2,545 2,640 2,917 2,956 2,664 22 To others ............................................................................... 762 801 1,105 976 872 802 678 515 590 23 Other loans, gross..................................................................... 103,141 100,435 100,084 98,762 97,385 98,709 97,327 98,230 97,030 24 Commercial and industrial ................................................ 51,754 51,243 51,551 51,082 50,614 50,845 49,785 49,857 49,378 25 Bankers acceptances and commercial paper .............. 767 790 1,183 942 1,056 1.155 680 1,037 886 26 Allother............................................................................. 50,986 50,453 50,368 50,140 49,558 49.690 49,105 48,820 48,491 27 U.S. addressees............................................................. 48,477 47,995 47,784 47,528 46,944 47.077 46,496 46,231 45,951 28 Non-U.S. addressees ................................................... 2,510 2,458 2,584 2,612 2,614 2.613 2,609 2,588 2,540 29 Real estate ............................................................................. 14,826 14,816 14,890 14,891 14,941 15.115 15,154 15,180 15,237 30 To individuals for personal expenditures ........................ 9,369 9,446 9,392 9,403 9,396 9,389 9,390 9,422 9,388 31 To financial institutions Commercial banks in the United States ...................... 2,081 1,502 1,660 1,268 1,280 1,163 1,359 1,643 1,430 32 Banks in foreign countries.............................................. 5,072 4,689 4,686 4,918 4,326 4,387 4,160 4,592 4,051 33 Sales finance, personal finance companies, etc............ 4,395 4,547 4,342 4,238 4,181 4,300 4,273 4,232 4,162 34 Other financial institutions ............................................ 4,848 4,703 4,621 4,562 4,454 4,541 4,434 4,432 4,380 35 To nonbank brokers and dealers in securities ................ 4,838 3,960 3,602 3,055 3,024 3,207 3,068 3,075 3,563 36 To others for purchasing and carrying securities4 .......... 405 395 431 424 472 489 489 507 504 37 To finance agricultural production.................................... 435 439 444 447 422 439 436 439 432 38 Allother................................................................................. 5,117 4,695 4,465 4,474 4,274 4,832 4,778 4,851 4,504 39 Less: Unearned income........................................................... 1,149 1,157 1,187 1,190 1,198 1,146 1,153 1,163 1,170 40 Loan loss reserve ......................................................... 1,783 1,809 1,804 1,808 1,804 1,839 1,856 1,866 1,874 41 Other loans, net ....................................................................... 100,208 97,470 97,093 95,764 94,382 95,724 94,318 95,201 93,986 42 Lease financing receivables.................................................... 1,758 1,768 1,966 1,966 1,973 2,271 2,259 2,259 2,261 43 All other assets5 .............................................................................. 37,241 36,975 38,782 34,272 34,615 37,144 39,498 35,403 36,713 44 Total assets................................................................................. 215,832 212,022 213,926 200,380 200,234 203,064 203,219 208,680 203,942 Deposits 45 Demand deposits....................................................................... 77,180 69,113 69,240 64,510 64,199 64,125 64,920 67,386 64,502 46 Mutual savings banks........................................................... 436 383 363 307 285 362 331 381 292 47 Individuals, partnerships, and corporations .................... 38,646 33,926 35,087 32,596 32,274 31,660 30,646 33,776 30,715 48 States and political subdivisions ........................................ 578 366 467 528 525 492 424 431 425 49 U.S. government................................................................... 173 350 401 291 352 831 426 306 240 50 Commercial banks in the United States .......................... 24,145 23,240 22,373 19,279 20,231 19,328 20,641 20,029 21,529 51 Banks in foreign countries................................................... 7,045 5,832 5,680 6,607 6,184 5,517 8,028 7,561 6,583 52 Foreign governments and official institutions ................ 2,073 1,355 1,139 1,523 1,160 1,501 1,277 1,925 1,329 53 Certified and officers’ checks ............................................ 4,083 3,662 3,731 3,379 3,186 4,432 3,146 2,976 3,389 54 Time and savings deposits...................................................... 57,318 57,961 57,590 57,962 58,096 58,201 57,318 56,444 55,707 55 Savings ................................................................................... 9,547 9,558 9,476 9,330 9,150 9,239 9,217 9,231 9,147 56 Individuals and nonprofit organizations ...................... 9,124 9,131 9,059 8,928 8,746 8,823 8,787 8,797 8,721 57 Partnerships and corporations operated for profit ... 308 305 297 290 289 2.90 289 287 288 58 Domestic governmental units ........................................ 107 115 113 104 111 122 136 144 135 59 Allother............................................................................. 8 6 7 7 4 4 5 3 3 60 Time ....................................................................................... 47,770 48,403 48,114 48,633 48,946 48,961 48,101 47,213 46,560 61 Individuals, partnerships, and corporations ................ 41,064 41,882 41,575 42,044 42,395 42,402 41,492 40,503 39,631 62 States and political subdivisions .................................... 1,436 1,384 1,339 1,413 1,508 1,559 1,674 1,725 1,770 63 U.S. government............................................................... 14 14 22 25 24 32 37 38 36 64 Commercial banks in the United States ...................... 2,370 2,305 2,460 2,515 2,347 2,304 2,196 2,213 2,258 65 Foreign governments, official institutions, and banks 2,886 2,818 2,719 2,636 2,672 2,664 2,702 2,734 2,865 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks........................ 475 1,490 150 2,730 67 Treasury tax-and-loan notes ............................................... 1,833 95 1 1 1 2 583 354 1,500 68 All other liabilities for borrowed money6........................ 37,976 45,713 47,020 39,535 38,223 40,516 40,394 43,974 38,151 69 Other liabilities and subordinated notes and debentures .. 25,296 23,402 22,958 22,816 24,175 24,342 24,002 24,727 25,637 70 Total liabilities........................................................................... 200,077 196,283 198,300 184,825 184,695 187,187 187,367 192,884 188,227 71 Residual (total assets minus total liabilities)4 .................... 15,755 15,738 15,627 15,555 15,539 15,877 15,852 15,796 15,716 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 A21 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions of dollars, Wednesday figures 1980 1981 Adjust­ ment Account bank, Dec. 31 Jan. 7 Jan. 14 Jan. 21 Jan. 28p Feb. Ap Feb. IIP Feb. 18P Feb. 25p 1980 Banks with Assets of $750 Million or More 1 Total loans (gross} and securities adjusted1 . 551,646 551,605 547,441 546,631 543,287 546,167 540,576 542,963 541,405 1,451 2 Total loans (gross) adjusted1 ............................. 433,582 432,308 429,250 428,902 425,949 426,795 423,198 425,404 423,216 1,197 3 Demand deposits adjusted2 ................................ 119,700 109,123 106,799 103,530 100,147 100,605 102,762 99,767 95,600 347 4 Time deposits in accounts of $100,000 or more.................................................................... 159,443 158,357 158,214 160,187 162,410 161,311 160,059 159,520 160,016 113 5 Negotiable CDs .................................................. 116,374 114,827 114,303 115,864 117,693 116,453 114,752 114,292 114,208 54 6 Other time deposits ........................................... 43,069 43,530 43,912 44,324 44,717 44,858 45,307 45,228 45,808 58 7 Loans sold outright to affiliates3 ....................... 2,748 2,773 2,778 2,753 2,760 2,785 2,793 2,883 2,760 8 Commercial and industrial ............................. 1,800 1,862 1,865 1,833 1,850 1,878 1,884 1,977 1,846 9 Other ...................................................................... 947 911 913 920 910 906 909 906 913 Banks with Assets of $1 Billion or More 10 Total loans (gross} and securities adjusted1 515,704 515,638 511,882 510,951 507,928 510,767 505,397 507,706 506,268 1,382 11 Total loans (gross) adjusted1 ............................. 407,141 405,793 403,029 402,567 399,910 400,743 397,380 399,604 397,460 1,133 12 Demand deposits adjusted2 ................................ 110,420 100,615 98,828 95,917 92,758 93,105 95,094 92,655 88,586 258 13 Time deposits in accounts of $100,000 or more.................................................................... 150,394 149,306 149,236 151,237 153,504 152,239 151,030 150,508 150,840 110 14 Negotiable CDs .................................................. 109,936 108,419 107,974 109,592 111,477 110,113 108,473 108,004 107,803 54 15 Other time deposits ........................................... 40,458 40,888 41,262 41,645 42,026 42,125 42,556 42,504 43,038 56 16 Loans sold outright to affiliates3 ....................... 2,711 2,733 2,738 2,708 2,725 2,748 2,756 2,849 2,724 17 Commercial and industrial ............................. 1,783 1,839 1,838 1,801 1,825 1,850 1,856 1,948 1,818 18 Other ...................................................................... 928 893 900 907 900 898 901 900 905 Banks in New York City 19 Total loans (gross) and securities adjusted1-4 126,976 125,329 123,896 123,052 121,183 122,610 121,063 121,857 120,534 175 20 Total loans (gross) adjusted1 ............................. 104,883 103,338 102,208 101,360 99,522 100,988 99,563 100,058 98,854 65 21 Demand deposits adjusted2 ................................ 28,081 24,909 24,838 26,244 24,972 25,194 25,946 27,502 23,906 -248 22 Time deposits in accounts of $100,000 or more.................................................................... 37,811 38,263 38,033 38,579 38,826 38,753 37,925 37,044 36,172 55 23 Negotiable CDs .................................................. 28,649 29,154 28,877 29,294 29,595 29,235 28,229 27,493 26,680 24 Other time deposits ........................................... 9,162 9,109 9,156 9,285 9,232 9,518 9,696 9,552 9,492 55 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

A22 Domestic Financial Statistics □ March 1981 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Domestic Classified Commercial and Industrial Loans Millions of dollars Outstanding Net change during Adjust­ Industry classification 1980 1981 1980 1981 ment bank1 Oct. 29 Nov. 26 Dec. 31 Jan. 28 Feb. 25p Q3 Q4 Dec. Jan. Feb .p 1 Durable goods manufacturing............ 23,335 24,088 24,676 24,378 24,424 783 1,164 587 -300 45 2 Nondurable goods manufacturing ... 20,273 20,804 20,503 19,359 18,937 1,195 970 -301 -1,142 -422 -1 3 Food, liquor, and tobacco.............. 4,584 4,921 5,384 4,915 4,529 649 1,033 463 -466 -386 -3 4 Textiles, apparel, and leather........ 5,070 4,906 4,150 4,096 4,364 269 -1,054 -756 -54 268 5 Petroleum refining ........................... 3,153 3,129 3,633 3,185 2,929 -28 947 504 -448 -256 6 Chemicals and rubber .................... 3,846 4,158 3,917 3,782 3,673 30 184 -241 -135 -109 7 Other nondurable goods ................ 3,620 3,690 3,419 3,381 3,442 275 -140 -271 -39 61 8 Mining (including crude petroleum and natural gas)............................ 14,716 15,338 16,427 16,251 15,935 199 2,471 -177 -316 9 Trade....................................................... 26,270 27,050 26,250 25,552 25,245 350 1,300 -801 -697 -307 10 Commodity dealers.......................... 2,470 2,402 2,563 2,116 1,874 588 444 161 -447 -242 11 Other wholesale .............................. 11,876 12,182 12,306 12,057 11,707 -94 720 124 -248 -350 12 Retail................................................... 11,923 12,467 11,381 11,378 11,663 -144 136 -2 285 13 Transportation, communication, and other public utilities ............ 19,316 20,099 21,316 20,741 20,270 478 2,093 1,217 -573 -472 14 Transportation.................................. 7,788 8,019 8,374 8,254 8,139 136 638 354 -117 -114 15 Communication................................. 3,094 3,161 3,319 3,184 3,097 154 326 158 -136 -87 16 Other public utilities........................ 8,434 8,919 9,623 9,303 9,033 188 1,128 704 -320 -270 17 Construction.......................................... 5,924 5,992 5,993 5,950 6,109 60 -37 1 -42 159 -2 18 Services................................................... 21,530 22,160 22,853 23,247 23,533 1,014 1,542 693 394 286 19 All other2 ............................................... 15,634 16,146 16,586 15,816 15,919 403 1,184 440 -1,111 103 ’ 341’ 20 Total domestic loans ............................ 146,998 154,604 151,295 150,371 4,483 10,687 2,926 -3,648 339 21 Memo: Term loans (original maturity more than 1 year) included in do­ mestic loans .................................. 76,912 78,956 81,745 81,794 0,147 2,241 5,209 2,789 -1,647 1. Adjustment bank amounts represent accumulated adjustments originally Note. New series. The 134 large weekly reporting commercial banks with do­ made to offset the cumulative effects of mergers. These adjustment amounts should mestic assets of $1 billion or more as of December 31, 1977, are included in this be added to outstanding data for any date in the year to establish comparability series. The revised series is on a last-Wednesday-of-the-month basis. Partly esti­ with any date in the subsequent year. Changes shown have been adjusted for these mated historical data are available from the Banking Section, Division of Research amounts. and Statistics, Board of Governors of the Federal Reserve System, Washington, 2. Includes commercial and industrial loans at a few banks with assets of $1 D.C., 20551. billion or more that do not classify their loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Deposits and Commercial Paper A23 1.31 GROSS DEMAND DEPOSITS of Individuals, Partnerships, and Corporations1 Billions of dollars, estimated daily-average balances Commercial banks Type of holder 19792 1980 1975 1976 1977 1978 Dec. Dec. Dec. Dec. Sept. Dec. Mar. June Sept. Dec. 1 All holders—Individuals, partnerships, and corporations........................................................... 236.9 250.1 274.4 294.6 292.4 302.2 288.4 288.6 302.0 316.8 2 Financial business ......................................................... 20.1 22.3 25.0 27.8 26.7 27.1 28.4 27.7 29.6 29.8 3 Nonfinancial business................................................... 125.1 130.2 142.9 152.7 148.8 157.7 144.9 145.3 151.9 162.3 4 Consumer....................................................................... 78.0 82.6 91.0 97.4 99.2 99.2 97.6 97.9 101.8 104.0 5 Foreign........................................................................... 2.4 2.7 2.5 2.7 2.8 3.1 3.1 3.3 3.2 3.3 6 Other............................................................................... 11.3 12.4 12.9 14.1 14.9 15.1 14.4 14.4 15.5 17.4 Weekly reporting banks 19793 1980 1975 1976 1977 1978 Dec. Dec. Dec. Dec. Sept. Dec. Mar. June Sept. Dec. 7 All holders—Individuals, partnerships, and corporations........................................................... 124.4 128.5 139.1 147.0 132.7 139.3 133.6 133.9 140.6 147.4 8 Financial business ......................................................... 15.6 17.5 18.5 19.8 19.7 20.1 20.1 20.2 21.2 21.6 9 Nonfinancial business................................................... 69.9 69.7 76.3 79.0 69.1 74.1 69.1 69.2 72.4 77.7 10 Consumer....................................................................... 29.9 31.7 34.6 38.2 33.7 34.3 34.2 33.9 36.0 36.3 11 Foreign........................................................................... 2.3 2.6 2.4 2.5 2.8 3.0 3.0 3.1 3.1 3.1 12 Other............................................................................... 6.6 7.1 7.4 7.5 7.4 7.8 7.2 7.5 7.9 8.7 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 ola 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. 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1980 1981 Instrument 1977 1978 19791 1980 Dec. Dec. Dec. Dec. July Aug. Sept. Oct. Nov. Dec. Jan. Commercial paper (seasonally adjusted) 1 All issuers................................................... 65.036 83,420 112,803 125,068 122,259 122,607 123,460 122,383 124,776 125,068 127,957 Financial companies2 Dealer-placed paper3 2 Total ....................................................... 8,888 12,300 17,579 19,847 18.207 19.092 19.509 18,992 19,556 19,847 20,103 3 Bank-related ......................................... 2,132 3,521 2,874 3,561 3,198 3.313 3,370 3,442 3,436 3.561 3,670 Directly placed paper* 4 Total ....................................................... 40,612 51,755 64,931 68,083 63,777 64.550 65,542 66,628 67,345 68,083 68,318 5 Bank-related ......................................... 7,102 12,314 17,598 22,382 19,239 19,909 19,692 21,146 21,939 22,382 22,570 6 Nonfinancial companies5 ........................ 15,536 19,365 30,293 37,138 40,275 38,965 38,409 36,763 37,875 37,138 39,536 Bankers dollar acceptances (not seasonally adjusted) 7 Total ........................................................... 25,450 33,700 45,321 54,744 54,334 54,486 55,774 56,610 55,226 54,744 54,465 Holder 8 Accepting banks ....................................... 10,434 8,579 9,865 10,564 9,764 9,644 10,275 11.317 10,236 10,564 9,371 9 Own bills ............................................... 8,915 7,653 8,327 8,963 8,603 8.544 9,004 9,808 8,837 8,963 7,951 10 Bills bought ........................................... 1,519 927 1,538 1,601 1,161 1.100 1,270 1,509 1,399 1,601 1,420 Federal Reserve Banks 11 Own account ......................................... 954 1 704 776 310 277 499 566 523 776 0 12 Foreign correspondents ...................... 362 664 1,382 1,791 1,899 1.841 1,820 1,915 1,852 1,791 1,771 13 Others......................................................... 13,700 24,456 33,370 41,614 42,361 42.724 43,179 42,813 42,616 41,614 43,323 Basis 14. Imports into United States .................... 6,378 8,574 10,270 11,776 12,109 11,861 11,731 12,254 11,774 11,776 11,903 15 Exports from United States .................. 5,863 7,586 9,640 12,712 12,401 12.582 12,991 13,445 13,670 12,712 12,816 16 All other..................................................... 13,209 17,540 25,411 30,257 29,824 30.043 31,052 30,911 29,782 30,257 29,746 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 com­ factoring, finance leasing, and other business lending; insurance underwriting; and munications. construction, manufacturing, mining, wholesale and retail trade, Digitized for oFthReAr iSnvEesRtm ent activities. transportation, and reserves. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Financial Statistics □ March 1981 1.33 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—Oct. 1 .................. 13.50 1980—Dec 10 .................. 20.00 1980—Jan............................ 15.25 1980—Aug........................... 11.12 17 .................. 14.00 16 .................. 21.00 Feb........................... 15.63 Sept.......................... 12.23 29 .................. 14.50 19 .................. 21.50 Mar........................... 18.31 Oct............................ 13.79 Nov. 6.................. 15.50 Apr........................... 19.77 Nov........................... 16.06 17.................. 16.25 1981—Jan. 2 .................. 20.50 May ........................ 16.57 Dec........................... 20.35 21.................. 17.00 9 .................. 20.00 June........................ 12.63 26.................. 17.75 Feb. 3 .................. 19.50 July ........................ 11.48 1981—Jan............................ 20.16 Dec. 2 .................. 18.50 19 .................. 19.00 Feb........................... 19.43 5.................. 19.00 1.34 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 3-8, 1980 Size of loan (in thousands of dollars) All Item 1,000 1-24 25^9 50-99 100-499 500-999 and over Short-Term Commercial and Industrial Loans 1 Amount of loans (thousands of dollars) ......................... 13,100,722 729,247 549,089 562,389 1,819,646 665,483 8,774,868 2 Number of loans ...................................................... ........... 131,579 92,779 16,539 9,235 10,024 1,049 1,953 3 Weighted-average maturity (months) ............................. 2.2 3.0 3.5 2.9 3.0 3.4 1.7 4 Weighted-average interest rate (percent per annum) . 15.71 15.97 15.72 16.39 15.52 15.87 15.68 5 Interquartile range1 ........................................................... 15.12-16.65 14.75-17.23 13.52-17.11 15.50-17.50 14.50-16.75 15.31-16.61 15.25-16.50 Percentage of amount of loans 6 With floating rate .................................................................... 50.5 25.0 27.9 40.7 52.1 68.3 53.0 7 Made under commitment .................................................... 45.7 25.1 22.3 35.3 46.4 65.6 48.0 8 With no stated maturity........................................................ 25.2 14.9 12.0 17.4 24.3 31.0 27.1 Long-Term Commercial and Industrial Loans 9 Amount of loans (thousands of dollars) ......................... 3,152,110 306,233 571,615 171,411 2,102,851 10 Number of loans ...................................................................... 17,989 15,060 2,245 245 439 11 Weighted-average maturity (months) ............................. 46.3 48.3 34.4 40.6 49.6 12 Weighted-average interest rate (percent per annum) . 15.07 15.42 15.29 15.20 14.95 13 Interquartile range1 ........................................................... 14.50-15.62 14.93-16.65 14.75-15.50 14.50-16.25 14.50-15.50 Percentage of amount of loans 14 With floating rate ................................................................... 70.1 39.3 29.5 72.3 85.5 15 Made under commitment .................................................... 58.1 29.0 25.1 70.2 70.3 Construction and Land Development Loans 16 Amount of loans (thousands of dollars) ......................... 1,072,203 105,341 242,030 167,557 230,726 326,549 17 Number of loans ...................................................................... 24,383 13,527 6,586 2,637 1,413 221 18 Weighted-average maturity (months) ............................. 13.4 9.4 5.0 19.4 10.0 18.0 19 Weighted-average interest rate (percent per annum) . 15.31 15.23 14.64 14.74 15.24 16.16 20 Interquartile range1 ........................................................... 14.00-16.65 14.04-16.99 13.10-15.50 14.00-14.75 14.00-17.00 15.50-17.00 Percentage of amount of loans 21 With floating rate ................................................................... 44.4 22.7 8.8 45.6 47.9 74.7 22 Secured by real estate .......................................................... 81.9 84.3 98.2 96.7 89.8 56.0 23 Made under commitment .................................................... 60.9 48.7 60.9 21.5 78.2 73.0 24 With no stated maturity........................................................ 16.5 4.9 26.9 3.1 35.8 5.8 Type of construction 25 1- to 4-family ............................................................................. 40.9 75.0 66.9 57.7 24.9 13.3 26 Multifamily................................................................................. 8.2 2.2 10.0 3.6 8.9 10.7 27 Nonresidential.......................................................................... 50.9 22.7 23.1 38.7 66.2 76.0 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) ......................... 1,301,641 191,079 217,452 190,952 196,075 275,324 230,759 29 Number of loans ...................................................................... 72,123 46,721 14,605 5,800 2,838 1,789 370 30 Weighted-average maturity (months) ............................. 7.3 6.7 7.1 5.6 6.6 10.6 5.8 31 Weighted-average interest rate (percent per annum) . 15.46 15.10 15.02 15.22 15.55 15.74 15.96 32 Interquartile range1 ........................................................... 14.49-16.64 14.30-15.97 14.32-15.95 14.04-16.21 15.00-16.10 14.48-16.64 14.93-17.05 By purpose of loan 33 Feeder livestock ...................................................................... 15.45 15.10 15.09 14.93 15.23 15.79 16.32 34 Other livestock ........................................................................ 15.35 15.19 15.96 14.84 15.46 15.30 (2) 35 Other current operating expenses .................................... 15.44 15.17 15.14 15.33 15.88 15.97 15.21 36 Farm machinery and equipment........................................ 15.13 15.01 14.81 15.44 15.42 (2) (2) 37 Other............................................................................................ 15.75 14.91 13.90 16.06 15.79 15.44 17.25 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(111) 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 A25 1.35 INTEREST RATES Money and Capital Markets Averages, percent per annum; weekly and monthly figures are averages of business day data unless otherwise noted. 1980 1981 1981, week ending Instrument 1978 1979 1980 Nov. Dec. Jan. Feb. Jan. 30 Feb. 6 Feb. 13 Feb. 20 Feb. 27 Money Market Rates 1 Federal funds1 2 ............................................... 7.93 11.19 13.36 15.85 18.90 19.08 15.93 18.12 17.19 16.51 15.81 14.96 Commercial paper3-4 2 1-month.......................................................... 7.76 10.86 12.76 15.23 18.95 17.73 15.81 17.07 16.47 16.34 15.81 14.72 3 3-month........................................................... 7.94 10.97 12.66 15.18 18.07 16.58 15.49 16.38 15.85 16.02 15.54 14.68 4 6-month........................................................... 7.99 10.91 12.29 14.73 16.49 15.10 14.87 15.02 14.90 15.20 15.02 14.45 Finance paper, directly placed3-4 5 1-month.......................................................... 7.73 10.78 12.44 14.87 17.87 16.97 15.52 16.71 16.17 16.15 15.64 14.29 6 3-month........................................................... 7.80 10.47 11.49 13.14 15.00 14.49 14.45 14.80 14.67 14.77 14.69 13.80 7 6-month........................................................... 7.78 10.25 11.28 13.07 14.78 14.09 14.05 14.24 14.14 14.27 14.31 13.60 Bankers acceptances4-5 8 3-month........................................................... 8.11 11.04 12.78 15.34 17.96 16.62 15.54 16.32 15.86 16.18 15.40 14.83 9 6-month........................................................... n.a. n.a. n.a. n.a. n.a. 14.88 14.89 14.91 14.88 15.28 14.95 14.55 Certificates of deposit, secondary market6 10 1-month........................................................... 7.88 11.03 12.91 15.39 19.24 17.99 16.11 17.43 16.63 16.79 16.23 14.96 11 3-month.......................................................... 8.22 11.22 13.07 15.68 18.65 17.19 16.14 17.03 16.38 16.71 16.31 15.31 12 6-month.......................................................... 8.61 11.44 12.99 15.36 17.10 15.92 16.00 15.92 15.81 16.43 16.33 15.59 13 Eurodollar deposits, 3-month2 .................. 8.78 11.96 14.00 16.46 19.47 18.07 17.18 18.56 17.23 17.16 18.11 16.59 U.S. Treasury bills4 Secondary market7 14 3-month...................................................... 7.19 10.07 11.43 13.73 15.49 15.02 14.79 15.01 14.90 15.51 14.68 14.19 15 6-month...................................................... 7.58 10.06 11.37 13.50 14.64 14.08 14.05 14.01 13.92 14.63 14.00 13.76 16 1-year .......................................................... 7.74 9.75 10.89 12.66 13.23 12.62 12.99 12.68 12.84 13.31 12.98 12.89 Auction average8 17 3-month...................................................... 7.221 10.041 11.506 13.888 15.661 14.724 14.905 15.199 14.657 15.397 15.464 14.103 18 6-month...................................................... 7.572 10.017 11.374 13.612 14.770 13.883 14.134 14.121 13.735 14.430 14.760 13.611 19 1-year ........................................................... 7.678 9.817 10.748 12.219 13,261 12.554 12.801 13.033 12.801 Capital Market Rates U.S. Treasury notes and bonds9 Constant maturities10 20 1-year ........................................................... 8.34 10.67 12.05 14.15 14.88 14.08 14.57 14.24 14.41 14.92 14.50 14.50 21 2-year .......................................................... 8.34 10.12 11.77 13.51 14.08 13.26 13.92 13.39 13.67 14.22 13.81 14.02 22 2^-year11 .................................................. 13.25 13.95 14.00 23 3-year ........................................................... 8.29 9.71 11.55 13.31 13.65 13.01 13.65 13.13 13.41 13.86 13.53 13.80 24 5-year ........................................................... 8.32 9.52 11.48 12.83 13.25 12.77 13.41 12.89 13.13 13.59 13.32 13.63 25 7-year ........................................................... 8.36 9.48 11.43 12.71 13.00 12.66 13.28 12.78 13.00 13.45 13.24 13.45 26 10-year ........................................................ 8.41 9.44 11.46 12.68 12.84 12.57 13.19 12.74 12.95 13.39 13.16 13.32 27 20-year........................................................ 8.48 9.33 11.39 12.44 12.49 12.29 12.98 12.48 12.72 13.15 12.97 13.10 28 30-year........................................................ 8.49 9.29 11.30 12.37 12.40 12.14 12.80 12.32 12.60 12.99 12.77 12.89 Composite12 29 Over 10 years (long-term) .................. 7.89 8.74 10.81 11.83 11.89 11.65 12.23 11.80 12.02 12.41 12.21 12.32 State and local notes and bonds Moody’s series13 30 Aaa............................................................... 5.52 5.92 7.85 8.71 9.44 8.98 9.46 9.30 9.30 9.40 9.50 9.65 31 Baa............................................................... 6.27 6.73 9.01 9.74 10.64 9.90 10.15 9.90 10.00 10.20 10.20 10.20 32 Bond Buyer series14 .................................. 6.03 6.52 8.59 9.56 10.11 9.66 10.10 9.91 9.90 9.99 10.22 10.27 Corporate bonds Seasoned issues15 33 All industries ........................................... 9.07 10.12 12.75 13.64 14.04 13.80 14.22 13.93 14.05 14.23 14.33 14.30 34 Aaa............................................................... 8.73 9.63 11.94 12.97 13.21 12.81 13.35 12.98 13.07 13.41 13.51 13.45 35 Aa................................................................. 8.92 9.94 12.50 13.34 13.78 13.52 13.89 13.62 13.69 13.87 14.04 14.00 36 A.................................................................... 9.12 10.20 12.89 13.59 14.03 13.83 14.27 13.97 14.12 14.22 14.40 14.35 37 Baa............................................................... 9.45 10.69 13.67 14.64 15.14 15.03 15.37 15.15 15.32 15.41 15.36 15.39 Aaa utility bonds16 38 New issue................................................. 8.96 10.03 12.74 13.85 14.51 14.12 14.90 14.06 14.90 39 Recently offered issues......................... 8.97 10.02 12.70 13.91 14.38 14.17 14.58 14.08 14.30 14.58 14.57 14.85 Memo: Dividend/price ratio17 40 Preferred stocks ........................................... 8.25 9.07 10.57 11.35 11.94 11.64 11.83 11.54 11.80 11.84 11.92 11.78 41 Common stocks ........................................... 5.28 5.46 5.25 4.63 4.74 4.76 5.00 4.84 5.00 5.00 5.00 5.02 1. Weekly and monthly figures are averages of all calendar days, where the rate 11. Each monthly figure is an average of only five business days near the end for a weekend or holiday is taken to be the rate prevailing on the preceding business of the month. The rate for each month was used to determine the maximum interest day. The daily rate is the average of the rates on a given day weighted by the rate payable in the following month on small saver certificates, until June 2, 1980. volume of transactions at these rates. Each weekly figure is calculated on a biweekly basis and is the average of five 2. Weekly figures are statement week averages—that is, averages for the week business days ending on the Monday following the calendar week. Beginning June ending Wednesday. 2, the biweekly rate is used to determine the maximum interest rate payable in the 3. Beginning November 1977, unweighted average of offering rates quoted by following two-week period on small saver certificates. (See table 1.16.) at least five dealers (in the case of commercial paper), or finance companies (in 12. Unweighted averages for all outstanding notes and bonds neither due nor the case of finance paper). Previously, most representative rate quoted by those callable in less than 10 years, including several very low yielding “flower” bonds. dealers and finance companies. Before November 1979, maturities for data shown 13. General obligations only, based on figures for Thursday, from Moody’s are 30-59 days, 90-119 days, and 120-179 days for commercial paper; and 30-59 Investors Service. days, 90-119 days, and 150-179 days for finance paper. 14. General obligations only, with 20 years to maturity, issued by 20 state and 4. Yields are quoted on a bank-discount basis, rather than an investment yield local governmental units of mixed quality. Based on figures for Thursday. basis (which would give a higher figure). 15. Daily figures from Moody’s Investors Service. Based on yields to maturity 5. Dealer closing offered rates for top-rated banks. Most representative rate on selected long-term bonds. (which may be, but need not be, the average of the rates quoted by the dealers). 16. Compilation of the Federal Reserve. Issues included are long-term (20 years 6. Unweighted average of offered rates quoted by at least five dealers early in or more). New-issue yields are based on quotations on date of offering; those on the day. recently offered issues (included only for first 4 weeks after termination of under­ 7. Unweighted average of closing bid rates quoted by at least five dealers. writer price restrictions), on Friday close-of-business quotations. 8. Rates are recorded in the week in which bills are issued. 17. Standard and Poor’s corporate series. Preferred stock ratio based on a sample 9. Yields (not compounded) are based on closing bid prices quoted by at least of ten issues: four public utilities, four industrials, one financial, and one trans­ five dealers. portation. Common stock ratios on the 500 stocks in the price index. 10. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields are read from a yield curve at fixed maturities. Based on only recently issued, actively traded securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Financial Statistics □ March 1981 1.36 STOCK MARKET Selected Statistics 1980 1981 Indicator 1978 1979 Aug. Sept Dec. Jan. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 53.76 55.67 68.06 70.87 73.12 75.17 78.15 76.69 76.24 73.52 2 Industrial ................................................................. 58.30 61.82 78.64 82.15 84.92 88.00 92.32 90.37 89.23 85.74 3 Transportation......................................................... 43.25 45.20 60.52 62.48 65.89 70.76 77.22 75.74 74.43 72.76 4 Utility....................................................................... 39.23 36.46 37.35 38.18 38.77 38.44 38.35 37.84 38.53 37.59 5 Finance ..................................................................... 56.74 58.65 64.28 67.22 69.33 68.29 67.21 67.46 70.04 68.48 6 Standard & Poor’s Corporation (1941-43 = 10)1 . 96.11 98.34 118.71 123.50 126.49 130.22 135.65 133.48 132.97 128.40 7 American Stock Exchange (Aug. 31, 1973 = 100) 144.56 186.56 300.94 321.87 337.01 350.08 349.97 347.56 344.21 338.28 Volume of trading (thousands of shares) 8 New York Stock Exchange ...................................... 28,591 32,233 44,867 45,984 50,397 44,860 54,895 46,620 45,500 42,963 9 American Stock Exchange ...................................... 3,622 4,182 6,377 6,452 7,880 7,087 7,852 6,410 6,024 4,816 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers/dealers2 11,035 11,619 14,721 12,007 12,731 13,293 14,363 14,721 14,242 11 Margin stock3.................................................. 10,830 11,450 14,500 11,800 12,520 13,080 14,140 14,500 14,020 12 Convertible bonds.......................................... 205 167 219 204 208 211 220 219 221 13 Subscription issues ........................................ 1 2 2 3 3 2 3 2 1 n.a. Free credit balances at brokers4 14 Margin-account.............................................. 835 1,105 2,105' 1,695 1,850 l,950c 2,120c 2,105 2,065 15 Cash-account.................................................. 2,510 4,060 6,070' 4,925 5,680 5,500c 5,590c 6,070' 5,655 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......................................................................... 33.0 16.0 14.0 11.0 13.0 13.0 13.0 14.0 20.0 18 40-49 ............................................................................... 28.0 29.0 30.0 25.0 28.0 29.0 18.0 30.0 30.0 19 50-59 ............................................................................... 18.0 27.0 25.0 30.0 26.0 25.0 31.0 25.0 22.0 n.a. 20 60-69 ............................................................................... 10.0 14.0 14.0 16.0 15.0 15.0 18.0 14.0 13.0 21 70-79 ............................................................................... 6.0 8.0 9.0 10.0 10.0 10.0 11.0 9.0 8.0 \ 22 80 or more ..................................................................... 5.0 7.0 8.0 8.0 8.0 8.0 9.0 8.0 7.0 Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)6 .......................... 13,092 16,150 21,690 18,350 19,283 19,929 21,600 21,690 21,686 t Distribution by equity status (percent) 1 24 Net credit status ........................................................... 41.3 44.2 47.8 48.2 49.0 46.8 46.5 47.8 47.0 n.a. Debt status, equity of 1 25 60 percent or more .................................................. 45.1 47.0 44.4 44.6 43.4 46.2 46.8 44.4 43.9 26 Less than 60 percent................................................. 13.6 8.8 7.7 7.0 7.6 7.0 6.7 7.7 9.1 1 Margin requirements (percent of market value and effective date)7 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 27 Margin stocks................................................................. 70 80 65 55 65 50 28 Convertible bonds......................................................... 50 60 50 50 50 50 29 Short sales ..................................................................... 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and 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 related collateral in the customer’s margin account or deposits of cash (usually sales pro­ equity instruments and secured at least in part by stock. Credit extended is end-of- ceeds) occur. 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 A ll 1.37 SAVINGS INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1980 1981 Account 1978 1979 Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan.P Savings and loan associations 1Assets ............................................................. 523,542 578,962 590,725 592,931 594,397 596,620 603,295 609,320 617,773 623,939 629,829' 631,046 2Mortgages ..................................................... 432,808 475,688 480,032 479,956 481,042 482,839 487,036 491,895 496,495 499,973 502,812' 504,078 3Cash and investment securities1 .............. 44,884 46,341 50,373 52,466 52,408 52,165 53,336 53,435 56,146 57,302 57,572' 57,383 4 Other ............................................................. 45,850 56,933 60,320 60,509 60,947 61,616 62,923 63,990 65,132 66,664 69,445' 69,585 5Liabilities and net worth ............................ 523,542 578,962 590,725 592,931 594,397 596,620 603,295 609,320 617,773 623,939 629,829' 631,046 6 Savings capital............................................... 430,953 470,004 478,400 481,411 486,680 488,896 497,403 496,991 500,861 503,365 510,959' 512,858 7Borrowed money ........................................ 42,907 55,232 57,253 55,199 54,796 41,239 55,396 58,418 60,727 62,067 64,491' 62,674 8 FHLBB ..................................................... 31,990 40,441 42,724 41,529 40,613 39,882 41,005 42,547 44,325 45,505 47,045' 46,585 9 Other ......................................................... 10,917 14,791 14,529 13,670 14,183 13,579 14.391 15,871 16,402 16,562 17,446' 16,098 10Loans in process.......................................... 10,721 9,582 7,725 7,185 7,031 7,112 7,540 8,243 8,654 8,853 8,783' 8,321 11 Other ............................................................. 9,904 11,506 14,143 16,141 12,966 14,364 16,190 12,776 14,502 16,433 12,227' 14,047 12Net worth2..................................................... 29,057 32,638 33,204 32,995 32,924 32,787 32,766 32,892 33,029 33,221 33,319' 33,137 13Memo: Mortgage loan com­ mitments outstanding3 ........................ 18,911 16,007 14,195 13,931 15,368 18,020 20,278 20,311 19,077 17,979 16,102' 15,859 Mutual savings banks4 14Assets ............................................................. 158,174 163,405 165,366 166,340 166,982 167,959 168,752 169,409 170,432 171,126 171,594 Loans 15 Mortgage ................................................... 95,157 98,908 99,045 99,163 99,176 99,301 99,289 99,306 99,523 99,677 99,891 16 Other ......................................................... 7,195 9,253 10,187 10,543 11,148 11,390 11,122 11,415 11,382 11,477 11,770 Securities 17 U.S. government5 .................................. 4,959 7,658 7,548 7,527 7,483 7,796 8,079 8,434 8,622 8,715 8,891 18 State and local government .................. 3,333 2,930 2,791 2,727 2,706 2,702 2,709 2,728 2,754 2,736 2.379 19 Corporate and other6 ............................ 39,732 37,086 37,801 38,246 38,276 38,863 39,327 39,609 39,720 39,888 39,349 20 Cash ............................................................... 3,665 3,156 3,405 3,588 3,561 3,260 3,456 3,153 3,592 3,717 4,330 21 Other assets................................................... 4,131 4,412 4,588 4,547 4,631 4,648 4,770 4,764 4,839 4,916 4,983 n.a. 22 Liabilities....................................................... 158,174 163,405 165,366 166,340 166,982 167,959 168,752 169,409 170,432 171,126 171,594 23 Deposits......................................................... 142,701 146,006 145,821 146,637 148,606 149,580 150,187 151,765 151,998 152,133 153,555 24 Regular7..................................................... 141,170 144,070 143,765 144,646 146,416 147,408 148,018 149,395 149,797 150,109 151.450 25 Ordinary savings.................................. 71.816 61,123 54,247 54,669 56,388 57,737 58,191 58,658 57,651 56,256 53,955 26 Time and other.................................... 69,354 82,947 89,517 89,977 90,028 89,671 89,827 90,736 92,146 93,853 97.494 27 Other ......................................................... 1,531 1,936 2,056 1,990 2,190 2,172 2,169 2,370 2,200 2,042 2.105 28 Other liabilities............................................. 4,565 5,873 7,916 8,161 6,898 6,964 7,211 6,299 7,117 7,644 6,665 29 General reserve accounts .......................... 10,907 11,525 11,629 11,542 11,478 11,416 11,353 11,344 11,317 11,349 11.374 30 Memo: Mortgage loan com­ mitments outstanding8........................ 4,400 3,182 2,097 1,883 1,898 1,939 1,849 1,883 1,817 1,682 1.476 Life insurance companies 31 Assets ............................................................. 389,924 432,282 442,932 447,020 450,858 455,759 459,362 464,483 468,057 473,529 476,190 Securities 32 Government ............................................. 20,009 0,338 20,470 20,529 20,395 20,736 20,833 20,853 20,942 21,204 21,453 33 United States9...................................... 4,822 4,888 5,059 5,107 4,990 5,325 5,386 5,361 5,390 5,568 5,753 34 State and local .................................... 6,402 6,428 6,351 6,352 6,349 6,361 6,421 6,474 6,484 6,568 6.682 35 Foreign10 ............................................... 8,785 9,022 9,060 9,070 9.056 9,050 9,026 9,018 9,068 9,068 9,018 36 Business..................................................... 198,105 222,332 222,175 223,556 224,874 228,645 230,477 233,652 236,115 239,150 238,048 n.a. 37 Bonds..................................................... 162,587 178,371 182,750 183,356 184,329 186,385 187,839 189,586 191,229 191,753 191.090 38 Stocks ..................................................... 35,518 39,757 39,425 40,200 40,545 42,260 42,638 44,066 44,886 47,397 46,958 39Mortgages ..................................................... 106,167 118,421 123,587 124,563 125,455 126,461 127,357 128,089 128,977 129,878 131,145 40 Real estate..................................................... 11,764 13,007 13,696 13,981 14,085 14,164 14,184 14,460 14,702 15,183 15.247 41 Policy loans ................................................... 30,146 34,825 38,166 38,890 39,354 39,649 39,925 40,258 40,548 40.878 41,411 42 Other assets................................................... 23,733 27,563 24,838 25,501 26.695 26,104 26,586 27,171 26,765 27,236 28,836 Credit unions 43 Total assets/liabilities and capital..................................................... 62,348 65,854 65,190 66,103 68,102 68,429 69,553 70,515 70,702 71,335 71,709 70,754 44 Federal........................................................... 34,760 35,934 35,834 36,341 37,555 37,573 38,168 39,219 39,155 39,428 39.801 39,142 45 State ............................................................... 27,588 29,920 29,356 29,762 30,547 30,856 31,385 31,296 31,547 31,907 31,908 31,612 46 Loans outstanding ...................................... 50,269 53,125 50,344 49,469 48,172 47,829 47,884 47,211 47,221 47,299 47,774 47,309 47 Federal....................................................... 27,687 28,698 27,119 26,550 25,773 25,435 25,401 25,381 25,288 25,273 25,627 25,272 48 State ........................................................... 22,582 24,426 23,225 22,919 22,399 22,394 22,483 21,830 21,933 22,026 22,147 22,037 49 Savings........................................................... 53,517 56,232 56,338 57,197 59,310 60,574 61,403 63,728 63,957 64,304 64,399 63,874 50 Federal (shares) ...................................... 29,802 35,530 30,851 31,403 32,764 33,472 33,964 35,961 36,030 36,183 36,348 35.915 51 State (shares and deposits) .................... 23,715 25,702 25,487 25,794 26,546 27,102 27,439 27,767 27,927 28,121 28,051 27,959 For notes see bottom of page A28. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics □ March 1981 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year Fiscal Fiscal Fiscal Type of account or operation year year year 1979 1980 1980 1981 1978 1979 1980 H2 HI H2 Nov. Dec. Jan. U.S. budget 1 Receipts1......................................................... 401,997 465,940 520,050 233,952 270,864 262,152 39,175 48,903 52,214 2 Outlays12...................................................... 450,804 493,635 579,613 263,004 289,905 310,972 48,049 56,202 59,099 3 Surplus, or deficit( -) ................................ -48,807 -27,694 -59,563 -29,052 -19,041 -48,821 -8,874 -7,299 -6,884 4 Trust funds................................................ 12,693 18,335 8,791 9,679 4,383 -2,551 -3,049 5,661 -3,434 5 Federal funds3 .......................................... -61,532 -46,069 -67,752 -38,773 -23,418 -46,306 -5,825 -12,960 -3,451 Off-budget entities (surplus, or deficit 6 Federal Financing Bank outlays................ -10,661 -13,261 -14,549 -5,909 -7,735 -7,552 -1,358 -1,033 -960 7 Other4............................................................ 302 793 303 765 -522 376 -466 463 -494 U.S. budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (-) ................................ -59,166 -40,162 -73,808 -34,197 -27,298 -55,998 -10,698 -7,869 -8,339 Source or financing 9 Borrowing from the public .................... 59,106 33,641 70,515 31,320 24,435 54,764 9,231 13,667 6,772 10 Cash and monetary assets (decrease, or increase (- ))^ .................................. -3,023 -408 -355 3,059 -3,482 -6,730 4,077 -10,485 2,252 11 Other6......................................................... 3,083 6,929 3,648 -182 6,345 7,964 -2,610 4,686 -685 Memo: 12 Treasury operating balance (level, end of period) .................................................. 22,444 24,176 20,990 15,924 14,092 12,305 7,226 12,305 13,917 13 Federal Reserve Banks .......................... 16,647 6,489 4,102 4,075 3,199 3,062 2,435 3,062 3,038 14 Tax and loan accounts ............................ 5,797 17,687 16,888 11,849 10,893 9,243 4,791 9,243 10,879 1. Effective June 1978, earned income credit payments in excess of an indi­ 6. Includes accrued interest payable to the public; allocations of special drawing vidual’s tax liability, formerly treated as income tax refunds, are classified as outlays rights; deposit funds; miscellaneous liability (including checks outstanding) and retroactive to January 1976. asset accounts; seignorage; increment on gold; net gain/loss for U.S. currency 2. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was re­ valuation adjustment; net gain/loss for IMF valuation adjustment; and profit on classified from an off-budget agency to an on-budget agency in the Department of the sale of gold. Labor. 3. Half-year figures are calculated as a residual (total surplus/deficit less trust Source. “Monthly Treasury Statement of Receipts and Outlays of the U.S. fund surplus/deficit). Government,” Treasury Bulletin, and the Budget of the United States Government, 4. Includes Postal Service Fund; Rural Electrification and Telephone Revolving Fiscal Year 1981. Fund; and Rural Telephone Bank. 5. Includes U.S. Treasury operating cash accounts; special drawing rights; gold tranche drawing rights; loans to International Monetary Fund; and other cash and monetary assets. NOTES TO TABLE 1.37 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, associations. Note. Savings and loan associations: Estimates by the FHLBB for all associations 3. Excludes figures for loans in process, which are shown as a liability. in the United States. Data are based on monthly reports of federally insured 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 are 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-reserves 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 are 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, nonguaranteed 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 by 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 A29 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year Fiscal Fiscal Fiscal Source or type year year year 1979 1980 1980 1981 1978 1979 1980 H2 HI H2 Nov. Dec. Jan. Receipts 1 All sources1..................................................... 401,997 465,955 520,050 233,952 270,864 262,152 39,175 48,903 52,214 2 Individual income taxes, net ...................... 180,988 217,841 244,069 115,488 119,988 131,962 20,851 23,725 30,964 3 Withheld..................................................... 165,215 195,295 223,763 105,764 110,394 120,924 20,379 22,844 20,896 4 Presidential Election Campaign Fund .. 39 36 39 3 34 4 1 0 1 5 Nonwithheld............................................... 47,804 56,215 63,746 12,355 49,707 14,592 673 1,150 10,121 6 Refunds1..................................................... 32,070 33,705 43,479 2,634 40,147 3,559 201 269 54 Corporation income taxes 7 Gross receipts ........................................... 65,380 71,448 72,380 29,169 43,434 28,579 1,774 10,155 2,826 8 Refunds....................................................... 5,428 5,771 7,780 3,306 4,064 4,518 771 768 667 9 Social insurance taxes and contributions, net ........................................................... 123,410 141,591 160,747 71,031 86,597 77,262 13,242 11,078 14,363 10 Payroll employment taxes and contributions2.................................... 99,626 115,041 133,042 60,562 69,077 66,831 11,189 10,268 12,533 11 Self-employment taxes and contributions3.................................... 4,267 5,034 5,723 417 5,535 188 0 0 426 12 Unemployment insurance ...................... 13,850 15,387 15,336 6,899 8,690 6,742 1,499 224 773 13 Other net receipts4 .................................. 5,668 6,130 6,646 3,149 3,294 3,502 554 586 631 14 Excise taxes ................................................... 18,376 18,745 24,329 9,675 11,383 15,332 2,080 2,391 2,523 15 Customs deposits........................................... 6,573 7,439 7,174 3,741 3,443 3,717 546 632 635 16 Estate and gift taxes.................................... 5,285 5,411 6,389 2,900 3,091 3,499 543 517 535 17 Miscellaneous receipts5 .............................. 7,413 9,252 12,741 5,254 6,993 6,318 909 1,174 1,035 Outlays 18 All types1’6 ..................................................... 450,804 493,635 579,613 263,004 289,905 310,972 48,049 56,202 59,099 19 National defense ........................................... 105,186 117,681 135,856 62,002 69,132 72,457 11,812 12,605 12,682 20 International affairs .................................... 5,922 6,091 10,733 4,617 4,602 5,430 674 1,249 396 21 General science, space, and technology .. 4,742 5,041 5,722 3,299 3,150 3,205 549 618 440 22 Energy............................................................. 5,861 6,856 6,313 3,281 3,126 3,997 627 845 915 23 Natural resources and environment.......... 10,925 12,091 13,812 7,350 6,668 7,722 1,086 1,325 1,134 24 Agriculture..................................................... 7,731 6,238 4,762 1,709 3,193 1,892 878 1,355 2,984 25 Commerce and housing credit .................. 3,324 2,565 7,782 3,002 3,878 3,163 -357 1,051 988 26 Transportation............................................... 15,445 17,459 21,120 10,298 9,582 11,547 1,808 1,870 3,810 27 Community and regional development ... 11,039 9,482 10,068 4,855 5,302 5,370 847 872 867 28 Education, training, employment, social services ................................................... 26,463 29,685 30,767 14,579 16,686 15,221 2,223 2,461 3,029 29 Health............................................................. 43,676 49,614 58,165 26,492 29,299 31,263 4,891 5,716 5,510 30 Income security1-6 ......................................... 146,180 160,159 193,100 85,967 94,605 107,912 17,216 18,944 19,299 31 Veterans benefits and services .................. 18,974 19,928 21,183 10,113 9,758 11,731 719 3,032 1,923 32 Administration of justice ............................ 3,802 4,153 4,570 2,174 2,291 2,299 348 382 383 33 General government.................................... 3,737 4,153 4,505 2,103 2,422 2,432 356 464 356 34 General-purpose fiscal assistance .............. 9,601 8,372 8,584 4,286 3,940 4,191 210 26 1,293 35 Interest7 ......................................................... 43,966 52,556 64,504 29,045 32,658 35,909 5,338 10,805 3,822 36 Undistributed offsetting receipts7 8 .......... -15,772 -18,489 -21,933 -12,164 -10,387 -14,769 -1,285 -7,400 -732 1.Effective June 1978, earned income credit payments in excess of an individual's classified from an off-budget agency to an on-budget agency in the Department of tax liability, formerly treated as income tax refunds, are classified as outlays ret­ Labor. roactive to January 1976. 7.Effective September 1976, “Interest” and “Undistributed offsetting receipts” 2.Old-age, disability, and hospital insurance, and railroad retirement accounts. reflect the accounting conversion from an accrual basis to a cash basis for the 3.Old-age, disability, and hospital insurance. interest on special issues for U.S. government accounts. 4.Supplementary medical insurance premiums, federal employee retirement con­ 8.Consists of interest received by trust funds, rents and royalties on the Outer tributions, and Civil Service retirement and disability fund. Continental Shelf, and U.S. government contributions for employee retirement. 5.Deposits of earnings by Federal Reserve Banks and other miscellaneous re­ ceipts. Source. “Monthly Treasury Statement of Receipts and Outlays of the U.S. 6.Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was re­ Government” and the Budget of the U.S. Government, Fiscal Year 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Financial Statistics □ March 1981 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1978 1979 1980 Item Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstanding ..................................................... 797.7 804.6 812.2 833.8 852.2 870.4 884.4 914.3 936.7 2 Public debt securities ........................................................... 789.2 796.8 804.9 826.5 845.1 863.5 877.6 907.7 930.2 3 Held by public................................................................... 619.2 630.5 626.4 638.8 658.0 677.1 682.7 710.0 737.7 4 Held by agencies............................................................... 170.0 166.3 178.5 187.7 187.1 186.3 194.9 197.7 192.5 5 Agency securities ................................................................. 8.5 7.8 7.3 7.2 7.1 7.0 6.8 6.6 6.5 6 Held by public................................................................... 7.0 6.3 5.9 5.8 5.6 5.5 5.3 5.1 5.0 7 Held by agencies............................................................... 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 8 Debt subject to statutory limit............................................. 790.3 797.9 806.0 827.6 846.2 864.5 878.7 908.7 931.2 9 Public debt securities ........................................................... 788.6 796.2 804.3 825.9 844.5 862.8 877.0 907.1 929.6 10 Other debt1 ........................................................................... 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.6 1.6 11 Memo: Statutory debt limit................................................. 798.0 798.0 830.0 830.0 879.0 879.0 925.0 925.0 935.1 1. Includes guaranteed debt of government agencies, specified participation cer- Note. Data from Treasury Bulletin (U.S. Treasury Department), tificates, notes to international lending organizations, and District of Columbia stadium bonds. 1.41 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1980 1981 Type and holder 1976 1977 1978 1979 Oct. Nov. Dec. Jan. Feb. 1 Total gross public debt......................................................... 653.5 718.9 789.0' 845.0' 908.2 9113.8 930.2 934.1 950.5 By type 2 Interest-bearing debt ........................................................... 652.5 715.2 782.4 844.0 906.9 909.4 928.9 929.8 946.5 3 Marketable............................................................................. 421.3 459.9 487.5 530.7 599.4 605.4 623.2 628.5 642.9 4 Bills..................................................................................... 164.0 161.1 161.7 172.6 202.3 208.7 216.1 220.4 229.0 5 Notes................................................................................... 216.7 251.8 265.8 283.4 311.9 311.1 321.6 321.2 324.5 6 Bonds ................................................................................. 40.6 47.0 60.0 74.7 85.2 85.5 85.4 86.9 89.4 7 Nonmarketable 1................................................................... 231.2 255.3 294.8 313.2 307.5 304.0 305.7 301.3 303.5 8 Convertible bonds 2 ......................................................... 2.3 2.2 2.2 2.2 9 State and local government series ................................ 4.5 13.9 24.3 24.6 23.9 2.4.0 23.8 23.7 23.6 10 Foreign issues 3 ................................................................. 22.3 22.2 29.6 28.8 24.8 24.5 24.0 23.8 24.0 11 Government................................................................... 20.8' 21.0' 28.0 23.6 18.4 18.1 17.6 17.5 17.5 12 Public ............................................................................. 1.5r 1.2' 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 73.0 72.8 72.5 71.4 70.7 14 Government account series 4 ........................................ 129.7 139.8 157.5 177.5 185.7 182.4 185.1 182.2 185.0 15 Non-interest-bearing debt ................................................... 1.1 3.7 6.8 1.2 1.2' 4.4 1.3 4.2 4.0 By holder 5 16 U.S. government agencies and trust funds...................... 147.1 154.8 170.0 187.1 193.4 189.7 192.5 17 Federal Reserve Banks ....................................................... 97.0 102.8' 110.6' 117.5 121.5 120.4 121.3 18 Private investors ................................................................... 409.5 461.3 508.6 540.5 593.3 60.3.2 616.4 19 Commercial banks ............................................................... 103.8 101.4 94.7' 97.0 103.4 101.8 104.7 20 Mutual savings banks ........................................................... 5.9 5.9 5.0 4.2' 5.5 5.6 5.8 21 Insurance companies ........................................................... 12.7 15.5 14.9 14.4 15.3 1.5.4 15.2 22 Other companies................................................................... 27.7 22.7 20.5' 23.9 25.3 24.8 24.6 n.a. n.a. 23 State and local governments ............................................... 41.6 54.8 70.1' 68.2' 73.1 74.6 74.7 Individuals 24 Savings bonds ................................................................... 72.0 76.7 80.7 79.9 73.0 72.5 72.5 25 Other securities................................................................. 28.8 28.6 30.1' 34.2 49.9 52.1' 56.7 26 Foreign and international 6................................................. 78.1 109.6 137.8 123.8 127.7' 132.6 134.3 27 Other miscellaneous investors 7 ......................................... 38.9 45.9' 58.2 94.8' 120.1' 123.4 127.9 1. Includes (not shown separately): Securities issued to the Rural Electrification 6. Consists of investments of foreign balances and international accounts in the Administration, depository bonds, retirement plan bonds, and individual retire­ United States. Beginning with July 1974, the figures exclude non-interest-bearing ment bonds. 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 1 Vi 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 A31 1.42 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 Nov. Dec. Nov. Dec. All maturities 1 to 5 years 1 All holders ............................................................................................. 487,546 530,731 605,381 623,186 162,886 164,198 191,614 197,409 2 U.S. government agencies and trust funds...................................... 12,695 11,047 9,569 9,564 3,310 2,555 1,990 1,990 3 Federal Reserve Banks ....................................................................... 109,616 117,458 120,447 121,328 31,283 28,469 35,190 35,835 4 Private investors ................................................................................... 365,235 402,226 475,365 492,294 128,293 133,173 154,434 159,585 5 Commercial banks ........................................................................... 68,890 69,076 75,691 77,868 38,390 38,346 43,659 44,482 6 Mutual savings banks....................................................................... 3,499 3,204 3,803 3,917 1,918 1,668 1,912 1,925 7 Insurance companies ....................................................................... 11,635 11,496 12,095 11,930 4,664 4,518 4,693 4,504 8 Nonfinancial corporations ............................................................... 8,272 8,433 7,880 7,758 3,635 2,844 2,705 2,213 9 Savings and loan associations ......................................................... 3,835 3,209 4,061 4,225 2,255 1,763 2,147 2,289 10 State and local governments ........................................................... 18,815 15,735 21,203 21,058 3,997 3,487 5,286 4,595 11 All others........................................................................................... 250,288 291,072 350,633 365,539 73,433 80,546 94,032 99,577 Total, within 1 year 5 to 10 years 12 All holders ............................................................................................. 228,516 255,252 288,481 297,385 50,400 50,440 52,893 56,037 13 U.S. government agencies and trust funds...................................... 1,488 1,629 834 830 1,989 871 1,404 1,404 14 Federal Reserve Banks ....................................................................... 52,801 63,219 56,660 56,858 14,809 12,977 13,468 13,458 15 Private investors ................................................................................... 174,227 190,403 230,987 239,697 33,601 36,592 38,021 41,175 16 Commercial banks ........................................................................... 20,608 20,171 23,614 25,197 7,490 8,086 5,915 5,793 17 Mutual savings banks....................................................................... 817 836 1,172 1,246 496 459 437 455 18 Insurance companies ....................................................................... 1,838 2,016 1,949 1,940 2,899 2,815 3,000 3,037 19 Nonfinancial corporations ............................................................... 4,048 4,933 3,916 4,281 369 308 382 357 20 Savings and loan associations ......................................................... 1,414 1,301 1,769 1,646 89 69 75 216 21 State and local governments ........................................................... 8,194 5,607 7,218 7,750 1,588 1,540 1,999 2,030 22 All others........................................................................................... 137,309 155,539 191,350 197,636 20,671 23,314 26,212 29,287 Bills, within 1 year 10 to 20 years 23 All holders ............................................................................................. 161,747 172,644 208,721 216,104 19,800 27,588 36,893 36,854 24 U.S. government agencies and trust funds...................................... 2 0 1 3,876 4,520 3,686 3,686 25 Federal Reserve Banks ....................................................................... 42,397 45,337 44,057 43,971 2,088 3,272 5,941 5,919 26 Private investors ................................................................................... 119,348 127,306 164,663 172,132 13,836 19,796 27,266 27,250 27 Commercial banks ........................................................................... 5,707 5,938 8,651 9,856 956 993 1,122 1,071 28 Mutual savings banks....................................................................... 150 262 337 394 143 127 181 181 29 Insurance companies ....................................................................... 753 473 549 672 1,460 1,305 1,744 1,718 30 Nonfinancial corporations ............................................................... 12 2,793 1,812 2,363 86 218 428 431 31 Savings and loan associations ......................................................... 262 219 822 818 60 58 57 52 32 State and local governments ........................................................... 5,524 3,100 5,126 5,413 1,420 1,762 3,651 3,597 33 All others........................................................................................... 105,161 114,522 147,366 152,616 9,711 15,332 20,083 20,200 Other, within 1 year Over 20 years 34 All holders ............................................................................................. 66,769 82,608 79,760 81,281 25,944 33,254 35,500 35,500 35 U.S. government agencies and trust funds...................................... 1,487 1,629 834 829 1,031 1,472 1,656 1,656 36 Federal Reserve Banks ....................................................................... 10,404 17,882 12,602 12,888 8,635 9,520 9,188 9,258 37 Private investors ................................................... ............................ 54,879 63,097 66,324 67,565 15,278 22,262 24,657 24,587 38 Commercial banks ........................................................................... 14,901 14,233 14,963 15,341 1,446 1,470 1,382 1,325 39 Mutual savings banks....................................................................... 667 574 834 852 126 113 100 110 40 Insurance companies ....................................................................... 1,084 1,543 1,401 1,268 774 842 708 730 41 Nonfinancial corporations ............................................................... 2,256 2,140 2,104 1,918 135 130 449 476 42 Savings and loan associations ......................................................... 1,152 1,081 947 828 17 19 13 21 43 State and local governments ........................................................... 2,670 2,508 2,091 2,337 3,616 3,339 3,049 3,086 44 All others........................................................................................... 32,149 41,017 43,984 45,020 9,164 16,340 18,956 18,838 Note. Direct public issues only. Based on Treasury Survey of Ownership from 460 mutual savings banks, and 723 insurance companies, each about 80 percent; Treasury Bulletin (U.S. Treasury Department). (2) 413 nonfinancial corporations and 478 savings and loan associations, each about Data complete for U.S. government agencies and trust funds and Federal Reserve 50 percent; and (3) 491 state and local governments, about 40 percent. Banks, but data for other groups include only holdings of those institutions that “All others,” a residual, includes holdings of all those not reporting in the report. The following figures show, for each category, the number and proportion Treasury Survey, including investor groups not listed separately. reporting as of Dec. 31, 1980: (1) 5,354 commercial tanks, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Financial Statistics □ March 1981 1.43 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1980 1980, week ending Wednesday 1978 Oct. Oct. 22 Oct. 29 Nov. 5 Nov. 12 Nov. 19 Nov. 26 1 U.S. government securities 10,838 10,285 17,464 21,716 25,386 20,769 By maturity 2 Bills...................................... 6,746 6,173 7,915 11,543 13,768 13,840 11,155 10,515 13,100 14,207 14,343 13,520 3 Other within 1 year .......... 237 392 454 350 442 464 430 373 332 302 636 432 4 1-5 years.............................. 2,320 1,889 2,417 2,745 3,699 3,461 2,256 3,339 2,541 4,691 3,494 3,942 5 5-10 years............................ 1,148 965 1,121 1,060 1,640 1,806 798 988 960 3,189 1,594 943 6 Over 10 years...................... 388 867 1,276 1,766 2,167 2,005 1,428 1,608 1,608 2,997 2,211 1,933 By type of customer 1 U.S. government securities dealers.......................... 1,268 1,135 1,448 1,296 1,745 992 1,066 1,669 1,640 1,687 2,096 8 U.S. government securities brokers ........................ 3,709 3,838 5,170 7,664 9,536 8,382 7,298 7,998 8,043 11,513 9,773 8,872 9 Commercial banks ............ 2,294 1,804 1,904 2,019 2,366 2,661 1,708 1,969 2,158 2,807 2,547 2,007 10 All others1 .......................... 3,567 3,508 4,660 6,485 8,069 8,726 6,070 5,790 6,671 9,427 8,271 7,795 11 Federal agency securities .. 1,729 1,894 2,723 3,277. 3,074 2,789 2,947 3,194 3,140 3,141 3,656 2,751 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. 1.44 U.S. GOVERNMENT SECURITIES DEALERS Positions and Sources of Financing Par value; averages of daily figures, in millions of dollars 1980 1980, week ending Wednesday Item 1977 1978 1979 Oct. Nov. Dec. Sept. 24 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 Positions1 1 U.S. government securities ........ 5,172 2,656 3,223 2,701 3,279 4,042 2,921 2,164 2,018 2,984 2,517 3,299 2 Bills................................................ 4,772 2,452 3,813 2,557 3,132 4,081 3,184 2,683 2,126 2,818 2,569 2,566 3 Other within 1 year .................... 99 260 -325 -1,082 -792 -1,394 -1,788 -1,425 -1,369 -1,502 -995 -712 4 1-5 years........................................ 60 -92 -455 755 -123 -43 970 908 1,097 853 229 970 5 5-10 years...................................... 92 40 160 -221 -13 104 -69 -359 -155 -69 -187 -342 6 Over 10 years................................ 149 -4 30 692 1,075 1,294 624 356 318 884 902 818 7 Federal agency securities ............ 693 606 1,471 979 357 643 435 486 858 947 1,188 1,066 Financing2 Reverse repurchase agreement3 . 8 Overnight and continuing .... 7,239 7,382 8,285 7,061 6,731 7,009 7,106 9 Term agreements .................... 23,088 22,883 21,188 23,322 23,118 23,610 24,203 Repurchase agreements4 ............ n.a. n.a. n.a. n.a. n.a. 10 Overnight and continuing .... 21,835 19,899 23,391 20,543 20,783 22,376 22,080 11 Term agreements .................... 19,699 19,537 17,550 20,467 19,280 20,791 20,408 1. Net amounts (in terms of par values) of securities owned by nonbank dealer 3. Includes all reverse agreements, including those that have been arranged to firms and dealer departments or commercial banks on a commitment, that is, trade- make delivery on sales and those for which the securities obtained have been used date basis, including any such securities that have been sold under agreements to as collateral on borrowings. repurchase. The maturities of some repurchase agreements are sufficiently long, 4. Includes both repurchase agreements undertaken to finance positions and however, to suggest that the securities involved are not available for trading pur­ “matched book” repurchase agreements. poses. Securities owned, and hence dealer positions, do not include securities purchased under agreement to resell. Note. Data for positions are averages of daily figures, based on the number of 2. Figures cover financing involving U.S. government and federal agency secu­ trading days in the period. Data for financing are based only on Wednesday figures. rities, negotiable CDs, bankers acceptances, and commercial paper. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A33 1.45 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt outstanding Millions of dollars, end of period 1980 Agency 1976 1977 1978 July Aug. Sept. Oct. Nov. Dec. 1 Federal and federally sponsored agencies1 ...................... 103,848 112,472 137,063 180,119 179,545 182,713 188,076 188,743 193,229 2 Federal agencies ................................................................... 22,419 22,760 23,488 26,810 26,930 27,618 27,797 27,941 28,606 3 Defense Department2....................................................... 1,113 983 968 661 651 641 636 631 610 4 Export-Import Bank3-4..................................................... 8,574 8,671 8,711 10,248 10,232 10,728 10,715 10,696 11,250 5 Federal Housing Administration5 ................................ 575 581 588 516 508 495 490 486 477 6 Government National Mortgage Association participation certificates6 ........................................ 4,120 3,743 3,141 2,842 2,842 2,842 2,842 2,842 2,817 7 Postal Service7................................................................... 2,998 2,431 2,364 1,770 1,770 1,770 1,770 1,770 1,770 8 Tennessee Valley Authority .......................................... 4,935 6,015 7,460 10,300 10,445 10,660 10,835 11,010 11,190 9 United States Railway Association7 ............................ 104 336 356 473 482 482 509 506 492 10 Federally sponsored agencies1 .......................................... 81,429 89,712 113,575 153,309 152,615 155,095 160,279 160,802 164,623 11 Federal Home Loan Banks............................................ 16,811 18,345 27,563 36,039 35,690 36,710 38,819 39,380 41,258 12 Federal Home Loan Mortgage Corporation .............. 1,690 1,686 2,262 2,634 2,634 2,537 2,537 2,537 2,536 13 Federal National Mortgage Association ...................... 30,565 31,890 41,080 52,114 52,001 52,382 53,889 53,643 55,185 14 Federal Land Banks......................................................... 17,127 19,118 20,360 12,765 12,765 12,765 12,365 12,365 12,365 15 Federal Intermediate Credit Banks .............................. 10,494 11,174 11,469 1,821 1,821 1,821 1,821 1,821 1,821 16 Banks for Cooperatives ................................................... 4,330 4,434 4,843 584 584 584 584 584 584 17 Farm Credit Banks1 ......................................................... 2,548 5,081 45,111 44,824 45,950 47,888 48,021 48,153 18 Student Loan Marketing Association8 ........................ 410 515 915 2,240 2,295 2,345 2,375 2,450 2,720 19 Other................................................................................... 2 2 2 1 1 1 1 1 1 Memo: 20 Federal Financing Bank debt7’9 ........................................ 28,711 38,580 51,298 78,870 80,024 82,559 83,903 85,440 87,460 Lending to federal and federally sponsored agencies 21 Export-Import Bank4........................................................... 5,208 5,834 6,898 9,558 9,558 10,067 10,067 10,067 10,654 22 Postal Service7....................................................................... 2,748 2,181 2,114 1,520 1,520 1,520 1,520 1,520 1,520 23 Student Loan Marketing Association8 ............................ 410 515 915 2,240 2,295 2,345 2,375 2,450 2,720 24 Tennessee Valley Authority .............................................. 3,110 4,190 5,635 8,575 8,720 8,935 9,110 9,285 9,465 25 United States Railway Association7 ................................ 104 336 356 473 482 482 509 506 492 Other Lending10 26 Farmers Home Administration.......................................... 10,750 16,095 23,825 36,715 37,403 37,961 38,466 39,431 39,431 27 Rural Electrification Administration................................ 1,415 2,647 4,604 8,084 8,233 8,425 8,646 8,760 9,196 28 Other....................................................................................... 4,966 6,782 6,951 11,705 11,813 12,824 13,210 13,421 13,982 1. In September 1977 the Farm Credit Banks issued their first consolidated bonds, of Housing and Urban Development; Small Business Administration; and the and in January 1979 they began issuing these bonds on a regular basis to replace Veterans Administration. the financing activities of the Federal Land Banks, the Federal Intermediate Credit 7. Off-budget. Banks, and the Banks for Cooperatives. Line 17 represents those consolidated 8. Unlike other federally sponsored agencies, the Student Loan Marketing As­ bonds outstanding, as well as any discount notes that have been issued. Lines 1 sociation may borrow from the Federal Financing Bank (FFB) since its obligations 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 and 9. The FFB, which began operations in 1974, is authorized to purchase or sell 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 partic­ curities market. ular agency being generally small. The Farmers Home Administration item consists 6. Certificates of participation issued prior to fiscal 1969 by the Government exclusively of agency assets, while the Rural Electrification Administration entry National Mortgage Association acting as trustee for the Farmers Home Admin­ 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

A34 Domestic Financial Statistics □ March 1981 1.46 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1980 Type of issue or issuer. 1977 1978 1979 June July Aug. Sept. Oct. Nov. 1 All issues, new and refunding1 ...................................................... 46,769 48,607 43,490 6,063 4,907 3,809 4,255 4,425 2,806 Type of issue 2 General obligation ........................................................................... 18,042 17,854 12,109 1,924 1,396 804 1,344 988 705 3 Revenue ............................................................................................. 28,655 30,658 31,256 4,136 3,506 2,995 2,902 3,418 2,090 4 Housing Assistance Administration2 ............................................ 5 U.S. government loans ................................................................... 72 95 125 3 5 10 9 19 11 Type of issuer 6 State ..................................................................................................... 6,354 6,632 4,314 897 185 304 640 195 323 7 Special district and statutory authority ........................................ 21,717 24,156 23,434 3,440 3.157 2,212 2,603 2,547 1,569 8 Municipalities, counties, townships, school districts.................. 18,623 17,718 15,617 1,724 1,558 1,283 1,003 1,666 902 9 Issues for new capital, total............................................................. 36,189 37,629 41,505 5,986 4,539 3,783 3,639 4,265 2,599 Use of proceeds 10 Education........................................................................................... 5,076 5,003 5,130 753 631 266 422 767 202 11 Transportation............................................................................................ 2,951 3,460 2,441 344 151 95 425 279 255 12 Utilities and conservation ............................................................... 8,119 9,026 8,594 625 1.260 1,176 716 764 367 13 Social welfare.............................................................................................. 8.274 10,494 15,968 3,007 1.695 1,424 1,198 1,095 1,023 14 Industrial aid .............................................................................................. 4,676 3,526 3,836 367 188 341 331 531 369 15 Other purposes ................................................................................. 7,093 6,120 5,536 930 614 481 547 829 383 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. 1.47 NEW SECURITY ISSUES of Corporations Millions of dollars 1980 Type of issue or issuer. 1977 1978 1979 or use May June July Aug. Sept. Oct. Nov. 1 AH issues1 ....................................................................... 53,792 47,230 51,464 9,067 9,511 7,941 5,371 4,922 5,728 3,827 2 Bonds............................................................................... 42,015 36,872 40,139 7,335 8,148 6,567 4,147 2,813 3,275 2,055 Type of offering 3 Public ............................................................................. 24,072 19.815 25,814 6,810 7,548 5.354 3,843 2,421 2,756 1,405 4 Private placement ......................................................... 17,943 17.057 14,325 525 600 1,213 304 392 519 650 Industry group 5 Manufacturing............................................................... 12,204 9.572 9,667 2,400 2,318 2.851 1.499 509 614 88 6 Commercial and miscellaneous.................................. 6,234 5.246 3,941 560 1,629 999 203 357 312 432 7 Transportation............................................................... 1,996 2,007 3,102 364 385 329 338 401 236 86 8 Public utility.................................................................. 8,262 7,092 8,118 723 1,412 316 971 555 754 565 9 Communication............................................................. 3,063 3,373 4,219 1,171 209 787 580 517 791 163 10 Real estate and financial ............................................ 10,258 9.586 11,095 2,116 2.195 1.284 556 472 568 722 11 Stocks ............................................................................. 11,777 10,358 11,325 1,732 1,363 1,374 1,224 2,109 2,453 1,772 Type 12 Preferred......................................................................... 3,916 2.832 3,574 202 382 360 101 392 535 256 13 Common......................................................................... 7,861 7,526 7,751 1,530 981 1.014 1.123 1.717 1,918 1,516 Industry group 14 Manufacturing............................................................... 1,189 1,241 1,679 215 127 165 293 502 848 418 15 Commercial and miscellaneous.................................. 1,834 1,816 2,623 512 202 390 238 569 321 509 16 Transportation............................................................... 456 263 255 27 9 32 54 117 53 17 Public utility................................................................... 5,865 5.140 5,171 615 494 714 463 633 526 227 18 Communication............................................................. 1,379 264 303 25 126 46 6 67 113 19 Real estate and financial ............................................. 1,049 1,631 1,293 338 406 104 152 345 574 452 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 A35 1.48 OPEN-END INVESTMENT COMPANIES Net Sales and Asset Position Millions of dollars 1980 1981 Item 1979 1980 June July Aug. Sept. Oct. Nov. Dec. Jan. Investment Companies1 1 Sales of own shares2 ..................................................... 7,495 15,266' 1,772 1,890 1,507 1,405 1,523 1,289 1,242' 1,675 2 Redemptions of own shares3...................................... 8,393 12,012 775 863 1,019 1,228 1,362 1,086 1,720 1,193 3 Net sales......................................................................... -898 3,254' 997 1,027 488 177 161 203 -478' 482 4 Assets4 ........................................................................... 49,277 58,400 52,946 54,406 54,941 55,779 56,156 60,329 58,400 56,160 5 Cash position5 ........................................................... 4,983 5,321 6,495 5,629 5,619 5,481 5,460 5,467 5,321 4,636 6 Other........................................................................... 44,294 53,079 46,451 48,777 49,322 50,298 50,696 54,862 53,079 51,524 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 reinvestment curities. 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. 1.49 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1979 1980 Account 1977 1978 1979 01 Q2 Q3 Q4 Ql Q2 Q3 1 Profits before tax........................................................... 192.6 223.3 255.4 253.1 250.9 262.0 255.4 277.1 217.9 237.6 2 Profits tax liability......................................................... 72.6 83.0 87.6 88.5 86.4 88.4 87.2 94.2 71.5 78.5 3 Profits after tax ............................................................. 120.0 140.3 167.7 164.6 164.5 173.6 168.2 182.9 146.4 159.1 4 Dividends................................................................... 38.7 43.1 48.6 47.5 48.3 48.6 50.1 52.4 54.2 55.1 5 Undistributed profits ............................................... 81.3 97.2 119.1 117.1 116.2 125.0 118.1 130.5 92.2 104.0 6 Capital consumption allowances................................ 110.4 122.9 139.5 131.9 137.2 142.6 146.4 151.7 155.4 160.5 7 Net cash flow................................................................. 191.7 220.1 258.6 249.0 253.4 267.6 264.5 282.2 247.6 264.5 Source. Survey of Current Business (U.S. Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Financial Statistics □ March 1981 1.50 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1979 1980 Account 1975 1976 1977 1978 Q2 03 04 Ql Q2 Q3 1 Current assets ............................................................... 759.0 826.8 902.1 1,030.0 1,108.2 1,169.5 1,200.9 1,235.2 1,233.8 1,255.8 2 Cash................................................................................. 82.1 88.2 95.8 104.5 100.1 103.7 116.1 110.2 111.5 113.2 3 U.S. government securities ......................................... 19.0 23.4 17.6 16.3 18.6 15.8 15.6 15.1 13.8 16.3 4 Notes and accounts receivable .................................. 272.1 292.8 324.7 383.8 421.1 453.0 456.8 471.2 464.2 479.2 5 Inventories..................................................................... 315.9 342.4 374.8 426.9 465.2 489.4 501.7 519.5 525.7 525.1 6 Other............................................................................... 69.9 80.1 89.2 98.5 103.2 107.7 110.8 119.3 118.7 122.0 7 Current liabilities ......................................................... 451.6 494.7 549.4 665.5 724.7 777.8 809.1 838.3 828.1 852.1 8 Notes and accounts payable ....................................... 264.2 281.9 313.2 373.7 406.4 438.8 456.3 467.9 463.1 477.3 9 Other............................................................................... 187.4 212.8 236.2 291.7 318.3 339.0 352.8 370.4 364.9 374.8 10 Net working capital...................................................... 307.4 332.2 352.7 364.6 383.5 391.7 391.8 397.0 405.7 403.7 11 Memo: Current ratio 1 ................................................. 1.681 1.672 1.642 1.548 1.529 1.504 1.484 1.474 1.490 1.474 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. 1.51 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1979 1980 1981 Industry 1979 19802 Q3 04 Ql Q2 Q3 Q42 Ql2 Q22 1 Total nonfarm business ............................................... 270.46 294.30 273.15 284.30 291.89 294.36 296.23 294.95 310.59 323.84 Manufacturing 2 Durable goods industries............................................. 51.07 58.25 52.13 55.03 58.28 59.38 58.19 57.42 60.23 65.36 3 Nondurable goods industries...................................... 47.61 56.65 47.97 51.55 53.49 56.32 58.21 57.96 62.46 65.21 Nonmanufacturing 4 Mining............................................................................. 11.38 13.50 11.40 11.86 11.89 12.81 13.86 15.25 16.07 18.02 Transportation 5 Railroad ..................................................................... 4.03 4.17 4.13 4.24 4.46 4.06 3.98 4.22 3.62 4.07 6 Air............................................................................... 4.01 3.97 3.95 4.55 3.90 4.27 4.06 3.59 4.04 3.41 7 Other........................................................................... 4.31 3.84 4.60 4.41 4.11 3.76 4.18 3.44 3.83 4.13 Public utilities 8 Electric....................................................................... 27.65 27.44 28.71 27.16 28.98 27.91 28.14 25.05 27.99 27.93 9 Gas and other .......................................................... 6.31 7.18 6.35 6.92 7.28 7.12 7.44 6.90 8.79 8.29 10 Trade and services ....................................................... 79.26 82.28 78.86 82.69 82.17 81.07 81.19 84.87 84.09 87.43 11 Communication and other1 ........................................ 34.83 37.02 35.05 35.90 37.34 37.66 36.97 36.26 39.48 40.01 1. “Other” consists of construction; social services and membership organization; 2. Anticipated by business, and forestry, fisheries, and agricultural services. 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 A37 1.52 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1980 Account 1974 1975 1976 1977 1978 1979 Ql Q2 Q3 Q4 Assets Accounts receivable, gross 1 Consumer....................................................................... 36.1 36.0 38.6 44.0 52.6 65.7 67.7 70.2 71.7 73.6 2 Business ......................................................................... 37.2 39.3 44.7 55.2 63.3 70.3 70.6 70.3 66.9 72.3 3 Total ........................................................................... 73.3 75.3 83.4 99.2 116.0 136.0 138.4 140.4 138.6 145.9 4 Less: Reserves for unearned income and losses ... 9.0 9.4 10.5 12.7 15.6 20.0 20.4 21.4 22.3 23.3 5 Accounts receivable, net ............................................. 64.2 65.9 72.9 86.5 100.4 116.0 118.0 119.0 116.3 122.6 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 24.91 23.7 26.1 28.3 27.5 8 Allother......................................................................... 12.0 11.8 12.6 14.3 17.3 9 Total assets..................................................................... 79.6 81.6 89.2 104.3 122.4 140.9 141.7 145.1 144.7 150.1 Liabilities 10 Bank loans ..................................................................... 9.7 8.0 6.3 5.9 6.5 8.5 9.7 10.1 10.1 13.2 11 Commercial paper......................................................... 20.7 22.2 23.7 29.6 34.5 43.3 40.8 40.7 40.5 43.4 Debt 12 Short-term, n.e.c........................................................ 4.9 4.5 5.4 6.2 8.1 8.2 7.4 7.9 7.7 7.5 13 Long-term n.e.c.......................................................... 26.5 27.6 32.3 36.0 43.6 46.7 48.9 50.5 52.0 52.4 14 Other........................................................................... 5.5 6.8 8.1 11.5 12.6 14.2 15.7 16.0 14.6 14.3 15 Capital, surplus, and undivided profits .................... 12.4 12.5 13.4 15.1 17.2 19.9 19.2 19.9 19.8 19.4 16 Total liabilities and capital........................................... 79.6 81.6 89.2 104.3 122.4 140.9 141.7 145.1 144.7 150.1 1. Beginning Ql 1979, asset items on lines 6, 7, and 8 are combined. Note. Components may not add to totals due to rounding. 1.53 DOMESTIC FINANCE COMPANIES Business Credit Millions of dollars, seasonally adjusted except as noted Changes in accounts Extensions Repayments Accounts Accounts receivable receivable receivable Type ou N ts o t v a . n d 30 in , g ou D ts e t c a . n 3 d 1 in , g 1980 1980 1980 19801 19801 Oct. Nov. Dec. Oct. Nov. Dec. Oct. Nov. Dec. 1 Total ....................................................................... 69,742 72,337 647 410 1,982 16,781 15,681 18,308 16,134 15,271 16,326 2 Retail automotive (commercial vehicles) ........ 12,469 12,455 -128 -169 -151 969 908 923 1,097 1,077 1,074 3 Wholesale automotive ......................................... 11,169 12,182 62 299 434 5,223 5,455 5,564 5,161 5,156 5,130 4 Retail paper on business, industrial and farm equipment............................................. 22,589 23,465 16 149 876 1,460 1,612 1,562 1,444 1,463 686 5 Loans on commercial accounts receivable and factored commercial accounts receivable . 6,014 7,416 408 -261 1,195 6,756 5,455 7,827 6,348 5,716 6,632 6 All other business credit ..................................... 17,501 16,819 289 392 -372 2,373 2,251 2,432 2,084 1,859 2,804 1. Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Financial Statistics □ March 1981 1.54 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1980 1981 Item 1978 1979 1980 July Aug. Sept. Oct. Nov. Dec. Jan. Terms and yields in primary and secondary markets Primary Markets Conventional mortgages on new homes Terms1 1 Purchase price (thousands of dollars) ...................... 62.6 74.4 83.5 89.0 88.6 83.7 84.0 77.1 97.0 89.8 2 Amount of loan (thousands of dollars).................... 45.9 53.3 59.3 63.7 61.5 58.7 61.3 56.1 63.0 65.1 3 Loan/price ratio (percent) ........................................... 75.3 73.9 73.3 73.5 71.2 72.2 75.0 75.2 72.9 75.6 4 Maturity (years) ........................................................... 28.0 28.5 28.2 28.9 27.7 27.6 28.2 27.6 28.2 29.0 5 Fees and charges (percent of loan amount)2 .......... 1.39 1.66 2.10 2.13 2.12 2.10 2.16 2.15 2.40 2.60 6 Contract rate (percent per annum) .......................... 9.30 10.48 12.25 12.11 11.84 11.95 12.20 12.62 12.80 13.02 Yield (percent per annum) 7 FHLBB series3 ............................................................. 9.54 10.77 12.65 12.51 12.25 12.35 12.60 13.04 13.26 13.54 8 HUD series4................................................................... 9.68 11.15 13.95 12.45 13.25 13.70 14.10 14.70 15.05 14.95 Secondary Markets Yield (percent per annum) 9 FHA mortgages (HUD series)5 ................................ 9.70 10.87 13.42 12.39 13.54 14.26 14.38 14.47 14.08 14.23 10 GNMA securities6......................................................... 8.98 10.22 12.55 11.53 12.34 12.84 12.91 13.55 13.62 13.50 FNMA auctions7 11 Government-underwritten loans............................ 9.77 11.17 14.11 12.65 13.92 14.77 14.94 15.53 15.21 14.27 12 Conventional loans................................................... 10.01 11.77 14.43 12.80 13.66 14.45 14.70 15.30 15.54 14.95 Activity in secondary markets Federal National Mortgage Association Mortgage holdings (end of period) 43,311 51,091 51,327 55,362 55,361 55,632 56,188 56,619 57,327 57,380 1 1 5 4 F V H A A -g - u in a s r u a r n e t d ee d .. ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 5 0 , , 5 5 1 4 1 4 1 1 0 8, , 8 49 86 6 | 33,4178 31,751 31,741 31,997 32,493 32,839 33,417 33,417 16 Conventional ............................................................. 11,524 16,106 18,358 18,034 18,049 18,074 18,148 18,239 18,358 18,435 Mortgage transactions (during period) 17 Purchases ....................................................................... 12,303 10,805 8,100 100 167 500 771 579 855 185 18 Sales ............................................................................... 9 0 0 0 0 0 0 0 0 0 Mortgage commitments9 19 Contracted (during period) ......................................... 18,959 10,179 8,044 734 1,180 1,070 514 472 403 241 20 Outstanding (end of period) ....................................... 9,185 6,409 3,278 4,230 4,545 4,789 4,399 3,963 3,278 3,063 Auction of 4-month commitments to buy Government-underwritten loans 21 Offered....................................................................... 12,978 8,860 8,605 1,055.6 1,063.3 907.0 427.8 252.0 242.1 210.7 22 Accepted..................................................................... 6,747.2 3,921 4,002 430.3 628.10 538.0 257.7 135.6 110.8 93.0 Conventional loans 23 Offered....................................................................... 9,933.0 4,495 3,639 228.7 430.4 347.7 107.6 81.6 84.8 32.0 24 Accepted..................................................................... 5,111 2,344 1,749 140.9 218.8 209.8 93.9 68.8 54.1 30.3 Federal Home Loan Mortgage Corporation Mortgage holdings (end of period)10 25 Total .............................................................................. 3,064 4,035 5,067 4,151 4,295 4,543 4,727 4,843 5,067 5,039 26 FHA/VA..................................................................... 1,243 1,102 1,033 1,066 1,058 1,050 1,044 1,038 1,033 1,029 27 Conventional ............................................................. 1,165 1,957 2,830 3,085 3,237 3,492 3,629 3,715 2,830 2,825 Mortgage transactions (during period) 28 Purchases ....................................................................... 6,525 5,717 3,722 440 495 521 398 231 285 152 29 Sales ............................................................................... 6,211 4,544 2,526 288 320 275 187 94 48 168 Mortgage commitments11 30 Contracted (during period) ......................................... 7,451 5,542 3,859 708 476 218 222 180 126 203 31 Outstanding (end of period) ....................................... 1,410 797 447 1,386 1,300 934 726 653 447 487 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 mortgages institutional lender groups. Compiled by the Federal Home Loan Bank Board in carrying the prevailing ceiling rate. Monthly figures are unweighted averages of cooperation with the Federal Deposit Insurance Corporation. 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 serv­ or the seller) in order to obtain a loan. icing) on accepted bids in Federal National Mortgage Association’s auctions of 4- 3. Average effective interest rates on loans closed, assuming prepayment at the month commitments to purchase home mortgages, assuming prepayment in 12 end of 10 years. 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. Beginning March 1980, FHA-insured and VA-guaranteed mortgage holdings 5. Average gross yields on 30-year, minimum-downpayment, Federal Housing in lines 14 and 15 are combined. Administration-insured first mortgages for immediate delivery in the private sec­ 9. Includes some multifamily and nonprofit hospital loan commitments in ad­ ondary market. Any gaps in data are due to periods of adjustment to changes in dition to 1- to 4-family loan commitments accepted in FNMA’s free market auction maximum permissible contract rates. system, and through the FNMA-GNMA tandem plans. 6. Average net yields to investors on Government National Mortgage Associ­ 10. Includes participation as well as whole loans. ation guaranteed, mortgage-backed, fully modified pass-through 11. Includes conventional and government-underwritten loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate Debt A39 1.55 MORTGAGE DEBT OUTSTANDING Millions of dollars, end of period 1979 1980 Type of holder, and type of property 1978 1979 1980 Q4 Ql Q2 03 Q4 1All holders ............................................................................. 1,168,486 1,324,856 1,449,633 1,333,550 1,355,402 1,378,414 1,412,515 1,449,633 2 1- to 4-family ......................................................................... 764,246 875,874 956,475 872,068 894,980 908,119 931,232 956,475 3Multifamily............................................................................. 121,285 129,261 137,859 130,713 130,800 132,430 134,856 137,859 4Commercial ........................................................................... 211,749 237,205 258,799 238,412 242,709 246,861 252,783 258,799 5 71,206 82,516 96,500 92,357 86,913 91,004 93,644 96,500 6Major financial institutions ................................................. 848,177 938,676 998,025 939,487 951,402 958,892 977,454 998,025 7 Commercial banks1........................................................... 214,045 245,187 264,602 245,998 250,702 253,103 258,003 264,602 8 1- to 4-family ................................................................. 129,167 149,460 160,746 145,975 152,553 153,753 156,737 160,746 9 Multifamily..................................................................... 10,266 11,180 12,304 12,546 11,557 11,764 11,997 12,304 10 Commercial ................................................................... 66,115 75,957 82,688 77,096 77,993 79,110 80,626 82,688 11 Farm ............................................................................... 8,497 8,590 8,864 10,381 8,599 8,476 8,643 8,864 12 Mutual savings banks ....................................................... 95,157 98,908 99,827 98,908 99,151 99,150 99,306 99,827 13 1- to 4-family ................................................................. 62,252 64,706 65,307 64,706 64,865 64,864 64,966 65,307 14 Multifamily..................................................................... 16,529 17,180 17,340 17,180 17,223 17,223 17,249 17,340 15 Commercial ................................................................... 16,319 16,963 17,120 16,963 17,004 17,004 17,031 17,120 16 Farm ............................................................................... 57 59 60 59 59 59 60 60 17 Savings and loan associations ......................................... 432,808 475,797 502,718 475,797 479,078 481,184 492,068 502,718 18 1- to 4-family ................................................................. 356,114 394,436 417,759 394,436 398,114 398,864 408,908 417,759 19 Multifamily..................................................................... 36,053 37,588 39,011 37,588 37,224 37,340 38,185 39,011 20 Commercial ................................................................... 40,641 43,773 45,948 43,773 43,740 43,980 44,975 45,948 21 Life insurance companies ............................................... 106,167 118,784 130,878 118,784 122,471 125,455 128,077 130,878 22 1- to 4-family ................................................................. 14,436 16,193 18,420 16,193 16,850 17,796 17,996 18,420 23 Multifamily..................................................................... 19,000 19,274 19,813 19,274 19,590 19,284 19,357 19,813 24 Commercial ................................................................... 62,232 71,137 79,843 71,137 73,618 75,693 77,995 79,843 25 Farm ............................................................................... 10,499 12,180 12,802 12,180 12,413 12,682 12,729 12,802 26 Federal and related agencies............................................... 81,853 97,293 114,325 97,293 104,133 108,742 110,695 114,325 27 Government National Mortgage Association.............. 3,509 3,852 4,453 3,852 3,919 4,466 4,389 4,453 28 1- to 4-family ................................................................. 877 763 709 763 749 736 719 709 29 Multifamily..................................................................... 2,632 3,089 3,744 3,089 3,170 3,730 3,670 3,744 30 Farmers Home Administration...................................... 926 1,274 3,725 1,274 2,845 3,375 3,525 3,725 31 1- to 4-family ................................................................. 288 417 1,033 417 1,139 1,383 978 1,033 32 Multifamily..................................................................... 320 71 818 71 408 636 774 818 33 Commercial ................................................................... 101 174 391 174 409 402 370 391 34 Farm ............................................................................... 217 612 1,483 612 889 954 1,403 1,483 35 Federal Housing and Veterans Administration.......... 5,419 5,764 5,824 5,764 5,833 5,894 5,769 5,824 36 1- to 4-family ................................................................. 1,641 1,863 1,879 1,863 1,908 1,953 1,826 1,879 37 Multifamily..................................................................... 3,778 3,901 3,945 3,901 3,925 3,941 3,943 3,945 38 Federal National Mortgage Association ...................... 43,311 51,091 57,327 51,091 53,990 55,419 55,632 57,327 39 1- to 4-family ................................................................. 37,579 5,488 51,775 45,488 48,394 49,837 50,071 51,775 40 Multifamily..................................................................... 5,732 5,603 5,552 5,603 5,596 5,582 5,561 5,552 41 Federal Land Banks ......................................................... 25,624 31,277 38,131 31,277 33,311 35,574 36,837 38,131 42 1- to 4-family ................................................................. 927 1,552 2,099 1,552 1,708 1,893 1,985 2,099 43 Farm ............................................................................... 24,697 29,725 36,032 29,725 31,603 33,681 34,852 36,032 44 Federal Home Loan Mortgage Corporation .............. 3,064 4,035 4,865 4,035 4,235 4,014 4,543 4,865 45 1- to 4-family ................................................................. 2,407 3,059 3,710 3,059 3,210 3,037 3,459 3,710 46 Multifamily..................................................................... 657 976 1,155 976 1,025 977 1,084 1,155 47 Mortgage pools or trusts2 ................................................... 88,633 119,278 142,498 119,278 124,632 129,647 136,583 142,498 48 Government National Mortgage Association.............. 54,347 76,401 93,874 76,401 80,843 84,282 89,452 93,874 49 1- to 4-family ................................................................. 52,732 74,546 91,602 74,546 78,872 82,208 87,276 91,602 50 Multifamily..................................................................... 1,615 1,855 2,272 1,855 1,971 2,074 2,176 2,272 51 Federal Home Loan Mortgage Corporation .............. 11,892 15,180 16,952 15,180 15,454 16,120 16,659 16,952 52 1- to 4-family ................................................................. 9,657 12,149 13,397 12,149 12,359 12,886 13,318 13,397 53 Multifamily..................................................................... 2,235 3,031 3,555 3,031 3,095 3,234 3,341 3,555 54 Farmers Home Administration...................................... 22,394 27,697 31,672 27,697 28,335 29,245 30,472 31,672 55 1- to 4-family ................................................................. 13,400 14,884 16,865 14,884 14,926 15,224 16,226 16,865 56 Multifamily..................................................................... 1,116 2,163 2,323 2,163 2,159 2,159 2,235 2,323 57 Commercial ................................................................... 3,560 4,328 5,258 4,328 4,495 4,763 5,059 5,258 58 Farm ............................................................................... 4,318 6,322 7,226 6,322 6,755 7,099 6,952 7,226 59 Individual and others3 ......................................................... 149,823 169,609 194,785 177,492 175,235 181,133 187,783 194,785 60 1- to 4-family ..................................................................... 82,769 96,358 111,174 96,037 99,333 102,685 106,767 111,174 61 Multifamily......................................................................... 21,352 23,350 26,027 23,436 23,857 24,486 25,284 26,027 62 Commercial ....................................................................... 22,781 24,873 27,551 24,941 25,450 25,909 26,727 27,551 63 Farm ................................................................................... 22,921 25,028 30,033 33,078 26,595 28,053 29,005 30,033 1. Includes loans held by nondeposit trust companies but not bank trust de­ Note. Based on data from various institutional and governmental sources, with partments. 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

A40 Domestic Financial Statistics □ March 1981 1.56 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change Millions of dollars 1980 1981 Holder, and type of credit July Aug. Sept. Oct. Amounts outstanding (end of period) 1 Total .............................. 230,564 273,645 312,024 303,853 305,763 306,926 307.222 308,051 313,435 310,554 By major holder 2 Commercial banks 112,373 136,016 154,177 146,555 146,548 146,362 145.895 145,147 145,765 143,749 3 Finance companies 44,868 54,298 68,318 73,909 74,433 74,823 •74.985 75,690 76,756 77,131 4 Credit unions................ 37,605 44,334 46,517 42,644 43,347 43,562 43,518 43,606 44,041 43,601 5 Retailers2 ...................... 23,490 25,987 28,119 24,620 24,918 25,301 25,703 26,469 29,410 28,300 6 Savings and loans ........ 7,089 7,097 8,424 8,991 9,141 9,266 9,611 9,687 9,911 10,023 7 Gasoline companies ... 2,963 3,220 3,729 4,500 4,710 4,872 4,736 4,662 4,717 4,929 8 Mutual savings banks .. 2,176 2,693 2,740 2,634 2,666 2,740 2,774 2,790 2,835 2,821 By major type of credit 9 Automobile .................. 82,911 101,647 116,362 116,125 116,868 116,781 116,657 116,517 116,327 115,262 10 Commercial banks .. 49,577 60,510 67,367 63,344 63,177 62,734 62,350 61,848 61,025 59,608 11 Indirect paper 27,379 33,850 38,338 36,233 36,047 35,768 35,572 35,284 34,857 33,947 12 Direct loans .......... 22,198 26,660 29,029 27,111 27,130 26,966 26,778 26,564 26,168 25,661 13 Credit unions ............ 18,099 21,200 22,244 20,392 20,728 20,831 20,810 20,852 21,060 20,850 14 Finance companies .. 15,235 19,937 26,751 32,389 32,963 33,216 33,497 33,817 34,242 34,804 15 Revolving...................... 39,274 48,309 56,937 53,036 53,771 54,406 54,598 55,304 59,862 58,985 16 Commercial banks .. 18,374 24,341 29,862 28,073 28,305 28,403 28,331 28,360 30,001 29,952 17 Retailers.................... 17,937 20,748 23,346 20,463 20,756 21,131 21,531 22,282 25,144 24,104 18 Gasoline companies . 2.963 3,220 3,729 4,500 4,710 4,872 4,736 4,662 4,717 4,929 19 Mobile home ................ 14.945 15,235 16,838 17,004 17,068 17,113 17,276 17,293 17,327 17,244 20 Commercial banks .. 9,124 9,545 10,647 10,568 10,564 10,538 10,502 10,452 10,376 10,271 21 Finance companies .. 3,077 3,152 3,390 3,546 3,566 3,601 3,657 3,702 3,745 3,741 22 Savings and loans ... 2,342 2,067 2,307 2,437 2,477 2,511 2.654 2,675 2,737 2,768 23 Credit unions ............ 402 471 494 453 461 463 463 464 469 464 24 Other.............................. 93,434 108,454 121,887 117,688 118,056 118,626 113,691 118,937 119,919 119,063 25 Commercial banks .. 35,298 41,620 46,301 44,570 44,502 44,687 44,712 44,487 44,363 43,918 26 Finance companies .. 26,556 31,209 38,177 37,974 37,904 38,006 37,831 38,171 38,769 38,586 27 Credit unions............ 19,104 22,663 23,779 21,799 22,158 22,268 22,245 22,290 22,512 22,287 28 Retailers.................... 5,553 5,239 4,773 4,157 4,162 4,170 4,172 4,187 4,266 4,196 29 Savings and loans .. 4,747 5,030 6,117 6,554 6,664 6,755 6,957 7,012 7,174 7,255 30 Mutual savings banks 2,176 2,693 2,740 2,634 2,666 2,740 2,774 2,790 2,835 2,821 Net change (during period)3 31 Total .......................................................... 35,462 43,079 38,381 -1,199 489 1,055 702 839 1,619 869 By major holder 32 Commercial banks .................................. 18,645 23,641 18,161 -1,749 -682 -265 -336 -120 -276 -1,357 33 Finance companies .................................. 5,949 9,430 14,020 439 387 613 454 594 860 1,113 34 Credit unions............................................ 6,436 6,729 2,185 -270 465 36 63 218 378 288 35 Retailers2 .................................................. 2,654 2,497 2,132 89 160 456 134 52 316 409 36 Savings and loans .................................... 1,309 7 1,327 155 5 93 246 -14 190 232 37 Gasoline companies ................................ 132 257 509 132 136 90 98 72 83 106 38 Mutual savings banks .............................. 337 518 47 5 18 32 43 37 68 78 By major type of credit 39 Automobile .............................................. 15,204 18,736 14,715 -717 355 84 201 245 302 -63 40 Commercial banks .............................. 9,956 10,933 6,857 -1,083 -344 -362 -348 -138 -491 -1,253 41 Indirect paper .................................. 5,307 6,471 4,488 -784 -286 -282 -170 -44 -181 -839 42 Direct loans ...................................... 4,649 4,462 2,369 -299 -58 -80 -178 -94 -310 -414 43 Credit unions ........................................ 2,861 3,101 1,044 -108 215 10 18 101 174 206 44 Finance companies .............................. 2,387 4,702 6,814 474 484 436 531 282 619 984 45 Revolving.................................................. 6,248 9,035 8,628 38 281 478 273 265 616 557 46 Commercial banks .............................. 4,015 5,967 5,521 -259 -24 -81 -19 121 211 59 47 Retailers................................................ 2,101 2,811 2,598 165 169 469 194 72 322 392 48 Gasoline companies ............................ 132 257 509 132 136 90 98 72 83 106 49 Mobile home ............................................ 371 286 1,603 14 33 43 141 24 66 -24 50 Commercial banks .............................. 387 419 1,102 -23 -8 -22 -21 -33 -34 -85 51 Finance companies .............................. -187 74 238 -2 14 30 42 44 48 15 52 Savings and loans ................................ 101 -276 240 45 21 35 120 11 47 46 53 Credit unions ........................................ 70 69 23 -6 6 0 0 2 5 0 54 Other.......................................................... 13,639 15,022 13,435 -534 -180 450 87 305 635 399 55 Commercial banks .............................. 4,287 6,322 4,681 -384 -306 200 52 -70 38 -78 56 Finance companies .............................. 3,749 4,654 6,968 -33 -111 147 -119 268 193 114 57 Credit unions ........................................ 3,505 3,559 1,118 -156 244 26 45 115 199 82 58 Retailers................................................ 553 -314 -466 -76 -9 -13 -60 -20 -6 17 59 Savings and loans ................................ 1,208 283 1,087 110 -16 58 126 -25 143 186 60 Mutual savings banks .......................... 337 518 47 5 18 32 43 37 68 78 1. The Board’s series cover most short- and intermediate-term credit extended 2. Includes auto dealers and excludes 30-day charge credit held by travel and to individuals through regular business channels, usually to finance the purchase entertainment companies. of consumer goods and services or to refinance debts incurred for such purposes, 3. Net change equals extensions minus liquidations (repayments, charge-offs, and scheduled to be repaid (or with the option of repayment) in two or more and other credit); figures for all months are seasonally adjusted. installments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Debt A41 1.57 CONSUMER INSTALLMENT CREDIT Extensions and Liquidations Millions of dollars; monthly data are seasonally adjusted. 1980 1981 Holder, and type of credit 1977 1978 1979 July Aug. Sept. Oct. Nov. Dec. Jan. Extensions 1 Total ............................................................................... 257,600 297,668 324,777 23,997 26,176 27,064 27,365 25,991 27,149 27,059 By major holder 2 Commercial banks ....................................................... 117,896 142,433 154,733 10,098 11,107 11,671 11,977 11,432 11,484 10,397 3 Finance companies ....................................................... 41,989 50,505 61,518 4,809 5,155 5,355 5,323 4,852 5,185 5,904 4 Credit unions................................................................. 34,028 38,111 34,926 2,305 3,085 2,752 2,872 2,795 3,035 2,994 5 Retailers1 ....................................................................... 42,183 44,571 47,676 4,148 4,263 4,596 4,291 4,250 4,497 4,673 6 Savings and loans ......................................................... 4,978 3,724 5,901 582 454 539 695 444 658 715 7 Gasoline companies ..................................................... 14,617 16,017 18,005 1,902 1,941 1,965 2,009 2,024 2,061 2,130 8 Mutual savings banks ................................................... 1,909 2,307 2,018 153 171 186 198 194 229 246 By major type of credit 9 Automobile ................................................................... 75,641 87,981 93,901 6,068 7,400 7,518 7,544 7,117 7,234 7,237 10 Commercial banks ................................................... 46,363 52,969 53,554 2,771 3,606 3,713 3,791 3,552 3,271 2,598 11 Indirect paper ....................................................... 25,149 29,342 29,623 1,329 1,866 2,035 2,135 1,962 1,857 1,230 12 Direct loans ........................................................... 21,214 23,627 23,931 1,442 1,740 1,678 1,656 1,590 1,414 1,368 13 Credit unions............................................................. 16,616 18,539 17,397 1,197 1,570 1,455 1,457 1,402 1,538 1,598 14 Finance companies ................................................... 12,662 16,473 22,950 2,100 2,224 2,350 2,296 2,163 2,425 3,047 15 Revolving....................................................................... 87,596 105,125 120,174 10,679 10,700 11,143 11,124 10,953 11,614 11,483 16 Commercial banks ................................................... 38,256 51,333 61,048 5,059 4,989 5,067 5,264 5,155 5,554 5,185 17 Retailers..................................................................... 34,723 37,775 41,121 3,718 3,770 4,111 3,851 3,774 3,999 4,168 18 Gasoline companies ................................................. 14,617 16,017 18,005 1,902 1,941 1,965 2,009 2,024 2,061 2,130 19 Mobile home ................................................................. 5,712 5,412 6,471 377 415 442 513 424 479 383 20 Commercial banks ................................................... 3,466 3,697 4,542 226 263 250 257 243 254 171 21 Finance companies ................................................... 644 886 797 52 56 84 89 93 89 81 22 Savings and loans ..................................................... 1,406 609 948 95 78 95 159 74 119 119 23 Credit unions............................................................. 196 220 184 4 18 13 8 14 17 12 24 Other............................................................................... 88,651 99,150 104,231 6,873 7,661 7,961 8,184 7,497 7,822 7,956 25 Commercial banks ................................................... 29,811 34,434 35,589 2,042 2,249 2,641 2,665 2,482 2,405 2,443 26 Finance companies ................................................... 28,683 33,146 37,771 2,657 2,875 2,921 2,938 2,596 2,671 2,776 27 Credit unions............................................................. 17,216 19,352 17,345 1,104 1,497 1,284 1,407 1,379 1,480 1,390 28 Retailers..................................................................... 7,460 6,796 6,555 430 493 485 440 476 498 505 29 Savings and loans ..................................................... 3,572 3,115 4,953 487 376 444 536 370 539 596 30 Mutual savings banks ............................................... 1,909 2,307 2,018 153 171 186 198 194 229 246 Liquidations 31 Total ............................................................................... 222,138 254,589 286,396 25,196 25,687 26,009 26,663 25,152 25,530 26,190 By major holder 32 Commercial banks ....................................................... 99,251 118,792 136,572 11,847 11,789 11,936 12,313 11,552 11,760 11,754 33 Finance companies ....................................................... 36,040 41,075 47,498 4,370 4,768 4,742 4,869 4,258 4,325 4,791 34 Credit unions................................................................. 27,592 31,382 32,741 2,575 2,620 2,716 2,809 2,577 2,657 2,706 35 Retailers1 ....................................................................... 39,529 42,074 45,544 4,059 4,103 4,140 4,157 4,198 4,181 4,264 36 Savings and loans ......................................................... 3,669 3,717 4,574 427 449 446 449 458 468 483 37 Gasoline companies ..................................................... 14,485 15,760 17,496 1,770 1,805 1,875 1,911 1,952 1,978 2,024 38 Mutual savings banks ................................................... 1,572 1,789 1,971 148 153 154 155 157 161 168 By major type of credit 39 Automobile ................................................................... 60,437 69,245 79,186 6,785 7,045 7,434 7,343 6,872 6,932 7,300 40 Commercial banks ................................................... 36,407 42,036 46,697 3,854 3,950 4,075 4,139 3,690 3,762 3,851 41 Indirect paper ....................................................... 19,842 22,871 25,135 2,113 2,152 2,317 2,305 2,006 2,038 2,069 42 Direct loans ........................................................... 16,565 19,165 21,562 1,741 1,798 1,758 1,834 1,684 1,724 1,782 43 Credit unions............................................................. 13,755 15,438 16,353 1,305 1,355 1,445 1,439 1,301 1,364 1,386 44 Finance companies ................................................... 10,275 11,771 16,136 1,626 1,740 1,914 1,765 1,881 1,806 2,063 45 Revolving....................................................................... 81,348 96,090 111,546 10,641 10,419 10,665 10,851 10,688 10,998 10,926 46 Commercial banks ................................................... 34,241 45,366 55,527 5,318 5,013 5,148 5,283 5,034 5,343 5,126 47 Retailers..................................................................... 32,622 34,964 38,523 3,553 3,601 3,642 3,657 3,702 3,677 3,776 48 Gasoline companies ................................................. 14,485 15,760 17,496 1,770 1,805 1,875 1,911 1,952 1,978 2,024 49 Mobile home ................................................................. 5,341 5,126 4,868 363 382 399 372 400 413 407 50 Commercial banks ................................................... 3,079 3,278 3,440 249 271 272 278 276 288 256 51 Finance companies ................................................... 831 812 559 54 42 54 47 49 41 66 52 Savings and loans ..................................................... 1,305 885 708 50 57 60 39 63 72 73 53 Credit unions............................................................. 126 151 161 10 12 13 8 12 12 12 54 Other............................................................................... 75,012 84,128 90,796 7,407 7,841 7,511 8,097 7,192 7,187 7,557 55 Commercial banks ................................................... 25,524 28,112 30,908 2,426 2,555 2,441 2,613 2,552 2,367 2,521 56 Finance companies ................................................... 24,934 28,492 30,803 2,690 2,986 2,774 3,057 2,328 2,478 2,662 57 Credit unions............................................................. 13,711 15,793 16,227 1,260 1,253 1,258 1,362 1,264 1,281 1,308 58 Retailers..................................................................... 6,907 7,110 7,021 506 502 498 500 496 504 488 59 Savings and loans ..................................................... 2,364 2,832 3,866 377 392 386 410 395 396 410 60 Mutual savings banks ............................................... 1,572 1,789 1,971 148 153 154 155 157 161 168 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

A42 Domestic Financial Statistics □ March 1981 1.58 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-yearly data are at seasonally adjusted annual rates. 1978 1979 1980 Transaction category, sector 1975 1976 1977 1978 1979 1980 HI H2 HI H2 HI H2 Nonfinancial sectors 1Total funds raised ......................................................... 210.8 271.9 338.5 400.4 394.9 363.3 384.8 416.0 380.5 408.2 321.1 405.6 2 Excluding equities......................................................... 200.7 261.0 335.3 398.3 390.6 349.8 387.4 409.2 377.7 402.3 313.0 386.5 By sector and instrument 3 U.S. government........................................................... 85.4 69.0 56.8 53.7 37.4 79.2 61.4 46.0 28.6 46.1 64.5 93.8 4 Treasury securities ................................................... 85.8 69.1 57.6 55.1 38.8 79.8 62.3 47.9 30.9 46.6 65.2 94.4 5 Agency issues and mortgages ................................ -.4 -.1 -.9 -1.4 -1.4 -.6 -.9 -1.9 -2.3 -.5 -.6 - .6 6 All other nonfinancial sectors.................................... 125.4 202.8 281.7 346.7 357.6 284.1 323.4 370.0 351.9 362.1 256.5 311.7 7 Corporate equities ................................................... 10.1 10.8 3.1 2.1 4.3 13.6 -2.6 6.8 2.8 5.9 8.0 19.1 8 Debt instruments...................................................... 115.3 192.0 278.6 344.6 353.2 270.6 326.0 363.2 349.1 356.2 248.5 292.7 9 Private domestic nonfinancial sectors .................. 112.1 182.0 267.8 314.4 336.4 254.2 302.8 326.1 338.6 333.0 227.0 281.5 10 Corporate equities ............................................... 9.9 10.5 2.7 2.6 3.5 11.4 -1.8 7.0 2.8 4.1 6.0 16.8 11 Debt instruments................................................... 102.2 171.5 265.1 311.8 333.0 242.8 304.6 319.1 335.8 328.9 221.0 264.7 12 Debt capital instruments ................................ 98.4 123.5 175.6 196.6 199.9 175.6 188.3 205.0 198.8 201.1 169.1 182.1 13 State and local obligations.......................... 16.1 15.7 23.7 28.3 18.9 22.2 27.8 28.7 16.0 21.8 18.0 26.4 14 Corporate bonds .......................................... 27.2 22.8 21.0 20.1 21.2 27.6 20.6 19.6 22.4 19.9 33.4 21.9 Mortgages 15 Home ......................................................... 39.5 63.6 96.3 104.6 109.1 81.5 100.1 109.1 109.8 108.5 73.6 89.3 16 Multifamily residential ............................ * 1.8 7.4 10.2 8.9 8.7 9.3 11.2 8.1 9.7 6.5 11.0 17 Commercial ............................................... 11.0 13.4 18.4 23.3 25.7 21.6 21.2 25.4 26.0 25.4 22.1 21.1 18 Farm ........................................................... 4.6 6.1 8.8 10.2 16.2 14.0 9.3 11.1 16.6 15.9 15.5 12.4 19 Other debt instruments .................................. 3.8 48.0 89.5 115.2 133.0 67.2 116.3 114.1 137.0 127.8 51.9 82.5 20 Consumer credit ........................................... 9.7 25.6 40.6 50.6 44.2 3.1 50.1 51.0 48.3 39.0 -6.4 12.5 21 Bank loans n.e.c............................................. -12.3 4.0 27.0 37.3 50.6 37.9 43.1 31.4 48.2 52.9 9.6 66.1 22 Open market paper .................................... -2.6 4.0 2.9 5.2 10.9 5.8 5.3 5.1 12.0 9.7 29.7 -18.1 23 Other............................................................... 9.0 14.4 19.0 22.2 27.3 20.4 17.8 26.5 28.4 26.2 18.9 22.0 24 By borrowing sector ............................................ 112.1 182.0 267.8 314.4 336.4 254.2 302.8 326.1 338.6 333.0 227.0 281.5 25 State and local governments .......................... 13.7 15.2 20.4 23.6 15.5 20.7 21.0 26.1 13.0 18.0 16.2 25.3 26 Households......................................................... 49.7 90.5 139.9 162.6 164.9 100.8 156.1 169.1 167.6 161.2 89.8 111.9 27 Farm ................................................................... 8.8 10.9 14.7 18.1 25.8 19.0 15.3 20.8 23.5 28.1 21.1 16.9 28 Nonfarm noncorporate.................................... 2.0 4.7 12.9 15.4 15.9 12.5 16.4 14.4 15.5 15.9 9.0 16.0 29 Corporate........................................................... 37.9 60.7 79.9 94.8 114.3 101.1 93.9 95.7 118.9 109.7 90.9 111.3 30 Foreign....................................................................... 13.3 20.8 13.9 32.3 21.2 29.9 20.6 43.9 13.3 29.1 29.5 30.3 31 Corporate equities ............................................... .2 .3 .4 -.5 .9 2.2 -.8 -.2 * 1.7 2.1 2.3 32 Debt instruments................................................... 13.2 20.5 13.5 32.8 20.3 27.7 21.4 44.1 13.3 27.3 27.5 28.0 33 Bonds ................................................................. 6.2 8.6 5.1 4.0 3.9 .8 5.0 3.0 3.0 4.7 2.0 -.4 34 Bank loans n.e.c................................................. 3.9 6.8 3.1 18.3 2.3 11.8 9.3 27.3 1.0 3.5 4.4 19.3 35 Open market paper ......................................... .3 1.9 2.4 6.6 11.2 10.1 3.6 9.6 6.1 16.3 15.7 4.5 36 U.S. government loans .................................. 2.8 3.3 3.0 3.9 3.0 5.0 3.6 4.2 3.1 2.8 5.4 4.6 Financial sectors 37 Total funds raised ............................................ 12.7 24.1 54.0 81.4 88.5 70.8 80.7 82.1 86.3 90.7 54.0 87.6 By instrument 38 U.S. government related ................................ 13.5 18.6 26.3 41.4 52.4 47.5 38.5 44.3 45.8 59.0 45.8 49.2 39 Sponsored credit agency securities............ 2.3 3.3 7.0 23.1 24.3 24.3 21.9 24.3 21.5 27.0 25.1 23.5 40 Mortgage pool securities ............................ 10.3 15.7 20.5 18.3 28.1 23.2 16.6 20.1 24.2 32.0 20.7 25.7 41 Loans from U.S. government .................... .9 -.4 -1.2 - 42 Private financial sectors .................................. -.8 5.5 27.7 40.0 36.1 23.3 42.2 37.8 40.5 31.7 8.1 38.4 43 Corporate equities .................................... .6 1.0 .9 1.7 2.3 3.4 2.2 l.l 2.0 2.5 3.1 3.8 44 Debt instruments.......................................... -1.4 4.4 26.9 38.3 33.8 19.8 40.0 36.7 38.4 29.2 5.1 34.6 45 Corporate bonds ...................................... 2.9 5.8 10.1 7.5 7.8 7.2 8.5 6.4 8.7 7.0 10.3 4.0 46 Mortgages................................................ 2.3 2.1 3.1 .9 -1.2 -.9 2.1 - .3 -.5 -1.9 -6.8 5.0 47 Bank loans n.e.c....................................... -3.7 -3.7 -.3 2.8 -.4 1.0 2.5 3.1 -.7 -.2 1.1 1.0 48 Open market paper and repurchase agreements...................................... 1.1 2.2 9.6 14.6 18.4 5.4 13.5 15.7 23.0 13.8 -3.6 14.4 49 Loans from Federal Home Loan Banks -4.0 -2.0 4.3 12.5 9.2 7.1 13.2 11.8 7.8 10.5 4.1 10.2 By sector 50 Sponsored credit agencies ............................ 3.2 2.9 5.8 23.1 24.3 24.3 21.9 24.3 21.5 27.0 25.1 23.5 51 Mortgage pools .............................................. 10.3 15.7 20.5 18.3 28.1 23.2 16.6 20.1 24.2 32.0 20.7 25.7 52 Private financial sectors ................................ -.8 5.5 27.7 40.0 36.1 23.3 42.2 37.8 40.5 31.7 8.1 38.4 53 Commercial banks ..................................... 1.2 2.3 1.1 1.3 1.6 .6 1.5 1.1 1.3 1.8 .8 .3 54 Bank affiliates ............................................ .3 -.8 1.3 6.7 4.5 5.6 5.8 7.6 6.2 2.9 4.5 6.6 55 Savings and loan associations .................. -2.3 .1 9.9 14.3 11.4 6.4 16.4 12.2 9.9 12.9 -4.7 17.6 56 Other insurance companies...................... 1.0 .9 .9 1.1 1.0 .8 1.0 1.1 1.0 .9 .8 .7 57 Finance companies .................................... .5 6.4 17.6 18.6 18.9 8.8 18.9 18.2 23.5 14.3 6.8 10.8 58 REITs.......................................................... -1.4 -2.4 -2.2 -1.0 -.4 -.9 -1.0 -1.0 -.6 -.1 -1.4 -.3 59 Open-end investment companies ............ -.1 -1.0 -.9 -1.0 -1.0 2.0 -.5 -1.5 -1.0 -.9 1.4 2.7 All sectors 60 Total funds raised, by instrument ............................ 223.6 295.9 392.5 481.8 483.4 434.1 465.5 498.1 466.7 498.9 375.0 493.2 61 Investment company shares ...................................... -.1 -1.0 -.9 -1.0 -1.0 2.0 -.5 -1.5 -1.0 -.9 1.4 2.7 62 Other corporate equities ............................................. 10.8 12.9 4.9 4.7 7.6 15.0 .1 9.4 5.8 9.3 9.8 20.2 63 Debt instruments........................................................... 212.9 284.1 388.5 478.1 476.8 417.1 465.9 490.2 461.9 490.5 363.9 470.4 64 U.S. government securities .................................... 98.2 88.1 84.3 95.2 89.9 126.8 100.0 90.4 74.5 105.2 110.5 143.2 65 State and local obligations...................................... 16.1 15.7 23.7 28.3 18.9 22.2 27.8 28.7 16.0 21.8 18.0 26.4 66 Corporate and foreign bonds ................................ 36.4 37.2 36.1 31.6 32.9 35.6 34.2 29.1 34.1 31.5 45.7 25.5 67 Mortgages................................................................... 57.2 87.0 133.9 149.1 158.6 124.8 141.9 156.3 159.8 157.4 110.8 138.8 68 Consumer credit ....................................................... 9.7 25.6 40.6 50.6 44.2 3.1 50.1 51.0 48.3 39.0 -6.4 12.5 69 Bank loans n.e.c......................................................... -12.2 7.0 29.8 58.4 52.5 50.7 54.9 61.8 48.6 56.2 15.0 86.4 Digitized for F7R0ASOEpeRn market paper and RPs ................................ -1.2 8.1 15.0 26.4 40.5 21.4 22.4 30.4 41.1 39.8 41.9 .9 http://fraser.st7l1ouisOftehder. oloragns/ ............................................................... 8.7 15.3 25.2 38.6 39.5 32.6 34.6 42.5 39.4 39.5 28.3 36.8 Federal Reserve Bank of St. Louis

Flow of Funds A43 1.59 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS Billions of dollars, except as noted; half-yearly data are at seasonally adjusted annual rates 1978 1979 1980 Transaction category, or sector 1975 1976 1977 1978 1979 1980 HI H2 HI H2 HI H2 1 Total funds advanced in credit markets to nonfinancial sectors ............................................................................. 200.7 261.0 335.3 398.3 390.6 349.8 387.4 409.2 377.7 402.3 313.0 386.5 By public agencies and foreign 2 Total net advances ............................................................... 44.6 54.3 85.1 109.7 80.1 95.8 102.8 116.6 47.6 112.5 101.7 89.9 3 U.S. government securities ............................................. 22.5 26.8 40.2 43.9 2.0 22.3 43.7 44.0 -22.1 26.2 24.9 19.7 4 Residential mortgages ..................................................... 16.2 12.8 20.4 26.5 36.1 32.0 22.2 30.7 32.6 39.6 33.5 30.4 5 FHLB advances to savings and loans .......................... -4.0 -2.0 4.3 12.5 9.2 7.1 13.2 11.8 7.8 10.5 4.1 10.2 6 Other loans and securities............................................... 9.8 16.6 20.2 26.9 32.8 34.5 23.7 30.1 29.2 36.3 39.3 29.6 Total advanced, by sector 7 U.S. government................................................................... 15.1 8.9 11.8 20.4 22.5 26.0 19.4 21.4 23.8 21.3 29.6 22.5 8 Sponsored credit agencies ................................................... 14.8 20.3 26.8 44.6 57.5 48.6 39.4 49.8 49.9 65.2 43.6 53.6 9 Monetary authorities ........................................................... 8.5 9.8 7.1 7.0 7.7 4.5 13.4 .5 .9 14.5 14.6 -5.6 10 Foreign................................................................................... 6.1 15.2 39.4 37.7 -7.7 16.7 30.6 44.9 -27.0 11.7 13.9 19.5 11 Agency borrowing not included in line 1 ........................ 13.5 18.6 26.3 41.4 52.4 47.5 38.5 44.3 45.8 59.0 45.8 49.2 Private domestic funds advanced 12 Total net advances ............................................................... 169.7 225.4 276.5 330.0 362.9 301.5 323.2 336.9 375.9 348.8 257.1 345.8 13 U.S. government securities ............................................ 75.7 61.3 44.1 51.3 87.9 104.6 56.3 46.4 96.6 79.1 85.6 123.5 14 State and local obligations............................................... 16.1 15.7 23.7 28.3 18.9 22.2 27.8 28.7 16.0 21.8 18.0 26.4 15 Corporate and foreign bonds ........................................ 32.8 30.5 22.5 22.5 25.6 25.5 24.1 20.9 26.9 24.3 32.4 18.7 16 Residential mortgages ..................................................... 23.2 52.6 83.3 88.2 81.8 58.1 87.1 89.5 85.1 78.5 46.5 69.8 17 Other mortgages and loans ............................................. 17.9 63.3 107.3 152.2 157.9 98.2 141.1 163.3 159.1 155.6 78.6 117.7 18 Less: Federal Home Loan Bank advances.................. -4.0 -2.0 4.3 12.5 9.2 7.1 13.2 11.8 7.8 10.5 4.1 10.2 Private financial intermediation 19 Credit market funds advanced by private financial institutions ..................................................................... 122.5 190.1 257.0 296.9 292.5 265.6 301.7 292.0 307.5 277.4 229.6 301.8 20 Commercial banking......................................................... 29.4 59.6 87.6 128.7 121.1 103.5 132.5 125.0 124.6 117.6 57.2 149.9 21 Savings institutions ........................................................... 53.5 70.8 82.0 75.9 56.3 57.6 75.8 75.9 57.7 54.9 31.4 83.8 22 Insurance and pension funds.......................................... 40.6 49.9 67.9 73.5 70.4 76.4 76.9 70.2 75.4 65.5 84.6 68.2 23 Other finance..................................................................... -1.0 9.8 19.6 18.7 44.7 28.1 16.6 20.9 49.8 39.6 56.3 -.1 24 Sources of funds ................................................................... 122.5 190.1 257.0 296.9 292.5 265.6 301.7 292.0 307.5 277.4 229.6 301.8 25 Private domestic deposits ............................................... 92.0 124.6 141.2 142.5 136.7 163.9 138.3 146.7 121.7 151.6 147.7 180.1 26 Credit market borrowing................................................. -1.4 4.4 26.9 38.3 33.8 19.8 40.0 36.7 38.4 29.2 5.1 34.6 27 Other sources..................................................................... 32.0 61.0 89.0 116.0 122.0 81.9 123.5 108.6 147.3 96.6 76.8 87.1 28 Foreign funds................................................................. -8.7 -4.6 1.2 6.3 26.3 -20.0 5.7 6.9 49.4 3.2 -18.1 -21.8 29 Treasury balances ......................................................... -1.7 -.1 4.3 6.8 .4 -2.0 1.9 11.6 5.1 -4.3 -2.5 -1.5 30 Insurance and pension reserves ................................ 29.7 34.5 49.4 62.7 49.0 58.5 66.2 59.2 53.9 44.0 59.6 57.4 31 Other, net....................................................................... 12.7 31.2 34.1 40.3 46.3 45.4 49.6 31.0 38.9 53.7 37.9 53.1 Private domestic nonfinancial investors 32 Direct lending in credit markets........................................ 45.8 39.7 46.3 71.5 104.2 55.7 61.4 81.6 106.8 100.5 32.6 78.7 33 U.S. government securities ............................................. 24.1 16.1 23.0 33.2 57.8 30.7 32.1 34.4 64.1 51.5 13.2 48.2 34 State and local obligations............................................... 8.4 3.8 2.6 4.5 -2.5 -1.8 7.0 2.0 -2.3 -2.7 -2.9 -.8 35 Corporate and foreign bonds ........................................ 8.4 5.8 -3.3 -1.4 11.1 5.4 -3.7 1.0 7.8 14.2 8.3 2.4 36 Commercial paper............................................................. -1.3 1.9 9.5 16.3 10.7 -2.4 8.2 24.4 12.5 9.0 -6.2 1.3 37 Other................................................................................... 6.2 12.0 14.5 18.8 27.1 23.9 17.8 19.8 24.7 28.5 20.2 27.6 38 Deposits and currency ......................................................... 98.1 131.9 149.5 151.8 144.7 173.5 148.7 154.8 131.1 158.1 156.7 190.1 39 Security RPs....................................................................... .2 2.3 2.2 7.5 6.6 4.7 9.8 5.1 18.5 -5.3 5.3 4.0 40 Money market fund shares ............................................. 1.3 .2 6.9 34.4 29.2 6.1 7.7 30.2 38.6 61.9 -3.4 41 Time and savings accounts ............................................. 84.0 113.5 121.0 115.2 84.7 131.8 110.7 119.8 71.4 97.9 91.9 171.7 42 Large at commercial banks ........................................ -15.8 -13.2 23.0 45.9 .4 12.7 33.9 57.9 -25.3 26.0 -12.0 37.4 43 Other at commercial banks........................................ 40.3 57.6 29.0 8.2 39.3 62.9 18.4 -1.9 41.3 37.3 60.6 65.2 44 At savings institutions ................................................. 59.4 69.1 69.0 61.1 45.1 56.2 58.5 63.8 55.4 34.7 43.4 69.1 45 Money................................................................................. 12.6 16.1 26.1 22.2 18.9 7.8 22.1 22.3 10.9 26.8 -2.4 17.9 46 Demand deposits........................................................... 6.4 8.8 17.8 12.9 11.0 -1.8 11.6 14.2 1.6 20.3 -11.4 7.8 47 Currency......................................................................... 6.2 7.3 8.3 9.3 7.9 9.6 10.5 8.1 9.3 6.5 9.0 10.1 48 Total of credit market instruments, deposits and currency ......................................................................... 143.9 171.6 195.8 223.3 248.9 229.1 210.1 236.4 237.9 258.7 189.3 268.8 49 Public support rate (in percent) .................................... 22.2 20.8 25.4 27.5 20.5 27.4 26.5 28.5 12.6 28.0 32.5 23.3 50 Private financial intermediation (in percent) .............. 72.2 84.3 93.0 90.0 80.6 88.1 93.4 86.7 81.8 79.5 89.3 87.3 51 Total foreign funds........................................................... -2.6 10.6 40.5 44.0 18.6 -3.3 36.3 51.8 22.4 14.9 -4.2 -2.3 Memo: Corporate equities not included above 52 Total net issues ..................................................................... 10.7 11.9 4.0 3.7 6.6 17.0 -.4 7.9 4.8 8.4 11.1 22.8 53 Mutual fund shares........................................................... -.1 -1.0 -.9 -1.0 -1.0 -2.0 -.5 -1.5 -1.0 -.9 1.4 2.7 54 Other equities ................................................................... 10.8 12.9 4.9 4.7 7.6 15.0 .1 9.4 5.8 9.3 9.8 20.2 55 Acquisitions by financial institutions................................ 9.6 12.3 7.4 7.6 15.7 18.7 .4 14.7 12.5 18.9 16.7 20.7 56 Other net purchases ............................................................. 1.1 -.4 -3.4 -3.8 -9.1 -1.7 -.8 -6.8 -7.7 -10.5 -5.6 2.1 Notes by line number. 30. Excludes net investment of these reserves in corporate equities. 1. Line 2 of p. A42. 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

A44 Domestic Nonfinancial Statistics □ March 1981 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1980 1981 Measure 1978 1979 1980 June July Aug. Sept. Oct. Nov. Dec. Jan .p Feb.6 1 Industrial production1 ......................................... 146.1 152.5 147.1 141.5 140.4 141.8 141.1 146.9 149.4 150.9 151.5 150.8 Market groupings 2 Products, total....................................................... 144.8 150.0 146.7 142.5 142.8 143.8 145.3 147.2 148.7 149.9 150.1 149.1 3 Final, total ......................................................... 135.9 147.2 145.4' 142.4 142.8 143.9 143.9 145.8 147.5'- 148.2 148.3 147.6 4 Consumer goods ........................................... 149.1 150.8 145.5 142.1 142.0 142.7 144.3 146.6 148. O' 147.7 147.4 146.5 5 Equipment ..................................................... 132.8 142.2 145.1 142.6 142.9 142.9 143.2 144.8 146.7'- 148.9 149.4 149.1 6 Intermediate....................................................... 154.1 160.5 151.9 143.5 144.4 147.6 150.6 152.4 153.5' 156.1 156.9 154.7 7 Materials................................................................. 148.3 156.4 147.6r 140.0 136.5 138.6 142.4 146.4 150.5' 152.4 153.8 153.3 Industry groupings 8 Manufacturing....................................................... 146.8 153.6 146.6 140.3 139.1 140.6 143.4 145.4 149.1 150.6 151.0 150.2 Capacity utilization (percent)1-2 9 Manufacturing................................................... 84.4 85.7 79.0 75.7 74.9 75.5 76.7 78.2 79.4 79.9 80.0 79.3 10 Industrial materials industries........................ 85.6 87.4 79.8 75.7 73.7 74.6 76.4 78.4 80.4 81.2 81.7 81.2 11 Construction contracts (1972 = 100)3 .............. 174.1 185.6 161.8 145.0 148.0 192.0 163.0 167.0 210.0 193.0 185.0 n.a. 12 Nonagricultural employment, total4 ................ 131.8 136.6 137.8 136.8 136.6 137.0 137.4 137.9 138.2 138.5 139.0 139.1 13 Goods-producing, total .................................. 109.8 113.7 110.9 109.1 108.0 108.6 109.3 110.0 110.7 111.1 111.7 111.4 14 Manufacturing, total..................................... 105.4 108.3 104.7 102.9 102.0 102.5 103.1 103.7 104.3 104.4 104.6 104.7 15 Manufacturing, production-worker .......... 103.0 105.4 n.a. 97.4 96.2 97.0 97.7 100.7 99.1 99.2 99.4 99.7 16 Service-producing ............................................. 143.8 149.2 152.5 152.1 152.3 152.6 152.7 153.1 153.3 153.5 154.0 154.3 17 Personal income, total ......................................... 273.3 308.5 342.9 337.6 343.0 345.9 350.1 354.7 358.3 361.4 364.9 n.a. 18 Wages and salary disbursements .................. 258.8 289.5 314.7 309.9 310.6 314.4 317.8 323.6 328.0 330.5 335.3 n.a. 19 Manufacturing............................................... 223.1 248.6 261.5 254.2 254.3 258.5 262.9 267.6 273.1 275.8 280.0 n.a. 20 Disposable personal income5 ............................ 268.7 301.5 334.5 338.0 348.3' 21 Retail sales6 ........................................................... 253.8 281.6 300.0'' 290.4 299.1 301.0 306.0 308.0 313.8' 315.8 325.1 327.9 Prices7 22 Consumer........................................................... 195.4 217.4 246.8 247.6 247.8 249.4 251.7 253.9 256.2 258.4 260.5 n.a. 23 Producer finished goods................................... 194.6 216.1 246.9 244.9 249.3 251.4 251.4 255.4 255.6 256.9 259.8 262.4 1. The industrial production and capacity utilization series have been revised 6. Based on Bureau of Census dat a published in Survey of Current Business. back to January 1979. 7. Data without seasonal adjustment, as published in Monthly Labor Review. 2. Ratios of indexes of production to indexes of capacity. Based on data from Seasonally adjusted data for changes in the price indexes may be obtained from Federal Reserve, McGraw-Hill Economics Department, and Department of Com­ the Bureau of Labor Statistics, U.S. Department of Labor. merce. 3. Index of dollar value of total construction contracts, including residential, Note. Basic data (not index numbers) for series mentioned in notes 4, 5, and nonresidential, and heavy engineering, from McGraw-Hill Information Systems 6, and indexes for series mentioned in notes 3 and 7 may also be found in the Company, F. W. Dodge Division. Survey of Current Business. 4. Based on data in Employment and Earnings (U.S. Department of Labor). Figures for industrial production for the last two months are preliminary and Series covers employees only, excluding personnel in the Armed Forces. estimated, respectively. 5. Based on data in Survey of Current Business (U.S. Department of Commerce). Series for disposable income is quarterly. 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1980 1980 1980 Series Q1 Q2 03 Q4 Q1 Q2 Q3 Q4 Q1 02 03 Q4 Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Manufacturing....................................................... 152.8 143.9 141.0 148.7 183.3 184.8 186.3 187.8 83.4 77.9 75.7 79.2 2 Primary processing ............................................... 160.5 145.0 139.6 153.0 188.5 190.0 191.5 193.0 85.1 76.3 72.9 79.3 3 Advanced processing ........................................... 148.8 143.3 141.8 146.4 180.5 182.0 183.5 185.0 82.5 78.7 77.3 79.1 4 Materials................................................................. 156.3 145.1 139.2 149.8 182.8 184.3 185.8 187.2 85.5 78.7 74.9 80.0 5 Durable goods....................................................... 155.0 140.6 131.5 145.1 187.2 188.6 190.0 191.5 82.8 74.6 69.2 75.8 6 Metal materials ................................................. 117.1 100.6 86.6 109.9 140.7 140.8 140.9 141.0 83.2 71.4 61.5 78.0 7 Nondurable goods................................................. 179.3 166.0 161.9 175.5 199.8 202.0 204.3 206.5 89.7 82.2 79.2 85.0 8 Textile, paper, and chemical.......................... 187.5 171.9 165.6 182.6 208.3 211.0 213.7 216.2 90.0 81.5 77.5 84.5 9 Textile............................................................. 120.6 116.4 113.4 113.1 138.8 139.2 139.6 140.0 86.9 83.7 81.2 80.8 10 Paper ............................................................... 146.1 142.1 142.9 149.4 154.7 156.0 157.4 158.8 94.5 91.0 90.7 94.0 11 Chemical......................................................... 233.6 208.3 197.9 226.8 260.4 264.6 268.7 272.9 89.7 78.7 73.6 83.1 12 Energy materials................................................... 130.8 130.0 129.6 129.2 151.1 151.8 152.6 153.1 86.6 85.6 85.0 84.4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Labor Market A45 2.11 Continued Previous cycle1 Latest cycle2 1980 1980 1981 Series High Low High Low Jan. Aug. Sept. Oct. Nov/ Dec/ Jan/ Feb. Capacity utilization rate (percent) 13Manufacturing....................................................... 88.0 69.0 87.2 74.9 83.9 75.5 76.7 78.2 79.4 79.9 80.0 79.3 14 Primary processing ........................................... 93.8 68.2 90.1 70.9 86.4 72.5 75.2 77.6 79.6 80.7 80.8 79.8 15 Advanced processing ...................................... 85.5 69.4 86.2 77.1 82.7 77.1 77.7 78.5 79.2 79.6 79.7 79.0 16Materials................................................................. 92.6 69.4 88.8 73.7 86.1 74.6 76.4 78.4 80.4 81.2 81.7 81.2 17 Durable goods................................................... 91.5 63.6 88.4 68.0 83.6 69.1 70.4 73.5 76.5 77.3 78.0 77.2 18 Metal materials ............................................. 98.3 68.6 96.0 58.4 84.1 62.2 63.9 71.5 81.4 81.0 81.5 80.3 19 Nondurable goods............................................. 94.5 67.2 90.9 76.8 90.9 78.2 82.7 84.4 84.3 86.3 86.2 85.9 20 Textile, paper, and chemical...................... 95.1 65.3 91.4 74.5 91.2 76.4 81.6 83.8 83.7 85.9 85.6 85.3 21 Textile......................................................... 92.6 57.9 90.1 79.5 86.6 79.5 82.0 82.1 80.7 79.5 80.0 79.5 22 Paper ........................................................... 99.4 72.4 97.6 88.1 96.0 90.2 93.9 93.0 94.1 94.9 92.5 91.4 23 Chemical..................................................... 95.5 64.2 91.2 69.6 91.2 72.5 78.7 82.1 82.0 85.2 85.3 85.3 24 Energy materials ............................................... 94.6 84.8 88.3 83.1 86.2 85.2 84.1 83.1 85.5 84.5 85.2 85.8 1. Monthly high 1973; monthly low 1975. 2. Preliminary; monthly highs December 1978 through January 1980; monthly lows July 1980 through October 1980. 2.12 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1980 1981 Category 1978 1979 1980 Aug. Sept. Oct. Nov/ Dec/ Jan/ Feb. Household Survey Data 1 Noninstitutional population1 ...................... 161,058 163,620 166,246 166,578 166,789 167,005 167,201 167,396 167,585 167,747 2 Labor force (including Armed Forces)1 . . 102,537 104,996 106,821 107.059 107,101 107,288 107.404 107.191 107,668 107,802 3 Civilian labor force .................................. 100,420 102,908 104,719 104,945 104,980 105,167 105.285 105,067 105,543 105,681 Employment 4 Nonagricultural industries2 .................... 91,031 93,648 93,960 93.793 93,781 93,887 93.999 93,888 94,294 94,646 5 Agriculture............................................. 3,342 3,297 3,310 3,210 3.399 3,319 3,340 3,394 3,403 3,281 Unemployment 6 Number................................................... 6,047 5,963 7.448 7.942 7,800 7,961 7,946 7,785 7.847 7,754 7 Rate (percent of civilian labor force) 6.0 5.8 7.1 7.6 7.4 7.6 7.5 7.4 7.4 7.3 8 Not in labor force ......................................... 58,521 58,623 59.425 59,519 59,687 59,717 59,797 60,205 59,917 59,946 Establishment Survey Data 9 Nonagricultural payroll employment3 .... 86,697 89,886 90,652 90,142 90,384 90,710 90,961 91,125 91,499 91,550 10 Manufacturing........................................................ 20,505 21,062 20.365 19,940 20,044 20,157 20,282 20,312 20,350 20,370 11 Mining............................................................. 851 960 1,025 1.013 1,028 1,037 1,054 1,072 1,084 1,090 12 Contract construction .................................. 4,229 4,483 4,468 4.359 4,404 4,442 4,475 4.508 4,608 4,500 13 Transportation and public utilities............ 4,923 5,141 5,155 5,129 5,124 5,147 5,132 5,137 5,148 5,147 14 Trade ............................................................... 19,542 20,269 20.571 20.589 20,620 20,641 20,660 20,638 20,782 20,892 15 Finance ....................................................................... 4,724 4,974 5,162 5.180 5,194 5,214 5,225 5,245 5,265 5,275 16 Service............................................................. 16,252 17,078 17,736 17.788 17,861 17,913 17,969 18,068 18,135 18,164 17 Government............................................................. 15,672 15,920 16,171 16.144 16,109 16,159 16,164 16,145 16,127 16,112 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 work­ figures. Based on data from Employment and Earnings (U.S. Department of La­ ers, 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

A46 Domestic Nonfinancial Statistics □ March 1981 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value' Monthly data are seasonally adjusted. 1967 1980 1980 1981 Grouping p p r o o r ­ ­ Aver­ tion age Feb. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan.P Feb.6 Index (1967 = 100) Major Market 1 Total index .................................................... 100.00 147.1 152.6 148.3 144.0 141.5 140.4 141.8 144.1 146.9 149.4 150.9 151.5 150.8 2 Products ........................................................ 60.71 146.7 150.1 146.6 143.7 142.5 142.8 143.8 145.3 147.2 148.7 149.9 150.1 149.1 3 Final products .......................................... 47.82 145.4 147.7 145.4 143.1 142.3 142.4 142.8 143.9 145.8 147.5 148.2 148.3 147.6 4 Consumer goods .................................. 27.68 145.5 148.4 145.3 142.4 142.1 142.0 142.7 144.3 146.6 148.0 147.7 147.4 146.5 5 Equipment ............................................ 20.14 145.1 146.6 145.6 144.0 142.6 142.9 142.9 143.2 144.8 146.7 148.9 149.4 149.1 6 Intermediate products ............................ 12.89 151.9 159.2 150.8 146.2 143.5 144.5 147.6 150.6 152.4 153.5 156.1 156.9 154.7 7 Materials........................................................ 39.29 147.6 156.5 151.0 144.3 140.0 136.5 138.6 142.4 146.4 150.5 152.4 153.8 153.3 Consumer goods 8 Durable consumer goods............................ 7.89 136.5 144.5 136.3 128.8 128.2 128.3 128.6 132.7 139.6 142.9 141.1 138.3 137.1 9 Automotive products .............................. 2.83 132.7 142.1 126.3 118.5 121.6 129.2 121.5 130.6 141.8 145.3 139.1 127.2 129.5 10 Autos and utility vehicles .................. 2.03 109.9 124.6 102.3 92.6 97.1 106.4 94.1 105.5 120.2 124.3 115.9 99.7 103.4 11 Autos.................................................. 1.90 103.4 116.8 97.1 88.4 95.7 105.2 91.3 98.0 110.7 114.3 105.3 90.0 96.0 12 Auto parts and allied goods .............. 80 190.4 186.7 187.2 184.0 183.7 186.9 191.1 194.2 196.8 198.6 198.0 196.9 196.0 13 Home goods.............................................. 5.06 138.7 145.8 142.0 134.6 132.0 127.7 132.6 134.0 138.3 141.5 142.2 144.5 141.4 14 Appliances, A/C, and TV .................. 1.40 117.1 122.3 114.8 102.8 105.6 102.3 114.2 116.3 123.5 128.4 126.8 131.7 124.5 15 Appliances and TV.......................... 1.33 119.5 124.4 117.5 106.0 108.5 103.4 114.2 117.6 125.6 131.0 129.2 133.3 16 Carpeting and furniture ...................... 1.07 155.0 168.2 165.8 154.2 146.7 136.1 141.1 146.1 150.2 154.9 156.3 157.0 17 Miscellaneous home goods ................ 2.59 143.6 149.4 146.8 143.8 140.2 138.1 139.1 138.6 141.5 143.0 144.8 146.3 145.0 18 Nondurable consumer goods...................... 19.79 149.2 150.0 148.8 147.7 147.6 147.4 148.3 148.9 149.4 150.1 150.4 151.0 150.2 19 Clothing .................................................... 4.29 126.8 130.7 128.7 127.9 126.7 122.5 123.6 122.1 125.1 127.3 124.1 15.50 155.3 155.4 154.5 153.2 153.4 154.3 155.1 156.3 156.1 156.4 157.6 158.3 157.8 21 Consumer roods and tobacco ............ 8.33 147.0 146.5 146.2 146.1 146.2 146.4 146.0 147.0 147.7 148.0 149.1 148.8 22 Nonfood staples.................................... 7.17 164.9 165.6 164.0 161.5 161.7 163.6 165.7 167.1 165.9 166.2 167.6 169.4 168.5 23 Consumer chemical products ........ 2.63 208.7 211.8 206.9 203.0 202.6 204.3 209.3 213.0 210.2 210.0 212.5 215.3 24 Consumer paper products .............. 1.92 122.9 122.5 120.4 120.2 120.6 121.5 122.0 122.3 124.8 127.3 127.0 128.4 25 Consumer energy products ............ 2.62 151.9 150.9 152.8 150.1 150.9 153.5 153.9 154.0 151.5 150.8 152.2 153.5 26 Residential utilities ...................... 1.45 171.2 162.5 172.5 169.8 170.1 176.5 178.6 178.3 175.0 171.8 171.2 Equipment 27 Business ........................................................ 12.63 173.3 176.0 174.2 171.9 169.8 170.1 170.3 170.5 172.3 174.5 177.5 178.3 177.7 28 Industrial .................................................. 6.77 157.0 159.2 159.3 157.8 155.2 154.8 154.5 154.2 154.4 157.1 160.1 163.4 164.3 29 Building and mining ............................ 1.44 241.3 231.6 239.5 242.2 241.0 244.4 243.6 243.4 244.3 250.1 255.7 267.5 273.6 30 Manufacturing...................................... 3.85 128.4 133.1 131.9 129.5 126.1 126.0 124.4 123.9 123.9 126.4 129.6 130.1 129.8 31 Power .................................................... 1.47 149.0 156.4 152.3 149.1 147.1 142.0 145.9 146.1 146.1 146.0 146.1 148.0 147.3 32 Commercial transit, farm........................ 5.86 192.1 195.5 191.5 188.2 186.7 187.8 188.4 189.4 192.8 194.7 197.6 195.5 193.2 33 Commercial .......................................... 3.26 237.5 238.7 235.6 232.0 228.8 229.0 233.6 237.2 242.0 244.0 248.3 247.9 246.1 34 Transit.................................................... 1.93 139.4 145.4 143.0 136.3 138.0 140.9 138.4 133.8 135.0 136.6 137.9 132.2 128.0 35 Farm ...................................................... 67 123.2 129.9 116.4 124.6 121.6 122.5 112.7 116.8 120.2 121.9 123.1 122.7 36 Defense and space ...................................... 7.51 97.8 97.2 97.6 97.2 96.8 97.2 96.9 97.4 98.5 99.8 100.7 101.0 101.2 Intermediate products 37 Construction supplies.................................. 6.42 140.7 153.8 139.4 133.0 128.5 128.6 133.1 137.4 140.5 142.8 144.7 146.9 143.1 38 Business supplies.......................................... 6.47 162.9 164.5 162.0 159.4 158.4 160.4 161.9 163.6 164.3 164.2 167.5 166.8 39 Commercial energy products ................ 1.14 173.6 171.7 174.8 172.0 168.7 172.1 173.7 175.2 174.6 174.0 179.2 175.9 Materials 40 Durable goods materials ............................ 20.35 143.1 154.8 148.2 139.8 133.8 129.0 131.3 134.2 140.4 146.6 148.4 150.2 ’ 148.8 41 Durable consumer parts.......................... 4.58 109.0 119.9 110.6 100.1 96.0 93.9 98.1 104.2 110.8 115.5 116.3 116.9 114.9 42 Equipment parts ...................................... 5.44 187.3 198.9 195.8 190.8 182.5 177.6 176.3 176.0 178.5 184.0 185.8 189.2 188.4 43 Durable materials n.e.c............................. 10.34 135.0 147.0 139.8 130.5 125.0 118.9 122.4 125.4 133.4 140.6 142.9 144.3 142.9 44 Basic metal materials .......................... 5.57 104.6 116.4 109.3 100.0 95.9 84.7 89.4 91.7 102.0 114.4 115.0 115.4 45 Nondurable goods materials ...................... 10.47 170.7 179.9 173.2 165.2 159.6 156.2 159.8 169.7 173.7 174.1 178.7 179.3 179.1 46 Textile, paper, and chemical materials . 7.62 177.0 188.1 180.7 171.5 163.4 158.5 163.2 175.1 180.5 181.0 186.4 186.4 186.5 47 Textile materials .................................. 1.85 116.0 121.1 117.7 117.6 114.0 114.4 111.0 114.7 114.9 113.0 111.4 112.1 48 Paper materials .................................... 1.62 145.2 146.0 141.2 141.7 143.4 138.4 142.0 148.2 147.3 149.5 151.3 147.7 49 Chemical materials .............................. 4.15 216.7 234.5 224.3 207.3 193.3 186.1 194.9 212.6 222.9 223.8 233.6 234.7 50 Containers, nondurable .......................... 1.70 165.1 170.6 166.8 155.8 157.7 159.0 158.8 167.2 168.6 166.6 169.7 172.7 51 Nondurable materials n.e.c...................... 1.14 137.3 138.7 133.0 136.4 136.8 136.6 137.9 137.2 135.7 139.1 141.1 141.5 52 Energy materials.......................................... 8.48 130.0 131.5 130.1 129.6 130.4 130.4 130.0 128.4 127.2 130.9 129.6 131.1 132.2 53 Primary energy ........................................ 4.65 114.9 113.7 116.4 116.2 117.3 115.6 114.0 114.3 113.7 114.5 113.3 114.1 54 Converted fuel materials ........................ 3.82 148.2 153.1 146.9 145.8 146.4 148.4 149.4 145.4 143.6 150.9 149.5 151.9 Supplementary groups 55 Home goods and clothing .......................... 9.35 133.2 138.9 135.9 131.5 129.5 125.3 128.5 128.5 132.2 135.0 133.9 135.3 132.8 56 Energy, total ................................................ 12.23 138.7 139.4 139.1 137.9 138.4 139.2 139.2 138.2 136.8 139.2 139.1 140.1 140.0 57 Products .................................................... 3.76 158.5 157.2 159.5 156.7 156.3 159.1 159.9 160.5 158.5 157.9 160.4 160.3 58 Materials.................................................... 8.48 130.0 131.5 130.1 129.6 130.4 130.4 130.0 128.4 127.2 130.9 129.6 131.1 132.2 L— For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Output A47 2.13 Continued 1967 1980 1981 Grouping SIC p p o ro r­ ­ A 19 v 8 g 0 . code tion Feb. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan .p Feb.* Index (1967 = 100) Major Industry 1 Mining and utilities...................... 12.05 150.4 149.0 150.1 149.6 150.1 150.1 150.5 150.5 150.2 152.8 153.4 155.4 155.2 2 Mining......................................... 6.36 132.8 132.9 133.1 133.4 132.9 130.6 129.6 130.5 132.1 136.0 138.2 140.5 141.5 3 Utilities....................................... 5.69 169.9 167.1 169.1 167.7 169.3 171.8 173.8 172.7 170.4 171.5 170.4 172.0 170.4 4 Electric ................................... 3.88 189.7 185.7 187.9 186.0 188.7 192.4 195.4 193.9 190.3 191.5 190.3 5 Manufacturing .............................. 87.95 146.6 153.0 147.9 143.4 140.3 139.2 140.6 143.4 146.4 149.1 150.6 151.0 150.2 6 Nondurable ............................... 35.97 161.1 165.9 161.6 158.0 155.3 154.7 156.9 160.3 161.8 163.3 165.1 165.2 165.1 7 Durable....................................... 51.98 136.6 144.1 138.4 133.3 129.9 128.3 129.4 131.7 135.8 139.3 140.5 141.1 139.9 Mining 8 Metal............................................... 10 .51 109.1 136.6 123.5 120.8 120.0 83.1 71.2 73.1 90.8 107.2 122.1 122.6 9 Coal................................................. 11.12 .69 146.7 136.0 143.4 145.0 150.0 149.8 154.9 148.9 145.7 151.6 155.3 150.3 156.2 10 Oil and gas extraction ................ 13 4.40 133.6 130.4 132.5 133.9 133.2 134.3 133.6 134.7 135.4 137.4 137.4 140.7 142.5 11 Stone and earth minerals............ 14 .75 131.7 142.3 133.1 128.1 123.9 123.7 123.5 128.2 129.0 133.0 137.8 142.7 Nondurable manufactures 12 Foods............................................... 20 8.75 149.3 149.0 147.8 149.5 149.0 148.9 148.3 148.6 149.4 150.5 151.4 151.1 13 Tobacco products ........................ 21 .67 119.8 120.0 121.9 116.2 113.9 119.6 117.4 119.1 123.1 125.1 118.8 14 Textile mill products.................... 22 2.68 136.8 144.0 139.9 137.1 133.6 132.5 132.6 133.0 133.8 135.0 133.2 133.8 15 Apparel products ......................... 23 3.31 128.6 133.8 131.3 128.6 127.2 121.5 123.8 126.7 127.5 128.0 125.0 16 Paper and products...................... 26 3.21 151.0 153.6 148.2 145.7 146.2 143.6 147.1 152.3 153.0 154.4 156.5 155.4 154.1 17 Printing and publishing .............. 27 4.72 139.6 139.9 136.5 135.5 135.4 138.6 140.3 140.3 141.5 142.7 144.9 145.6 146.2 18 Chemicals and products.............. 28 7.74 206.7 217.4 209.1 199.2 191.1 190.3 197.8 206.8 209.1 212.0 218.8 219.0 19 Petroleum products...................... 29 1.79 134.9 144.6 137.4 133.0 131.3 130.5 126.7 130.5 130.1 131.2 136.8 137.4 136.5 20 Rubber and plastic products----- 30 2.24 255.8 266.8 261.8 248.1 242.9 242.5 245.9 253.1 259.2 259.6 259.2 259.9 21 Leather and products .................. 31 .86 70.1 73.3 69.9 70.1 68.5 67.8 67.7 67.2 70.2 71.2 67.8 67.8 Durable manufactures 22 Ordnance, private and government .......................... 19.91 3.64 77.9 77.2 77.5 77.9 77.5 77.1 77.2 77.1 79.1 79.6 79.5 69.6 79.8 23 Lumber and products.................. 24 1.64 119.3 130.2 105.2 104.5 109.7 112.8 121.7 122.6 122.2 124.9 122.0 122.3 24 Furniture ana fixtures ................ 25 1.37 150.0 159.2 157.1 149.5 143.1 138.6 141.1 144.8 147.2 147.2 149.0 148.5 25 Clay, glass, stone products ........ 32 2.74 146.5 162.4 148.8 140.8 134.5 134.2 135.7 141.4 145.2 147.8 151.5 154.0 26 Primary metals............................... 33 6.57 101.6 111.9 106.4 96.1 90.4 81.7 86.0 90.1 100.6 113.4 112.1 112.9 111.7 27 Iron and steel............................. 331.2 4.21 91.7 103.4 97.4 84.4 75.4 68.1 75.3 79.8 93.3 107.4 103.6 106.4 28 Fabricated metal products.......... 34 5.93 135.0 145.7 141.4 133.2 126.1 123.8 125.8 129.0 132.8 134.1 137.4 138.2 137.9 29 Nonelectrical macninery ............ 35 9.15 162.7 167.0 163.2 162.1 158.3 158.5 158.8 159.1 161.1 163.4 167.1 168.8 168.1 30 Electrical machinery.................... 36 8.05 172.7 179.2 177.0 171.4 166.6 165.0 166.7 167.5 170.0 173.0 174.9 177.7 175.4 31 Transportation equipment.......... 37 9.27 116.8 125.7 115.1 109.8 110.0 110.7 108.3 112.9 118.8 121.7 120.6 117.4 116.4 32 Motor vehicles and parts ........ 371 4.50 118.8 133.9 114.7 105.9 106.7 107.9 104.4 113.4 124.2 129.0 126.3 119.0 117.9 33 Aerospace and miscellaneous transportation equipment 372-9 4.77 114.9 118.1 115.5 113.5 113.1 113.4 111.9 112.3 113.6 114.8 115.2 116.0 114.9 34 Instruments ................................... 38 2.11 171.0 174.8 173.8 171.0 169.2 167.5 167.6 167.4 169.6 169.9 172.1 173.6 171.6 35 Miscellaneous manufactures ___ 39 1.51 147.8 151.6 151.2 147.3 43.7 144.7 144.2 142.8 145.0 147.5 149.5 151.6 150.7 Gross value (billions of 1972 dollars, annual rates) Major Market 36 Products, total .............................. 507.4 602.0 619.8 599.5 588.6 585.0 586.7 585.9 593.3 604.7 610.9 615.1 614.4 609.6 37 Final ............................................... 390.92 465.4 476.4 464.5 457.3 455.6 456.9 453.0 58.0 467.7 473.0 475.0 472.7 470.4 38 Consumer goods ...................... 277.52 313.5 320.0 312.5 306.3 305.8 307.7 305.1 309.0 316.6 320.0 319.9 317.7 315.8 39 Equipment ................................. 113.42 151.9 156.3 152.0 151.0 .149.8 149.2 147.9 149.0 151.1 153.0 155.1 155.0 154.6 40 Intermediate................................... 116.62 136.7 143.4 135.0 131.3 129.4 129.9 132.9 135.3 137.1 137.9 140.1 141.7 139.2 1. The industrial production series has been revised back to January 1979. Note. Published groupings include some series and subtotals not shown sepa- 2. 1972 dollars. rately. For description and historical data, see Industrial Production—1976 Revision (Board of Governors of the Federal Reserve System: Washington, D.C.), Decem­ ber 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics □ March 1981 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1980 1981 Item 1978 1979 1980' June July Aug. Sept. Oct. Nov.' Dec.' Jan. Private residential real estate activity (thousands of units) New Units 1 Permits authorized .................................. 1,801 1,552 1,171 1,078 1,236' 1,361 1,564 1,333 1,355 1,235 1,213 2 1-family................................................... 1,183 981 704 628 781 857 914 819 812 743 703 3 2-or-more-family .................................. 618 570 467 450 455 504 650 514 543 492 510 4 Started......................................................... 2,020 1,745 1,292 1,184' 1,277' 1,411' 1,482' 1,519' 1,550 1,532 1,585 5 1-family................................................... 1,433 1,194 852 760' 867' 971' 1,032' 1,009' 1,019 971 941 6 2-or-more-family ................................... 587 551 440 424' 410' 440' 450' 510' 531 561 644 7 Under construction, end of period1 .... 1,310 1,140 903 871 851 843 868 886' 907 918 n.a. 8 1-family................................................... 765 639 519 474 473 474 500 515' 531 537 n.a. 9 2-or-more-family .................................. 546 501 385 397 378 369 368 371' 376 381 n.a. 10 Completed ................................................. 1,868 1,855 1,498 1,469 1,502 1,405 1,256 1,285 1,269 1,380 n.a. 11 1-family................................................... 1,369 1,286 954 886 876 917 753 819' 824 897 n.a. 12 2-or-more-farnily .................................. 499 570 544 583 626 488 503 466' 445 483 n.a. 13 Mobile homes shipped ............................ 276 277 222 166' 207' 208' 239' 236' 239 261 n.a. Merchant builder activity in 1-family units 14 Number sold ............................................ 818 709 531 532' 625' 616' 563' 549' 559 527 493 15 Number for sale, end of period1 .......... 419 402 342 341' 335' 331' 335 334 338 337 336 Price (thousands of dollars)2 Median 16 Units sold.............................................. 55.8 62.7 64.9 65.4 64.4 63.2 68.5 66.1' 67.2 67.8 67.2 Average 17 Units sold .............................................. 62.7 71.9 76.6 76.3 76.8 76.5 80.3 77.7' 82.1 81.9 79.6 Existing Units (1-family) 18 Number sold ............................................. 3,905 3,742 2,881 2,570' 2,920 2,970' 3,280' 3,120' 2,960 2,910 2,580 Price of units sold (thous. of dollars)2 19 Median ....................................................... 48.7 55.5 62.1 63.4 64.1 64.9 64.2 62.7 64.3 63.0 64.5 20 Average ..................................................... 55.1 64.0 72.7 74.1' 75.7 76.2 75.5 73.4 74.9 74.0 76.1 Value of new construction3 (millions of dollars) Construction 21 Total put in place .................................... 205,457 228,948 227,775 215,021 214,315 215,149 223,660 226,132 231,564 242,376 255,638 22 Private......................................................... 159,555 179,948 172,622 161,349 158,593 162,057 167,882 171,053 177,861 183,990 191,954 23 Residential ............................................. 93,423 99,029 86,210 73,360 74,277 78,632 84,378 87,375 93,692 95,978 100,682 24 Nonresidential, total............................ 66,132 80,919 86,412 87,989 84,316 83,425 83,504 83,678 84,169 88,012 91,272 Buildings 25 Industrial ...................................... 10,993 14,953 14,021 15,022 13,267 13,046 13,102 12,996 13,392 15,079 14,393 26 Commercial .................................. 18,568 24,924 29,344 29.609 28,063 27,993 27,425 28,417 28,888 30,392 33,574 27 Other.............................................. 6,739 7,427 8,533 8.256 8,115 8,095 8,447 8,760 8,799 9,086 9,864 28 Public utilities and other ................ 29,832 33,615 34,514 35,102 34,871 34,291 34,530 33,505 33,090 33,455 33,441 29 Public ......................................................... 45,901 49,001 55,154 53,672 55,721 53.092 55.778 55,078 53,703 58,386 63,684 30 Military................................................... 1,501 1,641 1,876 1,748 2,041 2.315 1.717 2,144 1,866 1,818 2,127 31 Highway ................................................. 10,713 11,915 13,450 14,012 13,758 11,334 13.804 13,550 12,427 13,347 n.a. 32 Conservation and development ........ 4,457 4,586 5,081 4,241 5,896 4,353 5.091 4,763 5,109 5,607 n.a. 33 Other....................................................... 29,230 30,859 34,747 33,671 34.026 35,090 35,166 34,621 34,301 37,614 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 comparable and seasonally adjusted by the Census Bureau, and (b) sales and prices of existing with data in prior periods due to changes by the Bureau of the Census in its units, which are published by the National Association of Realtors. All back and estimating techniques. For a description of these changes see Construction Reports current figures are available from originating agency. Permit authorizations are (C-30-76^5), issued by the Bureau in July 1976. those reported to the Census Bureau from 16,000 jurisdictions beginning with 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Prices A49 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 Jan. Item 1980 1980 1981 1981 1980 1981 (1967 Jan. Jan. = 100)1 Mar/ June' Sept/ Dec/ Sept/ Oct/ Nov/ Dec/ Jan Consumer Prices2 1 All items ..................................................... 13.9 11.7 17.3 11.4 7.8 13.2 1.0 1.0 1.1 1.0 .7 260.5 2 Commodities ................................................. 13.6 10.3 15.3 5.4 13.2 11.0 1.3 .9 1.0 .7 .6 245.4 3 Food ........................................................... 8.9 10.2 3.3 5.8 19.7 13.1 1.7 .9 1.2 1.0 -.1 268.6 4 Commodities less food............................ 15.7 10.5 20.7 5.2 10.6 9.9 1.1 .9 .9 .6 1.0 232.4 5 Durable................................................... 10.6 9.8 8.2 7.5 15.2 11.8 1.5 1.1 1.3 .4 .3 221.0 6 Nondurable ........................................... 22.3 11.2 38.1 3.8 5.0 6.2 .4 .3 .5 .7 2.1 245.3 7 Services........................................................... 14.5 13.7 20.1 20.5 .7 16.8 .7 1.2 1.3 1.4 .9 287.7 8 Rent............................................................. 8.1 9.1 8.3 10.0 8.6 9.6 1.0 1.0 .6 .7 .7 200.9 9 Services less rent...................................... 15.5 14.3 21.7 22.1 -.3 17.8 .7 1.2 1.4 1.5 .9 304.2 Other groupings 10 All items less food ...................................... 15.1 12.0 20.3 12.7 5.7 13.2 .9 1.0 1.1 1.0 1.0 257.6 11 All items less food and energy .................. 12.0 11.4 14.7 14.0 5.8 14.4 1.0 1.1 1.1 1.1 .6 245.7 12 Homeownership ........................................... 21.1 14.8 22.6 26.4 -3.5 23.1 .7 2.0 1.7 1.5 .5 335.8 Producer Prices 13 Finished goods............................................... 13.3 10.8 17.5 8.4 13.5 7.8 .3 .9 .5 .5 .9 259.8 14 Consumer................................................... 14.4 10.9 18.8 7.6 14.5 6.9 .3 .8 .5 .4 .8 261.4 15 Foods ....................................................... 5.2 8.1 -.9 -1.4 31.0 3.6 .5 .7 .1 .1 0.0 250.6 16 Excluding foods.................................... 19.4 12.2 29.7 12.1 7.6 8.5 .2 .8 .7 .5 1.2 260.9 17 Capital equipment.................................... 9.6 10.8 13.6 10.9 9.9 11.4 .1 1.7 .1 .9 1.0 253.9 18 Intermediate materials3 .............................. 18.6 10.6 23.7 6.2 7.8 12.6 .5 .5 .8 1.7 1.3 296.6 Crude materials 19 Nonfood ..................................................... 29.1 12.3 18.9 .2 32.3 17.6 2.3 1.9 1.3 .8 -.8 428.7 20 Food ........................................................... 3.9 11.1 -16.6 -.3 73.9 -4.1 .7 1.5 .2 -2.6 -1.1 270.6 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

A50 Domestic Nonfinancial Statistics □ March 1981 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 1978 1979 1980r Q4 Q1 Q2 03 Q4r Gross National Product 1 Total ......................................................................................................... 2,156.1 2,413.9 2,626.5 2.727.5 2,571.7 2,564.8 2,637.3 2,732.3 By source 2 Personal consumption expenditures.................................................... 1,348.7 1,510.9 1,672.3 1,582.3 1,631.0 1,626.8 1,682.2 1,749.2 3 Durable goods..................................................................................... 199.3 212.3 211.9 675.4 220.9 194.4 208.8 223.4 4 Nondurable goods............................................................................... 529.8 602.2 675.4 785.1 661.1 664.0 674.2 702.2 5 Services................................................................................................. 619.6 696.3 785.1 727.0 749.0 768.4 799.2 823.7 6 Gross private domestic investment ..................................................... 375.3 415.8 395.4 410.0 415.6 390.9 377.1 398.1 7 Fixed investment................................................................................. 353.2 398.3 400.8 108.6 413.1 383.5 393.2 413.3 8 Nonresidential................................................................................. 242.0 279.7 295.4 290.2 297.8 289.8 294.0 300.0 9 Structures..................................................................................... 78.7 96.3 108.6 105.1 108.2 108.4 107.3 110.5 10 Producers’ durable equipment ................................................ 163.3 183.4 186.8 185.1 189.7 181.4 186.8 189.5 11 Residential structures..................................................................... 111.2 118.6 105.3 120.6 115.2 93.6 99.2 113.3 12 Nonfarm....................................................................................... 106.9 113.9 100.3 115.4 110.1 88.9 94.5 107.9 13 Change in business inventories......................................................... 22.2 17.5 -5.3 -0.8 2.5 7.4 -16.4 -15.2 14 Nonfarm........................................................................................... 21.8 13.4 -4.1 -4.4 1.5 6.1 -12.3 -11.7 15 Net exports of goods and services ....................................................... -0.6 13.4 24.2 7.6 8.2 17.1 44.5 26.9 16 Exports................................................................................................. 219.8 281.3 340.1 306.3 337.3 333.3 342.4 347.5 17 Imports................................................................................................. 220.4 267.9 315.9 298.7 329.1 316.2 297.9 220.5 18 Government purchases of goods and services .................................. 432.6 473.8 534.6 496.4 516.8 530.0 533.5 558.0 19 Federal ................................................................................................. 153.4 167.9 198.9 178.1 190.0 198.7 194.9 212.1 20 State and local..................................................................................... 279.2 305.9 335.7 318.3 326.8 331.3 338.6 346.0 By major type of product 21 Final sales, total ..................................................................................... 2,133.9 2,396.4 2,631.8 2,497.1 2,569.1 2,557.4 2,653.4 2,747.5 22 Goods................................................................................................... 946.6 1,055.9 1,131.2 1,078.4 1,116.9 1,106.4 1,129.4 1,171.9 23 Durable............................................................................................. 409.8 451.2 458.8 448.1 456.4 444.6 456.5 477.8 24 Nondurable ..................................................................................... 536.8 604.7 672.3 630.3 660.5 661.8 672.9 694.1 25 Services................................................................................................. 976.3 1,097.2 1,229.5 1,142.8 1,178.6 1,205.6 1,249.0 1,284.8 26 Structures ............................................................................................. 233.2 260.8 265.8 275.1 276.2 252.8 258.9 275.5 27 Change in business inventories............................................................. 22.2 17.5 -5.3 -0.8 2.5 7.4 -16.0 -15.2 28 Durable goods..................................................................................... 17.8 11.5 -4.1 -0.4 -11.8 3.3 -8.4 .4 29 Nondurable goods............................................................................... 4.4 6.0 -1.2 -0.5 14.3 4.1 -7.7 -15.6 30 Memo: Total GNP in 1972 dollars ...................................................... 1,436.9 1,483.0 1,480.7 1,490.6 1,501.9 1,463.3 1,471.9 1,486.5 National Income 31 Total ......................................................................................................... 1,745.4 1,963.3 2,119.5 2,031.3 2,088.5 2,070.0 2,122.4 n.a. 32 Compensation of employees................................................................. 1,299.7 1,460.9 1,596.5 1,518.1 1,558.0 1,569.0 1,597.4 1,661.6 33 Wages and salaries ............................................................................. 1,105.4 1,235.9 1,343.6 1,282.4 1,314.5 1,320.4 1,342.3 1,397.2 34 Government and government enterprises.................................. 219.6 235.9 253.6 243.3 246.7 250.5 253.9 263.3 35 Other................................................................................................. 885.7 1,000.0 1,090.0 1,039.1 1,067.9 1,069.9 1,088.4 1,133.9 36 Supplement to wages and salaries .................................................. 194.3 225.0 252.9 235.7 243.5 248.6 255.0 264.5 37 Employer contributions for social insurance ............................ 92.1 106.4 115.8 109.8 112.6 113.6 116.0 121.0 38 Other labor income ....................................................................... 102.2 118.6 137.1 126.0 130.9 135.1 139.1 143.5 39 Proprietors’ income1............................................................................... 117.1 131.6 130.7 136.3 133.7 124.9 129.7 134.3 40 Business and professional1 ............................................................... 91.0 100.7 107.2 106.8 107.9 101.6 107.6 111.8 41 Farm1 ................................................................................................... 26.1 30.8 23.4 29.5 25.7 23.3 22.1 22.6 42 Rental income of persons2 ................................................................... 27.4 30.5 31.8 31.0 31.2 31.5 32.0 32.4 43 Corporate profits1................................................................................... 199.0 196.8 180.7 189.4 200.2 169.3 177.9 n.a. 44 Profits before tax3............................................................................... 223.3 255.4 241.8 255.4 277.1 217.9 237.6 n.a. 45 Inventory valuation adjustment ....................................................... -24.3 -42.6 -43.9 -50.8 -61.4 -31.1 -41.7 -41.4 46 Capital consumption adjustment ..................................................... -13.5 -15.9 -17.2 -15.1 -15.4 -17.6 -17.9 -17.8 47 Net interest ............................................................................................. 115.8 143.4 179.9 156.5 165.4 175.3 185.3 193.6 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.49. 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 A51 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1979 1980 Account 1978 1979 1980' Q4 Q1 02 03 04' Personal Income and Saving 1 Total personal income............................................................................. 1,721.8 1,943.8 2,160.2 2,032.0 2,088.2 2,114.5 2,182.1 2,256.0 2 Wage and salary disbursements ...................................................................... 1,105.2 1,236.1 1,343.6 1,282.2 1,314.7 1,320.4 1,341.8 1,397.7 3 Commodity-producing industries ............................................................... 389.1 437.9 465.4 450.4 461.7 456.0 460.1 484.1 4 Manufacturing................................................................................................. 299.2 333.4 350.7 340.4 347.9 343.2 346.7 365.0 5 Distributive industries ..................................................................................... 270.5 303.0 328.9 315.0 322.6 323.2 329.2 340.6 6 Service industries ............................................................................................... 226.1 259.2 295.7 273.7 283.6 290.8 298.7 309.7 7 Government and government enterprises.............................................. 219.4 236.1 253.6 243.1 246.8 250.5 253.9 263.3 8 Other labor income ............................................................................................... 102.2 118.6 137.1 126.0 130.9 135.1 139.1 143.5 9 Proprietors’ income1............................................................................................... 117.2 131.6 130.7 136.3 133.7 124.9 129.7 134.3 10 Business and professional1 ............................................................... 91.0 100.8 107.2 106.8 107.9 101.6 107.6 111.8 11 Farm1 ....................................................................................................................... 26.1 30.8 23.4 29.5 25.7 23.3 22.1 22.6 12 Rental income of persons2 ................................................................... 27.4 30.5 31.8 31.0 31.2 31.5 32.0 32.4 13 Dividends................................................................................................. 43.1 48.6 54.4 50.1 52.4 54.2 55.1 56.1 14 Personal interest income ....................................................................... 173.2 209.6 256.2 225.7 239.9 253.6 261.8 269.4 15 Transfer payments ................................................................................................. 223.3 249.4 294.2 263.1 271.7 280.7 310.7 313.9 16 Old-age survivors, disability, and health insurance benefits .... 116.2 131.8 153.8 139.3 142.0 144.7 163.2 165.3 17 Less: Personal contributions for social insurance ............................. 69.6 80.6 87.9 82.4 86.2 85.9 88.1 91.2 18 Equals: Personal income ................................................................................... 1,721.8 1,943.8 2,160.2 2,032.0 2,088.2 2,114.5 2,182.1 2,256.0 19 Less: Personal tax and nontax payments .............................................. 258.8 302.0 338.6 321.8 323.1 330.3 341.5 359.3 20 Equals: Disposable personal income .......................................................... 1,462.9 1,641.7 1,821.6 1,710.1 1,765.1 1,784.1 1,840.6 1,896.7 21 Less: Personal outlays ..................................................................................... 1,386.6 1,555.5 1,719.8 1,629.4 1,678.7 1,674.1 1,729.2 1,797.2 22 Equals: Personal saving..................................................................................... 76.3 86.2 101.8 80.7 86.4 110.0 111.4 99.5 Memo: Per capita (1972 dollars) 23 Gross national product..................................................................................... 6,568 6,721 6,646 6,730 6,768 6,580 6,597 6,645 24 Personal consumption expenditures.......................................................... 4,136 4,219 4,196 4,251 4,251 4,134 4,172 4,229 25 Disposable personal income ......................................................................... 4,487 4,584 4,571 4,596 4,600 4,532 4,565 4,585 26 Saving rate (percent) ............................................................................................ 5.2 5.2 5.6 4.7 4.9 6.2 6.1 5.2 Gross Saving 27 Gross saving............................................................................................. 355.2 412.0 400.7 402.0 404.5 394.5 402.0 n.a. 28 Gross private saving............................................................................................... 355.4 398.9 433.1 396.4 413.0 435.9 446.5 n.a. 29 Personal saving ......................................................................................................... 76.3 86.2 101.8 80.7 86.4 110.0 111.4 99.5 30 Undistributed corporate profits1 .................................................................... 57.9 59.1 44.0 50.6 52.1 42.1 42.8 n.a. 31 Corporate inventory valuation adjustment................................................ -24.3 -42.6 -43.9 -50.8 -61.4 -31.1 -41.7 -41.4 Capital consumption allowances 32 Corporate..................................................................................................................... 136.4 155.4 175.4 161.5 167.1 173.0 178.4 183.2 33 Noncorporate............................................................................................................. 84.8 98.2 111.8 103.6 107.4 110.7 113.4 115.8 34 Wage accruals less disbursements ....................................................... .0 .0 .0 .0 .0 .0 .5 -.5 35 Government surplus, or deficit (-), national income and product accounts ............................................................................................................. -0.2 11.9 -33.4 4.4 1.7 -29.6 -45.6 n.a. 36 Federal ..................................................................................................................... -29.2 -14.8 -62.3 -24.5 -36.3 -66.5 -74.2 n.a. 37 State and local...................................................................................................... 29.0 26.7 28.8 28.9 26.6 23.9 28.6 n.a. 38 Capital grants received by the United States, net.................................. .0 1.1 1.1 1.1 1.1 1.1 1.1 1.1 39 Gross investment..................................................................................... 361.6 414.1 402.5 401.3 407.3 392.5 405.0 405.0 40 Gross private domestic.......................................................................................... 375.3 415.8 395.4 410.0 415.6 390.9 377.1 398.1 41 Net foreign............................................................................................... -13.8 -1.7 7.0 -8.7 -8.3 1.7 27.8 6.9 42 Statistical discrepancy............................................................................. 6.4 2.2 1.7 -0.7 2.8 -1.9 3.0 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

A52 International Statistics □ March 1981 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 03 Q4 Ql Q2 Q3 p 1 Balance on current account ....................................................... -14,068 -14,259 -788 1,099 -1,802 -2,610 -2,431 4,900 2 Not seasonally adjusted ......................................................... -2,909 486 -2,426 -680 480 3 Merchandise trade balance2................................................... -30,873 -33,759 -29,469 -7,060 -9,225 -10,850 -7,505 -2,828 4 Merchandise exports........................................................... 120,816 142,054 182,055 47,198 50,237 54,708 54,710 56,288 5 Merchandise imports........................................................... -151,689 -175,813 -211,524 -54,258 -59,462 -65,558 -62,215 -59,116 6 Military transactions, net ....................................................... 1,628 886 -1,274 -443 -700 -922 -994 -632 7 Investment income, net3......................................................... 17,988 20,899 32,509 9,319 8,883 10,094 6,133 8,467 8 Other service transactions, net ............................................. 1,794 2,769 3,112 690 792 880 1,261 1,370 9 Memo: Balance on goods and services3 4 .......................... -9,464 -9,204 4,878 2,506 -250 -798 -1,105 6,377 10 Remittances, pensions, and other transfers ...................... -1,830 -1,884 -2,142 -529 -665 -565 -564 -574 11 U.S. government grants (excluding military) .................... -2,775 -3,171 -3,524 -878 -887 -1,247 -762 -903 12 Change in U.S. government assets, other than official re­ serve assets, net (increase, -) ........................................ -3,693 -4,644 -3,783 -766 -925 -1,467 -1,191 -1,320 13 Change in U.S. official reserve assets (increase, -) .......... -375 732 -1,132 2,779 -649 -3,268 502 -1,109 14 Gold........................................................................................... -118 -65 -65 0 -65 0 0 0 15 Special drawing rights (SDRs) ............................................. -121 1,249 -1,136 0 0 1,152 112 261 16 Reserve position in International Monetary Fund............ -294 4,231 -189 -52 27 -34 -99 -294 17 Foreign currencies................................................................... 158 -4,683 257 2,831 -611 -2,082 489 -554 18 Change in U.S. private assets abroad (increase, -)3 .......... -31,725 -57,279 -56,858 -27,228 -11,918 -7,976 -25,023 -17,767 19 Bank-reported claims ............................................................. -11,427 -33,631 -25,868 -16,997 -7,213 -274 -21,051 -12,477 20 Nonbank-reported claims....................................................... -1,940 -3,853 -2,029 -932 410 -1,474 147 n.a. 21 U.S. purchase of foreign securities, net ............................ -5,460 -3,450 -4,643 -2,143 -986 -765 -1,246 -805 22 U.S. direct investments abroad, net3.................................. -12,898 -16,345 -24,318 -7,156 -4,129 -5,463 -2,873 -4,485 23 Change in foreign official assets in the United States (increase, +) ....................................................................... 36,574 33,292 -14,270 5,789 -1,221 -7,215 7,775 8,025 24 U.S. Treasury securities......................................................... 30,230 23,523 -22,356 5,024 -5,769 -5,357 4,314 3,769 25 Other U.S. government obligations .................................... 2,308 666 465 335 41 801 250 549 26 Other U.S. government liabilities5...................................... 1,159 2,220 -714 216 -924 181 737 305 27 Other U.S. liabilities reported by U.S. banks .................. 773 5,488 7,219 56 4,881 -3,185 1,652 1,989 28 Other foreign official assets6 ................................................. 2,105 1,395 1,116 158 550 345 822 1,413 29 Change in foreign private assets in the United States (increase, +)3 ..................................................................... 14,167 30,804 51,845 19,152 5,246 14,409 174 2,978 30 U.S. bank-reported liabilities ............................................... 6,719 16,259 32,668 13,185 400 6,355 -4,208 36 31 U.S. nonbanK-reported liabilities ......................................... 473 1,640 1,692 606 1,050 683 1,331 n.a. 32 Foreign private purchases of U.S. Treasury securities, net ..................................................................................... 534 2,197 4,830 1,466 920 3,278 -1,225 -254 33 Foreign purchases of other U.S. securities, net................ 2,713 2,811 2,942 677 313 2,427 1,194 990 34 Foreign direct investments in the United States, net3 ... 3,728 7,896 9,713 3,218 2,563 1,666 3,082 2,206 35 Allocation of SDRs..................................................................... 0 0 1,139 0 0 1,152 0 0 36 Discrepancy ................................................................................. -880 11,354 22,848 -825 11,269 6,975 20,194 4,293 37 Owing to seasonal adjustments............................................. -3,641 2,400 -99 1,460 -4,022 38 Statistical discrepancy in recorded data before seasonal adjustment ....................................................................... -880 11,354 23,848 2,816 8 869 7,074 18,734 8,315 Memo: Changes in official assets 39 U.S. official reserve assets (increase, -) .......................... -375 732 -1,132 2,779 -649 -3,268 502 -1,109 40 Foreign official assets in the United States (increase, + ) ................................................................... 35,416 31,072 -13,556 5,573 -297 -7,396 7,038 7,720 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 1,676 4,955 2,930 4,749 4,380 42 Transfers under military grant programs (excluded from lines 4, 6, and 11 above) ................................................... 204 236 305 88 139 144 155 110 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 basis ranged with or through foreign official agencies. primarily because the IA basis includes imports into the U.S. Virgin Islands, and 6. Consists of investments in U.S. corporate stocks and in debt securities of 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 A53 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1980' 1981 Item 1978' 1979' 1980' July Aug. Sept. Oct. Nov. Dec. Jan. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments .......................................... 143,682 181,860 220,684 18,267 19,086 18,828 19,214 18,715 19,251 18,825 2 GENERAL IMPORTS including merchandis for immediate consump­ tion plus entries into bonded warehouses........................................ 174,759 209,458 245,010 19,139 19,713 19,940 20,347 19,860 21,436 23,194 3 Trade balance .......................................... -31,075 -27,598 -24,326 -872 -626 -1,112 -1,134 -1,145 -2,185 -4,369 Note. The data in this table are reported by the Bureau of Census data on a account” in table 3.10, line 6. On the import side, additions are made for gold, free-alongside-ship (f.a.s.) value basis—that is, value at the port of export. Begin­ ship purchases, imports of electricity from Canada and other transactions; military ning in 1981, foreign trade of the U.S. Virgin Islands is included in the Census payments are excluded and shown separately as indicated above. basis trade data; this adjustment has been made for all data shown in the table. The Census basis data differ from merchandise trade data shown in table 3.10. Source. FT900 “Summary of U.S. Export and Import Merchandise Trade” U.S. International Transactions Summary, for,reasons of coverage and timing. On (U.S. Department of Commerce, Bureau of the Census). the export side, the largest adjustments are: (a) the addition of exports to Canada not covered in Census statistics, and (b) the exclusion of military sales (which are combined with other military transactions and reported separately in the “service 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1980 1981 Type 1978 1979 1980 Aug. Sept. Oct. Nov. Dec. Jan. Feb.P 1 Total1 ........................................................ 18,650 18,956 26,756 22,691 22,994 23,967 25,673 26,756 28,316 29,682 2 Gold stock, including Exchange Stabili­ zation Fund1 .................................... 11,671 11,172 11,160 11,172 11,168 11,163 11,162 11,160 11,159 11,156 3 Special drawing rights2-3 ........................ 1,558 2,724 2,610 4,009 4,007 3,939 3,954 2,610 3,628 3,633 4 Reserve position in International Mone­ tary Fund2 ........................................ 1,047 1,253 2,852 1,564 1,665 1,671 1,822 2,852 2,867 3,110 5 Foreign currencies4-5 .............................. 4,374 3,807 10,134 5,946 6,154 7,194 8,735 10,134 10,662 11,783 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; $1,152 million on Jan. 1, 1980; and $1,093 2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based million on Jan. 1, 1981; plus net transactions in SDRs. on a weighted average of exchange rates for the currencies of member countries. 4. Beginning November 1978, valued at current market exchange rates. From July 1974 through December 1980, 16 currencies were used; from January 5. Includes U.S. government securities held under repurchase agreement against 1981, 5 currencies have been used. The U.S. SDR holdings and reserve position receipt of foreign currencies, if any. 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

A54 International Statistics □ March 1981 3.13 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1980 Asset account 1977 19781 1979 June July' Aug/ Sept.' Oct.r Nov. Dec.P All foreign countries 1 Total, all currencies ............................... 258,897 306,795 364,233 376,722 377,877 386,467 385,884 383,178 389,011 398,207 2 Claims on United States ........................ 11,623 17,340 32,302 29,069 29,085 36,864 29,341 30,476 30,617 28,480 3 Parent bank .......................................... 7,806 12,811 25,929 18,565 17,552 26,711 19,685 21,440 22,254 20,661 4 Other....................................................... 3,817 4,529 6,373 10,504 11,533 10,153 9,656 9,036 8,363 7,819 5 Claims on foreigners................................ 238,848 278,135 317,175 330,171 331,320 332,522 339,188 335,418 340,647 350,795 6 Other branches of parent bank ........ 55,772 70,338 79,661 76,061 75,196 72,558 73,856 72,458 74,043 76,556 7 Banks .................................................... 91,883 103,111 123,413r 132,667'- 134,710 136,617 139,924 138,246 139,929 144,443 8 Public borrowers2 ................................ 14,634 23,737 26,072 25,632 25,474 26,113 26,740 26,548 26,935 27,690 9 Nonbank foreigners ............................ 76,560 80,949 88,029'' 95,811'- 95,940 97,234 98,668 98,166 99,740 102,106 10 Other assets .............................................. 8,425 11,320 14,756 17,482 17,472 17,081 17,355 17,284 17,747 18,932 11 Total payable in U.S. dollars................. 193,764 224,940 267,711 275,232 275,783 283,974 282,171 279,689 284,281 290,818 12 Claims on United States ........................ 11,049 16,382 31,171 27,867 27,720 35,551 28,138 29,059 29,173 27,225 13 Parent bank .......................................... 7,692 12,625 25,632 18,254 17,236 26,390 19,414 21,043 21,853 20,310 14 Other....................................................... 3,357 3,757 5,539 9,613 10,484 9,161 8,724 8,016 7,320 6,915 15 Claims on foreigners................................ 178,896 203,498 229,118 238,213 239,290 239,561 245,588 242,018 246,238 253,330 16 Other branches of parent bank , 44,256 55,408 61,525 58,456 57,813 55,106 56,603 55,230 57,219 58,259 17 Banks .................................................... 70,786 78,686 96,261r 104,982r 106,399 108,109 111,916 109,443 110,799 115,863 18 Public borrowers2 ................................ 12,632 19,567 21,629 21,382 21,233 21,786 22,305 22,578 22,846 23,391 19 Nonbank foreigners ............................ 51,222 49,837 49,703r 53,393'- 53,845 54,560 54,764 54,767 55,374 55,817 3,820 5,060 7,422 9,152 8,773 8,862 8,445 8,612 8,870 10,263 United Kingdom 21 Total, all currencies .............................. 90,933 106,593 130,873 139,066 135,669 136,467 137,447 138,158 140,715 142,781 22 Claims on United States ........................ 4,341 5,370 11,117 9,157 8,366 8,465 8,022 8,216 8,771 7,477 23 Parent bank .......................................... 3,518 4,448 9,338 6,870 5,705 6,023 5,788 5,969 6,552 5,792 24 Other...................................................... 823 922 1,779 2,287 2,661 2,442 2,234 2,247 2,219 1,685 25 Claims on foreigners................................ 84.016 98,137 115,123 124,059 120,914 121,805 123,369 123,854 125,859 129,263 26 Other branches of parent bank ........ 22.017 27,830 34,291 34,824 32,231 31,607 30,858 31,431 32,267 34,538 27 Banks .................................................... 39,899 45,013 51,343 54,855 54,824 55,530 57,066 56,723 57,423 57,658 28 Public borrowers2 ................................ 2,206 4,522 4,919 5,897 5,710 5,865 6,251 6,113 6,405 6,780 29 Nonbank foreigners ............................ 19,895 20,772 24,570 28,483 28,149 28,803 29,194 29,587 29,764 30,287 30 Other assets .............................................. 2,576 3,086 4,633 5,850 6,389 6,197 6,056 6,088 6,085 6,041 31 Total payable in U.S. dollars................. 66,635 75,860 94,287 98,013 93,158 93,720 94,784 95,287 97,246 98,913 32 Claims on United States ........................ 4,100 5,113 10,746 8,790 7,831 7,954 7,656 7,647 8,233 7,098 33 Parent bank .......................................... 3,431 4,386 9,297 6,810 5,629 5,960 5,744 5,817 6,410 5,701 34 Other...................................................... 669 727 1,449 1,980 2,202 1,994 1,912 1,830 1,823 1,397 35 Claims on foreigners................................ 61,408 69,416 81,294 86,404 82,434 82,705 84,355 84,849 86,246 88,967 36 Other branches of parent bank ........ 18,947 22,838 28,928 28,692 26,083 25,565 24,913 25,593 26,710 28,231 37 Banks .................................................... 28,530 31,482 36,760 39,050 38,471 39,070 40,917 40,312 40,542 41,373 38 Public borrowers2 ................................ 1,669 3,317 3,319 4,396 4,280 4,327 4.663 4,551 4,706 4,909 39 Nonbank foreigners ............................ 12,263 11,779 12,287 14,266 13,600 13,743 13,862 14,393 14,288 14,454 40 Other assets .............................................. 1,126 1,331 2,247 2,819 2,893 3,061 2.773 2,791 2,767 2,848 Bahamas and Caymans 41 Total, all currencies .............................. 79,052 91,735 108,977 115,276 120,307 128,515 123,179 119,524 119,367 124,969 42 Claims on United States ........................ 5,782 9,635 19,124 17,682 18,272 25,882 18,305 19,656 18,325 17,813 43 Parent bank .......................................... 3,051 6,429 15,196 10,660 10,524 19,149 11,839 13,837 13,071 12,573 44 Other...................................................... 2,731 3,206 3,928 7,022 7,748 6,733 6,466 5,819 5,254 5,240 45 Claims on foreigners................................ 71,671 79,774 86,718 93,432 98,020 98,496 100,905 95,959 96,800 101,943 46 Other branches of parent bank ........ 11,120 12,904 9,689 12,977 14,362 13,160 14,724 13,093 13,135 13,336 47 Banks .................................................... 27,939 33,677 43,189r 48,092r 50,866 51,845 52,787 49,915 50,646 54,814 48 Public borrowers2 ................................ 9,109 11,514 12,905 11,554 11,627 12,055 12,078 12,441 12,213 12,574 49 Nonbank foreigners ............................ 23,503 21,679 20,935r 20,809r 21,165 21,436 21,316 20,510 20,806 21,219 50 Other assets .............................................. 1,599 2,326 3,135 4,162 4,015 4,137 3,969 3,909 4,242 5,213 51 Total payable in U.S. dollars................. 73,987 85,417 102,368 109,715 114,538 122,667 117,245 113,683 113,572 118,786 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Overseas Branches A55 3.13 Continued 1980 Liability account 1977 19781 1979 June July Aug. Sept.' Oct.' Nov. Dec.P All foreign countries 52 Total, all currencies .............................. 258,897 306,795 364,233 376,722 377,877' 386,467' 385,884 383,178 389,011 398,207 53 To United States....................................... 44,154 58,012' 66,686' 76,187' 83,244' 87,606' 84,068 84,152 86,580 91,017 54 Parent bank ........................................... 24,542 28,654' 24,530' 30,985' 35,423' 37,466' 38,490 37,187 36,957 39,298 5 5 5 6 N Ot 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 . ... . . . . . . . . . . . . . . . . . . . . . . . . 19,613 1 1 2 7 , , 1 1 6 8 9 9 ' ' 2 1 8 3 , , 1 9 8 6 8 8 3 1 2 2 , , 9 2 4 55 7 3 11 6 , , 4 4 1 0 5 6' 3 14 5 , , 7 4 2 1 5 5' 3 1 2 2 , , 9 63 43 5 3 1 4 2 , , 1 8 0 6 5 0 3 1 6 3 , , 2 4 1 1 3 0 3 1 7 4 , , 4 2 4 7 2 7 57 To foreigners ............................................. 206,579 238,912 283,344 284,716 279,604' 284,141' 287,810 285,198 288,225 291,637 58 Other branches of parent bank ........ 53,244 67,496 77,601 72,061 72,067 69,178' 70,689 69,691 71,498 73,864 59 Banks ..................................................... 94,140 97,711 122,849 127,813 122,727' 130,360' 131,022 132,142 132,237 130,408 60 Official institutions .............................. 28,110 31,936 35,664 34,141 33,073 33,080 33,086 30,713 31,073 32,386 61 Nonbank foreigners ............................ 31,085 41,769 47,230 50,701 51,737' 51,523' 53,013 52,652 53,417 54,979 62 Other liabilities ......................................... 8,163 9,871' 14,203' 15,819' 15,029' 14,720' 14,006 13,828 14,206 15,553 63 Total payable in U.S. dollars.................. 198,572 230,810 273,819 282,578 283,090' 291,873' 289,163 287,177 292,425 301,976 64 To United States...................................... 42,881 55,811 64,530 73,527 80,657' 84,698' 81,125 81,255 83,764 88,201 65 Parent bank ........................................... 24,213 27,519 23,403 29,547 33,977 35,906 36,825 35,431 35,243 37,666 6 6 6 7 N Ot 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 .. ... . . . . . . . . . . . . . . . . . . . . . . . . 18,669 1 1 6 1 , , 3 9 7 1 7 5 ' ' 2 1 7 3 , , 3 77 5 1 6 3 1 1 1 , , 9 9 9 85 5 3 11 5 , , 1 5 5 2 5 5' 1 3 4 4 , , 4 3 1 7 9 3' 3 1 1 2 , , 8 4 9 1 0 0 3 1 3 2 , , 2 5 4 81 3 3 1 5 3 , , 4 1 0 1 7 4 3 1 6 3 , , 5 9 7 5 6 9 68 To foreigners ............................................. 151,363 169,927 201,476 200,049 194,359' 198,971' 200,281 198,541 200,814 204,643 69 Other branches of parent bank ........ 43,268 53,396 60,513 56,247 56,206 53,355' 55,146 53,695 55,543 56,852 70 Banks ..................................................... 64,872 63,000 80,691 84,467 78,930' 86,420' 85,387 86,961 86,525 86,482 71 Official institutions .............................. 23,972 26,404 29,048 26,961 26,177 26,165 25,659 23,364 23,798 24,702 72 Nonbank foreigners ............................ 19,251 27,127 31,224 32,374 33,046' 33,031' 34,089 34,521 34,948 36,607 73 Other liabilities ......................................... 4,328 5,072 7,813 9,002 8,074 8,204' 7,757 7,381 7,847 9,132 United Kingdom 74 Total, all currencies ................................ 90,933 106,593 130,873 139,066 135,669 136,467 137,447 138,158 140,715 142,781 75 To United States....................................... 7,753 9,730 20,986 20,012 21,404 20,608 19,343 19,157 20,594 21,739 76 Parent bank ........................................... 1,451 1,887 3,104 2,410 3,275 2,542 2,951 2,712 3,198 4,176 7 7 8 7 N Ot 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 . ... . . . . . . . . . . . . . . . . . . . . . . . . 6,302 4 3 , , 1 6 8 5 9 4 ' ' 1 7 0 , , 6 1 9 8 3 9 1 6 1 , , 1 4 2 7 9 3 1 5 2 , , 5 5 6 6 7 2 1 5 2 , , 9 1 1 5 0 6 1 5 1 , , 3 0 6 31 1 1 5 0 , , 8 6 0 45 0 1 5 1 , , 7 6 3 6 2 4 1 5 1 , , 7 8 1 4 6 7 79 To foreigners ............................................. 80,736 93,202 104,032 112,055 107,739 109,604 112,412 113,539 114,813 115,578 80 Other branches of parent bank ........ 9,376 12,786 12,567 13,767 12,694 13,343 13,706 13,940 13,951 13,933 81 Banks ..................................................... 37,893 39,917 47,620 54,927 51,203 51,452 53,776 56,772 58,127 55,848 82 Official institutions .............................. 18,318 20,963 24,202 22,577 21,088 22,600 22,444 19,807 20,437 21,412 83 Nonbank foreigners ............................ 15,149 19,536 19,643 20,784 22,754 22,209 22,486 23,020 22,298 24,385 84 Other liabilities ......................................... 2,445 3,661 5,855 6,999 6,526 6,255 5,692 5,462 5,308 5,464 85 Total payable in U.S. dollars.................. 67,573 77,030 95,449 100,117 95,314 96,453 96,832 97,055 99,135 102,300 86 To United States...................................... 7,480 9,328 20,552 19,321 20,843 20,007 18,687 18,551 19,978 21,080 87 Parent bank ........................................... 1,416 1,836 3,054 2,315 3,238 2,496 2,892 2,634 3,101 4,078 8 8 9 8 N Ot 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 . ... . . . . . . . . . . . . . . . . . . . . . . . . 6,064 4 3 , , 1 3 0 9 1 1 ' ' 7 9 , , 6 8 5 4 1 7 1 6 0 , , 0 9 5 5 6 0 1 5 2 , , 4 1 8 1 6 9 1 5 1 , , 8 7 0 0 9 2 1 5 0 , , 2 5 5 3 9 6 1 5 0 , , 7 2 1 0 4 3 1 5 1 , , 6 2 1 61 6 1 5 1 , , 6 3 2 7 6 6 90 To foreigners ............................................. 58,977 66,216 72,397 77,322 71,489 73,431 75,422 76,114 76,696 78,512 91 Other branches of parent bank ........ 7,505 9,635 8,446 9,758 8,672 9,128 9,588 9,891 9,770 9,600 92 Banks ..................................................... 25,608 25,287 29,424 35,394 31,352 31,726 32,891 35,495 35,998 35,097 93 Official institutions .............................. 15,482 17,091 20,192 18,300 16,846 18,253 18,046 15,338 15,989 17,024 94 Nonbank foreigners ............................ 10,382 14,203 14,335 13,870 14,619 14,324 14,897 15,390 14,939 16,791 95 Other liabilities ........................................ 1,116 1,486 2,500 3,474 2,982 3,015 2,723 2,390 2,461 2,708 Bahamas and Caymans 96 Total, all currencies .............................. 79,052 91,735 108,977 115,276 120,307' 128,515' 123,179 119,524 119,367 124,969 97 To United States....................................... 32,176 39,431 37,719 48,431 54,217' 58,925' 56,317 56,123 56,860 59,746 98 Parent bank ........................................... 20,956 20,482 15,267 22,748 26,589 29,189 29,355 27,678 26,871 28,353 1 9 0 9 0 N Ot 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 . ... . . . . . . . . . . . . . . . . . . . . . . . . 11,220 1 6 2 , , 0 8 7 7 3 6 1 5 7 , , 2 2 0 4 4 8 2 5 0 , , 2 4 0 8 0 3 2 4 2 , , 8 8 2 0 1 7' 2 7 2 , , 4 2 6 7 0 6' 2 6 0 , , 0 8 7 8 5 7 2 5 2 , , 9 5 4 0 5 0 2 6 3 , , 5 4 1 71 8 2 7 4 , , 1 2 3 5 5 8 101 To foreigners ............................................. 45,292 50,447 68,598 63,935 63,208' 66,630' 63,966 60,593 59,492 61,305 102 Other branches of parent bank ........ 12,816 16,094 20,875 20,102 20,409 18,081 17,079 16,720 15,878 17,040 103 Banks ..................................................... 24,717 23,104 33,631 28,917 27,145' 34,100' 32,185 29,202 28,933 29,901 104 Official institutions .............................. 3,000 4,208 4,866 5,096 5,525 4,119 4,250 4,610 4,368 4,361 105 Nonbank foreigners ............................ 4,759 7,041 9,226 9,820 10,129' 10,330' 10,452 10.061 10,313 10,003 106 Other liabilities ......................................... 1,584 1,857 2,660 2,910 2,882 2,960' 2,896 2,808 3,015 3,918 107 Total payable in U.S. dollars.................. 74,463 87,014 103,460 11,494 116,246' 124,103' 118,576 115,166 115,121 120,789 1. In May 1978 the exemption level for branches required to report was increased, rowers, including corporations that are majority owned by foreign governments, 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

A56 International Statistics □ March 1981 3.14 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1980 1981 Item 1977 1978 1979 July Aug. Sept. Oct. Nov. Dec.P Jan.P 1 Total1............................................................................... 131,097 162,589 149,481' 153,088 154,674 156,899 157,385 163,196 164,312 162,701 By type 2 Liabilities reported by banks in the United States2 18,003 23,290 30,475 29,211 29,449 30,918 28,815 29,601 30,361 26,926 3 U.S. Treasury bills and certificates3 ........................ 47,820 67,671 47,666 47,982 49,811 49,361 50,392 55,104 56,243 56,525 U.S. Treasury bonds and notes 4 Marketable................................................................. 32,164 35,894 37,590 40,546 39,801 40,799 41,463 41,764 41,431 42,318 5 Nonmarketable4 ....................................................... 20,443 20,970 17,387 15,954 15,654 15,254 15,254 15,254 14,654 14,654 6 U.S. securities other than U.S. Treasury securities5 12,667 14,764 16,363' 19,395 19,959 20,567 21,461 21,473 21,623 22,278 By area 7 Western Europe1........................................................... 70,748 93,089 85,602 78,141 78,424 76,942 76.004 80,899 81,593 80,365 8 Canada ........................................................................... 2,334 2,486 1,898 1,907 2,156 1,901 1.736 1,433 1,562 1,174 9 Latin America and Caribbean .................................. 4,649 5,046 6,291 6,308 6,050 6,610 6,008 5,722 5,668 5,456 10 Asia................................................................................. 50,693 58,817 52,793' 63,086 64,287 67,696 69,042 70,025 70,536 70,548 11 Africa ............................................................................. 1,742 2,408 2,412 2,930 3,281 3,232 3,520 3,867 4,128 3,976 12 Other countries6 ........................................................... 931 743 485 716 476 518 1,075 1,250 825 1,182 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 in of foreign countries. 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 1979 1980 Item 1977 1978 Dec. Mar. June Sept. Dec. 1 Banks’ own liabilities ................................................................................... 925 2,363 1,868 2,358 2,693 2,669 3,737 2 Banks’ own claims1....................................................................................... 2,356 3,671 2,419 2,772 2,955 3,112 4,104 3 Deposits..................................................................................................... 941 1,795 994 1,212 1,048 1,126 2,506 4 Other claims............................................................................................... 1,415 1,876 1,425 1,560 1,908 1,985 1,598 5 Claims of banks’ domestic customers2 .................................................... 358 580 1,058 798 595 962 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 A57 3.16 LIABILITIES TO FOREIGNERS Reported by Banks in the United States Payable in U.S. dollars Millions of dollars, end of period 1980 1981 Holder and type of liability 1977 1978 1979 July Aug. Sept. Oct. Nov. Dec. Jan .p 1 All foreigners ............................................................. 126,168 166,877 187,492 188,295 201,402 191,683 195,827 204,882' 205,258 201,917 78,730 117,211 116,497 128,171 118,663 121,240 125,139' 124,751 122,442 3 Demand deposits....................................................... 18,996 19,218 23,325 22,046 22,511 22,474 22,457 22,847 23,377 22,129 4 Time deposits1 ........................................................... 11,521 12,431 13,627 12,995 13,208 13,824 14,157 14,773 15,164 15,657 9,704 16,419 18,700 18,785 18,046 17,222 17,in'- 17,583 14,867 37,376 63,839 62,757 73,667 64,319 67,405 70,401 68,627 69,789 88,147 70,281 71,797 73,231 73,020 74,587 79,743 80,506 79,475 8 U.S. Treasury bills and certificates5 .................... 48,906 68,202 48,573 49,627 51,505 50,731 51,990 56,484 57,595 57,667 9 Other negotiable and readily transferable 17,446 19,359 19,438 19,141 19,778 19,967 20,624 20,079 19,036 2,499 2,350 2,732 2,586 2,511 2,630 2,635 2,832 2,773 11 Nonmonetary international and regional organizations7..................................................... 3,274 2,607 2,356 2,903 2,820 2,549 2,734 2,476 2,342 1,961 906 714 607 501 476 352 383 442 419 13 Demand deposits....................................................... 231 330 260 214 171 141 115 187 146 212 14 Time deposits1........................................................... 139 84 151 93 101 100 95 92 85 71 15 Other2......................................................................... 492 303 299 229 235 143 104 211 137 1,701 1,643 2,296 2,319 2,073 2,382 2,093 1,900 1,542 17 U.S. Treasury bills and certificates ...................... 706 201 102 604 644 316 581 337 254 88 18 Other negotiable and readily transferable instruments6....................................................... 1,499 1,538 1,692 1,675 1,757 1,800 1,756 1,646 1,453 19 Other........................................................................... 1 2 0 0 0 0 0 0 0 20 Official institutions8 ................................................. 65,822 90,706 78,142 77,193 79,260 80,279 79,207 84,706 86,604 83,451 21 Banks’ own liabilities ................................................... 12,129 18,228 17,071 17,591 18,548 16,182 16,897 17,806 15,174 22 Demand deposits....................................................... 3,528 3,390 4,704 4,218 3,898 4,348 3,406 3,553 3,771 3,869 23 Time deposits1........................................................... 1,797 2,550 3,041 2,705 3,006 3,477 3,390 3,623 3,592 3,348 24 Other2......................................................................... 6,189 10,483 10,148 10,688 10,724 9,387 9,721 10,443 7,957 25 Banks’ custody liabilities4 ........................................... 78,577 59,914 60,122 61,669 61,731 63,025 67,808 68,798 68,277 26 U.S. Treasury bills and certificates5 .................... 47,820 67,415 47,666 47,982 49,811 49,361 50,392 55,104 56,243 56,525 27 Other negotiable and readily transferable instruments6....................................................... 10,992 12,196 12,092 11,805 12,307 12,542 12,648 12,501 11,723 28 Other........................................................................... 170 52 48 54 63 90 56 54 30 29 Banks9........................................................................ 42,335 57,495 88,352 90,111 100,788 89,979 95,012 97,759' 96,397 96,293 30 Banks’ own liabilities ................................................... 52,705 83,352 84,629 95,475 84,737 89,653 91,880' 90,439 90,212 31 Unaffiliated foreign banks....................................... 15,329 19,512 21,872 21,808 20,419 22,249 21,478' 21,812 20,423 32 Demand deposits................................................... 10,933 11,257 13,274 12,882 13,427 12,995 13,843 13,714 14,104 12,867 33 Time deposits1 ....................................................... 2,040 1,443 1,680 1,626 1,514 1,412 1,724 1,786 1,811 1,834 34 Other2..................................................................... 2,629 4,558 7,364 6,867 6,012 6,681 5,978' 5,897 5,723 35 Own foreign offices3................................................. 37,376 63,839 62,757 73,667 64,319 67,405 70,401' 68,627 69,789 36 Banks’ custody liabilities4 ........................................... 4,790 5,000 5,482 5,313 5,241 5,359 5,880 5,959 6,081 37 U.S. Treasury bills and certificates ...................... 141 300 422 557 577 361 515 529 623 647 38 Other negotiable and readily transferable instruments6....................................................... 2,425 2,405 2,395 2,435 2,533 2,417 2,883 2,748 2,856 39 Other........................................................................... 2,065 2,173 2,530 2,301 2,347 2,427 2,467 2,588 2,578 40 Other foreigners ....................................................... 14,736 16,070 18,642 18,088 18,533 18,876 18,874 19,941 19,914 20,211 41 Banks’ own liabilities ................................................... 12,990 14,918 14,190 14,604 14,901 15,052 15,979 16,065 16,636 42 Demand deposits....................................................... 4,304 4,242 5,087 4,732 5,014 4,991 5,093 5,393 5,356 5,181 43 Time deposits............................................................. 7,546 8,353 8,755 8,570 8,588 8,836 8,948 9,272 9,676 10,405 44 Other2......................................................................... 394 1,075 888 1,002 1,075 1,011 1,315 1,033 1,050 45 Banks’ custody liabilities4 ........................................... 3,080 3,725 3,898 3,930 3,975 3,822 3,962 3,849 3,575 46 U.S. Treasury bills and certificates ...................... 240 285 382 484 473 693 502 513 474 407 47 Other negotiable and readily transferable instruments6....................................................... 2,531 3,220 3,259 3,226 3,181 3,208 3,337 3,185 3,004 48 Other........................................................................... 264 123 154 231 100 112 112 190 164 49 Memo: Negotiable time certificates of deposit in custody for foreigners .................................... 11,007 10,974 10,500 10,433 10,704 10,799 10,553 10,745 10,108 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 se­ curities, held by or through reporting banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics □ March 1981 3.16 Continued 1980 1981 Area and country 1977 1978 1979 July Aug. Sept. Oct. Nov. Dec. Jan .p 1 126,168 166,877 187,492 188,295 201,402 191,683 195,827 204,882' 205,258 201,917 2Foreign countries.......................................................... 122,893 164,270 185,136 185,392 198,582 189,134 193,093 202,406' 202,916 199,956 3Europe .......................................................................... 60,295 85.169 90.935 83,848 86,077 83,476 83,990 90,741' 90,897 89,545 4 Austria ....................................................................... 318 513 413 432 390 432 460 519 523 553 5 Belgium-Luxembourg.............................................. 2,531 2,550 2.375 3,837 3,673 3,696 3,322 3,696 4,019 4,062 6 Denmark.................................................................... 770 1,946 1.092 534 525 528 493 586 497 420 7 Finland ...................................................................... 323 346 398 433 403 311 307 363 455 264 8 France ........................................................................ 5,269 9,214 10,433 12.178 12,596 12,332 11,654 12,380 12,125 12,141 9 Germany.................................................................... 7,239 17,286 12,935 7,626 9,121 7,854 7,557 9,171 9,969 10,333 10 Greece........................................................................ 603 826 635 567 642 591 643 711' 670 524 11 Italy............................................................................ 6,857 7,739 7,782 7,138 6.530 5,969 6,796 7,308 7,572 6,722 12 Netherlands ............................................................... 2,869 2,402 2,327 2,830 2,491 2,540 2,555 2,796' 2.441 2,568 13 Norway...................................................................... 944 1,271 1,267 1.140 1,040 1,074 1,381 1,444 1,344 899 14 Portugal .................................................................... 273 330 557 398 506 571 491 437 374 370 15 Spain.......................................................................... 619 870 1,259 1.371 1,491 1,321 1,520 1,379 1,500 1,412 16 Sweden ...................................................................... 2,712 3,121 2.005 1.795 1.861 1,826 1,813 1,811 1,737 1,365 17 Switzerland................................................................. 12,343 18,225 17.954 14.359 14.252 13,524 13,695 16,574 16,639 16,565 18 Turkey ........................................................................ 130 157 120 156 147 237 171 257 292 538 19 United Kingdom ...................................................... 14,125 14,265 24,694 22,556 22.925 22,818 23,797 24,443' 22,680 23,885 20 Yugoslavia................................................................. 232 254 266 190 139 169 203 225 681 296 21 Other Western Europe1 .......................................... 1,804 3,440 4,070 6,006 7,002 7,250 6.880 6,161 6,939 6,178 22 U.S.S.R....................................................................... 98 82 S2 36 70 39 33 64 68 46 23 Other Eastern Europe2 .......................................... 236 330 302 267 271 392 220 416 374 405 24 Canada .......................................................................... 4.607 6,969 7,379 9.228 9,187 10,234 9.992 9,871 10,031 9,774 25 Latin America and Caribbean .................................. 23,670 31,677 49.665 49,233 58.282 48,781 52,501 53,318' 53,165 52,956 26 Argentina.................................................................. 1,416 1,484 1,582 1,841 1,880 1,875 1,996 1,996 2,132 1,857 27 Bahamas.................................................................... 3,596 6,752 15,255 13.172 21.179 13,924 17,567 16,803' 16,372 16,116 28 Bermuda..................................................................... 321 428 430 464 559 677 595 555 670 475 29 Brazil.......................................................................... 1,396 1.125 1,005 1.434 1.378 1,168 1,342 1,248 1.216 1,338 30 British West Indies.................................................. 3,998 6,014 11,117 11.957 13,309 11.410 12,040 12,614' 12,761 12,563 31 Chile ........................................................................... 360 398 468 459 475 431 448 456 460 500 32 Colombia .................................................................. 1,221 1,756 2,617 2.954 2.893 2,916 3.037 2,962 3,077 3,096 33 Cuba .......................................................................... 6 13 13 6 7 5 5 6 6 6 34 Ecuador .................................................................... 330 322 425 346 818 381 387 437 371 389 35 Guatemala3 .............................................................. 416 414 373 372 373 365 359 367 428 36 Jamaica3.................................................................... 52 76 137 100 101 85 79 97 112 37 Mexico ....................................................................... 2,876 3,467 4.185 4.268 4.291 4,226 4,575 4,583 4,547 4,597 38 Netherlands Antilles................................................ 196 308 499 332 314 360 393 568 413 598 39 Panama...................................................................... 2,331 2,967 4,483 4.685 4,617 3,894 3,595 4,575 4,718 4,460 40 Peru............................................................................ 287 363 383 350 401 355 380 345 403 401 41 Uruguay ..................................................................... 243 231 202 232 241 199 220 244 254 290 42 Venezuela.................................................................. 2,929 3,821 4,192 4.350 3,692 4,405 3,659 3.667 3,170 3,794 43 Other Latin America and Caribbean .................. 2,167 1,760 2.318 1,874 1.755 2,080 1,811 1,819' 2,132 1,937 44 Asia................................................................................ 30,488 36,492 33.013 38,048 39,880 41,847 40,880 41,999' 42,388 41,665 China 45 Mainland................................................................. 53 67 49 38 37 38 46 62 49 55 46 Taiwan .................................................................. 1,013 502 1.393 1.438 1.552 1.595 1,610 1,636 1,662 1,820 47 Hong Kong................................................................ 1,094 1,256 1.672 2.186 1,994 2,204 2,150 2,410 2,548 2,762 48 India .......................................................................... 961 790 527 494 631 529 485 438 416 437 49 Indonesia .................................................................. 410 449 504 849 649 827 811 715 730 1,170 50 Israel ........................................................................... 559 688 707 488 569 534 530 548 883 525 51 Japan .......................................................................... 14,616 21,927 8.907 12,547 14,059 15,414 15,354 15,720 16,249 17,697 52 Korea ........................................................................ 602 795 993 1.482 1,473 1.994 1,809 1,764 1,528 1,497 53 Philippines ................................................................ 687 644 795 935 778 814 838 803' 919 849 54 Thailand.................................................................... 264 427 277 405 304 517 403 440 464 367 55 Middle-East oil-exporting countries4.................... 8,979 7.534 15.309 15.378 15,801 15,409 14,611 15,214 14,453 12,238 56 Other Asia ................................................................. 1,250 1,414 1,879 1.808 2,033 1.972 2,232 2,250 2,487 2,250 57 Africa ............................................................................. 2,535 2,886 3,239 3,796 4,221 3,902 4,246 4,725 5,187 4,358 58 Egypt........................................................................... 404 404 475 451 350 322 269 374 485 313 59 Morocco.................................................................... 66 32 33 33 47 32 57 38 33 42 60 South Africa.............................................................. 174 168 184 360 404 354 288 332 288 327 61 Zaire........................................................................... 39 43 110 78 38 42 36 34 57 48 62 Oil-exporting countries5.......................................... 1,155 1.525 1.635 2,094 2,685 2,459 2,911 3,211 3,540 2,921 63 Other Africa ............................................................. 698 715 804 779 697 694 685 735 783 707 64 Other countries ............................................................. 1.297 1,076 904 1,239 936 894 1,484 1,752' 1,247 1,657 65 Australia..................................................................... 1,140 838 684 959 692 613 1,190 1,419' 950 1,303 66 All other..................................................................... 158 239 220 281 243 281 294 333 297 354 67 Nonmonetary international and regional organizations ........................................................ 3,274 2,607 2.356 2.903 2,820 2,549 2,734 2,476 2,342 1,961 68 International ............................................................. 2,752 1,485 1,238 1,804 1,736 1,389 1.586 1,366 1,156 913 69 Latin American regional ........................................ 278 808 806 785 800 837 841 801 890 769 70 Other regional6 ........................................................ 245 314 313 314 285 323 307 309 296 279 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 A59 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 1980 1981 Area and country 1977 1978 1979 July Aug. Sept. Oct. Nov. Dec. Jan.P 1Total ............................................................................... 90,206 115,603 133,919 151,218 163,401 161,518 162,658 167,396r 172,557 166,717 2Foreign countries........................................................... 90,163 115,547 133,887 151,187 163,363 161,484 162,618 l#7,363r 172,488 166,672 3Europe ........................................................................... 18,114 24,232 28,429 28,439 29,411 29,722 29,259 32,520' 32,045 30,478 4 Austria ....................................................................... 65 140 284 309 280 264 196 250 236 251 5 Belgium-Luxembourg............................................... 561 1,200 1,339 1,622 1,881 1,954 1,680 1,946 1,621 1,722 6 Denmark..................................................................... 173 254 147 149 164 180 132 165 127 126 7 Finland ....................................................................... 172 305 202 223 215 184 253 248 460 334 8 France ......................................................................... 2,082 3,735 3,322 2,582 3,288 3,232 2,551 3,506' 2,958 2,716 9 Germany..................................................................... 644 845 1,179 1,004 1,131 1,018 987 1,506 948 1,006 10 Greece......................................................................... 206 164 154 279 265 221 278 265 256 264 11 Italy............................................................................. 1,334 1,523 1,631 2,295 2,433 2,560 2,842 3,063' 3,364 3,136 12 Netherlands ............................................................... 338 677 514 492 632 546 557 749 575 642 13 Norway....................................................................... 162 299 276 270 231 248 335 138 227 289 14 Portugal ..................................................................... 175 171 330 346 335 330 341 393 331 305 15 Spain........................................................................... 722 1,120 1,051 1,011 1,139 1,106 1,113 1,111' 993 1,136 16 Sweden ....................................................................... 218 537 542 534 558 716 763 633 783 691 17 Switzerland................................................................. 564 1,283 1,165 1,319 1,581 1,337 1,564 1,932 1,446 1,753 18 Turkey......................................................................... 360 300 149 143 137 144 123 149 145 146 19 United Kingdom ....................................................... 8,964 10,172 13,814 13,175 12,651 13,080 12,950 13,885 14,807 13,027 20 Yugoslavia ................................................................. 311 363 611 648 647 682 684 689 853 866 21 Other Western Europe1........................................... 86 122 175 170 172 245 226 234 179 347 22 U.S.S.R........................................................................ 413 366 290 531 232 241 257 271 281 251 23 Other Eastern Europe2 ........................................... 566 657 1,254 1,336 1,438 1,434 1,427 1,389 1,457 1,469 24 Canada ........................................................................... 3,355 5,152 4,143 4,654 4,775 5,255 4,614 4,542 4,810 4,157 25 Latin America and Caribbean .................................. 45,850 57,567 68,011 78,690 89,253 85,768 87,665 89,263 92,971 90,617 26 Argentina................................................................... 1,478 2,281 4,389 5,234 5,393 5,629 5,859 6,270 5,693 5,656 27 Bahamas..................................................................... 19,858 21,555 18,918 28,710 31,866 30,269 30,275 29,679 29,378 28,233 28 Bermuda..................................................................... 232 184 496 194 256 216 399 260 218 285 29 Brazil........................................................................... 4,629 6,251 7,720 8,989 9,251 9,639 10,135 10,001' 10,477 10,243 30 British West Indies ................................................... 6,481 9,692 9,822 8,637 14,570 11,980 12,630 13,674' 15,702 14,531 31 Chile ........................................................................... 675 970 1,441 1,359 1,487 1,627 1,721 1,730 1,951 1,843 32 Colombia ................................................................... 671 1,012 1,614 1,448 1,490 1,493 1,575 1,582 1,754 1,648 33 Cuba........................................................................... 10 0 4 4 3 6 3 3 3 4 34 Ecuador ..................................................................... 517 705 1,025 1,051 1,136 1,111 1,157 1,157 1,190 1,220 35 Guatemala3 ............................................................... 94 134 153 102 105 112 114 137 114 36 Jamaica3..................................................................... 40 47 31 31 33 35 40 36 33 37 Mexico ....................................................................... 4,909 5,479 9,099 10,660 10,785 11,123 11,745 12,014 12,586 12,634 38 Netherlands Antilles................................................. 224 273 248 760 725 710 799 816 821 835 39 Panama....................................................................... 1,410 3,098 6,031 4,552 4,931 4,461 3,972 4,367 4,974 5,028 40 Peru............................................................................. 962 918 652 647 687 671 719 749 890 912 41 Uruguay ..................................................................... 80 52 105 91 105 100 100 105 137 110 42 Venezuela................................................................... 2,318 3,474 4,669 4,469 4,737 4,879 4,710 5,113 5,438 5,515 43 Other Latin America and Caribbean .................. 1,394 1,490 1,598 1,700 1,697 1,715 1,721 1,591' 1,585 1,775 44 Asia................................................................................. 19,236 25,386 30,652 36,282 36,927 37,620 37,806 37,961' 39,118 38,388 China 45 Mainland................................................................. 10 4 35 68 50 117 126 187 195 225 46 Taiwan ................................................................... 1,719 1,499 1,821 2,224 2,284 2,492 2,332 2,382 2,469 2,410 47 Hong Kong................................................................. 543 1,479 1,804 2,174 2,063 2,099 1,980 2,094' 2,247 2,252 48 India ........................................................................... 53 54 92 97 118 84 103 125 142 110 49 Indonesia ................................................................... 232 143 131 205 245 208 214 248 245 280 50 Israel........................................................................... 584 888 990 950 1,012 918 1,055 1,125' 1,172 1,081 51 Japan ........................................................................... 9,839 12,671 16,946 20,595 21,205 20,663 20,607 20,323' 21,356 21,187 52 Korea ......................................................................... 2,336 2,282 3,798 5,523 5,464 5,574 5,885 5,844' 5,697 5,724 53 Philippines ................................................................. 594 680 737 881 1,019 1,169 1,081 1,122' 989 841 54 Thailand..................................................................... 633 758 935 939 947 947 925 974' 876 814 55 Middle East oil-exporting countries4.................... 1,746 3,125 1,548 1,120 1,040 1,471 1,258 1,538 1,494 1,436 56 Other Asia ................................................................. 947 1,804 1,813 1,506 1,480 1,876 2,240 1,999 2,236 2,027 57Africa ............................................................................. 2,518 2,221 1,797 2,179 1,977 2,029 2,090 1,933 2.377 1,910 58 Egypt........................................................................... 119 107 114 112 135 123 159 165 151 175 59 Morocco..................................................................... 43 82 103 134 180 166 119 146 223 186 60 South Africa............................................................... 1,066 860 445 691 469 535 440 375 370 337 61 Zaire........................................................................... 98 164 144 107 98 101 123 98 94 96 62 Oil-exporting countries5........................................... 510 452 391 378 349 374 469 402 805 410 63 Other........................................................................... 682 556 600 757 746 729 780 747 734 707 64 Other countries ............................................................. 1,090 988 855 943 1,021 1,091 1,185 1,143 1,166 1,122 65 Australia..................................................................... 905 877 673 743 793 879 942 915 859 827 66 All other..................................................................... 186 111 196 200 228 213 243 228 307 295 67Nonmonetary international and regional organizations6 ....................................................... 43 56 32 31 38 34 40 34 70 44 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

A60 International Statistics □ March 1981 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 1980 1981 Type of claim July Aug. Sept. Oct. Nov/ Dec/ Jan.P 1 Total ........................................................................ 90,206 126,851 154,017 187,008 198,663 2 Banks’ own claims on foreigners ........................ 115,603 133,919 151,218 163,401 161,518 162,658 167,396 172,557 166,717 3 Foreign public borrowers...................................... 10,312 15,580 16,659 17,419 18,969 19,046 20,661 20,668 20,645 4 Own foreign offices1............................................... 41,628 47,475 58,520 64,051 61,879 61,613 62,397 64,968 63,757 5 Unaffiliated foreign banks.................................... 40,496 40,969 42,007 47,500 46,008 46,574 49,071 50,204 46,079 6 Deposits ............................................................... 5,428 6,253 6,165 7,250 7,216 7,136 7,579 8,258 7,190 7 Other..................................................................... 35,067 34.716 35,842 40,250 38,792 39,438 41,493 41,947 38,889 8 All other foreigners .............................................. 23,167 29,896 34,032 34,431 34,661 35,425 35,267 36,717 36,236 9 Claims of banks’ domestic customers2 .............. 11,248 20,098 25,490 26,106 10 Deposits................................................................... 480 955 1,081 885 11 Negotiable and readily transferable instruments3 5.414 13,124 15,260 15,574 12 Outstanding collections and other claims4 ........ 6,176 5,353 6,019 9,148 9,648 13 Memo: Customer liability on acceptances ........ 14,969 18,058 23,533 22,821 Dollar deposits in banks abroad, reported by nonbankmg business enterprises in the United States5 ................................................................... 13,162 21,578 25.546' 24,245' 22,057' 22,667' 24,491' 21,177 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 foreign icates of deposit denominated in U.S. dollars issued by banks abroad. For descrip­ branches, agencies, or wholly owned subsidiaries of head office or parent foreign tion of changes in data reported by nenbanks, see July 1979 Bulletin, p. 550. 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 UN AFFILIATED 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 Dec. Sept. Dec. Mar. June Sept. Dec. 1 Total ........................................................................................................ 73,771 87,580 86,261 85,227 92,748 98,892 106,296 By borrower 2 Maturity of 1 year or less1........................................................................... 58,481 68,404 65,251 63.868 71,368 76,096 82,197 3 Foreign public borrowers......................................................................... 4,633 6.142 7,127 6,778 7,089 8,639 9,573 4 All other foreigners ................................................................................. 53,849 62.262 58.125 57,090 64,279 67,458 72,624 5 Maturity of over 1 year1 ............................................................................. 15,289 19.176 21,009 21,359 21,380 22,796 24,099 6 Foreign public borrowers......................................................................... 5,361 7,652 8.114 8,430 8,515 9,592 10,089 7 All other foreigners ................................................................................. 9,928 11.524 12,895 12,929 12,865 13,204 14,010 By area Maturity of 1 year or less1 8 Europe ....................................................................................................... 15,176 16,799 15,254 13,844 17,141 16,880 18,544 9 Canada ....................................................................................................... 2,670 2.471 1,777 1,818 2,013 2,166 2,721 10 Latin America and Caribbean .............................................................. 20,990 25.690 24,974 23,178 24,417 28,007 32,065 11 Asia............................................................................................................. 17,579 21,519 21,673 23,358 25,753 26,892 26,440 12 Africa ......................................................................................................... 1.496 1,401 1,080 1,043 1,320 1,401 1,756 13 Allother2................................................................................................... 569 524 493 627 7 4 751 671 Maturity of over 1 year1 14 Europe ....................................................................................................... 3,142 3,653 4.140 4,248 4,033 4,715 5,095 15 Canada ....................................................................................................... 1,426 1.364 1,317 1,214 1,199 1,188 1,447 16 Latin America and Caribbean .............................................................. 8,464 11,771 12,821 13,397 13,902 14,192 15,017 17 Asia............................................................................................................. 1,407 1.578 1.911 1,728 1,524 2,009 1,862 18 Africa ......................................................................................................... 637 623 652 620 576 567 507 19 All other2................................................................................................... 214 188 169 152 146 126 171 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 A61 3.20 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks' Billions of dollars, end of period 1979 1980 Area or country 1976 1977 19782 Mar. June Sept. Dec. Mar. June Sept. Dec.P 1Total ....................................................................................................... 206.8 240.0 266.2" 263.9" 275.6 293.9 303.8 308.0" 328.2 338.6" 352.1 2 G-10 countries and Switzerland......................................................... 100.3 116.4 124.7" 119.O" 125.3 135.7" 138.4 140.8" 154.3" 158.9 161.7 3 Belgium-Luxembourg....................................................................... 6.1 8.4 9.0 9.4 9.7 10.7 11.1 10.8 13.1 13.5 12.9 4 France ................................................................................................. 10.0 11.0 12.2 11.7 12.7 12.0 11.7" 12.0 14.0" 13.9 14.0 5 Germany............................................................................................. 8.7 9.6 11.3 10.5 10.8 12.8 12.2 11.4 12.7 12.9 11.5 6 Italy..................................................................................................... 5.8 6.5 6.7 5.7 6.1 6.1 6.4 6.2 6.9 7.2 8.2 7 Netherlands ....................................................................................... 2.8 3.5 4.4 3.9 4.0 4.7 4.8 4.3 4.5 4.4 4.4 8 Sweden ............................................................................................... 1.2 1.9 2.1 2.0 2.0 2.3 2.4 2.4 2.7 2.8 2.9 9 Switzerland......................................................................................... 3.0 3.6 5.3 4.5 4.7" 5.0 4.7" 4.3" 3.3" 3.4 4.0 10 United Kingdom ............................................................................... 41.7 46.5 47.3 46.4 50.3 53.7 56.4 57.6 64.4" 66.7 68.5 11 Canada ............................................................................................... 5.1 6.4 6.0 5.9 5.5 6.0 6.3 6.8 7.2 7.9 8.4 12 Japan ................................................................................................... 15.9 18.8 20.6 19.0 19.5 22.3 22.4 25.1" 25.5" 26.1 26.8 13 Other developed countries ................................................................. 15.0 18.6 19.4 18.2 18.2 19.7 19.9 18.8 20.3 20.6 21.2 14 Austria ............................................................................................... 1.2 1.3 1.7 1.7 1.8 2.0 2.0 1.7 1.8 1.8 1.9 15 Denmark............................................................................................. 1.0 1.6 2.0 2.0 1.9 2.0 2.2 2.1 2.2 2.2 2.2 16 Finland ............................................................................................... 1.1 1.2 1.2 1.2 1.1 1.2 1.2 1.1 1.3 1.2 1.4 17 Greece................................................................................................. 1.7 2.2 2.3 2.3 2.2 2.3 2.4 2.4 2.5 2.6 2.8 18 Norway............................................................................................... 1.5 1.9 2.1 2.1 2.1 2.3 2.3 2.4 2.4 2.4 2.6 19 Portugal ............................................................................................. .4 .6 .6 .6 .5 .7 .7 .6 .6 .7 .6 20 Spain................................................................................................... 2.8 3.6 3.5 3.0 3.0 3.3 3.5 3.5 3.9 4.2 4.0 21 Turkey................................................................................................. 1.3 1.5 1.5 1.4 1.4 1.4 1.4 1.4 1.4 1.3 1.5 22 Other Western Europe ................................................................... .7 .9 1.3 1.1 .9 1.5 1.4 1.4 1.6 1.7 1.8 23 South Africa....................................................................................... 2.2 2.4 2.0 1.7 1.8 1.7 1.3 1.1 1.5 1.2 1.1 24 Australia............................................................................................. 1.2 1.4 1.4 1.3 1.4 1.3 1.3 1.2 1.2 1.2 1.3 25 OPEC countries3................................................................................... 12.6 17.6 22.7 22.6 22.7 23.4 22.9 21.8 20.9 21.4 22.8 26 Ecuador ............................................................................................. .7 1.1 1.6 1.5 1.6 1.6 1.7 1.8 1.8 1.9 2.1 27 Venezuela........................................................................................... 4.1 5.5 7.2 7.2 7.6 7.9 8.7 7.9 7.9 8.5 9.1 28 Indonesia ........................................................................................... 2.2 2.2 2.0 1.9 1.9 1.9 1.9 1.9 1.9 1.9 1.8 29 Middle East countries ..................................................................... 4.2 6.9 9.5 9.4 9.0 9.2 8.0 7.8 6.9 6.7 7.0 30 African countries............................................................................... 1.4 1.9 2.5 2.6 2.6 2.8 2.6 2.5 2.5 2.4 2.8 31 Non-OPEC developing countries...................................................... 44.2 48.7 52.6 53.9 55.9 58.8 62.8 63.7 67.4" 72.8 76.9 Latin America 32 Argentina........................................................................................... 1.9 2.9 3.0 3.1 3.5 4.1 5.0 5.5 5.6 7.6 7.9 33 Brazil................................................................................................... 11.1 12.7 14.9 14.9 15.1 15.1 15.2 15.0 15.3 15.8 16.2 34 Chile ................................................................................................... .8 .9 1.6 1.7 1.8 2.2 2.5 2.5 2.7 3.2 3.5 35 Colombia ........................................................................................... 1.3 1.3 1.4 1.5 1.5 1.7 2.2 2.1 2.2 2.4 2.7 36 Mexico ............................................................................................... 11.7 11.9 10.8 10.9 10.7 11.4 12.0 12.1 13.6 14.4 15.9 37 1.8 1.9 1.7 1.6 1.4 1.4 1.5 1.3 1.4 1.5 1.8 38 Other Latin America ....................................................................... 2.8 2.6 3.6 3.5 3.3 3.6 3.7 3.6 3.6 3.9 3.9 Asia China 39 Mainland......................................................................................... .0 .0 .0 .1 .1 .1 .1 .1 .1 .1 .2 40 Taiwan ........................................................................................... 2.4 3.1 2.9 3.1 3.3 3.5 3.4 3.6 3.8" 4.1 4.2 41 India ................................................................................................... .2 .3 .2 .2 .2 .2 .2 .2 .2 .2 .3 42 Israel................................................................................................... 1.0 .9 1.0 1.0 .9 1.0 1.3 .9 1.2 1.1 1.5 43 Korea (South) ................................................................................... 3.1 3.9 3.9 4.2 5.0 5.3 5.5 6.5 7.1 7.3 7.1 44 Malaysia4 ........................................................................................... .5 .7 .6 .6 .7 .7 .9 .8 .9 .9 1.0 45 Philippines ......................................................................................... 2.2 2.5 2.8 3.2 3.7 3.7 4.2 4.4 4.6 4.8 5.0 46 Thailand............................................................................................. .7 1.1 1.2 1.2 1.4 1.6 1.6 1.4 1.5 1.5 1.4 47 Other Asia......................................................................................... .5 .4 .2 .3 .4 .3 .4 .4 .5 .5 .6 Africa 48 Egypt................................................................................................... .4 .3 .4 .5 .7 .6 .6 .7 .7 .7 .8 49 Morocco............................................................................................. .3 .5 .6 .6 .5 .5 .6 .5 .5 .6 .7 50 Zaire................................................................................................... .2 .3 .2 .2 .2 .2 .2 .2 .2 .2 .2 51 Other Africa5..................................................................................... 1.2 .7 1.4 1.4 1.5 1.6 1.7 1.8 1.8 2.0 2.0 52 Eastern Europe..................................................................................... 5.2 6.3 6.9 6.7 6.7 7.2 7.3 7.3 7.2 7.3 7.5 53 U.S.S.R................................................................................................ 1.5 1.6 1.3 1.1 .9 .9 .7 .6 .5 .5 .4 54 Yugoslavia......................................................................................... .8 1.1 1.5 1.6 1.7 1.8 1.8 1.9 2.1 2.1 2.3 55 Other ................................................................................................... 2.9 3.7 4.1 4.0 4.1 4.6 4.8 4.9 4.5" 4.7 4.7 56 Offshore banking centers..................................................................... 24.7 26.1 30.9 33.7 37.0 38.6 40.4 42.6 43.9" 44.1 47.1 57 Bahamas............................................................................................. 10.1 9.9 10.4 12.3 14.4 13.0 13.7 14.0 13.6 12.9 13.3 58 Bermuda............................................................................................. .5 .6 .7 .6 .7 .7 .8 .6 .6 .6 .6 59 Cayman Islands and other British West Indies .......................... 3.8 3.7 7.4 7.1 7.4 9.5 9.4 11.3 9.5 10.0 10.3 60 Netherlands Antilles......................................................................... .6 .7 .8 .8 1.0 1.1 1.2 .9 1.2" 1.3 2.0 61 Panama6............................................................................................. 3.0 3.1 3.0 3.4 3.8 3.4 4.3 4.9 5.6 5.6 6.3 62 Lebanon ............................................................................................. .1 .2 .1 .1 .1 .2 .2 .2 .2 .2 .2 63 Hong Kong......................................................................................... 2.2 3.7 4.2 4.8 4.9 5.5 6.0 5.7 6.9 7.4 8.1 64 Singapore........................................................................................... 4.4 3.7 3.9 4.2 4.2 4.9 4.5 4.7 5.9 5.6 5.9 65 Others7............................................................................................... .0 .5 .5 .4 .4 .4 .4 .4 .4 .4 .3 66 Miscellaneous and unallocated8 ......................................................... 5.0 5.3 9.1 9.5 9.9 10.6 11.7 13.1 14.3 13.7 15.1 1. The banking offices covered by these data are the U.S. offices and foreign the claims of the U.S. offices also include customer claims and foreign currency branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. claims (amounting in June 1978 to $10 billion). Offices not covered include (1) U.S. agencies and branches of foreign banks, and 3. In addition to the Organization of Petroleum Exporting Countries shown (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are ad­ individually, this group includes other members of OPEC (Algeria, Gabon, Iran, justed to exclude the claims on foreign branches held by a U.S. office or another Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) foreign branch of the same banking institution. The data in this table combine as well as Bahrain and Oman (not formally members of OPEC). 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. Beginning with data for June 1978, the claims of the U.S. offices 8. Includes New Zealand, Liberia, and international and regional organizations. Digitized for Fin RthAisS taEblRe include only banks’ own claims payable in dollars. For earlier dates http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics □ March 1981 3.21 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars 1981 Country or area Jan- Jan. July Aug. Sept. Oct. Nov. Dec. Jan.P Holdings (end of period)1 1 Estimated total2........................................ 51,344 57,416 54,884 54,120 55,869 56,553 57,217 57,416 58,482 2 Foreign countries2.................................... 45,915 52,828 50,590 49,992 51,173 52,075 52,867 52,828 53,948 3 Europe2...................................................... 24,824 24,333 25,259 24,643 25,016 24,783 24,708 24,333 25,171 4 Belgium-Luxembourg.......................... 60 77 45 89 91 78 74 77 80 5 Germany2.............................................. 14,056 12,335 13,697 13,097 13,110 12,823 12,758 12,335 12,789 6 Netherlands .......................................... 1,466 1,884 1,547 1,522 1.640 1,658 1,777 1,884 1,954 7 Sweden.................................................. 647 595 650 640 611 607 614 595 555 8 Switzerland2.......................................... 1,868 1,485 1,675 1,675 1,566 1,517 1,489 1,485 1,561 9 United Kingdom .................................. 6,236 7,180 7,074 7,089 7,456 7,538 7,411 7,180 7,435 10 Other Western Europe ...................... 491 777 571 531 542 562 584 111 796 11 Eastern Europe.................................... 0 0 0 0 0 0 0 0 12 Canada ...................................................... 232 449 481 469 480 503 532 449 458 13 Latin America and Caribbean .............. 466 999 690 706 768 768 942 999 998 14 Venezuela.............................................. 103 292 248 261 302 292 292 292 292 15 Other Latin America and Caribbean 200 285 242 240 241 255 278 285 281 16 Netherlands Antilles............................ 163 421 200 205 225 221 372 421 425 17 Asia............................................................ 19,805 26.110 23,575 23,585 24,292 25,331 25,966 26,110 26,335 18 Japan ...................................................... 11,175 9,479 9.614 9,465 9,444 9.503 9,547 9,479 9,527 19 Africa ........................................................ 591 922 592 592 617 685 715 922 973 20 Allother.................................................... -3 14 -6 -5 0 5 4 14 14 21 Nonmonetary international and regional organizations .................................... 5,429 4,588 4,294 4,128 4.696 4,478 4,350 4,588 4,534 22 International ........................................ 5,388 4,548 4,234 4,066 4,632 4,430 4,302 4,548 4,505 23 Latin American regional .................... 37 36 60 60 65 44 44 36 26 Transactions (net purchases, or sales (-) during period) 24 Total2.......................................................... 6,397 6.072 1,066 692 -767 1,752 681 1,066 25 Foreign countries2.................................... 6,099 6,913 1.120 795 -598 1.181 903 792 -39 1,120 26 Official institutions .............................. 1,697 3,841 887 762 -745 998 664 302 -334 887 27 Other foreign2 ...................................... 4,403 3.072 232 33 146 183 240 490 294 232 28 Nonmonetary international and regional organizations .................................... 301 -53 -104 -168 571 238 -53 Memo: Oil-exporting countries 29 Middle East3 ............................................ -1,014 7,672 325 598 140 601 990 561 358 325 30 Africa4........................................................ - 100 330 51 100 0 25 68 30 207 51 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 foreign United Arab Emirates (Trucial States). 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 1981 Assets 1978 1979 1980 Aug. Sept. Oct. Nov. Dec. Jan. Feb.P 1 Deposits........................................................................ 367 429 441 336 460 368 368 411 573 422 Assets held in custody 2 U.S. Treasury securities1 ............................................ 117.126 95,075 104,490 96,504 96,227 98,121 102,786 102,417 104,490 106,389 3 Earmarked gold2.......................................................... 15,463 15,169 14,893 15,025 14,987 14,986 14,968 14,965 14,893 13,835 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 A63 3.23 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1981 1980 1981 Transactions, and area or country 1979 1980 Jan.- Jan. July Aug. Sept. Oct. Nov. Dec. Jan.P U.S. corporate securities Stocks 1 Foreign purchases......................................................... 22.781 40,320 3,419 3.110 3,505 3,569 4,438 4,457 4,345 3,419 2 Foreign sales ................................................................. 21,123 35,044 3,001 2,800 3,301 3,329 3,920 3,588 3,783 3,001 3 Net purchases, or sales (-)........................................ 1,658 5,276 417 310 203 241 519 869 562 417 4 Foreign countries.......................................................... 1,642 5,258 406 308 205 246 524 867 540 406 5 Europe ........................................................................... 217 3,036 296 115 42 -83 300 633 222 296 6 France ......................................................................... 122 479 74 62 30 -33 53 109 57 74 7 Germany..................................................................... -221 184 18 -13 -21 -18 35 121 7 18 8 Netherlands .............................................................. -71 -328 42 -27 -26 -38 -29 -58 -17 42 9 Switzerland................................................................. -519 308 105 -82 -127 -122 83 265 -88 105 10 United Kingdom ...................................................... 964 2,502 177 188 216 153 172 251 299 177 11 Canada ........................................................................... 552 847 26 81 13 -22 -66 263 230 26 12 Latin America and Caribbean .................................. -19 143 63 -25 -32 -83 132 57 -12 63 13 Middle East1 ................................................................. 688 1,206 63 141 183 410 126 -109 177 63 14 Other Asia..................................................................... 211 -4 -24 -5 -22 19 33 18 -68 -24 15 Africa ............................................................................. -14 -1 2 -1 0 2 2 0 -2 2 16 Other countries ............................................................. 7 30 -20 2 21 4 -3 5 -6 -20 17 Nonmonetary international and regional organizations ........................................................ 17 18 12 2 -2 -5 -6 2 22 12 Bonds2 18 Foreign purchases........................................................ 8,803 15,356 1,603 1.695 1,087 645 1,612 1,181 946 1,603 19 Foreign sales ................................................................. 7,608 9,968 817 898 589 481 739 902 826 817 20 Net purchases, or sales (—) ........................................ 1,195 5,387 787 797 498 165 873 278 121 787 21 Foreign countries........................................................... 1,330 5,453 760 769 475 214 918 283 107 760 22 Europe ........................................................................... 626 1,585 214 129 27 -23 284 151 -26 214 23 France......................................................................... 11 143 4 8 6 -2 16 12 12 4 24 Germany..................................................................... 58 213 49 -50 -11 4 30 13 22 49 25 Netherlands ............................................................... -202 -65 6 -26 -7 7 8 -7 17 6 26 Switzerland................................................................. -118 54 22 -16 -9 0 1 8 14 22 27 United Kingdom ....................................................... 814 1,252 124 196 53 -5 235 154 -113 124 28 Canada ........................................................................... 80 135 7 -2 25 12 9 21 -7 7 29 Latin America and Caribbean .................................. 109 185 1 29 32 18 7 11 -5 1 30 Middle East1 ................................................................. 424 3,416 542 600 382 194 594 105 113 542 31 Other Asia..................................................................... 88 117 -1 13 9 14 24 -3 32 -1 32 Africa ............................................................................. 1 5 0 0 0 0 0 0 0 0 33 Other countries ............................................................. 1 10 -4 1 0 -2 0 -1 0 -4 34 Nonmonetary international and regional organizations ......................................................... -134 -65 27 28 23 -49 -45 -4 14 27 Foreign securities 35 Stocks, net purchases, or sales (-).......................... -786 -2.239 36 -76 -201 -558 -335 129 -68 36 36 Foreign purchases.................................................... 4,615 7,870 695 654 605 694 788 927 721 695 37 Foreign sales ............................................................. 5,401 10.108 659 731 805 1.253 1,143 798 788 659 38 Bonds, net purchases, or sales ( - ) ................... -3.855 -835 -235 374 -259 -84 -206 91 274 -235 39 Foreign purchases..................................................... 12.672 17,062 1,142 1.725 1,374 1.231 1,651 1,252 1.786 1,142 40 Foreign sales ............................................................. 16,527 17,898 1.378 1.351 1,634 1,316 1,857 1.161 1,512 1,378 41 Net purchases, or sales (-), of stocks and bonds .. -4,641 -3,074 -200 298 -460 -643 -561 219 206 -200 42 Foreign countries........................................................... -3,891 -3,950 -259 -32 -384 -680 -576 196 -177 -259 43 Europe ........................................................................... -1,646 -958 -116 10 -176 -110 113 -30 -86 -116 44 Canada ........................................................................... -2,601 -2,094 -4 -29 42 -344 -651 327 24 -4 45 Latin America and Caribbean .................................. 347 126 51 34 -14 7 -35 -24 -11 51 46 Asia................................................................................. 44 -1,131 -175 -55 -313 -223 -16 -73 -84 -175 47 Africa ............................................................................. -61 24 -10 1 0 -4 29 -1 -13 -10 48 Other countries ............................................................. 25 81 -4 7 76 -6 -16 -3 -7 -4 49 Nonmonetary international and regional organizations ......................................................... -750 876 59 330 -76 37 15 23 383 59 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

A64 International Statistics □ March 1981 3.24 LIABILITIES TO UN AFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1979 1980 Type, and area or country 1978 1979 June Sept. Dec. Mar. June. Sept. 1Total............................................................................................................. 14,879 16,950 15,519 15,700 16,950 17,373 18,472 18,406 2Payable in dollars....................................................................................... 11,516 13,932 12,631 12,692 13,932 14,437 15,105 15,203 3Payable in foreign currencies2 ................................................................ 3,363 3,018 2,888 3,008 3,018 2,936 3,366 3,203 By type 4Financial liabilities..................................................................................... 6,305 7,311 6,049 6,131 7,311 7,802 8,307 8,125 5 Payable in dollars................................................................................... 3,841 5,101 3,876 3,877 5,101 5,618 5,751 5,707 6 Payable in foreign currencies ............................................................... 2,464 2,210 2,173 2,254 2,210 2,184 2,556 2,418 7Commercial liabilities ............................................................................... 8,574 9,639 9,470 9,568 9,639 9,571 10,165 10,281 8 Trade payables ....................................................................................... 4,008 4,380 4,302 4,051 4,380 4,138 4,265 4,370 9 Advance receipts and other liabilities................................................ 4,566 5,258 5,168 5,518 5,258 5,433 5,899 5,911 10 Payable in dollars................................................................................... 7,675 8,830 8,755 8,815 8,830 8,819 9,355 9,496 11 Payable in foreign currencies............................................................... 899 808 715 754 808 752 810 785 By area or country Financial liabilities 12 Europe..................................................................................................... 3,903 4,579 3,582 3,713 4,579 4,813 5,392 5,214 13 Belgium-Luxembourg ....................................................................... 289 345 355 317 345 360 422 404 14 France ................................................................................................... 167 168 134 126 168 188 341 327 15 Germany ............................................................................................. 366 497 283 381 497 520 657 557 16 Netherlands......................................................................................... 390 834 401 542 834 801 783 766 17 Switzerland ......................................................................................... 248 168 235 190 168 172 238 224 18 United Kingdom................................................................................. 2,110 2,372 1,955 1,957 2,372 2,568 2,783 2,761 19 Canada ..................................................................................................... 244 445 290 304 445 383 482 456 20 Latin America and Caribbean ............................................................. 1,357 1,483 1,395 1,347 1,483 1,764 1,633 1,718 21 Bahamas............................................................................................... 478 375 477 390 375 459 434 412 22 Bermuda ............................................................................................. 4 81 2 2 81 83 2 1 23 Brazil ................................................................................................... 10 18 19 14 18 22 25 20 24 British West Indies............................................................................. 194 514 189 198 514 694 700 685 25 Mexico................................................................................................. 102 121 131 122 121 101 101 108 26 Venezuela ........................................................................................... 49 72 68 71 72 70 72 74 27 791 795 772 757 795 821 775 705 28 Japan ................................................................................................... 714 723 706 700 723 737 680 615 29 Middle East oil-exporting countries3 ............................................ 32 31 25 19 31 26 31 37 30 Africa....................................................................................................... 5 4 6 5 4 11 10 11 31 Oil-exporting countries4 ................................................................... 2 1 2 1 1 1 1 1 32 Allother5................................................................................................. 5 4 5 5 4 10 15 21 Commercial liabilities 33 Europe..................................................................................................... 3,033 3,621 3,303 3,393 3,621 3,682 4,008 4,010 34 Belgium-Luxembourg ....................................................................... 75 137 81 103 137 117 132 107 35 France ................................................................................................... 321 467 353 394 467 503 485 486 36 Germany ............................................................................................. 529 534 471 539 534 533 714 670 37 Netherlands......................................................................................... 246 227 230 206 227 288 245 272 38 Switzerland ......................................................................................... 302 310 439 348 310 382 462 451 39 United Kingdom................................................................................. 824 1,073 997 1,015 1,073 994 1,120 1,024 40 Canada ..................................................................................................... 667 868 663 717 8(38 720 591 590 41 Latin America......................................................................................... 997 1,323 1,335 1,401 1,323 1,253 1,271 1,361 42 Bahamas............................................................................................... 25 69 65 89 69 4 26 8 43 Bermuda ............................................................................................. 97 32 82 48 32 47 107 114 44 Brazil ................................................................................................... 74 203 165 186 203 228 151 156 45 British West Indies............................................................................. 53 21 121 21 21 20 37 12 46 Mexico................................................................................................. 106 257 216 270 257 235 272 324 47 Venezuela ........................................................................................... 303 301 323 359 301 211 210 293 48 2,932 2,865 3,034 2,996 2,865 2,912 3,053 2,889 49 Japan ................................................................................................... 448 488 516 517 488 578 411 492 50 Middle East oil-exporting countries3 ............................................ 1,523 1,017 1,225 1,070 1,017 901 1,019 937 51 Africa....................................................................................................... 743 728 891 775 728 742 875 1,036 52 Oil-exporting countries4 ................................................................... 312 384 410 370 384 382 498 633 53 Allother5................................................................................................. 203 233 243 287 233 263 367 396 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 A65 3.25 CLAIMS ON UN AFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1979 1980 Type, and area or country 1978 1979 June Sept. Dec. Mar. June Sept. 1Total............................................................................................................. 27,859 30,859 30,296 30,949 30,859 31,953 31,850 31,374 2Payable in dollars....................................................................................... 24,861 27,703 27,394 28,280 27,703 28,956 28,808 28,240 3Payable in foreign currencies2 ................................................................. 2,998 3,156 2,902 2,668 3,156 2,997 3,042 3,134 By type 4Financial claims ......................................................................................... 16,522 18,107 19,303 19,176 18,107 19,237 18,499 18,164 5 Deposits................................................................................................... 11,062 12,461 13,643 13,730 12,461 13,563 12,658 12,099 6 Payable in dollars............................................................................... 10,000 11,572 12,706 12,830 11,572 12,601 11,778 11,018 7 Payable in foreign currencies ........................................................... 1,061 889 938 901 889 963 879 1,081 8 Other financial claims ........................................................................... 5,461 5,646 5,660 5,446 5,646 5,673 5,841 6,065 9 Payable in dollars............................................................................... 3,855 3,792 4,059 4,030 3,792 4,046 4,103 4,395 10 Payable in foreign currencies........................................................... 1,606 1,854 1,601 1,416 1,854 1,627 1,737 1,670 11 Commercial claims..................................................................................... 11,337 12,752 10,993 11,773 12,752 12,716 13,352 13,210 12 Trade receivables................................................................................... 10,778 12,064 10,364 11,061 12,064 12,071 12,656 12,521 13 Advance payments and other claims ................................................ 559 688 628 712 688 645 695 689 14 Payable in dollars................................................................................... 11,006 12,339 10,629 11,421 12,339 12,309 12,926 12,827 15 Payable in foreign currencies............................................................... 331 413 363 352 413 407 425 383 By area or country Financial claims 16 Europe..................................................................................................... 5,218 6,115 5,638 6,562 6,115 5,826 5,835 5,576 17 Belgium-Luxembourg ....................................................................... 48 32 54 33 32 19 23 14 18 France ................................................................................................... 178 177 183 191 177 290 307 381 19 Germany ............................................................................................. 510 407 361 393 407 298 190 168 20 Netherlands......................................................................................... 103 53 62 51 53 39 37 30 21 Switzerland ......................................................................................... 98 73 81 85 73 89 96 41 22 United Kingdom................................................................................. 4,023 5,053 4,650 5,522 5,053 4,778 4,855 4,546 23 Canada ..................................................................................................... 4,482 4,812 5,146 4,767 4,812 4,882 4,778 4,798 24 Latin America and Caribbean ............................................................. 5,665 6,190 7,433 6,682 6,190 7,512 6,807 6,671 25 Bahamas............................................................................................... 2,959 2,680 3,637 3,284 2,680 3,448 2,962 2,757 26 Bermuda ............................................................................................. 80 30 57 31 30 34 25 65 27 Brazil ................................................................................................... 151 163 141 133 163 128 120 116 28 British West Indies............................................................................. 1,288 2,001 2,407 1,838 2,001 2,591 2,393 2,283 29 Mexico................................................................................................. 163 158 159 156 158 169 178 192 30 Venezuela ........................................................................................... 150 133 151 139 133 132 139 128 31 922 693 800 818 693 708 758 792 32 Japan ................................................................................................... 307 190 217 222 190 226 253 269 33 Middle East oil-exporting countries3 ............................................ 18 16 17 21 16 18 16 20 34 Africa....................................................................................................... 181 253 227 277 253 265 256 260 35 Oil-exporting countries4 ................................................................... 10 49 23 41 49 40 35 29 36 All other5................................................................................................. 55 44 61 69 44 43 65 68 Commercial claims 37 Europe..................................................................................................... 3,985 4,895 3,833 4,127 4,895 4,751 4,820 4,610 38 Belgium-Luxembourg ....................................................................... 144 203 170 179 203 208 255 227 39 France ................................................................................................... 609 727 470 518 727 703 662 698 40 Germany ............................................................................................. 399 584 421 448 584 515 504 561 41 Netherlands......................................................................................... 267 298 307 262 298 347 297 287 42 Switzerland ......................................................................................... 198 269 232 224 269 349 429 332 43 United Kingdom................................................................................. 827 905 731 818 905 924 908 979 44 Canada ..................................................................................................... 1,096 843 1,106 1,164 843 862 895 926 45 Latin America and Caribbean ............................................................. 2,547 2,853 2,406 2,595 2,853 2,990 3,281 3,351 46 Bahamas............................................................................................... 109 21 98 16 21 19 19 53 47 Bermuda ............................................................................................. 215 197 118 154 197 135 133 81 48 Brazil ................................................................................................... 629 647 503 568 647 656 697 709 49 British West Indies............................................................................. 9 16 25 13 16 11 9 17 50 Mexico................................................................................................. 506 698 584 648 698 833 921 973 51 Venezuela ........................................................................................... 292 342 296 346 342 349 394 384 52 3,082 3,365 2,967 3,116 3,365 3,370 3,540 3,361 53 Japan ................................................................................................... 976 1,127 1,005 1,128 1,127 1,209 1,130 1,065 54 Middle East oil-exporting countries3 ............................................ 717 766 685 701 766 718 829 829 55 Africa....................................................................................................... 447 556 487 549 556 518 567 699 56 Oil-exporting countries4 ................................................................... 136 133 139 140 133 114 115 135 57 Allother5................................................................................................. 179 240 194 220 240 225 249 264 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 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

A66 International Statistics □ March 1981 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on Feb. 28, 1981 Rate on Feb. 28, 1981 Rate on Feb. 28, 1981 Country Country Country Per­ Month Per­ Month Per­ Month cent effective cent effective cent effective Argentina 169.80 Feb. 1981 France1 .......................... 12.0 Feb. 1981 Sweden .............. 12.0 Jan. 1981 Austria .. 6.75 Mar. 1980 Germany, Fed. Rep. of 7.5 May 1980 Switzerland........ 4.0 Feb. 1981 Belgium .. 12.0 July 1980 Italy............................... 16.5 Sept. 1980 United Kingdom 14.0 Nov. 1980 Brazil 40.0 June 1980 Japan .............................. 7.25 Nov. 1980 Venezuela.......... 10.0 July 1980 Canada .. 17.08 Feb. 1981 Netherlands .................. 8.0 Oct. 1980 Denmark . 11.00 Oct. 1980 Norway .......................... 9.0 Nov. 1979 1. As from February 1981, the rate at which the bank of France discounts Treasury government securities for commercial banks or brokers. For countries with bills for seven to ten days. more than one rate applicable to such discounts or advances, the rate Note. Rates shown are mainly those at which the central bank either shown is the one at which it is understood the central bank transacts the discounts or makes advances against eligible commercial paper and/or largest proportion of its credit operations. 3.27 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1980 1981 Country, or type 1978 1979 1980 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 Eurodollars................................................ 8.74 11.96 14.00 10.82 12.07 13.55 16.46 19.47 18.07 17.18 2 United Kingdom ...................................... 9.18 13.60 16.59 16.45 15.89 15.87 15.84 14.64 14.20 13.12 3 Canada ...................................................... 8.52 11.91 13.12 10.47 10.73 11.71 12.96 16.83 16.98 17.28 4 Germany.................................................... 3.67 6.64 9.45 8.93 8.90 8.99 9.37 10.11 9.41 10.74 5 Switzerland................................................ 0.74 2.04 5.79 5.52 5.57 5.40 5.53 6.61 5.68 7.09 6 Netherlands .............................................. 6.53 9.33 10.60 9.97 10.31 9.63 9.59 9.69 9.36 9.78 7 France ........................................................ 8.10 9.44 12.18 11.20 11.81 11.69 11.26 11.52 11.38 11.87 8 Italy ............................................................ 11.40 11.85 17.50 17.30 17.50 18.16 17.51 17.47 17.34 17.50 9 Belgium...................................................... 7.14 10.48 14.06 12.52 12.35 12.24 12.40 12.75 12.41 12.52 10 Japan .......................................................... 4.75 6.10 11.45 12.04 11.46 10.98 9.74 9.60 9.00 8.52 Note. Rates are for 3-month interbank loans except for the following: francs and over; and Japan, Gensaki rate. Canada, finance company paper; Belgium, time deposits of 20 million 3.28 FOREIGN EXCHANGE RATES Cents per unit of foreign currency 1980 1981 Country/currency 1978 1979 1980 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 Australia/dollar ........................ 114.41 111.77 114.00 115.77 117.04 117.43 116.75 116.86 118.19 116.26 2 Austria/schilling........................ 6.8958 7.4799 7.7349 7.8840 7.8916 7.6714 7.3433 7.1549 7.0297 6.6033 3 Belgium/franc............................ 3.1809 3.4098 3.4247 3.4883 3.4844 3.3875 3.2457 3.1543 3.0962 2.8972 4 Canada/dollar............................ 87.729 85.386 85.530 86.263 85.861 85.538 84.286 83.560 83.974 83.442 5 Denmark/krone ........................ 18.156 19.010 17.766 18.070 18.068 17.639 16.962 16.573 16.181 15.152 6 Finland/markka ........................ 24.337 27.732 26.892 27.353 27.428 27.122 26.452 25.903 25.752 24.656 7 France/franc.............................. 22.218 23.504 23.694 24.106 24.056 23.489 22.515 21.925 21.539 20.142 8 Germany/deutsche mark ........ 49.867 54.561 55.089 55.867 55.883 54.280 52.113 50.769 49.771 46.757 9 India/rupee................................ 12.207 12.265 12.686 12.849 12.903 12.932 12.868 12.608 12.567 12.164 10 Ireland/pound .......................... 191.84 204.65 205.77 210.62 210.34 203.88 194.59 189.01 185.54 173.31 11 Italy/lira .................................... .11782 .12035 .11694 .11801 .11742 .11441 .11000 .10704 .10478 .09807 12 Japan/yen .................................. .47981 .45834 .44311 .44666 .46644 .47777 .46928 .47747 .49419 .48615 13 Malaysia/ringgit........................ 43.210 45.720 45.967 46.484 47.127 46.902 46.187 45.406 44.994 44.196 14 Mexico/peso.............................. 4.3896 4.3826 4.3535 4.3389 4.3443 4.3324 4.3166 4.3071 4.2792 4.2544 15 Netherlands/guilder.................. 46.284 49.843 50.369 51.305 51.398 50.052 48.102 46.730 45.810 42.870 16 New Zealand/dollar ................ 103.64 102.23 97.337 97.738 98.309 98.069 96.770 95.404 96.137 93.414 17 Norway/krone .......................... 19.079 19.747 20.261 20.555 20.676 20.421 19.938 19.370 19.087 18.485 18 Portugal/escudo........................ 2.2782 2.0437 1.9980 2.0163 2.0096 1.9756 1.9178 1.8773 1.8591 1.7722 19 South Africa/rand .................... 115.01 118.72 128.54 131.55 132.73 133.13 133.20 132.83 133.69 129.27 20 Spain/peseta.............................. 1.3073 1.4896 1.3958 1.3810 1.3639 1.3423 1.3085 1.2653 1.2409 1.1686 21 Sri Lanka/rupee........................ 6.3834 6.4226 6.1947 6.2980 6.3196 5.9707 5.8139 5.7379 5.9525 5.5975 22 Sweden/krona .......................... 22.139 23.323 23.647 23.953 24.072 23.845 23.240 22.722 22.490 21.734 23 Switzerland/franc...................... 56.283 60.121 59.697 60.527 61.012 60.185 57.942 56.022 54.907 51.502 24 United Kingdom/pound .......... 191.84 212.24 232.58 237.04 240.12 241.64 239.41 234.59 240.29 229.41 Memo: 25 United States/dollar1 .............. 92.39 88.09 87.39 86.09 85.50 86.59 89.31 90.99 91.38 96.02 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

A67 Guide to Tabular Presentation, Statistical Releases, and Special Tables Guide to Tabular Presentation Symbols and Abbreviations c Corrected 0 Calculated to be zero e Estimated n.a. Not available p Preliminary n.e.c. Not elsewhere classified r Revised (Notation appears on column heading IPCs Individuals, partnerships, and corporations when more than half of figures in that column REITs Real estate investment trusts are changed.) RPs Repurchase agreements * Amounts insignificant in terms of the last decimal SMSAs Standard metropolitan statistical areas place shown in the table (for example, less than Cell not applicable 500,000 when the smallest unit given is millions) General Information Minus signs are used to indicate (1) a decrease, (2) a negative gations of the Treasury. “State and local government” also figure, or (3) an outflow. includes municipalities, special districts, and other political “U.S. government securities” may include guaranteed is­ subdivisions. sues of U.S. government agencies (the flow of funds figures In some of the tables details do not add to totals because of also include not fully guaranteed issues) as well as direct obli­ rounding. Statistical Releases List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases .................................................................... December 1980 A80 Special Tables Published Irregularly, with Latest Bulletin Reference Commercial bank assets and liabilities, call dates, December 31, 1978, to March 31, 1980 October 1980 A71 Commercial bank assets and liabilities, June 30, 1980............................................................... December 1980 A68 Commercial bank assets and liabilities, September 30, 1980..................................................... February 1981 A68 Assets and liabilities of U.S. branches and agencies of foreign banks, June 30, 1980 .................................................................................. March 1981 A68 Special tables begin on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Special Tables □ March 1981 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, June 30, 1980* Millions of dollars All states2 New York Cali­ Other states2 Item T fo o r t n a i l a 3 B I r l a li n n c o h is es Total Branches Agencies Branches Agencies Branches Agencies 1 Total assets4......................................................................... 122,529 74,767 47,763 64,774 20,671 25,782 5,941 4,028 1,333 2 Cash and due from depository institutions.................... 17,340 14,342 2,999 13,575 2,756 219 671 96 24 3 Currency and coin (U.S. and foreign) ...................... 16 13 3 10 1 2 1 2 0 4 Balances with Federal Reserve Banks ...................... 22 17 5 14 5 0 3 0 0 5 Balances with other central banks .............................. 1 1 0 1 0 0 0 0 0 6 Demand balances with commercial banks in United States ......................................................................... 8,611 6,604 2,008 6,418 1,916 87 141 44 5 7 All other balances with depository institutions in United States and with banks in foreign countries................................................................... 7,894 7,038 855 6,465 723 113 524 49 19 8 Time and savings, balances with commercial banks in United States................................................... 3,700 3,401 300 3,246 243 45 109 46 11 9 Balances with other depository institutions in United States....................................................... 431 431 0 430 0 0 0 0 0 10 Balances with banks in foreign countries .............. 3,763 3,207 556 2,789 480 67 415 3 9 11 Foreign branches of U.S. banks.......................... 813 624 189 544 171 17 80 0 1 12 Other banks in foreign countries ........................ 2,949 2,583 366 2,245 308 50 335 3 8 13 Cash items in process of collection ............................ 796 669 128 666 111 17 1 1 0 14 Total securities, loans, and lease financing receivables . 75,602 49,778 25,824 42,428 12,438 112,172 4,873 2,465 1,226 15 Total securities, book value ............................................. 2,929 1,667 1,263 1,441 1,136 127 123 102 0 16 U.S. Treasury ................................................................. 1,918 1,018 900 895 840 60 25 98 0 17 Obligations of other U.S. government agencies and corporations............................................................. 299 80 220 77 201 20 0 1 0 18 Obligations of states and political subdivisions in United States........................................................... 159 124 36 93 1 35 28 3 0 19 Other bonds, notes, debentures and corporate stock 553 445 108 376 95 13 69 0 0 20 Federal funds sold and securities purchased under agreements to resell ................................................... 5,640 3,013 2,626 2,876 2,279 350 110 22 4 By holder 21 Commercial banks in United States .......................... 5,368 2,795 2,574 2,710 2,237 339 57 22 4 22 Others............................................................................... 271 219 53 166 42 10 53 0 0 By type 23 One-day maturity or continuing contract .................. 5,536 2,975 2,561 2,854 2,218 346 94 22 4 24 Securities purchased under agreements to resell .. 132 60 72 19 52 20 41 0 0 25 Other............................................................................. 5,404 2,915 2,489 2,834 2,166 326 53 22 4 26 Other securities purchased under agreements to resell ......................................................................... 104 38 66 22 62 4 16 0 0 27 Total loans, gross ............................................................... 72,760 48,161 24,599 41,035 11,315 12,070 4,751 2,364 1,226 28 Less: Unearned income on loans.................................... 90 52 38 50 13 25 1 1 0 29 Equals: Loans, net ........................................................... 72,670 48,109 24,561 40,985 11,302 12,045 4,750 2,363 1,226 Total loans, gross, by category 30 Real estate loans................................................................. 1,704 243 1,460 120 651 693 19 95 126 31 Loans to financial institutions........................................... 23,933 18,764 5,169 17,273 2,794 2,323 1,430 61 51 32 Commercial banks in United States .......................... 11,651 9,278 2,373 8,470 1,074 1,287 755 53 12 33 U.S. branches and agencies of other foreign banks 10,714 8,560 2,155 7,809 903 1,252 699 52 0 34 Other commercial banks ......................................... 937 718 219 661 172 35 56 1 12 35 Banks in foreign countries............................................. 11,285 8,791 2,494 8,274 1,479 980 515 2 35 36 Foreign branches of U.S. banks.............................. 1,456 1,086 371 1,006 277 94 77 2 0 37 Other............................................................................. 9,829 7,705 2,123 7,267 1,202 m 438 0 35 38 Other financial institutions .......................................... 997 695 302 529 241 56 160 6 5 39 Loans for purchasing or carrying securities .................. 735 362 372 337 354 19 20 5 0 40 Commercial and industrial loans .................................... 38,304 22,901 15,403 17,679 6,297 8,1.14 3,076 2,143 994 41 U.S. addressees (domicile) .......................................... 23,863 14,102 9,761 10,053 3,391 5,445 2,738 1,310 927 42 Non-U.S. addressees (domicile).................................. 14,440 8,799 5,642 7,626 2,906 2,669 339 834 67 43 Loans to individuals for household, family, and other personal expenditures................................................. 101 67 34 51 17 17 4 11 0 44 All other loans..................................................................... 7,985 5,824 2,161 5,575 1,202 m 202 47 55 45 Loans to foreign governments and official institutions ............................................................... 6,665 4,725 1,940 4,516 1,021 864 189 19 55 46 Other................................................................................. 1,320 1,099 221 1,058 181 40 13 28 0 47 Lease financing receivables............................................... 3 2 1 2 0 1 0 0 0 48 All other assets ................................................................... 23,947 7,634 16,313 5,895 3,197 13,041 288 1,446 80 49 Customers’ liability on acceptances outstanding ----- 7,617 3,711 3,906 3,618 2,728 1,151 61 32 27 50 U.S. addressees (domicile) ....................................... 4,000 2,092 1,908 2,044 899 988 37 11 21 51 Non-U.S. addressees (domicile).............................. 3,616 1,618 1,998 1,573 1,829 163 24 21 6 52 Net due from related banking institutions5 .............. 12,777 1,527 11,250 160 0 11,229 0 1,366 21 53 Other................................................................................. 3,553 2,396 1,157 2,117 469 661 227 48 31 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U. S. Branches and Agencies A69 4.30 Continued Item Total A B l r l a s n t c a h te e s s 2 Agencies Branc N he e s w Y A or g k encies T f C o o r a t n l a i i l a ­ 3 B I r l a li n n c o h is es Bran O ch th e e s r st A at g e e s n 2 cies 54 Total liabilities4 .................................................................. 122,529 74,767 47,763 64,774 20,671 25,782 5,941 4,028 1,333 55 Total deposits and credit balances .................................. 34,069 29,632 4.437 26,675 3,634 760 479 2,472 48 56 Individuals, partnerships, and corporations .............. 16,918 16,171 747 13,519 305 413 287 2,360 34 57 U.S. addressees (domicile) ...................................... 14,252 14.049 203 11,511 130 66 215 2,317 12 58 Non-U.S. addressees (domicile).............................. 2,666 2,122 544 2.008 175 348 71 43 21 59 U.S. government, states, and political subdivisions in United States...................................................... 103 103 0 29 0 0 3 71 0 60 All other.......................................................................... 17,048 13,359 3,690 13,128 3,329 346 190 41 14 61 Foreign governments and official institutions .... 2,927 2,672 255 2,550 91 165 112 10 0 62 Commercial banks in United States ...................... 5,743 4.638 1,105 4,631 1,095 1 3 4 9 63 U.S. branches and agencies of other foreign banks ................................................................ 841 832 9 831 8 0 0 0 1 64 Other commercial banks in United States ........ 4,902 3,806 1,096 3,799 1,087 1 3 4 8 65 Banks in foreign countries........................................ 2,707 2.318 389 2,266 267 119 40 12 3 66 Foreign branches of U.S. banks.......................... 48 39 8 37 0 8 0 2 0 67 Other banks in foreign countries ........................ 2,660 2,279 381 2,229 267 111 40 10 3 68 Certified and officers’ checks, travelers checks, and letters of credit sold for cash.................... 5,671 3.731 1,940 3,681 1,877 61 35 15 2 69 Demand deposits................................................................ 140915 8.910 2,005 8,655 1,877 116 133 120 15 70 Individuals, partnerships, and corporations .............. 1,526 1.479 47 1,280 0 38 93 104 11 71 U.S. addressees (domicile) ...................................... 981 968 12 798 0 7 72 96 7 72 Non-U.S. addressees (domicile).............................. 545 511 34 482 0 31 21 8 4 73 U.S. government, states, and political subdivisions in United States...................................................... 14 14 0 13 0 0 0 0 0 74 All other.......................................................................... 9,375 7.417 1,958 7,361 1,877 78 40 15 4 75 Foreign governments and official institutions .... 723 714 9 712 0 9 1 0 0 76 Commercial banks in United States ...................... 1,953 1,951 2 1,949 0 1 1 1 1 77 U.S. branches and agencies of other foreign banks ................................................................ 165 164 1 164 0 0 0 0 1 78 Other commercial banks in United States ........ 1,788 1.787 1 1,785 0 1 1 0 0 79 Banks in foreign countries........................................ 1,028 1,021 7 1,019 0 7 2 0 1 80 Certified and officers’ checks, travelers checks, and letters of credit sold for cash.................... 5,671 3,731 1,940 3,681 1.877 61 35 15 2 81 Time deposits...................................................................... 20,952 20.372 581 17,726 0 556 324 2,322 25 82 Individual, partnerships, and corporations................ 14,654 14.342 312 11,944 0 296 171 2,226 17 83 U.S. addressees (domicile) ...................................... 12,876 12.871 5 10,553 0 6 124 2,193 0 84 Non-U.S. addressees (domicile).............................. 1,778 1.471 307 1,391 0 290 47 33 17 85 U.S. government, states, and political subdivisions in United States...................................................... 89 89 0 16 0 0 3 71 0 86 Allother.......................................................................... 6,209 5.941 268 5,766 0 260 150 25 8 87 Foreign governments and official institutions .... 2,109 1.958 151 1,838 0 151 110 10 0 88 Commercial banks in United States ...................... 2,695 2.686 8 2,681 0 0 2 3 8 89 U.S. branches and agencies of other foreign banks ................................................................ 668 668 0 668 0 0 0 0 0 90 Other commercial banks in United States ........ 2,027 2,019 8 2,014 0 0 2 3 8 91 Banks in foreign countries........................................ 1,406 1.297 109 1,247 0 108 38 12 0 92 Savings deposits.................................................................. 377 351 26 295 0 28 23 31 0 93 Individuals, partnerships, and corporations .............. 376 350 26 295 0 28 23 31 0 94 U.S. addressees (domicile) ...................................... 209 209 0 161 0 1 19 29 0 95 Non-U.S. addressees (domicile).............................. 167 141 26 134 0 26 4 2 0 96 U.S. government, states, and political subdivisions in United States...................................................... 0 0 0 0 0 0 0 0 0 97 Allother........................................................................... 1 1 0 1 0 0 0 0 0 98 Credit balances ................................................................... 1,826 0 1.825 0 1,757 60 0 0 8 99 Individuals, partnerships, and corporations .............. 362 0 362 0 305 51 0 0 6 100 U.S. addressees (domicile) ...................................... 185 0 185 0 130 51 0 0 5 101 Non-U.S. addressees (domicile).............................. 177 0 177 0 175 1 0 0 1 102 U.S. government, states, and political subdivisions in United States...................................................... 0 0 0 0 0 0 0 0 0 103 Allother.......................................................................... 1,463 0 1,463 0 1,452 9 0 0 2 104 Foreign governments and official institutions .... 95 0 95 0 91 4 0 0 0 105 Commercial banks in United States ...................... 1,095 0 1.095 0 1,095 0 0 0 0 106 U.S. branches and agencies of other foreign banks ................................................................ 8 0 8 0 8 0 0 0 0 107 Other commercial banks in United States ........ 1,087 0 1,087 0 1,087 0 0 0 0 108 Banks in foreign countries........................................ 273 0 273 0 267 4 0 0 2 For notes see page A71. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables □ March 1981 4.30 Continued All states2 New York Cali­ Other states2 Item Total Branches Agencies Branches Agencies T fo o r t n a i l a 3 B I r l a li n n c o h is es Branches Agencies 109 Federal funds purchased and sold under agreement to repurchase ................................................................... 11,547 6,448 5,099 5,635 2,529 2,416 664 149 154 By holder 110 Commercial banks in United States .......................... 10,536 5,937 4,598 5,144 2,172 2,403 644 149 23 Ill Others............................................................................... 1,012 511 501 491 357 13 19 0 131 By type 112 One-day maturity or continuing contract .................. 11,346 6,254 5,092 5,451 2,529 2,410 654 149 153 113 Securities sold under agreements to repurchase .. 500 431 69 425 3 66 7, 0 0 114 Other............................................................................. 10,845 5,823 5,023 5,026 2,526 2,344 647 149 153 115 Other securities sold under agreements to repurchase ............................................................... 201 194 7 184 0 7 9 0 1 116 Other liabilities for borrowed money ............................ 33,383 11,673 21,710 9,691 3,756 17,916 1,545 437 37 117 Owed to banks ............................................................... 30,485 10,370 20,115 8,526 3,460 16,618 1,497 346 37 118 U.S. addressees (domicile) ...................................... 24,920 6,352 18,568 5,042 2,926 15,614 966 344 28 119 Non-U.S. addressees (domicile).............................. 5,565 4,018 1,547 3,484 534 1,004 531 2 9 120 Owed to others ............................................................... 2,898 1,304 1,595 1,164 296 1,299 49 91 0 121 U.S. addressees (domicile) ...................................... 2,142 960 1,182 843 80 1,102 30 87 0 122 Non-U.S. addressees (domicile).............................. 756 344 413 322 216 196 19 3 0 123 All other liabilities ............................................................. 43,529 27,013 16,516 22,772 10,751 4,690 3,253 969 1,094 124 Acceptances executed and outstanding...................... 8,103 3,809 4,294 3,702 2,504 1,763 73 34 27 125 Net due to related banking institutions5 .................... 32,379 20,798 11,581 16,911 8.017 2,533 2,976 893 1,049 126 Other................................................................................. 3,047 2,406 642 2,159 230 394 203 43 18 Memo 127 Time deposits of $100,000 or more ................................ 19,680 19,259 421 16,810 0 408 176 2,272 14 128 Certificates of deposit (CDs) in denominations of $100,000 or more ................................................... 16,526 16,210 316 13,818 0 314 154 2,237 3 129 Other................................................................................. 3,154 3,049 105 2,992 0 93 22 35 11 130 Savings deposits authorized for automatic transfer and now accounts............................................................... 56 55 1 52 0 1 0 2 0 131 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26 weeks 330 326 4 294 0 4 13 19 1 132 Time certificates of deposit in denominations of $100,000 or more with remaining maturity of more than 12 months ................................................. 1,395 1,311 84 1,230 0 82 14 67 2 133 Acceptances refinanced with a U.S.-chartered bank .. 1,560 734 826 616 321 506 10 108 0 134 Statutory or regulatory asset pledge requirement ........ 44,791 34,720 10,071 30,167 10,027 30 4,501 51 15 135 Statutory or regulatory asset maintenance requirement 4,765 4,536 229 2,953 173 18 157 1,426 38 136 Commercial letters of credit ............................................ 7,976 4,543 3,433 4,087 1,060 2,331 236 220 42 137 Standby letters of credit, total ........................................ 3,361 2,275 1,086 1,953 489 472 215 106 126 138 U.S. addressees (domicile) .......................................... 2,447 1,662 785 1,477 314 412 111 74 59 139 Non-U.S. addressees (domicile).................................. 914 613 301 476 175 60 104 33 67 140 Standby letters of credit conveyed to others through participations (included in total standby letters of credit)........................................................................... 48 20 29 18 6 20 0 2 3 141 Holdings of commercial paper included in total gross loans ............................................................................. 857 710 147 694 97 50 15 0 0 142 Holdings of acceptances included in total commercial and industrial loans..................................................... 3,573 1,832 1,741 1,749 617 1,119 48 35 4 143 Immediately available funds with a maturity greater than one day (included in other liabilities for bor­ rowed money) ............................................................. 15,713 5,092 10,621 3,956 2,139 8,471 901 235 11 144 Gross due from related banking institutions5 .............. 43,781 17,674 26,107 15,338 11,732 14,278 473 1,863 98 145 U.S. addressees (domicile) .......................................... 14,668 3,398 11,271 2,308 1,618 9,636 102 987 17 146 Branches and agencies in United States ................ 14,411 3,265 11,146 2,176 1„587 9,543 102 987 16 147 In the same state as reporter .............................. 584 84 500 67 0 492 0 17 8 148 In other states ......................................................... 13,828 3,181 10,646 2,109 1,587 9,051 102 970 8 149 U.S. banking subsidiaries6 ...................................... 257 132 125 132 31 93 0 0 1 150 Non-U.S. addressees (domicile).................................. 29,113 14,276 14,837 13,030 10,114 4,642 371 875 81 151 Head office and non-U.S. branches and agencies . 27,117 13,488 13,629 12,263 8,909 4,639 354 872 80 152 Non-U.S. banking companies and offices.............. 1,996 789 1,208 767 1,205 2 17 4 1 153 Gross due to related banking institutions5 .................... 63,383 36,945 26,438 32,088 19,749 5,581 3,450 1,389 1,125 154 U.S. addressees (domicile) ........................................... 15,257 7,836 7,421 5,192 4,592 2,346 1,758 885 484 155 Branches and agencies in United States ................ 15,043 7,731 7,312 5,111 4,507 2,326 1,737 883 478 156 In the same state as reporter .............................. 566 81 485 55 7 477 0 27 0 157 In other states ......................................................... 14,477 7,650 6,828 5,056 4,500 1,849 1,737 856 478 158 U.S. banking subsidiaries6 ...................................... 214 104 109 81 84 19 21 2 5 159 Non-U.S. addressees (domicile).................................. 48,126 29,110 19,017 26,896 15,158 3,236 1,692 504 641 160 Head office and non-U.S. branches and agencies . 46,186 27,381 18,805 25,243 15,077 3,106 1,616 504 639 161 Non-U.S. banking companies and offices.............. 1,940 1,729 212 1,653 80 129 76 0 2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A ll 4.30 Continued All states2 New York Cali­ Illinois Other states3 Item T fo o r t n a i P a Branches Total Branches Agencies Branches Agencies Branches Agencies Average for 30 calendar days (or calendar month) ending with report date 162 Total assets........................................................................... 126,918 76,433 50,485 66,417 23,436 25,805 5,813 4,183 1,264 163 Cash and due from depository institutions.................... 14,198 11,889 2,309 11,197 2,080 207 615 77 22 164 Federal funds sold ana securities purchased under agreements to resell ................................................... 7,206 5,069 2,137 4,900 1,846 288 152 14 5 165 Total loans........................................................................... 71,167 46,958 24,209 40,008 11,002 12,062 4,596 2,343 1,156 166 Loans to banks in foreign countries .............................. 10,942 8,361 2,581 7,846 1,498 1,049 513 2 34 167 Total deposits and credit balances.................................. 34,639 31,258 3,380 28,277 2,592 746 418 2,558 48 168 Time CDs in denominations of $100,000 or more .... 15,424 15,036 389 12,588 76 311 150 2,297 2 169 Federal funds purchased and securities sold under agreements to repurchase ........................................ 8,589 4,567 4,022 3,947 1,518 2,375 523 97 128 170 Other liabilities for borrowed money ............................ 33,663 12,899 20,764 10,914 2,794 17,932 1,527 457 38 171 Number of reports filed7 ................................................... 306 135 171 79 63 86 31 24 23 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, able through the G.ll statistical release, gross balances were included in total assets “Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign and total liabilities. Therefore, total asset and total liability figures in this table are Banks.” This form was first used for reporting data as of June 30, 1980. From not comparable to those in the G.ll tables. November 1972 through May 1980, U.S. branches and agencies of foreign banks 5. “Related banking institutions” includes the foreign head office and other U.S. had filed a monthly FR 886a report. Aggregate data from that report were available and foreign branches and agencies of the bank, the bank’s parent holding company, through the Federal Reserve statistical release G.ll, last issued on July 10, 1980. and majority-owned banking subsidiaries of the bank and of its parent holding Data in this table and in the G.ll tables are not strictly comparable because of company (including subsidiaries owned both directly and indirectly). Gross amounts differences in reporting panels and in definitions of balance sheet items. due from and due to related banking institutions are shown as memo items. 2. Includes the District of Columbia. 6. “U.S. banking subsidiaries” refers to U.S. banking subsidiaries majority- 3. Agencies account for virtually all of the assets and liabilities reported in owned by the foreign bank and by related foreign banks and includes U.S. offices California. of U.S.-chartered commercial banks, of Edge Act and Agreement corporations, 4. Total assets and total liabilities include net balances, if any , due from or due and of New York State (Article XII) investment companies. to related banking institutions in the United States and in foreign countries (see 7. In some cases two or more offices of a foreign bank within the same met­ footnote 5). On the former monthly branch and agency report, avail­ ropolitan area file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 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 S taff Director for M onetar y and Financial Polic y Joseph R. Coyne, Assistant to the Board Donald J. Winn, Assistant to the Board Stephen H. Axilrod, Staff Director Anthony F. Cole, Special Assistant to the Board Edward C. Ettin, Deputy Staff Director William R. Maloni, Special Assistant to the Board Murray Altmann, Assistant to the Board Frank O’Brien, Jr., Special Assistant to the Board Peter M. Keir, Assistant to the Board Joseph S. Sims, Special Assistant to the Board Stanley J. Sigel, Assistant to the Board James L. Stull, Manager, Operations Review Program Normand R. V. Bernard. Special Assistant to the Board Legal Division Division of Research and Statistics Neal L. Petersen, General Counsel James L. Kichline, Director Robert E. Mannion, Deputy General Counsel Joseph S. Zeisel, Deputy Director J. Virgil Mattingly, Jr., Associate General Counsel Michael J. Prell, Associate Director Gilbert T. Schwartz, Associate General Counsel Robert A. Eisenbeis, Senior Deputy Associate Director Maryellen A. Brown, Assistant to the General Counsel Jared J. Enzler, Senior Deputy Associate Director Charles R. McNeill, Assistant to the General Counsel Eleanor J. Stockwell, Senior Deputy Associate Director Michael E. Bleier, Assistant General Counsel Donald L. Kohn, Deputy Associate Director Cornelius K. Hurley, Jr., Assistant General Counsel J. Cortland G. Peret, Deputy Associate Director Helmut F. Wendel, Deputy Associate Director Martha Bethea, Assistant Director Office of the Secretary Joe M. Cleaver, Assistant Director Robert M. Fisher, Assistant Director Barbara R. Lowrey, Assistant Secretary David E. Lindsey, Assistant Director James McAfee, Assistant Secretary Lawrence Slifman, Assistant Director *Jefferson A. Walker, Assistant Secretary Frederick M. Struble, Assistant Director Stephen P. Taylor, Assistant Director Levon H. Garabedian, Assistant Director (Administration) Division of Consumer and Community Affairs Division of International Finance Janet O. Hart, Director Griffith L. Garwood, Deputy Director Edwin M. Truman, Director Jerauld C. Kluckman, Associate Director Robert F. Gemmill, Associate Director Glenn E. Loney, Assistant Director George B. Henry, Associate Director Delores S. Smith, Assistant Director Charles J. Siegman, Associate Director Samuel Pizer, Staff Adviser Dale W. Henderson, Assistant Director Division of Banking Larry J. Promisel, Assistant Director Supervision and Regulation Ralph W. Smith, Jr., Assistant Director John E. Ryan, 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 Laura M. Homer, Securities Credit Officer Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A73 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 Theodore E. Allison, 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 Clyde H. Farnsworth, Jr., Director Bruce M. Beardsley, Associate Director Walter Althausen, Assistant Director Uyless D. Black, Assistant Director Charles W. Bennett, Assistant Director Glenn L. Cummins, Assistant Director Lorin S. Meeder, Assistant Director Robert J. Zemel, Assistant Director P. D. Ring, Assistant Director David L. Robinson, Assistant Director Raymond L. Teed, Assistant Director Division of Personnel 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 Walter W. Kreimann, Associate Director Robert E. Frazier, Assistant Director *On loan from the Federal Reserve Bank of Richmond. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Bulletin □ March 1981 FOMC and Advisory Councils Federal Open Market Committee Paul A. Volcker, Chairman Anthony M. Solomon, Vice Chairman Edward G. Bochne Lyle E. Gramley Frederick H. Schultz Robert H. Boykin Robert P. Mayo Nancy H Teeters E. Gerald Corrigan J. Charles Partee Henry C. Wallich Emmett J. Rice Murray Altmann, Secretary Richard G. Davis, Associate Economist Normand R. 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 Merle E. Gilliand, Fourth District, President Chauncey E. Schmidt, Twelfth District, Vice President William S. Edgerly, First District Robert M. Surd am, Seventh District Donald C. Platten, Second District Ronald Terry, Eighth District John W. Walther, Third District Clarence G. Frame, Ninth District J. Owen Cole, Fifth District Gordon E. Wells, Tenth District Robert Strickland, Sixth District T. C. Frost, Jr., Eleventh District Herbert V. Prochnow, Secretary William J. Korsvik, Associate Secretary Consumer Advisory Council Ralph J. Rohner, Washington D.C., Chairman Charlotte H. Scott, Charlottesville, Virginia, Vice Chairman Arthur F. Bouton, Little Rock, Arkansas F. Thomas Juster, Ann Arbor, Michigan Julia H. Boyd, Alexandria, Virginia Richard F. Kerr, Cincinnati, Ohio Ellen Broadman, Washington, D.C. Harvey M. Kuhnley, Minneapolis, Minnesota James L. Brown, Milwaukee, Wisconsin The Rev. Robert J. McEwen, S.J., Chestnut Hill, Mark E. Budnitz, Atlanta, Georgia Massachusetts Joseph N. Cugini, Westerly, Rhode Island Stan L. Mularz, Chicago, Illinois Richard S. D’Agostino, Philadelphia, Pennsylvania William J. O’Connor, Buffalo, New York Susan Pierson De Witt, Springfield, Illinois Margaret Reilly-Petrone, Upper Montclair, New Jersey Joanne S. Faulkner, New Haven, Connecticut Rene Reixach, Rochester, New York Luther Gatling, New York, New York Florence M. Rice, New York, New York Vernard W. Henley, Richmond, Virginia Henry B. Schechter, Washington, D.C. Juan Jesus Hinojosa, McAllen, Texas Peter D. Schellie, Washington, D.C. Shirley T. Hosoi, Los Angeles, California Nancy Z. Spillman, Los Angeles, California George S. Irvin, Denver, Colorado Richard A. Van Winkle, Salt Lake City, Utah Mary W. Walker, Monroe, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK, Chairman President Vice President branch, ovfacility Zip Deputy Chairman First Vice President in charge of branch BOSTON*.................... 02106 Robert P. Henderson Frank E. Morris Thomas I. Atkins 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 Edward G. Boehne Jean A. Crockett Richard L. Smoot CLEVELAND* 44101 J. L. Jackson Willis J. Winn William H. Knoell Walter H. MacDonald Cincinnati.................. 45201 Martin B. Friedman Robert E. Showaiter Pittsburgh....................15230 Milton G. Hulme, Jr. Harold J. Swart RICHMOND* ...............23261 Maceo A. Sloan Robert P. Black Steven Muller Jimmie R. Monhollon Baltimore....................21203 Joseph H. McLain Robert D. McTeer, Jr. Charlotte ....................28230 Naomi G. Albanese Stuart P. Fishbume 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 Louis J. Willie Hiram J. Honea Jacksonville ............ ,32231 Jerome P. Keuper Charles D. East Miami .........................33152 Roy W. Vandegrift, Jr. F. J. Craven, Jr. Nashville .................. 37203 John C. Bolinger, Jr. Jeffrey J. Wells New Orleans............ ,,70161 Horatio C. Thompson James D. Hawkins CHICAGO*.................. 60690 John Sagan Robert P. Mayo Stanton R. Cook Daniel M. Doyle Detroit.......................,,48231 Vacancy 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 Sister Eileen M. Egan Donald L. Henry Memphis .................. 38101 Patricia W. Shaw Robert E. Matthews MINNEAPOLIS......... ,,55480 Stephen F. Keating E. Gerald Corrigan William G. Phillips Thomas E. Gainor Helena........................ 59601 Norris E. Hanford Betty J. Lindstrom KANSAS CITY 64198 Paul H. Henson Roger Guffey Doris M. Drury 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 Gerald D. Hines Robert H. Boykin John V. James William H. Wallace El Paso........................ ,79999 Josefina A. Salas-Porras Joel L. Koonce, Jr. Houston..................... ,77001 Jerome L. Howard J. Z. Rowe San Antonio ............. ,78295 Lawrence L. Crum 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 John C. Hampton Angelo S. Carella Salt Lake City...........,.84125 Wendell J. Ashton A. Grant Holman Seattle........................ ,98124 George H. Weyerhaeuser 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

A76 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 Survey of Changes in Family Finances. 1968. 321 pp. tions. 1974. 125 pp. $1.00 each; 10 or more to one address, $.85 each. Annual Report. Report of the Joint Treasury-Federal Reserve Study Federal Reserve Bulletin. Monthly. $20.00 per year or of the U.S. Government Securities Market. 1969. $2.00 each in the United States, its possessions, Canada, 48 pp. $.25 each; 10 or more to one address, $.20 each. and Mexico; 10 or more of same issue to one address, Joint Treasury-Federal Reserve Study of the Gov­ $18.00 per year or $1.75 each. Elsewhere, $24.00 per ernment Securities Market; Staff Studies—Part year or $2.50 each. 1. 1970. 86 pp. $.50 each; 10 or more to one address, $.40 Banking and M onetary Statistics. 1914-1941. (Reprint each. Part 2,1971. 153 pp. and Part 3,1973. 131 pp. Each of Part I only) 1976. 682 pp. $5.00. volume $1.00; 10 or more to one address, $.85 each. Banking and M onetary Statistics, 1941-1970. 1976. Open Market Policies and Operating Procedures— 1,168 pp. $15.00. Staff Studies. 1971. 218 pp. $2.00 each; 10 or more to Annual Statistical Digest one address, $1.75 each. 1971-75. 1976. 339 pp. $4.00 per copy for each paid sub­ Reappraisal of the Federal Reserve Discount Mecha­ scription to Federal Reserve Bulletin; all others $5.00 nism. Vol. 1. 1971. 276 pp. Vol. 2. 1971. 173 pp. Vol. 3. each. 1972. 220 pp. Each volume $3.00; 10 or more to one ad­ 1972-76. 1977. 377 pp. $10.00 per copy. dress, $2.50 each. 1973-77. 1978. 361 pp. $12.00 per copy. The Econometrics of Price Determination Confer­ 1974-78. 1980. 305 pp. $10.00 per copy. ence, October 30-31, 1970, Washington, D.C. 1972. 397 Federal Reserve Chart Book. Issued four times a year in pp. Cloth ed. $5.00 each; 10 or more to one address, February, May, August, and November. Subscription $4.50 each. Paper ed. $4.00 each; 10 or more to one ad­ includes one issue of Historical Chart Book. $7.00 per dress, $3.60 each. year or $2.00 each in the United States, its possessions, Federal Reserve Staff Study: Ways to Moderate Canada, and Mexico. Elsewhere, $10.00 per year or Fluctuations in Housing Construction. 1972. 487 $3.00 each. pp. $4.00 each; 10 or more to one address, $3.60 each. Historical Chart Book. Issued annually in Sept. Subscrip­ Lending Functions of the Federal Reserve Banks. tion to Federal Reserve Chart Book includes one issue. 1973. 271 pp. $3.50 each; 10 or more to one address, $1.25 each in the United States, its possessions, Canada, $3.00 each. and Mexico; 10 or more to one address, $1.00 each. Else­ Improving the M onetary Aggregates: Report of the where, $1.50 each. Advisory Committee on M onetary Statistics. Capital Market Developments. Weekly. $15.00 per year 1976. 43 pp. $1.00 each; 10 or more to one address, $.85 or $.40 each in the United States, its possessions, Cana­ each. da, and Mexico; 10 or more of same issue to one address, Annual Percentage Rate Tables (Truth in Lending— $13.50 per year or $.35 each. Elsewhere, $20.00 per year Regulation Z) Vol. I (Regular Transactions). 1969. 100 or $.50 each. pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each Selected Interest and Exchange Rates—W eekly Se­ volume $1.00; 10 or more of same volume to one ad­ ries of Charts. Weekly. $15.00 per year or $.40 each in dress, $.85 each. the United States, its possessions, Canada, and Mexico; 10 or more of same issue to one address, $13.50 per year Federal Reserve Measures of Capacity and Capacity or $.35 each. Elsewhere, $20.00 per year or $.50 each. Utilization. 1978. 40 pp. $1.75 each; 10 or more to one address, $1.50 each. The Federal Reserve Act, as amended through December 1976, with an appendix containing provisions of certain The Bank Holding Company Movement to 1978: A other statutes affecting the Federal Reserve System. 307 Compendium. 1978. 289 pp. $2.50 each; 10 or more to one address, $2.25 each. pp. $2.50. Regulations of the Board of Governors of the Fed­ Improving the Monetary Aggregates: Staff Papers. 1978. 170 pp. $4.00 each; 10 or more to one address, eral Reserve System $3.75 each. Published Interpretations of the Board of Gover­ nors, as of June 30, 1980. $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. $1.75 each; 10 or more to one address, $4.00 each. each; 10 or more to one address, $1.50 each. Bank Credit-Card and Check-Credit Plans. 1968. 102 Introduction to Flow of Funds. 1980. 68 pp. $1.50 each; pp. $1.00 each; 10 or more to one address, $.85 each. 10 or more to one address, $1.25 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All Consumer Education Pamphlets The GNMA-Guaranteed Passthrough Security: Mar­ Short pamphlets suitable for classroom use. Multiple cop­ ket Development and Implications for the ies available without charge. Growth and Stability of Home Mortgage Lend­ ing, by David F. Seiders. Dec. 1979. 65 pp. Alice in Debitland Foreign Ownership and the Performance of U.S. The Board of Governors of the Federal Reserve System Banks, by James V. Houpt. July 1980. 27 pp. Consumer Handbook To Credit Protection Laws Performance and Characteristics of Edge Corpora­ The Equal Credit Opportunity Act and . . . Age tions, by James V. Houpt. Feb. 1981. 56 pp. The Equal Credit Opportunity Act and . . . Credit Rights in Banking Structure and Performance at the State Housing Level during the 1970s, by Stephen A. Rhoades. Mar. The Equal Credit Opportunity Act and . . . Doctors, Law­ 1981. 26 pp. yers, Small Retailers, and Others Who May Provide In­ cidental Credit The Equal Credit Opportunity Act and . . . Women Fair Credit Billing Printed in Full in the Bulletin The Federal Open Market Committee Federal Reserve Bank Board of Directors An Assessment of Bank Holding Companies, by Robert Federal Reserve Banks J. Lawrence and Samuel H. Talley. January 1976. Federal Reserve Glossary How to File A Consumer Credit Complaint If You Borrow To Buy Stock Reprints If You Use A Credit Card Most of the articles reprinted do not exceed 12 pages. Truth in Leasing U.S. Currency Measures of Security Credit. 12/70. What Truth in Lending Means to You Revision of Bank Credit Series. 12/71. Assets and Liabilities of Foreign Branches of U.S. Banks. 2/72. Staff Studies Bank Debits, Deposits, and Deposit Turnover—Revised Se­ Studies and papers on economic and financial subjects that ries. 7/72. are of general interest. Rates on Consumer Instalment Loans. 9/73. New Series for Large Manufacturing Corporations. 10/73. Summaries Only Printed in the Bulletin The Structure of Margin Credit. 4/75. Requests to obtain single copies of the full text or to be Industrial Electric Power Use. 1/76. added to the mailing list for the series may be sent to Pub­ Revised Series for Member Bank Deposits and Aggregate Re­ lications Services. serves. 4/76. Industrial Production—1976 Revision. 6/76. Tie-ins Between the Granting of Credit and Sales of Federal Reserve Operations in Payment Mechanisms: A Insurance by Bank Holding Companies and Other Summary. 6/76. Lenders, by Robert A. Eisenbeis and Paul R. Schweit­ The Commercial Paper Market. 6/77. zer. Feb. 1979. 75 pp. The Federal Budget in the 1970’s. 9/78. Innovations in Bank Loan Contracting: Recent Evi­ Redefining the Monetary Aggregates. 1/79. dence by Paul W. Boltz and Tim S. Campbell. May Implementation of the International Banking Act. 10/79. 1979. 40 pp. U.S. International Transactions in 1979: Another Round of Measurement of Capacity Utilization: Problems and Oil Price Increases. 4/80. Tasks, by Frank de Leeuw, Lawrence R. Forest, Jr., Perspectives on Personal Saving. 8/80. Richard D. Raddock, and Zoltan E. Kenessey. July The Impact of Rising Oil Prices on the Major Foreign Indus­ 1979. 264 pp. trial Countries. 10/80. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Index to Statistical Tables References are to pages A-5 through A-71 although the prefix “A” is omitted in this index ACCEPTANCES, bankers, 10, 23,25 Demand deposits—Continued Agricultural loans, commercial banks, 18,19, 20,24 Subject to reserve requirements, 14 Assets and liabilities (See also Foreigners) Turnover, 12 Banks, by classes, 17,18-21,27,68-73 Deposits (See also specific types) Pomestic finance companies, 37 Banks, by classes, 3,17,18-21, 27 Federal Reserve Banks, 11 Federal Reserve Banks, 4,11 Foreign banks, U.S. branches and agencies, 68-71 Turnover, 12 Nonfinancial corporations, current, 36 Discount rates at Reserve Banks (See Interest rates) Automobiles Discounts and advances by Reserve Banks (See Loans) Consumer installment credit, 40,41 Dividends, corporate, 35 Production, 46, 47 EMPLOYMENT, 44, 45 BANKERS balances, 17, 18-20, 68, 70, 72 Eurodollars, 25 {See also Foreigners) Banks for Cooperatives, 33 FARM mortgage loans, 39 Bo N nd ew s ( i S s e s e u e a s l , s o 3 4 U .S. government securities) Farmers Home Administration, 39 Federal agency obligations, 4,10,11,12,32 Yields, 3 Branch banks, 15, 21, 54, 68-71 Federal and federally sponsored credit agencies, 33 Federal finance Business activity, nonfinancial, 44 Debt subject to statutory limitation and types and Business expenditures on new plant and equipment, 36 ownership of gross debt, 30 Business loans (See Commercial and industrial loans) Receipts and outlays, 28,29 CAPACITY utilization, 44 Treasury operating balance, 28 Capital accounts Federal Financing Bank, 28,33 Banks, by classes, 17,69,71,73 Federal funds, 3,6, 18,19,20,25, 28 Federal Reserve Banks, 11 Federal Home Loan Banks, 33 Central banks, 66 Federal Home Loan Mortgage Corporation, 33, 38, 39 Certificates of deposit, 21, 25 Federal Housing Administration, 33, 38, 39 Commercial and industrial loans Federal Intermediate Credit Banks, 33 Commercial banks, 15,24 Federal Land Banks, 33, 39 Weekly reporting banks, 18-21, 22 Federal National Mortgage Association, 33, 38, 39 Commercial banks Federal Reserve Banks Assets and liabilities, 3, 15,17,18-21 Condition statement, 11 Business loans, 24 Discount rates (See Interest rates) Commercial and industrial loans, 22, 24 U.S. government securities held, 4,11,12, 30, 31 Consumer loans held, by type, 40,41 Federal Reserve credit, 4, 5, 11,12 Loans sold outright, 21 Federal Reserve notes, 11 Nondeposit funds, 16 Federally sponsored credit agencies, 33 Number by classes, 17, 69, 71, 73 Finance companies Real estate mortgages held, by holder and property, 39 Assets and liabilities, 37 Commercial paper, 3, 23,25,37 Business credit, 37 Condition statements (See Assets and liabilities) Loans, 18, 19, 20, 40, 41 Construction, 44,48 Paper, 23,25 Consumer installment credit, 40,41 Financial institutions, loans to, 18,19,20 Consumer prices, 44,49 Float, 4 Consumption expenditures, 50,51 Flow of funds, 42,43 Corporations Foreign Profits and their distribution, 35 Banks, assets and liabilities of U.S. branches and Security issues, 34,63 agencies, 68-71 Cost of living (See Consumer prices) Currency operations, 11 Credit unions, 27,40,41 Deposits in U.S. banks, 4, 11,18,19,20 Currency and coin, 5,17,68,70,72 Exchange rates, 66 Currency in circulation, 4,13 Trade, 53 Customer credit, stock market, 26 Foreigners Claims on, 54, 56, 59, 60,61, 65 DEBITS to deposit accounts, 12 Liabilities to, 21, 54-58,62-64 Debt (See specific types of debt or securities) Demand deposits GOLD Adjusted, commercial banks, 12,14 Certificates, 11 Banks, by classes, 17, 18-21, 69, 71, 73 Stock,4,53 Ownership by individuals, partnerships, and Government National Mortgage Association, 33, 38,39 corporations, 23 Gross national product, 50,51 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 HOUSING, new and existing units, 48 REAL estate loans Banks, by classes, 18-20,27, 29 INCOME, personal and national, 44, 50,51 Life insurance companies, 27 Industrial production, 44,46 Mortgage terms, yields, and activity, 3, 38 Installment loans, 40,41 Type of holder and property mortgaged, 39 Insurance companies, 27, 30, 31, 39 Repurchase agreements and federal funds, 6,18,19,20 Interbank loans and deposits, 17 Reserve requirements, member banks, 8 Interest rates Reserves Bonds, 3 Commercial banks, 17,68,70,72 Business loans of banks, 24 Federal Reserve Banks, 11 Federal Reserve Banks, 3,7 Member banks, 3,4, 5,14,17 Foreign countries, 66 U.S. reserve assets, 53 Money and capital markets, 3,25 Residential mortgage loans, 38 Mortgages, 3,38 Retail credit and retail sales, 40,41,44 Prime rate, commercial banks, 24 Time and savings deposits, 9 SAVING International capital transactions of the Flow of funds, 42, 43 United States, 54-65 National income accounts, 51 International organizations, 54-59,62-65 Savings and loan assns., 3,9,27, 31,39,42 Inventories, 50 Savings deposits (See Time deposits) Investment companies, issues and assets, 35 Savings institutions, selected assets, 27 Investments (See also specific types) Securities (See also U.S. government securities) Banks, by classes, 17,27 Federal and federally sponsored agencies, 33 Commercial banks, 3,15,17,18-20,68,70,72 Foreign transactions, 63 Federal Reserve Banks, 11,12 New issues, 34 Life insurance companies, 27 Prices, 26 Savings and loan associations, 27 Special drawing rights, 4,11,52, 53 State and local governments LABOR force, 45 Deposits, 18,19, 20 Life insurance companies (See Insurance companies) Holdings of U.S. government securities, 30, 31 Loans (See also specific types) New security issues, 34 Banks, by classes, 17,18-21,27 Ownership of securities of, 18,19,20,27 Commercial banks, 3,15,17,18-21,22,24,68,70,72 Yields of securities, 3 Federal Reserve Banks, 3,4,5,7,11,12 Stock market, 26 Insurance companies, 27,39 Insured or guaranteed by United States, 38, 39 Stocks (See also Securities) New issues, 34 Savings and loan associations, 27 Prices, 26 MANUFACTURING Capacity utilization, 44 TAX receipts, federal, 29 Production, 44,47 Time deposits, 3,9,12, 14,17,18-21 Margin requirements, 26 Trade, foreign, 53 Member banks Treasury currency, Treasury cash, 4 Assets and liabilities, by classes, 17 Treasury deposits, 4,11,28 Borrowings at Federal Reserve Banks, 5,11 Treasury operating balance, 28 Federal funds and repurchase agreements, 6 Number, 17 UNEMPLOYMENT, 45 Reserve requirements, 8 U.S. balance of payments, 52 Reserves and related items, 3,4,5,14 U.S. government balances Mining production, 47 Commercial bank holdings, 18,19,20 Mobile home shipments, 48 Member bank holdings, 14 Monetary aggregates, 3,14 Treasury deposits at Reserve Banks, 4,11,28 Money and capital market rates (See Interest rates) U.S. government securities Money stock measures and components, 3,13 Bank holdings, 17,18-20,27, 30, 31,68,70,72 Mortgages (See Real estate loans) Dealer transactions, positions, and financing, 32 Mutual funds (See Investment companies) Federal Reserve Bank holdings, 4,11,12, 30, 31 Mutual savings banks, 3,9,18-20,27,30,31, 39 Foreign and international holdings and transactions, 11, 30, 62 NATIONAL defense outlays, 29 Open market transactions, 10 National income, 50 Outstanding, by type and ownership, 30,31 Rates, 3,25 OPEN market transactions, 10 Utilities, production, 47 PERSONAL income, 51 Prices VETERANS Administration, 38,39 Consumer and producer, 44,49 Stock market, 26 WEEKLY reporting banks, 18-22 Prime rate, commercial banks, 24 Wholesale (producer) prices, 44,49 Production, 44,46 Profits, corporate, 35 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories Chicagi Dallas® SSSHS ALASKA HAWAI Legend Boundaries of Federal Reserve Districts Federal Reserve Bank Cities Boundaries of Federal Reserve Branch Federal Reserve Branch Cities Territories Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis