Federal Reserve Bulletin, 1981-04

V o lum e 67 □ N um ber 4 □ A pril 1981 FEDERAL RESERVE BULLETIN B o ard o f G o v e rn o rs o f th e F e d e ra l R e serv e S y stem W ash in g to n , D .C . Publicatio ns Co m m ittee 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

T a b le o f C o n te n ts 269 U.S. International Transactions 297 Frederick H. Schultz, Vice Chairman, in 1980 Board of Governors, discusses the ways in which the Federal Reserve is attempting to The U.S. current account was in balance in understand and deal with the financial prob­ 1980, essentially unchanged from 1979, de­ lems of small businesses, before the House spite another large increase in the value of Committee on Small Business, April 7, imported oil. 1981. 277 New Monetary Control Procedure: 302 Announcements Findings and Evaluation Issuance of new Regulation Z. From a Federal Reserve Study Adoption of fee schedule for commercial The operating procedure proved flexible check-clearing and collection services. enough to permit some accommodation in the short run to last year’s unexpected Meeting of Consumer Advisory Council. shifts in money demand, and worked to Change in Board staff. limit the extent to which changes in de­ mands for goods and services were reflect­ Availability of revised list of over-theed in actual money growth. counter stocks that are subject to the Board’s margin regulations. 291 Industrial Production Publication of Annual Statistical Digest, Output rose about 0.4 percent in March. 1970-1979. Admission of eleven state banks to mem­ 293 Statements to Congress bership in the Federal Reserve System. Paul A. Volcker, Chairman, Board of Gov­ ernors, discusses the interrelationships of budgetary and monetary policy and empha­ 311 Record of Policy Actions of the sizes the importance of reducing taxes and Federal Open Market Committee of cutting back federal spending; he says At its meeting on February 2-3, 1981, the that reducing the federal budget deficit can Committee decided to specify ranges for help head off tension in financial markets growth of M_1A and M-1B, adjusted for the and make room for private investment, be­ effects of flows into NOW accounts, that fore the House Committee on the Budget, were */2 percentage point lower than those March 27, 1981. for 1980 and to retain the 1980 ranges for 296 Theodore E. Allison, Staff Director for Fed­ M-2 and M-3. Thus, the Committee adopted eral Reserve Bank Activities, says that the the following ranges for growth of the mon­ Board supports the proposal by the Bureau etary aggregates over the period from the of the Mint to introduce a zinc-based penny fourth quarter of 1980 to the fourth quarter and eventually to replace the predominantly of 1981: M -l A, 3 to 5‘/2 percent; M-1B, 3*/2 copper one, before the Subcommittee on to 6 percent; M-2, 6 to 9 percent; and M-3, Consumer Affairs of the House Committee 6*/2 to 9‘/2 percent. The associated range for on Banking, Finance and Urban Affairs, growth of commercial bank credit was 6 to 9 March 31, 1981. percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

For the period from December to March, Committee; various bank holding company the Committee decided to seek behavior of and bank merger orders; and pending cases. reserve aggregates associated with growth of M-1 A and M-1B at annual rates of 5 to 6 373 Directors of Federal Reserve percent and in M-2 of about 8 percent, Banks and Branches abstracting from the impact of flows into List of directors by Federal Reserve Dis­ NOW accounts. Those rates were associat­ trict. ed with growth of M-1 A, M-1B, and M-2 from the fourth quarter of 1980 to the first A l Financial and Business Statistics quarter of 1981 at annual rates of about 2 percent, 23/4 percent, and 7 percent respec­ A3 Domestic Financial Statistics tively. If it appeared during the period be­ A44 Domestic Nonfinancial Statistics fore the next regular meeting that fluctua­ A52 International Statistics tions in the federal funds rate, taken over a A68 Special Tables period of time, within a range of 15 to 20 percent were likely to be inconsistent with A67 Guide to Tabular Presentation, the monetary and related reserve paths, the Statistical Releases, and Special Manager for Domestic Operations was Tables promptly to notify the Chairman, who would then decide whether the situation A82 BOARD OF GOVERNORS AND STAFF called for supplementary instructions from the Committee. In a telephone conference A84 FEDERAL OPEN MARKET COMMITTEE on February 24, the Committee agreed to and Staff; Advisory Councils accept some shortfall in growth of M-1 A and M-1B from the rates specified at the A85 Federal Reserve Banks, meeting on February 2-3. Branches, and Offices A86 Federal Reserve Board Publications 319 Legal Developments Revised Regulation Z; amendments to Reg­ A88 Index to Statistical Tables ulations K and P; amendment to regulation of the Depository Institutions Deregulation A90 Map of Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U . S . I n te r n a tio n a l T r a n s a c tio n s in 1 9 8 0 Lois E. Stekler of the Board's Division of Inter­ little change during the summer, appreciated national Finance prepared this article. sharply again in the fourth quarter. These relative movements in interest rates and exchange rates both influenced and in turn were The U.S. current account was in balance in 1980, influenced by private and official capital flows. essentially unchanged from 1979. Although the Because the current account was roughly in net result for all transactions for the two years balance in 1980, as it was in 1979, by definition was the same, there were significant develop­ the sum of all recorded capital flows plus the ments within the trade account, the nontrade statistical discrepancy also was equal to zero in current account, and the capital account. both years. However, the composition of these The most striking aspect of the current ac­ capital flows differed substantially between 1980 count in 1980 was the decline in the merchandise and 1979. In 1980 there were large net increases trade deficit despite a large increase in the value in foreign official reserve assets in the United of oil imports. Exports remained strong, while States, in contrast to large declines in 1979. A nonpetroleum imports were sharply cut by the comparison of private capital flows in the two decline in U.S. economic activity in the second years is clouded by the rise in the statistical dis­ quarter. The volume of oil imports fell about onecrepancy in the balance of payments accounts in fifth in 1980 as a result of both slower growth in 1980. Generally, the statistical discrepancy is gross national product and a reduction in the assumed to reflect unrecorded net private capital ratio of oil consumption to GNP. flows. The very large recorded net private out­ After growing rapidly in 1979, the surplus on flow in 1980 was almost matched by an equally nontrade current account fell slightly in 1980, large unrecorded net inflow as measured by the largely as a result of a reduction in net direct statistical discrepancy. investment receipts. Weaker economic activity in foreign countries, together with other factors 1. Interest rate differential and the exchange value that held down the profits earned abroad by U.S. petroleum companies, accounted for most of the March 1973=100 Percent per annum change. In contrast to many other countries, the Unit­ A / ed States was able to absorb the large increases Interest rate in oil prices in 1979 and 1980 and avoid a a differential / \ A[ deterioration in its current-account position. This relatively smooth adjustment helped main­ tain the average value of the dollar in 1980; during the year, however, exchange rates fluctu­ j \ ^Exchange value \ j^ \j^ of the U.S. dollar ated widely. These movements mirrored not so much changing prospects for the current account as changing financial market conditions. In par­ I t i i ! I i i i l ) l I t l I i t Dec. Mar. June Sept. Dec. Mar. June ticular, the path of the weighted-average value of 1979 1980 1981 the dollar at times responded strongly to the Exchange value of the U.S. dollar is the index of weighted-average interest rate differential between investments de­ exchange value of the U.S. dollar against currencies of other Group of Ten countries plus Switzerland using 1972-76 total trade weights. nominated in dollars and in foreign currencies Interest rate differential is the interest rate on three-month U.S. (chart 1). The dollar appreciated sharply in the CDs minus the weighted-average foreign three-month interest rate for other G-10 countries plus Switzerland using 1972-76 total trade first quarter, depreciated in the second, and after weights. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

270 Federal Reserve Bulletin □ April 1981 Merchandise Trade 2. Average exchange value of the U.S. dollar March 1973=100 The merchandise trade deficit declined slightly to $27.4 billion in 1980 despite a $19 billion increase in the value of imported oil (table 1). Movements of the trade deficit during the year largely reflect­ ed the impact on imports of fluctuations in U.S. economic activity and a reduction in oil con­ sumption relative to GNP. 1. U.S. merchandise trade, international accounts basis Billions of dollars, seasonally adjusted annual rate 1980 Item 1\ (yV/7yQ 1980 1977 1979 1981 Ql Q2 Q3 Q4 Price-adjusted dollar is weighted-average dollar multiplied by rela­ Exports.......... 182.1 221.8 218.4 218.4 224.7 225.6 tive consumer prices (U.S. divided by foreign consumer prices). Agricultural... 35.4 42.0 41.2 38.6 43.5 44.5 Nonagricultural 146.7 179.8 177.2 179.8 181.2 181.0 Imports.......... 211.5 249.1 261.8 248.4 236.2 250.1 change rates in late 1977 and in 1978 (chart 2). Petroleum___ 60.0 78.9 86.3 83.8 68.9 76.7 After the first quarter, however, export volume Nonpetroleum. 151.5 170.2 175.5 164.6 167.2 173.5 leveled off and then declined, as GNP in major Balance.......... -29.4 — 27.4 -43.4 -30.0 -11.4 -24.6 foreign trading partners fell (chart 3). This de­ Source. U.S. Department of Commerce. cline in export volume was concentrated in in­ dustrial supplies and machinery. Agricultural exports increased almost one-fifth The economic downturn in Europe has intensi­ in value in 1980, despite the embargo imposed in fied pressures in the European Community for January that limited grain exports to the Soviet protection and aid for certain industries, includ­ Union to 8 million metric tons. The volume of ing steel, automobiles, and petrochemicals. U.S. agricultural exports during 1980 averaged more exports of petrochemicals and related products than 10 percent above the total for 1979 and was (for example, fertilizers, synthetic fibers, and rug almost as high as the record rate in the fourth yarns) have been the target of dumping com­ quarter of 1979. As other major grain-exporting plaints and quotas. European producers have countries increased their shipments to Russia, charged that U.S. price controls on natural gas the United States expanded its sales to nontradi- subsidize U.S. production and give U.S. export­ tional markets, particularly to Eastern Europe, ers an unfair price advantage. U.S. trade negotia­ China, and Latin America. Agricultural export tors, on the other hand, have argued that our prices, which had risen as a result of the poor energy price controls do not constitute a subsidy Soviet and Eastern European harvests in 1979, as defined by the General Agreement on Tariffs were pushed up again in the second half of 1980 and Trade, and that lower raw material costs by the drought and poor harvests in the United afford only a small part of the advantage enjoyed States and several other countries. by U.S. producers. Most of the U.S. advantage The value of nonagricultural exports increased is accounted for by more modern equipment, more than one-fifth in 1980; this growth was economies of scale, and much higher rates of concentrated in the first quarter of the year and capacity utilization. Consultations between the was spread over a wide range of commodities United States and the European Community on and regional export markets. Part of the growth these issues are continuing. was attributable to price increases, but volume Oil imports rose to nearly $80 billion in 1980, also increased substantially—by 6 percent over an increase of 30 percent over 1979, as a result of 1979. U.S. exports continued to benefit from the higher prices; there was a substantial reduction lagged effects of improvements in U.S. competi­ in volume (table 2). The increases in petroleum tiveness resulting from the decline in dollar ex- prices in 1979 continued through the first quarter Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1980 271 3. Changes in real GNP in major countries whole averaged 7 million barrels per day, down one-fifth from 1979. This decline reflected slower Percent U.S. economic activity, a reduced rate of stockbuilding, and a continuation of the decline in the ratio of U.S. oil consumption to GNP as a result of conservation and the substitution of other energy sources. Curtailment of oil consumption relative to GNP was much sharper in the wake of recent price increases than after the 1973-74 increases (chart 4). Although the percentage in­ crease in oil import prices was higher in the earlier period, the rate of increase in the prices paid by consumers was about the same because of the relaxation of price controls in the later period and because excise taxes on gasoline changed little. Expectations of continued price increases may also have spurred adjustment after the recent round of oil price increases. Since Changes are from previous quarter, seasonally adjusted. “Foreign” imported oil accounts for only about 40 percent is the weighted average of 10 countries. of U.S. consumption, reductions in total con­ of 1980. From April to October oil import prices sumption imply, ceteris paribus, larger percent­ increased only slightly, but the outbreak of war age reductions in the value of oil imports. between Iraq and Iran in September disrupted supplies and led to a substantial increase in spot 4. Real import price of petroleum and products and market prices. At year-end the Organization of ratio of petroleum consumption to real GNP Petroleum Exporting Countries (OPEC) an­ Ratio scale, 1973 Ql = 100 nounced price increases of 10 percent, which are reflected in imports in early 1981. Prices of U.S. oil imports rose more than one-third from the fourth quarter of 1979 to the fourth quarter of 1980, and averaged about $32 per barrel at the end of the year. The volume of U.S. oil imports dropped after the first quarter of 1980 and for the year as a 2. Imports of petroleum and products, international accounts basis' Quantity5 Price2 Value Year (millions of (dollars (billions of barrels per day) per barrel) dollars) 1970................... 3.75 2.16 2.9 The real import price of petroleum and products is the average 1971................... 4.14 2.43 3.6 quarterly unit value of U.S. imported oil deflated by the GNP price 1972................... 5.00 2.57 4.7 index. 1973................... 6.83 3.33 8.4 The ratio of consumption to GNP is a four-quarter moving average 1974................... 6.61 10.98 26.6 of U.S. oil consumption (millions of barrels per day) divided by U.S. real GNP. 1975................... 6.50 11.45 27.0 Sources. U.S. Departments of Commerce and Energy. 1976................... 7.81 12.14 34.6 1977................... 9.27 13.29 45.0 1978................... 8.72 13.31 42.3 Nonpetroleum imports rose about 12 percent 1979................... 8.81 18.67 60.0 in value in 1980, entirely as a consequence of 1980................... 7.09 30.46 78.9 higher prices. The volume of these imports, 1. Includes imports into the U.S. Virgin Islands. which is highly sensitive to fluctuations in U.S. 2. Annual averages. Source. U.S. Department of Commerce. economic activity, began to decline in the second Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

272 Federal Reserve Bulletin □ April 1981 quarter and by the fourth quarter was almost 4 exporters from lowering prices in order to ex­ percent below the year-earlier level. Part of the pand sales. decline in import volume during 1980 was proba­ bly due also to the continued response of demand to previous improvements in the price competi­ The Nontrade Current Account tiveness of U.S. goods. The decrease in volume was concentrated in industrial supplies; only Net income on nontrade current-account items marginal declines were recorded in capital goods (services and private and government transfers) and consumer goods imports. fell slightly in 1980, but still offset the merchan­ The slowdown in U.S. economic activity also dise trade deficit and produced a current-account accentuated pressures for protection by certain balance for the second year in a row (chart 5). U.S. industries, particularly automobiles and Net direct investment receipts fell from $32 steel. In June the United Auto Workers filed a billion in 1979 to $28 billion in 1980, after having case before the International Trade Commission increased sharply in both 1978 and 1979 (table 3). claiming injury due to imports. However, the In part this fall was a consequence of weaker ITC ruled that imports were not the major cause economic activity abroad, but in part it was the of the current economic problems of the domes­ result of special nonrecurring transactions. Di­ tic automobile industry and that import restric­ rect investment receipts in the second quarter tions were not justified. Pressures for protection were depressed by a capital loss associated with have continued nevertheless, and the United the sale of assets by a U.S.-owned petroleum States is currently trying to reach an understand­ company to a Middle Eastern country; payments ing with the Japanese regarding their car exports in the third quarter were increased by capital to the United States. Because of the slump in gains associated with the sale of holdings in the sales of U.S.-produced cars, imports from Eu­ United States by a Canadian-owned company. In rope and Japan averaged 27 percent of total U.S. contrast to net direct investment receipts, net car sales in 1980 compared with 22 percent in income from other private investments rose, 1979. Although the volume of new foreign car reflecting higher interest rates in 1980. sales was about the same in 1980 as in 1979, the value of imports increased about 15 percent to 5. U.S. trade, services and transfers, and almost $19 billion because prices were higher and current-account balances, because new car inventories were gradually built up from low levels early in the year. In the fourth quarter the volume of foreign car imports de­ clined somewhat as sales leveled off. As a result of dumping charges filed by the U.S. Steel Corporation against certain European producers, the trigger-price mechanism (which had in effect set a minimum price for imported steel) was suspended from the end of March to the end of October 1980. The impact of the suspension and reimposition of the trigger-price mechanism on the aggregate steel import data is diflicult to assess. The value of steel imports was almost the same in 1980 as in 1979, about $7 billion. Volume was down, but imports as a percent of supply in the U.S. market increased slightly from 15 percent in 1979 to 16 percent in 1980. During the months when the trigger-price Balance on current account includes goods, services, and private mechanism was suspended, the threat of retroac­ and government transfers. tive dumping duties may have deterred foreign Annual data from the U.S. Department of Commerce. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1980 273 3. Direct investment receipts and payments lion to their dollar holdings. A large part of this Billions of dollars sum was acquired as a result of swaps between two European central banks and commercial Item 1977 1978 1979 1980 banks in their countries. These swaps were, in Net................................... 17.2 21.0 31.8 28.2 effect, open market operations using dollar-de­ Payments......................... 2.8 4.2 6.0 8.9 nominated assets. The central banks bought dol­ Receipts by industry........ 20.1 25.2 37.8 37.1 Petroleum .................... 5.7 5.7 13.2 n.a. lars spot and simultaneously sold them forward, Manufacturing............... 7.5 10.6 13.6 n.a. thereby providing liquidity in their own currency Other .......................... 7.0 8.9 10.9 n.a. to the domestic banking systems of the countries n.a. Not available. involved. Source. U.S. Department of Commerce. During 1980 the U.S. government took advan­ tage of periods when the dollar was strong to add to its holdings of foreign currencies. By the end Official Capital Flows of 1980, U.S. foreign currency reserve assets more than covered the Treasury’s debt denomi­ Foreign official reserve assets in the United nated in foreign currencies resulting from the States grew $16 billion in 1980 (table 4). This sales of the “Carter bonds.” inflow mainly reflected increases in the official holdings of members of OPEC. Data published by the Department of Commerce covering all Private Capital Flows OPEC investors (official plus private) indicate that the bulk of these OPEC funds were placed in The analysis of private capital flows in 1980 is securities issued by either the U.S. Treasury or clouded by the very large statistical discrepancy U.S. corporations. The liabilities of banks in the in the U.S. balance of payments accounts (chart United States to OPEC investors fell in 1980. 6). While undoubtedly there are errors and omis­ sions in the reporting of current-account transac­ 4. Change in official reserve assets tions, particularly service items, sharp shifts in Billions of dollars the statistical discrepancy are generally assumed 1980 to measure net unrecorded private capital flows. Item 1979 1980 Ql Q2 Q3 Q4 In 1980 the large unrecorded inflow almost offset the large net outflow through banks (table 5). Official reserve assets, net inflow( +)............... —15.4 8.0 -10.5 8.3 6.9 3.3 These two-way capital flows reflected the close Increase (-) in U.S. integration of U.S. and offshore financial mar­ reserve assets1 ....... -1.1 -8.2 -3.3 .5 -1.1 -4.3 Increase (+) in foreign kets: the use of U.S. financial markets for inter­ official reserve assets in the United States. -14.3 16.2 -7.2 7.8 8.0 7.6 mediation by foreigners and the conduct of U.S. Industrial countries ... -21.3 1.1 - 10.7 3.0 2.4 6.4 OPEC....................... 5.6 13.0 3.0 4.8 4.4 .9 domestic intermediation offshore. Other ....................... 1.5 2.1 .5 * 1.2 .3 In much of 1979 and in the first quarter of 1980, 1. Includes allocation of SDRs equal to $1,139 million in 1979 Ql U.S. banks borrowed heavily from their own and $1,152 million in 1980 Ql. offices in foreign countries in order to fund loans *Negligible. Source. U.S. Department of Commerce. in the United States (table 6). After the imposi­ tion of the credit restraint program in March and The official reserve holdings of industrial the slowing of U.S. economic activity, U.S. countries in the United States fell sharply during banks repaid about $20 billion in borrowings the first quarter of 1980, when the dollar was from their own offices in foreign countries and strong, because of these countries’ intervention expanded their loans to nonbanks and to unaffili­ sales of dollars and because of swap repayments ated banking offices in foreign countries. At the by the United States. Their holdings rose over same time, private foreigners were increasing the remainder of the year. In the final quarter of their holdings of assets in the United States 1980, when the value of the dollar was rising (much of it through unrecorded channels). Little sharply, industrial countries added about $6 bil­ of this inflow was placed directly in U.S. banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

274 Federal Reserve Bulletin □ April 1981 6. The statistical discrepancy in the able than U.S. bank rates. Increasingly U.S. balance of payments accounts corporations have been able to borrow from ._____•______________ ____ Billions of dollars foreigners directly without using U.S. banks as intermediaries. In some cases last year this bor­ 18 rowing took the form of private placements of U.S. corporate securities with OPEC investors. In other cases multinational corporations ob­ 12 tained funds from their offshore affiliates as a substitute for borrowing in the United States to finance domestic operations. Overall, foreigners 6 made record net purchases of U.S. corporate securities in 1980. As a result of the increased competition they A Mm ill 5 have faced from other forms of intermediation, both foreign and domestic, U.S. banks have increasingly been making loans to customers at 6 rates below the prime. Credit arrangements that give U.S. corporations the option to borrow ’60 ’65 70 75 ’80 at rates based on prime or Libor (the London Quarterly data from the Commerce Department. interbank offered rate) have spread. Many Liborbased loans have been booked offshore. Other These flows in opposite directions cannot be things equal, this shifting of loans to offshore explained by overall interest rate differentials branches results in a capital outflow from U.S. between the United States and foreign countries banks and a capital inflow through corporations. or by exchange rate expectations, for these In the second quarter of 1980, after the imposi­ would tend to produce flows by all private asset tion of credit controls, particularly the restric­ holders in the same direction. Instead, these two- tions on the growth of bank credit, U.S. banks way flows are related to differences in prefer­ lowered the prime rate very slowly, and a sub­ ences and opportunities faced by U.S. banks, stantial gap appeared between the prime rate and holders of foreign wealth, U.S. borrowers, and other money market rates, including Libor. foreign borrowers. For example, borrowing from Many corporations exercised their option to U.S. banks is only one of many sources of funds switch to Libor-priced loans, and loans to U.S. for U.S. corporations; these other sources are residents (nonbanks) from the foreign branches tapped when money market rates are more favor­ of U.S. banks increased (chart 7). 5. U.S. international transactions Billions of dollars, seasonally adjusted, outflow (-) 1980 Item 1979 1980 Ql Q2 Q3 Q4 Net private capital flows .............................. -5.0 -39.8 6.4 -24.8 -12.9 -8.3 Change in net foreign portions of banking offices in the United States1 ... 6.8 -35.9 6.1 -25.3 - 12.1 -4.7 Net private securities transactions2........... 3.1 6.9 4.9 -1.3 0 3.4 Net flows reported by nonbanking concerns -.3 n.a. -.8 1.5 .9 n.a. Net direct investment............................... -14.6 -12.4 - 3.8 .2 -1.7 -7.2 Net official reserve asset flows..................... -15.4 8.0 -10.5 8.3 6.9 3.3 Current-account balance............................... -.7 .1 -2.6 -2.4 4.5 .7 Other items................................................. -2.7 -3.9 -.4 -■1.1 -1.4 - 1.0 Seasonal adjustment discrepancy.................. -.1 1.5 -4.0 2.7 Statistical discrepancy ................................. 23! 8 35.6 7.1 18.7 6.9 2.9 1. Excluding liabilities to foreign official institutions. n.a. Not available. 2. Including private foreign purchases of U.S. Treasury obliga- Source. U.S. Department of Commerce, tions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. International Transactions in 1980 275 6. Capital flows reported by banks Billions of dollars, outflow (-) 1980 Item 1 1 y07/y0 lyou Ql Q2 Q3 Q4 Change in net foreign positions of banking offices in the United States (excluding liabilities to foreign official institutions) ................................................................ 6.8 -35.9 6.1 -25.3 - 12.1 -4.7 Through interbank transactions With own offices in foreign countries..................................................... 21.3 -12.3 7.1 -18.2 -2.4 1.2 With unaffiliated banking offices in foreign countries............................... 3.7 -6.4 2.8 - 2.2 -4.7 -2.3 Through nonbank transactions Claims on nonbanks in foreign countries (increase, -)............................ - 12.2 -11.9 -.4 -3.6 -4.2 -3.8 Liabilities to private nonbanks in foreign countries (including custody liabilities)............................................................................. 2.3 1.0 -.5 .9 -.5 1.1 Miscellaneous1......................................................................................... -8.3 -6.3 -2.9 -3.0 -.3 -.9 1. Miscellaneous includes custody claims and banks’ own claims and liabilities payable in foreign currencies. Source. U.S. Department of Commerce. The closer integration of U.S. and offshore ments in the United States by OPEC or other financial markets and the increased competition foreign investors probably contributed to the faced by U.S. banks from offshore centers are statistical discrepancy because investments in also reflected in the Eurodollar holdings of U.S. real estate or private placements of corporate residents. These holdings leveled off at about $60 securities are less likely to be reported accurate­ billion in 1980, after growing rapidly in 1979. A ly than are bank deposits or holdings of U.S. major part of these Eurodollar holdings was Treasury securities. Political instability abroad acquired through money market mutual funds may have provided an additional incentive for and unit investment trusts. private foreigners to invest in the United States As mentioned earlier, the statistical discrepan­ in 1980. In addition, part of the unrecorded cy reached a record high in 1980. Several factors inflow in the second quarter resulted from the may have combined to swell capital inflows omission from reports of some Libor-based bank through channels that were not adequately cov­ loans to U.S. corporations. ered by the reporting system for U.S. interna­ tional transactions. Diversification of invest- Outlook 7. Offshore branch loans to U.S. residents and From the first of this year to mid-February the the prime rate-Libor differential average value of the dollar relative to major foreign currencies rose sharply. During the fol­ lowing weeks part of that gain was reversed, but at the end of March the dollar remained about 10 percent above its average levels in 1979 and 1980. If sustained, this appreciation, combined with an inflation performance that has been worse on average than that of other major trading nations, will put U.S. producers under greater competitive pressures and make it difficult to sustain further reductions in the trade deficit. The outlook for the trade balance is also influenced by cyclical factors. The widening of Mar. June Sept. Dec. Mar. _________1980______________________ 1981 the merchandise trade deficit in the first two Loans are credit extended to U.S. nonbank residents by offshore months of 1981 reflects in part the impact of branches of U.S. banks obtained from required reserve reports. Data more rapid U.S. economic growth on imports. on the prime rate and the London interbank offered rate (Libor) are from Salomon Brothers’ International Bond Market Roundup. The value of U.S. petroleum imports is likely Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

276 Federal Reserve Bulletin □ April 1981 to grow more slowly in 1981 than in 1980. World ring severe reductions in production abroad, supply has been increased as a result of expand­ price increases are likely to be relatively re­ ed exports from Iran and Iraq, and demand has strained during the next year. However, under been reduced by slow economic growth in other these circumstances the direct investment re­ industrial countries and by the continued adjust­ ceipts of U.S. oil companies are not likely to ment of consumers to past price increases. Bar­ increase substantially. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

277 N e w M o n e t a r y C o n tr o l P r o c e d u r e : F in d in g s a n d E v a lu a tio n fr o m a F e d e r a l R e s e r v e S tu d y This article, which appeared originally as an Overview of Findings with appendix to the Monetary Policy Report to Con- Regard to Experience gress by the Board of Governors of the Federal since Adoption of New Procedure Reserve System, February 25, 1981, was pre­ pared by Stephen H. Axilrod, the Board's Staff Questions investigated in reviewing experience Director for Monetary and Financial Policy. with the new control procedure included, among others, its impact on precision of money control, This paper reviews experience with the new volatility of interest rates, the course of econom­ monetary control procedure established in Octo­ ic activity, and exchange market conditions. Of ber 1979 and evaluates implications for current course, other influences on financial markets and and alternative control techniques. The new pro­ the broader economy were surely of far more cedure involved employing reserve aggregates— importance than the particular technical innova­ on a day-to-day basis, nonborrowed reserves— tions under consideration here. Indeed, a major as operating tools for achieving control of the problem has been to distinguish the impacts of money supply. Less emphasis was placed on the new procedure per se from larger influences confining short-term fluctuations in the federal operating on the economy. This difficulty is funds rate—the overnight market rate reflecting especially acute given the relatively short period the demand for and supply of bank reserves. The of time since the new procedure was implement­ change in procedure, it should be pointed out, ed—a period of time that may have been too represented a technical innovation rather than a short for market participants to have fully adjust­ change in the broader objectives of monetary ed to the new environment and a period of time policy or in the monetary targets themselves. in which markets were buffeted by changing Target ranges for various measures of the money inflationary expectations, fiscal uncertainties, supply, with the actual behavior of money in the credit controls, and oil price shocks. course of 1980, are shown in the chart. The paper is divided into three sections. The first presents an overview of findings about the Relation between Reserves and Money effects of the new monetary control procedure on economic and financial behavior based on evi­ 1. Over the operating periods between meetings dence gathered in staff papers.1 Because the new of the Federal Open Market Committee, actual control procedure was designed to strengthen the nonborrowed reserves fell below the Trading System’s ability to control the money supply, the Desk’s operating target by about 0.3 of 1 percent second section provides certain additional back­ on average; the average absolute miss was about ground analysis relevant to assessment of the 0.4 of 1 percent. These deviations reflected in role of money as an intermediate target for part errors in projection of uncontrollable factors monetary policy. The third section contains an affecting reserves (such as float). In addition, the evaluation of the current operating procedure Desk at times accommodated to variations rela­ and alternatives. tive to expectations in banks’ demand for bor­ rowing in the course of a bank statement week 1. The staff papers are listed in the appendix and are (for example, an unexpected willingness by available on request from Publications Services, Board of banks to obtain reserves by borrowing heavily Governors of the Federal Reserve System, Washington, D.C. 20551. over a weekend). Total reserves came out some- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

278 Federal Reserve Bulletin □ April 1981 Growth ranges and actual monetary growth Billions of dollars of dollars The shaded lines reflect adjustments that should be made for by permitting all institutions to offer NOW and similar accounts technical reasons to the original range for M-l A and M-l B to allow for beginning in 1981. As the year progressed, banks offered ATS unanticipated shifts of existing deposits from demand deposits to accounts more actively and more funds than expected were being interest-bearing transactions accounts, such as ATS (automatic trans­ diverted to these accounts from demand deposits. Such shifts are fer from savings) and related accounts. At the beginning of 1980 it estimated to have depressed growth of M-l A over the year 1980 by 3/4 appeared that such shifts would have just a limited effect on growth of to 1 percentage point, and of M-lB by Vi to 3A of a percentage point, M-l A and M-IB, and the longer-run growth range for M-l A was set more than had been originally anticipated. The shaded range allows only V2 percentage point below the growth range for M-IB. Passage of for these unanticipated shifts, and therefore in an economic sense the Monetary Control Act later altered the financial environment by more accurately represents the intentions underlying the original making permanent the authority of banks to offer ATS accounts and target. what above intermeeting period paths, by about level of M-lB relative to target path during the 0.2 of a percent on average; the absolute miss four- to seven-week operating periods between averaged about 0.8 of a percent. The individual FOMC meetings was a little over 0.6 of a per­ intermeeting period misses reflected deviation of cent. This degree of va riability was in line with— money stock from short-run targets, variations in in some cases less than and in some cases more excess reserves, and multiplier adjustments to than—model simulation results (holding various the original path (to take account of changes in reserve measures at predetermined target levels required reserves for a given level of deposits) for the simulations).2 In comparing the models that turned out to be incomplete. and the reserve technique actually used, it 2. Econometric evidence from simulations of should also be observed that model simulations monthly money market models carried out with generally implied more interest rate variability various reserve measures as operating targets (nonborrowed and total reserves and the mone­ 2. The root mean square errors of actual misses and tary base), given the existing institutional frame­ simulated model misses ranged around 0.7 to 0.8 of a percent over short-run operating periods of a month or so. This would work, buttresses indications from last year’s mean that, with disturbances similar to last year’s, two-thirds actual experience that the relationship between of the time M-IB would generally come within plus or minus reserves and money is relatively loose in the 0.7 to 0.8 of a percent of the intermeeting target path over approximately a one-month period (or, expressed in annual short run. Over the one-year period since Octo­ rate terms, within a range of plus or minus 8 to 10 percentage ber 1979, the mean absolute error of misses in the points over such a period). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Monetary Control Procedure: Findings and Evaluation 279 last year than proved to be the product of the rates that would not have contributed to better technique actually in use. control of money over time. 3. In the model simulations of the past year, control of money supply through strict adher­ ence to a total reserves or total monetary base Variability in Money Growth target produced more slippage than control through the nonborrowed counterparts of each. 1. Evaluation of the variability of money supply This phenomenon largely reflects the presence of series is importantly affected by the seasonal multiplier disturbances on the supply side that adjustment process. Seasonal factors applied would be generated, for example, in the current during a current year are unable adequately to institutional environment by changes in deposit reflect changing seasonal patterns in the course mix and hence in required reserves for any given of that year; after a year is over, therefore, level of money supply. In the model simulations, reestimation of seasonal factors often tends to use of total reserves or the total base as an smooth variability. Based on current seasonal invariant target over the control period does not adjustment factors for the year just past (that is, permit these disturbances to be cushioned by factors before seasonal revisions that take ac­ changes in borrowings. count of the influence of actual experience this 4. Judgmental predictions of the multiplier re­ year), variability in weekly, monthly, and quar­ lationship between reserves or base measures terly growth of M-1 (and also M-2) was substan­ and money made since the shift in operating tially greater than in any year during the past procedure were generally superior to, though on decade. However, when the variability in money a few tests not significantly different from, fore­ growth during the year from October 1979 to casts derived from econometric models. October 1980 is compared with variability in 5. Over a longer period than a month (or than earlier years—with earlier years adjusted using an intermeeting period) errors in the predicted seasonal factors that were current in those relationship between money and reserves may be years—nearly all of the heightened variability in expected to average out; that is, over time, weekly growth of M-1 and a sizable portion of errors in one direction tend to be offset by errors the monthly and quarterly variability are re­ in the other. Simulations of the Board’s monthly moved. While this comparison makes it seem model suggest that such a process is at work. In probable that seasonal factor distortions are actual operations over a one-year period since overstating variability in the year just past, the October 1979, the absolute miss in the level of extent cannot be assessed with confidence until a M-1B when individual misses relative to the number of years have passed. In general, it short-run target paths are averaged over three or would appear that money has been more variable four intermeeting periods was reduced from a over the past year—especially on a monthly and little over 0.6 of a percent (reported above) to quarterly basis—though so far as can be judged more than 0.4 of a percent. This represents a from the available data, still generally well within somewhat smaller reduction than would have the range of foreign experience with money sup­ been expected from certain results and may have ply volatility. reflected the nature of unusually large, unantici­ 2. The variability in money growth of the past pated successive month-to-month changes in year appears to be related to an unusual combi­ money demand last year, first in one direction nation of circumstances: and then in the other. These changes were relat­ a. There were large swings within the year ed in part to identifiable special factors such as in the demand for money resulting from sharp the imposition and subsequent removal of the short-run variations in economic activity caused credit control program. Accommodation to such in large part by factors independent of the new special and temporary factors, as they emerged, monetary control procedure, such as the imposi­ might tend to lengthen the period over which tion and subsequent removal of the credit control deviations from monetary targets could be ex­ program. The imposition and subsequent remov­ pected to average out, but would, by the same al of the credit control program may have also token, tend to dampen fluctuations in interest increased the variability of money growth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

280 Federal Reserve Bulletin □ April 1981 through a more direct channel, as the associated estimated standard deviation of noise in monthly large variation in bank loans was accompanied growth rates is 3V2 percent at an annual rate. The by temporary changes in demand deposits—for noise factor declines for growth rates over longer example, as large loan repayments were initially periods of time. made from existing demand balances. b. In addition, econometric evidence from a variety of models suggests that there were “un­ Variability of Interest Rates explained” factors other than economic activity and interest rates causing substantial fluctuations 1. As expected, the federal funds rate has been in money demand. In particular, money levels more variable on an intra-day, intra-weekly, and fell considerably short of model simulations (giv­ inter-weekly basis since the new procedure en gross national product and interest rates) in was implemented. Intra-day and day-to-day vari­ the second quarter, when money growth was ability has tended to be at least twice as large as negative. Relatively rapid growth in subsequent before, as have weekly changes after adjusting quarters reflected in part a tendency for money for trend. This greater variability of the federal levels to move back toward more normal rela­ funds rate reflects the role of nonborrowed tionships with GNP and interest rates. reserves as an operating guide for the Desk. 3. The money targets on which reserve paths 2. There has also been heightened variability were based reflected the intention to return mon­ of interest rates on Treasury securities of all ey over time to the long-run objective following maturities following adoption of the new operat­ divergences. In 1980 the target for narrow money ing procedure. Based on data from which cycli­ in the month following the FOMC meeting typi­ cal movements were removed, the variability in cally implied making up about 30 percent of the Treasury yields measured on a weekly average difference between the projected level of the basis has been at least twice as large as before money stock in the month of the meeting and the October 1979. long-run target path. If disturbances in 1980 had 3. The relationship over interest rate cycles been more representative of those prevailing in between the federal funds rate and yields on the 1970s, simulations using the Board’s monthly Treasury securities of all maturities has been model suggest that the reserve operating tech­ essentially the same before and after October nique would have kept money closer to long-run 1979, suggesting that the underlying linkage be­ objectives on a month-by-month basis last year tween the federal funds rate and other market than actually was the case. These simulations rates has remained aibout unchanged. At the also indicate a distinct trade-off between variabil­ same time, however, correlations between very ity of the federal funds rate—and money market short-run nonsystematic movements in the funds rates generally—and the speed with which at­ rate and other market rates have increased sub­ tempts are made to return the money stock to its stantially since the new procedure was imple­ longer-term path once it moves off path. The mented. This higher correlation possibly reflects more rapid the attempted return to path, the the sensitivity of market participants to day-tolarger are the implied fluctuations in money day changes in the funds rate in last year’s market rates. uncertain environment but possibly also reflects 4. Interpretation of money supply volatility is concurrent adjustments in market interest rates complicated by the large amount of noise in generally, particularly short rates, that tend to weekly and monthly changes in first-published occur as closer control is sought over the money figures for the narrow monetary aggregates (and supply, given variations in money demand. for monthly changes in M-2) resulting from tran­ sitory variation and seasonal factor uncertainty. Based on data for the 1973-79 period, the esti­ Effects on Domestic Financial Markets mated standard deviation of the noise factor for monthly changes in M-1 A and M-1B is about $1.5 The swings in interest rates last year and the high billion (4l/2 percent at an annual rate), and about levels reached clearly affected behavior in finan­ $3.3 billion for weekly changes. For M-2, the cial markets. It is difficult to isolate the role of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Monetary Control Procedure: Findings and Evaluation 281 the new operating procedure, as such, in contrib­ leaner inventory positions relative to transac­ uting to interest rate swings or changes in market tions; turnover of dealer inventories rose last behavior. It is likely that large cyclical variations year as a very large expansion in gross transac­ in interest rates would have developed last year tions outpaced the rise in the level of inventories. in any event if the basic monetary aggregate targets were pursued by other operating tech­ 3. Underwriting spreads on corporate bonds. niques in the face of cyclical variations in money Underwriting spreads on corporate bonds issued and credit demands that were exceptionally large on a negotiated basis did not widen, on balance, and compressed in time. And adjustments that over the year since October 1979. However, data took place in financial market behavior last year on competitively bid issues suggest that spreads largely represented adaptations that would have on such issues have widened. This might tend to been expected on the basis of past cyclical raise bond costs, but any such effect last year experience—for example, constraints on housing would appear to have been very small relative to finance—or that were related to the special credit the more basic supply and demand conditions control program. Market adjustments that might affecting markets. have primarily reflected adaptations to the new procedure as such are likely to be those more 4. Commercial bank behavior. Bank behavior associated with a perceived greater continuing last year was strongly influenced by a number of risk of short-term interest rate volatility—adjust­ factors other than the new procedure, such as the ments that would be difficult to detect in an imposition and removal of the special voluntary environment like that of last year, which was credit restraint program, marginal reserve re­ dominated by cyclical changes in credit flows, a quirements on managed liabilities, and increasing credit control program, and inflationary expecta­ reliance, especially by small banks, on money tions. market certificates as a source of funds. It is difficult to detect changes in behavior associated 1. Mortgage markets. Greater interest rate with the new procedure per se. There appears to volatility since October 1979 may have hastened have been some increased reliance on floatingthe trend in process for a number of years toward rate loans, especially for term loans, but this more flexible mortgage instruments, such as trend was evident before October 1979. variable-rate, renegotiable, and equity participa­ tion mortgages. In addition, mortgage bankers 5. Futures markets. Futures market activity and other originators in their commitment poli­ expanded rapidly in the period following October cies appear to have attempted to avoid some of 1979, raising the possibility that the new proce­ the risk of interest rate changes occurring be­ dure led to an increased desire to hedge against tween the time a commitment is made and funds expected greater interest rate fluctuations. How­ are extended. They have done so by setting rates ever, the expansion in activity represented a or points at the time of closing, shortening the continuation of a trend of recent years, as has period for guaranteed fixed-rate mortgage com­ been the case with other market adaptations mitments, and by imposing large nonrefundable noted above. It is virtually impossible to separate commitment fees to discourage cancellation if growth in futures activity arising from attempts rates should decline. to reduce exposure to interest rate risk in the new environment from underlying trend growth 2. Dealer market for Treasury and agency connected with increasing familiarization by the securities. Wider bid-ask spreads on Treasury public with the variety of financial futures instru­ bills appear to have emerged last year. Evidence ments that are becoming available. on such spreads for coupon issues is difficult to interpret; spreads rose considerably a few 6. Liquidity premiums. An attempt was made months before introduction of the new proce­ to determine whether there was an increase last dure, and thereafter remained wider than in year in liquidity premiums, manifested by a rise earlier years. Greater uncertainty about interest in long-term rates relative to short-term rates. rates may have influenced dealers to maintain Such a result might be expected if risk-averse Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

282 Federal Reserve Bulletin □ April 1981 financial market participants attempted to pro­ effects on the domestic price level, because price tect themselves from a perceived risk that the increases caused by currency depreciation would new procedure would make for greater interest not be fully offset by the reverse effect of curren­ rate variability and hence greater risk of capital cy appreciation, is not supported by econometric loss on holdings of longer-term issues. There evidence. Therefore, the short-term variability of appears to be little, if any, evidence that liquidity exchange rates since October 1979 would not premiums became greater last year—although as itself appear to have raised the domestic price noted above there may have been some increase level. Meanwhile, the underlying trend toward of transaction costs in financial markets. appreciation since that time would have had a favorable effect on the price level. Exchange Market and Other External Impacts Economic Activity 1. The spot value of the dollar appreciated more 1. Assessing the contribution of the new proce­ than 5 percent in the 14-month period subsequent dure as such to the pattern of economic activity to late September 1979, though there were pro­ and inflationary expectations is complicated—as nounced cycles that coincided with intermediate- noted at other points in this paper—by the force term movements of interest rates in the United of other factors that were importantly influencing States. the markets for goods and services over the 2. Day-to-day movement in money market recent period, including the effect of the basic rates related to the new procedure could have money supply targets themselves. Certain “fun­ had some influence on very short-term exchange damentals”—such as the previous sharp in­ rate volatility. Spot rates have displayed more crease in oil prices, the relatively low saving variability on a daily basis since the new proce­ rate, and the illiquid balance sheet of the house­ dure was adopted, reflecting greater daily vari­ hold sector—suggest that economic activity ability of interest rate differentials between U.S. would have contracted in any event in 1980. In dollar assets and foreign currency assets. In addition, prices and real economic activity were addition, the evidence on weekly and monthly strongly influenced by the highly sensitive state exchange rate movements suggests more vari­ of inflationary psychology, the imposition and ability, but the evidence is not so conclusive as removal of the credit control program that lasted that for daily variability. from mid-March to early July 1980, and the 3. There is little evidence of a significant in­ erosion of fiscal restraint. crease in the variability of foreign interest rates, 2. Nevertheless, to the extent that the new except in Canada, on a monthly basis related to control procedure encouraged more prompt in­ the new procedure as such. Some countries, terest rate adjustments in response to cyclical especially developing countries with currencies fluctuations in money and credit demands, it tied to the dollar and with inflexible interest rate probably exerted some influence on the pattern structures, appear to have experienced some of economic activity. It may have hastened the technical difficulties over this period connected, slowdown in economic activity—especially in for example, with the impact of interest rate housing and possibly consumer durable goods— variability on financial flows. in early 1980 and also hastened the recovery in 4. The evidence does not suggest that the new the summer, as interest rates advanced rapidly to operating procedure has contributed to the vari­ peak levels and then contracted sharply. Psycho­ able nature of gross U.S. international capital logical reactions to the credit control program, flows since the fall of 1979. Significantly greater however, may have been an important influence contributing factors were the credit control pro­ on the depth of the recession and the promptness gram and marginal reserve requirements on man­ and strength of the subsequent rebound. There aged liabilities. was a sharp contraction in spending following 5. The proposition that more short-term vari­ introduction of the program, and relief on the ability of exchange rates could have adverse part of both financial institutions and borrowers Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Monetary Control Procedure: Findings and Evaluation 283 as the program was phased out probably encour­ slightly more impact. The smoothing of money aged a sizable resurgence of spending. growth would have been at the cost of even 3. In view of the lags in the response of capital greater interest rate variability than was actually spending plans to changes in credit conditions, observed over the last five quarters. the new procedure does not appear to have exerted much influence on plant and equipment spending during the past year. The timing of General Considerations inventory movements, by contrast, may have been altered to the extent that the new procedure Evaluation of the current and alternative operat­ had effects on the pattern of final sales and on ing techniques to be discussed in the next section movements in short-term financing costs. depends very much on the role accorded inter­ 4. The new control procedure was adopted in mediate targets, particularly the monetary aggre­ part to provide more assurance that inflation gates, in the formulation of monetary policy. would come under control (as money growth was This section examines advantages and disadvan­ restrained), and thereby to reduce inflationary tages involved in employing monetary aggre­ expectations. It is difficult to measure inflation­ gates, or for that matter interest rates, as inter­ ary expectations, let alone to attribute changes to mediate targets and also examines certain a technical change in monetary control proce­ limitations on the feasible range of target set­ dures in so highly unsettled a period as last year. tings. Indirect evidence about inflation expectations based on changes in interest rates is obviously difficult to interpret, since interest rates are also Monetary Aggregates influenced by other factors. Some direct evi­ as Intermediate Targets dence about consumer expectations of inflation can be gleaned from the University of Michigan 1. Advantages index of consumer sentiment. No clear improve­ a. Money stock control tends to work to­ ment in inflationary attitudes is evident until the ward stabilizing GNP when the economy is buf­ spring, probably related in large part to the sharp feted by disturbances to spending on goods and contraction of economic activity in the second services and shifts in inflation expectations; such quarter. Also, according to the Michigan survey, factors appeared to be an important influence on there did not appear to be any significant economic and financial behavior last year. If worsening of expectations in the latter part of the spending surges unexpectedly, for example, as it year as the economy strengthened. did in the second half of 1980, adherence to a 5. The Board’s large-scale quarterly econo­ money stock target would automatically lead to metric model, as well as two other much more tighter financial markets, tending to offset some simplified models used for comparison, were of the surge in spending. Similarly, if spending employed to help evaluate the extent to which were to weaken unexpectedly—and very sub­ the actual fluctuations in money and interest stantial weakness developed in the second quar­ rates affected economic activity in the course of ter of last year—efforts to hold to a money stock the year. These models, of course, all suffer from target would lead automatically to lower market an inability to take account adequately of attitu- rates of interest, which would tend to partially dinal changes and other behavioral factors relat­ restore spending to desired levels. ed to the special conditions of a particular year, b. Current approaches emphasizing control including any attitudinal changes that might be of monetary aggregates rest on the proposition occasioned by the shift in operating procedure. that planned deceleration in monetary growth Simulation results suggest that, because of long will lower inflation over time by limiting funds response lags, the pattern of economic activity available to finance price increases and encour­ last year would not have been particularly sensi­ aging expectations and behavioral patterns con­ tive to efforts at smoothing the quarter-to-quarter sistent with reduced inflation. pattern either of money growth or of interest rate c. By clearly communicating to the public variations, though smoothing money growth had the Federal Reserve’s objectives for monetary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

284 Federal Reserve Bulletin □ April 1981 policy, a monetary aggregates targeting proce­ periods. It would be difficult to attribute the dure enables private decisionmakers to plan their cyclical behavior of economic activity over the activities better and to make wage and price past year to such a process, though, given model decisions that are more harmonious with nonin- estimates of the interest-elasticity of money de­ flationary growth in money and credit. mand and of relatively long lags between interest Targeting on monetary aggregates involves rates and spending (with such lags implying a adjustments of market interest rates, in response longer cycle than observed last year). to underlying changes in demands for credit, that d. The concept of money is elusive and is might otherwise be unduly delayed, either on the becoming more so as new substitutes evolve for down- or on the up-side. traditional transaction media and as improve­ ments in financial technology facilitate the ability 2. Disadvantages of the public to shift funds about for payments a. Looseness in the relationship between purposes. money demand and nominal GNP reduces the significance of monetary aggregates as a target, Interest Rates As Targets particularly in the short run. Unexpected shifts in this relationship lead to undesirable interest 1. Advantages rate movements with strict adherence to money a. Control over total spending can be supply targets. Last year, there was evidence of strengthened by greater emphasis on stabilizing looseness in this relationship. For example, as interest rates when disturbances stem mainly noted earlier, econometric models suggest a siz­ from the monetary sector rather than from mar­ able downward shift in the demand for money in kets for goods and services. the second quarter, given actual GNP and inter­ b. Control over rates might make for greater est rates. short-run stability in financial markets, since b. Attempts to achieve steady growth in market institutions might be relatively certain monetary aggregates on a month-by-month or about the terms and conditions under which they even quarter-by-quarter basis can lead to large can “safely” meet near-term credit demands. fluctuations in interest rates, given the high de­ gree of variability in short-run money flows and 2. Disadvantages the relatively interest-inelastic demand for mon­ a. It is very difficult to determine the appro­ ey over the near term. Large fluctuations in priate interest rate level, particularly in an infla­ interest rates have certain risks; for instance, tionary environment in which shifting expecta­ they might endanger financial institutions that tions of inflation are continuously altering the are unable to make timely compensating adjust­ relationship between real and nominal market ments in their balance sheets, adversely affect rates of interest. the functions of securities and exchange mar­ b. Efforts to stabilize interest rates tend to kets, and lead to confusion about the basic thrust amplify economic cycles stemming from cyclical of policy. variations in the demand for goods and services, c. Money supply targeting procedures since by stabilizing rates, procyclical growth in might introduce recurrent cyclical responses of money and credit would be heightened. An up­ economic activity following an economic distur­ swing in the demand for goods and services, for bance. Whether this is a realistic risk depends on example, would be accompanied by an expan­ the nature of response functions in the economy. sion in the volume of money and credit. By It would be a high risk in the degree that (1) contrast, with a money stock targeting proce­ money demand was very insensitive to interest dure, resistance would be introduced automati­ rate changes (and thus interest rates would need cally through increases in interest rates.3 to change sharply to maintain steady money growth in response to an exogenous disturbance 3. Even with a money stock procedure such resistance from the goods market), and (2) there was no may not be sufficient to hold nominal GNP down to a previously desired level if the upward shock in demand for significant current impact on spending from such goods and services involves a rise in velocity—as it well changes in rates, but impacts were felt over later might if it resulted from, say, expansion in federal spending. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Monetary Control Procedure: Findings and Evaluation 285 c. While interest rate targets could in con­that such close control is needed to attain the cept be adjusted promptly so as to minimize the underlying economic objective of encouraging likelihood of a procyclical monetary policy, in noninflationary economic growth. Statistical in­ practice the institutional decisionmaking proce­ vestigation suggests that “noise” alone accounts dure often limits the ability to make sizable for substantial variation in monthly money adjustments in the target. This could constrain growth rates. Moreover, model simulations indi­ interest rate variations when rates are taken as cate that variations in money growth, above or the intermediate target of monetary policy. below targets, lasting a quarter or so are not likely to have substantial economic effects. 4. Uncertainties involving the relationship be­ Limitations in the Targeting Process tween money demand and GNP—as evidenced by unexpected variations in such demand last Regardless of whether monetary aggregates or year—suggest the need for a degree of flexibility interest rates are selected as intermediate tar­ in target setting (ranges may be preferable to gets, there appear to be a number of limitations point estimates) and also suggest the possibility on the monetary authority’s range of choice of that, at times, there may be a need for large the particular target setting and the precision deviations from predetermined targets or for with which the target is pursued. changes in the targets. On the other hand, devi­ 1. The particular target setting must take into ations from target ranges involve the risk of account the capacity of the economy and finan­ changes in market expectations that are counter­ cial markets to adjust to the targets and the productive (for example, when money supply degree to which the implications of those targets runs strong relative to target, inflationary expec­ can be understood by and are acceptable to the tations may be heightened, compounding the larger public whose behavior patterns are in­ difficulties of controlling inflation). In general, volved. Inflexibilities in wage and price determi­ though, in the degree that there is success in nation, for example, have implications for the achieving targets over time, expectations are less degree to which monetary targets can be re­ likely to be adversely affected by short-run devi­ duced, without risking unduly adverse implica­ ations in money growth. tions for economic activity in the short run. This would be less of a limitation to the extent that attitudinal shifts—in response to either an­ Evaluation of Operating Procedures nounced monetary targets or other factors— brought upward wage and price pressures down Because the past year was in many ways excep­ in line with monetary targets. Experience of the tional—and because a year, or 15 months, in any past year has not yet provided a basis for believ­ event is too short a time frame within which to ing that the lengthy lags between money growth judge whether observed relationships are acci­ and price changes have been shortened signifi­ dental to the period or are lasting—evaluation of cantly or that inflation expectations have begun the new control procedure and of possible alter­ to respond more rapidly to the money control natives must at best be quite tentative. The procedure per se. choice of operating procedure would be influ­ 2. The question may arise as to whether dis­ enced by the predictability of certain financial turbances in domestic or in foreign exchange and economic relationships and by the capacity markets may on occasion require short-run de­ of markets to adjust to operating techniques partures from intermediate-term targets of mone­ without severe distortions—evidence about tary policy. However, these markets appear to which was presented in the first section. In have adjusted to a substantial degree of interest addition, the desirability of retaining the present rate or exchange rate fluctuation in the past year. reserve procedure (with or without possible 3. Precise month-by-month control of money modifications), of shifting to an alternative re­ does not seem possible, given existing behavior serve procedure, or indeed of shifting back en­ patterns in the economy and financial markets tirely to a federal funds rate operating guide and institutional factors. Nor is there evidence depends in part on the value to be placed on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

286 Federal Reserve Bulletin □ April 1981 relatively tight short-run control of money, given occurred last year. At the same time, the proce­ uncertainties about the likely sources of potential dure worked to limit the extent to which changes disturbances in economic and financial condi­ in demands for goods and services (and thus in tions. transaction demands for money) were reflected If there were complete certainty about eco­ in actual money growth. Actual money growth nomic relationships, the choice of operating pro­ deviated from short-run targets last year, but cedure would not be particularly critical, for a there were large accompanying changes in inter­ given money stock target would be associated est rates that tended, over time, to set up forces with unique, known values for the federal funds bringing money back toward path. Nonetheless, rate, nonborrowed reserves, and the monetary money growth over time deviated more from base. And the monetary authority could achieve path than might have been expected relative to its objectives no matter which of these instru­ the average degree of looseness that seems to ments was selected for operating purposes. exist in reserve-to-money relationships. In practice, however, markets are continually Whereas the experience of last year may have subject to disturbances that are not known in been atypical because of the nature of distur­ advance. The principal kinds of disturbances are bances during the year, still a number of modifi­ those occurring in overall spending (the market cations to the operating procedure used since for goods and services), those occurring in the October 1979 might be considered for their po­ demand for money (independently of GNP and tential value in reducing slippage in money rela­ interest rates), and those affecting the supply tive to reserve paths. These modifications all schedule for money (such as deposit mix or have certain disadvantages, however, that need banks’ demand for excess reserves). Moreover, to be weighed against their varying advantages such disturbances—all of which were evident for more precise monetary control, to the degree last year—can be of a temporary or self-revers­ that closer control in the short run is considered ing variety, or they can be permanent. desirable. Alternative operating procedures tend to pro­ 1. Evidence of the past year suggests that duce different outcomes for the pattern of inter­ during an intermeeting period relatively prompt est rates and money growth in the face of these downward (or upward) adjustments in the origi­ disturbances. With some procedures, and de­ nal nonborrowed reserve path may be needed in pending on the source of the disturbance, inter­ an effort to offset, over time, increased (or de­ est rates would be changed more, while with creased) demand for borrowing when money is others the money stock and other financial quan­ strengthening (or weakening) relative to target. tities would absorb more of the impact. The As an alternative, more prompt upward (or choice of operating procedure therefore in­ downward) adjustments in the discount rate volves, among other things, judgments about would tend to discourage (or encourage) borrow­ whether there is more risk to monetary policy’s ing over time (in practice the actual level of ultimate objective of noninflationary growth borrowing will not change until money demand from procedures that tend to emphasize interest changes sufficiently to alter reserves demanded rates as operating targets with some implication to meet reserve requirements).4 These adjust­ of a relatively gradual change in rates, or from 4. Experience has demonstrated that it is difficult to deter­ those that tend to work more directly against mine in advance the appropriate level of borrowing to be money supply variations. employed in constructing the nonborrowed reserve path consistent with the short-run money supply target. This level of borrowing would depend on a projection of market interest rates consistent with the money supply target path and Assessment of knowledge of the willingness of depository institutions to Present Operating Procedure borrow, given the spread between market rates and the discount rate, and could differ significantly from borrowing levels based on or ranging around recent experience. In The present reserve operating procedure proved attempting to forecast borrowings, evidence from models flexible enough to permit some accommodation may be usefully weighed along with judgmental assessment of particular conditions at the time. However, in view of consid­ in the short run to unexpected shifts in money erable uncertainties about interest rate projections, the high demand, given GNP and interest rates, that degree of year-to-year variability in the success with which Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Monetary Control Procedure: Findings and Evaluation 287 ments run the risk of increasing the volatility of types of discount window credit—based on, say, short-run interest rate movements in view of the size of borrowing. This approach would tend to transitory fluctuations often experienced in make the relationship between borrowing and short-run money demand. However, they could short-term market rates more certain by elim­ also dampen the amplitude of longer-term swings inating from the decision to borrow the uncer­ of interest rates by more promptly leading to tainties connected with administrative guide­ adjustments by banks that bring money growth lines. Also, it thereby transforms the highest back toward path. discount rate on the schedule into an upper limit 2. More fundamental changes in the adminis­ for the federal funds rate. There are, however, tration of the discount window and in the way legal questions about the System’s ability to use discount rates are structured and varied could be size of borrowing as a criterion, administrative considered for strengthening the relationship be­ problems in overseeing the adequacy of collater­ tween reserves and money. al and the financial condition of a vast number of a. At an extreme, discount window borrow­ potential regular borrowers, and difficult ques­ ing might be limited to emergency needs. This is tions with regard to the appropriate gradient for tantamount to adhering to a total reserves or the discount rate schedule. Too steep a gradient monetary base path. However, this would elimi­ risks undue market interest rate fluctuations, nate the valuable buffering function of the dis­ particularly at times when borrowing demands count window. The window buffers the money may be changing for transitory reasons, while stock (and the markets) from disturbances affect­ too flat a gradient—and at the limit a perfectly ing the supply of money (such as changing de­ flat one—would tend to eliminate the incentive of mands for excess reserves and changes in the banks to make portfolio adjustments that would deposit mix affecting required reserves). Its role bring money supply back to target. in that respect was evident from the results of c. The recent policy of applying a surcharge model simulations showing a weak relationship above the basic discount rate for frequent bor­ between total reserves or the monetary base and rowing (by larger banks) represents a step to­ money (when reserves or the base are treated as ward a graduated discount rate structure within exogenously determined). In addition, the dis­ the present administrative guidelines and tends, count window cushions markets from the full when applied, to speed up the response of mar­ impact of variations in money demand that may ket rates to overshoots or undershoots of money be transitory or which the FOMC may wish at relative to path. This approach has the attraction least partially to accommodate. Finally, lagged of flexibility, but in practice it has proved diffi­ reserve accounting requires access to the dis­ cult to assess because of the limited experience count window in the short run on occasions with it thus far. when required reserves run above the nonbor­ d. Another approach to speeding up the rowed reserve path (if that path is to be main­ response of banks within present administrative tained).5 guidelines would be to tie the discount rate to b. Another approach to consider would be market rates, either as a penalty rate or not. to eliminate administrative guidelines at the dis­ However, this approach tends to limit flexibility count window and to substitute a graduated and raises the danger of upward or downward discount rate schedule for adjustment credit—in ratcheting of market rates in the short run that contrast to emergency and other longer-term may be excessive for monetary control needs and unduly disturbing to the functioning of mar­ kets.6 While a tied rate accelerates the response models project economic and financial relationships, and the heightened variability in demands for discount window credit evident last year, projections of borrowing demand from 6. This danger is greatest in the degree that the discount interest rate forecasts and past bank behavior are subject to a rate is tied to a current or very recent market rate. If required considerable degree of error. reserves expand rapidly in the current week, banks will have 5. Even with contemporaneous instead of lagged reserve to borrow the added required reserves that are not being accounting, it is by no means clear that banks would be able accommodated by the nonborrowed reserve target. As a to make needed adjustments reducing their required reserves result market rates must rise to the point at which banks are within a statement week—except at the expense of relatively willing to borrow from the discount window. With an attempt extreme interest rate movements. to maintain a “penalty” discount rate, the new market rate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

288 Federal Reserve Bulletin □ April 1981 of market rates, the change may be counterpro­ otherwise been more variable on average. Thus, ductive—particularly if money behavior were there is no reason not to continue making such going to reverse itself naturally or if the rise in adjustments, though it remains unclear, because borrowing were needed to moderate shocks from multiplier changes are so erratic, whether full the supply side—and could intensify short-run adjustment should be made to each week’s added money supply and interest rate cycles. information. 3. A closer short-run relationship between re­ 5. It appears from tentative results based on serves and money could be attained by measures the Board’s monthly money market model that that strengthen the link between required re­ the faster the FOMC attempts to move back serves and deposits in the particular money stock toward the longer-run target for money, once off that is being controlled. One such measure would target, the more likely is the long-run target to be be a shift from lagged reserve accounting (LRA) hit, assuming no federal funds rate constraint. to contemporaneous reserve accounting (CRA), However, these results also suggest that the a shift that the Board has already announced it is more quickly a return to path is sought, the more contemplating. Such a shift would make the link substantial fluctuations in money market rates between current reserves and current deposits are likely to be. And experience of the past year stronger, though there still would be relatively suggests these more substantial fluctuations sizable slippage between reserves and money would be transmitted broadly through the rate from other sources. The monetary control ad­ structure. Moreover, for a more rapid return vantages of CRA apply particularly to the short beyond a certain speed—perhaps around three run. They have to be weighed against (1) the months—it seems as if the gain in reducing the benefits of LRA for reducing the cost of reserve chance of departures from longer-term money management by the banks, (2) the contribution of targets is small compared with the increasing LRA to the Trading Desk’s ability to assess chance of a wider range of variability in money reserve supply conditions, and (3) judgments market rates. about the adequacy of monetary control under LRA over a longer-term period. Assessment of Other Targeting Procedures 4. The present relatively complicated reserve requirement structure, even apart from LRA, 1. Monetary base or total reserves makes for considerable slippage in the relation a. The principal reason for adopting these between reserves and money. While the Mone­ measures as day-to-day operating guides would tary Control Act has tended to simplify the be to ensure more precise control of money. required reserve structure, it will be a number of However, there is no clear evidence that money years before the new structure is fully phased in. can be controlled moire closely through use of a Because of the unpredictability of shifts in de­ strict total reserves or monetary base operating posit mix, in the ratio of currency to deposits, as procedure under the present institutional frame­ well as in banks’ demand for excess reserves, work than through current procedures. Indeed, judgmental multiplier adjustments to original most of the evidence suggested that these mea­ paths were made week-by-week last year as new sures could produce more slippage because of information was obtained. Model simulations supply-side shocks to the money multiplier. suggest money-reserve relationships would have These shocks tend to be partially offset by changes in borrowing with a nonborrowed re­ serves day-to-day operating target. Under a total would therefore have to move temporarily above the discount reserves or a base target, there would not auto­ rate, which could not be maintained, in those circumstances, above current market rates. Market rates would go up by the matically be an offsetting tendency. In practice, amount needed to reestablish the normal spread of market though, the precision of a total reserve or base rates over the discount rate (that emerges from pressures target would be improved through judgmental generated by discount window administration and banks’ reluctance to borrow). But this rise in rates may well bring adjustments to the reserve path that offset multi­ about a further rise in the discount rate if an attempt is made plier shifts. Improvements could also be effect­ to reestablish a “penalty” rate, entailing yet a further rise in ed, and the need for judgment reduced, by fur­ market rates, so long as required reserves remain at an advanced level. ther simplification of the reserve requirement Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

New Monetary Control Procedure: Findings and Evaluation 289 structure (such as removal of the reserve require­ can be taken as an indication to hold back on the ment on nonpersonal time deposits if the FOMC supply of nonborrowed reserves relative to their mainly wishes to control narrow money) and by a path (in order over time to offset the rise in return to CRA. Whereas such changes would borrowing) or to raise the discount rate (in order tighten the linkage between reserves and money, over time to discourage a rise in borrowing). shifts between currency and deposits would still tend to be a factor causing slippage—with model 2. Federal funds rate target simulations indicating greater slippage with the a. Model simulations, given existing institu­ monetary base as the operating target (which is tional arrangements, indicated that in concept essentially currency plus total reserves) than slippage in short-run money stock targets could with total reserves. With a monetary base target, be little different on the whole under a fundsshort-run volatility in currency would lead to rate-targeting regime than under a nonborrowed large variations in money supply because reserves regime. However, in practice—to be changes in the public’s holdings of currency reasonably certain of attaining its long-run tar­ would need to be offset by equal changes in bank get—the FOMC would need to be willing to reserves; and these changes in reserves would, move the funds rate quite actively when it was given the fractional reserve system, force a mul­ the operating instrument and be able to predict tiple change of deposits in the money supply. fairly well the appropriate extent, and indeed the With a reserves target, the changes in money direction, of the required change. Uncertainties supply would be no larger than the currency in those respects were among the factors leading variation; consequently, money supply would be to a shift toward reserve targeting. less volatile with a reserves target. b. A federal funds rate operating target b. In any event, strict adherence to total would have advantages if the FOMC wished to reserve or base targets appears to be impractical provide more scope for being accommodative to over short-run operating periods in the current variations in money demand, either because of institutional setting. With the present LRA sys­ uncertainties about the proper path of money tem, it is clearly not feasible. If CRA were growth within its longer-run target band or be­ adopted, such targets might become somewhat cause of a belief that money demand distur­ more practical, though efforts to attain them bances are more likely to occur than distur­ would accentuate short-run interest rate fluctua­ bances in the market for goods and services. tions. Such fluctuations, given the inelasticity of c. The federal funds rate range under the money demand relative to interest rates over the current reserve operating procedure has been short run, would stem from the inability of the much wider than under the earlier funds-ratereserve supply to provide at least partial accom­ targeting regime. Moreover, the range under the modation to transitory money demand varia­ new procedure has generally been changed as the tions, and would also result from remaining limits were approached—a practice that has been multiplier slippage. In the process, borrowing at consistent with evidence suggesting that a wide the discount window would fluctuate widely, as range of variation in the funds rate is a by­ banks reacted to efforts by the Open Market product of efforts to attain tight control of the Desk to reach the total reserve target. money supply. In that context, a relatively nar­ c. While there are practical questions about row acceptable funds rate range would only have the feasibility of targeting on total reserves (or advantages in the degree that the FOMC (1) felt the base) on a day-to-day or week-to-week basis, more scope could be given in a particular period, in a longer-run context a path for such reserve for one reason or another, to variations of money aggregates, properly adjusted for multiplier from a pre-set target, or (2) felt that narrow funds shifts, could serve as a general guide in helping to rate limits provided a device that, given the need make adjustments in the nonborrowed reserve to make judgments about sources of economic path or in indicating the need for a change in the and monetary disturbances, would prompt fur­ basic discount rate—as is, in fact, present prac­ ther assessment of underlying monetary and tice. For example, when total reserves are run­ other conditions by the FOMC in the interval ning strong relative to their adjusted path, this between meetings. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

290 Federal Reserve Bulletin □ April 1981 APPENDIX: Monetary Control Project Staff Papers Davis, Richard G. “Monetary Aggregates and Levin, Fred J. and Paul Meek. “Implementing the Use of Intermediate Targets in Monetary the New Procedures: The View from the Trad­ Policy.” ing Desk.” Enzler, Jared J. “Economic Disturbances and Lindsey, David, and others. “Monetary Control Monetary Policy Responses.” Experience under the New Operating Proce­ _____ and Lewis Johnson. “Cycles Resulting dures.” from Money Stock Targeting.” Pierce, David A. “Trend and Noise in the Mone­ Greene, Margaret L. “The New Approach to tary Aggregates.” Monetary Policy—A View from the Foreign Slifman, Lawrence, and Edward McKelvey. Exchange Trading Desk at the Federal Re­ “The New Operating Procedures and Eco­ serve Bank of New York.” nomic Activity since October 1979.” Johnson, Dana, and others. “Interest Rate Vari­ Tinsley, Peter A., and others. “Money Market ability under the New Operating Procedures Impacts of Alternative Operating Proce­ and the Initial Response in Financial Mar­ dures.” kets.” Truman, Edwin M., aind others. “The New Fed­ Keir, Peter. “Impact of Discount Policy Proce­ eral Reserve Operating Procedure: An Exter­ dures on the Effectiveness of Reserve Target­ nal Perspective.” ing.” Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

291 Industrial Production Released for publication April 15 put of construction supplies edged down further and remained more than 5 percent below their Industrial production increased an estimated 0.4 level a year earlier. percent in March, after a decline of similar Total materials output was little changed in magnitude in February. Most of the March gain March. Durable goods materials increased 0.8 was due to an increase in the output of autos, trucks, and related parts; changes in other group­ Seasonally adjusted, ratio scale, 1967= 100 ings were mixed. At 151.7 percent of the 1967 average, the March index was 8.0 percent above its July 1980 low but slightly below its yearearlier level. Industrial output in the first quarter of 1981 averaged 1.6 percent higher than in the fourth quarter of 1980—a 6.6 percent rise at a compound annual rate. In market groupings, output of consumer goods increased 0.5 percent in March, reflecting a 7.6 percent rise in automotive products. Autos were assembled at an annual rate of 6.5 million units—about 12 percent more than in February— and output of lightweight trucks for consumer use also rose sharply. Production of home goods, such as appliances, edged up in March, but - MANUFACTURING: output of consumer nondurable goods decreased Nondurable^. slightly further. Following a small decline in February, output of business equipment ad­ vanced 0.8 percent in March; this was due, in large part, to sharp increases in production of Federal Reserve indexes, seasonally adjusted. Latest figures: building and mining equipment and trucks. Out­ March. Auto sales and stocks include imports. Major market groupings 1967 == 100 Percentage change from preceding month Percentage change, Grouping 1981 1980 1981 Mar. 1980 to Feb.p Mar.e Nov. Dec. Jan. Feb. Mar. Mar. 1981 Total industrial production...... 151.1 151.7 1.7 1.1 .5 -.4 .4 -.3 Products, total...................... 149.6 150.3 1.0 .8 .2 -.4 .5 .2 Final products.................... 147.8 148.8 1.2 .5 -.1 -.3 .7 .7 Consumer goods.............. 146.9 147.7 1.0 -.2 -.3 -.2 .5 -.6 Durable ...................... 137.9 141.6 2.4 -1.1 -2.0 -.4 2.7 -1.7 Nondurable................. 150.5 150.2 .5 .1 .3 -.1 -.2 -.1 Business equipment......... 178.0 179.5 1.3 1.9 .4 -.3 .8 1.9 Defense and space........... 100.7 101.0 1.3 .9 .1 -.1 .3 4.0 Intermediate products......... 156.1 156.2 .7 1.7 1.1 -1.1 .1 -1.3 Construction supplies...... 145.0 144.4 1.6 1.3 1.9 -1.6 -.4 -5.2 Materials............................. 153.4 153.7 2.8 1.4 .9 -.3 .2 -1.0 p Preliminary. e Estimated. Note. Indexes are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

292 Federal Reserve Bulletin □ April 1981 Major industry groupings 1967= 100 Percentage change from preceding month Percentge change, Grouping 1981 1980 1981 Mar. 1980 to Feb.p Mar.e Nov. Dec. Jan. Feb. Mar. Mar. 1981 Manufacturing...... 150.4 151.0 1.8 1.0 .3 -.5 .4 -.7 Durable ........... 140.1 141.3 2.6 .9 .5 -.9 .9 -1.5 Nondurable...... 165.2 165.0 .9 1.0 .2 -.1 -.1 .2 Mining............... 143.3 143.7 3.0 2.4 1.5 1.3 .3 8.0 Utilities .............. 169.7 169.9 .6 -.7 .4 -.8 .1 -1.2 p Preliminary. e Estimated. Note. Indexes are seasonally adjusted. percent, mainly reflecting increases in the pro­ in durable goods manufacturing reflected a siz­ duction of parts for consumer durables and for able gain in production of motor vehicles and equipment. Output of nondurable goods materi­ parts and a moderate increase in machinery als edged down further; and production of energy output. Production of nondurable goods indus­ materials declined, mainly because of strike- tries edged down again in March. Due to in­ related decreases in coal output. creases in metal mining and oil and gas extrac­ In industry groupings, manufacturing output tion, mining production increased slightly, increased 0.4 percent in March, after a decline of despite decreased coal output. Output of utilities 0.5 percent in February. A 0.9 percent increase was little changed in March. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

293 Statements to Congress Statement by Paul A. Volcker, Chairman, Board As you are painfully aware, inflation is not yet of Governors of the Federal Reserve System, receding. We did avoid a further ratcheting up in before the Committee on the Budget, U.S. the general rate of inflation last year, despite House of Representatives, March 27, 1981. another quantum jump in oil prices and strong wage pressures. But that “holding action” has I am pleased to be here to discuss our shared been accompanied by little growth, on balance, concerns about the interrelationships of budget­ in economic activity since 1979, and unemploy­ ary and monetary policy. I have the distinct ment is high in several important sectors of the impression that there is a broad consensus about economy. the appropriate goals for economic policy, in­ Moreover, inflationary expectations are now cluding the priority need for a marked reduction deeply embedded in public attitudes, as reflected in inflation as a prerequisite for sustained growth in the practices and policies of individuals and in employment, productivity, and real income. economic institutions. After years of false starts The difficult task we have before us is to trans­ in the effort against inflation, there is widespread late that general consensus into effective action. skepticism about the prospects for success. The administration has provided a firm lead in its Overcoming this legacy of doubt is a critical program for economic recovery. I hope that our challenge that must be met in shaping—and in dialogue today will further contribute to this carrying out—all our policies. process by enhancing mutual understanding of Changing both expectations and actual price our needs and policies. performance will be difficult. But it is essential if In principle, it is broadly accepted that the our economic future is to be secure. objective of monetary policy must be to restrain Monetary policy inevitably has a crucial role in growth in money and credit as part of the process this effort. It must be—and must be seen to be— of turning back inflationary forces. Indeed, the consistently directed toward curbing excessive effort to control inflation has, until now, often growth in money and credit. Such restraint is seemed to rely almost exclusively on monetary inherent in the Federal Reserve’s commitment to policy. The consequence has been higher interest reduce the growth of money and credit over time rates and greater strains on our financial fabric until inflationary pressures subside. and on industries particularly dependent on cred­ Our specific objectives for monetary and cred­ it markets than would otherwise be necessary. it growth in 1981 were presented to the House There is also understanding that no escape and Senate banking committees last month. from those financial pressures can be found in Without going into detail here, these targets expansive monetary policies. In the end, such an point toward further reductions in the growth of approach would only aggravate the very infla­ money and credit as compared with the rates of tionary forces that underlie so many of the increase in other recent years. In the context of difficulties in the economy and in financial mar­ strong inflationary pressures, the targets are in­ kets. What is necessary is that other policies— tended to be restrictive, as they necessarily must including most specifically the fiscal decisions be if there is to be a winding down of the that are the province of this committee—be in inflationary process. harmony with the need to deal forcefully with The need for that basic discipline is common to inflation. In particular, I cannot stress too virtually all schools of economic thought and is, strongly the need to change the strong upward as you know, recognized in the administration’s trend in federal spending that has characterized program for economic recovery. The only issue recent years. for debate is how vigorously to proceed. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

294 Federal Reserve Bulletin □ April 1981 I might also note that our efforts to keep tion proposed by the administration. There ap­ money growth within acceptable bounds will at pears to be broad recognition of the nature and times be associated with substantial variations in urgency of our problems and a willingness to short-term interest rates in response to shifting bring to bear a new discipline on spending. credit demands, changes in economic activity, or This committee and others will be debating, as other factors. Increases or declines in short-term you must, the administration’s proposals. In my rates—such as have occurred recently—are view, it would be inappropriate for me or the sometimes cited as an indication that Federal Federal Reserve to inject ourselves into consid­ Reserve “policy” is changing. But those inter­ eration of the precise form of the budget and tax pretations are misleading. Those interest rate cuts. Rather, I will confine myself to some fluctuations typically reflect shifts in credit de­ general comments about the overall thrust of the mands and expectations about inflation and eco­ budget and how it interrelates with the problems nomic activity, which can be volatile, and should and purposes of monetary policy. not call into question our intent to maintain firm In that connection, I want to emphasize that control on monetary growth over time. At times, my judgments about appropriate budgetary deci­ with inflation strong and the economy expand­ sions are not heavily dependent on a particular ing, restraint of money and credit expansion may forecast about economic activity over the next well be associated with high interest rates. But year or two. Of course, the actual budget results those high interest rates are fundamentally a for any fiscal year are in fact sensitive to what is reflection of the strength of inflation and exces­ happening with respect to prices, unemploy­ sive credit demands; they are not in themselves a ment, real income, and interest rates. But our policy objective. Indeed, over time, restraint on ability to forecast these variables with precision money creation should lead to lower, not higher, is demonstrably limited. The range of uncertain­ interest rates as inflation subsides. ty is probably increased at a time of major new It is clear that the process of reducing inflation policy initiatives and possible “external” shocks through monetary restraint can be painful. It because past relationships may be a less reliable implies less money and credit than is needed to guide to the future. support both the current rate of inflation and I know you will need, in the end, to make sustained growth of real activity. Obviously, the precise numerical assumptions in presenting the faster that inflation subsides, the greater will be budget. But rather than suggesting precisely the scope for real gains in economic activity. which assumptions are most plausible for fiscal Monetary policy is, of course, designed to en­ 1982, I believe it more important to emphasize courage and speed this disinflationary process. certain basic and longer-run considerations that But if strong cost pressures from wage settle­ seem to me valid whether or not growth or ments, energy prices, or other factors persist or inflation turns out moderately better or worse accelerate, strains in financial markets will be next year than a particular forecast might sug­ greater than otherwise, and real activity is likely gest. I emphasize the point because the problems to remain constrained. All of that points up the with which we are dealing are fundamental; they importance of other aspects of economic policy have arisen over a long period of years; and the and, in particular, the stance of fiscal policy, the solutions must be geared to the fundamentals principal concern of this committee. rather than to cyclical concerns, which to a The Congress and the administration are now considerable degree are unpredictable in any in the process of making a fundamental reap­ event. Put another way, I believe we have a clear praisal of the conduct of economic policy. The idea of where the major economic and financial focus of this effort is the administration’s far- risks lie, and now the task is to minimize them. reaching proposals for tax cuts, spending reduc­ Among the fundamental considerations is the tions, and regulatory reforms. The design and desirability, from the standpoint of economic success of the program that emerges are critical performance over time, of tax reduction. I have to the effort to reduce inflation and increase little doubt that the growing level of taxes— productivity. I personally am encouraged by the which relative to gross national product is ap­ initial congressional reactions to the new direc­ proaching the highest level in our history, even Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 295 during war—is a factor in slowing growth, adding the tendency has been to add or enlarge pro­ to inflationary cost pressures, and distorting sav­ grams and to underestimate their expenditure ings and investment decisions. requirements. If history is any guide, spending There is no dispute among economists that the tends to exceed intentions as we move from particular structure of taxes can have important initial budgetary planning to actual results, and I effects on incentives to work, to save, to invest, would suggest that you appraise the risks in that and to bear risk. Consequently, to the extent light. taxes can prudently be reduced, it is important I would also be cautious, in assessing budget­ that the reductions be designed in a manner to ary prospects, of the view that increased busi­ maximize the beneficial effects on incentives. ness and personal savings should be looked to as That is why, as I understand it, the administra­ a means of financing a deficit. Savings are excep­ tion has urged that tax proposals involving other tionally low today. I share the hope and expecta­ considerations be deferred. tion that new economic policies and declining What limits our ability to reduce taxes is, of inflation will restore a more adequate level of course, the potential budgetary deficits—deficits savings. But those savings, as and when they that are already likely to be large in the period materialize, are urgently needed to finance pro­ immediately ahead. Given restrained growth in ductive investment and housing—they should money and credit, the sale of Treasury securities not be dissipated in financing prolonged huge to finance a deficit curtails the availability of budgetary deficits. funds to private borrowers, potentially reducing For all those reasons, considerations of gener­ needed productive investment. As the deficits al economic policy suggest all the risks lie on the become larger, the threat of extraordinary pres­ side of cutting expenditures too little. I am sures and strains on interest rates and financial acutely aware of the difficulties and constraints markets increases, and it is more difficult to that you face—the need to increase defense control the money supply and inflation. The risks spending, to protect the truly needy, to pay are increased to the extent deficits are incurred interest on the national debt, and to maintain when the economy is expanding. strength and continuity in other essential pro­ That is why I emphasized at the start the grams. In the broadest sense, those security, critical importance of cutting back as sharply as social, and other requirements ultimately limit possible the inexorable rise in federal spending. what can be done to reduce spending. But looked In my judgment, that must be the keystone in the at from the standpoint of the need to reduce arch of any new approach to economic policy—a inflation and to encourage economic growth, you policy that can offer a real prospect of success in cannot, in my judgment, cut too much. Every dealing with inflation and in laying the ground­ added dollar of spending cuts will provide more work for lower interest rates and more vigorous assurance that needed tax reduction can be ac­ growth. complished within a prudent budgetary frame­ In approaching that job, we should bear in work. Every step toward a reduced budgetary mind the seemingly chronic tendency for actual deficit can only help head off tension in financial federal spending to exceed official estimates for markets and make room for private investment. future fiscal years. Recent experience in that You know how difficult it has been in practice regard has been particularly disturbing. We have to achieve a reasonable balance between federal usually been overly optimistic in our assump­ outlays and receipts. The record is clear; only tions about economic circumstances, overesti­ one surplus has occurred in the federal budget in mating growth in the economy or underestimat­ the past 20 years. We will not reach that objec­ ing inflation. To be sure, there will always be tive in fiscal 1982. But we must not continue to errors in estimates, and in some circumstances— rationalize decisions that can only have the effect an unexpected recession, for example—a tempo­ of sustaining huge deficits indefinitely. rary, automatic response of expenditures to dete­ In setting the 1982 budget, we can meet two riorating economic conditions may be appropri­ crucial criteria that seem to me implicit in the ate. But not all of the unanticipated expenditure administration’s thinking. First, we can cut back increases reflect new economic circumstances; the upward trend in spending and significantly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

296 Federal Reserve Bulletin □ April 1981 reduce the ratio of spending to the GNP. Second, will, and the administration’s proposals for spe­ we can put the budget on a path that realistically cific cuts over a broad array of programs point will produce balance and move into surplus as the way. the economy returns to levels of unemployment The Federal Reserve has an indispensable role and capacity utilization characteristic of most to play in dealing with inflation. To be effective, recent years. we must demonstrate that our own commitment You are well aware that there are no easy is strong, visible, and sustained. That is our choices before you. But the wrong choice, it intention. But the effectiveness of our effort seems to me, would be to let this opportunity depends on complementary fiscal, regulatory, pass to change the direction of federal spending. and other government policies. I feel sure that Then, the risk of prolonging inflation and unsatis­ we are in fundamental agreement about those factory economic performance and of great concepts. What remains is to confront unflinch­ strains in financial markets would be aggravated. ingly the hard decisions that this effort will Surely, there is room for cutting if there is the require. □ Statement by Theodore E. Allison, Staff Director their intrinsic value.) Of course, the intentional for Federal Reserve Bank Activities, Board of hoarding of the penny severely reduced supplies Governors of the Federal Reserve System, be­ available for monetary use. By March 1980, the fore the Subcommittee on Consumer Affairs of demand for pennies so greatly exceeded avail­ the Committee on Banking, Finance and Urban able supplies that the Federal Reserve began to Affairs, U.S. House of Representatives, March allocate them on a monthly basis. This allocation 31, 1981. program has had to be continued throughout 1980 and into 1981 because demand has contin­ I am pleased to present the views of the Federal ued to exceed supplies despite the fact that Reserve Board regarding the Treasury Depart­ copper prices are currently less than $0.90 per ment’s plans to change the metallic composition pound. of the one-cent coin. The Federal Reserve has no The Bureau of the Mint proposes to change the objection to the introduction of the zinc-based metallic composition of the penny from 95 per­ penny and the eventual replacement of the pre­ cent copper and 5 percent zinc to 97.6 percent dominantly copper one. zinc and 2.4 percent copper. This change in There are two reasons to support this step. composition should reduce or eliminate the spec­ First, because the price of zinc is considerably ulative demand for the one-cent coin, since the less than the price of copper, a zinc-based penny price of zinc averaged less than $0.45 per pound will be cheaper to produce. Second, since copper in 1980. Moreover, the change from copper to prices fluctuate substantially with cyclical and zinc will result in a $50 million annual savings in other developments, we are exposed to the likeli­ production costs when the conversion is fully hood of recurring speculative demand for copper implemented, because of the lower price of zinc. pennies from time to time, the effect of which Other savings will accrue as well: The zinc penny would severely limit their availability for mone­ will weigh less, will use less material, will be tary use. cheaper to transport, and can be produced with In February 1980, demand for pennies was less energy. running 87 percent above the same period in Based on historical experience, the introduc­ 1979. This increase occurred rather suddenly, tion of the new penny may be accompanied by a when copper prices rose from $0.93 per pound in temporary surge in demand that will subside December 1979 to a peak of $1.43 in February after numismatic interests are fulfilled. More­ 1980. (When the price of copper rises above over, because production of the old copper pen­ $1.12 per pound, the total cost to produce a ny will have to continue for awhile, there will penny exceeds its face value and, at $1.50 per also be some increase in its demand for both pound, it becomes profitable to melt pennies for numismatic and speculative purposes. If it were Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 297 possible, the mint would build up excess inven­ A minor concern of the Federal Reserve Sys­ tories equal to the anticipated temporary surge in tem relates to verifying coin deposits received demand before the new penny was introduced. from the commercial banks that will contain a This practice worked very successfully when the mix of new and old pennies. At present, the bicentennial quarter was introduced in 1976, and predominant means of verifying coin is by weigh­ existing supplies were sufficient to meet numis­ ing it within certain tolerance ranges. However, matic demands as well as needs for monetary this method will no longer be accurate because use. Unfortunately, the Bureau of the Mint ap­ the new coin is 19 percent lighter. We believe parently will be unable to generate adequate this difficulty can be resolved by statistical sam­ excess inventories of the new penny to meet all pling of coin deposits. contingencies due to budget constraints and limi­ In evaluating the need for a new penny, the tations on the availability of the copper-coated possibility of eliminating pennies as a unit of zinc blanks. The initial conversion from the old coinage should be considered. The point is often to the new penny will take place just at the San made that such a step might raise the price level Francisco and West Point mint facilities, which slightly, because some prices might be rounded will be able to deliver only 300 million new up to the nearest nickel. However, the effect pennies per month starting in the fall of 1981. would not be large or lasting because competitive Meanwhile, production of 700 million old pen­ pressures would result in some rounding down as nies per month will continue at the Philadelphia well as up. There is precedent here and abroad and Denver facilities. Since the current demand for eliminating outdated coins. For example, the for pennies is running at around 1.4 billion per half cent circulated freely from 1793 until 1857, month, total production of 1 billion a month will when it was discontinued because it was judged mean continued allocations until full and mean­ to be nonfunctional. Clearly a half-cent coin was ingful increases to production of the zinc penny worth more in purchasing power in those years are completed. than a penny today. We are not prepared at this These shortages are unavoidable given the time to make a recommendation in this state­ current constraints under which the mint is oper­ ment, given the political and other aspects in­ ating, and it is therefore recommended that the volved. But, if the demand for the one-cent coin conversion to the new penny take place as soon were to decline significantly in the future, this as possible. While the inventories of copper option would have to be carefully considered. pennies at the mint and the Reserve Banks are One other historical event is that during 1943, relatively low, we hope they will be sufficient to when copper was at a premium due to the war respond to a moderate increase in demand during effort, the composition of the penny was changed the transition period. from copper to zinc-coated steel. However, Because the mint is considering freezing the since this modified coin was rather unattractive 1981 date to increase the supply of the 1981 dated and somewhat resembled the existing dime, it coins, and because the new and old pennies will was unpopular with the general public. One be identical in appearance, not much numismatic lesson to be learned from this experience is that interest is expected. However, a dramatic in­ the new penny should be distinct from silvercrease in the price of copper or in attention colored coinage, as it will be. generated by public discussion could aggravate In summary, the Board supports the mint’s the shortage. proposal to introduce a new zinc-based penny. Statement by Frederick H. Schultz, Vice Chair­ I am pleased to have the opportunity to partici­ man, Board of Governors of the Federal Reserve pate in these hearings on the effects of monetary System, before the Committee on Small Busi­ policy on small business. At the outset, I want to ness, U.S. House of Representatives, April 7, emphasize that the financing problems of small 1981. business are a subject very much on our minds at Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

298 Federal Reserve Bulletin □ April 1981 the Federal Reserve. We recognize that in many and lower inflationary expectations can this key respects small businesses form the backbone country hope to obtain sound economic growth of the American economic system, providing and the kind of economic environment in which much of the employment, investment, technolog­ businesses, small and large, can thrive. An es­ ical innovation, and competitive vigor that are so sential element in the effort to restore price important to the continued vitality of our econo­ stability is the Federal Reserve’s commitment to my. At the same time, we are aware of the a responsible and disciplined monetary policy. problems small businesses are encountering in Experience over long periods and in many differ­ the current financial and economic environment. ent countries has shown that inflation cannot These are the problems that your committee persist in the absence of rapid monetary growth grappled with last year, and in my testimony I to support it; it seems only sensible, therefore, will be commenting on the issues raised in the that the Federal Reserve work to bring down the report you published last fall on “Federal Mone­ pace of money expansion over the long run to tary Policy and Its Effect on Small Business.” noninflationary levels. This is the approach that Although I am glad to participate in your has governed monetary policy for well over two deliberations on these issues, none of us can be years now. pleased that conditions have made it necessary Last year, as the Federal Reserve refused to to hold hearings again on the same subject that accommodate inflation-fed demands for money was of such concern more than a year ago. The and credit, interest rates rose substantially. reason we are back is, I believe, the result of the These rate advances also were given impetus by continuation and virulence of inflation over the concerns about inflation, the unexpected resil­ intervening period. Small businesses themselves ience of the economy, and the growing federal most frequently list inflation as their number one deficit, factors whose importance cannot be problem, even ahead of high interest rates, gov­ overemphasized. Under circumstances like ernment regulation, and taxation. those prevailing last year, the Federal Reserve It is easy to see why this is so. Businesses— could not have attempted to hold down interest whose survival depends on their ability to earn a rates without abdicating its commitment to reasonable rate of return on their investments— achieving targeted growth rates in the monetary must be able to anticipate changes in product aggregates and thus its commitment to a policy sales and future income flows. The persistence of that would ultimately result in breaking the infla­ generally rising prices greatly alters established tion spiral. patterns of spending and saving, and creates an Unfortunately, experience has shown that environment in which it is particularly difficult to when monetary policy carries a disproportionate discern underlying demand and supply relation­ responsibility for restraining inflationary pres­ ships. In particular, price adjustments that are sures, the greatest burden falls on those sectors frequent and variable undermine the ability of of the economy that are heavily dependent on business managers to plan; profit flows are much financial intermediaries for credit—including less predictable; and the risks of undertaking housing, farmers, and small businesses. There is new investments are greatly increased. Small no question that small businesses have been businesses are especially vulnerable to the prob­ particularly hard hit by the high level of interest lems associated with inflation. Unexpected shifts rates. Because they typically have fewer alterna­ in product demand are likely to be much more tive sources of funds, small firms rely heavily on devastating to a small firm whose activities typi­ commercial banks for credit, and therefore much cally are concentrated in a narrow range of of their borrowing is short or intermediate term. product lines or in a small geographic area. In As interest rates rise, small firms, which in addition, the sluggish pace of economic activity general already borrow at rates above those that has accompanied recent inflation has made it extended to larger companies, experience sub­ more difficult to pass through cost increases to stantial increases in financing costs that are not customers. readily passed on. Inflation, moreover, has Only by returning to a path of price stability greatly enlarged their financing needs, thus in­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 299 creasing their exposure to changes in credit est rates by accommodating shifts in money and market conditions and perhaps increasing the credit demands can produce dangerous devi­ risk premiums they must pay for borrowed ations from targeted growth rates of the money funds. supply and make it more difficult to achieve On balance, 1980 was not a good year for the noninflationary growth of money and credit over economy in general and for small business in time. And in the process it can increase the particular. Not only did interest rates move to cyclical movements in rates that are far more unprecedented levels last year, but they also significant in their effects on the economy. behaved in an extraordinarily irregular and vola­ Similarly, many have called for the monetary tile fashion. Such abrupt swings in the level of authorities to lower interest rates, but we see this activity and financial conditions obviously create as a transitory short-run response that in the long serious planning and adjustment problems for run would be detrimental to our financial well­ businesses; small businesses probably find it being. Although the Federal Reserve might be particularly difficult in the short run to alter successful in temporarily lowering short-term operating or financing practices in response to rates by pouring reserves into the system and by such rapid changes in the environment. A num­ increasing growth of the money stock, such a ber of factors contributed to the unusually sharp policy would only serve to exacerbate inflation­ fluctuations in rates last year, not the least of ary pressures and produce even higher interest which was the imposition of credit controls last rates down the road. March, which had a profound impact on develop­ It also would be extremely unwise for the ments in the spring and summer. And demands Federal Reserve to get into the business of for money and credit fluctuated widely in re­ setting guidelines or reserve allocation schemes sponse to exceptional movements in real activi­ designed to channel credit flows to specific sec­ ty—including one of the sharpest declines in tors. Our experience with the credit restraint output on record in the second quarter followed program last year reinforces our reluctance in by a surprisingly strong rebound in the third. this regard. I can assure you that administering Although 1981 should have less violent ups these controls proved to be a task filled with and downs, I certainly cannot assure you that the intractable problems. The program was designed months just ahead will offer a substantial im­ to rely as much as possible on market forces, provement in overall economic conditions. We at given the basic objectives of the administration’s the Federal Reserve believe we have embarked anti-inflation effort, yet it demonstrated all too on a course that will eventually reduce inflation plainly how difficult it is to implement desired and interest rates. But this will take time and we credit allocation policies. Business decisionmak­ recognize that, in the interim, there could be ing is distorted in unanticipated and unintended considerable discomfort for many as we move to ways. Inequities multiply and require an unend­ a noninflationary environment. Inflation has be­ ing chain of exemptions and qualifications. In the come deeply embedded in our economic system, short run, the confusion and uncertainty are and there is no painless way out of our predica­ damaging to the economy; in the long run, the ment. In these circumstances, as we ponder market devises ways of circumventing the con­ specific efforts that might smooth the transition, trols; and in the meanwhile, attention may be it is unfortunately easier to state what we ought diverted from the fundamental policies needed to not to do than it is to suggest what should be achieve economic stability. done. Nor should the Federal Reserve get involved The question of interest rate volatility, for in setting terms on credit, such as requiring example, is very troublesome, but the small banks to maintain dual prime lending rates. We amount of additional short-run interest volatility believe that the lending institutions are best able that may be resulting from the Federal Reserve’s to determine the requirements of their customers monetary control techniques must be weighed and their own abilities to service those needs. against the advantages of better control over the The lending rate appropriate for any particular monetary aggregates. To seek to stabilize inter­ loan will vary depending, among other things, on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

300 Federal Reserve Bulletin □ April 1981 the bank’s costs of funds, the borrower’s credit­ the health and vitality of their local business worthiness, and the purpose and terms of the communities. Most of these institutions, I am loan: These factors can only be evaluated by the sure, give top priority to the needs of their small individual institution and the loan terms negotiat­ business customers. Some large banks also have ed between bank and borrower. developed active small business lending pro­ Many banks, of course, tie rates on their loans grams, and it is likely that such programs would to small businesses to the prime lending rate. The be initiated on a larger scale if bank manage­ meaning of this practice has been called into ments were better informed of demand and po­ question recently by the phenomenon referred to tential returns. Our staff and those of the Federal as “below-prime lending.” As you are aware, Reserve Banks are working in a variety of ways some of the large commercial banks have made a to learn more about the particular problems of sizable share of their loans at interest rates that small businesses and about the types of programs are below prime. Indeed, our most recent data that have been instituted. indicate that about 70 percent of loans extended We are also seeking ways to increase the in the first week of February at a selected sample availability of data on small business financing. of the nation’s largest banks were at rates below As noted in this committee’s report, the lack of a prime. Thus, the prime rate no longer seems to substantial data base for small businesses makes be the lowest rate offered to prime or best it impossible to quantify the impact of changing business customers—as it was in the past. financial and economic conditions on this sector In a study of below-prime lending by the of the economy. In part the lack of data reflects Federal Reserve staff, however, it was clearly the difficulty of establishing uniform and useful demonstrated that loans at these discounted definitions of “small business;” in addition, the rates are of a different nature than ordinary cost of collecting statistically reliable data for business loans. They tend to be very large loans this heterogeneous population has appeared pro­ that are extended for very short time periods, hibitive. There are several projects currently with rates that are tied to money market rates. In under way, however, that should give us a better essence, they are loans designed to compete with indication of what data are needed and the cost commercial paper issuance as a source of short­ of obtaining them. One of these projects—under term financing for very large corporations. This the guidance of an interagency task force on suggests that the prime rate may still be a rele­ small business finance—is specifically focusing vant concept for the traditional type of business on the financing needs of small businesses. An loan and that discounting below prime need not important part of the project is an interview be construed as an attempt by the banks to survey of small business lending practices at a mislead their other business customers. Never­ small sample of banks and other creditors. The theless, by grouping these different types of results of this survey will be available early next business credit under one heading, considerable year and should provide some insight into the confusion has arisen. I personally believe the types of data that might feasibly be collected banks would do their customers a great service from such lenders. by choosing different terminology to distinguish In summary, let me assure you that the Feder­ these lending rates. al Reserve has very much in mind the plight of Before concluding, let me suggest some ways small business firms in the current inflationary in which the Federal Reserve is attempting to environment. We believe, however, that the best understand better and to deal with the financial course is to pursue with diligence those policies problems of small businesses directly. First, as a that will return us to a world of price stability. matter of continuing policy, the Board encour­ Any sign that the Federal Reserve is turning ages commercial banks to take account of the away from its commitment to monetary restraint special needs of their small customers. The vast would seriously undermine the credibility of our majority of the banks in this country are them­ fight against inflation, set back the progress that selves small, local, and regional institutions, has been made, and make it much more difficult whose economic well-being is inalterably tied to to break the embedded inflationary psychology. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 301 At the same time, it is essential that the burden ous consideration. I would be gravely con­ of restraining inflation not rest solely on mone­ cerned, however, if the benefits achieved in tary policy. The Congress, along with the admin­ budget cuts were dissipated in excessive tax istration, has at hand one of the most important reductions so that the financing needs of the means for reducing the strains on private finan­ government remained large. Such a course cial markets—that means is the implementation would worsen rather than ease the financial of prudent and disciplined budgetary policies. A pressures facing private businesses and all bor­ large volume of government borrowing associat­ rowers. ed with huge federal deficits such as we have had While the process of reducing the grip of in recent years both raises the cost and reduces inflation will require painful adjustments by all the availability of funds to private borrowers— sectors of the economy for some time to come, I the impact of this is most pronounced on housing feel confident that adherence to our monetary and small business finance. I strongly support goals, accompanied by responsible fiscal policy, the administration’s efforts to reduce the growth will lead us to the kind of stable financial and of budget outlays and the size of the deficit, and economic environment in which businesses can ask that the Congress give these proposals seri­ operate efficiently and productively. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

302 Announcements New Regulation Z tion in a straightforward manner, and on reduction in the number of technical disclosure burdens placed on creditors. The regulation's focus on simplified disclo­ The Federal Reserve Board on March 26, 1981, sure of material terms should benefit consumers by issued a restructured, shortened, and simplified providing a more useful basis for credit decisions, and version of its Regulation Z, to implement the creditors by reducing the difficulty of compliance. Truth in Lending Simplification and Reform As required by the Truth in Lending Simplifi­ Act.1 cation Act, new Regulation Z was effective April New Regulation Z covers the Truth in Lending 1, 1981. The Board gave creditors the option of and Fair Credit Billing Acts.2 As part of its continuing to comply with the existing regulation simplification of Regulation Z, the Board re­ until March 31, 1982. This provides time for both moved from the regulation the sections dealing creditors and borrowers to become familiar with with the Consumer Leasing Act2 and issued them the new regulation, for changes to the use of new as a separate Regulation M.3 At the same time, disclosure forms, and for reprogramming of com­ the Board suggested, in letters to the chairmen of puters and retraining of personnel. the House and Senate banking committees, that To make compliance with the new rules easi­ the Consumer Leasing Act be simplified. Pend­ er—and in this way to assist the public by ing congressional action, the Board suspended encouraging compliance—the Board provided, in efforts it had begun to simplify its consumer the new regulation, a series of standard disclo­ leasing rules. sure forms. Proper use of these forms will assure In issuing its new Regulation Z the Board compliance. The new forms were developed with emphasized that it expects the simplified rules particular attention to the use of plain, nontech­ for disclosure of the full cost of borrowing to help nical language, and are available on request from both consumers and creditors: the Federal Reserve Board, Banks, or Branches. The revised act and regulation reflect a growing The principal changes in the new regulation, concern in the Congress and elsewhere that Truth in together with related current rules and reasons Lending has not completely fulfilled its original pur­ for the changes, are shown in the accompanying poses. In the last decade, surveys indicate that Truth table. in Lending has heightened consumers’ awareness and understanding of the cost and terms of consumer The Board began work on simplification of credit transactions. However, during the same period, Regulation Z in 1977. The Simplification Act was it has become increasingly evident that the act, as then enacted following Board suggestions that the implemented, imposed highly complex and technical basic statute be changed to make possible sub­ requirements on creditors, produced disclosures that stantial simplification of the implementing regu­ sometimes obscured the important information to con­ sumers, and generated costly and burdensome litiga­ lation. The final simplified rules issued by the tion over technical interpretation of the regulation. Board reflect provisions of the new law and The revised regulation addresses these concerns in consideration of some 1,000 comments received its emphasis on disclosure of essential credit informa­ on draft regulations twice proposed for public comment during 1980. In its final form, the 1. Title VI of the Depository Institutions Deregulation and Board’s new Regulation Z is some 40 percent Monetary Control Act of 1980. shorter than the current regulation; it is restruc­ 2. Contained in Title 1 of the Consumer Credit Protection Act of 1968. tured to make it easier to use; its language has 3. The text of new Regulation Z and of Regulation M, been revised in the interests of simplicity and (consolidating the Board’s rules under the Consumer Leasing readability; and under the Board’s Regulatory Act) may be obtained upon request from the Federal Reserve Board or from the Federal Reserve Banks or Branches. Improvement Project, a review of all Federal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

303 Current rule Change Reason 1. The regulation applies to “creditors” “Creditor” defined as person who ex­ To avoid the imprecision of “ordinary who in the “ordinary course of business tends credit more than 25 times a year (or course of business” and “regularly ex­ regularly extend or arrange for the exten­ more than 5 times in the case of transac­ tends” and the need for further regula­ sion of consumer credit.” tions secured by a dwelling). tory material. 2. Loans made by trusts, or arranged by The 25-transaction test for determining Trust loans are usually made on preferen­ banks from trusts, are covered if made whether creditors are covered would be tial terms, usually to trust beneficiaries, “regularly in the ordinary course of busi­ applied to individual trusts, thereby ex­ and due to their infrequency it is a sub­ ness.” cluding many trust loans. stantial regulatory burden to maintain procedures, training, and forms for isolat­ ed trust department loans. The proposal would reduce the burden but still cover large trust plans such as employee benefit trusts. 3. Unusual transactions that may have Exclude these transactions from cover­ To remove a source of unnecessary regu­ aspects of credit, but that do not lend age. latory detail and burden in situations themselves to disclosures without com­ where disclosures are not particularly plex rules, are covered—for example, meaningful. lay away plans, letters of credit, and utili­ ty “budget plans.” 4. Loans to finance rental property are A clean test is substituted for the current Current rule is ambiguous, causing uncer­ covered if the property is a “personal” distinction between “personal” as op­ tainty and necessitating interpretative investment as opposed to a “business or posed to “business” investment. Loans opinions about what is “personal” and commercial” activity. to finance rental property that is not own­ what is “business.” er-occupied (or expected to be owner-oc­ cupied within 1 year) are excluded. Loans for rental property containing three or more units are excluded even if one unit is occupied by the owner. 5. Credit for which no finance charge is Coverage limited to written agreements To exclude informal arrangements not in­ imposed is covered if it is payable by unless a finance charge is involved. All volving a finance charge, such as those agreement in more than four installments. agreements involving a finance charge frequently made by hospitals, doctors, This has been deemed to include informal continue to be covered. dentists, small tradespeople, and others arrangements. as an accommodation to their customers. 6. “Consummation,” the time by which “Consummation” defined as a time when The “economic coercion” line of analysis disclosures must be made, has been inter­ a contractual relationship is created under causes uncertainty and necessitates inter­ preted as occurring when the customer is state law between the parties. pretative opinions. under “economic coercion” to go for­ ward with the transaction—for example, by having paid a nonrefundable fee. 7. Disclosures must be made on the basis Disclosures based on the legally enforce­ To avoid uncertainties produced by dis­ of the “understanding” between the par­ able obligation. closure based upon informal terms of re­ ties, even if at variance from the legal ob­ payment. ligation. 8. Creditors must redisclose before con­ Creditors that make early disclosures To provide incentive for early disclosures summation if early disclosures become in­ must redisclose only if the annual per­ in order to facilitate credit shopping, accurate. centage rate varies by more than speci­ while assuring consumer of notice about fied percentage. significant change in cost of credit. 9. New disclosures required when any New disclosures required only in assump­ To limit redisclosure responsibilities to consumer credit transaction is assumed tion of residential mortgage transaction. those assumptions in which consumer is by another customer. most likely to compare credit sources. 10. Most changes in terms on outstanding “Refinancing” redefined to include only Removes source of regulatory complexity obligations are considered “refinancings” those agreements that satisfy an old debt in identifying which changes in terms requiring all new disclosures. and replace it with a new obligation. constitute refinancing. Also focuses dis­ closure on what is likely to be a credit shopping point. 11. Required terminology is specified in Eliminate terminology requirements other Terminology requirements are a source of open-end disclosures in addition to the than “annual percentage rate” and “fi­ regulatory detail and technical violation “annual percentage rate” and “finance nance charge.” and are not mandated by statute. Uni­ charge”—for example, the “previous bal­ form open-end terminology is probably ance,” “new balance,” “payments,” and now ingrained in the industry anyway. “periodic rate.” 12. The minimum payment is a required Eliminate this requirement. Not required by the statute, and will be disclosure in the initial open-end credit disclosed in most cases anyway. disclosures. 13. Minimum finance charges must be Minimum and other flat charges must be Periodic statement overloaded with infor­ disclosed on periodic statements as a re­ disclosed only if they were, in fact, im­ mation; no statutory requirement to re­ minder to consumers of the charges that posed during the billing cycle. mind consumers of a minimum or other may be imposed, even if the charges are types of flat charges. not imposed during the billing cycle. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

304 Federal Reserve Bulletin □ April 1980 Current rule Change Reason 14. Debit cards assessing a deposit ac­ Such cards are exempt from this rule. Applying this provision to debit cards count with overdraft credit privileges are presents operational problems and proba­ subject to “credit card” provision making bly exceeds congressional intent. issuer responsible for merchandise claims against the merchant. 15. To impose $50 liability for unautho­ Disclosure can be given at any time prior Statute does not require anything more. rized use of a credit card, card issuer to unauthorized use, and need not state must have disclosed potential liability, ei­ an address so long as some means of re­ ther on card or within two years prior to ceiving notice (for example, telephone unauthorized use. Disclosure must include number) is given. liability limit, fact that notice of loss or theft may be oral or written, and address for receiving notice. 16. In irregular transactions, although Provide a tolerance of V4 to 1 percent for To reduce regulatory complexity and cal­ certain APR tolerances are permitted, any transactions involving multiple ad­ culation difficulties. these are limited to several slight irregu­ vances or irregular payments. larities and have no application to the majority of complex transactions. 17. No tolerance for finance charge dis­ A de minimis tolerance is provided: $5 if To provide tolerance for minor mistakes, closure. amount financed is $1,000 or less; $10 if as permitted by the act, while protecting more than $1,000. consumers against significant understate­ ments. 18. Creditor must disclose certain sums Credit need only disclose that a required Eliminates need for complicated APR as “required deposit balances” and take deposit has not been factored into APR computation, while still apprising con­ them into account in calculating APR. calculation. sumers of effect of deposit on cost of credit. 19. Creditors must provide example of Creditors must give example (designed by To help consumers better understand po­ effect of variable-rate feature in real es­ the creditor) of variable-rate feature in tential effect of variable-rate feature on tate transactions, based on l/4 of 1 per­ any closed-end transaction. payment schedule. Representative exam­ cent immediate increase. ple designed by creditor will make com­ pliance easier. 20. Itemization of amount financed must In transactions subject to the Real Estate Eliminates redundant disclosures and re­ be provided in all transactions. (Under Settlement Procedures Act (virtually all duces federally required paperwork. the simplification amendments to the stat­ home purchase transactions) the RESPA ute, itemization need only be provided if closing cost disclosures would be deemed the customer requests it.) to satisfy the Truth in Lending itemiza­ tion requirements. 21. “Points” paid by the seller in a real Exclude seller’s points from the finance To avoid difficulty in determining wheth­ estate transaction must be included in the charge in all cases. Points paid by the er purchase prices have been specifically finance charge if paid, indirectly, by the buyer of the house would continue to be increased to cover seller's points. Also, purchaser through an increase in pur­ disclosed as part of the finance charge. to simplify disclosures. chase. 22. Total cost of insurance must be dis­ Allow unit cost disclosure in a limited Current rule can be burdensome in some closed in closed-end credit (rather than number of closed-end transactions (e.g., cases. unit cost—e.g., $1 per $1,000 of “amount those made by mail or phone). financed”) to exclude it from the finance charge. 23. Certain minor disclosures are re­ Deletion of requirements. To omit detail with no substantive loss to quired with specified language—e.g., consumers. “pickup payment,” “balloon payment,” “trade-in.” 24. Where there are advances under a The creditor may either treat the arrange­ To recognize that individual circum­ closed-end credit line, the dates of the ment as a single transaction or, alterna­ stances, best known to the creditor, may advances must be estimated and a single tively, make disclosures for each draw make one disclosure method or the other disclosure made. under the line. more meaningful and easier to compute. 25. A single integrated disclosure is re­ At the creditor’s option, the transaction To remove need for complicated calcula­ quired for construction loans involving may be divided into two segments for dis­ tions required to integrate construction advances during construction and a set closure—one for the construction phase advances with amortization schedule, amortization schedule after construction and one for the amortization. where separate disclosures may also be is completed. useful to consumers. 26. Extended disclosure of security inter­ Elimination of disclosure details such as To remove unnecessary technical materi­ ests and other terms relevant to postcon­ whether security interest applies to “af- al that does not aid credit shopping, com­ summation events like default and pre­ ter-acquired” property. plicates disclosures, and causes unpro­ payment. ductive litigation. 27. The three-day right of rescission Waiver may be made simply if consumer To allow customers to obtain their money where a home is used as security (which determines there is a “bona fide personal promptly (for example, from a second requires that no funds be disbursed dur­ financial emergency” (the statutory lan­ mortgage). Protection from overreaching ing the period) may be waived only if the guage). is still provided since the use of preprint­ delay “will jeopardize welfare, health, or ed forms to request a waiver is prohibit­ safety or endanger property.” ed. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 305 Current rule Change Reason 28. Specific rules apply for treatment of At the creditor’s option, cash rebates To avoid necessity for complex rules cov­ “cash rebates” from the creditor or the need not be incorporated into disclosures. ering great variety of cash rebate situa­ manufacturer. tions. 29. In credit advertising an example of a Creditors are given more flexibility in To allow creditor to determine most ap­ specific payment schedule must be showing terms of repayment in ads. propriate way to describe its own plan. shown. 30. Disclosure must be given in certain These requirements are deleted. To reduce regulatory detail that inhibited type size, in certain locations, and not on creditor flexibility and raised numerous more than one page in open-end credit. interpretive issues. 31. Creditors may make inconsistent Creditor may not give a state disclosure if Avoids broad preemption (which Con­ state-required disclosures, provided they Board determines it directly contradicts gress apparently rejected) of state disclo­ are so labeled. federal disclosures. sure laws, and permits creditors to con­ tinue to use integrated disclosure/contract forms. Reserve regulations, it has been examined line much required specified terminology and specifi­ by line to eliminate nonessential provisions and cations for type size and location of disclosures. to improve and modernize the regulation in other 3. Increased flexibility in a number of ways, respects. including allowing disclosure of interim and per­ The Board will publish in the near future a manent construction financing as a single trans­ commentary on the regulation to provide guid­ action or as two transactions; allowing a single ance on its use and to incorporate certain de­ disclosure when a transaction combines both tailed material now in the existing regulation. credit sale and loan features; and permitting The commentary will deal with the substance of advances made under a loan agreement to be some 1,500 staff interpretations issued over the disclosed separately or as a single transaction. past decade. These interpretations will be re­ 4. Direct reduction of the burden of compli­ scinded effective April 1, 1982. ance for creditors (which is reflected in costs to The Board said it had these principal objec­ the consumer) in such ways as permitting com­ tives in revising and simplifying Regulation Z: pliance with relevant requirements of other agen­ 1. To reduce substantially the burden of com­ cies (for example, compliance with the Depart­ pliance. ment of Housing and Urban Development’s 2. To assist small creditors, such as those disclosure requirements for the amount financed many consumers rely on, by streamlining regula­ under the Real Estate Settlement Procedures tory requirements and by providing additional Act) to satisfy certain Truth in Lending require­ guidance in the interpretive commentary that will ments, and by simplifying compliance with the accompany the new regulation. requirement for a cooling-off period when credit 3. To assist the majority of consumers by is advanced involving the use of a residence as focusing the regulation on material disclosures collateral. and the dominant objectives of the law. 4. To make the revised and simplified regula­ tion a model of rational regulation under consum­ Fee Schedule for Check Clearing er credit protection laws. and Collection The revised regulation is characterized by the following: The Federal Reserve Board has approved a fee 1. Exemption of a number of types of transac­ schedule for its commercial check clearing and tions covered by the existing regulation, includ­ collection services, effective August 1, 1981. ing many informal credit arrangements by doc­ The Board acted in accordance with the Mone­ tors, hospitals, and small merchants; level- tary Control Act of 1980, which requires the payment plans by fuel dealers; retail lay away Federal Reserve to set fees for System services plans; many refinancings of debts; and work-out to depository institutions. The Board published a agreements for delinquent debts. proposed schedule of fees for check services in 2. Deletion of a good deal of detail, such as August 1980 and adopted its fees for check Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

306 Federal Reserve Bulletin □ April 1980 services after consideration of comment re­ Reserve’s Planning and Control System (PACS). The ceived; it adopted pricing principles and a sched­ cost-accounting principles and procedures used by Reserve Banks are described in System accounting ule of fees for other services last December. The manuals available to the public. fee schedule reflects estimated 1981 direct and The structure of the 1981 fee schedule differs from indirect costs of providing check clearing and those published earlier in one respect: it shows a collection services to depository institutions, separate surcharge for consolidated shipments rather plus a private sector adjustment factor of 16 than a separate price for each consolidated-shipment deposit type. To calculate the total fee for deposit by percent. consolidated shipment, the surcharge is added to the A description of the 1981 fee schedule follows. fee for direct deposits at the collecting Federal Re­ serve office. Since the consolidated shipment service The Monetary Control Act of 1980 requires that has been expanded from two to five deposit types, use “over the long run, fees shall be established on the of the surcharge simplifies the price schedule. basis of all direct and indirect costs actually incurred The 1981 fee structure may be regarded as an in providing the Federal Reserve services priced . . . interim structure in two respects. First, while it covers except that the pricing principles shall give due regard the deposit types described below, individual Federal to competitive factors and the provision of an ade­ Reserve offices may, in 1981, expand or repackage quate level of such services nationwide.” The act also these services within this structure in response to local requires that fees for Federal Reserve services take demand to improve the efficiency of the payments into account “the taxes that would have been paid and mechanism. For example, the group-sort deposit op­ the return on capital that would have been provided tion may be offered by a greater number of Federal had the services been furnished by a private business Reserve offices, or additional services may be offered firm.” This markup is referred to as the private sector that are combinations of existing services. (The groupadjustment factor (PSAF). sort, consolidated-shipment, and package-sort deposit The proposed fee schedule for Federal Reserve options may be combined for certain high volume Bank commercial check collection services published payer bank endpoints so that the Federal Reserve by the Board in August 1980 was based on estimates of office of first deposit could fine sort the deposit for the full direct and indirect costs during 1980 of provid­ final presentment in other Federal Reserve office ing these services, plus a 12 percent PSAF. territories.) Second, as stated in the Board’s Decem­ The revised fee schedule for commercial check ber 30, 1980, notice, this fee structure may be changed services, which will become effective on August 1, in 1982 to price separately return items and to provide 1981, when access to these services is opened to all price incentives to encourage more efficient utilization depository institutions, is based on the estimated full of resources in the check clearing and collection direct and indirect costs of providing these services in service. 1981, plus a 16 percent PSAF, which was adopted by Finally, the Federal Reserve Banks, as announced the Board on December 30, 1980, for use in calculating in the Board’s August 28, 1980, pricing proposal, are 1981 fee schedules. On average, for all services in all engaged in the three-phase effort to reduce and/or offices, the 1981 fees are 11 percent higher than those price float. The fee schedule for 1981 does, in fact, published for comment in August 1980 due principally reflect the higher costs of operational improvements to the higher PSAF added to 1981 costs, operating undertaken in 1981 to reduce float. Further recommen­ costs increasing more rapidly than volume from 1980 dations will be presented to the Board in 1981. to 1981, and the substantial increase in the surcharge The 1981 fee schedule for commercial check serv­ for consolidated shipments (from 0.44 cent to 0.64 cent ices shown in table 1 is described below. per item), which reflects the higher interoffice trans­ portation costs associated with the System’s float reduction effort. However, in the revised fee schedule, Service Descriptions1 the PSAF has not been applied to shipping costs because shipping services (interoffice air transporta­ All checks collected through the Federal Reserve must tion and intraoffice ground courier deliveries to facili­ ultimately be presented for payment by the Federal tate presentment) are provided under contract to the Reserve office responsible for serving the territory in Federal Reserve from private companies whose prices which the paying institution is located. Depository include the cost of taxes and financing. Consequently, institutions generally have two options for depositing it would be inappropriate to impose an additional check cash letters with Federal Reserve offices.2 First, PSAF to such shipping costs. all check cash letters may be deposited at the local The 1981 fee schedule was calculated by the Federal Reserve Banks by using a methodology similar to that used to compute the fee schedule published by the 1. This description excludes Federal Reserve processing of U.S. Treasury checks and postal money orders deposited Board in August 1980. The methodology was standard­ separately. ized among Federal Reserve districts and offices and 2. A cash letter contains a listing of individual checks and the derivation of full costs was based on the Federal the packaged checks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 307 Federal Reserve office (the Federal Reserve office deposited at the Federal Reserve office that serves the whose territory includes the depositing institution).3 territory in which the paying institution is located. Not Second, appropriately sorted cash letters may be all services described below are available at all offices. An institution should consult with its local Federal 3. A depositing institution unfamiliar with Federal Reserve Reserve office to ascertain the services available territories should contact any Federal Reserve office to determine the name and address of its local Federal Reserve there. office. Cash letters deposited at the local Federal Reserve Fee schedule for Federal Reserve commercial check services, by types of cash letter deposits,1 effective August 1, 1981 Cents per item Accepted only from institutions located in Accepted at the collecting Federal Reserve office from the territory served by institutions located in any F.R. office territory2 Sent to Federal the F.R. office Non­ Reserve office machineable3 Other Country Package Group Mixed City Fed or RCPC sort sort Boston ^ Lewiston 1............ 1.81 4.29 1.60 1.81 .42 1.65 5.54 Windsor Locks New York 2.87 5.30 2.74 2.87 .47 9.04 Buffalo Jericho Cranford 1.66 3.99 1.51 1.66 .79 1.46 6.08 Utica Philadelphia 2.30 4.64 1.79 2.30 .87 1.98 5.33 Cleveland Cincinnati 1.92 4.16 1.48 1.92 .82 5.12 Pittsburgh Columbus Richmond 1.85 4.03 1.39 1.85 .67 5.54 Baltimore 1.97 4.37 1.67 1.97 .63 5.86 Charlotte 1.50 3.96 1.29 1.50 .49 5.24 Columbia 1.52 4.01 1.37 1.52 .44 4.68 Charleston 1.75 4.10 1.40 1.75 .52 5.30 Atlanta Birmingham Jacksonville 1.86 4.15 1.46 1.86 .98 6.13 Nashville New Orleans Miami Chicago 2.94 5.02 2.36 2.94 .94 6.29 Detroit 1.57 3.98 1.46 1.57 .56 3.97 Des Moines 1.99 4.17 1.65 1.99 .73 5.88 Indianapolis 1.50 3.79 1.24 1.50 .48 3.23 Milwaukee 1.82 4.06 1.41 1.82 .61 3.59 St. Louis Little Rock 2.51 4.54 2.06 2.51 .78 5.09 Louisville Memphis Minneapolis Helena 2.22 4.68 1.80 2.22 .62 2.10 5.60 Kansas City 2.80 4.67 2.12 2.80 .45 7.55 Denver 1.63 3.97 1.24 1.63 .72 7.98 Oklahoma City 1.90 4.11 1.52 1.90 .67 6.94 Omaha 1.76 4.06 1.27 1.76 .46 6.26 Dallas Houston 2.22 4.64 1.74 2.22 .80 1.64 7.19 San Antonio El Paso San Francisco Los Angeles Portland 1.71 4.12 1.54 1.71 .58 7.99 Salt Lake City Seattle Consolidated shipment surcharge per item for transportation from local Federal Reserve office to collecting Federal Reserve office ......................... .64 .64 .64 .64 .64 1. Depository institutions should consult with their local Federal 3. This fee applies to cash letters that cannot be computer processed Reserve office about the availability of check services at any Federal by the Federal Reserve. It is not a surcharge. The availability schedule Reserve office, since all services are not available at all offices. for nonmachineable items is different from the availability schedule 2. Accepted by a Federal Reserve office for presentment to deposi­ for comparable machineable items. tory institutions located within that Federal Reserve office territory. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

308 Federal Reserve Bulletin □ April 1980 office are referred to generally as intraterritory depos­ Cash letters accepted from institutions located in its, while cash letters deposited at other Federal any Federal Reserve territory. The fees for check cash Reserve offices are referred to as interterritory depos­ letter deposits are determined according to the fees for its. Interterritory deposits may be (1) delivered to the check processing at the collecting Federal Reserve local Federal Reserve office for shipping as “consoli­ office, and can be found on the fee schedule by (1) dated shipments” by using transportation provided by location of the office and (2) type of cash letter deposit. the Federal Reserve, or (2) shipped as “direct ship­ For example, items drawn on designated city area ments” to another Federal Reserve office by using institutions within the Boston office territory are transportation provided by the sending depository “Boston city items” and are identified by routing institution. In all instances, credit for cash letter symbols 0110 or 2110, and the fee is 1.60 cents per deposits is posted to accounts held at the local Federal item.5 In contrast, items drawn on institutions located Reserve office of the depository institution even in the Indianapolis office RCPC zone are “Indianapo­ though these cash letters may have been deposited at lis RCPC items” and are identified by routing symbols another Federal Reserve office. 0749 or 2749, and the fee for such items is 1.50 cents This description of services is not intended as a per item. Consolidated shipments are subject to an comprehensive guide on how to use Federal Reserve additional 0.64 cent per item transportation fee. check collection services. Any depository institution “City” cash letters contain only checks drawn on desiring to use Federal Reserve services is urged to depository institutions located within the collecting consult first with its local Federal Reserve office. A Federal Reserve office territory assigned city routing depository institution that has a small number of symbols. These institutions are generally located in an checks daily for collection may need to become famil­ area that has been designated as the city check-clear­ iar only with the mixed cash letter service offered by ing zone by the collecting Federal Reserve office its local Federal Reserve office. Any institution wish­ When deposited at the collecting Federal Reserve ing to perform some preliminary work such as sorting office, credit for city cash letters is immediate (that is, or interoffice shipping will have to become familiar funds are available on the same day if the cash letter is with all of the services shown in the fee schedule. received prior to the cut-off hour established by the The following types of cash letter deposit services collecting Federal Reserve office). are available: “RCPC” cash letters contain only checks that are drawn on depository institutions in the collecting Cash letters accepted only from institutions located Federal Reserve office territory that are located in within the local Federal Reserve office territory. The areas designated as RCPC zones and assigned RCPC fees for the services described below can be found in routing symbols.6 RCPC checks drawn on depository table 1 by reading across the row of fees listed for each institutions in RCPC zones are usually transported by local Federal Reserve office. courier from the collecting Federal Reserve office for “Mixed” cash letters contain unsorted checks that presentment. When deposited at the collecting Federal can be any mixture of city, country, and regional Reserve office, credit for RCPC cash letters is immedi­ check processing center (RCPC) checks. These cash ate (the same business day) if the cash letters are letters may also contain checks drawn on depository deposited by 12:01 a.m. institutions in other Federal Reserve territories and “Country” cash letters contain only checks that are U.S. Treasury checks and postal money orders. Each drawn on depository institutions located in the collect­ Federal Reserve office has established a maximum ing Federal Reserve office territory that are assigned number of items (checks or other cash items) that may country routing symbols. These institutions are locat­ be included in mixed cash letters.4 Only depository ed outside the designated city area of the collecting institutions with cash letter deposits, which on average Federal Reserve office and are also outside any RCPC do not exceed this maximum number of checks, are zone. Credit for country cash letters is available one eligible to deposit mixed cash letters. Credit for checks day after timely deposit at the collecting Federal in mixed cash letters is based on availability as calcu­ Reserve office. lated by the local Federal Reserve office. Each “package-sort” cash letter contains checks “Other Fed” cash letters contain checks drawn on drawn only on a single institution located within the depository institutions located in Federal Reserve 5. A routing symbol is defined as the first four digits of the territories other than the local Federal Reserve terri­ routing transit number. For a listing of routing symbol tory. Prices for collecting these checks reflect the assignments by deposit type within Federal Reserve terri­ resources required to sort each check at two Federal tories, depository institutions should contact their local Fed­ Reserve offices and to transport the items between eral Reserve office for a copy of the booklet entitled “Check Collection, Federal Reserve System.” For a detailed discus­ these offices. Other Fed cash letters may be deposited sion of routing numbers, depository institutions should con­ only at the local Federal Reserve office. sult the Rand McNally publication, “Key to Routing Num­ bers.” 6. RCPC zones are designated areas within the territories of Federal Reserve offices, but outside Federal Reserve 4. An institution desiring to use this service should consult cities. In these zones the Federal Reserve is able to present with its local Federal Reserve office for additional informa­ checks for payment and collection on the same day they are tion. deposited at the local Federal Reserve office. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 309 collecting Federal Reserve office territory and is pack­ “Direct-shipment” (direct sends) cash letters are aged for delivery to that institution. Reflecting the those for which transportation to the collecting Feder­ sorting work done by the depositing institution, Feder­ al Reserve office is arranged by the depositing institu­ al Reserve involvement is limited to presentment, tion. Fees for direct-shipment cash letter deposits are settlement, adjustments, and returns. As a result, the the same as fees charged to local depository institu­ fee for package sorts is lower than the fees for all other tions for the respective class of items at the collecting categories of cash letters at the collecting Federal Federal Reserve office. Cash letters eligible for direct Reserve, and later cut-off hours are applicable to shipment are city, RCPC, country, nonmachineable, package-sort cash letters. Credit is passed by the local package-sort, and group-sort. Credit for these deposits Federal Reserve office according to the same availabil­ is given by the local Federal Reserve office based on ity schedule for the type of items contained in the availability schedules for direct shipments. package-sort cash letter (for example, city, country, or RCPC). Nonmachineable cash letter deposits. Nonmachin­ Each “group-sort” cash letter contains checks of a eable cash letters contain checks that were rejected specific type (city, RCPC, or country) drawn on two or from the reader-sorter equipment of a depositing finan­ more depository institutions that are designated by the cial institution, as well as those checks that are muti­ collecting Federal Reserve office. Because the depos­ lated or cannot be computer processed. Fees for iting institution has already done some sorting, this nonmachineable checks reflect the additional manual service requires less handling by the Federal Reserve handling required to process these exception items. than some other deposit types and the fee reflects this Credit for nonmachineable checks is generally de­ difference. Later cut-off hours are applicable to group- ferred one day beyond normal availability for the same sort cash letters and credit is passed to depositing type check (for example, credit for a city nonmachin­ institutions by the local Federal Reserve office accord­ eable check would be available the day after timely ing to the schedule for the type of items in the cash deposit at the collecting Federal Reserve office). letter—city, RCPC, and country items. Interterritory cash letters sent to other Federal Fee Schedules Reserve offices. Before an attempt is made to use interterritory cash letter deposit services, an institu­ Each fee in the check service fee schedule covers tion must obtain authorization from its local Federal receiving, sorting, reconciling, and delivery. These Reserve office to assure accurate and timely handling. fees do not include charges for special intraoffice After obtaining authorization, depositing institutions deposit arrangements that individual Reserve Banks may send cash letters to the appropriate Federal may establish. Reserve office other than the local Federal Reserve The per-item fees include the costs associated with office. The purpose of this method of deposit is to returns and adjustments. However, consideration is improve availability, generally. Such interterritory de­ being given to the establishment of separate prices for posits of cash letters must be destined for the collect­ return items. No charges will be made for postal ing Federal Reserve office; that is, the office responsi­ money orders or U.S. Treasury checks deposited ble for presenting the items in the cash letters to the separately because such processing is conducted by payer institutions within its territory. the Federal Reserve as part of its fiscal agency respon­ Depositing institutions should consult with their sibilities. When such items are not deposited separate­ local Federal Reserve office about the availability of ly, they will be assessed the same fee as commercial each cash letter service at other Federal Reserve checks deposited in mixed cash letters. offices. “Collecting Federal Reserve office,” as used in The two ways in which transportation of interterri­ table 1, refers to the Federal Reserve office responsi­ tory deposits can be arranged, consolidated shipments ble for presenting cash letters to the institutions within and direct shipments, are described below. its territory. Thus, the local Federal Reserve office “Consolidated shipment” cash letters are delivered would be the collecting Federal Reserve office if the to the local Federal Reserve office for shipment to the institution on which the checks are drawn is located collecting Federal Reserve office. Since the items are within the same Federal Reserve territory as the not processed by the local Federal Reserve office, the depositing institution. total fee for these items is the sum of (1) a surcharge for consolidated shipments to recover the cost of transporting these checks between Federal Reserve offices, and (2) the appropriate item fee at the collect­ Meeting of ing Federal Reserve office. Cash letters eligible for Consumer Advisory Council consolidated shipment are city, RCPC, country, nonmachineable, package-sort, and group-sort. Credit for The Federal Reserve Board has announced that these deposits is given by the local Federal Reserve office according to availability schedules for consoli­ its Consumer Advisory Council met on April 15dated shipments. 16, 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

310 Federal Reserve Bulletin □ April 1980 The Council, with 30 members who represent burden of assembling time series by providing a a broad range of consumer and creditor interests, single source of historical continuations of the advises the Board on its responsibilities regard­ statistics carried regularly in the Federal Re­ ing consumer credit protection legislation. The serve Bulletin. The Digest also offers a con­ Council generally meets four times a year. tinuation of series that formerly appeared regu­ larly in the Bulletin, as well as certain special, irregular tables that the Bulletin also once Change in Board Staff carried. The domestic nonfinancial series includ­ ed are those for which the Board of Governors is The Board of Governors has announced the the primary source. appointment of David Michael Manies, Assistant This issue of the Digest covers, in general, Vice President of the Federal Reserve Bank of data for the years 1971 through 1979. It serves to Kansas City, as Assistant Secretary of the Board maintain the historical series first published in for a six-month period beginning April 1, 1981. Banking and Monetary Statistics, 1941-70, and Mr. Manies replaces Jefferson Walker, who for many series it supplants the earlier issues of has returned to the Federal Reserve Bank of the Digest—for 1971-75, 1972-76, 1973-77, and Richmond. Mr. Manies holds B.A. and M.A. 1974-78. degrees from the University of Missouri at Kan­ Copies of the Digest are available from Publi­ sas City and attended the Colorado School of cations Services, Board of Governors of the Banking. Federal Reserve System, Washington, D.C. 20551. The price is $20.00 per copy. Revised OTC Stock List The Federal Reserve Board has published a Admission of State Banks to revised list of over-the-counter (OTC) stocks Membership in the Federal Reserve that are subject to its margin regulations, effec­ System tive April 3, 1981. The following banks were admitted to member­ The list supersedes the revised list of OTC ship in the Federal Reserve System during the margin stocks that was issued on October 6, period March 11 through April 10, 1981: 1980. Changes that have been made in the list, which now includes 1,307 OTC stocks, are as California follows: 85 stocks have been included for the Simi Valley..........................Simi Valley Bank first time; 20 stocks previously on the list have Colorado been removed for substantially failing to meet Basalt........................................ Bank of Basalt the requirements for continued listing; and 62 Carbondale......................Roaring Fork Bank stocks have been removed because they are now Glenwood..................Valley Bank and Trust listed on a national securities exchange or be­ Snowmass........................ Bank of Snowmass cause the companies were acquired by another Michigan firm. Kalamazoo ... Old Kent Bank of Kalamazoo The list is available on request from Publica­ Montana tions Services, Board of Governors of the Feder­ Bozeman ... First Citizens Bank of Bozeman al Reserve System, Washington, D.C. 20551. Oregon Newberg........................Newberg State Bank New P ublication Texas McAllen................................Texas State Bank The Annual Statistical Digest, 1971-1979 is now Virginia available. This new ten-year Digest is designed Haysi..................Dickenson-Buchanan Bank as a compact source of economic—and especial­ Timberville .Farmers and Merchants Bank of ly financial—data. The object is to lighten the Rockingham Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

311 Record of Policy Actions of the Federal Open Market Committee Meeting Held The Department of Commerce on February 2-3, 1981 survey of business spending plans taken in November and December Domestic Policy Directive suggested that expenditures for plant The information reviewed at this and equipment would rise about 103/4 meeting indicated that real gross na­ percent in 1981, following an expan­ tional product expanded at a 5 per­ sion of about 83/4 percent in 1980. cent annual rate in the fourth quar­ After allowance for respondents’ ex­ ter. Average prices, as measured by pectations for price increases, how­ the fixed-weight price index for ever, the survey results implied no gross domestic business product, in­ increase in real outlays for 1981. creased at an annual rate of about In December private housing 9l/2 percent. Over the year ending in starts remained at the annual rate of the fourth quarter of 1980, real GNP about ll/2 million units recorded in was unchanged and nominal GNP the previous three months. Newly rose about 93/4 percent. issued permits for residential con­ The index of industrial production struction declined, and sales of both rose an estimated 1 percent in De­ new and existing houses fell some­ cember, following substantial gains what. in each of the four preceding Producer prices of finished goods months. By December, the index continued to rise at a rapid pace in had regained much of the ground lost December, but the rate of increase earlier in the year. Capacity utiliza­ over the fourth quarter was consid­ tion in manufacturing increased fur­ erably below the exceptional pace in ther in December to 79.8 percent, the third quarter. Consumer prices 4.9 percentage points above its July also rose at a rapid pace in Decem­ trough but well below earlier peaks. ber, reflecting not only continued Nonfarm payroll employment ex­ sharp advances in food prices and a panded substantially in December renewed upsurge in energy prices, for the fifth consecutive month, and but sizable increases in most other the unemployment rate was essen­ categories as well. Over the year tially unchanged at about l l/2 per­ ending in December 1980, producer cent. Growth in manufacturing em­ prices of finished goods and consum­ ployment slowed in December, but er prices rose about ll3/4 and 12V2 the average workweek lengthened percent respectively, compared with 0.3 hour to 40.2 hours. increases of about I2V2 and \3l/4 The dollar value of retail sales percent over the preceding year. declined in December, according to Over the last few months of 1980, the advance report, after a sizable the rise in the index of average hour­ gain over the preceding six months. ly earnings was at about the rapid Sales of new automobiles were at an pace recorded earlier in the year. annual rate of 9 million units in De­ Over the year 1980 the index was up cember, virtually unchanged from 9x/2 percent compared with a rise of the rate in the preceding five about 8 percent over 1979. months. In foreign exchange markets the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

312 Federal Reserve Bulletin □ April 1981 trade-weighted value of the dollar during the period before the next against major foreign currencies had regular meeting that fluctuations in risen about 3l/2 percent over the in­ the federal funds rate, taken over a terval since the Committee’s meet­ period of time, within a range of 15 ing in December. There were diver­ to 20 percent were likely to be incon­ gent changes against individual cur­ sistent with the monetary and relat­ rencies: the dollar appreciated sub­ ed reserve paths, the Manager for stantially against the German mark Domestic Operations was promptly and other continental European cur­ to notify the Chairman, who would rencies, and depreciated somewhat then decide whether the situation against the pound sterling, the Japa­ called for supplementary instruc­ nese yen, and the Canadian dollar. tions from the Committee. The U.S. trade deficit in the fourth During the course of the inter­ quarter of 1980 widened from the meeting period, incoming data for exceptionally low rate in the third the latter part of December and sub­ quarter but remained substantially sequent weeks indicated that a less than the rate in the first half. shortfall in growth of the monetary The value of exports rose slightly in aggregates, after adjustment for the the fourth quarter, but the value of estimated effects of shifts into NOW imports increased by a larger accounts, had developed from the amount, mainly as a result of higher short-run objectives set forth by the oil imports. Committee. Required reserves con­ At its meeting on December 18- tracted in relation to the supply of 19, the Committee had decided that reserves being made available open market operations in the period through open market operations. Af­ until this meeting should be directed ter the turn of the year, member toward expansion of reserve aggre­ bank borrowings declined; they av­ gates associated with growth of eraged about $1.2 billion in the two M-1 A, M-1B, and M-2 over the first weeks ending January 14, compared quarter along a path consistent with with about $1.6 billion in the preced­ the ranges for growth in 1981 con­ ing four weeks. Nevertheless, the templated in July 1980, abstracting federal funds rate remained in a from the effects of shifts into NOW range of 19 to 20 percent, perhaps in accounts; the midpoints of those part because of unusually strong de­ ranges were 4l/4 percent, 43/4 per­ mands for excess reserves and an cent, and 7 percent respectively.1 inclination of some banks to increase The members agreed that some their overnight borrowings in the shortfall in growth would be accept­ funds market in expectation of nearable in the near term if it developed term declines in interest rates. Bor­ in the context of reduced pressures rowings moved up to an average of in the money market. If it appeared $1.8 billion in the statement week ending January 28, while the funds rate declined to a range of 17 to 18 1. M-1 A comprises demand deposits at percent in the days preceding this commercial banks plus currency in circula­ meeting. tion. M-1B comprises M-1 A plus negotiable order of withdrawal (NOW) and automatic M-1 A and M-1B declined in De­ transfer service (ATS) accounts at banks and cember at annual rates of about 11 thrift institutions, credit union share draft percent and 9 percent respectively. accounts, and demand deposits at mutual Growth in these aggregates in Janu­ savings banks. M-2 contains M-1B and sav­ ings and small-denomination time deposits at ary was affected greatly by the intro­ all depository institutions, overnight repur­ duction of NOW accounts on a na­ chase agreements (RPs) at commercial banks, tionwide basis as of December 31, overnight Eurodollars held at Caribbean 1980. It had been anticipated that branches of member banks by U.S. residents other than banks, and money market mutual shifts into NOW accounts would sig­ fund shares. nificantly retard the growth of M-1 A Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 313 and enhance the growth of M-1B subsequently reduced to 20 percent. during 1981. Such shifts during the In home mortgage markets, average first few weeks of the year were rates on new commitments for fixedmuch larger than generally had been rate loans at savings and loan associ­ expected, and available data sug­ ations reached 14.95 percent in the gested a very sharp decline in M-l A latter part of December and edged in January and a substantial rise in off slightly in subsequent weeks. M-1B. However, after adjustment The staff projections presented at for shifts into NOW accounts based this meeting suggested that the on surveys of commercial banks and buoyancy of economic activity in the other data, both M-l A and M-1B final quarter of 1980 would extend were estimated to have risen moder­ into the first quarter of the new year ately in January. but that over the four quarters of Growth in M-2 slowed markedly 1981 real GNP would change little in December to an annual rate of for the second consecutive year. about 2% percent. Growth apparent­ Such a sluggish performance of the ly accelerated to a relatively rapid economy would be associated with rate in January, however, as money an increase in the rate of unemploy­ market mutual fund shares posted a ment during 1981. The rise in the sizable increase and growth in small- fixed-weight price index for gross and large-denomination time depos­ domestic business product was pro­ its remained substantial. jected to remain rapid, although not Growth in total credit outstanding quite so rapid in the second half of at U.S. commercial banks slowed the year as in the first half. somewhat in December from the In the Committee’s discussion of rapid pace of other recent months. the economic situation and outlook, The slowing reflected a deceleration members continued to stress the dif­ in the pace of investment acquisi­ ficulties of forecasting output and tions and in expansion of loans, in­ prices in the current environment of cluding business loans. However, high inflation and volatile expecta­ the moderation in the growth of busi­ tions, and they recognized also the ness loans at commercial banks was uncertainties surrounding the imple­ accompanied by stepped-up issu­ mentation of the fiscal and other ance of commercial paper and long­ economic policies soon to be an­ er-run debt instruments by nonfinan­ nounced by the new administration cial businesses. For the period from inaugurated on January 20. In re­ the fourth quarter of 1979 to the sponse to a request to set forth their fourth quarter of 1980 total commer­ views concerning the outlook, a cial bank credit grew at an annual number of members expressed the rate of 7.9 percent, well within the 6 opinion that the most likely outcome to 9 percent range adopted by the for the period through the fourth Committee for the year. quarter of 1981 was little change in Market interest rates fluctuated real GNP with a significant increase considerably over the intermeeting in the unemployment rate, as pro­ period but declined on balance from jected by the staff. Other members their mid-December highs. At the anticipated a small rise in real GNP time of this meeting, short-term over the year, generally with some­ rates were down about 2!/4 to 4V2 what less increase in unemployment, percentage points and long-term and two members projected a small rates about /2 to 1 percentage point decline in real GNP with a larger from their December peaks. During increase in unemployment. All of the the intermeeting interval, the prime members expected continuation of a rate charged by commercial banks high rate of inflation over the year, on short-term business loans was although the anticipated rates of in­ raised to a record 2 1 percent and crease differed. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

314 Federal Reserve Bulletin □ April 1981 At this meeting, the Committee by about ll/4 percentage points. completed the review, begun at the Alternatively, measured growth of meeting in December 1980, of the M-l A could be adjusted upward to ranges for growth of monetary ag­ 6V4 percent and that of M-IB adjust­ gregates over the period from the ed downward to 63/4 percent. With fourth quarter of 1980 to the fourth either method of adjustment, growth quarter of 1981 within the frame­ of each aggregate marginally exceed­ work of the Full Employment and ed the upper bound of its range. Balanced Growth Act of 1978. At its In contemplating ranges for 1981, meeting in July 1980, the Committee the Committee continued to face un­ had reaffirmed ranges for growth usual uncertainties concerning the over the year ending in the fourth forces affecting monetary growth, in quarter of 1980 of 3 V2 to 6 percent for part because of sizable variations M-1A, 4 to 6V2 percent for M-IB, 6 evident in the demand for both nar­ to 9 percent for M-2, and 6l/2 to 9l/2 rowly and broadly defined money in percent for M-3, with an associated relation to nominal GNP. In the cur­ range of 6 to 9 percent for growth of rent year, moreover, relationships commercial bank credit.2 For the among the measured rates of growth year ending in the fourth quarter of for the monetary aggregates were 1981, the Committee had tentatively subject to large changes resulting indicated reductions on the order of from the introduction of NOW ac­ V2 percentage point in the ranges for counts on a nationwide basis as au­ growth of M-1A, M-IB, and M-2, thorized by the Monetary Control abstracting from institutional influ­ Act of 1980. Specifically, shifts into ences affecting the behavior of the NOW accounts from demand depos­ aggregates. its were expected to retard growth of In reviewing the ranges for mone­ M-l A significantly while shifts from tary growth in 1981, the Committee savings deposits and other interestnoted that from the fourth quarter of bearing assets would enhance 1979 to the fourth quarter of 1980, growth of M-IB. However, esti­ M-l A grew 5 percent; M-IB, 7!/4 mates of the impact of such shifts on percent; M-2, 9% percent; and M-3, measured growth of the two aggre­ 10 percent. For M-1A and M-IB, gates could only be tentative, be­ however, acturi growth in 1980 was cause of the overall size of the shift not comparable to the Committee’s and uncertainty about the ultimate ranges for the year. The ranges had sources of the funds. In January, the been established on the assumption first month after their nationwide of virtually no further shifts into authorization, NOW accounts ex­ ATS-NOW accounts from demand panded far more than had been an­ and other accounts; but as the year ticipated. It was expected that the progressed, and particularly after flow of funds into NOW accounts passage of the Monetary Control would subside in coming months, Act, further significant shifts be­ and also that the proportion of the came apparent. Taking account of funds representing shifts from de­ the estimated effects of such shifts, mand deposits would be gradually which have no significance for mon­ reduced. etary policy, the basic range for Shifts of funds into NOW ac­ growth of M-IB in 1980 could be counts were not expected to affect adjusted upward by about V2 per­ growth of the broader monetary ag­ centage point and the range for gregates significantly, because virtu­ M-l A could be adjusted downward ally all of the funds likely to be shifted into such accounts are al­ 2. M-3 is M-2 plus large-denomination time ready included in M-2. It was antici­ deposits at all depository institutions and term pated, however, that growth of both RPs at commercial banks and savings and loan associations. M-2 and M-3 would be somewhat Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 315 stronger in relation to growth of the in their views concerning the broad­ narrower aggregates, adjusted for er monetary aggregates, in part be­ the flows into NOW accounts, than cause of uncertainty about the po­ projected in July 1980, when ranges tential effects of interest rate for 1981 were first considered. The relationships on the behavior of the public has shown an increased pref­ nontransaction component. Reflect­ erence for holding savings in depos­ ing an expectation that growth of the its included in the nontransaction broader aggregates would increase component of M-2, as changes in relative to that of the narrower ag­ regulatory ceilings on interest rates gregates adjusted for expansion of have made small time and savings NOW accounts, a number of mem­ deposits more attractive relative to bers favored specification of ranges market instruments and as money slightly higher than those for 1980. market mutual funds have become However, most members believed more popular. that sufficient allowance for the pos­ In the Committee’s discussion of sibility of relatively stronger growth its objectives for 1981, the members of the broader aggregates would be agreed that some further reduction made by reiterating the 1980 ranges in the ranges for monetary growth, for them in association with ranges abstracting from the effects of shifts for the narrower aggregates that into NOW accounts, was appropri­ were V2 percentage point lower than ate in line with the longstanding goal those for 1980. In this connection, it of contributing to a reduction in the was stressed that specification of rate of inflation and providing the ranges rather than precise rates for basis for restoration of economic growth over the year inherently pro­ stability and sustainable growth in vided for some change in relative output of goods and services. The rates of growth among the monetary members differed somewhat in their aggregates, and that growth of both views concerning the extent of the M-2 and M-3 might well be in the reductions that might be made and upper portions of their ranges. Even also about the particular aggregates so, growth of the broader aggregates for which longer-run ranges should would be less than actual growth in be specified. 1980. One member preferred to fo­ For M-1 A and M-1B, most mem­ cus exclusively on the narrower ag­ bers favored specification of ranges, gregates, not specifying ranges for abstracting from the NOW account the broader aggregates. effect, that were V2 percentage point At the conclusion of the discus­ lower than the ranges for 1980. One sion, the Committee decided to member advocated a reduction of 1 specify ranges for growth of M-1 A percentage point, particularly be­ and M-1B, adjusted for the effects of cause growth over 1980 had appre­ flows into NOW accounts, that were ciably exceeded the midpoints of the V2 percentage point lower than those adjusted ranges for that year. Anoth­ for 1980 and to retain the 1980 ranges er member preferred not to specify for M-2 and M-3. Thus, the Commit­ ranges for the narrower monetary tee adopted the following ranges for aggregates at all, because he be­ growth of the monetary aggregates lieved that the NOW account effects over the period from the fourth quar­ could not be reliably estimated. In ter of 1980 to the fourth quarter of the view of one other member, con­ 1981: M-1 A, 3 to 5l/2 percent; M-1B, fusion could be lessened by focusing 3V2 to 6 percent; M-2, 6 to 9 percent; attention entirely on M-1B, because and M-3, 6l/2 to 9l/2 percent. The it would be less subject than M-1 A to associated range for growth of com­ the distorting effects of the flows mercial bank credit was 6 to 9 per­ into NOW accounts. cent. It was emphasized that at an Members differed somewhat more early date the Committee might wish Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

316 Federal Reserve Bulletin □ April 1981 to reconsider the longer-run ranges third ami the fourth quarters of 1980 in the light of developing conditions (quarterly average basis) had been and that in any case it would recon­ strong, more than compensating for sider them in July within the frame­ the weakness earlier in the year. work of the Full Employment and From the fourth quarter to January Balanced Growth Act of 1978. It was 1981, however, the annual rates of understood, moreover, that the dis­ growth of M-l A and M-1B had fallen torting effects of shifts into NOW below the lower ends of the ranges accounts would change during the for 1981, reflecting the sharp de­ year and that other short-run factors clines in those aggregates in Decem­ might cause considerable variation ber and the only partial recovery in in annual rates of growth from one January. month to the next and from one In tlmt light, the members in gen­ quarter to the next. The Committee eral agreed that operations in the planned that periodically the staff period before the next regular meet­ would provide estimates of the ef­ ing scheduled for March 31 should fects that shifts into ATS-NOW ac­ be directed toward a gradual restora­ counts were having on the reported tion of growth of M-l A and M-1B data. (adjusted for NOW account effects) to rates consistent with their longer- The Committee adopted the following run ranges. Almost all members ranges for growth in monetary aggre­ were willing to accept continuation gates for the period from the fourth quar­ of relatively slow growth in relation ter of 1980 to the fourth quarter of 1981, abstracting from the impact of introduc­ to the ranges for 1981 at least tion of NOW accounts on a nationwide through March in recognition that it basis: M-1A, 3 to 5l/2 percent; M-1B, 3V2 would generally compensate for the to 6 percent; M-2, 6 to 9 percent; and rapid growth during the fourth quar­ M-3, 6l/2 to 9l/2 percent. The associated ter of 1980, which carried growth for range for bank credit is 6 to 9 percent. the year slightly above the upper Votes for this action: Messrs. bounds of the ranges for the year. Volcker, Gramley, Guffey, Morris, They differed somewhat over the Partee, Rice, Roos, Schultz, Solo­ mon, Mrs. Teeters, and Mr. Winn. acceptable amount of growth. One Vote against this action: Mr. Wallich. member preferred to direct opera­ tions toward raising growth of the Mr. Wallich dissented from this aggregates to the midpoints of their action because he thought that the 1981 ranges by March. ranges adopted for growth of M-l A In accepting the gradual approach and M-1B were too high. He be­ toward encouraging rates of mone­ lieved that somewhat lower ranges tary growth consistent with the would provide for adequate mone­ ranges adopted for 1981, several tary growth in 1981, because he ex­ members commented on the danger pected a further downward shift in of potentially confusing interpreta­ money demand and also because tions of policy intentions and also of growth of the monetary aggregates possible instability in financial mar­ over the past year generally had ex­ kets. It was observed, for example, ceeded the specified ranges. that efforts to raise monetary growth In reviewing its objectives for promptly toward the longer-run monetary growth from December paths could have the undesirable 1980 to March 1981 in light of the consequences of encouraging first ranges adopted for the year from the relatively rapid growth and then an fourth quarter of 1980 to the fourth abrupt deceleration. A few members quarter of 1981, the Committee took also suggested that the gradual ap­ note of the recent behavior of the proach to making up the shortfall monetary aggregates. Specifically, would be acceptable provided that it growth of the aggregates in both the proved to be compatible with rela­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 317 tive stability or some easing in mon­ U.S. trade deficit in the final quarter of ey market pressures. 1980 widened from the exceptionally low rate in the third quarter but remained At the conclusion of the discus­ substantially less than the rate in the first sion, the Committee decided to seek half. behavior of reserve aggregates asso­ M-l A and M-IB declined sharply in ciated with growth of M-l A and December; in January, after adjustment of the actual figures for the estimated M-IB over the period from Decem­ effects of shifts into NOW accounts, ber to March at annual rates of 5 to 6 these aggregates recovered in part. percent and in M-2 of about 8 per­ Growth in M-2 slowed markedly in De­ cent, abstracting from the impact of cember but accelerated in January. flows into NOW accounts. Those Some moderation of the expansion in commercial bank credit in December and rates were associated with growth of early January was accompanied by M-l A, M-IB, and M-2 from the stepped-up financing of nonfinancial fourth quarter of 1980 to the first businesses through issuance of commer­ quarter of 1981 at annual rates of cial paper and longer-term debt instru­ ments. Market interest rates have de­ about 2 percent, 23/4 percent, and 7 clined on balance from their highs of percent respectively. The members mid-December. recognized that shifts into NOW ac­ The Federal Open Market Committee counts would continue to distort seeks to foster monetary and financial measured growth in M-l A and M-IB conditions that will help to reduce infla­ tion, encourage economic recovery, and to an unpredictable extent and that contribute to a sustainable pattern of operational paths would have to be international transactions. The Commit­ developed in the light of evaluation tee agreed that these objectives would be of those distortions. If it appeared furthered by growth of M-l A, M-IB, M-2, and M-3 from the fourth quarter of during the period before the next 1980 to the fourth quarter of 1981 within regular meeting that fluctuations in ranges of 3 to 5% percent, 3l/2 to 6 the federal funds rate, taken over a percent, 6 to 9 percent, and 6l/2 to 9l/2 period of time, within a range of 15 percent respectively, abstracting from to 20 percent were likely to be incon­ the impact of introduction of NOW ac­ counts on a nationwide basis. The asso­ sistent with the monetary and relat­ ciated range for bank credit was 6 to 9 ed reserve paths, the Manager for percent. These ranges will be reconsid­ Domestic Operations was promptly ered as conditions warrant. to notify the Chairman, who would In the short run the Committee seeks behavior of reserve aggregates consis­ then decide whether the situation tent with growth in M-l A and M-IB from called for supplementary instruc­ December to March at annual rates of 5 tions from the Committee. to 6 percent and in M-2 at a rate of about The following domestic policy di­ 8 percent, abstracting from the impact of rective was issued to the Federal flows into NOW accounts. These rates are associated with growth of M-l A, Reserve Bank of New York: M-IB, and M-2 from the fourth quarter of 1980 to the first quarter of 1981 at The information reviewed at this meet­ annual rates of about 2 percent, 23/4 ing suggests that real GNP expanded percent, and 7 percent respectively. It is substantially in the fourth quarter of 1980 recognized that shifts into NOW ac­ and that prices on the average continued counts will continue to distort measured to rise rapidly. In December industrial growth in M-l A and M-IB to an unpre­ production and nonfarm payroll employ­ dictable extent, and operational reserve ment expanded further, and the unem­ paths will be developed in the light of ployment rate was essentially unchanged evaluation of those distortions. If it ap­ at about lV2 percent. Retail sales de­ pears during the period before the next clined, however, following a sizable gain meeting that fluctuations in the federal over the preceding six months. Housing funds rate, taken over a period of time, starts were about unchanged for the third within a range of 15 to 20 percent are month. Over the last few months of 1980, likely to be inconsistent with the mone­ the rise in the index of average hourly tary and related reserve paths, the Man­ earnings was at about the rapid pace ager for Domestic Operations is prompt­ recorded earlier in the year. ly to notify the Chairman, who will then The weighted average value of the decide whether the situation calls for dollar in exchange markets has risen supplementary instructions from the further over the past six weeks. The Committee. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

318 Federal Reserve Bulletin □ April 1981 Votes for this action: Messrs. eral funds rate to around 15 percent, Volcker, Gramley, Guffey, Morris, the lower end of the range of 15 to 20 Partee, Rice, Roos, Schultz, Solo­ percent specified by the Committee, mon, and Winn. Votes against this raising the question of whether the action: Mrs. Teeters and Mr. Wallich. situation called for supplementary Mrs. Teeters dissented from this instructions from the Committee. action because she believed that the In a telephone conference on Feb­ specifications adopted for monetary ruary 24, the Committee adopted the growth over the first quarter were following modification of the domes­ unduly restrictive. She preferred tic policy directive adopted on Feb­ specification of higher rates for mon­ ruary 3: etary growth over the first quarter, consistent with the ranges adopted In light of the relatively strong growth for monetary growth over the whole of M-2 cind M-3 and the substantial eas­ ing recently in money market conditions, year, in association with a lower as well as uncertainties about the inter­ intermeeting range for the federal pretation of the behavior of M-1, the funds rate. Committee on February 24 agreed to Mr. Wallich dissented from this accept some shortfall in growth of M-1 A action because he preferred to set a and M-1B from the specified rates in the domestic policy directive adopted on higher range for the federal funds February 3 as consistent with develop­ rate in order to help avoid a repeti­ ments in the aggregates generally and the tion of the sharp drop in interest objectives for the year. rates that had occurred in the second quarter of 1980. Votes for this action: Messrs. In late February, incoming data Volcker, Gramley, Guffey, Morris, Partee, Rice, Schultz, Mrs. Teeters, indicated that M-1 A and M-1B, after and Mr. Winn. Vote against this ac­ adjustment for the estimated effects tion: Mr. Roos. Absent: Messrs. Sol­ of shifts into NOW accounts, were omon and Wallich. growing at rates well below those consistent with the Committee’s ob­ Mr. Roos dissented from this ac­ jectives for the period from Decem­ tion because he believed that it ber to March. Consequently, mem­ would tend to prolong unduly the ber bank demands for reserves had shortfall in growth of M-1 A and eased in relation to the supply of M-1B from the Committee’s ranges reserves being made available for the year. In the circumstances, through open market operations, he preferred to reduce the lower and member bank borrowings had limit of the intermeeting range for fallen appreciably. At the same time, the federal funds rate in order to growth of M-2 and M-3 appeared to encourage a more prompt pickup in be strong. These developments were growth of the narrowly defined mon­ associated with a decline in the fed­ etary aggregates. Records of policy actions taken by the Federal Open Market Committee at each meeting, in the form in which they will appear in the Board’s Annual Report, are made available a few days after the next regularly scheduled meeting and are later published in the Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

319 Legal Developments Revision of Regulation Z Subpart C—Closed-End Credit The Board of Governors has adopted a complete Section 226.17 General disclosure requirements. revision of its Regulation Z (Truth in Lending). The 226.18 Content of disclosures. revision implements the Truth in Lending Simplifica­ 226.19 Certain residential mortgage transac­ tion and Reform Act (Title VI of the Depository tions. Institutions Deregulation and Monetary Control Act of 226.20 Subsequent disclosure requirements. 1980) and substantially alters the requirements and the 226.21 Treatment of credit balances. structure of the current regulation. 226.22 Determination of annual percentage The new regulation becomes effective on April 1, rate. 1981, but creditors have the option of continuing to 226.23 Right of rescission. comply with current Regulation Z until March 31, 226.24 Advertising. 1982. Beginning April 1, 1982, creditors subject to Regulation Z must comply with the revised regulation. Subpart D—Miscellaneous The Board has consolidated the consumer leasing provisions contained in current Regulation Z, and is Section 226.25 Record retention. publishing them as a separate regulation. 226.26 Use of annual percentage rate in oral Effective April 1, 1981, Regulation Z is revised to disclosures. read as set forth below: 226.27 Spanish language disclosures. 226.28 Effect on state laws. 226.29 State exemptions. Truth in Lending Revised Regulation Z Appendix A Effect on state laws. Subpart A—General Appendix B State exemptions. Appendix C Issuance of staff interpretations. Section 226.1 Authority, purpose, coverage, orga­ Appendix D Multiple advance construction loans. nization, enforcement and liability. Appendix E Rules for card issuers that bill on a 226.2 Definitions and rules of construc­ transaction-by-transaction basis. tion. Appendix F Annual percentage rate computations 226.3 Exempt transactions. for certain open-end credit plans. 226.4 Finance charge. Appendix G Open-end model forms and clauses. Appendix H Closed-end model forms and clauses. Subpart B—Open-End Credit Appendix I Federal enforcement agencies. Appendix J Annual percentage rate computations Section 226.5 General disclosure requirements. for closed-end credit transactions. 226.6 Initial disclosure statement. 226.7 Periodic statement. 226.8 Identification of transactions. 226.9 Subsequent disclosure requirements. Subpart A—General 226.10 Prompt crediting of payments. 226.11 Treatment of credit balances. Section 226.1—Authority, Purpose, Coverage, 226.12 Special credit card provisions. Organization, Enforcement and Liability 226.13 Billing error resolution. 226.14 Determination of annual percentage (a) Authority. This regulation, known as Regulation Z, rate. is issued by the Board of Governors of the Federal 226.15 Right of rescission. Reserve System to implement the federal Truth in 226.16 Advertising. Lending and Fair Credit Billing Acts, which are con­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

320 Federal Reserve Bulletin □ April 1981 tained in Title I of the Consumer Credit Protection retention, effect on state laws, and state exemp­ Act, as amended (15 U.S.C. 1601 et seq.). tions. (5) There are several appendices containing infor­ (b) Purpose. The purpose of this regulation is to mation such as the procedures for determinations promote the informed use of consumer credit by about state laws, state exemptions and issuance of requiring disclosures about its terms and cost. The staff interpretations, special rules for certain kinds regulation also gives consumers the right to cancel of credit plans, a list of enforcement agencies, and certain credit transactions that involve a lien on a the rules for computing annual percentage rates in consumer’s principal dwelling, regulates certain credit closed-end credit transactions. card practices, and provides a means for fair and timely resolution of credit billing disputes. The regula­ (e) Enforcement and liability. Section 108 of the act tion does not govern charges for consumer credit. contains the administrative enforcement provisions. Sections 112, 113, 130, 131, and 134 contain provisions (c) Coverage. relating to liability for failure to comply with the (1) In general, this regulation applies to each individ­ requirements of the act and the regulation. ual or business that offers or extends credit when four conditions are met: (i) the credit is offered or Section 226.2—Definitions and Rules of extended to consumers; (ii) the offering or extension Construction of credit is done regularly;1 (iii) the credit is subject to a finance charge or is payable by a written (a) Definitions. For purposes of this regulation, the agreement in more than 4 installments; and (iv) the following definitions apply: credit is primarily for personal, family, or household purposes. “Act" means the Truth in Lending Act (15 U.S.C. (2) If a credit card is involved, however, certain 1601 et seq.). provisions apply even if the credit is not subject to a finance charge, or is not payable by a written “Advertisement" means a commercial message in agreement in more than 4 installments, or if the any medium that promotes, directly or indirectly, a credit card is to be used for business purposes. credit transaction. (d) Organization. The regulation is divided into sub­ “Arranger of credit ” means a person who regularly parts and appendices as follows: arranges for the extension of consumer credit2 by (1) Subpart A contains general information. It sets another person if: forth: (i) the authority, purpose, coverage, and (1) A finance charge may be imposed for that organization of the regulation; (ii) the definitions of credit, or the credit is payable by written agree­ basic terms; (iii) the transactions that are exempt ment in more than 4 installments (not including a from coverage; and (iv) the method of determining downpayment); and the finance charge. (2) The person extending the credit is not a credi­ (2) Subpart B contains the rules for open-end credit. tor. It requires that initial disclosures and periodic state­ ments be provided. It also describes special rules “Billing cycle” or “cycle" means the interval be­ that apply to credit card transactions, treatment of tween the days or dates of regular periodic state­ payments and credit balances, procedures for re­ ments. These intervals shall be equal and no longer solving credit billing errors, annual percentage rate than a quarter of a year. An interval will be consid­ calculations, rescission requirements, and advertis­ ered equal if the number of days in the cycle does ing rules. not vary more than 4 days from the regular day or (3) Subpart C relates to closed-end credit. It con­ date of the periodic statement. tains rules on disclosures, treatment of credit bal­ ances, annual percentage rate calculations, rescis­ “Board" means the Board of Governors of the sion requirements, and advertising. Federal Reserve System. (4) Subpart D contains rules on oral disclosures, Spanish language disclosure in Puerto Rico, record 2. A person regularly arranges for the extension of consumer credit only if it arranged credit more than 25 times (or more than 5 times for transactions secured by a dwelling) in the preceding calendar year. If a person did not meet these numerical standards in the preceding 1. The meaning of “regularly” is explained in the definition of calendar year, the numerical standards shall be applied to the current “creditor” in § 226.2(a). calendar year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 321 “Business day” means a day on which a creditor’s “Credit” means the right to defer payment of debt offices are open to the public for carrying on sub­ or to incur debt and defer its payment. stantially all of its business functions. However, for purposes of rescission under §§ 226.15 and 226.23, “Credit card” means any card, plate, coupon book, the term means all calendar days except Sundays or other single credit device that may be used from and the legal public holidays specified in 5 U.S.C. time to time to obtain credit. 6103(a), such as New Year’s Day, Washington’s Birthday, Memorial Day, Independence Day, Labor “Credit sale” means a sale in which the seller is a Day, Columbus Day, Veterans Day, Thanksgiving creditor. The term includes a bailment or lease Day, and Christmas Day. (unless terminable without penalty at any time by the consumer) under which the consumer: “Card issuer’’ means a person that issues a credit (1) Agrees to pay as compensation for use a sum card or that person’s agent with respect to the substantially equivalent to, or in excess of, the card. total value of the property and services involved; and “Cardholder” means a natural person to whom a (2) Will become (or has the option to become), for credit card is issued for consumer credit purposes, no additional consideration or for nominal consid­ or a natural person who has agreed with the card eration, the owner of the property upon compli­ issuer to pay consumer credit obligations arising ance with the agreement. from the issuance of a credit card to another natural person. For purposes of § 226.12(a) and (b), the “Creditor” means: term includes any person to whom a credit card is (1) A person (i) who regularly extends consumer issued for any purpose, including business, commer­ credit3 that is subject to a finance charge or is cial, or agricultural use, or a person who has agreed payable by written agreement in more than 4 with the card issuer to pay obligations arising from installments (not including a downpayment), and the issuance of such a credit card to another person. (ii) to whom the obligation is initially payable, either on the face of the note or contract, or by “Cash price” means the price at which a creditor, in agreement when there is no note or contract. the ordinary course of business, offers to sell for (2) An arranger of credit. cash the property or service that is the subject of the (3) For purposes of §§ 226.4(c)(8) (Discounts), transaction. At the creditor’s option, the term may 226.9(d) (Finance charge imposed at time of trans­ include the price of accessories, services related to action), and 226.12(e) (Prompt notification of re­ the sale, service contracts and taxes and fees for turns and crediting of refunds), a person that license, title, and registration. The term does not honors a credit card. include any finance charge. (4) For purposes of Subpart B, any card issuer that extends either open-end credit or credit that “Closed-end credit” means consumer credit other is not subject to a finance charge and is not than “open-end credit” as defined in this section. payable by written agreement in more than 4 installments. “Consumer” means a cardholder or a natural per­ (5) For purposes of Subpart B (except for the son to whom comsumer credit is offered or extend­ finance charge disclosures contained in ed. However, for purposes of rescission under §§ 226.6(a) and 226.7(d) through (g) and the right §§ 226.15 and 226.23, the term also includes a natu­ of rescission set forth in § 226.15) and Subpart C, ral person in whose principal dwelling a security any card issuer that extends closed-end credit that interest is or will be retained or acquired, if that is subject to a finance charge or is payable by person’s ownership interest in the dwelling is or will written agreement in more than 4 installments. be subject to the security interest. “Downpayment” means an amount, including the “Consumer credit” means credit offered or extend­ value of any property used as a trade-in, paid to a ed to a consumer primarily for personal, family, or household purposes. 3. A person regularly extends consumer credit only if it extended “Consummation” means the time that a consumer credit more than 25 times (or more than 5 times for transactions secured by a dwelling) in the preceding calendar year. If a person did becomes contractually obligated on a credit transac­ not meet these numerical standards in the preceding calendar year, the tion. numerical standards shall be applied to the current calendar year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

322 Federal Reserve Bulletin □ April 1981 seller to reduce the cash price of goods or services or interests in after-acquired property. For purposes purchased in a credit sale transaction. A deferred of disclosure under §§ 226.6 and 226.18, the term portion of a downpayment may be treated as part of does not include an interest that arises solely by the downpayment if it is payable not later than the operation of law. However, for purposes of the right due date of the second otherwise regularly sched­ of rescission under §§ 226.15 and 226.23, the term uled payment and is not subject to a finance charge. does include interests that arise solely by operation of law. “Dwelling” means a residential structure that con­ tains 1 to 4 units, whether or not that structure is “State” means any state, the District of Columbia, attached to real property. The term includes an the Commonwealth of Puerto Rico, and any terri­ individual condominium unit, cooperative unit, mo­ tory or possession of the United States. bile home, and trailer, if it is used as a residence. (b) Rules of construction. For purposes of this regula­ “Open-end credit” means consumer credit extend­ tion, the following rules of construction apply: ed by a creditor under a plan in which: (1) Where appropriate, the singular form of a word (1) The creditor reasonably contemplates repeat­ includes the plural form and plural includes singular. ed transactions; (2) Where the words “obligation” and “transac­ (2) The creditor may impose a finance charge tion” are used in this regulation, they refer to a from time to time on an outstanding unpaid bal­ consumer credit obligation or transaction, depend­ ance; and ing upon the context. Where the word “credit” is (3) The amount of credit that may be extended to used in this regulation, it means “consumer credit” the consumer during the term of the plan (up to unless the context clearly indicates otherwise. any limit set by the creditor) is generally made (3) Unless defined in this regulation, the words used available to the extent that any outstanding bal­ have the meanings given to them by state law or ance is repaid. contract. (4) Footnotes have the same legal effect as the text “Periodic rate ” means a rate of finance charge that of the regulation. is or may be imposed by a creditor on a balance for a day, week, month, or other subdivision of a year. Section 226.3—Exempt Transactions “Person” means a natural person or an organiza­ This regulation does not apply to the following: tion, including a corporation, partnership, propri­ etorship, association, cooperative, estate, trust, or (a) Business, commercial, agricultural, or organiza­ government unit. tional credit. (1) An extension of credit primarily for a business, “Prepaid finance charge” means any finance commercial or agricultural purpose. charge paid separately in cash or by check before or (2) An extension of credit to other than a natural at consummation of a transaction, or withheld from person, including credit to government agencies or the proceeds of the credit at any time. instrumentalities.4 “Residential mortgage transaction” means a trans­ (b) Credit over $25,000 not secured by real property or action in which a mortgage, deed of trust, purchase a dwelling. An extension of credit not secured by real money security interest arising under an installment property, or by personal property used or expected to sales contract, or equivalent consensual security be used as the principal dwelling of the consumer, in interest is created or retained in the consumer’s which the amount financed exceeds $25,000 or in principal dwelling to finance the acquisition or initial which there is an express written commitment to construction of that dwelling. extend credit in excess of $25,000. “Security interest” means an interest in property (c) Public utility credit. An extension of credit that that secures performance of a consumer credit obli­ involves public utility services provided through pipe, gation and that is recognized by state or federal law. It does not include incidental interests such as interests in proceeds, accessions, additions, fix­ 4. Extensions of credit that are exempt under paragraph (a)(1) and tures, insurance proceeds (whether or not the credi­ (2) remain subject to § 226.12(a) and (b) governing the issuance of tor is a loss payee or beneficiary), premium rebates, credit cards and the liability for their unauthorized use. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 323 wire, other connected facilities, or radio or similar loss of or damage to property, or against liability transmission (including extensions of such facilities), if arising out of the ownership or use of property, the charges for service, delayed payment, or any written in connection with a credit transaction. discounts for prompt payment are filed with or regulat­ (9) Discounts for the purpose of inducing payment ed by any government unit. The financing of durable by a means other than the use of credit. goods or home improvements by a public utility is not exempt. (c) Charges excluded from the finance charge. The following charges are not finance charges: (d) Securities or commodities accounts. Transactions (1) Application fees charged to all applicants for in securities or commodities accounts in which credit credit, whether or not credit is actually extended. is extended by a broker-dealer registered with the (2) Charges for actual unanticipated late payment, Securities and Exchange Commission or the Commod­ for exceeding a credit limit, or for delinquency, ity Futures Trading Commission. default, or a similar occurrence. (3) Charges imposed by a financial institution for (e) Home fuel budget plans. An installment agreement paying items that overdraw an account, unless the for the purchase of home fuels in which no finance payment of such items and the imposition of the charge is imposed. charge were previously agreed upon in writing. (4) Fees charged for participation in a credit plan, Section 226.4—Finance Charge whether assessed on an annual or other periodic basis. (a) Definition. The finance charge is the cost of con­ (5) Seller’s points. sumer credit as a dollar amount. It includes any charge (6) Interest forfeited as a result of an interest reduc­ payable directly or indirectly by the consumer and tion required by law on a time deposit used as imposed directly or indirectly by the creditor as an security for an extension of credit. incident to or a condition of the extension of credit. It (7) The following fees in a transaction secured by does not include any charge of a type payable in a real property or in a residential mortgage transac­ comparable cash transaction. tion, if the fees are bona fide and reasonable in amount: (b) Examples of finance charges. The finance charge (i) Fees for title examination, abstract of title, includes the following types of charges, except for title insurance, property survey, and similar pur­ charges specifically excluded by paragraphs (c) poses. through (e) of this section: (ii) Fees for preparing deeds, mortgages, and (1) Interest, time price differential, and any amount reconveyance, settlement, and similar docu­ payable under an add-on or discount system of ments. additional charges. (iii) Notary, appraisal, and credit report fees. (2) Service, transaction, activity, and carrying (iv) Amounts required to be paid into escrow or charges, including any charge imposed on a check­ trustee accounts if the amounts would not other­ ing or other transaction account to the extent that wise be included in the finance charge. the charge exceeds the charge for a similar account (8) Discounts offered to induce payment for a pur­ without a credit feature. chase by cash, check, or other means, as provided (3) Points, loan fees, assumption fees, finder’s fees, in § 167(b) of the act. and similar charges. (4) Appraisal, investigation, and credit report fees. (d) Insurance. (5) Premiums or other charges for any guarantee or (1) Premiums for credit life, accident, health, or insurance protecting the creditor against the con­ loss-of-income insurance may be excluded from the sumer’s default or other credit loss. finance charge if the following conditions are met: (6) Charges imposed on a creditor by another per­ (i) The insurance coverage is not required by the son for purchasing or accepting a consumer’s obliga­ creditor, and this fact is disclosed. tion, if the consumer is required to pay the charges (ii) The premium for the initial term of insurance in cash, as an addition to the obligation, or as a coverage is disclosed. If the term of insurance is deduction from the proceeds of the obligation. less than the term of the transaction, the term of (7) Premiums or other charges for credit life, acci­ insurance also shall be disclosed. The premium dent, health, or loss-of-income insurance, written in may be disclosed on a unit-cost basis only in connection with a credit transaction. open-end credit transactions, closed-end credit (8) Premiums or other charges for insurance against transactions by mail or telephone under Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

324 Federal Reserve Bulletin □ April 1981 § 226.17(g), and certain closed-end credit transac­ (a) Form of disclosures. tions involving an insurance plan that limits the (1) The creditor shall make the disclosures required total amount of indebtedness subject to coverage, by this subpart clearly and conspicuously in writ­ (iii) The consumer signs or initials an affirmative ing,7 in a form that the consumer may keep.8 written request for the insurance after receiving (2) The terms “finance charge” and “annual per­ the disclosures specified in this paragraph. Any centage rate,” when required to be disclosed with a consumer in the transaction may sign or initial the corresponding amount or percentage rate, shall be request. more conspicuous than any other required disclo­ (2) Premiums for insurance against loss of or dam­ sure.9 age to property, or against liability arising out of the ownership or use of property,5 may be excluded (b) Time of disclosures. from the finance charge if the following conditions are met: (1) Initial disclosures. The creditor shall furnish the (i) The insurance coverage may be obtained from initial disclosure statement required by § 226.6 be­ a person of the consumer’s choice,6 and this fact fore the first transaction is made under the plan. is disclosed. (ii) If the coverage is obtained from or through (2) Periodic statements. the creditor, the premium for the initial term of (i) The creditor shall mail or deliver a periodic insurance coverage shall be disclosed. If the term statement as required by § 226.7 for each billing of insurance is less than the term of the transac­ cycle at the end of which an account has a debit or tion, the term of insurance shall also be disclosed. credit balance of more than $1 or on which a The premium may be disclosed on a unit-cost finance charge has been imposed. A periodic basis only in open-end credit transactions, closed- statement need not be sent for an account if the end credit transactions by mail or telephone under creditor deems it uncollectible, or if delinquency § 226.17(g), and certain closed-end credit transac­ collection proceedings have been instituted, or if tions involving an insurance plan that limits the furnishing the statement would violate federal total amount of indebtedness subject to coverage. law. (ii) The creditor shall mail or deliver the periodic (e) Certain security interest charges. If itemized and statement at least 14 days prior to any date or the disclosed, the following charges may be excluded from end of any time period required to be disclosed the finance charge: under § 226.7(j) in order for the consumer to avoid (1) Taxes and fees prescribed by law that actually an additional finance or other charge.10 A creditor are or will be paid to public officials for determining that fails to meet this requirement shall not collect the existence of or for perfecting, releasing, or any finance or other charge imposed as a result of satisfying a security interest. such failure. (2) The premium for insurance in lieu of perfecting a security interest to the extent that the premium does (c) Basis of disclosures and use of estimates. Disclo­ not exceed the fees described in paragraph (e)(1) of sures shall reflect the terms of the legal obligation this section that otherwise would be payable. between the parties. If any information necessary for accurate disclosure is unknown to the creditor, it shall (f) Prohibited offsets. Interest, dividends, or other make the disclosure based on the best information income received or to be received by the consumer on reasonably available and shall state clearly that the deposits or investments shall not be deducted in disclosure is an estimate. computing the finance charge. (d) Multiple creditors; multiple consumers. If the credit plan involves more than one creditor, only one Subpart B—Open-End Credit 7. The disclosure required by § 226.9(d) when a finance charge is Section 226.5—General Disclosure imposed at the time of a transaction need not be written. Requirements 8. Disclosures made under § 226.10(b) about payment require­ ments, and the alternative summary billing rights statement provided for in § 226.9(a)(2) need not be in a form that the consumer can keep. 9. The terms need not be more conspicuous when used under § 226.7(d) on periodic statements and in advertisements under 5. This includes single interest insurance if the insurer waives all § 226.16. right of subrogation against the consumer. 10. This timing requirement does not apply if the creditor is unable 6. A creditor may reserve the right to refuse to accept, for to meet the requirement because of an act of God, war, civil disorder, reasonable cause, an insurer offered by the consumer. natural disaster, or strike. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 325 set of disclosures shall be given, and the creditors shall scription of how any finance charge other than the agree among themselves which creditor must comply periodic rate will be determined. with the requirements that this regulation imposes on any or all of them. If there is more than one consumer, (b) Other charges. The amount of any charge other the disclosures may be made to any consumer who is than a finance charge that may be imposed as part of primarily liable on the account. If the right of rescis­ the plan, or an explanation of how the charge will be sion under § 226.15 is applicable, however, the disclo­ determined. sures required by §§ 226.6 and 226.15(b) shall be made to each consumer having the right to rescind. (c) Security interests. The fact that the creditor has or will acquire a security interest in the property pur­ (e) Effect of subsequent events. If a disclosure be­ chased under the plan, or in other property identified comes inaccurate because of an event that occurs after by item or type. the creditor mails or delivers the disclosures, the resulting inaccuracy is not a violation of this regula­ (d) Statement of billing rights. A statement that out­ tion, although new disclosures may be required under lines the consumer’s rights and the creditor’s responsi­ § 226.9(c). bilities under §§ 226.12(c) and 226.13 and that is sub­ stantially similar to the statement found in Appen­ Section 226.6—Initial Disclosure Statement dix G. The creditor shall disclose to the consumer, in termi­ Section 226.7—Periodic Statement nology consistent with that to be used on the periodic statement, each of the following items, to the extent The creditor shall furnish the consumer with a periodic applicable: statement that discloses the following items, to the extent applicable: (a) Finance charge. The circumstances under which a finance charge will be imposed and an explanation of (a) Previous balance. The account balance outstand­ how it will be determined, as follows: ing at the beginning of the billing cycle. (1) A statement of when finance charges begin to accrue, including an explanation of whether or not (b) Identification of transactions. An identification of any time period exists within which any credit each credit transaction in accordance with § 226.8. extended may be repaid without incurring a finance charge. If such a time period is provided, a creditor (c) Credits. Any credit to the account during the may, at its option and without disclosure, impose no billing cycle, including the amount and the date of finance charge when payment is received after the crediting. The date need not be provided if a delay in time period’s expiration. crediting does not result in any finance or other (2) A disclosure of each periodic rate that may be charge. used to compute the finance charge, the range of balances to which it is applicable,11 and the corre­ (d) Periodic rates. Each periodic rate that may be sponding annual percentage rate.12 When different used to compute the finance charge, the range of periodic rates apply to different types of transac­ balances to which it is applicable,14 and the corre­ tions, the types of transactions to which the periodic sponding annual percentage rate.15 If different periodic rates apply shall also be disclosed. rates apply to different types of transactions, the types (3) An explanation of the method used to determine of transactions to which the periodic rates apply shall the balance on which the finance charge may be also be disclosed. computed. (4) An explanation of how the amount of any fi­ (e) Balance on which finance charge computed. The nance charge will be determined,13 including a de­ amount of the balance to which a periodic rate was applied and an explanation of how that balance was determined. When a balance is determined without 11. A creditor is not required to adjust the range of balances disclosure to reflect the balance below which only a minimum charge first deducting all credits and payments made during applies. the billing cycle, that fact and the amount of the credits 12. If a creditor is offering a variable rate plan, the creditor shall and payments shall be disclosed. also disclose: (1) the circumstances under which the rate(s) may increase; (2) any limitations on the increase; and (3) the effect(s) of an increase. 13. If no finance charge is imposed when the outstanding balance is 14. See footnotes 11 and 13. less than a certain amount, no disclosure is required of that fact or of 15. If a variable rate plan is involved, the creditor shall disclose the the balance below which no finance charge will be imposed. fact that the periodic rate(s) may vary. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

326 Federal Reserve Bulletin □ April 1981 (f) Amount of finance charge. The amount of any (1) Copy of credit document provided. When an finance charge debited or added to the account during actual copy of the receipt or other credit document the billing cycle, using the term “finance charge.” The is provided with the first periodic statement reflect­ components of the finance charge shall be individually ing the transaction, the transaction is sufficiently itemized and identified to show the amount(s) due to identified if the amount of the transaction and either the application of any periodic rates and the amount(s) the date of the transaction or the date of debiting the of any other type of finance charge. If there is more transaction to the consumer’s account are disclosed than one periodic rate, the amount of the finance on the copy or on the periodic statement. charge attributable to each rate need not be separately itemized and identified. (2) Copy of credit document not provided—creditor and seller same or related person(s). When the (g) Annual percentage rate. When a finance charge is creditor and the seller are the same person or related imposed during the billing cycle, the annual percent­ persons, and an actual copy of the receipt or other age rate(s) determined under § 226.14, using the term credit document is not provided with the periodic “annual percentage rate.” statement, the creditor shall disclose the amount and date of the transaction, and a brief identifica­ (h) Other charges. The amounts, itemized and identi­ tion17 of the property or services purchased.18 fied by type, of any charges other than finance charges debited to the account during the billing cycle. (3) Copy of credit document not provided—creditor and seller not same or related person(s). When the (i) Closing date of billing cycle; new balance. The creditor and seller are not the same person or related closing date of the billing cycle and the account persons, and an actual copy of the receipt or other balance outstanding on that date. credit document is not provided with the periodic statement, the creditor shall disclose the amount (j) Free-ride period. The date by which or the time and date of the transaction; the seller’s name; and period within which the new balance or any portion of the city, and state or foreign country where the the new balance must be paid to avoid additional transaction took place.19 finance charges. If such a time period is provided, a creditor may, at its option and without disclosure, (b) Nonsale credit. A nonsale credit transaction is impose no finance charge when payment is received sufficiently identified if the first periodic statement after the time period’s expiration. reflecting the transaction discloses a brief identifica­ tion of the transaction;20 the amount of the transac­ (k) Address for notice of billing errors. The address to tion; and at least one of the following dates: the date of be used for notice of billing errors. Alternatively, the the transaction, the date of debiting the transaction to address may be provided on the billing rights state­ the consumer’s account, or, if the consumer signed the ment permitted by § 226.9(a)(2). credit document, the date appearing on the document. If an actual copy of the receipt or other credit docu­ Section 226.8—Identification of Transactions ment is provided and that copy shows the amount and The creditor shall identify credit transactions on or with the first periodic statement that reflects the 17. As an alternative to the brief identification, the creditor may transaction by furnishing the following information, as disclose a number or symbol that also appears on the receipt or other credit document given to the consumer, if the number or symbol applicable.16 reasonably identifies that transaction with that creditor, and if the creditor treats an inquiry for clarification or documentation as a notice (a) Sale credit. For each credit transaction involving of a billing error, including correcting the account in accordance with § 226.13(e). the sale of property or services, the following rules 18. An identification of property or services may be replaced by the shall apply: seller’s name and location of the transaction when: (1) the creditor and the seller are the same person; (2) the creditor’s open-end plan has fewer than 15,000 accounts; (3) the creditor provides the consumer 16. Failure to disclose the information required by this section shall with point-of-sale documentation for that transaction; and (4) the not be deemed a failure to comply with the regulation if: (1) the creditor treats an inquiry for clarification or documentation as a notice creditor maintains procedures reasonably adpated to obtain and of a billing error, including correcting the account in accordance with provide the information and (2) the creditor treats an inquiry for § 226.13(e). clarification or documentation as a notice of a billing error, including 19. The creditor may omit the address or provide any suitable correcting the account in accordance with § 226.13(e). This applies to designation that helps the consumer to identify the transaction when transactions that take place outside a state, as defined in § 226.2(a), the transaction (1) took place at a location that is not fixed; (2) took whether or not the creditor maintains procedures reasonably adapted place in the consumer’s home; or (3) was a mail or telephone order. to obtain the required information. 20. See footnote 17. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 327 at least one of the specified dates, the brief identifica­ change, unless the change has been agreed to by the tion may be omitted. consumer, or a periodic rate or other finance charge is increased as a result of the consumer’s delinquen­ Section 226.9—Subsequent Disclosure cy or default. Requirements (2) No notice under this section is required when the change involves late payment charges, charges (a) Furnishing statement of billing rights. for documentary evidence, or over-the-limit charges; a reduction of any component of a finance (1) Annual statement. The creditor shall mail or or other charge; suspension of future credit privi­ deliver the billing rights statement required by leges or termination of an account or plan ; or when § 226.6(d) at least once per calendar year, at inter­ the change results from an agreement involving a vals of not less than 6 months nor more than 18 court proceeding, or from the consumer’s default or months, either to all consumers or to each consumer delinquency (other than an increase in the periodic entitled to receive a periodic statement under rate or other finance charge). § 226.5(b)(2) for any one billing cycle. (d) Finance charge imposed at time of transaction. (2) Alternative summary statement. As an alterna­ (1) Any person, other than the card issuer, who tive to paragraph (a)(1) of this section, the creditor imposes a finance charge at the time of honoring a may mail or deliver, on or with each periodic consumer’s credit card, shall disclose the amount of statement, a statement substantially similar to that that finance charge prior to its imposition. in Appendix G. (2) The card issuer, if other than the person honor­ ing the consumer’s credit card, shall have no re­ (b) Disclosures for supplemental credit devices and sponsibility for the disclosure required by paragraph additional features. (d)(1) of this section, and shall not consider any such (1) If a creditor, within 30 days after mailing or charge for purposes of §§ 226.6 and 226.7. delivering the initial disclosures under § 226.6(a), adds a credit feature to the consumer’s account or Section 226.10—Prompt Crediting of Payments mails or delivers to the consumer a credit device for which the finance charge terms are the same as those previously disclosed, no additional disclo­ (a) General rule. A creditor shall credit a payment to sures are necessary. After 30 days, if the creditor the consumer’s account as of the date of receipt, adds a credit feature or furnishes a credit device except when a delay in crediting does not result in a (other than as a renewal, resupply, or the original finance or other charge or except as provided in issuance of a credit card) on the same finance charge paragraph (b) of this section. terms, the creditor shall disclose, before the con­ sumer uses the feature or device for the first time, (b) Specific requirements for payments. If a creditor that it is for use in obtaining credit under the terms specifies, on or with the periodic statement, require­ previously disclosed. ments for the consumer to follow in making payments, (2) Whenever a credit feature is added or a credit but accepts a payment that does not conform to the device is mailed or delivered, and the finance charge requirements, the creditor shall credit the payment terms for the feature or device differ from disclo­ within 5 days of receipt. sures previously given, the disclosures required by § 226.6(a) that are applicable to the added feature or (c) Adjustment of account. If a creditor fails to credit device shall be given before the consumer uses the a payment, as required by paragraphs (a) or (b) of this feature or device for the first time. section, in time to avoid the imposition of finance or other charges, the creditor shall adjust the consumer’s (c) Change in terms. account so that the charges imposed are credited to the consumer’s account during the next billing cycle. (1) Written notice required. Whenever any term required to be disclosed under § 226.6 is changed or Section 226.11—Treatment of Credit Balances the required minimum periodic payment is in­ creased, the creditor shall mail or deliver written When a credit balance in excess of $1 is created on a notice of the change to each consumer who may be credit account (through transmittal of funds to a credi­ affected. The notice shall be mailed or delivered at tor in excess of the total balance due on an account, least 15 days prior to the effective date of the through rebates of unearned finance charges or insur­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

328 Federal Reserve Bulletin □ April 1981 ance premiums, or through amounts otherwise owed be notified of loss or theft of the card. The notice to or held for the benefit of a consumer), the creditor shall state that the cardholder’s liability shall not shall: exceed $50 (or any lesser amount) and that the (a) Credit the amount of the credit balance to the cardholder may give oral or written notification, consumer’s account; and shall describe a means of notification (for (b) Refund any part of the remaining credit balance example, a telephone number, an address, or within 7 business days from receipt of a written both); and request from the consumer; and (iii) The card issuer has provided a means to (c) Make a good faith effort to refund to the con­ identify the cardholder on the account or the sumer by cash, check, or money order, or credit to a authorized user of the card. deposit account of the consumer, any part of the credit balance remaining in the account for more (3) Notification to card issuer. Notification to a than 6 months. No further action is required if the card issuer is given when steps have been taken as consumer’s current location is not known to the may be reasonably required in the ordinary course creditor and cannot be traced through the consum­ of business to provide the card issuer with the er’s last known address or telephone number. pertinent information about the loss, theft, or possi­ ble unauthorized use of a credit card, regardless of Section 226.12—Special Credit Card Provisions whether any particular officer, employee, or agent of the card issuer does, in fact, receive the informa­ (a) Issuance of credit cards. Regardless of the pur­ tion. Notification may be given, at the option of the pose for which a credit card is to be used, including person giving it, in person, by telephone, or in business, commercial, or agricultural use, no credit writing. Notification in writing is considered given card shall be issued to any person except: at the time of receipt or, whether or not received, at (1) In response to an oral or written request or the expiration of the time ordinarily required for application for the card; or transmission, whichever is earlier. (2) As a renewal of, or substitute for, an accepted credit card.21 (4) Effect of other applicable law or agreement. If state law or an agreement between a cardholder and (b) Liability of cardholder for unauthorized use. the card issuer imposes lesser liability than that provided in this paragraph, the lesser liability shall (1) Limitation on amount. The liability of a card­ govern. holder for unauthorized use22 of a credit card shall not exceed the lesser of $50 or the amount of money, (5) Business use of credit cards. If 10 or more credit property, labor, or services obtained by the unau­ cards are issued by one card issuer for use by the thorized use before notification to the card issuer employees of an organization, this section does not under paragraph (b)(3) of this section. prohibit the card issuer and the organization from agreeing to liability for unauthorized use without (2) Conditions of liability. A cardholder shall be regard to this section. However, liability for unau­ liable for unauthorized use of a credit card only if: thorized use may be imposed on an employee of the (i) The credit card is an accepted credit card; organization, by either the card issuer or the organi­ (ii) The card issuer has provided adequate no­ zation, only in accordance with this section. tice23 of the cardholder’s maximum potential li­ ability and of means by which the card issuer may (c) Right of cardholder to assert claims or defenses against card issuer} 4 21. For purposes of this section, “accepted credit card” means any credit card that a cardholder has requested or applied for and received, or has signed, used, or authorized another person to use to (1) General rule. When a person who honors a obtain credit. Any credit card issued as a renewal or substitute in credit card fails to resolve satisfactorily a dispute as accordance with this paragraph becomes an accepted credit card when to property or services purchased with the credit received by the cardholder. 22. “Unauthorized use” means the use of a credit card by a person, card in a consumer credit transaction, the card­ other than the cardholder, who does not have actual, implied, or holder may assert against the card issuer all claims apparent authority for such use, and from which the cardholder (other than tort claims) and defenses arising out of receives no benefit. 23. “Adequate notice” means a printed notice to a cardholder that sets forth clearly the pertinent facts so that the cardholder may reasonably be expected to have noticed it and understood its meaning. 24. This paragraph does not apply to the use of a check guarantee The notice may be given by any means reasonably assuring receipt by card or a debit card in connection with an overdraft credit plan, or to a the cardholder. check guarantee card used in connection with cash advance checks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 329 the transaction and relating to the failure to resolve same procedure is constitutionally available to cred­ the dispute. The cardholder may withhold payment itors generally: obtain or enforce a consensual secu­ up to the amount of credit outstanding for the rity interest in the funds; attach or otherwise levy property or services that gave rise to the dispute and upon the funds; or obtain or enforce a court order any finance or other charges imposed on that relating to the funds. amount.25 (3) This paragraph does not prohibit a plan, if authorized in writing by the cardholder, under (2) Adverse credit reports prohibited. If, in accor­ which the card issuer may periodically deduct all or dance with paragraph (c)(1) of this section, the part of the cardholder’s credit card debt from a cardholder withholds payment of the amount of deposit account held with the card issuer (subject to credit outstanding for the disputed transaction, the the limitations in § 226.13(d)(1)). card issuer shall not report that amount as delin­ quent until the dispute is settled or judgment is (e) Prompt notification of returns and crediting of rendered. refunds. (1) When a creditor other than the card issuer (3) Limitations. The rights stated in paragraphs accepts the return of property or forgives a debt for (c)(1) and (2) of this section apply only if: services that is to be reflected as a credit to the (i) The cardholder has made a good faith attempt consumer’s credit card account, that creditor shall, to resolve the dispute with the person honoring within 7 business days from accepting the return or the credit card; and forgiving the debt, transmit a credit statement to the (ii) The amount of credit extended to obtain the card issuer through the card issuer’s normal chan­ property or services that result in the assertion of nels for credit statements. the claim or defense by the cardholder exceeds (2) The card issuer shall, within 3 business days $50, and the disputed transaction occurred in the from receipt of a credit statement, credit the con­ same state as the cardholder’s current designated sumer’s account with the amount of the refund. address or, if not within the same state, within 100 (3) If a creditor other than a card issuer routinely miles from that address.26 gives cash refunds to consumers paying in cash, the creditor shall also give credit or cash refunds to (d) Offsets by card issuer prohibited. consumers using credit cards, unless it discloses at (1) A card issuer may not take any action, either the time the transaction is consummated that credit before or after termination of credit card privileges, or cash refunds for returns are not given. This to offset a cardholder’s indebtedness arising from a section does not require refunds for returns nor does consumer credit transaction under the relevant cred­ it prohibit refunds in kind. it card plan against funds of the cardholder held on deposit with the card issuer. (f) Discounts; tie-in arrangements. No card issuer (2) This paragraph does not alter or affect the right may, by contract or otherwise: of a card issuer acting under state or federal law to (1) Prohibit any person who honors a credit card do any of the following with regard to funds of a from offering a discount to a consumer to induce the cardholder held on deposit with the card issuer if the consumer to pay by cash, check, or similar means rather than by use of a credit card or its underlying 25. The amount of the claim or defense that the cardholder may account for the purchase of property or services; or assert shall not exceed the amount of credit outstanding for the (2) Require any person who honors the card issuer’s disputed transaction at the time the cardholder first notifies the card credit card to open or maintain any account or issuer or the person honoring the credit card of the existence of the claim or defense. To determine the amount of credit outstanding for obtain any other service not essential to the opera­ purposes of this section, payments and other credits shall be applied tion of the credit card plan from the card issuer or to: (1) late charges in the order of entry to the account; then to (2) any other person, as a condition of participation in a finance charges in the order of entry to the account; and then to (3) any other debits in the order of entry to the account. If more than one credit card plan. If maintenance of an account for item is included in a single extension of credit, credits are to be clearing purposes is determined to be essential to distributed pro rata according to prices and applicable taxes. 26. The limitations stated in paragraph (c)(3)(ii) of this section shall the operation of the credit card plan, it may be not apply when the person honoring the credit card: (1) is the same required only if no service charges or minimum person as the card issuer; (2) is controlled by the card issuer directly balance requirements are imposed. or indirectly; (3) is under the direct or indirect control of a third person that also directly or indirectly controls the card issuer; (4) controls the card issuer directly or indirectly; (5) is a franchised dealer in the card (g) Relation to Electronic Fund Transfer Act and issuer’s products or services; or (6) has obtained the order for the disputed transaction through a mail solicitation made by or participat­ Regulation E. For guidance on whether Regulation Z ed in by the card issuer. or Regulation E applies in instances involving both Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

330 Federal Reserve Bulletin □ April 1981 credit and electronic fund transfer aspects, refer to (1) Is received by a creditor at the address disclosed Regulation E, 12 CFR 205.5(c) regarding issuance and under § 226.7(k) no later than 60 days after the 205.6(d) regarding liability for unauthorized use. On creditor transmitted the first periodic statement that matters other than issuance and liability, this section reflects the alleged billing error; applies to the credit aspects of combined credit/elec­ (2) Enables the creditor to identify the consumer’s tronic fund transfer transactions, as applicable. name and account number; and (3) To the extent possible, indicates the consumer’s Section 226.13—Billing Error Resolution27 belief and the reasons for the belief that a billing error exists, and the type, date, and amount of the (a) Definition of billing error. For purposes of this error. section, the term “billing error” means: (1) A reflection on or with a periodic statement of (c) Time for resolution; general procedures. an extension of credit that is not made to the (1) The creditor shall mail or deliver written ac­ consumer or to a person who has actual, implied, or knowledgment to the consumer within 30 days of apparent authority to use the consumer’s credit card receiving a billing error notice, unless the creditor or open-end credit plan. has complied with the appropriate resolution proce­ (2) A reflection on or with a periodic statement of dures of paragraphs (e) and (f) of this section, as an extension of credit that is not identified in accor­ applicable, within the 30-day period; and dance with the requirements of §§ 226.7(b) and (2) The creditor shall comply with the appropriate 226.8 resolution procedures of paragraphs (e) and (f) of (3) A reflection on or with a periodic statement of this section, as applicable, within two complete an extension of credit for property or services not billing cycles (but in no event later than 90 days) accepted by the consumer or the consumer’s desig­ after receiving a billing error notice. nee, or not delivered to the consumer or the con­ sumer’s designee as agreed. (d) Rules pending resolution. Until a billing error is (4) A reflection on a periodic statement of the resolved under paragraphs (e) or (f) of this section, the creditor’s failure to credit properly a payment or following rules apply: other credit issued to the consumer’s account. (5) A reflection on a periodic statement of a compu­ (1) Consumer's right to withhold disputed amount; tational or similar error of an accounting nature that collection action prohibited. The consumer need not is made by the creditor. pay (and the creditor may not try to collect) any (6) A reflection on a periodic statement of an exten­ portion of any required payment that the consumer sion of credit for which the consumer requests believes is related to the disputed amount (including additional clarification, including documentary evi­ related finance or other charges).30 If the cardholder dence. maintains a deposit account with the card issuer and (7) The creditor’s failure to mail or deliver a period­ has agreed to pay the credit card indebtedness by ic statement to the consumer’s last known address if periodic deductions from the cardholder’s deposit that address was received by the creditor, in writing, account, the card issuer shall not deduct any part of at least 20 days before the end of the billing cycle for the disputed amount or related finance or other which the statement was required. charges if a billing error notice is received any time up to 3 business days before the scheduled payment (b) Billing error notice.28 A billing error notice is a date. written notice29 from a consumer that: (2) Adverse credit reports prohibited. The creditor or its agent shall not (directly or indirectly) make or 27. A creditor shall not accelerate any part of the consumer’s indebtedness or restrict or close a consumer’s account solely because threaten to make an adverse report to any person the consumer has exercised in good faith rights provided by this about the consumer’s credit standing, or report that section. A creditor may be subject to the forfeiture penalty under an amount or account is delinquent, because the § 161(e) of the act for failure to comply with any of the requirements of this section. 28. The creditor need not comply with the requirements of para­ 30. A creditor is not prohibited from taking action to collect any graphs (c) through (g) of this section if the consumer concludes that no undisputed portion of the item or bill; or from deducting any disputed billing error occurred and vountarily withdraws the billing error amount and related finance or other charges from the consumer’s notice. credit limit on the account; or from reflecting a disputed amount and 29. The creditor may require that the written notice not be made on related finance or other charges on a periodic statement, provided that the payment medium or other material accompanying the periodic the creditor indicates on or with the periodic statement that payment statement if the creditor so stipulates in the billing rights statement of any disputed amount and related finance or other charges is not required by §§ 226.6(d) and 226.9(a). required pending the creditor’s compliance with this section. 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Legal Developments 331 consumer failed to pay the disputed amount or this section remains unpaid after the creditor related finance or other charges. has allowed any time period disclosed under §§ 226.6(a)(1) and 226.7(j) or 10 days (whichever is (e) Procedures if billing error occurred as asserted. If longer) during which the consumer can pay the a creditor determines that a billing error occurred as amount; but asserted, it shall within the time limits in paragraph (4) May not report that an amount or account is (c)(2) of this section: delinquent because the amount due under paragraph (1) Correct the billing error and credit the consum­ (g)(1) of the section remains unpaid, if the creditor er’s account with any disputed amount and related receives (within the time allowed for payment in finance or other charges, as applicable; and paragraph (g)(3) of this section) further written no­ (2) Mail or deliver a correction notice to the con­ tice from the consumer that any portion of the billing sumer. error is still in dispute, unless the creditor also: (i) Promptly reports that the amount or account is (f) Procedures if different billing error or no billing in dispute; error occurred. If, after conducting a reasonable inves­ (ii) Mails or delivers to the consumer (at the same tigation,31 a creditor determines that no billing error time the report is made) a written notice of the occurred or that a different billing error occurred from name and address of each person to whom the that asserted, the creditor shall within the time limits creditor makes a report; and in paragraph (c)(2) of this section: (iii) Promptly reports any subsequent resolution (1) Mail or deliver to the consumer an explanation of the reported delinquency to all persons to that sets forth the reasons for the creditor’s belief whom the creditor has made a report. that the billing error alleged by the consumer is incorrect in whole or in part; (h) Reassertion of billing error. A creditor that has (2) Furnish copies of documentary evidence of the fully complied with the requirements of this section consumer’s indebtedness, if the consumer so re­ has no further responsibilities under this section (other quests; and than as provided in paragraph (g)(4) of this section) if a (3) If a different billing error occurred, correct the consumer reasserts substantially the same billing billing error and credit the consumer’s account with error. any disputed amount and related finance or other charges, as applicable. (i) Relation to Electronic Fund Transfer Act and Reg­ ulation E. If an extension of credit is incident to an (g) Creditor's rights and duties after resolution. If a electronic fund transfer, under an agreement between creditor, after complying with all of the requirements a consumer and a financial institution to extend credit of this section, determines that a consumer owes all or when the consumer’s account is overdrawn or to part of the disputed amount and related finance or maintain a specified minimum balance in the consum­ other charges, the creditor: er’s account, the creditor shall comply with the re­ (1) Shall promptly notify the consumer in writing of quirements of Regulation E § 205.11 (12 CFR Part 205) the time when payment is due and the portion of the governing error resolution rather than those of para­ disputed amount and related finance or other graphs (a), (b), (c), (e), (f), and (h) of this section. charges that the consumer still owes; (2) Shall allow any time period disclosed under Section 226.14—Determination of Annual §§ 226.6(a)(1) and 226.7(j), during which the con­ Percentage Rate sumer can pay the amount due under paragraph (g)(1) of this section without incurring additional (a) General rule. The annual percentage rate is a finance or other charges; measure of the cost of credit, expressed as a yearly (3) May report an account or amount as delinquent rate. An annual percentage rate shall be considered because the amount due under paragraph (g)(1) of accurate if it is not more than V8 of 1 percentage point above or below the annual percentage rate determined in accordance with this section.3la 31. If a consumer submits a billing error notice alleging either the non-delivery of property or services under paragraph (a)(3) of this section or that information appearing on a periodic statement is 31a. An error in disclosure of the annual percentage rate or finance incorrect because a person honoring the consumer’s credit card has charge shall not, in itself, be considered a violation of this regulation made an incorrect report to the card issuer, the creditor shall not deny if: (1) the error resulted from a corresponding error in a calculation the assertion unless it conducts a reasonable investigation and deter­ tool used in good faith by the creditor; and (2) upon discovery of the mines that the property or services were actually delivered, mailed, or error, the creditor promptly discontinues use of that calculation tool sent as agreed or that the information was correct. for disclosure purposes, and notifies the Board in writing of the error Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

332 Federal Reserve Bulletin □ April 1981 (b) Annual percentage rate for initial disclosures and multiplying each periodic rate imposed during the for advertising purposes. Where one or more periodic billing cycle by the number of periods in a year.35 rates may be used to compute the finance charge, the (4) If the finance charge imposed during the billing annual percentage rate(s) to be disclosed for purposes cycle is or includes a minimum, fixed, or other of §§ 226.6(a)(2) and 226.16(b)(2) shall be computed by charge not due to the application of a periodic rate multiplying each periodic rate by the number of peri­ and the total finance charge imposed during the ods in a year. billing cycle does not exceed 50 cents for a monthly or longer billing cycle, or the pro rata part of 50 (c) Annual percentage rate for periodic statements. cents for a billing cycle shorter than monthly, at the The annual percentage rate(s) to be disclosed for creditor’s option, by multiplying each applicable purposes of § 226.7(d) shall be computed by multiply­ periodic rate by the number of periods in a year, ing each periodic rate by the number of periods in a notwithstanding the provisions of paragraphs (c)(2) year and, for purposes of § 226.7(g), shall be deter­ and (3) of this section. mined as follows: (1) If the finance charge is determined solely by (d) Calculations where daily periodic rate applied. If applying one or more periodic rates, at the creditor’s the provisions of paragraphs (c)(l)(ii) or (2) of this option, either: section apply and all or a portion of the finance charge (i) By multiplying each periodic rate by the num­ is determined by the application of one or more daily ber of periods in a year; or periodic rates, the annual percentage rate may be (ii) By dividing the total finance charge for the determined either: billing cycle by the sum of the balances to which (1) By dividing the total finance charge by the the periodic rates were applied and multiplying average of the daily balances and multiplying the the quotient (expressed as a percentage) by the quotient by the number of billing cycles in a year; or number of billing cycles in a year. (2) By dividing the total finance charge by the sum (2) If the finance charge imposed during the billing of the daily balances and multiplying the quotient by cycle is or includes a minimum, fixed, or other 365. charge not due to the application of a periodic rate, other than a charge with respect to any specific Section 226.15—Right of Rescission transaction during the billing cycle, by dividing the total finance charge for the billing cycle by the (a) Consumer s right to rescind. amount of the balance(s) to which it is applicable32 (1)(i) Except as provided in paragraph (a)(l)(ii) of and multiplying the quotient (expressed as a per­ this section, in a credit plan in which a security centage) by the number of billing cycles in a year.33 interest is or will be retained or acquired in a (3) If the finance charge imposed during the billing consumer’s principal dwelling, each consumer cycle is or includes a charge relating to a specific whose ownership interest is or will be subject to transaction during the billing cycle (even if the total the security interest shall have the right to re­ finance charge also includes any other minimum, scind: each credit extension made under the plan; fixed, or other charge not due to the application of a the plan when the plan is opened; a security periodic rate), by dividing the total finance charge interest when added or increased to secure an imposed during the billing cycle by the total of all existing plan; and the increase when a credit limit balances and other amounts on which a finance on the plan is increased. charge was imposed during the billing cycle without (ii) As provided in § 125(e), the consumer does duplication, and multiplying the quotient (expressed not have the right to rescind each credit extension as a percentage) by the number of billing cycles in a made under the plan if such extension is made in year,34 except that the annual percentage rate shall accordance with a previously established credit not be less than the largest rate determined by limit for the plan. (2) To exercise the right to rescind, the consumer shall notify the creditor of the rescission by mail, in the calculation tool. This footnote shall cease to be effective on April 1, 1982. telegram, or other means of written communication. 32. If there is no balance to which the finance charge is applicable, Notice is considered given when mailed, or when an annual percentage rate cannot be determined under this section. filed for telegraphic transmission, or, if sent by other 33. Where the finance charge imposed during the billing cycle is or includes a loan fee, points, or similar charge that relates to the opening means, when delivered to the creditor’s designated of the account, the amount of such charge shall not be included in the place of business. calculation of the annual percentage rate. 34. See Appendix F regarding determination of the denominator of the fraction under this paragraph. 35. See footnote 33. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 333 (3) The consumer may exercise the right to rescind (d) Effects of rescission. until midnight of the third business day following the (1) When a consumer rescinds a transaction, the occurrence described in paragraph (a)(1) of this security interest giving rise to the right of rescission section that gave rise to the right of rescission, becomes void, and the consumer shall not be liable delivery of the notice required by paragraph (b) of for any amount, including any finance charge. this section, or delivery of all material disclosures,36 (2) Within 20 calendar days after receipt of a notice whichever occurs last. If the required notice and of rescission, the creditor shall return any money or material disclosures are not delivered, the right to property that has been given to anyone in connec­ rescind shall expire 3 years after the occurrence tion with the transaction and shall take any action giving rise to the right of rescission, or upon transfer necessary to reflect the termination of the security of all of the consumer’s interest in the property, or interest. upon sale of the property, whichever occurs first. In (3) If the creditor has delivered any money or the case of certain administrative proceedings, the property, the consumer may retain possession until rescission period shall be extended in accordance the creditor has met its obligation under paragraph with § 125(f) of the act. (d)(2) of this section. When the creditor has com­ (4) When more than one consumer has the right to plied with that paragraph, the consumer shall tender rescind, the exercise of the right by one consumer the money or property to the creditor or, where the shall be effective as to all consumers. latter would be impracticable or inequitable, tender its reasonable value. At the consumer’s option, (b) Notice of right to rescind. In any transaction or tender of property may be made at the location of occurrence subject to rescission, a creditor shall deliv­ the property or at the consumer’s residence. Tender er 2 copies of the notice of the right to rescind to each of money must be made at the creditor’s designated consumer entitled to rescind. The notice shall identify place of business. If the creditor does not take the transaction or occurrence and clearly and conspic­ possession of the money or property within 20 uously disclose the following: calendar days after the consumer’s tender, the con­ (1) The retention or acquisition of a security interest sumer may keep it without further obligation. in the consumer’s principal dwelling. (4) The procedures outlined in paragraphs (d)(2) and (2) The consumer’s right to rescind, as described in (3) of this section may be modified by court order. paragraph (a)(1) of this section. (3) How to exercise the right to rescind, with a form (e) Consumer s waiver of right to rescind. The con­ for that purpose, designating the address of the sumer may modify or waive the right to rescind if the creditor’s place of business. consumer determines that the extension of credit is (4) The effects of rescission, as described in para­ needed to meet a bona fide personal financial emergen­ graph (d) of this section. cy. To modify or waive the right, the consumer shall (5) The date the rescission period expires. give the creditor a dated written statement that de­ scribes the emergency, that specifically modifies or (c) Delay of creditor's performance. Unless a con­ waives the right to rescind, and that bears the signa­ sumer waives the right to rescind under paragraph (e) tures of the consumers entitled to rescind. Printed of this section, no money shall be disbursed other than forms for this purpose are prohibited. in escrow, no services shall be performed, and no materials delivered until after the rescission period has (f) Exempt transactions. The right to rescind does not expired and the creditor is reasonably satisfied that the apply to the following: consumer has not rescinded. A creditor does not (1) A residential mortgage transaction. violate this section if a third party with no knowledge (2) A credit plan in which a state agency is a of the event activating the rescission right does not creditor. delay in providing materials or services, as long as the debt incurred for those materials or services is not Section 226.16—Advertising secured by the property subject to rescission. (a) Actually available terms. If an advertisement for credit states specific credit terms, it shall state only those terms that actually are or will be arranged or 36. The term “material disclosures” means the information that must be provided to satisfy the requirements in § 226.6 with regard to offered by the creditor. the method of determining the finance charge and the balance upon which a finance charge will be imposed, the annual percentage rate, and the amount or method of determining the amount of any member­ (b) Advertisement of terms that require additional ship or participation fee that may be imposed as part of the plan. disclosures. If any of the terms required to be dis­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

334 Federal Reserve Bulletin □ April 1981 closed under § 226.6 is set forth in an advertisement, centage rate,” when required to be disclosed under the advertisement shall also clearly and conspicuously § 226.18(d) and (e) together with a corresponding set forth the following: amount or percentage rate, shall be more conspicu­ (1) Any minimum, fixed, transaction, activity or ous than any other disclosure, except the creditor’s similar charge that could be imposed. identity under § 226.18(a). (2) Any periodic rate that may be applied expressed as an annual percentage rate as determined under (b) Time of disclosures. The creditor shall make dis­ § 226.14(b). If the plan provides for a variable closures before consummation of the transaction. In periodic rate, that fact shall be disclosed. certain residential mortgage transactions, special tim­ (3) Any membership or participation fee that could ing requirements are set forth in § 226.19. In certain be imposed. transactions involving mail or telephone orders or a series of sales, the timing of the disclosures may be (c) Catalogs and multiple-page advertisements. delayed in accordance with paragraphs (g) and (h) of (1) If a catalog or other multiple-page advertisement this section. gives information in a table or schedule in sufficient detail to permit determination of the disclosures (c) Basis of disclosures and use of estimates. required by paragraph (b) of this section, it shall be (1) The disclosures shall reflect the terms of the legal considered a single advertisement if: obligation between the parties. (i) The table or schedule is clearly and conspicu­ (2) If any information necessary for an accurate ously set forth; and disclosure is unknown to the creditor, it shall make (ii) Any statement of terms set forth in § 226.6 the disclosure based on the best information reason­ appearing anywhere else in the catalog or adver­ ably available and shall state that the disclosure is an tisement clearly refers to that page on which the estimate. table or schedule begins. (3) The creditor may disregard the effects of the (2) A catalog or multiple-page advertisement com­ following in making calculations and disclosures: plies with this paragraph if the table or schedule of (i) That payments must be collected in whole terms includes all appropriate disclosures for a cents. representative scale of amounts up to the level of the (ii) That dates of scheduled payments and ad­ more commonly sold higher-priced property or serv­ vances may be changed because the scheduled ices offered. date is not a business day. (iii) That months have different numbers of days. (iv) The occurrence of leap year. Subpart C—Closed-End Credit (4) In making calculations and disclosures, the cred­ itor may disregard any irregularity in the first period Section 226.17—General Disclosure that falls within the limits described below and any Requirements payment schedule irregularity that results from the irregular first period: (a) Form of disclosures. (i) For transactions in which the term is less than (1) The creditor shall make the disclosures required 1 year, a first period not more than 6 days shorter by this subpart clearly and conspicously in writing, or 13 days longer than a regular period; in a form that the consumer may keep. The disclo­ (ii) For transactions in which the term is at least 1 sures shall be grouped together, shall be segregated year and less than 10 years, a first period not more from everything else, and shall not contain any than 11 days shorter or 21 days longer than a information not directly related37 to the disclosures regular period; and required under § 226.18.38 The itemization of the (iii) For transactions in which the term is at least amount financed under § 226.18(c)(1) must be sepa­ 10 years, a first period shorter than or not more rate from the other disclosures under that section. than 32 days longer than a regular period. (2) The terms “finance charge” and “annual per­ (5) If an obligation is payable on demand, the credi­ tor shall make the disclosures based on an assumed 37. The disclosures may include an acknowledgment of receipt, the maturity of 1 year. If an alternate maturity date is date of the transaction, and the consumer’s name, address, and account number. stated in the legal obligation between the parties, the 38. The following disclosures may be made together or separately disclosures shall be based on that date. from other required disclosures: the creditor’s identity under (6)(i) A series of advances under an agreement to § 226.18(a), the variable rate example under § 226.18(f)(4), insurance under § 226.18(n), and certain security interest charges under extend credit up to a certain amount may be § 226.18(o). considered as one transaction. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 335 (ii) When a multiple-advance loan to finance the (ii) Any limitations on the increase. construction of a dwelling may be permanently (iii) The effect of an increase. financed by the same creditor, the construction (5) The terms of repayment. phase and the permanent phase may be treated as either one transaction or more than one transac­ (h) Series of sales—delay in disclosures. If a credit tion. sale is one of a series made under an agreement providing that subsequent sales may be added to an (d) Multiple creditors; multiple consumers. If a trans­ outstanding balance, the creditor may delay the re­ action involves more than one creditor, only one set of quired disclosures until the due date of the first disclosures shall be given and the creditors shall agree payment for the current sale, if the following two among themselves which creditor must comply with conditions are met: the requirements that this regulation imposes on any (1) The consumer has approved in writing the annu­ or all of them. If there is more than one consumer, the al percentage rate or rates, the range of balances to disclosures may be made to any consumer who is which they apply, and the method of treating any primarily liable on the obligation. If the transaction is unearned finance charge on an existing balance. rescindable under § 226.23, however, the disclosures (2) The creditor retains no security interest in any shall be made to each consumer who has the right to property after the creditor has received payments rescind. equal to the cash price and any finance charge attributable to the sale of that property. For pur­ (e) Effect of subsequent events. If a disclosure be­ poses of this provision, in the case of items pur­ comes inaccurate because of an event that occurs after chased on different dates, the first purchased is the creditor delivers the required disclosures, the deemed the first item paid for; in the case of items inaccuracy is not a violation of this regulation, al­ purchased on the same date, the lowest priced is though new disclosures may be required under para­ deemed the first item paid for. graph (f) of this section, § 226.19, or § 226.20. (i) Interim student credit extensions. For each trans­ (f) Early disclosures. If disclosures are given before action involving an interim credit extension under a the date of consummation of a transaction and a student credit program, the creditor need not make the subsequent event makes them inaccurate, the creditor following disclosures: the finance charge under shall disclose the changed terms before consumma­ § 226.18(d), the payment schedule under § 226.18(g), tion, if the annual percentage rate in the consummated the total of payments under § 226.18(h), or the total transaction varies from the annual percentage rate sale price under § 226.18(j). disclosed under § 226.18(e) by more than V8 of 1 percentage point in a regular transaction, or more than Section 226.18—Content of Disclosures V4 of 1 percentage point in an irregular transaction, as defined in § 226.22(a). For each transaction, the creditor shall disclose the following information as applicable: (g) Mail or telephone orders—delay in disclosures. If a creditor receives a purchase order or a request for an (a) Creditor. The identity of the creditor making the extension of credit by mail, telephone, or any other disclosures. written or electronic communication without face-toface or direct telephone solicitation, the creditor may (b) Amount financed. The “amount financed,” using delay the disclosures until the due date of the first that term, and a brief description such as “the amount payment, if the following information for repre­ of credit provided to you or on your behalf.” The sentative amounts or ranges of credit is made available amount financed is calculated by: in written form to the consumer or to the public before (1) Determining the principal loan amount or the the actual purchase order or request: cash price (subtracting any downpayment); (1) The cash price or the principal loan amount. (2) Adding any other amounts that are financed by (2) The total sale price. the creditor and are not part of the finance charge ; (3) The finance charge. and (4) The annual percentage rate, and if the rate may (3) Subtracting any prepaid finance charge. increase after consummation, the following disclo­ sures: (c) Itemization of the amount financed.39 A separate (i) The circumstances under which the rate may increase. 39. Good faith estimates of settlement costs provided for transac­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

336 Federal Reserve Bulletin □ April 1981 written itemization of the amount financed, including: any scheduled interest payments for the first year. (i) The amount of any proceeds distributed direct­ (2) In a transaction in which a series of payments ly to the consumer. varies because a finance charge is applied to the (ii) The amount credited to the consumer’s ac­ unpaid principal balance, the creditor may comply count with the creditor. with this paragraph by disclosing the following infor­ (iii) Any amounts paid to other persons by the mation: creditor on the consumer’s behalf. The creditor (i) The dollar amounts of the largest and smallest shall ideiitify those persons.40 payments in the series. (iv) The prepaid finance charge. (ii) A reference to the variations in the other (2) The creditor need not comply with paragraph payments in the series. (c)(1) of this section if the creditor provides a statement that the customer has the right to receive (h) Total of payments. The “total of payments,” using a written itemization of the amount financed, togeth­ that term, and a descriptive explanation such as “the er with a space for the consumer to indicate whether amount you will have paid when you have made all it is desired, and the consumer does not request it. scheduled payments.”44 (d) Finance charge. The “finance charge,” using that (i) Demand feature. If the obligation has a demand term, and a brief description such as “the dollar feature, that fact shall be disclosed. When the disclo­ amount the credit will cost you.”41 sures are based on an assumed maturity of 1 year as provided in § 226.17(c)(5), that fact shall also be (e) Annual percentage rate. The “annual percentage disclosed. rate,” using that term, and a brief description such as “the cost of your credit as a yearly rate.”42 (j) Total sale price. In a credit sale, the “total sale price,” using that term, and a descriptive explanation (f) Variable rate.43. If the annual percentage rate may (including the amount of any downpayment) such as increase after consummation, the following disclo­ “the total price of your purchase on credit, including sures: your downpayment of $---------.” The total sale price is (1) The circumstances under which the rate may the sum of the cash price, the items described in increase. paragraph (b)(2), and the finance charge disclosed (2) Any limitations on the increase. under paragraph (d) of this section. (3) The effect of an increase. (4) An example of the payment terms that would (k) Prepayment. result from an increase. (1) When an obligation includes a finance charge computed from time to time by application of a rate (g) Payment schedule. The number, amounts, and to the unpaid principal balance, a statement indicat­ timing of payments scheduled to repay the obligation. ing whether or not a penalty may be imposed if the (1) In a demand obligation with no alternate maturi­ obligation is prepaid in full. ty date, the creditor may comply with this paragraph (2) When an obligation includes a finance charge by disclosing the due dates or payment periods of other than the finance charge described in paragraph (k)(l) of this section, a statement indicating whether or not the consumer is entitled to a rebate of any tions subject to the Real Estate Settlement Procedures Act (12 U.S.C. finance charge if the obligation is prepaid in full. 2601 et seq.) may be substituted for the disclosures required by paragraph (c) of this section. 40. The following payees may be described using generic or other (1) Late payment. Any dollar or percentage charge general terms and need not be further identified: public officials or that may be imposed before maturity due to a late government agencies, credit reporting agencies, appraisers, and insur­ payment, other than a deferral or extension charge. ance companies. 41. The finance charge shall be considered accurate if it is not more than $5 above or below the exact finance charge in a transaction (m) Security interest. The fact that the creditor has or involving an amount financed of $1,000 or less, or not more than $10 above or below the exact finance charge in a transaction involving an will acquire a security interest in the property pur­ amount financed of more than $1,000. chased as part of the transaction, or in other property 42. For any transaction involving a finance charge of $5 or less on identified by item or type. an amount financed of $75 or less, or a finance charge of $7.50 or less on an amount financed of more than $75, the creditor need not disclose the annual percentage rate. 43. Information provided in accordance with variable rate regula­ tions of other federal agencies may be substituted for the disclosures 44. In any transaction involving a single payment, the creditor need required by paragraph (f) of this section. not disclose the total of payments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 337 (n) Insurance. The items required by § 226.4(d) in transaction or more than V4 of 1 percentage point in an order to exclude certain insurance premiums from the irregular transaction, as defined in § 226.22, the credi­ finance charge. tor shall disclose the changed terms no later than consummation or settlement. (o) Certain security interest charges. The disclosures required by § 226.4(e) in order to exclude from the finance charge certain fees prescribed by law or cer­ Section 226.20—Subsequent Disclosure tain premiums for insurance in lieu of perfecting a Requirements security interest. (a) Refinancings. A refinancing occurs when an exist­ (p) Contract reference. A statement that the consum­ ing obligation that was subject to this subpart is er should refer to the appropriate contract document satisfied and replaced by a new obligation undertaken for information about nonpayment, default, the right by the same consumer. A refinancing is a new transac­ to accelerate the maturity of the obligation, and pre­ tion requiring new disclosures to the consumer. The payment rebates and penalties. At the creditor’s op­ new finance charge shall include any unearned portion tion, the statement may also include a reference to the of the old finance charge that is not credited to the contract for further information about security inter­ existing obligation. The following shall not be treated ests and, in a residential mortgage transaction, about as a refinancing: the creditor’s policy regarding assumption of the obli­ (1) A renewal of a single payment obligation with no gation. change in the original terms. (2) A reduction in the annual percentage rate with a (q) Assumption policy. In a residential mortgage corresponding change in the payment schedule. transaction, a statement whether or not a subsequent (3) An agreement involving a court proceeding. purchaser of the dwelling from the consumer may be (4) A change in the payment schedule or a change in permitted to assume the remaining obligation on its collateral requirements as a result of the consumer’s original terms. default or delinquency, unless the rate is increased, or the new amount financed exceeds the unpaid (r) Required deposit. If the creditor requires the con­ balance plus earned finance charge and premiums sumer to maintain a deposit as a condition of the for continuation of insurance of the types described specific transaction, a statement that the annual per­ in § 226.4(d). centage rate does not reflect the effect of the required (5) The renewal of optional insurance purchased by deposit.45 the consumer and added to an existing transaction, if disclosures relating to the initial purchase were Section 226.19—Certain Residential Mortgage provided as required by this subpart. Transactions (b) Assumptions. An assumption occurs when a credi­ (a) Time of disclosure. In a residential mortgage trans­ tor expressly agrees in writing with a subsequent action subject to the Real Estate Settlement Proce­ 'Consumer to accept that consumer as a primary obligor dures Act (12 U.S.C. 2601 et seq.) the creditor shall on an existing residential mortgage transaction. Before make good faith estimates of the disclosures required the assumption occurs, the creditor shall make new by § 226.18 before consummation, or shall deliver or disclosures to the subsequent consumer, based on the place them in the mail not later than 3 business days remaining obligation. If the finance charge originally after the creditor receives the consumer’s written imposed on the existing obligation was an add-on or application, whichever is earlier. discount finance charge, the creditor need only dis­ close: (b) Redisclosure required. If the annual percentage (1) The unpaid balance of the obligation assumed. rate in the consummated transaction varies from the (2) The total charges imposed by the creditor in annual percentage rate disclosed under § 226.18(e) by connection with the assumption. more than % of 1 percentage point in a regular (3) The information required to be disclosed under § 226.18(k), (1), (m), and (n). (4) The annual percentage rate originally imposed on the obligation. 45. A required deposit need not include, for example: (1) an escrow (5) The payment schedule under § 226.18(g) and the account for items such as taxes, insurance or repairs; (2) a deposit that total of payments under § 226.18(h), based on the earns not less than 5 percent per year; or (3) payments under a Morris Plan. remaining obligation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

338 Federal Reserve Bulletin □ April 1981 Section 226.21—Treatment of Credit Balances annual percentage rate determined in accordance with paragraph (a)(1) of this section.46 When a credit balance in excess of $1 is created in connection with a transaction (through transmittal of (b) Computation tools. funds to a creditor in excess of the total balance due on (1) The Regulation Z Annual Percentage Rate Ta­ an account, through rebates of unearned finance bles produced by the Board may be used to deter­ charges or insurance premiums, or through amounts mine the annual percentage rate, and any rate deter­ otherwise owed to or held for the benefit of a consum­ mined from those tables in accordance with the er), the creditor shall: accompanying instructions complies with the re­ (a) Credit the amount of the credit balance to the quirements of this section. Volume I of the tables consumer’s account; applies to single advance transactions involving up (b) Refund any part of the remaining credit balance, to 480 monthly payments or 104 weekly payments. upon the written request of the consumer; and It may be used for regular transactions and for (c) Make a good faith effort to refund to the con­ transactions with any of the following irregularities: sumer by cash, check, or money order, or credit to a an irregular first period, an irregular first payment, deposit account of the consumer, any part of the and an irregular final payment. Volume II of the credit balance remaining in the account for more tables applies to transactions involving multiple than 6 months, except that no further action is advances and any type of payment or period irregu­ required if the consumer’s current location is not larity. known to the creditor and cannot be traced through (2) Creditors may use any other computation tool in the consumer’s last known address or telephone determining the annual percentage rate if the rate so number. determined equals the rate determined in accor­ dance with Supplement I, within the degree of Section 226.22—Determination of Annual accuracy set forth in paragraph (a) of this section. Percentage Rate (c) Single add-on rate transactions. If a single add-on (a) Accuracy of annual percentage rate. rate is applied to all transactions with maturities up to (1) The annual percentage rate is a measure of the 60 months and if all payments are equal in amount and cost of credit, expressed as a yearly rate, that relates period, a single annual percentage rate may be dis­ the amount and timing of value received by the closed for all those transactions, so long as it is the consumer to the amount and timing of payments highest annual percentage rate for any such transac­ made. The annual percentage rate shall be deter­ tion. mined in accordance with either the acturial method or the United States Rule method. Explanations, (d) Certain transactions involving ranges of balances. equations and instructions for determining the annu­ For purposes of disclosing the annual percentage rate al percentage rate in accordance with the actuarial referred to in § 226.17(g)(4)(Mail or telephone orders— method are set forth in Appendix J to this regula- delay in disclosures) and (h)(Series of sales—delay in tion.45a disclosures), if the same finance charge is imposed on (2) As a general rule, the annual percentage rate all balances within a specified range of balances, the shall be considered accurate if it is not more than % annual percentage rate computed for the median bal­ of 1 percentage point above or below the annual ance may be disclosed for all the balances. However, percentage rate determined in accordance with para­ if the annual percentage rate computed for the median graph (a)(1) of this section. balance understates the annual percentage rate com­ (3) In an irregular transaction, the annual percent­ puted for the lowest balance by more than 8 percent of age rate shall be considered accurate if it is not more the latter rate, the annual percentage rate shall be than »/4 of 1 percentage point above or below the computed on whatever lower balance will produce an annual percentage rate that does not result in an understatement of more than 8 percent of the rate determined on the lowest balance. 45a. An error in disclosure of the annual percentage rate or finance charge shall not, in itself, be considered a violation of this regulation if: (1) the error resulted from a corresponding error in a calculation tool used in good faith by the creditor; and (2) upon discovery of the 46. For purposes of paragraph (a)(3) of this section, an irregular error, the creditor promptly discontinues use of that calculation tool transaction is one that includes one or more of the following features: for disclosure purposes and notifies the Board in writing of the error in multiple advances, irregular payment periods or irregular payment the calculation tool. This footnote shall cease to be effective on amounts (other than an irregular first period or an irregular first or April 1, 1982. final payment). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 339 Section 226.23—Right of Rescission (4) The effects of rescission, as described in para­ graph (d) of this section. (a) Consumer’s right to rescind. (5) The date the rescission period expires. (1) In a credit transaction in which a security inter­ est is or will be retained or acquired in a consumer’s (c) Delay of creditor’s performance. Unless a con­ principal dwelling, each consumer whose ownership sumer waives the right of rescission under paragraph interest is or will be subject to the security interest (e) of this section, no money shall be disbursed other shall have the right to rescind the transaction, than in escrow, no services shall be performed and no except for transactions described in paragraph (f) of materials delivered until the rescission period has this section.47 expired and the creditor is reasonably satisfied that the (2) To exercise the right to rescind, the consumer consumer has not rescinded. shall notify the creditor of the rescission by mail, telegram or other means of written communication. (d) Effects of rescission. Notice is considered given when mailed, when filed (1) When a consumer rescinds a transaction, the for telegraphic transmission or, if sent by other security interest giving rise to the right of rescission means, when delivered to the creditor’s designated becomes void and the consumer shall not be liable place of business. for any amount, including any finance charge. (3) The consumer may exercise the right to rescind (2) Within 20 calendar days after receipt of a notice until midnight of the third business day following of rescission, the creditor shall return any money or consummation, delivery of the notice required by property that has been given to anyone in connec­ paragraph (b) of this section, or delivery of all tion with the transaction and shall take any action material disclosures,48 whichever occurs last. If the necessary to reflect the termination of the security required notice or material disclosures are not deliv­ interest. ered, the right to rescind shall expire 3 years after (3) If the creditor has delivered any money or consummation, upon transfer of all of the consum­ property, the consumer may retain possession until er’s interest in the property, or upon sale of the the creditor has met its obligation under paragraph property, whichever occurs first. In the case of (d)(2) of this section. When the creditor has com­ certain administrative proceedings, the rescission plied with that paragraph, the consumer shall tender period shall be extended in accordance with § 125(f) the money or property to the creditor or, where the of the act. latter would be impracticable or inequitable, tender (4) When more than one consumer in a transaction its reasonable value. At the consumer’s option, has the right to rescind, the exercise of the right by tender of property may be made at the location of one consumer shall be effective as to all consumers. the property or at the consumer’s residence. Tender of money must be made at the creditor’s designated (b) Notice of right to rescind. In a transaction subject place of business. If the creditor does not take to rescission, a creditor shall deliver 2 copies of the possession of the money or property within 20 notice of the right to rescind to each consumer entitled calender days after the consumer’s tender, the con­ to rescind. The notice shall be on a separate document sumer may keep it without further obligation. that identifies the transaction and shall clearly and (4) The procedures outlined in paragraphs (d)(2) and conspicuously disclose the following: (3) of this section may be modified by court order. (1) The retention or acquisition of a security interest in the consumer’s principal dwelling. (e) Consumer’s waiver of right to rescind. The con­ (2) The consumer’s right to rescind the transaction. sumer may modify or waive the right to rescind if the (3) How to exercise the right to rescind, with a form consumer determines that the extension of credit is for that purpose, designating the address of the needed to meet a bona fide personal financial emergen­ creditor’s place of business. cy. To modify or waive the right, the consumer shall give the creditor a dated written statement that de­ scribes the emergency, specifically modifies or waives 47. For purposes of this section, the addition to an existing obliga­ tion of a security interest in a consumer’s principal dwelling is a the right to rescind, and bears the signature of all of the transaction. The right of rescission applies only to the addition of the consumers entitled to rescind. Printed forms for this security interest and not the existing obligation. The creditor shall purpose are prohibited. deliver the notice required by paragraph (b) of this section but need not deliver new material disclosures. Delivery of the required notice shall begin the rescission period. (f) Exempt transactions. The right to rescind does not 48. The term “material disclosures” means the required disclo­ apply to the following: sures of the annual percentage rate, the finance charge, the amount financed, the total of payments, and the payment schedule. (1) A residential mortgage transaction. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

340 Federal Reserve Bulletin □ April 1981 (2) A refinancing or consolidation by the same (i) The amount or percentage of the downpay­ creditor of an extension of credit already secured by ment. the consumer’s principal dwelling. If the new (ii) The terms of repayment. amount financed exceeds the unpaid principal bal­ (iii) The “annual percentage rate,” using that ance plus any unearned unpaid finance charge on term, and, if the rate may be increased after the existing debt, this exemption applies only to the consummation, that fact. existing debt and its security interest. (3) A transaction in which a state agency is a (d) Catalogs and multiple-page advertisements creditor. (1) If a catalog or other multiple-page advertisement (4) An advance, other than an initial advance, in a gives information in a table or schedule in sufficient series of advances or in a series of single-payment detail to permit determination of the disclosures obligations that is treated as a single transaction required by paragraph (c)(2) of this section, it shall under § 226.17(c)(6), if the notice required by para­ be considered a single advertisement if: graph (b) of this section and all material disclosures (i) The table or schedule is clearly set forth; and have been given to the consumer. (ii) Any statement of the credit terms in para­ (5) A renewal of optional insurance premiums that graph (c)(1) of this section appearing anywhere is not considered a refinancing under § 226.20(a)(5). else in the catalog or advertisement clearly refers to the page on which the table or schedule begins. (2) A catalog or multiple-page advertisement com­ Section 226.24—Advertising plies with paragraph (c)(2) of this section if the table or schedule of terms includes all appropriate disclo­ (a) Actually available terms. If an advertisement for sures for a representative scale of amounts up to the credit states specific credit terms, it shall state only level of the more commonly sold higher-priced those terms that actually are or will be arranged or property or services offered. offered by the creditor. Subpart D—Miscellaneous (b) Advertisement of rate of finance charge. If an advertisement states a rate of finance charge, it shall Section 226.25—Record Retention state the rate as an “annual percentage rate,” using that term. If the annual percentage rate may be in­ (a) General rule. A creditor shall retain evidence of creased after consummation, the advertisement shall compliance with this regulation (other than advertising state that fact. The advertisement shall not state any requirements under §§ 226.16 and 226.24) for 2 years other rate, except that a simple annual rate or periodic after the date disclosures are required to be made or rate that is applied to an unpaid balance may be stated action is required to be taken. The administrative in conjunction with, but not more conspicuously than, agencies responsible for enforcing the regulation may the annual percentage rate. require creditors under their jurisdictions to retain records for a longer period if necessary to carry out (c) Advertisement of terms that require additional their enforcement responsibilities under § 108 of the disclosures. act. (1) If any of the following terms is set forth in an advertisement, the advertisement shall meet the (b) Inspection of records. A creditor shall permit the requirements of paragraph (c)(2) of this section: agency responsible for enforcing this regulation with (i) The amount or percentage of any downpay­ respect to that creditor to inspect its relevant records ment. for compliance. (ii) The number of payments or period of repay­ ment. Section 226.26—Use of Annual Percentage Rate (iii) The amount of any payment. in Oral Disclosures (iv) The amount of any finance charge. (2) An advertisement stating any of the terms in (a) Open-end credit. In an oral response to a consum­ paragraph (c)(1) of this section shall state the follow­ er’s inquiry about the cost of open-end credit, only the ing terms,49 as applicable: annual percentage rate or rates shall be stated, except that the periodic rate or rates also may be stated. If the annual percentage rate cannot be determined in ad­ 49. An example of one or more typical extensions of credit with a vance because there are finance charges other than a statement of all the terms applicable to each may be used. periodic rate, the corresponding annual percentage Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 341 rate shall be stated, and other cost information may be those required by the federal law. However, a given. state law that allows a consumer to inquire about an open-end credit account and imposes on the (b) Closed-end credit. In an oral response to a con­ creditor an obligation to respond to such inquiry sumer’s inquiry about the cost of closed-end credit, after the time allowed in the federal law for the only the annual percentage rate shall be stated, except consumer to submit written notice of a billing that a simple annual rate or periodic rate also may be error shall not be preempted in any situation stated if it is applied to an unpaid balance. If the annual where the time period for making written notice percentage rate cannot be determined in advance, the under this regulation has expired. If a creditor annual percentage rate for a sample transaction shall gives written notice of a consumer’s rights under be stated, and other cost information for the consum­ such state law, the notice shall state that reliance er’s specific transaction may be given. on the longer time period available under state law may result in the loss of important rights that Section 226.27—Spanish Language Disclosures could be preserved by acting more promptly under federal law; it shall also explain that the All disclosures required by this regulation shall be state law provisions apply only after expiration of made in the English language, except in the Common­ the time period for submitting a proper written wealth of Puerto Rico, where creditors may, at their notice of a billing error under the federal law. If option, make disclosures in the Spanish language. If the state disclosures are made on the same side of Spanish disclosures are made, English disclosures a page as the required federal disclosures, the shall be provided on the consumer’s request, either in state disclosures shall appear under a demarca­ substitution for or in addition to the Spanish disclo­ tion line below the federal disclosures, and the sures. This requirement for providing English disclo­ federal disclosures shall be identified by a head­ sures on request shall not apply to advertisements ing indicating that they are made in compliance subject to §§ 226.16 and 226.24 of this regulation. with federal law. (ii) State law requirements are inconsistent with Section 226.28—Effect on State Laws the requirements contained in chapter 4 (Credit billing) of the act (other than §§ 161 or 162) and (a) Inconsistent disclosure requirements. the implementing provisions of this regulation (1) State law requirements that are inconsistent and are preempted if the creditor cannot comply with the requirements contained in chapter 1 (Gen­ with state law without violating federal law. eral provisions), chapter 2 (Credit transactions), or (iii) A state may request the Board to determine chapter 3 (Credit advertising) of the act and the whether its law is inconsistent with chapter 4 of implementing provisions of this regulation are pre­ the act and its implementing provisions. empted to the extent of the inconsistency. A state law is inconsistent if it requires a creditor to make (b) Equivalent disclosure requirements. If the Board disclosures or take actions that contradict the re­ determines that a disclosure required by state law quirements of the federal law. A state law is contra­ (other than a requirement relating to the finance dictory if it requires the use of the same term to charge or annual percentage rate) is substantially the represent a different amount or a different meaning same in meaning as a disclosure required under the act than the federal law, or if it requires the use of a or this regulation, creditors in that state may make the term different from that required in the federal law state disclosure in lieu of the federal disclosure. A to describe the same item. A creditor, state, or other creditor, state, or other interested party may request interested party may request the Board to determine the Board to determine whether a state disclosure is whether a state law requirement is inconsistent. substantially the same in meaning as a federal disclo­ After the Board determines that a state law is sure. inconsistent, a creditor may not make disclosures using the inconsistent term or form. (c) Request for determination. The procedures under (2)(i) State law requirements are inconsistent with which a request for a determination may be made the requirements contained in §§ 161 (Correction under this section are set forth in Appendix A. of billing errors) or 162 (Regulation of credit reports) of the act and the implementing provi­ Section 226.29—State Exemptions sions of this regulation and are preempted if they provide rights, responsibilities, or procedures for (a) General rule. Any state may apply to the Board to consumers or creditors that are different from exempt a class of transactions within the state from the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

342 Federal Reserve Bulletin □ April 1981 requirements of chapter 2 (Credit transactions) or section 13 of the FRA shall be subject to the amount chapter 4 (Credit billing) of the act and the correspond­ limitations provided therein; ing provisions of this regulation. The Board shall grant an exemption if it determines that: (1) The state law is substantially similar to the federal law or, in the case of chapter 4, affords the Amendments to Regulation P consumer greater protection than the federal law; and The Board of Governors has amended Regulation P (2) There is adequate provision for enforcement. (Minimum Security Devices and Procedures for Fed­ eral Reserve Banks and State Member Banks) imple­ (b) Civil liability. menting the Bank Protection Act to eliminate several (1) No exemptions granted under this section shall reporting requirements. The actions lighten the regula­ extend to the civil liability provisions of §§ 130 and tory reporting burden of all state member banks and 131 of the act. are expected to be of particular benefit to small banks. (2) If an exemption has been granted, the disclo­ 1. Effective March 10, 1981, Sections 216.3(c) and sures required by the applicable state law (except 216.4(a) are amended as set forth below: any additional requirements not imposed by federal law) shall constitute the disclosures required by this Section 216.3—Security Devices act. * * * * * (c) Applications. The procedures under which a state (c) Implementation. It is appropriate for banking of­ may apply for an exemption under this section are set fices in areas with a high incidence of crime to install forth in Appendix B. many devices which would not be practicable because of costs for small banking offices in areas substantially free of crimes against financial institutions. Each bank Appendixes A through J are available from Publica­ shall consider the appropriateness of installing, main­ tions Services, Room MP-510, Board of Governors of taining, and operating security devices which are the Federal Reserve System, Washington, D.C. 20551. expected to give a general level of bank protection at least equivalent to the standards described in Appen­ dix A of this Part, as amended. In any case in which Amendment to Regulation K (on the basis of the factors listed in paragraph (b) or similar ones, the use of other measures, or the decision The Board of Governors has amended Regulation K, that technological change allows the use of other International Banking Operations, to remove ineligible measures judged to give equivalent protection) it is bankers’ acceptances from the limitation on the total decided not to install, maintain, and operate devices at amount of bankers’ acceptances that foreign branches least equivalent to these standards, the bank shall of member banks may issue. Removal of this restric­ preserve in its records a statement of the reasons for tion will assure that the regulatory treatment of bank­ such decision. ers’ acceptances issued by a foreign branch of a member bank is on the same basis as those issued by a Section 216.4—Security Procedures member bank domestically. Effective March 16, 1981, Section 211.3 (b)(2) is (a) Development and administration. On or before amended to read as follows: July 15, 1969 (or within thirty days after a State bank becomes a member of the Federal Reserve System, Section 211.3—Foreign Branches of Member whichever is later), each State member bank shall Banks develop and provide for the administration of a securi­ ty program to protect each of its banking offices from robberies, burglaries, and larcenies and to assist in the (b) * * * identification and apprehension of persons who com­ (2) accept drafts or bills of exchange drawn upon it; mit such acts. This security program shall be reduced however, such acceptances that are of the type to writing, approved by the bank’s board of directors, described in paragraph 7 of section 13 of the FRA and retained by the bank in such form as will readily (12 U.S.C. 372) shall be subject to the amount permit determination of its adequacy and effective­ limitations provided therein and such acceptances ness. that are of the type described in paragraph 12 of * * * * * Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 343 2. Section 216.5 is amended by removing paragraph rate is not permitted and interest may not be com­ (b), redesignating paragraph (c) paragraph (b), and pounded during the term of this deposit. redesignating paragraph (d) as paragraph (c), as set forth below. Rate established and announced (auction average on a discount ba­ sis) for U.S. Treasury bills with Section 216.5—Filing of Reports maturities of 26 weeks at the auc­ Maximum per cent tion held immediately prior to the date of deposit (“Bill Rate”) (b) External crime reports. Each time a robbery, Commercial Banks burglary, or nonbank-employee larceny is perpetrated or attempted at a banking office operated by a State 7.50 per cent or below 7.75 member bank, the bank shall, within a reasonable Above 7.50 per cent Bill Rate plus one-quarter of time, file a report in conformity with the requirements one per cent of Form P-2. One copy of such report shall be filed with the appropriate State supervisory authority and Mutual Savings Banks and Savings three copies of such report shall be filed with the and Loan Associations Federal Reserve Bank for the District in which the head office of the reporting bank is located. 7.25 per cent or below 7.75 Above 7.25 per cent, but below Bill Rate plus one-half of (c) Special reports. Each State member bank shall file 8.50 per cent one per cent such other reports as the Board may require. 8.50 per cent, but below 8.75 9 per cent 8.75 per cent or above Bill Rate plus one-qudrter of one per cent Depository Institutions Deregulation Committee Amendments to Interest on Deposits Hs * * * The Depository Institutions Deregulation Committee Section 1204.106—Time Deposits of Less Than has amended its rules to reduce the period between the $100,000 With Maturities of l x/2 Years or More announcement and the effective date of the ceiling rates of interest payable on the 26-week money market (a) A commercial bank may pay interest on any non­ certificate (MMC) and on the 2l/2 year or more small negotiable time deposit with a maturity 2x/2 years or saver certificate (SSC). Under the revised rules, the more at a rate not to exceed the higher of one-quarter ceiling rates of interest payable on MMCs and SSCs of one per cent below the average 2!/2 year yield for will become effective on the day after they are an­ United States Treasury securities as determined and nounced. Ceiling rates for such deposits normally are announced by the United States Department of the announced on Monday and, thus, normally will be Treasury immediately prior to the date of deposit, or effective on Tuesday rather than on Thursday as under 9.25 per cent. Such announcement is made by the the present rules. This action was taken by the Com­ United States Department of the Treasury every two mittee in order to more closely link the ceiling rates of weeks. The average 2V2 year yield will be rounded by interest payable on MMCs and SSCs with current the United States Department of the Treasury to the market rates. nearest 5 basis points. The rate paid on any such Effective April 7, 1981, the Committee amends deposit cannot exceed the ceiling rate in effect on the Sections 104 and 106 of Part 1204 (Interest on Depos­ date of deposit. In no event shall the rate of interest its) to read as follows: paid exceed 11.75 per cent, except as provided in 12 CFR 217.7(g) and in 12 CFR 329.6(b)(6). Section 1204.104—26-Week Money Market (b) A mutual savings bank or savings and loan associ­ Time Deposits of Less Than $100,000 ation may pay interest on any nonnegotiable time deposit with a maturity of 2x/2 years or more at a rate Commercial banks, mutual savings banks, and savings not to exceed the higher of the average 2x/2 year yield and loan associations may pay interest on any nonne­ for United States Treasury securities as determined gotiable time deposit of $10,000 or more, with a and announced by the United States Department of maturity of 26 weeks at a rate not to exceed the rates the Treasury immediately prior to the date of deposit, set forth below. Rounding any rate to the next higher or 9.50 per cent. Such announcement is made by the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

344 Federal Reserve Bulletin □ April 1981 United States Department of the Treasury every two By Order of the Board of Governors, effective weeks. The average 2l/2 year yield will be rounded by March 23, 1981. the United States Department of the Treasury to the nearest 5 basis points. The rate paid on any such Voting for this action: Chairman Volcker and Governors deposit cannot exceed the ceiling rate in effect on the Schultz, Wallich, and Teeters. Voting against this action: date of deposit. In no event shall the rate of interest Governors Partee and Gramley. Absent and not voting: Governor Rice. paid exceed 12.00 per cent. (Signed) James McAfee, [seal] Assistant Secretary of the Board. Bank Holding Company and Bank Merger Orders Issued by the Board of Governors Statement by the Board of Governors of the Federal Reserve System Regarding the Application of Orders Under Section 3 of Bank Holding Emerson First National Company to Acquire the Company Act First National Bank of Emerson, Emerson, Nebraska, and the Related Applications of Arcadia Emerson First National Company, Agency Company, Decatur Agency Company, and Emerson, Nebraska Tekamah Agency Company to Acquire Voting Arcadia Agency Company, Interests in Emerson First National Company. Arcardia, Nebraska Decatur Agency Company By Order dated March 23, 1981, the Board denied the Decatur, Nebraska application of Emerson First National Company, Em­ Tekamah Agency Company, erson, Nebraska (“Emerson”), for the Board’s ap­ Tekamah, Nebraska proval under section 3(a)(1) of the Bank Holding Company Act (12 U.S.C. § 1842(a)(1)) (the “Act”), to Order Denying Formation of a Bank Holding become a bank holding company by acquiring 95 Company and, the Acquisition of a Bank Holding percent of the outstanding voting shares of The First Company National Bank of Emerson, Emerson, Nebraska (“Bank”). In related actions, the Board denied the Emerson First National Company (“Emerson”), Em­ applications of Tekamah Agency Company, Tekamah, erson, Nebraska, has applied for the Board’s approval Nebraska (“Tekamah”), Decatur Agency Company, under section 3(a)(1) of the Bank Holding Company Decatur, Nebraska (“Decatur”), and Arcadia Agency Act (the “BHC Act”) (12 U.S.C. § 1842(a)(1)) of Company, Arcadia, Nebraska (“Arcadia”), for the formation of a bank holding company by acquiring 95 Board’s approval for each to acquire 24.9 percent of percent or more of the shares of The First National the outstanding voting shares of Emerson, under sec­ Bank, Emerson, Nebraska. In connection with this tion 3(a)(3) of the BHC Act (12 U.S.C. § 1842(a)(3)). application, Arcadia Agency Company, Arcadia, Ne­ Emerson, a nonoperating corporation, was orga­ braska; Decatur Agency, Company, Decatur, Nebras­ nized for the purpose of becoming a bank holding ka; and Tekamah Agency Company, Tekamah, Ne­ company by acquiring Bank, which holds deposits of braska, all of which are affiliated one-bank holding $9.6 million.1 Upon acquisition of Bank, Emerson companies within the meaning of the BHC Act, have would control the 224th largest bank in Nebraska and each applied for the Board’s approval under section hold approximately 0.1 percent of the total deposits in 3(a)(3) of the BHC Act (12 U.S.C. § 1842(a)(3)) to commercial banks in the state. acquire, 24.9 percent of the outstanding shares of Arcadia, Decatur, and Tekamah are one-bank hold­ Emerson. ing companies by virtue of their ownership respective­ Notice of the applications, affording opportunity for ly of Arcadia State Bank, Arcadia, Nebraska (“Arca­ interested persons to submit comments and views has dia Bank”), Citizens State Bank, Decatur, Nebraska been given in accordance with section 3(b) of the Act. (“Decatur Bank”) and First National Bank of Teka­ The time for filing comments and views has expired, mah, Tekamah, Nebraska (“Tekamah Bank”). Arca­ and the Board has considered the applications and all dia Bank, Decatur Bank, and Tekamah Bank hold comments received in light of the factors set forth in deposits of $8.8 million, $5.6 million, and $23.6 mil­ section 3(c) of the Act (12 U.S.C. § 1842(c)). lion, respectively.2 These three bank holding compa­ On the basis of the record, the applications are 1. Unless otherwise indicated, all banking data are as of June 30, denied for the reasons set forth in the Board’s State­ 1980. ment, which will be released at a later date. 2. Data are as of December 31, 1980. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 345 nies constitute a chain banking organization, which, debt. Under these circumstances, the Board has been after consummation of this proposal, would control willing to approve the formation of one-bank holding 74.7 percent of the voting shares of Emerson. companies with what the Board views as excessive Bank is the second largest of three banking organi­ debt obligations on the condition that they can demon­ zations in the relevant market, controlling 24.8 percent strate their ability to become a source of strength to of the total deposits in commercial banks in the their subsidiary banks within a relatively short period market.3 The principal of Emerson and Bank is also a of time, such as by reducing their debt-to-equity ratio principal of Tekamah, Arcadia and Decatur and their of .3 to 1 within 12 years of consummation. subsidiary banks. However, neither Tekamah Bank, The Board also believes that the amount of acquisi­ Arcadia Bank, nor Decatur Bank is located in the same tion debt that can be incurred in a one-bank holding banking market as Emerson and Bank. It appears from company formation by one company or a chain of the facts of record the consummation of the proposal bank holding companies must be resricted to 75 per­ would result in no adverse effects on existing or cent of the purchase price of the bank to be acquired. potential competition in any relevant area. According­ This limitation reduces the amount of debt, which ly, the Board concludes that competitive consider­ usually still remains excessive; reduces the possibility ations are consistent with approval. of strain on the financial resources of the banking The Board has indicated on previous occasions that organization; and creates a greater incentive for man­ a holding company should be a source of strength to its agement to conduct the affairs of the banking organiza­ subsidiary bank, and that the Board would closely tion in a safe and sound manner. In this connection, examine the condition of an applicant in each case the Board notes that the Emerson proposal calls for with these considerations in mind.4 Furthermore, the chain of banking organizations to assume 100 where the principal of an applicant is engaged in percent of the purchase price of Bank through debt. operating a chain of banking organizations, the Board, The debt to be assumed by Emerson would result in in addition to analyzing the one-bank holding company a debt-to-equity ratio of 1.37 to 1, which is greater than proposal before it, also considers the total chain and the .3 to 1 ratio that the Board considers desirable. analyzes the financial and managerial resources and However, the Board is willing to permit this level of future prospects of the institutions comprising the debt in Emerson for the purpose of facilitating the chain. transfer of ownership of small banks as discussed In this case, the Board is concerned that the use of above. The Board believes that these special consider­ acquisition debt, which amounts to 100 percent of ations do not apply to Tekamah’s assumption of a Bank’s original purchase price, may adversely affect portion of Emerson’s acquisition debt. The Board is the ability of the bank holding companies in the chain concerned that the overall financial consequences of to serve as a source of strength to their subsidiary the debt servicing requirements created by this pro­ banks. A one-bank holding company that relies on the posal present adverse financial factors that warrant earnings of its subsidiary bank to service debt often denial. creates a drain on the resources of its subsidiary bank. Under this proposal, Tekamah, a bank holding com­ The Board has found that with a debt-to-equity ratio pany that is already in debt, would borrow an addition­ less than .3 to 1, a bank holding company generally has al $805,500, which represents approximately 25 per­ sufficient access to debt and equity markets to aid its cent of the acquisition cost of Bank. This new debt subsidiary bank should unforeseen circumstances oc­ would double Tekamah’s debt-to-equity ratio, increas­ cur. As this ratio increases beyond .3 to 1, the ability ing it from .4:1 to .9:1. The Board regards such a of the bank holding company to utilize debt and equity substantial increase in Tekamah’s debt-to-equity ratio markets correspondingly decreases. These concerns for the purpose of funding a bank acquisition by a are equally applicable to chain banking organizations. related bank holding company to be inconsistent with The Board has recognized that, on balance, the Tekamah’s responsibility to serve as a source of public interest is served by facilitating the transfer of strength to its subsidiary bank. Tekamah’s existing ownership of small community banks to one-bank indebtedness exceeds what the Board would consider holding companies even though such transfers often appropriate for Tekamah to reasonably meet any un­ require the assumption of a substantial acquisition expected needs of Tekamah Bank. The assumption of the additional debt by Tekamah for purposes unrelated to strengthening Tekamah Bank would further impair 3. The relevant banking market is approximated by Thurston County, Nebraska, and the southeast portion of Dixon County, its ability to meet the needs of its subsidiary bank Nebraska. should unforeseen circumstances occur. The Board 4. In BH Co., Inc., 60 Federal Reserve Bulletin 123 (1974), the believes that the primary focus of a bank holding Board expressed its concern abut the financial flexibility of bank holding companies. company should be the operations of its subsidiaries Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

346 Federal Reserve Bulletin □ April 1981 and any diversion from this objective is generally not the purchase price of a bank to be acquired, and not consistent with the public interest. Accordingly, the increase their debt-to-equity ratio above .3 to 1 for a Board concludes that considerations relating to the nonsubsidiary bank acquisition. We believe that such financial resources and future prospects of the chain of requirements should be adopted through a rulemaking related banking organizations are so adverse as to procedure pursuant to section 553 of the Administra­ warrant denial of these applications. Managerial re­ tive Procedure Act (5 U.S.C. § 553) and not through sources of Applicants, Bank, and the other banks in adjudication by the Board under the Bank Holding the chain are consistent with approval of the transac­ Company Act. The rulemaking procedure would put tion. the industry on notice of what the Board considers to No changes in the services offered by Bank are be safe and sound banking practices. expected to follow from consummation of the pro­ For the reasons stated above and based upon the posed transaction. Consequently, the Board concludes facts of record, we believe these appications should be that considerations relating to the convenience and approved. needs of the community to be served lend no weight toward approval of the proposal. Thus, based on the April 2, 1981 criteria the Board must consider under the Act, there are no factors favoring approval of these applications and the Board’s review of the banking factors, as Financial Services of Winger, summarized above, favor denial. Winger, Minnesota On the basis of the above, and all the facts of record, the Board concludes that banking considerations in­ Order Denying Formation of a Bank Holding volved in this proposal present adverse factors bearing Company upon the financial resources and future prospects of the chain of related banking organizations, in general, Financial Services of Winger, Winger, Minnesota, has and of Tekamah, in particular. Such adverse factors applied for the Board’s approval under section 3(a) are not outweighed by any procompetitive effects or (1) of the Bank Holding Company Act (12 U.S.C. by benefits that would result in better service to the § 1842(a)(1)) of formation of a bank holding company convenience and needs of the community. According­ by acquiring 94.6 percent of the voting shares of ly, it is the Board’s judgment that approval of these Farmers State Bank of Winger, Winger, Minnesota applications would not be in the public interest, and (“Bank”). that the applications should be denied. Notice of the application, affording opportunity for Board of Governors of the Federal Reserve System, interested persons to submit comments and views, has April 2, 1981. been given in accordance with section 3(b) of the Act. The time for filing comments and views has expired, (Signed) James McAfee, and the Board has considered the application and all [seal] Assistant Secretary of the Board. comments received in light of the factors set forth in section 3(c) of the Act (12 U.S.C § 1842(c)). Applicant, a nonoperating Minnesota corporation Dissenting Statement of Governors Partee and with no subsidiaries, was organized for the purpose of Gramley becoming a bank holding company by acquiring Bank, which holds deposits of $7.6 million.1 Upon acquisi­ We would approve the application of Emerson First tion of Bank, Applicant would control the 424th largest National Company to become a one-bank holding bank in Minnesota and would hold approximately 0.03 company and the related applications of Arcadia percent of the total deposits of commercial banks in Agency Company, Decatur Agency Company, and the state. Tekamah Agency Company to acquire voting interests Bank is the smallest of four banking organizations in in Emerson First National Company. In our view, the the relevant banking market and holds approximately facts of record in this case indicate that both Emerson 19.3 percent of the total deposits in commercial banks and Tekamah are capable of servicing their proposed in the market.2 Principals of Applicant and Bank have debt, and that financial factors favor approval of these no interest in any other financial institutions. It ap­ applications. In light of these considerations, a denial in this case would mean that one-bank holding companies, and 1. All banking data are as of December 31, 1979. similar chain banking organizations, would be required 2. The relevant banking market is approximated by the eastern half to limit their acquisition debt to less than 75 percent of of Polk County, Minnesota. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 347 pears from the facts of record that consummation of Voting for this action: Vice Chairman Schultz and Gover­ the proposal would not result in any adverse effects nors Wallich, Partee, Rice, and Gramley. Absent and not upon competition or increase concentration of banking voting: Chairman Volcker and Governor Teeters. resources in any relevant area. Accordingly, the Board concludes that competitive considerations are consis­ (Signed) James McAfee, tent with approval of the application. [seal] Assistant Secretary of the Board. The Board has indicated on previous occasions that a holding company should serve as a source of finan­ cial and managerial strength to its subsidiary bank(s), and that the Board would closely examine the condi­ First Bank Holding Company of Batesville, tion of an applicant in each case with this consider­ Batesville, Arkansas ation in mind. In this case, the Board concludes that the record in this application presents adverse consid­ Order Approving Formation of Bank Holding erations that warrant denial of the proposal to form a Company bank holding company. With regard to financial considerations, the Board First Bank Holding Company of Batesville, Batesville, notes that in connection with this proposal Applicant Arkansas, has applied for the Board’s approval under would incur a sizeable debt, which it proposes to section 3(a)(1) of the Act (12 U.S.C. § 1842(a)(1)) of service over a 15-year period through dividends to be formation of a bank holding company by acquiring 80 declared by Bank, and tax savings to be derived from percent or more of the voting shares of First National filing consolidated tax returns. Applicant’s estimates Bank (“Batesville Bank”), Batesville, Arkansas. of the overall cost of servicing this debt appear to be Notice of the application, affording opportunity for overly optimistic. Moreover, in light of current eco­ interested persons to submit comments, has been nomic conditions, the amount of debt involved in the given in accordance with section 3(b) of the Act. The proposal, and Bank’s historical earnings and growth time for filing comments has expired, and the Board performance, the Board believes that Applicant would has considered the application and all comments re­ lack sufficient flexibility to service its debt, maintain ceived in light of the factors set forth in section 3(c) of adequate capital in Bank, and meet an unforeseen the Act (12 U.S.C. § 1842(c)). problems that might arise at Bank. Accordingly, the Applicant, a nonoperating corporation with no sub­ Board is of the opinion that the considerations relating sidiaries, was organized for the purpose of becoming a to financial resources and future prospects of Appli­ bank holding company through the acquisition of cant and Bank weigh against approval of the applica­ Batesville Bank. Upon acquisition of Batesville Bank, tion. Managerial resources of Applicant and Bank are Applicant would be the 25th largest banking organiza­ generally satisfactory and would be consistent with tion in Arkansas, controlling 0.8 percent of total approval. deposits in commercial banks in the state.1 No significant changes in the services offered by Bank is the largest of three banks competing in the Bank are expected to follow from consummation of relevant banking market,2 controlling deposits of $57.2 the proposed transaction. Consequently, convenience million, representing 54.9 percent of total market and needs factors are consistent with, but lend no deposits. While this proposal involves a restructuring weight toward, approval of this application. of Batesville Bank’s ownership from individuals to a On the basis of the circumstances concerning this corporation owned by substantially those same indi­ application, the Board concludes that the banking viduals, the Board notes that two of Applicant’s considerations involved in this proposal present ad­ principals also are associated with another bank locat­ verse factors bearing upon the financial resources and ed in the relevant banking market. The Chairman of future prospects of Applicant and Bank. Such adverse Applicant and Batesville Bank also owns 96.5 percent factors are not outweighed by any procompetitive of Bank of Newark (“Newark Bank”), Newark, Ar­ effects or by benefits to the convenience and needs of kansas, the smallest bank in the Independence County the community. Accordingly, it is the Board’s judg­ banking market, with deposits of $3.7 million, repre­ ment that approval of the application would not be in senting 3.6 percent of total market deposits. In addi­ the public interest and the application should be de­ tion, this individual serves as President and director of nied. On the basis of the facts of record, the application is denied for the reasons summarized above. 1. Banking data are as of December 31, 1979, unless otherwise noted. By order of the Board of Governors, effective 2. The relevant banking market is approximated by Independence March 3, 1981. County, Arkansas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

348 Federal Reserve Bulletin □ April 1981 Newark Bank, and the President of Applicant and calendar day following the effective date of this Order Batesville Bank serves as a director of Newark Bank. or later than three months after the effective date of In analyzing the competitive effects of an applica­ this Order, unless such period is extended for good tion to form a bank holding company where an individ­ cause by the Board or by the Federal Reserve Bank of ual or group of individuals, controlling in a personal St. Louis pursuant to delegated authority. capacity more than one bank in a relevant banking By order of the Board of Governors, effective market, seeks to transfer control of one or more of the March 24, 1981. banks to a holding company, the Board takes into consideration the competitive effects of the transac­ Voting for this action: Chairman Volcker and Governors tion whereby common ownership was established be­ Schultz, Wallich, Partee, Teeters, and Gramley. Absent and tween the banks in the market.3 Inasmuch as Bates­ not voting: Governor Rice. ville Bank and Newark Bank in 1976 controlled 55.0 percent and 3.3 percent, respectively, of total market (Signed) James McAfee, deposits,4 the acquisition of Newark Bank by Appli­ [seal] Assistant Secretary of the Board. cant’s principals appears to have eliminated a substan­ tial amount of existing competition in the relevant banking market. However, based upon all of the facts First Community Bancorporation, of record, including the poor financial condition of Joplin, Missouri Newark Bank at the time of its acquisition by Appli­ cant’s principals, it is the Board’s opinion that the Order Approving Acquisition of Bank adverse effects associated with that acquisition are clearly outweighed by the considerations discussed First Community Bancorporation, Joplin, Missouri, a below. bank holding company within the meaning of the Bank The financial and managerial resources and future Holding Company Act, has applied for the Board’s prospects of Applicant, Batesville Bank, and Newark approval under section 3(a)(3) of the Act (12 U.S.C. Bank are currently regarded as satisfactory. At the § 1842(a)(3)) to acquire 82.9 percent or more of the time of the acquisition of Newark Bank by Applicant’s voting shares of Merchants and Miners Bank of Webb principals, however, it was apparent that the contin­ City (“Bank”), Webb City, Missouri. ued operation of Newark Bank was jeopardized. While Notice of the application, affording opportunity for a less anticompetitive means of assuring the existence interested persons to submit comments, has been of Newark Bank as an alternative source of banking given in accordance with section 3(b) of the Act. The services would have been preferable, the record indi­ time for filing comments has expired, and the Board cates that such an alternative was not readily avail­ has considered the application and all comments re­ able. Further, Newark Bank’s financial condition has ceived, including those of Webb City Bank (“Protes­ improved substantially under the management of Ap­ tant”), Webb City, Missouri, and Mr. Robert J. Baker, plicant’s principals and it has significantly expanded Webb City, Missouri, in light of the factors set forth in the services it offers. Thus, banking factors and conve­ section 3(c) of the Act.1 nience and needs considerations clearly outweigh the Applicant, the 17th largest banking organization in substantially adverse competitive effects of the 1976 Missouri, controls six subsidiary banks with aggregate acquisition and lend significant weight toward approv­ deposits of $175.1 million, representing 0.7 percent of al of this proposal to become a bank holding company. the commercial bank deposits in the state.2 Upon Based upon these and other facts of record, the Board consummation of the proposal, Applicant’s share of has determined that consummation of the transaction deposits in commercial banks in Missouri would in­ would be in the public interest and that the application crease by only 0.03 percent and Applicant would should be approved. remain the 17th largest banking organization in the On the basis of the record, the application is ap­ state. Accordingly, consummation of this proposal proved for the reasons summarized above. The trans­ would not have an appreciable effect upon the concen­ action shall not be consummated before the thirtieth tration of commercial banking resources in Missouri. 3. E.g., Mid-Nebraska Bancshares, Inc., 64 Federal Reserve Bulletin 589 (1978), afTd sub nom., Mid-Nebraska Bancshares, Inc. 1. Webb City Bank, the larger of the two banks located in Webb v. Board of Governors, 627 F.2d 266 (D.C. Cir. 1980). City, urged denial of the proposal on competitive grounds. Mr. Baker, 4. Deposit data relating to the time Newark Bank became affiliated an interested member of the public, urged approval because of with Batesville Bank are as of December 31, 1976, and exclude convenience and needs considerations. deposits held by a branch of Batesville Bank located in a separate 2. Banking data are as of December 31, 1979, unless otherwise banking market. noted. 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Legal Developments 349 Protestant, in contending that consummation of the Applicant, through its banking subsidiaries, First proposal would result in adverse competitive effects, National Bank and Trust, Joplin, Missouri, and Com­ asserts that the relevant banking market should be munity National Bank, Joplin, Missouri, is the largest limited to the area within a ten-mile radius of Joplin.3 of 18 banking organizations competing in the Joplin In proposing this definition of the market, Protestant banking market, with total market deposits of $132.8 relied on the fact that this is the area within which million, representing 25.0 percent of commercial bank management official interlocks between depository deposits in the market.7 Bank is the 16th largest institutions are generally prohibited by the Depository banking organization in the market, with total deposits Institution Management Interlocks Act (12 U.S.C. of $7.2 million, representing 1.4 percent of market § 3202) (the “DIMIA”) and the Board’s Regulation L deposits. Consummation of the acquisition will in­ (12 C.F.R. Part 212). The DIMIA prohibits a manage­ crease Applicant’s share of deposits in the Joplin ment official of a depository institution from serving as banking market to 26.4 percent. In light of these facts a management official of another depository institution of record, the Board finds that consummation of the in the same city, town, or village, or a contiguous or proposal would result in the elimination of existing adjacent city, town, or village. Federal law has prohib­ competition between Applicant and Bank and remove ited management interlocks between banks in contigu­ an independent competitor from the market. ous or adjacent cities, towns, and villages since 1935,4 Proposals involving the acquisition of an indepen­ but the Board has not limited the relevant geographic dent banking organization by an organization already area for analyzing competition among banks in this represented in the relevant market must be analyzed manner. The Board believes that the relevant banking carefully, giving attention to all the facts presented in market should consist of the localized area where the each case, such as the structural characteristics of the banks involved offer their services and where local market as well as the quantitative factors associated customers can practicably turn for alternatives. As the with the proposal. In this instance, the Board finds Supreme Court has noted in this regard, “the proper that there are several significant factors that mitigate question is not where the parties to the merger do the adverse competitive effects of this proposal. The business or even where they compete, but where, Joplin banking market is relatively unconcentrated, within the area of competitive overlap, the effect of the with a four-firm concentration ratio of 54.9 percent. merger on competition will be direct and immediate.”5 Further, there are eleven remaining independent and In determining the area within which the effect of unaffiliated banks in the market that could serve as this proposed acquisition on competition will be direct entry vehicles by bank holding companies not repre­ and immediate, the Board has analyzed a number of sented in the market. Of those bank holding companies factors, including commuter patterns, newspaper cir­ represented in the Joplin banking market, four are culation, and regional commercial growth projections among the six largest bank holding companies in in Joplin and surrounding areas. Based on these and Missouri, while Applicant comparatively ranks only as other facts of record, it is the Board’s judgment that 17th largest in the state. Finally, the Board notes that the relevant geographic market for analyzing the com­ Bank is a comparatively small institution with limited petitive effects of ths proposal is the Joplin banking resources, and, therefore, its overall competitive influ­ market, which is approximated by all of Jasper and ence in the market is regarded as relatively insignifi­ Newton Counties, Missouri, and the portion of Chero­ cant. Accordingly, on the basis of the above and other kee County, Kansas, that includes the towns of Galena facts of record, the Board does not regard the effect of and Baxter Springs.6 the proposal on competition in the Joplin banking market as so substantially adverse as to warrant denial of the application. 3. Webb City is located approximately seven miles from Joplin, The financial and managerial resources and future Missouri. prospects of Applicant, its subsidiaries, and Bank are 4. Section 8 of the Clayton Antitrust Act (15 U.S.C. § 19) generally regarded as generally satisfactory. Upon acquisition of prohibited a director, officer, or employee of a member bank from acting in such capacities with another bank located in the same city, Bank, Applicant will assist Bank in providing new and town, or village or a contiguous or adjacent city, town, or village. The improved services to its customers. In particular, fact that section 212.2(a) of the Board’s Regulation L (12 C.F.R. § 212.2(a)), adopted July 19, 1979, pursuant to the DIMIA, defines “adjacent cities, towns, or villages” as “cities, towns, or villages whose borders are within ten road miles of each other at their closest Cherokee County, Kansas, and Ottawa County, Oklahoma. The points” does not affect the definition of the relevant banking market. Board has determined that Joplin’s economic influence extends 5. United States v. Philadelphia National Bank, 374 U.S. 321, 357 throughout Jasper and Newton Counties. The portion of Ottawa (1963); United States v. Phillipsburg National Bank, 399 US. 350, County that Applicant included in its proposed definition is not, in the 364-365 (1970). Board’s judgment, sufficiently dependent upon Joplin to warrant 6. Applicant believes that the Joplin banking market should be inclusion in the Joplin banking market. defined as portions of Jasper and Newton Counties and parts of 7. Market data are as of June 30, 1980. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

350 Federal Reserve Bulletin □ April 1981 Applicant will assist Bank in providing improved de­ First Southeast Banking Corporation, mand and savings deposit services, incuding checking Darien, Wisconsin overdraft privileges and automatic transfer services or NOW accounts, and broadening Bank’s range of lend­ Order Approving Acquisition of One Bank, ing services. In addition, Applicant will assist Bank in Conditionally Approving Acquisition of Two Banks, improving its facilities to provide for safe deposit and Denying Acquisition of Two Banks boxes, drive-in banking facilities, automated teller machines, and facilities for handicapped persons. Fi­ First Southeast Banking Corp., Darien, Wisconsin, a nally, affiliation with Applicant would provide Bank bank holding company within the meaning of the Bank with access to Applicant’s electronic data processing Holding Company Act, has applied for the Board’s facilities and managerial resources. The record indi­ approval under section 3(a)(3) of the Act (12 U.S.C. cates that Bank does not currently have the resources § 1842(a)(3)) to acquire 62 percent or more of the to provide these services, and that, although there is voting shares of First Bank Southeast, N.A., Keno­ another bank in Webb City, the introduction of these sha, Wisconsin (“Kenosha Bank”), 80 percent or services through Bank as a result of this proposal will more of the voting shares of First Bank Southeast of permit the banking needs of the Webb City community West Kenosha, Kenosha, Wisconsin (“West Kenosha to be better served, thereby enhancing the overall Bank”), 87 percent or more of the voting shares of quality of banking services. Since state law prohibits First Bank Southeast of Silver Lake, Silver Lake, banks from branching within Missouri, and in the Wisconsin (“Silver Lake Bank”), and 88 percent or Board’s judgment Webb City is not attractive for de more of the voting shares of each of the following novo entry, acquisition of Bank by a larger organiza­ banks: First Bank Southeast of Lake Geneva, Lake tion appears to be the most expedient method of Geneva, Wisconsin (“Lake Geneva Bank”), and First accomplishing these purposes. Therefore, consider­ Bank Southeast of Twin Lakes, Twin Lakes, Wiscon­ ations relating to the convenience and needs of the sin (“Twin Lakes Bank”). community to be served lend substantial weight to­ Notice of the applications, affording opportunity for ward approval of the application, and in the Board’s interested persons to submit comments and views, has view, outweigh any adverse competitive effects that been given in accordance with section 3(b) of the Act. would result from consummation of the proposal. The time for filing comments and views has expired, Based on the foregoing and other considerations re­ and the Board has considered the applications and all flected in the record, it is the Board’s judgment that comments received in light of the factors set forth in the proposed acquisition is in the public interest and section 3(c) of the Act (12 U.S.C. § 1842(c)). that the application should be approved. Applicant is a one-bank holding company that con­ On the basis of the record, the application is ap­ trols First Bank Southeast of Darien, Darien, Wiscon­ proved for the reasons summarized above. The trans­ sin (“Darien Bank”). Darien Bank is the 553rd largest action shall not be consummated before the thirtieth commercial bank in Wisconsin, with deposits of $6.9 calendar day following the effective date of this Order million, representing .03 percent of the total deposits or later than three months after the effective date of in commercial banks in the state.1 Approval of the this Order, unless such period is extended for good proposals to acquire the five additional banks, which cause by the Board or by the Federal Reserve Bank of hold deposits of $120.7 million, would cause Applicant Kansas City pursuant to delegated authority. to become the sixteenth largest banking organization By order of the Board of Governors, effective in Wisconsin, controlling approximately 0.6 percent of March 12, 1981. the total deposits in commercial banks in Wisconsin and would not result in a significant increase in the Voting for this action: Chairman Volcker and Governors concentration of banking resources in Wisconsin. Schultz, Partee, Teeters, Rice, and Gramley. Absent and not voting: Governor Wallich. Lake Geneva Bank is located in the Walworth banking market,2 which also contains Applicant’s ex­ (Signed) James McAfee, isting subsidiary, Darien Bank. Lake Geneva Bank is [seal] Assistant Secretary of the Board. the fourth largest of fifteen banking organizations in 1. All deposit data are as of December 31, 1979, unless otherwise indicated. 2. The Walworth banking market is defined as Walworth County, Wisconsin (except for the township of East Troy), and the township of Burlington in Racine County, Wisconsin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 351 the Walworth banking market, controlling $34.2 mil­ As part of its analysis of the competitive effects of a lion in deposits, which represents 8.9 percent of the proposal involving the restructuring of a bank’s own­ total deposits in commercial banks in the market. ership into corporate form, the Board takes into con­ Darien Bank is the fourteenth largest banking organi­ sideration the competitive effects of the transaction zation in the Walworth banking market, controlling 1.8 whereby common share ownership or interlocking percent of the total deposits in commercial banks in director or officer relationships were established be­ the market. Upon completion of the proposed acquisi­ tween the subject bank and one or more of the other tions, Applicant’s banks in the Walworth banking banks in the same market.4 In this case the Board has market would control $41.1 million in deposits, which considered the competitive effects of the original represent 10.7 percent of the total deposits in commer­ transactions by which all of the banks that are the cial banks in the market. subjects of this proposal came under common owner­ The four other banks that Applicant proposes to ship. acquire are located in the Kenosha banking market.3 In the Walworth banking market, Applicant’s princi­ In the Kenosha market, Kenosha Bank ranks third out pal acquired control of Lake Geneva Bank in 1975 and of the market’s eight commercial banks with $55.7 Darien Bank in 1977. While these acquisitions had no million in deposits, or 16.3 percent of the total deposits competitive effect in the Kenosha market, the 1977 in commercial banks in the market. West Kenosha acquisition eliminated some existing competition in Bank ranks sixth, with $11.1 million in deposits (3.3 the Walworth market. However, the Board does not percent of the market total); Silver Lake Bank ranks view the competitive effects of this acquisition as seventh, with $10.7 million in deposits (3.1 percent of significant, due to the market share (11.5 percent) then the market total); and Twin Lakes Bank ranks eighth, held by the two banks, the fact that the market was not with $9.0 million in deposits (2.6 percent of the market particularly concentrated at the time, and the exis­ total). Upon completion of the proposed acquisitions, tence of eleven unaffiliated banks that remained in the Applicant would control a total of $86.5 million in market as possible acquisition candidates. According­ deposits in the Kenosha market, or 25.3 percent of the ly, competitive considerations pertaining to the acqui­ total deposits in commercial banks in that market, and sition of Lake Geneva Bank are consistent with ap­ Applicant would become the second largest banking proval. organization in the Kenosha market. In the Kenosha banking market, the acquisition by Applicant’s principal, who owns 100 percent of Applicant’s principal of Kenosha Bank in 1969 consti­ Applicant’s stock, also owns controlling interests in tuted an acquisition of an existing bank by a person each of the banks that Applicant proposes to acquire. controlling no other banking interests within the mar­ Since these applications represent a restructuring of ket. Accordingly, the Board concludes that no existing existing ownership interests, no existing competition competition in the Kenosha market was eliminated would be eliminated as a result of the proposed when Applicant’s principal acquired control of Keno­ acquisitions. However, section 3(c) of the Bank Hold­ sha Bank in 1969. Additionally, the Board concludes ing Company Act precludes the Board from approving that neither this acquisition nor the other Kenosha any proposed acquisition by a bank holding company market acquisitions affected competition in the Wal­ that (1) would result in a monopoly or be in further­ worth market. ance of any combination to monopolize or attempt to The acquisition by Applicant’s principal of Silver monopolize a banking market, or that (2) may substan­ Lake Bank in 1970 eliminated some existing competi­ tially lessen competition or tend to create a monopoly tion in the Kenosha market. In 1970, Kenosha Bank or be in restraint of trade in any banking market unless ranked third out of seven banks in the Kenosha the anticompetitive effects are clearly outweighed by banking market, with $27.6 million in deposits, or 17.3 the convenience and needs of the community to be percent of the market total. Silver Lake Bank ranked served. fifth, with $5.1 million in deposits, or 3.2 percent of the market total. Upon acquisition of Silver Lake Bank, Applicant’s principal controlled 20.5 percent of the total deposits in commercial banks in the market and 3. The Kenosha banking market is defined as Kenosha County, Wisconsin. Applicant has urged that the Kenosha banking market be the banks under his control in the Kenosha market defined as Kenosha County and Western Racine County. The staffs of constituted the third largest banking organization in the Federal Reserve Bank of Chicago and the Board have made a thorough review and analysis of the definition of the relevant market. As a result of this review and its analysis of all the facts of record, including commuting and population data, the Board has concluded that the appropriate area for analyzing the competitive effects in the 4. Mid-Nebraska Bancshares, Inc. \. Board of Governors, No. 78- Kenosha market of the subject proposals is approximated by the 1658, slip op. 6-8 (D.C. Cir. February 15, 1980); Mahaska Investment single-county area described herein. Co., 63 Federal Reserve Bulletin 579, 580 (1977). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

352 Federal Reserve Bulletin □ April 1981 that market. However, the Board does not view the other hand, approval would solidify and strengthen the competitive effect as significantly adverse, because of common ownership of the four banks and would certain considerations concerning that acquisition. eliminate or significantly diminish the likelihood of Specifically, Silver Lake Bank was eighteen miles their disaffiliation. from the closest office of Kenosha Bank in 1970, no In light of the structure of the Kenosha banking significant overlap of deposits and loans between the market and the market shares of the organizations two banks then existed, and five banking alternatives involved, the Board is of the opinion that approval of remained in the market. Thus, although some existing the Applicant’s proposals to acquire Kenosha Bank competition was eliminated when Applicant’s princi­ and Silver Lake Bank while Applicant’s principal pal acquired Silver Lake Bank in 1970, the competitive retains control of West Kenosha Bank and Twin Lakes effect of this acquisition taken alone would not be Bank would also serve to perpetuate a significantly sufficient to warrant denial of the proposal if Appli­ adverse competitive situation. The Board therefore cant’s principal did not own additional banks in the concludes that the applications to acquire Kenosha Kenosha banking market. Bank and Silver Lake Bank should be approved on the With regard to the other acquisitions in the Kenosha condition that Applicant divest of West Kenosha Bank market, the Board concludes that Applicant’s princi­ and Twin Lakes Bank prior to consummation of the pal’s acquisition of West Kenosha Bank in 1972 and acquisition of Kenosha Bank and Silver Lake Bank. Twin Lakes Bank in 1977 had substantially adverse The financial and managerial resources and future effects on existing competition in the market. Upon prospects of Applicant, Darien Bank and the five acquisition of West Kenosha Bank in 1972, Appli­ banks to be acquired are regarded as satisfactory and cant’s principal eliminated a banking alternative in this their future prospects appear favorable. Accordingly, highly concentrated market5 and controlled three of banking factors are consistent with but lend no weight the eight banks competing in the market, representing toward approval of each proposal. 22.0 percent of the total deposits in the market. In No significant changes in Banks’ operations or in addition, the rank of the banking group advanced from the services offered to their customers are anticipated third to second. Upon acquisition of Twin Lakes Bank to follow from consummation of the proposed acquisi­ in 1977, Applicant’s principal eliminated another bank­ tions. Consequently, convenience and needs factors ing alternative in the market and controlled four of the lend no weight toward approval of these applications. eight banks competing in the market and 26.1 percent On the basis of the foregoing and all the facts of of the total deposits in commercial banks in the record, and in light of the factors set forth in section market. 3(c) of the Act, it is the Board’s judgment that approv­ In the Board’s view, the proposals to acquire West al of the applications to acquire West Kenosha Bank Kenosha Bank and Twin Lakes Bank involve the use and Twin Lakes Bank would not be in the public of the holding company form to further an anticompet­ interest and these applications should be and hereby itive arrangement. On the basis of all of the facts of are denied. The applications to acquire Kenosha Bank record, including the size of all of the organizations and Silver Lake Bank are approved subject to the involved (together the four Kenosha banks hold 25.3 condition that Applicant’s principal divest of West percent of the total deposits in the market), the Board Kenosha Bank and Twin Lakes Bank prior to consum­ concludes that the proposals to acquire West Kenosha mation of the acquisition of Kenosha Bank and Silver Bank and Twin Lakes Bank should be denied since Lake Bank. The application to acquire Lake Geneva approval of these proposals would serve to perpetuate Bank is approved. a substantially adverse competitive situation. While The approved transactions shall not be made before denial of these proposals might not immediately alter the thirtieth calendar day following the effective date of the anticompetitive relationships existing among these this Order or later than three months after the effective four banks, a denial would strengthen the prospect of date of this Order unless such period is extended for disaffiliation and the possibility that West Kenosha good cause by the Board or by the Federal Reserve Bank and Twin Lakes Bank would become indepen­ Bank of Chicago under delegated authority. The acqui­ dent and competing organizations in the future. On the sition of Kenosha Bank and Silver Lake Bank shall not be consummated until Applicant provides the Federal Reserve Bank of Chicago with evidence that Appli­ cant’s principal has effectively and completely divest­ ed of his interests in West Kenosha Bank and Twin 5. In 1972, the four largest banking organizations in the market Lakes Bank. controlled 93.2 percent of the total deposits in commercial banks in By order of the Board of Governors, effective the market. In 1977, the four-firm concentration ratio had increased to 94.3 percent of the total deposits in commercial banks in the market. March 6, 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 353 Voting for this action: Vice Chairman Schultz and Gover­ Act. The time for filing comments and views has nors Wallich, Partee, and Rice. As noted in the appended expired, and the Board has considered the application statement, Governor Gramley voted to approve all five and all comments received in light of the factors set applications. Absent and not voting: Chairman Volcker and forth in section 3(c) of the Act (12 U.S.C. § 1842(c)). Governor Teeters. The Board has indicated on previous occasions that a holding company should serve as a source of finan­ (Signed) James McAfee, cial and managerial strength to its subsidiary banks, [seal] Assistant Secretary of the Board. and that the Board would closely examine the condi­ tion of an applicant with this consideration in mind. In this case, the Board concludes that the record presents Concurring and Dissenting Statement of Governor adverse considerations that warrant denial of the pro­ Gramley posal to form a bank holding company. Accordingly, the application is denied for the rea­ I concur in the Board’s decision to approve the sons set forth in the Board’s Statement, which will be application to acquire Lake Geneva Bank. However, I released at a later date. would approve the West Kenosha and Twin Lakes On the basis of all the facts of record, the application applications also, and I would unconditionally approve is denied. the Kenosha and Silver Lake applications. The affili­ By order of the Board of Governors, effective ation between Kenosha, West Kenosha, and Silver March 2, 1981. Lake Banks has spanned nearly a decade. Denial in any of these cases would not increase significantly the Voting for this action: Vice Chairman Schultz and Gover­ probability that common control of the three banks nors Wallich, Partee, Rice, and Gramley. Absent and not will be terminated. Regarding the Twin Lakes applica­ voting: Chairman Volcker and Governor Teeters. tion, the absolute and relative size of the bank in its market ($9.0 million and 2.6 percent of total commer­ (Signed) James McAfee, cial bank deposits) is sufficiently small that any anti­ [seal] Assistant Secretary of the Board. competitive effects associated with its acquisition in 1977 were not serious. In addition, the economic growth potential in the bank’s market is limited. Entry Statement by Board of Governors of the Federal into the market by third parties through acquisition of Reserve System Regarding Application of Bank a bank the size of Twin Lakes Bank therefore appears Shares, Inc. to Acquire the State Bank unlikely, so that the prospects for disaffiliation seem small. Moreover, in a market with limited growth Bank Shares, Inc., Lake Havasu City, Arizona, has potential, a bank the size of Twin Lakes might not be applied for the Board’s approval under section 3(a)(1) viable on its own. I would therefore approve all five of the Bank Holding Company Act (12 U.S.C. applications. § 1842(a)(1) of formation of a bank holding company by acquiring 32.57 percent of the voting shares of The March 6, 1981 State Bank (“Bank”), Lake Havasu City, Arizona. Notice of the application, affording an opportunity for interested persons to submit comments and views, Bank Shares, Inc., has been given in accordance with section 3(b) of the Lake Havasu City, Arizona Act. The time for filing comments and views has expired, and the Board has considered the application Order Denying Formation of a Bank Holding and all comments received in light of the factors set Company forth in section 3(c) of the Act (12 U.S.C. § 1842(c)). Applicant, a nonoperating corporation with no sub­ Bank Shares, Inc., Lake Havasu City, Arizona, has sidiaries, was organized for the purpose of becoming a applied for the Board’s approval under section 3(a)(1) bank holding company by acquiring Bank, which holds of the Bank Holding Company Act (12 U.S.C. deposits of $38.2 million.1 Upon acqusition of Bank, § 1842(a)(1)) of formation of a bank holding company Applicant would control the ninth largest bank in by acquiring 32.57 percent of the voting shares of The Arizona and would hold approximately 0.36 percent of State Bank (“Bank”), Lake Havasu City, Arizona. the total deposits of commercial banks in the state. Notice of the application, affording an opportunity for interested persons to submit comments and views, 1. All deposit data are as of June 30, 1980, unless otherwise has been given in accordance with section 3(b) of the indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

354 Federal Reserve Bulletin □ April 1981 Bank is the second largest banking organization in the Board of Governors of the Federal Reserve System, relevant market and holds 17.9 percent2 of the total March 4, 1981. deposits in commercial banks in the market.3 While one of Applicant’s principals is associated with anoth­ (Signed) James McAfee, er bank, that organization operates in a separate [seal] Assistant Secretary of the Board. banking market from Bank. It appears that consumma­ tion of the proposal would not eliminate competition or increase the concentration of banking resources in any relevant area. Accordingly, the Board concludes Marine National Bancorporation, that competitive considerations are consistent with Jacksonville, Florida approval of the application. The Board has indicated on previous occasions that Order Denying Formation of a Bank Holding a holding company should serve as a source of finan­ Company cial and managerial strength to its subsidiary banks, and that the Board would closely examine the condi­ Marine National Bancorporation, Jacksonville, Flori­ tion of an applicant with this consideration in mind. In da, has applied for the Board’s approval under section this case, the Board concludes that the record presents 3(a)(1) of the Bank Holding Company Act (12 U.S.C. adverse considerations that warrant denial of the pro­ § 1842(a)(1)) of formation of a bank holding company posal to form a bank holding company. by acquiring 92.6 percent of the voting shares of With regard to financial considerations, the Board Marine National Bank of Jacksonville, Jacksonville, notes that Bank’s capital formation during recent Florida (“Bank”). years has not kept pace with this asset growth. While Notice of the application, affording an opportunity Applicant has suggested a proposal designed to im­ for interested persons to submit comments and views, prove Bank’s capital position through sales of equity has been given in accordance with section 3(b) of the capital, in light of the uncertainties inherent in such Act. The time for filing comments and views has undertakings and the limitations imposed by the nature expired, and the Board has considered the application of Applicant’s proposal and Applicant’s proposed and all comments received in light of the factors set ownership interest in Bank, the Board does not con­ forth in section 3(c) of the Act (12 U.S.C. § 1842(c)). sider the benefits to be provided by this proposal to be Applicant, a nonoperating corporation with no sub­ meaningful. Accordingly, the Board is of the opinion sidiaries, was organized for the purpose of becoming a that the considerations relating to financial resources bank holding company by acquiring Bank, which holds and future prospects warrant denial of the application. deposits of $18.1 million.1 Upon acquisition of Bank, Managerial considerations are generally satisfactory, Applicant would control the 413th largest bank in but lend no weight toward approval. Florida and would hold approximately 0.05 percent of In light of the fact that no significant changes in the the total commercial bank deposits in the state. services offered by Bank are expected to follow from Bank is the 11th largest of 16 commercial banks in consummation of the proposed transaction, conve­ the Jacksonville banking market, and holds approxi­ nience and needs considerations are consistent with mately 0.9 percent of the total deposits in commercial but lend no weight towards approval of this applica­ banks in the market.2 While three principals of Bank tion. and Applicant are principals in six other banks, these On the basis of the circumstances concerning this banks do not compete in the relevant banking market. application, the Board concludes that the banking It appears from the facts of record that consummation considerations involved in this proposal present ad­ of the proposal would not result in any adverse effects verse factors bearing upon the financial resources and upon competition or increase the concentration of future prospects of Applicant and Bank. Such adverse banking resources in any relevant area. Accordingly, factors are not outweighed by any procompetitive the Board concludes that competitive considerations effects or by benefits that would result in better are consistent with approval of the application. serving the convenience and needs of the community. The Board has indicated on previous occasions that Accordingly, it is the Board’s judgment that approval a holding company should serve as a source of finan­ of the application would not be in the public interest cial and managerial strength to its subsidiary bank(s), and the application should be denied. and that the Board would closely examine the condi- 2. Market share data as of June 30, 1979. 1. All banking data are as of June 30, 1980. 3. The relevant banking market is approximated by Mohave Coun- 2. The Jacksonville banking market is approximated by Duval ty, Arizona. County plus the City of Orange Park, Clay County. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 355 tion of an applicant in each case with this consider­ in the public interest and that the application should be ation in mind. While the financial and managerial denied. resoures and future prospects of the six other banks On the basis of the facts of record, the application is affiliated with Applicant and Bank are considered denied for the reasons summarized above. generally satisfactory, in this case the Board con­ By order of the Board of Governors, effective cludes that considerations relating to the financial March 2, 1981. resources and future prospects of Applicant warrant denial of the application. Voting for this action: Vice Chairman Schultz and Gover­ With respect to Applicant’s and Bank’s financial nors Wallich, Partee, Rice, and Gramley. Absent and not considerations and future prospects, the Board notes voting: Chairman Volcker and Governor Teeters. that in connection with this proposal Applicant would incur a sizeable debt. Applicant proposes to service (Signed) James McAfee, the debt over a 25-year period through dividends to be [seal] Assistant Secretary of the Board declared by Bank and tax benefits to be derived from filing consolidated tax returns. Applicant projects reaching a debt-to-equity ratio of less than 30 percent Mercantile Bancorporation Inc., by the end of the 12th year while maintaining an St. Louis, Missouri adequate capital level in Bank. However, in light of the recent performance of Bank and the historical Order Approving Acquisition of Bank performance of its peer banks in the Jacksonville market, Applicant’s earnings and growth projections Mercantile Bancorporation Inc., St. Louis, Missouri, for Bank appear to be unrealistic. In particular, Appli­ a bank holding company within the meaning of the cant’s projections of Bank’s earnings are overly opti­ Bank Holding Company Act, has applied for the mistic, while its growth projections, in light of all the Board’s approval under section 3(a)(3) of the Act (12 facts of record including future growth prospects of U.S.C. § 1842(a)(3)) to acquire all of the voting shares the downtown Jacksonville area, are low. Thus, based (less directors’ qualifying shares) of Mercantile Bank upon the record in this case, it is the Baord’s view that of South County, N.A., St. Louis County, Missouri Bank is unlikely to generate sufficient earnings to (“Bank”), a proposed de novo bank. enable Applicant to service its debt while maintaining Notice of the application, affording opportunity for adequate capital in Bank, as well as affording Appli­ interested persons to submit comments and views, has cant the flexibility to meet any unforeseen problems been given in accordance with section 3(b) of the Act. that might arise at Bank. Accordingly, the Board The time for filing comments and views has expired, concludes that considerations relating to the financial and the Board has considered the application and all resources and future prospects of Applicant and Bank comments received, including those submitted on be­ lend weight toward denial of this application. While half of Mehlville Bank, St. Louis County, Missouri managerial considerations are generally satisfactory, it (“Protestant”), the Comptroller of the Currency and is the Board’s judgment that Applicant’s principals the Office of the Commissioner of Finance of the State have not established a sufficient record of performance of Missouri, in light of the factors set forth in section to mitigate the adverse considerations relating to the 3(c) of the Act (12 U.S.C. § 1848(c)). resources and future prospects connected with this Applicant is the largest banking organization in application. Missouri and controls 29 banks with aggregate depos­ No significant changes in the operations or services its of approximately $2.9 billion, representing 11.1 offered by Bank are expected to follow from consum­ percent of the total deposits in commercial banks in mation of the proposed transaction. Accordingly, con­ the state.1 Since Bank is a proposed de novo bank, its venience and needs factors are consistent with, but acquisition by Applicant would not immediately in­ lend no weight toward, approval of this application. crease Applicant’s share of deposits in commercial On the basis of all the facts of record, the Board banks in Missouri. concludes that the banking considerations involved in Bank is to be located in the St. Louis banking this proposal present adverse factors bearing upon the market,2 in which Applicant is the second largest financial resources and future prospects of Application banking organization, with six subsidiary banks con­ and Bank. Such adverse factors are not out weighted by any procompetitive effects or by benefits that would result in better serving the convenience and 1. Unless otherwise indicated, all deposit data are as of Decem­ ber 31, 1979. needs of the community. Accordingly, it is the Board’s 2. The St. Louis banking market is approximated by the St. Louis judgment that approval of the application would not be Ranally Metro Area, which includes all of St. Louis City and St. Louis Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

356 Federal Reserve Bulletin □ April 1981 trolling 16.1 percent of total market deposits. Appli­ was organized in violation of federal laws requiring cant’s closest banking subsidiary, High Ridge Mercan­ that organizers of a national bank be natural persons tile Bank, High Ridge, Missouri, is located and subscribe to their shares in good faith. Finally, approximately 11 miles from Bank’s proposed site and Protestant argues that Applicant would operate Bank derives less than one percent of its deposits from in violation of Missouri antibranch banking statutes.4 Bank’s proposed primary service area (“PSA”). Ap­ Although Protestant contends that consummation of plicant’s market share would not change initially as a the proposal will result in adverse competitive effects, result of approval of this application. Since Bank Protestant has not submitted any information in sup­ would be a de novo bank, there will be no elimination port of its contention, other than recitation of Appli­ of existing competition. Moreover, given the de novo cant’s rank in the state. However, the facts of record nature of Bank, the size of the market, the number of do not support Protestant’s conclusion. Applicant is banking organizations operating therein, and the pros­ not clearly dominant within the market, controlling pects for continuing growth in the area, it does not only 16.1 percent of market deposits, and the market is appear that consummation of the proposal would have not highly concentrated, with a four-firm deposit con­ any adverse effects on potential competition. On the centration of only 44.3 percent. The St. Louis banking basis of the above and other facts of record, competi­ market contains 88 other banking organizations in tive considerations appear consistent with approval of addition to Applicant. Applicant’s establishment of a the application. de novo bank would provide an additional source of The financial and managerial resources of Appli­ competition within the market. Applicant’s relatively cant, its subsidiaries and Bank are regarded as satis­ small market share, the relatively low market concen­ factory. Bank, as a proposed de novo bank, has no tration, the number of competing banking organiza­ financial or operating history; however, its prospects tions in the market, the fact that Bank is a de novo as a subsidiary of Applicant appear favorable. Accord­ bank, and other facts of record support the conclusion ingly, considerations relating to banking factors are that competitive considerations are consistent with consistent with approval of this application. As a new approval of the application. institution in the St. Louis banking market, Bank Protestant’s claim that Bank’s proposed PSA would would serve as an additional source of a full range of be unable to support an additional bank and that banking services in the market. Accordingly, consider­ Applicant’s acquisition of Bank would endanger Pro­ ations relating to the convenience and needs of the testant’s solvency likewise is not supported by the community to be served appear consistent with ap­ facts of record. Bank’s proposed PSA is growing proval of the application. considerably more rapidly than the surrounding St. In its review of the application, the Board has given Louis County or St. Louis SMSA. Population has careful consideration to the comments submitted on advanced more rapidly in the PSA (4.9 percent) than in behalf of Protestant, a bank located 2.5 miles (3.5 road the SMSA (2.2 percent) from 1976 to 1980. Population miles) from the proposed site of Bank.3 Protestant per banking office is significantly higher in the PSA contends that consummation of the proposed acquisi­ (11,391) than for St. Louis County (8,978) or St. Louis tion would have anticompetitive effects. Protestant City (7,871). The seven banks located within a fourasserts that Bank’s proposed primary service area mile radius of Protestant have experienced significant­ would be unable to support an additional bank and that ly higher average annual deposit growth between 1976 Applicant’s acquisition of Bank would threaten Pro­ and 1979 (13.0 percent) than deposit growth for the testant’s solvency. Protestant also claims that bank Missouri portion of the St. Louis SMSA (7.2 percent). County; portions of Franklin, Jefferson, Lincoln, and St. Charles 4. Protestant also requested a hearing regarding this application. Counties in Missouri, and portions of Jersey, Macoupin, Madison, Under section 3(b) of the Act, the Board is required to hold a hearing Monroe, and St. Clair counties in Illinois. when the primary supervisor of the bank to be acquired recommends 3. Protestant opposed two unsuccessful attempts by Applicant to disapproval of the application (12 U.S.C. § 1842(b)). In this case the obtain a state charter for a bank to be located in the same general Comptroller of the Currency issued preliminary charter approval to location as Bank, as well as Applicant’s successful application for a Bank on June 27, 1980, and indicated by letter dated November 17, national bank charter for Bank. Applicant’s first application for a state 1980, that he had no objection to approval of this application. Thus, charter was denied on August 31, 1977, after a hearing before the there is no statutory requirement that the Board hold a hearing. Commissioner of Finance of the State of Missouri. Applicant’s second Moreover, the Board has examined the record of the two hearings state charter application was approved on April 20, 1979, and subse­ held in connection with the applications for a state charter for Bank, quently was reversed on appeal on July 18, 1979, after a hearing before the written submissions by Protestant, and Applicant’s responses and the Missouri State Banking Board. Applicant appealed the Missouri is unable to conclude that a hearing would significantly supplement State Banking Board’s decision to the Circuit Court for the County of the record before the Board or resolve issues not already discussed at St. Louis in August, 1979, but subsequently requested dismissal of the length in the written submissions contained in the record before the appeal. On June 27, 1980, the Comptroller of the Currency granted Board. In view of these facts, the Board concludes that the record in Applicant’s application for a national charter for Bank, conditioned this case is sufficiently complete to render a decision and hereby upon Board approval of Applicant’s application to acquire Bank. denies Protestant’s request for a hearing. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 357 Therefore, it appears from these and other facts of 1973). If the Board determines that a violation of state record that this area of the market would be capable of law would occur as a result of the consummating of the supporting an additional bank. Although Protestant, proposal, it is required to disapprove the transaction. which opened for business on September 13, 1976, did Whitney National Bank in Jefferson Parish v. Bank of not meet its deposit growth projections contained in its New Orleans & Trust Co., 323 F.2d 290 (D.C. Cir. charter application, its deposits have grown from 1963), reversed on other grounds, (379 U.S. 411 $69,600 (December 31, 1976) to $4,077,000 (December (1965)). 31, 1977) to $7,775,894 (December 31, 1980). Although The facts of record indicate that Bank will be a Protestant experienced slow growth initially, perhaps separate corporation, with its own capital, surplus due in part to the fact that it operated out of a trailer and, as earned, undivided profits; that Bank will have during its first 10 months of operation until its perma­ loan limits based upon its own capital structure in the nent building was constructed, its total deposits grew same manner as if it were unaffiliated with a bank at an average annual compound rate of approximately holding company; that Bank will be managed by its 24 percent between December 31, 1977, and December own officers to be recruited locally; that after its initial 31, 1980. In January 1979, Protestant became profit­ organization phase, Bank’s board of directors will be able, and as of December 31, 1980, after slightly over separate and distinct from the boards of Applicant’s four years of operation, Protestant had grown to $9.4 other banking subsidiaries, and will include members million in total assets, earning approximately $80,000 of Bank’s community; that Bank will maintain its own in 1980. Based upon the demonstrated financial separate books of account, issue its own distinctive strength of Protestant, and in light of the rapid growth checks, and use its own stationery. Moreover, except within the PSA discussed above, the Board concludes as permitted by law, money deposited at Bank will not that consummation of this proposal does not represent be credited to the account of a depositor at any other a serious threat to Protestant’s solvency. banking subsidiary, nor will money deposited at the Protestant alleges that Bank’s organization violated other subsidiaries be credited to accounts at Bank; federal statutes requiring organizers of a national bank that Bank’s officers and employees will not directly to be natural persons and to subscribe to their shares perform any services for customers of Applicant’s in good faith. Federal law requires that in order to other subsidiary banks other than those services that organize a national bank, natural persons must enter would be provided for customers of other area banks, into articles of association to be signed by such and conversely, officers and employees of Applicant’s persons (12 U.S.C. §21). The natural persons must other subsidiary banks will not directly perform any execute an organization certificate (12 U.S.C. § 22). services for customers of Bank that would not be These steps have been taken and approved by the provided for customers of other area banks. Applicant Comptroller of the Currency, by letter dated July 25, further represents that it will purchase Bank’s shares 1980. Further, the organizers have certified as to the from its own capital resources. amount of bank stock to which they will subscribe and Protestant contends that the proposed automatic there has been no showing by Protestant that they teller machine (“ATM”) services at Bank would vio­ have not done so in good faith. Therefore, the record late Missouri’s branch banking laws. However, Pro­ before the Board does not support Protestant’s claim testant has made no showing as to how Bank’s pro­ that Bank was organized in violation of federal law. posed ATM operations, which would function in a Finally, Protestant contends that Bank’s proposed manner essentially equivalent to the performance of affiliation with Applicant would violate Missouri law many banking functions through methods other than prohibiting branch banking. It is clear from a long line ATM, would violate Missouri law. The Attorney Gen­ of court cases that a state’s restrictive branch banking eral of Missouri has considered the general question of laws do not automatically bar bank holding company whether an ATM network among affiliated banks operation. The ownership of banks by bank holding would violate Missouri’s branch banking statutes and companies has been found to be in compliance with has concluded that it would not (Attorney General of Missouri law by the Attorney General of Missouri, Missouri Opinion No. 131 (November 8, 1979)). In Attorney General of Missouri Opinion No. 375, (July 27, addition, the Missouri Commissioner of Finance has 1971), and the Missouri Statutes specifically recognize advised the Board that it has no objections to the the bank holding company form of bank ownership. proposed acquisition under the Missouri Bank Holding See, § 362.910-940 R.S. Mo. 1978. Company Act (section 362.910 et seq, RS Mo. Supp In a given case, the Board must examine the facts to 1980). determine whether a particular acquisition would con­ The Board concludes, based upon the above and stitute illegal branch banking under state law. See other facts of record, that Applicant is a “traditionally Gravois v. Board of Governors, 478 F.2d 546 (8th Cir. recognized bank holding company which, with its own Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

358 Federal Reserve Bulletin □ April 1981 capital, invests in or buys the stock of banks,”5 and percent of the voting shares (less directors’ qualifying that, upon consummation of the proposed acquisition, shares) of the successor by merger to The Sullivan Bank would not be an illegal branch of any of Appli­ County National Bank of Liberty, Liberty, New York cant’s other banking subsidiaries. See also, North (“Bank”). The bank into which Bank is to be merged Hills Bank v. Board of Governors (506 F.2d 623 (8th has no significance except as a means to facilitate the Cir. 1974)) where the court ruled that Mercantile’s acquisition of voting shares of Bank. Accordingly, the acquisition of a newly chartered national bank, in a proposed acquisition of shares of the successor organi­ manner substantially similar to the proposal now be­ zation is treated herein as the proposed acquisition of fore the Board, did not violate Missouri’s antibranch the shares of Bank. banking statutes. Furthermore, it appears that any Notice of the application, affording opportunity for indicia of unitary operations that may be present in interested persons to submit comments and views, has Applicant’s future operations are those that are inher­ been given in accordance with section 3(b) of the Act. ent in the structure of bank holding companies general­ The time for filing comments and views has expired, ly and permissible under Missouri law. Grandview and the Board has considered all comments received, Bank and Trust Company v. Board of Governors (550 including those of the United States Department of F.2d 415 (8th Cir. 1977)). Justice, in light of the factors set forth in section 3(c) of In view of the foregoing discussion and having the Act. considered the facts of record and all the comments of Applicant, the sixteenth largest commercial banking Protestant in light of the statutory factors the Board organization in the State of New York, controls four must consider under section 3(c) of the Act, it is the banks with aggregate deposits of approximately $1.7 Board’s judgment that consummation of the subject billion, representing 1.0 percent of the total deposits proposal would be in the public interest and that the held by commercial banks in the state.1 Acquisition of application to acquire Bank should be approved. Bank (deposits of approximately $85.6 million) would On the basis of the record, the application is ap­ increase Applicant’s share of statewide deposits by 0.1 proved for the reasons summarized above. The trans­ percent and would not alter Applicant’s ranking action shall not be made before the thirtieth calendar among the other commercial banking organizations in day following the effective date of this Order or later New York. Accordingly, consummation of this pro­ than three months after the effective date of this posal would not result in a significant increase in the Order, unless such period is extended for good cause concentration of commercial banking resources in the by the Board, or by the Federal Reserve Bank of St. state. Louis pursuant to delegated authority. Bank, the second largest banking organization in the By order of the Board of Governors, effective Middletown market (the relevant market),2 controls March 11, 1981. approximately 12.4 percent of commercial bank de­ posits in the market. Applicant, through four offices of Voting for this action: Chairman Volcker and Governors its subsidiary, Highland National Bank of Newburgh, Schultz, Wallich, Partee, Teeters, and Gramley. Absent and Newburgh, New York, is the ninth largest banking not voting: Governor Rice. organization in the market, controlling 4.3 percent of market deposits. Consummation of the proposed (Signed) James McAfee, transaction would increase Applicant’s share of mar­ [seal] Assistant Secretary of the Board. ket deposits to 16.7 percent and would cause Appli­ cant to become the second largest banking organiza­ 5. Whitney National Bank in Jefferson Parish v. Bank of New tion in the market. The Department of Justice Orleans & Trust Co., supra, at 303. concludes on the basis of these and other facts of record that consummation of the proposal would have an adverse effect on competition in the Middletown United Bank Corporation of New York, market. The Board would normally consider the elimi­ Albany, New York nation of existing competition through such a combi­ nation of market shares to have a substantially adverse Order Approving Acquisition of Bank effect on competition. However, the Board is of the United Bank Corporation of New York, Albany, New 1. Statewide deposit data are as of June 30, 1980. Market deposit York, a bank holding company within the meaning of data are as of June 30, 1979. the Bank Holding Company Act (the “Act”), has 2. The Middletown banking market includes Sullivan and Orange Counties, New York, except for the Orange County municipalities of applied for the Board’s approval under section 3(a)(3) Newburgh, Newburgh City, Montgomery, New Windsor, Cornwall, of the Act (12 U.S.C. § 1842(a)(3)) to acquire 100 and Highland. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 359 view that the adverse competitive effects of this acqui­ upon the affiliation. In addition, Applicant proposes to sition are mitigated by several factors not considered expand Bank’s business to include increased trust by the Justice Department. activities, accounts receivable processing, automatic Although Bank is the second largest commercial payroll processing, custodial and trusteed Keogh plans banking organization in the market, its market share and credit card issuance. Applicant also intends to and absolute deposit size have declined in recent replace Bank’s headquarters building with an updated years. Moreover, the Middletown market remains one facility. of the least concentrated markets in the state, due in In light of the above, considerations relating to the some measure to the entry into the market of six of the convenience and needs of the community to be served 14 largest banks in the nation. As the Board has noted lend such weight toward approval of the application as previously, the competitive influence of such firms to outweigh any adverse competitive effects associat­ cannot be measured by their market shares alone, ed with this proposal. Based on the foregoing and especially with respect to their ability to serve com­ other considerations reflected in the record on this mercial customers.3 application, it is the Board’s judgment that the subject In evaluating the proposed acquisition’s effects on proposal is in the public interest and that the applica­ competition, the Board has also considered the pres­ tion should be approved. ence of mutual savings banks and savings and loan On the basis of the record, the application is ap­ associations in the market. While the Board continues proved for the reasons summarized above. The pro­ to view commercial banking as the relevant line of posed transaction shall not be made before the thirti­ commerce in determining the competitive effects of a eth calendar day following the effective date of this proposal,4 the Board has stated that it may be appro­ Order, or later than three months after the effective priate in particular cases to take into consideration date of this Order unless such period is extended for direct competition from thrifts in specific areas in good cause by the Board or by the Federal Reserve evaluating various competitive influences.5 In view of Bank of New York pursuant to delegated authority. the absolute size and significant deposit-taking role of By order of the Board of Governors, effective thrifts in the Middletown market, as well as their March 17, 1981. increasing powers, the Board believes that the influ­ ence of thrift institutions further diminishes the ad­ Voting for this action: Chairman Volcker and Governors verse competitive effects of the proposed acquisition. Schultz, Wallich, Partee, Teeters, and Gramley. Absent and Accordingly, the Board concludes that the competitive not voting: Governor Rice. effects of the proposal are not so serious as to warrant denial of the proposal. (Signed) James McAfee, The financial and managerial resources of Applicant [seal] Assistant Secretary of the Board. are considered satisfactory and its future prospects favorable. The financial and managerial resources of Bank are considered generally satisfactory and its Order Under Sections 3 and 4 of Bank Holding future prospects as an affiliate of Applicant are consid­ Company Act ered favorable. Affiliation of Bank with Applicant will strengthen Bank and enable it to market its services Mid-Nebraska Bancshares, Inc., more effectively by providing Bank with access to Ord, Nebraska Applicant’s expertise in specialized lending areas. Applicant has committed to provide Bank’s market Order Approving Formation of a Bank Holding area with at least $2.0 million in new lease financing Company and Acquisition of a Nonbanking Company Mid-Nebraska Bancshares, Inc., Ord, Nebraska 3. The Bank of New York, 66 Federal Reserve Bulletin 807 (1980). (“Applicant”), has applied for the Board’s approval 4. In view of the uncertainty with respect to the extent to which under section 3(a)(1) of the Bank Holding Company thrift institutions in New York will exercise the new powers conferred on them by the Depository Institutions Deregulation and Monetary Act, 12 U.S.C. § 1842(a)(1), to become a bank holding Control Act (P.L. 96-221) and by recent state legislation, the Board company by acquiring 100 percent of the voting shares believes that it is premature to consider thrift institutions as full of Nebraska State Bank, Ord, Nebraska (“Bank”). As competitors of commercial banks until the effects of the newlyconferred powers can be meaningfully ascertained. part of the same proposal, Applicant has also applied 5. United Bank Corporation of New York, 66 Federal Reserve for the Board’s approval under section 4(c)(8) of the Bulletin 61 (1980); Fidelity Union Bancorporation, 66 Federal Reserve Bulletin 576 (1980); The Bank of New York, 66 Federal Act, 12 U.S.C. § 1843(c)(8), and section 225.4(b)(2) of Reserve Bulletin 807 (1980). the Board’s Regulation Y, 12 C.F.R. § 225.4(b)(2), to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

360 Federal Reserve Bulletin □ April 1981 acquire 90 percent of the voting shares of Ord Agency, affirmed in Mid-Nebraska Bancshares v. Board of Inc., Ord, Nebraska (“Agency”), which engages in Governors, 627 F.2d 266 (D.C. Cir. 1980). general insurance agency activities in a community The present application proposes to alleviate the with a population of less than 5,000. This activity has anticompetitive effects of the 1972 acquisition by Ap­ been determined by the Board to be closely related to plicant’s principal by separating control of Applicant banking. 12 C.F.R. § 225.4(a)(9)(iii). and Bank from North Loup Bank.3 Immediately fol­ Notice of the applications, affording opportunity for lowing acquisition of Bank by Applicant, the principal interested persons to submit comments and views, has would dispose of all his interest in Applicant, in part, been given in accordance with sections 3 and 4 of the by sale of controlling interest to his adult son, who has Act. The time for filing comments and views has been president of Bank since 1977 and also is a expired, and the Board has considered the applications director and minority shareholder of North Loup and all comments received in light of the factors set Bank. Further, principal’s son would dispose of his forth in section 3(c) of the Act, 12 U.S.C. § 1842(c), stock interest in North Loup Bank. Also, all interlocks and the considerations specified in section 4(c)(8) of between the two banks would be severed and both the the Act. principal and his son have submitted affidavits stating Applicant is a non-operating corporation with no that neither will seek to control or influence the other’s subsidiaries, organized for the purposes of becoming a banking interests. In addition, Applicant’s principal bank holding company through the acquisition of has agreed, should the Board specifically require, to Bank, which has deposits of $19.6 million.1 Upon order his affairs so that on his or his wife’s death acquisition of Bank, Applicant would control the 107th (whomever is the survivor) none of his interest in largest of 454 Nebraska banks with 0.22 percent of North Loup Bank will pass by will or intestate succes­ deposits in that state. Bank is the second largest of five sion to his son unless he obtains prior Board approval. commercial banks in the Valley County banking mar­ The separation of slock ownership, the severed ket2 controlling 30.7 percent of the market’s deposits. interlocks, the sworn statements by Applicant’s prin­ This is the third time Applicant’s principal has cipal and his son not to control the other’s bank, and sought Board approval to reorganize Bank into a bank evidence that each of them is capable of competent holding company. In 1976, the Board denied the bank management, tend to support the conclusion that application of Nebraska Banco, Inc., to acquire Bank, Bank and North Loup Bank will be operated as primarily because the condition of other banks in a separate entities. These commitments alone, however, chain owned by Applicant’s principal reflected ad­ would not be sufficient to eliminate the anticompeti­ versely on management, and the proposal involved tive effects of the joint ownership; the son of Appli­ excessive acquisition debt. Also, at that time the cant’s principal is his only child and, absent provision Board noted the adverse competitive relationship be­ to the contrary, that son would most likely succeed to tween Bank and North Loup Valley Bank, North ownership of North Loup Bank upon the death of his Loup, Nebraska, (“North Loup Bank”), another bank surviving parent. To preserve the possibility of com­ owned by Applicant’s principal in the Valley County plete and permanent disaffiliation, the Board condi­ market. Nebraska Banco, Inc., 62 Federal Reserve tions approval of this application on the commitment Bulletin 638 (1976). After modifying his interest in of Applicant’s principal to order his affairs so that his other chain banks, Applicant’s principal filed an­ upon his death, all of his interest in North Loup Bank other application to place Bank into a bank holding would be placed in trust with an independent corpo­ company. In 1978, the Board denied that application rate trustee instructed to dispose of the interest in that solely on anticompetitive grounds. The Board found bank within two years of his or his wife’s death (if she that the acquisition of Bank by Applicant’s principal in survives him). In no event may the trustee transfer the 1972 was anticompetitive because he had already shares to the son of Applicant’s principal (or his issue) owned North Loup Bank, and that approval of the without prior Board approval. This condition pre­ application to form a holding company for Bank would serves the possibility that Bank and North Loup Bank amount to Board sanction of the 1972 acquisition and ultimately will be permanently disaffiliated. remove any chance of disaffiliation of the two banks. In addition to Bank and North Loup Bank, the son Mid-Nebraska Bancshares, Inc., 64 Federal Re­ of Applicant’s principal is a principal of two other serve Bulletin 589 (1978). The Board’s Order was bank holding companies. However, all of these other 1. Banking data are as of December 31, 1979, except as otherwise 3. North Loup Bank presently controls 12.9 percent of the commer­ noted. cial bank deposits in the Valley County market. If considered together 2. The Valley County banking market includes all of Valley County Bank and North Loup Bank would control 43.6 percent of such and the town of Scotia in Greely County, Nebraska. deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 361 organizations operate in separate markets. It appears, to make the testamentary plans outlined above. The therefore, that consummation of the proposal with the acquisition of Bank shall not be made before the condition the Board has outlined, will not eliminate thirtieth calendar day following the effective date of competition or increase the concentration of banking this Order or no later than three months after the resources in any relevant area. Accordingly, the Board effective date of this Order, unless such period is concludes that competitive considerations are consis­ extended for good cause by the Board, or by the tent with approval of this application. Federal Reserve Bank of Kansas City pursuant to In addition to analyzing the competitive effects of a delegated authority. The approval of Applicant’s in­ chain of banking organizations operated by principals surance activities is subject to the conditions set forth of an applicant, the Board also considers the entire in section 225.4(c) of Regulation Y and to the Board’s chain of organizations in the context of its multibank authority to require reports by, and make examina­ holding company standards in analyzing the financial tions of, holding companies and their subsidiaries and and managerial and future resources associated with to require such modification or termination of the the one-bank holding company proposal. Based on activities of a bank holding company or any of its such an anlaysis in this case, the financial and manage­ subsidiaries as the Board finds necessary to assure rial resources and future prospects of Applicant, compliance with the provisions and purposes of the Bank, and the other organizations in the chain appear Act and the Board’s regulations and orders issued to be generally satisfactory. Therefore, considerations thereunder, or to prevent evasion thereof. Insurance relating to banking factors are consistent with, but activities are to commence no later than three months lend no weight toward approval of the application. after the effective date of this Order unless such period Although consummation of this proposal would have is extended for good cause by the Board or by the no immediate effect on the banking services offered by Federal Reserve Bank of Kansas City pursuant to Bank, the ultimate disaffiliation of Bank and North delegated authority. Loup Bank is expected to result in providing an By order of the Board of Governors, effective independent source of banking services to the commu­ March 24, 1981. nity. Therefore, it is the Board’s judgment that consid­ erations relating to the convenience and needs of the Voting for this action: Chairman Volcker and Governors community to be served lend some weight toward Partee, Teeters, and Gramley. Voting against this action: approval of this application and that the application to Governor Rice. Governor Schultz voted against the section 3(a)(1) application and abstained from all consideration of the form a bank holding company should be approved. section 4(c)(8) application. Absent and not voting: Governor As part of the subject proposal, Applicant also has Wallich. applied for the Board’s approval to acquire 90 percent of Agency, a corporation presently controlled by the (Signed) James McAfee, Applicant’s principal and his son and that engages in [seal] Assistant Secretary of the Board. general insurance agency activities in a community with a population of less than 5,000. Agency’s acquisi­ Dissenting Statement of Governors Schultz and Rice tion by Applicant merely will constitute a reorganiza­ tion of ownership interests, which will enable Agency The Board determined on two prior occasions that the to continue to serve the residents of Ord. It thus anticompetitive effects arising from common control appears that the proposal is in the public interest. of Bank and North Loup Bank warranted denial of Furthermore, there is no evidence that Applicant’s proposals by Applicant’s principal to reorganize Bank acquisition of Agency would result in undue concen­ into a bank holding company. We believe that the tration of resources, decreased or unfair competition, instant proposal should be denied for the same reason. conflicts of interests, unsound practices, or other Applicant’s principal and his only child have re­ adverse effects on the public interest. structured their share ownership and management Based upon the foregoing and other considerations positions with Bank and North Loup Bank. However, reflected in the record, the Board has determined, in the facts of this case persuade us that the mere accordance with the provisions of § 4(c)(8) of the Act, reorganization proposed here does not overcome the that consummation of this proposal can reasonably be long history of cooperative management of these two expected to produce benefits to the public that out­ banks exercised by Applicant’s principal and his son. weigh possible adverse effects and that the application In fact, Applicant’s principal and his son have man­ to engage in insurance activities should be approved. aged Bank together since January 1977, and principal’s On the basis of the record, the applications are son has been a director and 20 percent owner of North approved for the reasons summarized above, condi­ Loup Bank, which is controlled by Applicant’s princi­ tioned upon the commitment of Applicant’s principal pal. Furthermore, the son’s purchase of Bank’s stock Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

362 Federal Reserve Bulletin □ April 1981 is being financed by a loan from his father on very mined that Applicants are not entitled to permanent favorable terms. Given these factors, we cannot find grandfather privileges because they did not own or that approval of this proposal would cause these two control a subsidiary bank in the United States on June banks to become competitors. Furthermore, we be­ 30, 1968, as required by section 4(a)(2) of the Act (12 lieve that the testamentary plan upon which the U.S.C. § 1843(1)(2)). On the same date, the Board Board’s approval is conditioned requires toleration, approved Applicants’ request pursuant to section for an indeterminate time, of a situation that the Board 4(c)(9) to continue to engage, through Leumi Securi­ in the past has characterized as substantially anticom­ ties, in acting as a broker or dealer in securities issued petitive. by the State of Israel after the expiration of their For these reasons, we dissent from the Board’s temporary grandfather privileges on December 31, Order. 1980.2 The Board refused, however, to permit Leumi Securities to continue to engage in general broker/ March 25, 1981 dealer or underwriter activities with respect to securi­ ties of companies with a significant connection with Israel. Order Issued Under Section 4 of Bank Holding Applicants have now applied, pursuant to section Company Act 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)), for permis­ sion for Leumi Securities to engage in the following JCT Trust Company Limited, activities: (1) executing unsolicited purchases and Tel Aviv, Israel sales of securities as agent solely upon the order and for the account of customers; (2) providing custodial Otzar Hityashvuth Hayehudim B.M., services for such securities; (3) acting as managing Tel Aviv, Israel agent for customers with respect to such securities; and (4) buying and selling gold and silver coin and Bank Leumi Le-Israel B.M., bullion for its own account and for the account of Tel Aviv, Israel others.3 Applicants anticipate that the proposed securities-related activities would involve primarily securi­ Order Approving Request for Exemption of ties of companies located in Israel, or of subsidiaries of Securities-Related Activities from Nonbanking such companies, but Leumi Securities would also Restrictions of the Bank Holding Company Act perform some services with respect to other securities. Those applications under section 4(c)(8) are pending. JCT Trust Company Limited (“JCT”), Otzar Hityash­ At the same time that Applicants submitted their vuth Hayehudim B.M. (“OHH”), and Bank Leumi le- applications pursuant to section 4(c)(8), they also Israel B.M. (“Bank Leumi”) all of Tel Aviv, Israel requested temporary authority, until the Board acts on (collectively referred to as “Applicants”),1 bank hold­ that application, for Leumi Securities to engage in the ing companies within the meaning of the Bank Holding proposed activities pursuant to section 4(c)(9). Appli­ Company Act (the “Act”), have requested the cants assert that unless temporary authority to contin­ Board’s approval under section 4(c)(9) of the Act (12 ue these activities is granted pending action on the U.S.C. § 1843(c)(9)), to engage temporarily through section 4(c)(8) applications, Leumi Securities will in their subsidiary, Leumi Securities Corporation the interim lose its base of established customers and (“Leumi Securities”), New York, New York, in cer­ will be unable, in practical effect, to resume these tain securities-related activities. activities even if those applications are approved. Bank Leumi, a bank organized under the laws of the Section 4(c)(9) of the Act provides that the nonbank­ State of Israel, and the other Applicants became bank ing prohibitions of section 4 shall not apply to the holding companies as a result of the Bank Holding investments or activities of foreign bank holding com­ Company Act Amendments of 1970. They commenced panies that conduct the greater part of their business acting as broker, dealer, and underwriter in securities outside the United States, if the Board by regulation or transactions in the United States through Leumi Secu­ order determines that, under the circumstances and rities in 1962. On December 8, 1980, the Board deter­ 2. Bank Leumi le-Israel B.M., 67 Federal Reserve Bulletin 62 (1981). 3. Applicants have also applied to engage in furnishing, without 1. The only assets of OHH consist of 94 percent of the voting charge, general information and advice about the Israeli economy, shares of Bank Leumi, a bank organized under the laws of Israel. JCT information about particular Israeli companies, and assistance in the is the trustee for a trust controlling 38.9 percent of the voting shares of formation of investment clubs to invest in Israeli companies. The OHH. This trust is also a bank holding company within the meaning of Board regards these as merely promotional activities incidental to the Act and the trust is one of the Applicants. activities (1),(2), and (3), and as such not requiring separate approval. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 363 subject to the conditions set forth in the regulation or exemption are approved.7 This approval is subject to order, the exemption would not be substantially at the conditions that Applicants continue to actively variance with the purposes of the Act and would be in pursue approval of the applications for these activities the public interest. pursuant to section 4(c)(8), and that Applicants cease The Board has refused to exempt general securities to engage in these activities as soon as practicable if activities under section 4(c)(9). It has viewed such the Board denies those applications, but in no case exemption as contrary to the public interest in light of later than six months from the date of such denial. This Congress’ indications, in enacting the Glass-Steagall approval is also subject to considerations set forth in Act, that affiliations of banks and securities companies section 225.4(c) of the Board’s Regulation Y and to the give rise to potential conflicts of interests and unsound Board’s authority to require reports by and make banking practices.4 In determining whether to grant an examinations of bank holding companies and their exemption under section 4(c)(9), the Board has also subsidiaries, and to require such modification or termi­ considered whether such exemption would give the nation of the activities of a bank holding company or foreign institution a competitive advantage over do­ any of its subsidiaries as the Board finds necessary to mestic or other foreign banking organizations.5 These assure compliance with the provisions and purposes of concerns are somewhat mitigated with respect to the the Act and the Board’s Orders and regulations issued proposed brokerage and custodial activities in view of thereunder, or to prevent evasion thereof. the provision of section 16 of the Glass-Steagall Act By order of the Board of Governors, effective (12 U.S.C. § 24 Seventh) that permits member banks March 13, 1981. to engage in purchasing and selling securities “solely upon the order, and for the account of, customers Voting for this action: Chairman Volcker and Governors With respect to the other proposed activities, more­ Schultz, Wallich, Partee, Teeters, and Gramley. Absent and not voting: Governor Rice. over, the Board notes that bank holding companies are permitted to act as managing agent pursuant to section 225.4(a)(5)(iii) of Regulation Y (12 C.F.R. § 225.4 (Signed) James McAfee, (a)(5)(iii», and that the Board has previously deter­ [seal] Assistant Secretary of the Board. mined in one case that buying and selling gold and silver coin and bullion is closely related to banking.6 7. The Board’s action on these applications in no way constitutes Furthermore, the Board notes that Leumi Securities any finding on the pending section 4(c)(8) applications. engaged in the proposed securities activities for 18 years, until December 31, 1980, when Applicants’ tenyear grandfather authority expired. In view of the inconvenience that denial would cause for longstand­ Orders Under Section 2 of Bank Holding ing customers of Leumi Securities, the Board believes Company Act it would be consistent with the public interest and the purposes of the Act to grant the requested temporary Rae C. Heiple, Inc., exemptions. Abingdon, Illinois Based upon the foregoing and other considerations reflected in the record, and based upon the assumption Order Granting Determination Under the Bank that Applicants will continue to qualify as foreign bank Holding Company Act holding companies under section 4(c)(9) and the Board’s regulations, these applications for temporary Rae C. Heiple, Inc., Abingdon, Illinois (“Company”), a registered bank holding company within the meaning of section 2(a) of the Bank Holding Company Act of 4. In addition to the Board’s previous Order regarding Applicants, 1956, as amended (“BHC Act”) (12 U.S.C. § 1841(a)), see also Board Orders approving applications of The Industrial Bank of Japan, Ltd., and The Fuji Bank Ltd., to become bank holding by virtue of its ownership, of more than 25 percent of companies (39 Federal Register 39,503 and 39,504 (1974)). the outstanding voting shares of Abingdon Bank and 5. See Board letter of September 17, 1979, to Banco di Roma, Trust Company, Abingdon, Illinois (“Bank”), has S.p. A; The Bank of Tokyo, Ltd. (Tokyo International (Houston) Inc.), 61 Federal Reserve Bulletin 449 (1975) (denying an application requested a determination, pursuant to the provisions under section 4(c)(9)); Lloyd's Bank Limited, 60 Federal Reserve of section 2(g)(3) of the BHC Act (12 U.S.C. Bulletin 139 (1974) (conditionally approving retention of export § 1841(g)(3)), that Company is not, in fact, capable of credit and marketing corporation). 6. In Standard Chartered Banking Group Limited (Mocatta Metals, controlling Bank, Rae C. Heiple, II (an individual to Inc.), 38 Federal Register 27552 (1973), the Board determined that this whom it transferred its shares of Bank), or Sharon activity was closely related to banking in the circumstances of that case, but declined to add the activity to the list of those generally Heiple, notwithstanding, the fact that Mr. Heiple and permissible for bank holding companies. his wife, Sharon Heiple (referred to jointly as the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

364 Federal Reserve Bulletin □ April 1981 “Heiples”), are officers and directors of both Bank (12 C.F.R. § 265.2(b)(1)), effective March 23, 1981. and Company. Under the provisions of section 2(g)(3) of the BHC (Signed) James McAfee, Act, shares transferred after January 1, 1966, by any [seal] Assistant Secretary of the Board. bank holding company to a transferee that is indebted to the transferor or has one or more officers, directors, trustees, or beneficiaries in common with or subject to Orders Under Section 25(a) Federal Reserve the control of the transferor, are deemed to be indi­ Act rectly owned or controlled by the transferor unless the Board, after opportunity for a hearing, determines that Bankers International Corporation, the transferor is not in fact capable of controlling the New York, New York transferee. No request for a hearing was made by Company. Instead, Company has submitted evidence Order Denying Additional Activity Under Section to the Board to support its contention that it is 25(a) of the Federal Reserve Act incapable of controlling the Heiples either directly or indirectly. The Board has received no contradictory Bankers International Corporation (“BIC”), New evidence. York, New York, has applied for the Board’s consent It is hereby determined that Company is not, in fact, under section 25(a) of the Federal Reserve Act (12 capable of controlling Bank or the Heiples. This U.S.C. § 615(c)) and section 211.5(d) of the Board’s determination is based upon the evidence in the mat­ Regulation K (12 C.F.R. § 211.5(d)) to engage through ter, including the following facts. Company is a small a subsidiary, BT Australia Limited (“BT Australia”), closely-held corporation of which 100 percent of its Sydney, Australia, in the trading of physical commod­ common stock is owned by Mr. Heiple, who along ities futures on the Sydney Futures Exchange with his wife serve as its only officers and directors. (“SFE”), Sydney, Australia. By virtue of section 4(c)(ii) of the BHC Act, Company BIC is a corporation organized under section 25(a) was exempted from divesting either its banking or of the Federal Reserve Act (an “Edge Corporation”) insurance activities—as otherwise required by section and is a wholly-owned subsidiary of Bankers Trust 4(a)(2) of the BHC Act. Nevertheless, Company chose Company (“Bank”), New York, New York. Bank, a to divest its voting shares of Bank before December 31, wholly-owned subsidiary of Bankers Trust New York 1980. In anticipation of such a divestiture, Company Corporation, New York, New York, had assets on sold all of its voting shares of Bank to Mr. Heiple. June 30, 1980, of approximately 30.5 billion dollars. Thus, Company’s interest in Bank has terminated. The BIC’s indirect subsidiary, BT Australia, is an Aus­ Heiples own 73 percent of Bank’s common stock, and tralian merchant bank offering a broad range of serv­ are also directors and officers of Bank, and the divesti­ ices. In early 1979, BT Australia purchased a floor ture does not appear to have been a means for perpetu­ membership on the SFE and currently engages in a ating Company’s control over Bank. Rather, from the brokerage business with respect to financial and gold record it appears that control of both Company and bullion futures.1 BT Australia now seeks to be able to Bank resides with the Heiples as individuals, and there engage in a futures brokerage business with respect to is no evidence that Company controls or is in fact physical commodities, i.e., greasy wool, live cattle capable of controlling the Heiples either as a transfer­ and boneless beef. The proposed activity is not includ­ ee of Bank stock, or otherwise. ed in the list of activities that subsidiaries of Edge Accordingly, it is ordered that the request of Com­ Corporations may perform (section 211.5(d) of Regula­ pany for a determination pursuant to section 2(g)(3) tion K (12 C.F.R. 211.5(d)). be, and hereby is granted. This determination is based Edge Corporations are organized for the purpose of upon the representations made to the Board by Com­ engaging in international or foreign banking or other pany and Mr. Heiple. In the event the Board should international or foreign financial operations. In amend­ hereafter determine that facts material to this determi­ ing its Regulation K in June 1979, the Board included a nation are otherwise than as represented, or that list of activities that it had determined to be “usual in Company or Mr. Heiple has failed to disclose to the Board other materials facts, this determination may be 1. The Board has determined that pursuant to section 4(c)(8) of the Bank Holding Company Act certain bank holding companies may act revoked, and any change in the facts or circumstances as futures commission merchants dealing in precious metals. Republic relied upon in making this determination could result National Bancorporation, 63 Federal Reserve Bulletin 951 in a reconsideration of the determination made herein. (1977). Since Regulation K permits foreign subsidiaries of U.S. banking organizations to engage in activities that the Board has By order of the Board of Governors, acting through determined by regulation or order are closely related to banking under its General Counsel pursuant to delegated authority section 4(c)(8), this activity is permissible to BT Australia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 365 connection with the transaction of the business of indicated that of the 23 members of the Australian banking or other financial operations abroad.” The Merchant Bankers Association, eight are floor mem­ Board’s regulation provides, however, that an Edge bers of the SFE and, presumably, are or will be Corporation that is of the opinion that other activities engaged in commodity as well as financial futures are usual in connection with the transaction of the dealings. BIC also claims that many of its important business of banking or other financial operations customers frequently use commodity and financial abroad and are consistent with the Federal Reserve futures in related transactions. In the view of the Act or the Bank Holding Company Act may apply to Board, evidence that other financial institutions are the Board for such a determination. As in the case of engaged in a specific activity, while probative, is not an application by a bank holding company to engage in determinative of the financial nature of the activity. In a new activity under section 4(c)(8) of the Bank dealing with an activity that is not on its face financial Holding Company Act (12 U.S.C. 1843(c)(8)), the the most important consideration is the nexus between Board may either deny the application or, if it deter­ the proposed activity and other banking or financial mines to approve the application, may do so by issuing activities. In this regard, the Board does not believe an order permitting the specific proposal or by under­ that the fact that the customers of BT Australia may taking to revise its regulation to indicate the general find it convenient to conduct physical commodities permissibility of the activity. futures business with it alters the nonfinancial nature The Board recognizes that in the diverse banking of the activity. and financial systems of the world, local institutions Acting as a dealer in physical commodities futures are often permitted to engage in activities that would entails assuming risks of a type not normally associat­ not be permissible for United States banking organiza­ ed with banking. Experience indicates that at times tions under applicable United States laws and regula­ these risks can be substantial. The activity as de­ tions. In the Edge Act and the Bank Holding Company scribed by BIC would involve the registration of Act, the Board has been granted broad discretionary contracts in the name of BT Australia. BT Australia authority to permit activities abroad that will augment would therefore have ultimate financial responsibility the competitive capabilities of United States banking for these contracts if volatile commodities prices organizations. In the exercise of that authority, how­ caused BT Australia’s clients to be unable to meet ever, the Board has generally adhered to the policy their obligations. In such instances, BT Australia that the foreign activities that it authorizes should be would be in the position of an unsecured creditor of its of a banking or financial, as opposed to commercial, commodities futures customer. BT Australia would nature. In this regard, some activities that have com­ have to absorb any losses, which could be substantial. mercial characteristics may, under the circumstances While BIC has proposed several measures to reduce in which they are performed abroad, be financial in the exposure of BT Australia, the Board does not nature. Thus, in acting on an application to engage in a believe that these adequately mitigate the risks inher­ new activity abroad, the Board examines the context ent in commodities futures brokerage. in which the activity is performed to determine wheth­ Based upon the foregoing and other considerations er the activity is usual in connection with banking or reflected in the record, the Board concludes that the other financial operations. activity of trading in physical commodities futures in The Board also takes into consideration the risks Australia would not be financial in nature and would inherent in the activity, especially whether those risks not be consistent with the purposes of the Federal are of a type and nature normally associated with Reserve Act and therefore the application is denied. banking, and the effect of the activity on the capital By order of the Board of Governors, effective and managerial resources of the United States banking March 25, 1981. organization. Therefore, in addition to determining whether a proposed activity is banking or financial in Voting for this action: Chairman Volcker and Governors nature, the Board assesses whether performance of Schultz, Wallich, Partee, Rice, and Gramley. Absent and not the activity indirectly by a United States banking voting: Governor Teeters. organization is consistent with the supervisory and regulatory aspects of the Federal Reserve Act and the (Signed) James McAfee, Bank Holding Company Act. [seal] Assistant Secretary of the Board. It does not appear that acting as a broker in physical commodities futures as described by BIC is inherently financial. Furthermore, it does not appear that the activity, in the context in which it would be performed by BT Australia, would be financial in nature. BIC has Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

366 Federal Reserve Bulletin □ April 1981 Citibank Overseas Investment Corporation, extensions of credit made by Holdings and its affili­ Wilmington, Delaware ates. In 1976, Citicorp requested that the Board con­ sider Citicorp’s indirect holding of Ajax and Surrey to Order Approving Additional Activity Under Section be permissible, notwithstanding the various types of 25(a) of the Federal Reserve Act insurance coverage provided by the two corporations. In a letter dated March 29, 1977 (the “March 29 Citibank Overseas Investment Corporation (“COIC”), letter”), the Board granted its consent for Citicorp to Wilmington, Delaware, has applied for the Board’s retain its indirect interest in Ajax subject to several consent under section 25(a) of the Federal Reserve Act conditions, including a provision that Ajax “confine a (12 U.S.C. § 615(c)) and section 211.5(d) of the clear majority (51 percent) of its underwriting business Board’s Regulation K (12 C.F.R. § 211.5(d)) to engage to transactions directly related to extensions of credit through an indirect subsidiary, Surrey Insurance Com­ or to dealer financing arrangements made by [Hold­ pany (“Surrey”), Sydney, Australia, in the underwrit­ ings] and its affiliates.” The Board also granted its ing of credit life and credit accident and health insur­ consent for Citicorp to retain its indirect interest in ance in Australia, regardless of whether such Surrey subject to the condition that Surrey confine its insurance is directly related to extensions of credit by activities to the underwriting of credit life, accident COIC and it affiliates. and health insurance and title insurance on chattels COIC is a corporation organized under section 25(a) securing extensions of credit made by Holdings and its of the Federal Reserve Act (an “Edge Corporation”) affiliates. COIC now seeks to have the Board modify and is a wholly-owned subsidiary of Citibank, N.A. the conditions established in the Board’s March 29 (“Bank”), New York, New York. Bank, a wholly- letter, specifically by removing the restriction that at owned subsidiary of Citicorp, New York, New York, least 51 percent of the underwriting of credit life is the second largest commercial bank in the United insurance by Ajax be directly related to extensions of States, having assets on September 30, 1980, of ap­ credit or dealer financing arrangements by the Citicorp proximately $97.2 billion. organization.1 COIC’s Australian subsidiary, Citicorp Australia Edge Corporations are organized for the purpose of Holdings Limited (“Holdings”), which is primarily a engaging in international or foreign banking or other consumer finance company, has two Australian insur­ international or foreign financial operations. In amend­ ance subsidiaries, Surrey and Ajax Insurance Compa­ ing its Regulation K in June 1979, the Board included a ny (“Ajax”), also of Sydney. Ajax engages in the list of activities that it had determined to be “usual in underwriting of motor vehicle comprehensive insur­ connection with the transaction of the business of ance and credit life and credit accident and health banking or other financial operations abroad.” The insurance, while Surrey is currently an inactive com­ Board’s regulation provides, however, that an Edge pany that until recently underwrote title insurance on Corporation that is of the opinion that other activities chattels. are usual in connection with the transaction of the COIC and Citicorp currently hold 100 percent of business of banking or other financial operations Holdings’ shares pursuant to Board consents. When abroad and are consistent with the Federal Reserve the Board granted its consent, it required Holdings to Act or the Bank Holding Company Act may apply to confine its activities to international or foreign banking the Board for such a determination. As in the case of and other international or foreign financial operations. an application by a bank holding company to engage in Accordingly, the Board’s 1975 consent was subject to a new activity under section 4(c)(8) of the Bank the condition that Holdings cease to engage directly, Holding Company Act (12 U.S.C. 1843(c)(8)), the or indirectly through subsidiaries, in certain specified Board may either deny the application or, if it deter­ activities, including underwriting life and casualty mines to approve the application, may do so by issuing insurance, within two years from the time Citicorp acquired majority voting control of Holdings. At that 1. COIC has stated that Surrey has ceased underwriting title time, Ajax was engaged in a general casualty insurance insurance following a change in Australian regulations. Since the Australian Life Insurance Commissioner has requested that the credit underwriting business and Surrey served as an alter life insurance underwriting of Ajax be transferred to a separate legal ego for Ajax while reinsuring some of Ajax’s policies. vehicle not engaging in other insurance activities, COIC proposes that Subsequently, Citicorp restructured the operations of Ajax’s credit life and credit accident health insurance be transferred to Surrey, that Ajax handle the run-off of that insurance already booked, those companies so that Ajax underwrote only credit and that Ajax continue to underwrite motor vehicle insurance in life insurance and motor vehicle comprehensive insur­ conformity with the conditions of the March 29 letter. COIC is thus ance (e.g., auto, fire, theft and physical damage, but seeking the Board’s prior consent, pursuant to the final paragraph of section 12 C.F.R. § 211.5(d), for Surrey to engage in the general not liability insurance) while Surrey underwrote only business of underwriting credit life and credit accident and health title insurance on chattels serving as collateral for insurance in Australia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 367 an order permitting the specific proposal or by under­ underwriting credit related insurance is only permitted taking to revise its regulation to indicate the general when directly related to extensions of credit by the permissibility of the activity. bank holding company system. The Board recognizes that in the diverse banking COIC argues that the underwriting of credit related and financial systems of the world, local institutions insurance is integrally related to the lending process, are often permitted to engage in activities that would regardless of the identity of the lender, and that the not be permissible for United States banking organiza­ restrictions applicable in the United States serve no tions under applicable United States laws and regula­ regulatory purpose when the activity is conducted tions. In the Edge Act and the Bank Holding Company abroad. Moreover, COIC provides evidence of official Act, the Board has been granted broad discretionary concern by local authorities regarding the effect on authority to permit activities abroad that will augment local competition of a limitation on the scope of the competitive capabilities of United States banking Holdings’ credit related insurance activities. COIC organizations. In the exercise of that authority, how­ contends that that concern might result in Holdings’ ever, the Board has generally adhered to the policy inability to continue to furnish credit related insurance that the foreign activities that it authorizes should be in connection with its own lending activities and thus of a banking or financial, as opposed to commercial, lessen its ability to compete in the Australian market. nature. In this regard, some activities that have com­ United States banking organizations, including Citi­ mercial characteristics may, under the circumstances corp, have extensive experience in managing the risks in which they are performed abroad, be financial in associated with underwriting credit related insurance, nature. Thus, in acting on an application to engage in a both in the United States and abroad. Those risks are new activity abroad, the Board examines the context likely to be only marginally different when the insur­ in which the activity is performed to determine wheth­ ance is underwritten in relation to extensions of credit er the activity is usual in connection with banking or by nonaffiliated companies. Moreover, the activity is other financial operations. not likely to have an adverse effect on the capital, The Board also takes into consideration the risks liquidity or managerial resources of COIC or its parent inherent in the activity, especially whether those risks organization. are of a type and nature normally associated with Based on the foregoing and other considerations banking, and the effect of the activity on the capital reflected in the record, the Board concluded that the and managerial resources of the United States banking proposed activity in the circumstances of this case is organization. Therefore, in addition to determining of a banking or financial nature and that its perform­ whether a proposed activity is banking or financial in ance by a subsidiary of COIC would be consistent with nature, the Board assesses whether performance of the purposes of the Federal Reserve Act. Accordingly, the activity indirectly by a United States banking the application is approved.2 The Board’s approval is organization is consistent with the supervisory and subject to the conditions that the lender be the benefi­ regulatory aspects of the Federal Reserve Act and the ciary of the policies underwritten and that the terms of Bank Holding Company Act. the insurance policies shall not exceed the amount or The list of permissible activities in Regulation K tenor of the credit to which the policies are related. includes the underwriting of credit life insurance and By order of the Board of Governors, effective credit accident and health insurance that is related to March 25, 1981. extensions of credit by the Edge Corporation or its affiliates (12 C.F.R. 211.5(d)(5)). The activity of under­ Voting for this action: Chairman Volcker and Governors writing credit insurance with respect to extensions of Schultz, Wallich, Partee, Rice, and Gramley. Absent and not credit by unaffiliated lenders is not on the list. In the voting: Governor Teeters. United States, the underwriting of credit related insur­ ance is generally viewed as a financially related activi­ (Signed) James McAfee, ty. The insurance is directly linked to an extension of [seal] Assistant Secretary of the Board. credit, the purpose of the insurance is to assure repayment of the credit, and the beneficiary is the 2. The Board’s action addresses solely the issue of the permissibil­ lender. Under section 4(c)(8) of the Bank Holding ity of the activity of underwriting credit life and credit accident and health insurance with regard to extensions of credit by unaffiliated Company Act (12 U.S.C. 1843(c)(8)), and section organizations and carries no implications regarding the permissibility 225.4(a)(10) of Regulation Y (12 C.F.R. 225.4(a)(10)), of underwriting other forms of insurance abroad. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

368 Federal Reserve Bulletin □ April 1981 Orders Approving Applications Under the Bank Holding Company Act and Bank Merger Act By the Board of Governors During March 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 International Bancshares, Inc. Lake Air National Bank of Waco, March 24, 1981 Dallas, Texas Waco, Texas G.W.B. Holding Company, N.V., Great Western Bank and Trust, March 26, 1981 Curacao, Netherlands Antilles Phoenix, Arizona G.W.B. Company, B.V., Rotterdam, The Netherlands, GWB Holding Company, Dover, Delaware Metro Bank Corp., Metro National Bank, March 31, 1981 Denver, Colorado Denver, Colorado Riggs National Corporation, Riggs National Bank of Washington, March 6, 1981 Washington, D.C. D.C., Washington, D.C. Southwest Bancshares, Inc., American National Bank of Garland, March 27, 1981 Houston, Texas Garland, 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 ABT Bancshares Corporation Arkansas Bank and Trust St. Louis March 3, 1981 Hot Springs National Park, Company Arkansas Hot Springs National Park, Arkansas Alpine Bancorp, Inc., Valley Bank and Trust, Kansas City February 27, 1981 Glenwood Springs, Colorado Glenwood Springs, Colorado Roaring Fork Bank, Carbondale, Colorado Roaring Fork Bancorporation, Inc., Carbondale, Colorado American Holding Co., Bank of Highland Park, Chicago February 20, 1981 Glencoe, Illinois Highland Park, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 369 Section 3 — Continued Reserve Effective Applicant Bank(s) Bank date Ashton Bancorporation, Inc., The Ashton Bank and Trust Chicago March 9, 1981 Ashton, Illinois Company, Ashton, Illinois Bankstock Two, Inc., Arkansas Valley Bank, St. Louis February 25, 1981 Dardanelle, Arkansas Dardanelle, Arkansas Beardsley Bancshares, Inc., Security State Bank of Beardsley, Minneapolis March 23, 1981 Beardsley, Minnesota Beardsley, Minnesota CBC Bancorp, Inc., Citizens Bank, Atlanta March 19, 1981 Cookeville, Tennessee Cookeville, Tennessee CNB Corp., The City National Bank of Shen­ Chicago March 17, 1981 Shenandoah,Iowa andoah, Shenandoah,Iowa California Pacific Corporation, American National Bank, San Francisco March 27, 1981 Bakersfield, California Bakersfield, California Commercial Security Bancorpora­ Bear River State Bank, San Francisco March 25, 1981 tion, Tremonton, Utah Ogden, Utah Commonwealth Bancshares, Inc., Shelby County Trust Bank, St. Louis March 23, 1981 Shelbyville, Kentucky Shelbyville, Kentucky Consolidated Bancorp, Inc., The First National Bank of Rose­ Dallas February 27,1981 Waco, Texas bud, Rosebud, Texas The First National Bank, Hills­ boro, Texas, Hillsboro, Texas First State Bank of Hewitt, Hewitt, Texas Darrouzett Bancshares, Inc., The First National Bank of Dallas March 4, 1981 Darrouzett, Texas Darrouzett, Darrouzett, Texas Dritter Financial Corporation, Bank of Chicago, Chicago March 18, 1981 Chicago, Illinois Chicago, Illinois Exchange Holding, Inc., Exchange Investors, Inc., Kansas City March 9, 1981 El Dorado, Kansas El Dorado, Kansas First National Bank and Trust Company, El Dorado, Kansas FNB Financial Services, Inc., The First National Bank of Kansas City March 20, 1981 Cambridge, Nebraska Cambridge, Cambridge, Nebraska First Blackwell Bancshares, First National Bank and Trust Kansas City February 20, 1981 Blackwell, Oklahoma Company, Blackwell, Oklahoma First Kansas BancGroup, Inc., The State Bank of Herndon, Kansas City February 19, 1981 Herndon, Kansas Herndon, Kansas First of Searcy, Inc., First Security Bank, St. Louis March 5, 1981 Searcy, Arkansas Searcy, Arkansas First State Corporation, First Bank and Trust Company, Atlanta March 19, 1981 Albany, Georgia Albany, Georgia State Bank of Leesburg, Leesburg, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

370 Federal Reserve Bulletin □ April 1981 Section 3 — Continued Reserve Effective Applicant Bank(s) Bank date First United Bancshares, Inc., McDonald State Bank, Kansas City March 20, 1981 North Platte, Nebraska North Platte, Nebraska Gray Bancorp., The Coleridge National Bank, Kansas City March 13, 1981 Coleridge, Nebraska Coleridge, Nebraska Heritage Financial Corporation, First Heritage National Bank, Atlanta March 3, 1981 Loudon, Tennessee Loudon, Tennessee J & L Bancorporation, Inc., First Security Bank of Glendive, Minneapolis March 24, 1981 Glendive, Montana Glendive, Montana James Madison Limited, Madison National Bank, Richmond March 6, 1981 Washington, D.C. Washington, D.C. Jay hawk Bancshares, Inc., Lawrence Bancshares, Inc., Kansas City February 27, 1981 Kansas City, Kansas Kansas City, Missouri Lawrence Bank & Trust Co., N.A., Lawrence, Kansas LaFarge Bancorp. Inc., LaFarge State Bank, Chicago March 9, 1981 La Farge, Wisconsin La Farge, Wisconsin Mercantile Bancorporation Inc., The First National Bank of St. Louis February 26, 1981 St. Louis, Missouri Monett, Monett, Missouri Osage Bank Services, Inc., Osage Farmer National Bank, Chicago March 24, 1981 Osage, Iowa Osage, Iowa Pacwest Bancorp and Citizens Citizens Bank of Oregon, San Francisco March 27, 1981 Bank Purchase Company, Eugene, Oregon Milwaukie, Oregon Piedmont BankGroup Incorp­ The First National Bank of Richmond March 2, 1981 orated, Ferrum, Martinsville, Virginia Ferrum, Virginia Republic of Texas Corporation, Spring Branch Bank, Dallas March 12, 1981 Dallas, Texas Houston, Texas Society Corporation, The First National Bank at Cleveland March 20, 1981 Cleveland, Ohio Carrollton, Carrollton, Ohio St. Croix Banco, Inc., Bank of Somerset, Minneapolis March 4, 1981 Somerset, Wisconsin Somerset, Wisconsin Texas Commerce Bancshares, Texas Commerce Bank-Quorum, Dallas March 11, 1981 Inc., National Association, Houston, Texas Addison, Texas Valders Bancorporation, Valders State Bank, Chicago February 27, 1981 Valders, Wisconsin Valders, Wisconsin Valley Bancorporation, The First National Bank of Chicago March 16, 1981 Appleton, Wisconsin Ripon, Ripon, Wisconsin Valley Bancorporation, Citizens Bank of Juneau, Chicago February 24, 1981 Appleton, Wisconsin Juneau, Wisconsin Warren Bancorp, Inc., Citizens Bank and Trust Chicago February 24, 1981 Warren, Illinois Company, Warren, Illinois Weatherford Bancshares, Inc., Security State Bank, Kansas City March 6, 1981 Weatherford, Oklahoma Weatherford, Oklahoma Welch Bancshares, Inc., Welch State Bank of Welch, Kansas City February 27, 1981 Welch, Oklahoma Oklahoma, Welch, Oklahoma Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 371 Section 3 — Continued Reserve Effective Applicant Bank(s) Bank date West Gate Banshares, Inc. West Gate Bank, Kansas City March 12, 1981 Omaha, Nebraska Lincoln, Nebraska Sections 3 and 4 Nonbanking Reserve Effective Applicant Bank(s) company Bank date (or activity) Clayton Bancshares, The Clayton Banking to engage in general Atlanta March 20, 1981 Inc., Company insurance and con­ Clayton, Alabama Clayton, Alabama sumer financing ac­ tivities In wood Bancorp. Inwood State Bank, to engage in general Chicago February 26, 1981 Inc., Inwood, Iowa insurance activities In wood, Iowa Peoples Ban Cor­ Peoples National to engage in originat­ San February 26, 1981 poration, Bank of Washing­ ing and servicing Francisco Seattle, Washing­ ton loans secured by ton Seattle, Washington real estate for con­ struction purposes Southwest Bancorp, Southwest Bank, to engage in the activ­ San March 5, 1981 Vista, California Vista, California ities of an industrial Francisco loan company Orders Approved Under Bank Merger Act By the Board of Governors Reserve Effective Applicant Banks Bank date Exchange Bank and Trust Com­ Exchange National Bank of Pinel­ Atlanta March 11, 1981 pany of Florida, las County, Tampa, Florida Clearwater, Florida Exchange National Bank of Pasco County, Holiday, Florida By Federal Reserve Banks Reserve Effective Applicant Banks Bank date Fidelity Union Trust Company, The National Bank of New New York February 26, 1981 Newark, New Jersey Jersey, Piscataway, New Jersey The Harter Bank & Trust The First National Bank at Cleveland March 20, 1981 Company Carrollton, Canton, Ohio Carrollton, Ohio Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

372 Federal Reserve Bulletin □ April 1981 Pending Cases Involving the Board of Governors* *This list of pending cases does not include suits A. G. Becker, Inc. v. Board of Governors, et al., filed against the Federal Reserve Banks in which the Board August 1980, U.S.D.C. for the District of Columbia. of Governors is not named a party. Otero Savings and Loan Association v. Board of Governors, filed August 1980, U.S.D.C. for the First Bank & Trust Company v. Board of Governors, District of Columbia. filed February 1981, U.S.D.C. for the Eastern Dis­ Edwin F. Gordon v. Board of Governors, et al., filed trict of Kentucky. August 1980, U.S.C.A. for the Fifth Circuit. Ellis E. St. Rose & James H. Sibbet v. Board of Martin-Trigona v. Board of Governors, filed July Governors, filed February 1981, U.S.D.C. for the 1980, U.S.C.A. for the District of Columbia. District of Columbia. U.S. League of Savings Associations v. Depository Option Advisory Service, Inc. v. Board of Governors, Institutions Deregulation Committee, et al., filed et al., filed February 1981, U.S.C.A. for the Second June 1980, U.S.D.C. for the District of Columbia. Circuit. 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 Decemer 1980, U.S.D.C. for New California. Jersey. Mercantile Texas Corporation v. Board of Governors, 9 to 5 Organization for Women Office Workers v. filed May 1980, U.S.C.A. for the Fifth Circuit. Board of Governors, filed December 1980, Corbin, Trustee v. United States, filed May 1980, U.S.D.C. for the District of Massachusetts. United States Court of Claims. Securities Industry Association v. Board of Gover­ Louis J. Roussel v. Board of Governors, filed April nors, et al., filed October 1980, U.S.D.C. for the 1980, U.S.D.C. for the District of Columbia. District of Columbia. Ulyssess S. Crockett v. United States, et al., filed Securities Industry Association v. Board of Gover­ April 1980, U.S.D.C. for the Eastern District of nors, et al., filed October 1980, U.S.C.A. for the North Carolina. District of Columbia. County National Bancorporation and TGB Co. v. A. G. Becker, Inc. v. Board of Governors, et al., filed Board of Governors, filed September 1979, October 1980, U.S.D.C. for the District of Colum­ U.S.C.A. for the Eighth Circuit. bia. Gregory v. Board of Governors, filed July 1979, A. G. Becker, Inc. v. Board of Governors, et al., filed U.S.D.C. for the District of Columbia. October 1980, U.S.C.A. for the District of Colum­ Donald W. Riegel, Jr. v. Federal Open Market Com­ bia. mittee, filed July 1979, U.S.D.C. for the District of Independent Insurance Agents of America and Inde­ Columbia. pendent Insurance Agents of Missouri v. Board of Connecticut Bankers Association, et al., v. Board of Governors, filed September 1980, U.S.C.A. for the Governors, filed May 1979, U.S.C.A. for the Dis­ Eighth Circuit. trict of Columbia. Independent Insurance Agents of America and Inde­ Security Bancorp and Security National Bank v. pendent Insurance Agents of Virginia v. Board of Board of Governors, filed March 1978, U.S.C.A. for Governors, filed September 1980, U.S.C.A. for the the Ninth Circuit. Fourth Circuit. Roberts Farms, Inc. v. Comptroller of the Currency, Nebraska Bankers Association, et al. v. Board of et al., filed November 1975, U.S.D.C. for the South­ Governors, et al., filed September 1980, U.S.D.C. ern District of California. for the District of Nebraska. David Merrill, et al. v. Federal Open Market Commit­ Republic of Texas Corporation v. Board of Governors, tee, filed May 1975, U.S.D.C. for the District of filed September 1980, U.S.C.A. for the Fifth Cir­ Columbia. cuit. Consumers Union of the United States, Inc. v. Board of Governors, et al., filed August 1980, U.S.D.C. for the District of Columbia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

373 Directors of Federal Reserve Banks and Branches Following is a list of the directorates of the Federal each group elects one Class A and one Class B Reserve Banks and Branches as presently constituted. director. Class C directors are selected to represent The list shows, in addition to the name of each the public with due but not exclusive consideration to director, the principal business affiliation, the class of the interests of agriculture, commerce, industry, serv­ directorship, and the date when the term expires. Each ices, labor, and consumers, and may not be officers, Federal Reserve Bank has nine directors: three Class directors, employees, or stockholders of any bank. A and three Class B directors, who are elected by the One Class C director is designated by the Board of stockholding member banks, and three Class C direc­ Governors as Chairman of the board of directors and tors, who are appointed by the Board of Governors of Federal Reserve Agent and another is appointed Dep­ the Federal Reserve System. All Federal Reserve uty Chairman. Bank directors are chosen without discrimination on Federal Reserve Branches have either five or seven the basis of race, creed, color, sex, or national origin. directors, of whom a majority are appointed by the Class A directors are representative of the stockhold­ board of directors of the parent Federal Reserve Bank; ing member banks. Class B directors represent the the others are appointed by the Board of Governors of public and are elected with due but not exclusive the Federal Reserve System. One of the directors consideration to the interests of agriculture, com­ appointed by the Board of Governors at each Branch merce, industry, services, labor, and consumers, and is designated annually as Chairman of the board of that may not be officers, directors, or employees of any Branch in such a manner as the Federal Reserve Bank bank. may prescribe. For the purpose of electing Class A and Class B In this list of the directorates, a name followed by directors, the member banks of each Federal Reserve footnote reference 1 (0 is a Chairman of the Bank’s District are classified by the Board of Governors of the board, that by footnote reference 2 (2) is a Deputy Federal Reserve System into three groups, each of Chairman, and that by footnote reference 3 (3) indi­ which consists of banks of similar capitalization, and cates a new appointment. District 1—Boston Term expires Class A Dec. 31 Fred A. White President, Dartmouth National Bank of Hanover, Hanover, N.H. 1981 H. Alan Timm President, Bank of Maine, N.A., Augusta, Maine 1982 Henry S. Woodbridge, Jr.3 Chairman of the Board and Chief Executive Officer, Rhode Island 1983 Hospital Trust National Bank, Providence, R.I. Class B Robert D. Kilpatrick President and Chief Executive Officer, Connecticut General Life 1981 Insurance Company, Hartford, Conn. Carol R. Goldberg Senior Vice President, The Stop & Shop Companies, Inc., Boston, 1982 Mass. Joseph A. Baute3 Chairman and Chief Executive Officer, Markem Corporation, 1983 Keene, N.H. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

374 Federal Reserve Bulletin □ April 1981 Class C Term expires Dec. 31 Robert P. Henderson1 President and Chief Executive Officer, Itek Corporation, Lexington, 1981 Mass. Thomas I. Atkins2 General Counsel, National Association for the Advancement of 1982 Colored People, New York, N.Y. Michael J. Harrington3 Harrington, Keefe, and Schork, Inc., Boston, Mass. 1983 District 2—New York Class A James Whelden President, Ballston Spa National Bank, Ballston Spa, N.Y. 1981 Gordon T. Wallis Chairman of the Board, Irving Trust Company, New York, N.Y. 1982 Peter D. Kiernan3 Chairman and President, United Bank Corporation, Albany, N.Y. 1983 Class B Edward L. Hennessy, Jr. Chairman of the Board, Allied Chemical Corporation, 1981 Morristown, N.J. William S. Cook President, Union Pacific Corporation, New York, N.Y. 1982 John R. Opel3 President and Chief Executive Officer, International Business 1983 Machines Corporation, Armonk, N.Y. Class C Gertrude G. Michelson Senior Vice President, R. H. Macy & Compamy, Inc., 1981 New York, N.Y. Boris Yavitz2 Dean, Graduate School of Business, Columbia University, 1982 New York, N.Y. Robert H. Knight1 Partner, Shearman and Sterling, Attorneys, New York, N.Y. 1983 —Buffalo Branch Appointed by Federal Reserve Bank Robert J. Donough President, Liberty National Bank and Trust Company, 1981 Buffalo, N.Y. M. Jane Dickman Partner, Touche Ross & Co., Buffalo, N.Y. 1982 Arthur M. Richardson President and Chief Executive Officer, Security Trust Company, 1982 Rochester, N.Y. Carl F. Ulmer3 President, The Evans National Bank of Angola, Angola, N.Y. 1983 Appointed by Board of Governors George L. Wessel President, Buffalo AFL-CIO Council, Buffalo, N.Y. 1981 Frederick D. Berkeley, III Chairman of the Board and President, Graham Manufacturing 1982 Company, Inc., Batavia, N.Y. John R. Burwell President, Rollins Container Corporation, Rochester, N.Y. 1983 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 375 District 3—Philadelphia Term expires Dec. 31 Class A Robert H. Deacon President, The Bank of Mid-Jersey, Bordentown, N.J. 1981 Donald J. Seebold President, The First National Bank of Danville, Danville, Pa. 1982 Roger S. Hillas3 Chairman and President, Provident National Bank, 1983 Philadelphia, Pa. Class B Richard P. Hauser Chairman and Chief Executive Officer, John Wanamaker, 1981 Philadelphia, Pa. Eberhard Faber Chairman of the Board and Chief Executive Officer, Eberhard 1982 Faber, Inc., Wilkes-Barre, Pa. Harry A. Jensen President and Chief Executive Officer, Armstrong World Industries, 1983 Inc., Lancaster, Pa. Class C John W. Eckman1 Chairman and Chief Executive Officer, Rorer Group Inc., 1981 Fort Washington, Pa. Jean A. Crockett2 Chairman, Department of Finance, Wharton School, University of 1982 Pennsylvania, Philadelphia, Pa. Robert M. Landis3 Partner, Dechert Price & Rhoads, Philadelphia, Pa. 1983 D istrict 4—Cleveland Class A Everett L. Maffett President and Chief Executive Officer, Eaton National Bank & 1981 Trust Co., Eaton, Ohio John W. Alford Chairman of the Board and Chief Executive Officer, The Park 1982 National Bank, Newark, Ohio J. David Barnes3 Chairman and Chief Executive Officer, Mellon Bank, N.A., 1983 Pittsburgh, Pa. Class B Jeffery A. Robb Managing Partner, Proctor, Robb and Company, Granville, Ohio 1981 John W. Kessler President, John W. Kessler Company, Columbus, Ohio 1982 E. M. de Windt3 Chairman of the Board, Eaton Corporation, Cleveland, Ohio 1983 Class C J. L. Jackson1 President—Coal Unit and Executive Vice President, Diamond 1981 Shamrock Corporation, Lexington, Ky. John D. Anderson3 Senior Partner, The Andersons, Maumee, Ohio 1982 William H. Knoell2’ 3 President and Chief Executive Officer, Cyclops Corporation, 1983 Pittsburgh, Pa. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

376 Federal Reserve Bulletin □ April 1981 —Cincinnati Branch Term expires Appointed by Federal Reserve Bank Dec. 31 Lawrence C. Hawkins Senior Vice President, University of Cincinnati, Cincinnati, Ohio 1981 Elden Houts President, The Citizens Commercial Bank and Trust Company, 1981 Celina, Ohio Oliver W. Birckhead Chairman of the Board and Chief Executive Officer, The Central 1982 Trust Company, N.A., Cincinnati, Ohio O. T. Dorton3 President, Citizens National Bank, Paintsville, Ky. 1983 Appointed by Board of Governors Martin B. Friedman Director, Formica Corporation, Cincinnati, Ohio 1981 Sister Grace Marie Hiltz President, Sisters of Charity Health Care Systems, Inc., Cincinnati, 1982 Ohio Vacancy 1983 —Pittsburgh Branch Appointed by Federal Reserve Bank Thomas V. Mansell President and Chief Executive Officer, First National Bank of 1981 Western Pennsylvania, New Castle, Pa. R. Burt Gookin Director, H. J. Heinz Co., Pittsburgh, Pa. 1981 William D. McKain President, Wheeling National Bank, Wheeling, W. Va. 1982 Ernest L. Lake3 President, The National Bank of North East, North East, Pa. 1983 Appointed by Board of Governors Vacancy 1981 Robert S. Kaplan Dean, Graduate School of Industrial Administration, Carnegie- 1982 Mellon University, Pittsburgh, Pa. Milton G. Hulme, Jr. President and Chief Executive Officer, Mine Safety Appliances 1983 Company, Pittsburgh, Pa. D istrict 5—Richmond Class A Vincent C. Burke, Jr. Chairman of the Board and Chief Executive Officer, The Riggs 1981 National Bank, Washington, D.C. William M. Dickson President & Senior Trust Officer, First National Bank in 1982 Ronceverte, Ronceverte, W. Va. J. Banks Scarborough3 Chairman and President, Pee Dee State Bank, Timmonsville, S.C. 1983 Class B Paul G. Miller Chairman of the Board and Chief Executive Officer, Commercial 1981 Credit Company, Baltimore, Md. James A. Chapman, Jr. Chairman of the Board and Chief Executive Officer, Inman Mills, 1982 Inman, S.C. Leon A. Dunn, Jr.3 Chairman, President and Chief Executive Officer, Guardian 1983 Corporation and Subsidiaries, Rocky Mount, N.C. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 377 Class C Term expires Dec. 31 Maceo A. Sloan1 Executive Vice President and Chief Operating Officer, North 1981 Carolina Mutual Life Insurance Company, Durham, N.C. Paul E. Reichardt Chairman of the Board and Chief Executive Officer, Washington 1982 Gas Light Company, Washington, D.C. Steven Muller2 President, The Johns Hopkins University, Baltimore, Md. 1983 —Baltimore Branch Appointed by Federal Reserve Bank Pearl C. Brackett Assistant/Deputy Manager, Baltimore Regional Chapter of 1981 American Red Cross, Baltimore, Md. Hugh D. Shires President and Chief Executive Officer, The First National Bank and 1982 Trust Company of Western Maryland, Cumberland, Md. A. R. Reppert President, The Union National Bank of Clarksburg, Clarksburg, 1982 W. Va. Joseph M. Gough, Jr. President, The First National Bank of St. Mary’s, Leonardtown, 1983 Md. Appointed by Board of Governors Joseph H. McLain President, Washington College, Chestertown, Md. 1981 Edward H. Co veil Vice President, Country Pride Foods Limited, General Manager, 1982 Delmarva Division, Easton, Md. Robert L. Tate3 Chairman, Tate Industries, Baltimore, Md. 1983 —Charlotte Branch Appointed by Federal Reserve Bank Hugh M. Chapman Chairman of the Board, The Citizens & Southern National Bank of 1981 South Carolina, Columbia, S.C. J. B. Aiken, Jr.3 Chairman of the Board, Guaranty Bank and Trust Company, 1982 Florence, S.C. W. B. Apple, Jr. President, First National Bank of Reidsville, Reidsville, N.C. 1982 Nicholas W. Mitchell3 President and Director, Piedmont Federal Savings and Loan 1983 Association, Winston-Salem N.C. Appointed by Board of Governors Henry Ponder Office of the President, Benedict College, Columbia, S.C. 1981 Naomi G. Albanese Dean, School of Home Economics, University of North Carolina at 1982 Greensboro, Greensboro, N.C. William S. Lee III3 President and Chief Operating Officer, Duke Power Company, 1983 Charlotte, N.C. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

378 Federal Reserve Bulletin □ April 1981 District 6—Atlanta Term expires Class A Dec. 31 Guy W. Botts Chairman of the Board, Barnett Banks of Florida, Inc., 1981 Jacksonville, Fla. Dan B. Andrews President, First National Bank of Dickson, Dickson, Tenn. 1982 Hugh M. Willson President, Citizens National Bank, Athens, Tenn. 1983 Class B Floyd W. Lewis Chairman of the Board and Chief Executive Officer, Middle South 1981 Utilities, Inc., New Orleans, La. Jean McArthur Davis President, McArthur Dairy, Inc., Miami, Fla. 1982 Harold B. Blach, Jr.3 President, Blach’s Inc., Birmingham, Ala. 1983 Class C Fred Adams, Jr. President, Cal-Maine Foods, Inc., Jackson, Miss. 1981 John H. Weitnauer, Jr.2 Chairman and Chief Executive Officer, Richway, Atlanta, Ga. 1982 William A. Fickling, Jr.1 Chairman and Chief Executive Officer, Charter Medical 1983 Corporation, Macon, Ga. —Birmingham Branch Appointed by Federal Reserve Bank Guy H. CafFey, Jr. Chairman and Chief Executive Officer, Southern Bancorporation of 1981 Alabama and Birmingham Trust National Bank, Birmingham, Ala. C. Gordon Jones President and Chief Executive Officer, First National Bank of 1982 Decatur, Decatur, Ala. Martha A. Mclnnis Executive Vice President, Alabama Environmental Quality 1982 Association, Montgomery, Ala. Henry A. Leslie3 President and Chief Executive Officer, Union Bank & Trust Co., 1983 Montgomery, Ala. Appointed by Board of Governors Louis J. Willie Executive Vice President, Booker T. Washington Insurance Co., 1981 Birmingham, Ala. William H. Martin, III President and Chief Executive Officer, Martin Industries, Inc., 1982 Florence, Ala. Samuel R. Hill, Jr.3 President, University of Alabama in Birmingham, Birmingham, Ala. 1983 —Jacksonville Branch Appointed by Federal Reserve Bank Robert E. Warfield, Jr. Chairman and President, Barnett Bank of Eustis, N.A., Eustis, Fla. 1981 Whitfield M. Palmer, Jr. Chairman, Florida Crushed Stone Company, Ocala, Fla. 1982 Billy J. Walker President, Atlantic Bancorporation, Jacksonville, Fla. 1982 Gordon W. Campbell3 President and Chief Executive Officer, Exchange Bancorporation, 1983 Inc., Tampa, Fla. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 379 Appointed by Board of Governors Term expires Dec. 31 Jerome P. Keuper President, Florida Institute of Technology, Melbourne, Fla. 1981 Copeland D. Newbern Chairman of the Board, Newbern Groves, Inc., Tampa, Fla. 1982 Joan W. Stein Partner, Regency Square Shopping Center, Jacksonville, Fla. 1983 —Miami Branch Appointed by Federal Reserve Bank Jane C. Cousins President, Cousins Associates, Inc., Miami, Fla. 1981 Alfred W. RoepstorfiF President, National Bank of Collier County, Marco Island, Fla. 1981 M. G. Sanchez President and Chief Executive Officer, First Bankers Corporation of 1982 Florida, Pompano Beach, Fla. Daniel S. Goodrum3 President and Chief Executive Officer, Century Banks, Inc., 1983 Ft. Lauderdale, Fla. Appointed by Board of Governors Roy W. Vandegrift, Jr. President, Vandegrift-Williams Farms, Inc., Pahokee, Fla. 1981 David H. Rush President, ACR Electronics, Inc., Hollywood, Fla. 1982 Eugene E. Cohen3 Treasurer and Chief Financial Officer, Howard Hughes Medical 1983 Institute, Coconut Grove, Fla. —Nashville Branch Appointed by Federal Reserve Bank Ruth W. Ellis President, Mountain Empire Bank, Johnson City, Tenn. 1981 Charles J. Kane Chairman and Chief Executive Officer, Third National Bank in 1982 Nashville, Nashville, Tenn. John R. King President, The Mason and Dixon Lines, Inc., Kingsport, Tenn. 1982 James F. Smith, Jr.3 Chairman and Chief Executive Officer, Park National Bank, 1983 Knoxville, Tenn. Appointed by Board of Governors John C. Bolinger, Jr. Management Consultant, Knoxville, Tenn. 1981 Cecelia Adkins Executive Director, Sunday School Publishing Board, Nashville, 1982 Tenn. Robert C. H. Mathews Jr. President, R. C. Mathews Contractor, Inc., Nashville, Tenn. 1983 —New Orleans Branch Appointed by Federal Reserve Bank Robert H. Bolton President, Rapides Bank and Trust Company in Alexandria, 1981 Alexandria, La. Patrick A. Delaney President, Whitney National Bank of New Orleans, 1982 New Orleans, La. Ben M. Radcliff President, Ben M. Radcliff Contractor, Inc., Mobile, Ala. 1982 Paul W. McMullan3 Chairman and Chief Executive Officer, First Mississippi National 1983 Bank, Hattiesburg, Miss. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

380 Federal Reserve Bulletin □ April 1981 Appointed by Board of Governors Term expires Dec. 31 Horatio C. Thompson President, Horatio Thompson Investment, Inc., Baton Rouge, La. 1981 Levere C. Montgomery Chairman, Time Saver Stores, Inc., New Orleans, La. 1982 Leslie B. Lampton3 President, Ergon, Inc., Jackson, Miss. 1983 District 7—Chicago Class A Roger E. Anderson Chairman of the Board, Continental Illinois National Bank and 1981 Trust Company of Chicago, Chicago, 111. Patrick E. McNarny President, First National Bank of Logansport, Logansport, Ind. 1982 Ollie Jay Tomson3 President, The Citizens National Bank of Charles City, 1983 Charles City, la. Class B Dennis W. Hunt President, Hunt Truck Lines, Inc., Rockwell City, la. 1981 Mary Garst Manager of Cattle Division, Garst Company. Coon Rapids, la. 1982 Leon T. Kendall3 President, Mortgage Guaranty Insurance Corp., Milwaukee, Wis. 1983 Class C Edward F. Brabec Business Manager, Chicago Journeymen Plumbers, Local Union 1981 130, U.A., Chicago, 111. Stanton R. Cook2 President, Tribune Company, Chicago, 111. 1982 John Sagan1 Vice President-Treasurer, Ford Motor Company, Dearborn, Mich. 1983 —Detroit Branch Appointed by Federal Reserve Bank Thomas Ricketts3 Chairman, President and Managing Officer, Standard Federal 1981 Savings and Loan of Troy, Troy, Mich. James H. Duncan Chairman and Chief Executive Officer, First American Bank 1981 Corporation, Kalamazoo, Mich. Dean E. Richardson Chairman, Manufacturers National Bank of Detroit, Detroit, Mich. 1982 Lawrence A. Johns President, Isabella Bank and Trust, Mount Pleasant, Mich. 1983 Appointed by Board of Governors Herbert H. Dow Director and Secretary, The Dow Chemical Company, Midland, 1981 Mich. Russell G. Mawby President and Trustee, W. K. Kellogg Foundation, Battle Creek, 1982 Mich. Karl D. Gregory3 Professor of Economics and Management, Oakland University, 1983 Rochester, Mich. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 381 D istrict 8—St. Louis Term expires Class A Dec. 31 George M. Ryrie President, First National Bank & Trust Co., Alton, 111. 1981 Donald L. Hunt President, First National Bank of Marissa, Marissa, 111. 1982 Clarence C. Barksdale3 Chairman and Chief Executive Officer, First National Bank in 1983 St. Louis, St. Louis, Mo. Class B Tom K. Smith, Jr. St. Louis, Mo. 1981 Mary P. Holt President, Clothes Horse, Little Rock, Ark. 1982 Frank A. Jones, Jr.3 President, Dietz Forge Company, Memphis, Tenn. 1983 Class C William B. Walton2 Vice Chairman of the Board Emeritus, Holiday Inns, Inc., 1981 Memphis, Tenn. Armand C. Stalnaker1 Chairman of the Board, General American Life Insurance Co., 1982 St. Louis, Mo. William H. Stroube Department of Agriculture, Western Kentucky University, 1983 Bowling Green, Ky. —L ittle Rock Branch Appointed by Federal Reserve Bank Gordon E. Parker President and Chief Executive Officer, The First National Bank of 1981 El Dorado, El Dorado, Ark. Shirley J. Pine Speech Communication, University of Arkansas at Little Rock, 1981 Little Rock, Ark. William H. Bowen President and Chief Executive Officer, The Commercial National 1982 Bank of Little Rock, Little Rock, Ark. William H. Kennedy, Jr.3 Chairman of the Board, National Bank of Commerce of Pine Bluff, 1983 Pine Bluff, Ark. Appointed by Board of Governors G. Larry Kelley President, Pickens-Bond Construction Co., Little Rock, Ark. 1981 E. Ray Kemp, Jr. Vice Chairman of the Board and Chief Administrative Officer, 1982 Dillard Department Stores, Inc., Little Rock, Ark. Richard V. Warner3 Group Vice President, Wood Products Group, Potlatch 1983 Corporation, Warren, Ark. —Louisville Branch Appointed by Federal Reserve Bank Fred B. Oney President, The First National Bank of Carrollton, Carrollton, Ky. 1981 William C. Ballard, Jr. Executive Vice President—Finance and Administration, Humana, 1981 Inc., Louisville, Ky. Howard Brenner Vice Chairman of the Board, Tell City National Bank, Tell City, 1982 Ind. Frank B. Hower, Jr.3 Chairman and Chief Executive Officer, Liberty National Bank and 1983 Trust Company, Louisville, Ky. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

382 Federal Reserve Bulletin □ April 1981 Appointed by Board of Governors Term expires Dec. 31 Sister Eileen M. Egan President, Spalding College, Louisville, Ky. 1981 James F. Thompson Professor of Economics, Murray State University, Murray, Ky. 1982 Richard O. Donegan Senior Vice President and Group Executive, General Electric 1983 Company, Louisville, Ky. —Memphis Branch Appointed by Federal Reserve Bank Stallings Lipford President, First-Citizens National Bank of Dyersburg, Dyersburg, 1981 Tenn. Bruce E. Campbell, Jr. Chairman of the Board and President, National Bank of Commerce, 1981 Memphis, Tenn. Earl L. McCarroll President, The Farmers Bank & Trust Co., Blytheville, Ark. 1982 Wayne W. Pyeatt3 Independent Investor, Memphis, Tenn. 1983 Appointed by Board of Governors Benjamin P. Pierce President, Tyrone Hydraulics, Inc., Corinth, Miss. 1981 Patricia W. Shaw Senior Vice President and Assistant Secretary, Universal Life 1982 Insurance Company, Memphis, Tenn. Donald B. Weis3 President, Tamak Transportation Corp., West Memphis, Ark. 1983 District 9—Minneapolis Class A Zane G. Murfitt President, Flint Creek Valley Bank, Philipsburg, Mont. 1981 Henry N. Ness Senior Vice President, The Fargo National Bank, Fargo, N.D. 1982 Vern A. Marquardt3 President, Commercial National Bank of L’Anse, L’Anse, Mich. 1983 Class B Russell G. Cleary Chairman and President, G. Heileman Brewing Company, 1981 LaCrosse, Wis. Joe F. Kirby Chairman, Western Surety Company, Sioux Falls, S.D. 1982 Harold F. Zigmund3 President and Chief Executive Officer, Blandin Paper Company, 1983 Grand Rapids, Minn. Class C William G. Phillips2 Chairman and Chief Executive Officer, International Multifoods, 1981 Minneapolis, Minn. Sister Generose Gervais Administrator, St. Mary’s Hospital, Rochester, Minn. 1982 Stephen F. Keating1 Minneapolis, Minn. 1983 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 383 —Helena Branch Term expires Appointed by Federal Reserve Bank Dec. 31 Lynn D. Grobel President, First National Bank of Glasgow, Glasgow, Mont. 1981 Jase O. Norsworthy President, The N.R.G. Company, Billings, Mont. 1982 Harry W. Newlon President, First National Bank, Bozeman, Mont. 1982 Appointed by Board of Governors Norris E. Hanford Fort Benton, Mont. 1981 Ernest B. Corrick3 Vice President and General Manager, Champion International 1982 Corporation, Timberlands-Rocky Mountain Operation, Missoula, Mo. District 10—Kansas City Class A John D. Woods Chairman and Chief Executive Officer, The Omaha National Bank, 1981 Omaha, Nebr. Howard K. Loomis President, The Peoples Bank, Pratt, Kans. 1982 Wayne D. Angell President, Council Grove National Bank, Ottawa, Kans. 1983 Class B Alan R. Sleeper Alden, Kans. 1981 Charles C. Gates President and Chairman of the Board, Gates Rubber Company, 1982 Denver, Colo. James G. Harlow, Jr. President and Chief Executive Officer, Oklahoma Gas and Electric 1983 Co., Oklahoma City, Okla. Class C Doris M. Drury2 Professor of Economics, University of Denver, Englewood, Colo. 1981 Paul H. Henson1 Chairman, United Telecommunications, Inc., Kansas City, Mo. 1982 John F. Anderson3 President and Chief Executive Officer, Farmland Industries, Inc., 1983 Kansas City, Mo. —Denver Branch Appointed by Federal Reserve Bank Kenneth C. Naramore President, Stockmen’s Bank & Trust Company, Gillette, Wyo. 1981 Delano E. Scott President and Chairman, The Routt County National Bank of 1982 Steamboat Springs, Steamboat Springs, Colo. George S. Jenks3 Chairman and Chief Executive Officer, Albuquerque National 1982 Bank, Albuquerque, N.M. Appointed by Board of Governors Caleb B. Hurtt President and Corporate Vice President, Martin Marietta Aerospace 1981 Corporation, Denver, Colo. Alvin F. Grospiron Denver, Colo. 1982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

384 Federal Reserve Bulletin □ April 1981 —Oklahoma City Branch Term expires Appointed by Federal Reserve Bank Dec. 31 J. A. Maurer Chairman, Security National Bank & Trust Co., Duncan, Okla. 1981 Marcus R. Tower3 Vice Chairman of the Board, Chairman of the Credit Policy 1982 Committee, Bank of Oklahoma, Tulsa, Okla. W. L. Stephenson, Jr. Chairman and Chief Executive Officer, Central National Bank and 1982 Trust Company, Enid, Okla. Appointed by Board of Governors Christine H. Anthony Oklahoma City, Okla. 1981 Samuel R. Noble Chairman of the Board, Noble Affiliates, Inc., Ardmore, Okla. 1982 —Omaha Branch Appointed by Federal Reserve Bank W. W. Cook, Jr. President, Beatrice National Bank and Trust Company, Beatrice, 1981 Nebr. Joe J. Huckfeldt President, Gering National Bank and Trust Company, 1981 Gering, Nebr. Donald J. Murphy3 Chairman and Chief Executive Officer, United States National Bank 1982 of Omaha, Omaha, Nebr. Appointed by Board of Governors Gretchen S. Pullen Chairman of the Board, Swanson Enterprises, Inc., Omaha, Nebr. 1981 Robert G. Lueder President, Lueder Construction Company, Omaha, Nebr. 1982 District 11—Dallas Class A Lewis H. Bond Chairman of the Board and Chief Executive Officer, Texas 1981 American Bancshares Inc., Ft. Worth, Tex. John P. Gilliam President and Chief Executive Officer, First National Bank in 1982 Valley Mills, Valley Mills, Tex. Miles D. Wilson3 Chairman of the Board and President, The First National Bank of 1983 Bell ville, Bell ville, Tex. Class B J. Wayland Bennett Texas Tech University, Lubbock, Tex. 1981 Robert D. Rogers President, Texas Industries, Inc., Dallas, Tex. 1982 Kent Gilbreath Professor of Economics, Department of Economics and Finance, 1983 Baylor University, Waco, Tex. Class C Gerald D. Hines1 Owner, Gerald D. Hines Interests, Houston, Tex. 1981 Margaret S. Wilson Chairman of the Board and Chief Executive Officer, Scarbroughs 1982 Stores, Austin, Tex. John V. James2,3 Chairman of the Board, Dresser Industries, Inc., Dallas, Tex. 1983 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 385 —El Paso Branch Term expires Appointed by Federal Reserve Bank Dec. 31 Arnold B. Peinado, Jr. Executive Vice President, AVC Development Corporation, El Paso, 1981 Tex. Ernest M. Schur Chairman of the Executive Committee, The First National Bank of 1981 Odessa, Odessa, Tex. Arthur L. Gonzales Chairman of the Board and Chief Executive Officer, First City 1982 National Bank of El Paso, El Paso, Tex. Claude E. Leyendecker President, Mimbres Valley Bank, Deming, N. Mex. 1983 Appointed by Board of Governors Josefina A. Salas-Porras Executive Director, BI Language Services, El Paso, Tex. 1981 A. J. Losee Shareholder, Losee, Carson, & Dickerson, Professional 1982 Association, Artesia, N. Mex. Chester J. Kesey C. J. Kesey Enterprises, Pecos, Tex. 1983 —Houston Branch Appointed by Federal Reserve Bank John T. Cater President, Bank of the Southwest National Association, Houston, 1981 Tex. Ralph E. David President, First Freeport National Bank, Freeport, Tex. 1981 Will E. Wilson President and Chief Executive Officer, First Security Bank of 1983 Beaumont, N.A., Beaumont, Tex. Raymond L. Britton Labor Arbitrator & Professor of Law, University of Houston, 1983 Houston, Tex. Appointed by Board of Governors George V. Smith, Sr. President, Smith Pipe & Supply, Inc., Houston, Tex. 1981 Jerome L. Howard Chairman of the Board and Chief Executive Officer, Mortgage & 1982 Trust, Inc., Houston, Tex. Paul N. Howell3 Chairman and President, Howell Corporation, Houston, Tex. 1983 —San Antonio Branch Appointed by Federal Reserve Bank John H. Holcomb Owner-Manager, Progreso Haciendas Company, Progreso, Tex. 1981 Charles E. Cheever, Jr. President, Broadway National Bank, San Antonio, Tex. 1981 George Brannies Chairman of the Board and President, The Mason National Bank, 1982 Mason, Tex. John H. Garner President and Chief Executive Officer, Corpus Christi National 1983 Bank, Corpus Christi, Tex. Appointed by Board of Governors Carlos A. Zuniga Zuniga Freight Services, Inc., Laredo, Tex. 1981 Pat Legan Owner, Legan Properties, San Antonio, Tex. 1982 Lawrence L. Crum Professor of Banking and Finance, The University of Texas at 1983 Austin, Austin, Tex. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

386 Federal Reserve Bulletin □ April 1981 District 12—San Francisco Term expires Class A Dec. 31 Robert A. Young Chairman and President, Northwest National Bank, Vancouver, 1981 Wash. Frederick G. Larkin, Jr. Chairman of the Executive Committee, Security Pacific National 1982 Bank, Los Angeles, Calif. Ole R. Mettler President and Chairman, Farmers & Merchants Bank of Central 1983 California, Lodi, Calif. Class B Malcolm T. Stamper President, The Boeing Company, Seattle, Wash. 1981 Clair L. Peck, Jnr. Chairman of the Board, C. L. Peck Contractor, Los Angeles, Calif. 1982 J. R. Vaughan Senior Member, Richards, Watson, Dreyfuss & Gershon, 1983 Los Angeles, Calif. Class C Alan C. Furth President, Southern Pacific Company, San Francisco, Calif. 1981 Caroline L. Ahmanson2 Chairman of the Board, Caroline Leonetti, Ltd., Beverly Hills, 1982 Calif. Cornell C. Maier1 Chairman, President and Chief Executive Officer, Kaiser Aluminum 1983 & Chemical Corp., Oakland, Calif. —Los Angeles Branch Appointed by Federal Reserve Bank Harvey J. Mitchell President, First National Bank of San Diego County, Escondido, 1981 Calif. Bram Goldsmith Chairman of the Board, City National Bank, Beverly Hills, Calif. 1982 Fred W. Andrew President and Chief Operating Officer, Superior Farming Company, 1982 Bakersfield, Calif. James D. McMahon President, Santa Clarita National Bank, Valencia, Calif. 1983 Appointed by Board of Governors Harvey A. Proctor Chairman of the Board, Southern California Gas Company, 1981 Los Angeles, Calif. Togo W. Tanaka President, Gramercy Enterprises, Los Angeles, Calif. 1982 Lola M. McAlpin-Grant Assistant Dean, Loyola Law School, Los Angeles, Calif. 1983 —Portland Branch Appointed by Federal Reserve Bank Jack W. Gustavel President and Chief Executive Officer, First National Bank of North 1981 Idaho, Coeur d’Alene, Idaho Robert F. Wallace Chairman of the Board and President, First National Bank of 1981 Oregon, Portland, Oreg. Merle G. Bryan President, Forest Grove National Bank, Forest Grove, Oreg. 1982 William S. Naito3 Vice President, Norcrest China Company, Portland, Oreg. 1983 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 387 Appointed by Board of Governors Term expires Dec. 31 Jean Mater Vice President, Mater Engineering, Ltd., Corvallis, Oreg. 1981 Phillip W. Schneider Former Northwest Regional Executive, National Wildlife 1982 Federation, Portland, Oreg. John C. Hampton3 Chairman and President, Willamina Lumber Company, Portland, 1983 Oreg. —Salt Lake City Branch Appointed by Federal Reserve Bank Spencer F. Eccles President and Chief Operating Officer, First Security Corporation, 1981 Salt Lake City, Utah David P. Gardner President, University of Utah, Salt Lake City, Utah 1981 Fred H. Stringham President, Valley Bank and Trust Company, South Salt Lake, Utah 1982 Albert C. Gianoli3 President and Chairman of the Board, First National Bank of Ely, 1983 Ely, Nev. Appointed by Board of Governors Wendell J. Ashton Publisher, Deseret News, Salt Lake City, Utah 1981 Robert A. Erkins Geothermal Agri/Aquaculturist, White Arrow Ranch, Bliss, Idaho 1982 J. L. Terteling President, The Terteling Company, Inc., Boise, Idaho 1983 —Seattle Branch Appointed by Federal Reserve Bank Douglas S. Gamble President and Chief Executive Officer, Pacific Gamble Robinson 1981 Co., Seattle, Wash. C. M. Berry President, Seattle-First National Bank, Seattle, Wash. 1981 Donald L. Mellish Chairman of the Board, National Bank of Alaska, Anchorage, 1982 Alaska Lonnie G. Bailey3 Executive Vice President, Farmers & Merchants Bank of Rockford, 1983 Spokane, Wash. Appointed by Board of Governors George H. Weyerhaeuser President and Chief Executive Officer, Weyerhaeuser Company, 1981 Federal Way, Wash. Merle D. Adlum President, Maritime Trades Department, Puget Sound District 1982 Council, AFL-CIO, Seattle, Wash. Virginia L. Parks Vice President for Finance and Treasurer, Seattle University, 1983 Seattle, Wash. 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 A22 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 □ April 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 Nonbanking 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 Survey of time and savings deposits at commer­ A52 U.S. international transactions—Summary cial banks, January 31, 1981 A53 U.S. foreign trade All Commercial bank assets and liabilities, Decem­ ber 31, 1980 A78 Assets and liabilities of U.S. branches and agen­ cies of foreign banks, September 30, 1980 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 1980 1981 Item Ql Q2 Q3 Q4 Oct. Nov. Dec. Jan. Feb. 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 5.2 35.9 1.6 -1.0 -14.6 2 Required................................................................ 5.1 0.7 5.8 15.2 6.8 27.0 -0.1' -0.7 -3.9 3 Nonborrowed........................................................ 3.3 7.4 12.4 7.2 5.4 13.2 13.4 8.2 -12.4 4 Monetary base2.................................................... 7.8 5.2 9.9 11.2 10.1 15.0 4.9 2.7 2.3 Concepts of money and liquid assets3 5 M-1A................................................................... 4.6 -4.4 11.5 8.1 9.1 6.5 -11.1 -37.4 -21.9 6 M-1B.................................................................... 5.8 -2.6 14.6 10.8 11.8 8.7 -9.0 11.9' 3.8 7 M-2....................................................................... 7.3 5.6 16.0 9.1 10.4 1.9 5.7 7.7 8 M-3....................................................................... 8.0 5.8 13.0 11.6 10.8 15.2 7.3 12.9' 8.9 9 L............................................................................ 8.6 7.8 9.7 11.0' 6.6 14.2 12.5' n.a. n.a. Time and savings deposits Commercial banks 10 Total................................................................. 8.2 10.0 4.9 15.0 11.7 23.2 18.3 18.1 12.0 11 Savings4............................................................. -19.8 -21.7 27.5 1.7 10.0 -8.7 -40.0 -54.9 -29.1 12 Small-denomination time5................................ 28.9 33.1 0.7 17.1 11.3 31.6 39.6 36.3 17.8 13 Large-denomination time6................................ 11.1 10.6 -7.2 23.4 14.1 38.2 39.5 49.9 32.7 14 Thrift institutions7................................................ 2.6 4.8 9.9 11.5 11.7 12.7 10.8 -1.2' -1.0 15 Total loans and securities at commercial banks8. 9.7' 0.0' 6.7' 14.7' 13.0' 17.6' 12.8' 15.7' 8.1 1980 1981 1980 1981 02 Q3 Q4 Ql Nov. Dec. Jan. Feb. Mar. Interest rates (levels, percent per annum) Short-term rates 16 Federal funds9............................................................................... 12.69 9.83 15.85 16.57 15.85 18.90 19.08 15.93 14.70 17 Discount window borrowing10..................................................... 12.45 10.35 11.78 13.00 11.47 12.87 13.00 13.00 13.00 18 Treasury bills (3-month market yield)11...................................... 9.62 9.15 13.61 14.39 13.73 15.49 15.02 14.79 13.36 19 Commercial paper (3-month)1112............................................... 11.18 9.65 15.26 15.34 15.18 18.07 16.58 15.49 13.94 Long-term rates Bonds 20 U.S. government13.................................................................... 10.58 10.95 12.23 12.74 12.44 12.49 12.29 12.98 12.94 21 State and local government14................................................... 7.95 8.58 9.59 9.97 9.56 10.11 9.66 10.10 10.16 22 Aaa utility (new issue)15.......................................................... 11.77 12.20 13.49 14.45 13.85 14.51 14.12 14.90 14.71 23 Conventional mortgages16............................................................ 12.70 13.12 14.62 n.a. 14.70 15.05 14.95 15.10 n.a. 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 D $100,000. 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-1A: 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-l A 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 □ April 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 1981 1981 Jan. Feb. Mar. Feb. 11 Feb. 18 Feb. 25 Mar. 4 Mar. 11 Mar. 18 Mar. 25 Supplying Reserve Funds 1 Reserve Bank credit outstanding................. 142,819 140,373 140,919 139,545 141,281 140,696 140,382 139,195 141,557 141,445 2 U.S. government securities1............................. 119,362 116.509 118,098 115.857 117.348 115.262 117.657 116.750 118.711 118,667 3 Bought outright................................................. 118,795 116.509 118,033 115.857 117.348 115.262 117.657 116.750 118.711 118,515 4 Held under repurchase agreements........... 567 65 152 5 Federal agency securities.................................... 8,812 8.739 8,751 8.739 8.739 8.739 8.737 8.736 8.733 8,793 6 Bought outright................................................. 8,739 8.739 8,734 8.739 8.739 8.739 8.737 8.736 8.733 8,733 7 Held under repurchase agreements........... 73 17 60 8 Acceptances............................................................ 68 35 38 9 Loans......................................................................... 1,405 1,278 1,004 1,113 1,145 1,713 1,299 768 774 888 10 Float ......................................................................... 4,161 3,755 2,925 3,438 3,745 5,272 2,762 3,014 3,262 2,836 11 Other Federal Reserve assets........................... 9,011 10,092 10,106 10,398 10,305 9,709 9,928 9,927 10,077 10,223 12 Gold stock.............................................................. 11,160 11,159 11,156 11,159 11,159 11,159 11,156 11,156 11,156 11,155 13 Special drawing rights certificate account... 2,518 2,518 2,653 2,518 2,518 2,518 2,518 2,518 2,647 2,732 14 Treasury currency outstanding......................... 13,465 13,498 13,490 13,460 13,465 13,474 13,677 13,484 13,489 13,493 Absorbing Reserve Funds 15 Currency in circulation........................................ 133,443 131,879 132,537 131,721 132,431 131,989 131,863 132,388 132,765 132,630 16 Treasury cash holdings........................................ 440 451 471 445 450 450 461 455 472 477 Deposits, other than member bank reserves, with Federal Reserve Banks 17 Treasury.............................................................. 3,172 3,297 3,045 3,926 2,832 3,376 2,682 3,022 3,131 3,242 18 Foreign................................................................ 380 319 319 283 346 282 347 276 391 272 19 Other..................................................................... 541 401 342 431 366 373 420 291 352 328 20 Other Federal Reserve liabilities and capital.............................................................. 4,872 4,609 4,782 4,532 4,635 4,610 4,838 4,704 4,774 4,719 21 Reserve accounts2................................................. 27,114 26,591 26,722 25,344 27,364 26,765 27,122 25,217 26,963 27,158 End-of-month figures Wednesday figures 1981 1981 Jan. Feb. Mar. Feb. 11 Feb. 18 Feb. 25 Mar. 4 Mar. 11 Mar. 18 Mar. 25 Supplying Reserve Funds 22 Reserve bank credit outstanding................... 139,328 139,199 141,272 143,200 142,868 143,683 140,712 139,094 143,791 145,343 23 U.S. government securities1............................. 117.169 117.621 118,043 117.146 117.913 116,622 115.812 116.271 119.561 119,606 24 Bought outright................................................. 117.169 117.621 117,666 117.146 117.913 116,662 115.812 116.271 119.561 118,541 25 Held under repurchase agreements........... 377 1,065 26 Federal agency securities.................................... 8.739 8.737 8,779 8.739 8.739 8.737 8.737 8.733 8.733 9,151 27 Bought outright................................................. 8.739 8.737 8,722 8.739 8.739 8.737 8.737 8.733 8.733 8,733 28 Held under repurchase agreements........... 57 418 29 Acceptances............................................................ 298 267 30 Loans......................................................................... 1,304 1,249 656 1,037 875 5,192 1 939 569 1,912 3,229 31 Float......................................................................... 2,280 1,545 3,261 5,700 5,472 3,279 3.928 3,497 3,350 2,743 32 Other Federal Reserve assets........................... 9,836 10,047 10,235 10,578 9,869 9,853 10296 10,024 10,235 10,347 33 Gold stock.............................................................. 11,159 11,156 11,154 11,159 11,159 11,158 11.156 11,156 11,156 11,155 34 Special drawing rights certificate account... 2,518 2,518 2,818 2,518 2,518 2,518 2.518 2,518 2,668 2,818 35 Treasury currency outstanding......................... 13,886 13,939 13,509 13,464 13,471 13,477 13.483 13,489 13,489 13,502 Absorbing Reserve Funds 36 Currency in circulation........................................ 131,113 131,833 133,435 132,461 132,846 132,006 132,186 133,051 132,994 133,031 37 Treasury cash holdings........................................ 451 464 481 445 450 450 461 455 474 476 Deposits, other than member bank reserves, with Federal Reserve Banks 38 Treasury.............................................................. 3,038 2,284 3,032 3,468 3,729 3,433 3,099 2,645 2,858 2,609 39 Foreign................................................................ 573 422 474 267 241 232 274 231 261 244 40 Other..................................................................... 515 337 313 424 364 397 518 317 392 369 41 Other Federal Reserve liabilities and capital.............................................................. 4,579 4,737 4,855 4,708 4,486 4,449 5,050 4,568 4,621 4,670 42 Reserve accounts2................................................. 26,621 26,734 26,164 28,568 27,900 29,869 26,281 24,990 29,504 31,419 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 July Aug. Sept. Dec. Feb.P 1 Reserve balances with Reserve Banks1....... 32,473 31,384 28,923 29,164 29,976 29,215 26,664 27,114 26,591 26,722 2 Total vault cash (estimated)........................ 15,311 18,149 19,293 17,824 17,327 3 Vault cash at institutions with required reserve balances2................................ 11,344 11,287 11,262 11,811 11,678 11,876 12,602 13,587 12,187 11,687 4 Vault cash equal to required reserves at other institutions................................ n.a. n.a. n.a. n.a. 439 704 700 763 1,237 5 Surplus vault cash at other institutions3 .. n.a. n.a. n.a. n.a, 2,996 4,843 5,006 4,874 4,403 6 Reserve balances + total vault cash4......... 43,972 42,859 40,373 41,164 41,815 44,674 44.940 46,520 44,524 44,155 7 Reserve balances + total vault cash used to satisfy reserve requirements4 5......... n.a. n.a. n.a. n.a. 41,678 40,097 41,514 39,650 39,752 9 8 E R x e c q e u s i s r e r d es e r r e v s e e r b v a e l s a n (e ce s s t im at a R te e d se ) r . v .. e .. . B ... a . n .. k .. s .. 4 .. -6 .. . . 43,5 3 7 9 8 4 42,5 2 7 8 5 4 40,0 3 7 0 1 2 40,9 2 0 5 8 6 41,4 3 9 1 8 7 40,7 9 2 5 3 5 40,06 3 7 0 41,0 4 2 8 5 9 39,424082 39,3 3 7 8 2 0 1 1 1 0 To S ta e l a s b o o n r a r l o w bo in rr g o s w a i t n R gs e s a e t r R ve e s B er a v n e k s B .. a .. n .. k .. s . 1,47 8 3 2 395 7 65190 1,31 2 1 6 1,33 6 5 7 2,15 9 6 9 1,6 1 1 1 7 6 1,410250 1,2 1 7 4 8 8 1,0 1 0 9 4 7 Large commercial banks 12 Reserves held................................................. 24.940 26,267 24,874 24,772 13 Required.................................................... 25,819 26,605 25,328 25,145 14 Excess........................................................ -879 -338 -454 -373 Small commercial banks 15 Reserves held............................................... 13,719 13,935 13,305 13,386 16 Required.................................................... 13,523 13,690 13,235 13,229 17 Excess........................................................ 196 245 70 157 U.S. agencies and branches 18 Reserves held................................................ 260 253 388 461 2 1 0 9 E R x eq ce u s ir s e .. d .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3 3 0 0 22 25 8 36226 45110 All other institutions 21 Reserves held................................................. 494 513 502 605 2 23 2 E R x eq ce u s ir s e .. d .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-915 50121 - 5 1 1 7 9 54 5 8 7 Weekly averages of daily figures for week ending Jan. 21 p Jan. 28p Feb. 4p Feb. Up Feb. 18p Feb. 25p Mar. 4p Mar. \\P Mar. 18p Mar. 25p 24 Reserve balances with Reserve Banks1 .... 27,809 26,508 26,571 25,344 27,364 26,765 27,122 25,217 26,963 27,158 25 Total vault cash (estimated)............................. 20,244 18,827 18,985 18,742 17,421 16,820 17,415 18,457 17,144 16,496 26 Vault cash at institutions with required reserve balances2...................................... 14,066 13,736 13,067 12,942 11,886 11,464 11,640 12,506 11,538 11,152 27 Vault cash equal to required reserves at other institutions...................................... 700 700 700 700 700 700 1,285 1,269 1,226 1,208 28 Surplus vault cash at other institutions3 .. 5,478 4,391 5,218 5,100 4,835 4,656 4,490 4,682 4,380 4,136 29 Reserve balances + total vault cash4........... 48,165 45,442 45,667 44,196 44,893 43,693 44,644 43,780 44,214 43,760 30 Reserve balances + total vault cash used to satisfy reserve requirements4-5........... 42,687 41,051 40,449 39,096 40,058 39,037 40,154 39,098 39,834 39,624 31 Required reserves (estimated)......................... 42,180 40,651 40,221 38,926 39,760 39,202 39,479 38,868 39,491 39,464 32 Excess reserve balances at Reserve Banks4-6 . 507 400 228 170 298 -165 675 230 343 160 33 Total borrowings at Reserve Banks........... 1,419 1,793 1,201 1,113 1,145 1,713 1,299 768 774 888 34 Seasonal borrowings at Reserve Banks 123 137 125 131 154 160 176 185 193 200 Large commercial banks 35 Reserves held.......................................................... 27,380 25.881 25,526 24,830 25,241 23,669 24,946 24,595 24,583 24,348 36 Required.............................................................. 27,629 26,222 25,955 25,031 25,573 25,041 25,283 24,831 25,302 25,066 37 Excess................................................................... -249 -341 -429 -201 -332 -1,372 -337 -236 -719 -718 Small commercial banks 38 Reserves held.......................................................... 14,185 13,929 13,674 13,159 13,336 13,180 13,376 13,224 13,315 13,492 39 Required.............................................................. 13,825 13,698 13,554 13,126 13,184 13,226 13,206 13,027 13,191 13,387 40 Excess................................................................... 360 231 120 33 152 -46 170 197 124 105 U.S. agencies and branches 41 Reserves held.......................................................... 252 244 226 261 465 482 490 470 470 444 42 Required.............................................................. 223 231 226 237 461 440 463 455 446 460 43 Excess................................................................... 29 13 0 24 4 42 27 15 24 -16 All other institutions 44 Reserves held.......................................................... 496 473 495 479 510 485 625 587 589 626 45 Required.............................................................. 503 500 486 532 542 495 527 555 552 551 46 Excess................................................................... -7 -27 9 -53 -32 -10 98 32 37 75 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 □ April 1981 1.13 FEDERAL FUNDS AND REPURCHASE AGREEMENTS Large Member Banks1 Averages of daily figures, in millions of dollars 1981, week ending Wednesday By maturity and source Jan. 28 Feb. 4 Feb. 11 Feb. 18 Feb. 25 Mar. 4 Mar. 11 Mar. 18 Mar. 25 One day and continuing contract 1 Commercial banks in United States................................ 44,416 45,728 48,974 48,056 47,407 49,384 53,647 49,104 47,575 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies. 14,227 13,884 15,093 15,244 14,672 14,060 15,595 15,548 15,700 3 Nonbank securities dealers................................................ 2,768 2,272 2,234 2,574 2,251 2,759 2,887 2,179 2,101 4 Allother............................................................................ 17,325 17,846 17,143 17,153 19,179'’ 20,076 19,514 19,180 18,763 All other maturities 5 Commercial banks in United States................................ 4,196 4,095 4,582 4,935 3,958 3,669 3,475 3,531 3,629 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies. 7,302 7,553 7,539 7,530 7,339 7,430 7,552 7,664 7,975 7 Nonbank securities dealers................................................ 4,918 5,014 4,868 4,751 4,390 4,146 4,314 4,144 4,556 8 Allother............................................................................ 12,377 11,740 11,924 11,564 11,020' 10,681 10,938 10,581 10,236 Memo: Federal funds and resale agreement loans in ma­ turities of one day or continuing contract 9 Commercial banks in United States................................ 11,356 13,967 14,038 17,221 14,409 15,554 15,117 17,058 16,006 10 Nonbank securities dealers................................................ 2,547 2,869 2,686 2,918 3,066 2,719 2,651 3,258 3,042 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 A l 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 3/31/81 date rate 3/31/81 date rate 3/31/81 date rate 3/31/81 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. Ba o n f k Effective date A le l v l e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. Ba o n f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1970 ............... 5^2 5^ 1974— Apr. 25................. lVZr-8 8 1978— July 10................. 1V4 71/4 1971— Jan. 8........................... 5V*-5Vz 5^4 30................. 8 8 Aug. 21................. V/4 73/4 15........................... 5V4 51* Dec. 9................. 73A-8 73/4 Sept. 22................. 8 8 19........................... 5-5 W 51/4 16................. 73/4 73/4 Oct. 16................. 8r-8Vz 8Vz 22........................... 5-51/4 5 20................. 8 Vi 8Vz 29........................... 5 5 1975— Jan. 6................. 1V4 1V4 Nov. 1................. 8Vz-9Vz 9 Vz Feb. 13 ........................... 43A-5 5 10................. 1V4 1V4 3................. 9 Vz 9 Vz 19........................... 43/4 43/4 24................. 1V4 1V4 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 10 Vz Nov. 11.......................... 43/4-5 5 Mar. 10................. 6W63/4 61/4 20................. lOVi 10 Vz 19.......................... 43/4 43/4 14................. 6V4 61/4 Sept. 19................. iofc-11 11 Dec. 13........................... 4VZr-43A 43/4 May 16................. 6-61/4 6 21................. 11 11 17........................... 4Vz-43A 4 Vz Oct. 8................. 11-12 12 24........................... 4Vz 4Vi 1976— Jan. 19................. 5V2-6 5h 10................. 12 12 23................. 5 Vz 5h 1973— Jan. 15........................... 5 5 Nov. 22................. 5V*-5Vz 51/4 1980— Feb. 15................. 12-13 13 Feb. 26 ........................... 5-5 5Vi 26................. 5V4 51/4 19................. 13 13 Mar. 2........................... 5^2 SVz May 29................. 12-13 13 Apr. 23........................... 5Vz-53/4 5 Vz 1977— Aug. 30................. 5V^53/4 51/4 30................. 12 12 May 4........................... 53/4 53/4 31................. 5V4-53/4 5% June 13 ................. 11-12 11 11........................... 5^-6 6 Sept. 2................. 53/4 5^4 16................. 11 11 18........................... 6 6 Oct. 26................. 6 6 July 28................. 10-11 10 June 11 ........................... 6-6 Vz 6 Vz 29................. 10 10 15........................... 6 Vz 6 Vz 1978— Jan. 9................. 6-6 Vz 6 Vz Sept. 26................. 11 11 July 2........................... 7 1 20................. 6Vz 6 Vz Nov. 17................. 12 12 Aug. 14........................... 1-1 Yi iVz May 11................. 6VZr-7 1 Dec. 5................. 12-13 13 23........................... IVz iVz 12................. 1 1 8................. 13 13 July 3................. 7-71/4 1V4 In effect Mar. 31, 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 □ April 1981 1.15 DEPOSITORY INSTITUTIONS RESERVE REQUIREMENTS1 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.................... 9 Vi 12/30/76 Over $25 million ................ 12 11/13/80 10-100 .................. UVa 12/30/76 100-400 .......................... 12-V4 12/30/76 Nonpersonal time deposits1 Over 400 ........................ 16V4 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 .......................... 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 nonto 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 were gross demand deposits minus cash items in process of collection marginal reserve requirement was originally the greater of (a) $100 million or (b) ana 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, bv 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 at the time of imple­ balances due from domestic banks to their foreign branches and on deposits that mentation of the Monetary Control Act, the phase-in period ends Sept. 3, 1987. foreign branches lend to U.S residents were reduced to zero from 4 percent and For existing member banks the phase-in perioa is about three years, depending on 1 percent respectively. The Regulation D reserve requirement on borrowings from whether their new reserve requirements are greater or less than the old require­ unrelated banks abroad was also reduced to zero from 4 percent. ments. For existing agencies and branches of foreign banks, the phase-in ends Aug. (d) Effective with the reserve computation period beginning Nov. 16, 1978, 12,1982. All new institutions will have a two-year phase-in beginning with the date domestic deposits of Edge corporations were subject to the same reserve require­ that they open for business. ments as deposits of member banks. 6. Transaction accounts include all deposits on which the account holder is 3. (a) Negotiable order of withdrawal (NOW) accounts and time deposits such permitted to make withdrawals by negotiable or transferable instruments, payment as Christmas and vacation club accounts were subject to the same requirements orders of withdrawal, and telephone and preauthorized transfers (in excess of three as savings deposits. per month) for the purpose of making payments to third persons or others. (b) The average reserve requirement on savings and other time deposits before 7. In general, nonpersonal time deposits are time deposits, including savings implementation of the Monetary Control Act had to be at least 3 percent, the deposits, that are not transaction accounts and in which the beneficial interest is minimum specified by law. held by a depositor that is not a natural person. Also included are certain trans­ 4. (a) Effective Nov. 2,1978, a supplementary reserve requirement of 2 percent ferable time deposits held by natural persons, and certain obligations issued to was imposed on large time deposits of $100,000 or more, obligations of affiliates, depository institution offices located outside the United States. For details, see and ineligible acceptances. This supplementary requirement was eliminated with section 204.2 of Regulation D. 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 m?v 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 Mar. 31, 1981 Previous maximum In effect Mar. 31, 1981 Previous maximum Percent Effective Percent Effective Percent Effective Effective date date date date 1 Savings ............................................................................ 5^4 7/1/79 5 7/1/73 5 Vi 7/1/79 5Va 0 2 Negotiable order of withdrawal accounts 2 ................. 5Va 12/31/80 5 1/1/74 5Va 12/31/80 5 1/1/74 Time accounts 3 Fixed ceiling rates by maturity 4 4 3 9 1 0 4 - d 8 a 9 y d s a to y 1 s * y . e .. a ... r .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5 V 3/4 a 8 1 / / 1 1 / / 7 8 9 0 5 5 Vi 7 7 / /1 1/ / 7 7 3 3 6 (6) 1/1/80 (6) 53/4 0) 5 6 2 1 t t o o 2 2 V y i e y a e r a s r 7 s 7 . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7/1/73 5 5 V 3/4 i 1 1 / / 2 2 1 1/ / 7 7 0 0 £OlrA2 0) 6 53/4 1 1 / / 2 2 1 1 / / 7 7 0 0 7 2Vi to 4 years 7 ........................................................... 6Vl 7/1/73 53/4 1/21/70 63/4 0) 6 1/21/70 1 8 9 0 4 8 6 t t y o o e a 6 8 r s y y e e o a a r r r m s s 8 8 o re . . . . . . 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II 7 VV 3/4 a i 1 1 2 6 1 /2 / /1 1 3 / / / 7 7 7 3 8 4 ( ( 9 6 ) ) IVa 11/1/73 8 7 7 V 3/4 i 1 1 2 6 1 /2 / / 1 1 3 / / / 7 7 7 3 8 4 ( ( 9 6 ) ) 7Vi 11/1/73 11 Issued to governmental units (all maturities') 10 ___ 6/1/78 73/4 12/23/74 8 6/1/78 73/4 ‘ 12/23/74 12 Individual retirement accounts and Keogh (H.R. 10) plans (3 years or more) 10’n .............................. 6/1/78 73/4 7/6/77 8 6/1/78 73/4 7/6/77 Special variable ceiling rates by maturity 13 6-month money market time deposits '2................... (13) (i3) (13) (13) (13) 14 2Vi years or more ....................................................... M M O4) 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. Tne maximum allowable rates in March for commercial banks and and New Hampshire were first permitted to offer negotiable order of withdrawal thrift institutions were as follows: Mar. 5,14.383; Mar. 12,13.677; Mar. 19,12.346; (NOW) accounts on Jan. 1, 1974. Authorization to issue NOW accounts was ex­ Mar. 26, 12.524. 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 + Va percent bill rate + Va percent Reserve Bulletin for October 1962 (p. 1279), August 1965 (p. 1084), and Feb­ 8.50 to 8.75 bill rate + Va percent 9.00 ruary 1968 (p. 167). 7.50 to 8.50 bill rate + Va percent bill rate -I- Vi percent 4. Effective Nov. 10, 1980, the minimum notice period for public unit accounts 7.25 to 7.50 7.75 bill rate + Vi 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 2Vi 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 2^-year U.S. Treasury securities; the ceiling rate for thrift institutions 6. No separate account category. is Va 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 11 ^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 2Vi 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— Va 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, 19/3, 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 March for commercial banks were as follows: Mar. 5, 11.75; Mar. 19, of its total time and savings deposits. Sales in excess of that amount, as well as 11.75. The maximum allowable rates in March for thrift institutions were as follows: certificates of less than $1,000, were limited to the 6Vi percent ceiling on time Mar. 5, 12.00; Mar. 19, 12.00. deposits maturing in 2Vi 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 Wa 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 Va 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 2Vt>-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 □ April 1981 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1980 1981 Type of transaction 1978 1979 1980 Aug. Sept. Oct. Nov. Dec. Jan. Feb. U.S. Government Securities Outright transactions (excluding matched salepurchase transactions) Treasury bills 1 Gross purchases........................................................... 16,628 15,998 7,668 0 200 991 0 1,331 1,100 0 2 Gross sales...................................................................... 13,725 6,855 7,331 47 237 531 600 0 3,865 357 3 Exchange ........................................................................ 0 0 0 0 0 0 0 0 0 0 4 Redemptions................................................................. 2,033 2,900 3,389 0 0 700 500 49 1,000 0 Others within 1 year1 5 Gross purchases........................................................... 1,184 3,203 912 137 0 0 0 100 0 0 6 Gross sales...................................................................... 0 0 0 0 0 0 0 0 0 23 7 Maturity shift ............................................................... -5,170 17,339 12,427 2,423 589 596 2,368 754 462 990 8 9 E R x e c d h e a m ng p e t io .. n ... s .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 -11 2 , , 3 6 0 0 8 0 -18,251 0 -3,134 0 -1,459 0 -420 0 -879 0 -967 0 0 0 -1,936 0 1 to 5 years 10 Gross purchases........................................................... 4,188 2,148 2,138 541 0 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 - 1 8 3 ,9 ,4 0 1 9 2 - 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 - 1 9 ,2 9 1 0 1 5 to 10 years 14 Gross purchases........................................................... 1,526 523 703 236 0 0 0 0 0 0 15 Gross sales...................................................................... 0 0 0 0 0 0 0 0 0 0 16 Maturity shift ............................................................... -4,646 -3,092 -1,703 0 0 0 0 0 0 17 Exchange ........................................................................ | 2,803 2,181 2,970 1,000 0 0 220 0 0 400 Over 10 years 18 Gross purchases........................................................... 1,063 454 811 320 0 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 1,869 384 0 0 159 0 0 325 All maturities1 22 Gross purchases........................................................... 24,591 22,325 12,232 1,234 200 991 0 1,431 1,100 0 23 Gross sales...................................................................... 13,725 6,855 7,331 47 237 531 600 0 3,865 380 24 Redemptions................................................................. 2,033 5,500 3,389 0 0 700 500 49 1,000 0 Matched transactions 25 Gross sales...................................................................... 511,126 627,350 674,000 72,315 55,766 55,787 40,944 79,754 61,427 30,819 26 Gross purchases........................................................... 510,854 624,192 675,496 71,645 56,207 56,462 41,129 78,734 63,062 31,651 Repurchase agreements 27 Gross purchases........................................................... 151,618 107,051 113,902 2,783 3,203 20,145 24,169 11,534 6,108 0 28 Gross sales...................................................................... 152,436 106,968 113,040 3,016 2,743 19,808 23,924 11,381 8,137 0 29 Net change in U.S. government securities.............. 7,743 6,896 3,869 284 863 771 -670 516 -4,159 452 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 * 91 21 0 22 0 3 Repurchase agreements 33 Gross purchases........................................................... 40,567 37,321 28,895 1,082 977 5,922 4,825 1,889 652 0 34 Gross sales...................................................................... 40,885 36,960 28,863 1,132 1,188 5,734 4,880 1,767 1,177 0 35 Net change in federal agency obligations................ -426 681 555 -50 -302 167 -55 99 -525 -3 Bankers Acceptances 36 Outright transactions, net............................................. 0 0 0 0 0 0 0 0 0 37 Repurchase agreements, net ...................................... -366 116 73 -33 222 67 -43 253 -776 0 38 Net change in bankers acceptances........................... -366 116 73 -33 222 67 -43 253 -776 0 39 Total net change in System Open Market Account ........................................................... 6,951 7,693 4,497 202 784 1,005 -768 868 -5,460 450 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 1981 1981 Feb. 25 Mar. 4 Mar. 11 Mar. 18 Mar. 25 March Consolidated condition statement Assets 1 Gold certificate account................................................... 11,158 11,156 11,156 11,156 11,155 11,159 11,156 11,154 2 Special drawing rights certificate account...................... 2,518 2,518 2,518 2,668 2,818 2,518 2,518 2,818 3 Coin.................................................................................. 486 484 482 480 474 468 495 468 Loans 4 To depository institutions........................................... 5,192 1,939 569 1,912 3,229 1,304 1,249 656 5 Other............................................................................. 0 0 0 0 0 0 0 0 Acceptances 6 Held under repurchase agreements............................ 0 0 0 0 267 0 0 298 Federal agency obligations 7 Bought outright............................................................ 8,737 8,737 8,733 8,733 8,733 8,739 8,737 8,722 8 Held under repurchase agreements............................ 0 0 0 0 418 0 0 57 U.S. government securities Bought outright 9 Bills........................................................................ 41,034 40,224 40,683 43,973 42,953 41,558 42,033 42,078 10 Notes......................................................................... 58,370 58,370 58,370 58,370 58,370 58,718 58,370 58,370 11 Bonds....................................................................... 17,218 17,218 17,218 17,218 17,218 16,893 17,218 17,218 12 Total1....................................................................... 116,622 115.812 116.271 119.561 118,541 117.169 117.621 117,666 13 Held under repurchase agreements............................ 0 0 0 0 1,065 0 0 377 14 Total U.S. government securities................................... 116,622 115.812 116.271 119.561 119,606 117.169 117.621 118,043 15 Total loans and securities................................................. 130,551 126,488 125,573 130,206 132,253 127,212 127,607 127,776 16 Cash items in process of collection................................ 9,220 10,689 9,544 9,893 8,613 7,865 7,473 11,107 17 Bank premises.................................................................. 461 461 461 464 466 458 461 465 Other assets 18 Denominated in foreign currencies2.......................... 7,088 7,088 7,131 7,143 7,148 5,993 7,086 7,060 19 All other....................................................................... 2,304 2,747 2,432 2,628 2,733 3,385 2,500 2,710 20 Total assets....................................................................... 163,786 161,631 159,297 164,638 165,660 159,058 159,296 163,558 Liabilities 21 Federal Reserve notes..................................................... 119,465 119,648 120,499 120,459 120,479 118,147 118,854 120,874 Deposits 22 Depository institutions................................................. 29,869 26,281 24,990 29,504 31,419 26,621 26,734 26,164 23 U.S. Treasury—General account................................ 3,433 3,099 2,645 2,858 2,609 3,038 2,284 3,032 24 Foreign—Official accounts......................................... 232 274 231 261 244 573 422 474 25 Other............................................................................. 397 518 317 392 369 515 337 313 26 Total deposits.................................................................... 33,931 30,172 28,183 33,015 34,641 30,747 29,777 29,983 27 Deferred availability cash items...................................... 5,941 6,761 6,047 6,543 5,870 5,585 5,928 7,846 28 Other liabilities and accrued dividends3........................ 1,755 2,362 1,860 1,906 1,959 1,957 1,958 1,952 29 Total liabilities.................................................................. 161,092 158,943 156,589 161,923 162,949 156,436 156,517 160,655 Capital Accounts 30 Capital paid in.................................................................. 1,221 1,222 1,226 1,227 1,227 1,208 1,222 1,227 31 Surplus............................................................................. 1,203 1,203 1,203 1,203 1,203 1,203 1,203 1,203 32 Other capital accounts..................................................... 270 263 279 285 281 211 354 473 33 Total liabilities and capital accounts.............................. 163,786 161,631 159,297 164,638 165,660 159,058 159,296 163,558 34 Memo: Marketable U.S. government securities held in custody for foreign and international account....... 93,977 97,078 97,279 97,949 98,309 92,756 94,658 101,214 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to bank) ... 141,361 141,494 141,762 142,005 142,063 140,717 141,297 142,182 36 Less-held by bank4................................................... 21,896 21,846 21,263 21,546 21,584 22,570 22,443 21,308 37 Federal Reserve notes, net...................................... 119,465 119,648 120,499 120,459 120,479 118,147 118,854 120,874 Collateral for Federal Reserve notes 38 Gold certificate account............................................... 11,158 11,156 11,156 11,156 11,155 11,159 11,156 11,154 39 Special drawing rights certificate account................... 2,518 2,518 2,518 2,668 2,818 2,518 2,518 2,818 40 Other eligible assets..................................................... 0 0 0 0 0 0 0 0 41 U.S. government and agency securities..................... 105,789 105,974 106,825 106,635 106,506 104,470 105,180 106,902 42 Total collateral.................................................................. 119,465 119,648 120,499 120,459 120,479 118,147 118,854 120,874 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 □ April 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 1981 Feb. 25 Mar. 4 Mar. 11 Mar. 18 Mar. 25 Jan. 31 Feb. 28 Mar. 31 1Loans—Total...................................................................... 5,192 1,939 569 1,912 3.229 1,304 1,249 656 2 Within 15 days............................................................... 5,163 1,846 475 1,874 3.208 1,255 1,199 616 3 16 days to 90 days......................................................... 29 93 94 38 21 49 50 40 4 91 days to 1 year........................................................... 0 0 0 0 0 0 0 0 5Acceptances—Total........................................................... 0 0 0 0 267 0 0 298 6 Within 15 days............................................................... 0 0 0 0 267 0 0 298 7 16 days to 90 days......................................................... 0 0 0 0 0 0 0 0 8 91 days to 1 year ........................................................... 0 0 0 0 0 0 0 0 9U.S. government securities—Total.................................. 116,622 115,812 116,271 119,561 119,606 117,169 117,621 118,043 10 Within 15 days1.............................................................. 5,096 2,768 4,692 7,484 7,141 2,125 3,101 2,265 11 16 days to 90 days......................................................... 21,510 21,752 20,486 20,205 21,680 24,904 23,245 22,904 12 91 days to 1 year ........................................................... 26,125 27,519 27,321 28,100 27,014 27,279 27,385 29,020 13 Over 1 year to 5 years................................................... 34,809 34,691 34,691 34,691 34,690 34,505 34,809 34,772 14 Over 5 years to 10 years............................................... 13,755 13,755 13,754 13,754 13,754 13,354 13,754 13,755 15 Over 10 years................................................................ 15,327 15,327 15,327 15,327 15,327 15,002 15,327 15,327 16Federal agency obligations—Total.................................. 8,737 8,737 8,733 8,733 9,151 8,739 8,737 8,779 17 Within 15 days1.............................................................. 128 54 0 199 616 73 128 266 18 16 days to 90 days......................................................... 439 529 529 418 419 550 439 397 19 91 days to 1 year ........................................................... 1,834 1,819 1,931 1,843 1,843 1,749 1,834 1,843 20 Over 1 year to 5 years................................................... 4,621 4,620 4,613 4,613 4,613 4,597 4,621 4,613 21 Over 5 years to 10 years............................................... 1,030 1,030 975 975 975 1,085 1,030 975 22 Over 10 years................................................................ 685 685 685 685 685 685 685 685 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 1981 Bank group, or type of customer 1977 1978 1979' Oct. Nov. Dec. Jan. Feb. Debits to demand deposits1 (seasonally adjusted) 1 All commercial banks....................................................... 34,322.8 40,297.8 49,775.0 65,346.7 67,621.4 69,950.2 72,402.3 73,174.6 2 Major New York City banks............................................ 13,860.6 15,008.7 18,512.7 26,035.0 26,821.8 27,352.2 29,656.0 29,752.0 3 Otherbanks........................................................................ 20,462.2 25,289.1 31,262.3 39,311.7 40,799.6 42,598.0 42,746.3 43,422.5 Debits to savings deposits2 (not seasonally adjusted) 4 ATS/NOW3........................................................................ 5.5 17.1 83.3 185.5 173.4 218.3 529.3 526.6 5 Business4............................................................................ 21.7 56.7 77.3 100.1 95.6 119.2 108.2 93.4 6 Others5............................................................................... 152.3 359.7 515.2 688.2 573.7 704.2 685.7 553.1 7 All accounts........................................................................ 179.5 432.9 675.8 973.8 842.8 1,041.6 1,323.2 1,173.1 Demand deposit turnover1 (seasonally adjusted) 8 All commercial banks.................................................. 129.2 139.4 163.5 202.1 211.6 222.7 244.6 253.6 9 Major New York City banks...................................... 503.0 541.9 646.2 799.5 842.2 865.8 956.2 952.6 10 Otherbanks................................................................... 85.9 96.8 113.3 135.2 141.8 150.8 161.3 168.7 Savings deposit turnover2 (not seasonally adjusted) 11 ATS/NOW3........................................................................ 6.5 7.0 7.8 9.7 8.4 10.4 15.1 12.5 12 Business4............................................................................ 4.1 5.1 7.2 8.8 8.5 11.3 10.9 9.8 13 Others5............................................................................... 1.5 1.7 2.7 3.8 .3.2 4.1 4.1 3.4 14 All accounts........................................................................ 1.7 1.9 3.1 4.6 4.0 5.1 6.3 5.5 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 SMS As, 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 A 13 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures 1980 1981 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 . Sept. Oct. Nov. Dec. Jan. Feb. Seasonally adjusted Measures1 1 M-l A........................................................ 328.4 351.6 369.8 384.8 383.4 386.3 388.4 384.8 372.8 366.0 2 M-1B........................................................ 332.6 360.1 386.9 411.9 408.0 412.0 415.0 411.9 416.1 417.3 3 M-2.......................................................... 1,294.1 1,401.5 1,526.0 1,673.4 1,644.4 1,656.5 1,670.8 1,673.4 1,681.4' 1,692.2 4 M-3.......................................................... 1,460.3 1,623.6 1,775.5 1,957.9 1,904.6 1,921.8 1,946.1 1,957.9 1,978.9' 1,993.6 5 L2............................................................. 1,720.2 1,934.9 2,151.8 2,372.0' 2,306.5 2,319.1 2,346.5 2,372.0' n.a. n.a. Components 6 Currency.................................................. 88.7 97.6 106.3 116.4 113.9 115.1 115.8 116.4 116.6 117.3 7 Demand deposits..................................... 239.7 253.9 263.5 268.4 269.5 271.2 272.6 268.4 256.2 248.8 8 Savings deposits....................................... 486.4 475.8 417.0 393.6 412.1 414.2 407.8' 393.6 377.2' 367.5 9 Small-denomination time deposits3....... 454.9 533.8 656.2 763.2 716.4 723.6 741.6 763.2 778.0' 786.5 10 Large-denomination time deposits4....... 145.2 194.7 219.0 248.0 226.8 229.8 238.8 248.0 258.8' 263.5 Not seasonally adjusted Measures1 11 M-1A........................................................ 337.2 360.9 379.4 394.7 382.6 388.0 391.1 394.7 377.3 358.2 12 M-1B........................................................ 341.4 369.5 396.4 421.8 407.2 413.7 417.7 421.8 420.7 409.4 13 M-2.......................................................... 1,295.9 1,403.6 1,527.7 1,674.8 1,642.3 1,656.9 1,665.7 1,674.8 1,684.8' 1,685.3 14 M-3.......................................................... 1,464.5 1,629.2 1,780.8 1,962.8 1,902.3 1,923.1 1,942.1 1,962.8 1,984.3' 1,986.6 15 L2............................................................. 1,723.2 1,938.3 2,154.3 2,373.5' 2,296.2 2,318.0 2,344.7 2,373.5' n.a. n.a. Components 16 Currency.................................................. 90.3 99.4 108.3 118.5 113.7 114.9 116.6 118.5 115.8 115.9 17 Demand deposits..................................... 247.0 261.5 271.2 276.2 268.9 273.1 274.5 276.2 261.5 242.3 18 Other checkable deposits5...................... 4.2 8.6 17.0 27.1 24.6 25.7 26.6 27.1 43.3 51.2 19 Overnight RPs and Eurodollars6........... 18.6 23.9 25.3 32.2 32.9 32.5 32.6 32.2 32.5' 31.8 20 Money market mutual funds................... 3.8 10.3 43.6 75.8 78.2 77.4 77.0 75.8 80.7 92.4 21 Savings deposits....................................... 483.1 472.6 414.1 390.9 412.4 412.9 405.8 390.9 374.9' 364.7 22 Small-denomination time deposits3....... 451.3 529.8 651.2 757.4 714.9 723.7 735.9 757.4 779.2' 790.2 23 Large-denomination time deposits4....... 147.7 198.2 222.6 251.5 226.5 230.7 240.0 251.5 260.7' 263.4 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 (NOW) and automatic transfer or more and are net of the holdings of domestic banks, thrift institutions, the U.S. service (ATS^ accounts at banks and thrift institutions, credit union share draft government, money market mutual funds, and foreign banks and official institu­ accounts, ana 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 □ April 1981 1.22 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS1 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 . Aug. Sept. Oct. Nov.2 Dec. Jan. Feb. Seasonally adjusted 1 Total reserves3............................................................................................ 41.16 43.46 40.13 40.75 41.52 41.73 41.23 40.13 40.10 39.76 2 Nonborrowed reserves............................................................................... 40.29 41.98 38.44 40.09 40.21 40.42 39.17 38.44 38.70 38.45 3 Required reserves...................................................................................... 40.93 43.13 39.58 40.45 41.26 41.52 40.73 39.58 39.56 39.58 4 Monetary base4.......................................................................................... 142.2 153.7 159.8 158.2 159.5 160.9 160.7 159.8 160.1 160.6 5 Member bank deposits subject to reserve requirements5........................ 616.1 644.5 701.8 667.8 678.2 684.7 694.3 701.8 703.8 704.3 6 Time and savings........................................................................................ 428.7 451.2 485.6 474.2 482.0 485.5 475.4 485.6 517.4 523.3 Demand 7 Private..................................................................................................... 185.1 191.5 196.0 191.5 194.5 195.6 198.1 196.0 184.1 178.9 8 U.S. government.................................................................................... 2.2 1.8 1.9 2.1 1.8 2.4 2.2 1.9 2.3 2.1 Not seasonally adjusted 9 Monetary base4.......................................................................................... 144.6 156.2 162.5 158.0 159.0 160.6 161.5 162.5 161.0 158.9 10 Member bank deposits subject to reserve requirements5........................ 624.0 652.7 710.3 662.5 675.6 684.2 694.6 710.3 712.6 701.5 11 Time and savings........................................................................................ 429.6 452.1 486.5 471.8 479.6 484.5 474.5 486.5 493.4 494.0 Demand 12 Private..................................................................................................... 191.9 198.6 203.2 189.0 193.9 196.4 199.6 203.2 189.9 174.6 13 U.S. government.................................................................................... 2.5 2.0 2.1 1.7 2.1 2.1 1.9 2.1 2.1 2.0 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 weeke nd avoidance activities of a few large banks. and M. Before Nov. 13, 1980, the date of implementation of the Monetary The reduction in these activities lead to essentially a one-time increase in the Control Act, only the reserves of commercial banks that were members of the average level of required reserves that need to be held for a given level of deposits Federal Reserve System were included in the series. Since that date the series entering the money supply. In November, this increase in required reserves is include the reserves of all depository institutions. In conjunction with the imple­ estimated at $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.” Tnis 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 was calculated was raised. This action reduced required reserves about $980 million those due to the U.S. government, less cash items in process of collection and in the week ending June 18, 1980. Effective July 24, 1980, the 5 percent marginal demand 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 1981 1981 Category 1978 1979 1980 1978 1979 1980 Dec. Dec. Dec. Dec. Dec. Dec. Jan. Feb. Jan. Feb. Seasonally adjusted Not seasonally adjusted 1 Total loans and securities2............................ 1,013.43 1,134.64 1,237.3 1,253.5 1,262.9H 1,022.53 1,145.04 1,248.9 1,253.8 1,250.911 2 U.S. Treasury securities................................ 93.3 93.8 110.7 113.6 115.3 94.5 95.0 112.1 114.6 116.1 3 Other securities............................................. 173.23 191.8 213.9 216.3 217.2 173.93 192.6 214.8 215.8 216.1 4 Total loans and leases2.................................. 746.93 848.94 912.7 923.6 930.311 754.23 857.44 922.1 923.3 918.711 5 Commercial and industrial loans............. 246.15 291.I4 324.9 329.5 331.511 247.75 293.04 327.0 328.5 327.811 6 Real estate loans....................................... 210.5 241.34 260.6 262.0 264.711 210.9 241.84 261.1 262.0 263.611 7 Loans to individuals.................................. 164.7 184.9 175.2 174.9 174.3 165.6 186.0 176.2 174.9 172.7 8 Security loans............................................. 19.3 18.6 17.6 18.7 18.2 20.6 19.8 18.8 19.0 17.8 9 Loans to nonbank financial institutions .. 27.16 28.84 28.7 29.0 28.911 27.66 29.34 29.2 28.7 28.311 10 Agricultural loans..................................... 28.2 31.1 31.6 31.8 32.2 28.1 30.9 31.4 31.4 31.6 11 Lease financing receivables...................... 7.5 9.3 10.9 11.4 11.9 7.5 9.3 10.9 11.4 11.9 12 All other loans........................................... 43.63 44.0 63.4 66.5 68.8 46.23 47.3 67.5 67.5 65.1 Memo: 13 Total loans and securities plus loans sold2 8 . 1,017.13 1,137.64 7 1,240.0 1,256.2 1,265.7H 1,026.23 1,148.047 1,251.6 1,256.5 1,253.7H 14 Total loans plus loans sold2-8...................... 750.63 851.94'7 915.5 926.4 933.111 757.93 860.44,7 924.8 926.1 921.511 15 Total loans sold to affiliates8....................... 3.7 3.07 2.7 2.8 2.8 3.7 3.07 2.7 2.8 2.8 16 Commercial and industrial loans plus loans sold8........................................................ 248.05,9 293.14-7 326.6 331.3 333.411 249.65,9 295.04,7 328.8 330.3 329.711 17 Commercial and industrial loans sold8 ... 1.99 2.07 1.8 1.9 1.9 1.99 2.07 1.8 1.9 1.9 18 Acceptances held..................................... 6.6 8.2 8.1 8.8 9.0 7.3 9.1 8.8 9.2 8.9 19 Other commercial and industrial loans... 239.5 282.9 316.7 320.7 322.5 240.4 283.9 318.2 319.2 319.0 20 To U.S. addressees10............................ 226.0 264.1 295.2 297.0 297.6 225.9 264.1 295.2 294.9 294.1 21 To non-U.S. addressees........................ 13.5 18.8 21.5 23.7 24.9 14.5 19.8 23.0 24.3 24.9 22 Loans to foreign banks................................ 21.5 18.5 23.2 24.0 24.6 23.2 20.0 24.9 24.9 23.1 1. Includes domestically chartered banks; U.S. branches and agencies of foreign 9. As of Dec. 31, 1978, commercial and industrial loans sold outright were banks, New York investment companies majority owned by foreign banks, and increased $0.7 billion as the result of reclassifications, but $0.1 billion of this amount Edge Act corporations owned by domestically chartered and foreign banks. was offset by a balance sheet reduction of $0.1 billion as noted above. 2. Excludes loans to commercial banks in the United States. 10. United States includes the 50 states and the District of Columbia. 3. As of Dec. 31, 1978, total loans and securities were reduced by $0.1 billion. 11. Absorption of a nonbank affiliate by a large commercial bank added the “Other securities” were increased by $1.5 billion and total loans were reduced by following to February figures: total loans and securities, $1.0 billion; total loans $1.6 billion largely as the result of reclassifications of certain tax-exempt obligations. and leases, $1.0 billion; commercial and industrial loans, $.5 billion; real estate Most of the loan reduction was in “all other loans.” loans, $.1 billion; nonbank financial, $.1 billion. 4. As of Jan. 3, 1979, as the result of reclassifications, total loans and securities and total loans were increased by $0.6 billion. Business loans were increased by Note. Data are prorated averages of Wednesday estimates for domestically char­ $0.4 billion and real estate loans by $0.5 billion. Nonbank financial loans were tered banks, based on weekly reports of a sample of domestically chartered banks reduced by $0.3 billion. and quarterly reports of all domestically chartered banks. For foreign related in­ 5. As of Dec. 31,1978, commercial and industrial loans were reduced $0.1 billion stitutions, data are averages of month-end estimates based on weekly reports from as a result of reclassifications. large agencies and branches and quarterly reports from all agencies, branches, 6. As of Dec. 31, 1978, nonbank financial loans were reduced $0.1 billion as investment companies, and Edge Act corporations engaged in banking. Data in the result of reclassification. this release have been revised to reflect benchmarking to call reports through March 7. As of Dec. 1, 1979, loans sold to affiliates were reduced $800 million and 1980 for domestically chartered commercial banks and through December 1980 for commercial and industrial loans sold were reduced $700 million due to corrections foreign related institutions. Back data are available from the Banking Section, of two banks in New York City. Division of Research and Statistics. 8. Loans sold are those sold outright to a bank’s own foreign branches, non­ consolidated nonbank affiliates of the bank, the bank’s holding company (if not a bank), and nonconsolidated nonbank subsidiaries of the holding company. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics □ April 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 June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Total nondeposit funds 1 Seasonally adjusted2............................................... 61.5 91.2 121.1 115.9 114.6 109.4 114.0 119.9 n.a. n.a. n.a. n.a. 2 Not seasonally adjusted......................................... 60.1 90.2 119.8 116.0 118.6 112.3 114.5 120.8 n.a. n.a. n.a. n.a. Federal funds, RPs, and other borrowings from non-banks 3 Seasonally adjusted3............................................... 58.4 80.7 90.0 98.5 100.9 96.2 102.2 105.7 n.a. n.a. n.a. n.a. 4 Not seasonally adjusted......................................... 57.0 79.7 88.7 98.7 104.9 99.1 102.7 106.6 n.a. n.a. n.a. n.a. 5 Net balances due to foreign-related institutions, not seasonally adjusted............................................. -1.5 6.8 28.1 14.6 10.9 10.3 8.9 11.4 7.4 6.8 8.3 8.3 6 Loans sold to affiliates, not seasonally adjusted4'5.. 4.7 3.7 3.0 2.8 2.8 2.9 2.9 2.8 2.6 2.7 2.8 2.8 Memo 7 Domestically chartered banks net positions with own foreign branches, not seasonally adjusted6 -12.5 -10.2 6.5 -5.4 -8.4 -10.3 -14.5 -12.9 -14.2 -14.7 -16.2 -14.8 8 Gross due from balances....................................... 21.1 24.9 22.8 30.1 32.7 35.8 38.2 38.3 37.2 37.5 37.4 36.4 9 Gross due to balances........................................... 8.6 14.7 29.3 24.7 24.3 25.5 23.7 25.5 23.0 22.7 21.2 21.6 10 Foreign-related institutions net positions with di­ rectly related institutions, not seasonally adjusted7.............................................................. 10.9 17.0 21.6 19.9 19.3 20.6 23.3 24.3 21.6 21.5 24.5 23.1 11 Gross due from balances....................................... 10.7 14.3 28.9 28.5 30.8 30.9 30.3 30.8 32.4 33.9 31.4 31.7 12 Gross due to balances........................................... 21.7 31.3 50.5 48.4 50.1 51.6 53.6 55.2 54.0 55.4 55.9 54.8 13 Security RP borrowings, seasonally adjusted^......... 36.0 44.8 49.2 49.0 55.0 57.5 56.2 59.7 58.8 63.4 68.7 67.0 14 Not seasonally adjusted......................................... 35.1 43.6 47.9 48.8 54.7 59.1 58.7 59.5 60.9 61.7 65.0 65.2 15 U.S. Treasury demand balances, seasonally adjusted9.......................................................... 4.4 8.7 8.1 8.6 10.9 11.8 12.6 14.0 6.9 7.6 8.0 7.8 16 Not seasonally adjusted......................................... 5.1 10.3 9.7 10.0 9.3 9.3 14.2 12.7 6.6 9.0 7.9 8.1 17 Time deposits, $100,000 or more, seasonally adjusted10........................................................ 162.0 213.0 227.6 237.6 234.0 234.4 238.8 241.6 249.3 257.5 268.2 275.5 18 Not seasonally adjusted......................................... 165.4 217.9 232.8 235.5 230.0 232.1 236.7 241.1 250.8 263.4 272.8 276.8 1. Commercial banks are those in the 50 states and the District of Columbia 6. Averages of daily figures for member and nonmember banks. Before October with national or state charters plus agencies and branches of foreign banks, New 1980 nonmember banks were interpolated from quarterly call report data. York investment companies majority owned by foreign banks, and Edge Act cor­ 7. Includes averages of current and: previous month-end data until August 1979; porations owned by domestically chartered and foreign banks. beginning September 1979 averages of daily data. 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from 8. Based on daily average data reported by 122 large banks beginning February nonbanks and not seasonally adjusted net Eurodollars and loans to affiliates. In­ 1980 and 46 banks before February 1980. cludes averages of Wednesday data for domestically chartered banks and averages 9. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at of current and previous month-end data for foreign-related institutions. commercial banks. Averages of daily data. 3. Other borrowings are borrowings on any instrument, such as a promissory 10. Averages of Wednesday figures. note or due bill, given for the purpose of borrowing money for the banking business. Note. Data have been revised to reflect benchmarking to call reports through This includes borrowings from Federal Reserve Banks and from foreign banks, March 1980 for domestically chartered banks and through December 1980 for term federal funds, overdrawn due from bank balances, loan RPs, and participa­ foreign-related institutions. Back data are available from the Banking Section, tions in pooled loans. Includes averages of daily figures for member banks and Division of Research and Statistics. 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 A ll 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 May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Domestically Chartered Commercial Banks1 1 Loans and investments, excluding interbank.................................................. 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 1,169.7 2 Loans, excluding interbank ....................... 792.5 793.2 793.4 801.9 809.1 821.6 832.8 851.4 840.2 839.0 840.8 3 Commercial and industrial.................... 256.6 256.9 257.1 259.5 263.9 269.0 275.7 281.5 277.6 276.3 277.7 4 Other............................................................. 535.9 536.4 536.3 542.4 545.2 552.6 557.1 569.9 562.6 562.7 563.1 5 U.S. Treasury securities............................. 94.8 96.2 98.7 101.4 103.2 104.4 107.1 111.2 112.0 113.7 112.8 6 Other securities................................................ 199.8 201.1 203.3 205.2 205.6 208.9 210.9 214.6 213.8 214.3 216.2 7 Cash assets, total........................................... 172.7 150.6 154.3 148.8 156.6 155.9 175.6 194.2 159.3 165.9 166.4 8 Currency and coin.................................... 17.7 17.3 17.5 18.2 17.8 18.3 16.9 19.9 18.7 18.6 17.8 9 Reserves with Federal Reserve Banks 37.9 29.5 32.2 29.0 31.1 31.7 30.4 28.2 25.2 30.4 31.7 10 Balances with depository institutions . 48.3 45.8 45.0 45.9 46.8 47.2 56.1 63.0 54.9 54.6 53.6 11 Cash items in process of collection ... 68.9 58.1 59.6 55.8 60.9 58.8 72.2 83.0 60.5 62.3 63.3 12 Other assets2............................................ 140.1 143.8 143.5 150.3 154.4 151.3 151.3 165.6 155.8 160.1 164.9 13 Total assets/total liabilities and capital .. 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 1,501.1 14 Deposits................................................... 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 1,136.7 15 Demand........................................................ 370.3 358.1 363.5 363.4 369.7 375.7 393.0 432.2 351.1 345.5 345.4 16 Savings........................................................... 192.4 197.7 205.5 208.5 209.1 210.9 209.5 201.3 211.9 214.3 220.6 17 Time............................................................... 498.2 492.4 484.2 490.9 498.5 506.2 523.7 553.8 565.7 572.3 570.7 18 Borrowings...................................................... 152.6 151.0 157.0 158.5 163.7 161.7 157.3 156.4 156.4 163.2 163.7 19 Other liabilities................................................ 77.9 75.9 74.0 75.4 75.6 74.7 78.1 79.0 76.7 80.3 80.7 20 Residual (assets less liabilities)................ 108.5 109.8 109.0 111.0 112.3 112.7 116.1 114.2 119.3 117.5 120.0 Memo: 21 U.S. Treasury note balances included in borrowing.................................................. 5.2 13.3 7.6 8.7 15.7 11.5 4.4 10.2 9.5 8.5 10.2 22 Number of banks........................................... 14,639 14,646 14,658 14,666 14,678 14,760 14,692 14,693 14,689 14,696 14,701 All Commercial Banking Institutions3 23 Loans and investments, excluding interbank.................................................. 1,154.9 1,160.9 1,195.2 1,262.3 24 Loans, excluding interbank....................... 856.9 860.2 882.5 932.5 25 Commercial and industrial.................... 298.7 297.6 308.1 330.6 26 Other............................................................. 558.3 562.5 574.4 601.9 27 U.S. Treasury securities.............................. 96.7 98.3 105.6 113.7 28 Other securities................................................ 201.3 202.5 207.2 216.3 29 Cash assets, total........................................... 190.9 172.2 179.8 218.6 30 Currency and coin.................................... 17.7 17.3 17.8 20.7 31 Reserves with Federal Reserve Banks 38.7 30.3 31.7 28.2 32 Balances with depository institutions . 64.0 65.0 n.a. n.a. 67.8 n.a. n.a. 84.9 n,a. n.a. n.a. 33 Cash items in process ot collection ... 70.5 59.7 62.5 84.7 34 Other assets2.................................................... 186.6 191.0 204.1 221.7 35 Total assets/total liabilities and capital .. 1,532.4 1,524.2 1,579.2 1,702.7 36 Deposits............................................................. 1,101.1 1,091.9 1,124.5 1,239.9 37 Demand......................................................... 388.1 379.0 390.9 453.6 38 Savings........................................................... 192.7 198.1 209.5 201.6 39 Time..................................................... 520.3 514.8 524.1 584.7 40 Borrowings...................................................... 194.7 197.6 211.0 211.5 41 Other liabilities................................................ 125.8 123.3 129.8 135.5 42 Residual (assets less liabilities)................ 110.9 111.4 113.9 115.8 Memo: 43 U.S. Treasury note balances included in borrowing.................................................. 5.2 13.3 15.7 10.2 44 Number of banks........................................... 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 rations, and New York State foreign investment corporations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics □ April 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 Account Jan. 28 Feb. 4 Feb. 11 Feb. 18 Feb. 25p Mar. 4p Mar. Up Mar. 18 p Mar. 25p 1 Cash items in process of collection.............................. 49,625 53,357 49,107 62,715 50,670 57,373 53,554 55,444 52,064 2 Demand deposits due from banks in the United States ..................................................................... 20,344 19,378 19,609 22,433 19,921 20,717 19,906 21,752 19,620 3 All other cash and due from depository institutions.. 31,036 31,582 33,981 33,562 35,153 30,543 30,774 33.986 35,225 4 Total loans and securities................................................ 553,248 557,235 550,895 556,847 553,710 558,629 553,421 555,505 551,056 Securities 5 U.S. Treasury securities............................................... 39,769 41,122 40,209 40,572 40,816 42,629 41,986 41,233 39,577 6 Trading account....................................................... 6.331 7,504 6,477 6,723 7,089 8,557 7,843 7,429 6,017 7 Investment account, by maturity............................ 33,438 33,618 33.732 33,849 33,726 34,072 34,143 33,804 33,561 8 One year or less..................................................... 9,178 9,342 9,442 9,192 9,207 9,051 9,254 9,178 9,083 9 Over one through five years................................ 20,790 20,812 20.836 21,149 20,958 21,359 21,236 21,012 20,846 10 Over five years..................................................... 3,469 3,463 3.453 3,508 3,561 3,662 3,654 3,614 3,631 11 Other securities............................................................ 77.579 78,255 77,173 76,992 77,386 78,043 77,462 77,417 77,360 12 Trading account....................................................... 2,524 3,561 2,608 2,412 2,811 3,389 2,860 2,882 2,735 13 Investment account.................................................. 75,056 74,694 74,565 74,579 74,575 74,654 74,601 74,535 74,626 14 U.S. government agencies.................................... 16,124 16,143 16,125 16,165 16,111 16,167 16,109 16,072 16,104 15 States and political subdivision, by maturity .... 56,075 55,776 55,643 55,616 55,673 55,690 55,731 55,670 55,711 16 One year or less................................................. 7,248 7,213 7,059 7,050 7,091 7,130 7,208 7,160 7,229 17 Over one year................................................... 48,828 48,563 48,585 48,566 48,582 48,560 48,522 48,510 48,482 18 Other bonds, corporate stocks and securities... . 2.857 2.776 2,796 2,798 2,790 2,797 2,761 2.793 2,810 Loans 19 Federal funds sold1....................................................... 26.785 27,663 26,273 29,636 28,341 28,608 28,646 30.050 27,672 20 To commercial banks............................................... 18,175 19,661 18,506 21,857 20,498 20,613 21,181 21,589 19,996 21 To nonbank brokers and dealers in securities....... 6,366 5,873 6.098 6,120 5,924 6,224 5,643 6,487 5,947 22 To others................................................................... 2,244 2,129 1,669 1,659 1,920 1,771 1,822 1,973 1,729 23 Other loans, gross........................................................ 421,614 422,688 419,779 422,239 419,746 421,962 418,000 419,520 419,104 24 Commercial and industrial....................................... 171,297 171,826 170,038 170,221 169.410 169,932 168,915 169,584 169,684 25 Bankers acceptances and commercial paper....... 4,188 4,212 3,564 4,170 3,682 3,865 3,658 3.544 3,668 26 All other................................................................ 167,109 167,614 166,474 166,052 165,729 166,067 165,257 166,040 166,016 27 U.S. addressees................................................. 159,709 160,447 159.291 158,912 158,695 159,070 158,297 158,974 158,876 28 Non-U.S. addressees......................................... 7.400 7,167 7,183 7,139 7,033 6,997 6,960 7,066 7,141 29 Real estate................................................................... 112,891 113,125 113,314 113,543 113,625 113,748 113,927 114,146 114,230 30 To individuals for personal expenditures............... 71.928 71,640 71,346 71,299 71,150 71,048 70,867 70,808 70,793 To financial institutions 31 Commercial banks in the United States............. 4.219 3,897 4,349 4,629 4,380 4,537 4,418 4,579 4,381 32 Banks in foreign countries.................................... 9,034 9,053 8.612 9,216 8,411 8,637 8,554 8,396 8,529 33 Sales finance, personal finance companies, etc .. 9,972 9,922 9.835 9,881 9,764 9,675 9,414 9,530 9,588 34 Other financial institutions.................................... 15,295 15,377 15.249 15,316 15.125 15,176 14,956 14,927 14,996 35 To nonbank brokers and dealers in securities....... 5,562 5,603 5,226 5,349 5,926 6,385 5,341 5,972 5,123 36 To others for purchasing and carrying securities2 .. 2.198 2,207 2,222 2,272 2,270 2,247 2,269 2,257 2,252 37 To finance agricultural............................................. 5,416 5.425 5,383 5,378 5,423 5,432 5,426 5,431 5,401 38 All other.................................................................... 13.803 14,614 14,205 15,134 14,263 15,145 13,912 13,891 14,125 39 Less; Unearned income............................................... 6,751 6,647 6,666 6,692 6,661 6,589 6,626 6,656 6,681 40 Loan loss reserve............................................... 5,749 5,846 5,874 5,899 5,918 6,024 6,046 6,059 5,977 41 Other loans, net............................................................ 409,115 410,195 407,240 409,647 407.168 409,349 405,327 406.805 406,446 42 Lease financing receivables......................................... 9,624 9.930 9,956 9,962 9,986 10,025 10,033 10,032 10,040 43 All other assets............................................................ 82,030 83,738 87,446 82,869 85.057 88,167 89,840 85,392 87,652 44 Total assets........................................................................ 745,907 755,220 750,994 768,387 754,496 765,455 757,529 762,111 755,657 Deposits 45 Demand deposits.......................................................... 185.508 191,950 188,847 201,931 183,212 195,701 191,191 191,809 182,968 46 Mutual savings banks............................................... 574 733 623 747 566 645 658 595 549 47 Individuals, partnerships, and corporations........... 127,887 130,274 127,997 137,776 123,744 132,045 131,054 129,468 125,203 48 States and political subdivisions.............................. 4,846 5,282 4,698 4,755 4,709 4,708 4,173 4,748 4,479 49 U.S. government...................................................... 1,677 3,506 1,979 1,651 1,579 3,266 2,109 3,122 1,662 50 Commercial banks in the United States................. 34,041 34,459 34,976 37,774 35,230 38,359 36,361 37.389 34,794 51 Banks in foreign countries........................................ 8,047 7.177 9,901 9,436 8,433 7,150 8,245 7,620 7,841 52 Foreign governments and official institutions......... 1,457 1,783 1,546 2,292 1,591 1,930 1,614 1,632 1,287 53 Certified and officers' checks.................................. 6,979 8,736 7,126 7,499 7,360 7,597 6,978 7,234 7,151 54 Time and savings deposits........................................... 321,064 321,696 320,339 320,293 321,010 319,484 320,514 322,278 321,054 55 Savings....................................................................... 74,540 75,685 75,552 75,871 75,080 76,702 76,718 77,001 77,415 56 Individuals and nonprofit organizations............. 70,414 71,540 71,401 71,649 70,991 72,654 72,709 73,039 73,394 57 Partnerships and corporations operated for profit.............................................................. 3,473 3,454 3,461 3,488 3,416 3,396 3,418 3,366 3,431 58 Domestic governmental units.............................. 631 671 670 715 655 635 573 576 572 59 All other................................................................ 21 20 19 19 18 17 18 21 19 60 Time........................................................................... 246,524 246,011 244,788 244,422 245,930 242,782 243,796 245,277 243,639 61 Individuals, partnerships, and corporations....... 210,707 210,394 209,275 208,896 209,945 207,722 208,737 210,207 208,647 62 States and political subdivisions.......................... 20,720 20,567 20,755 20,789 21,216 20,692 20,641 20,394 20,286 63 U.S. government................................................... 309 298 298 310 306 299 296 276 282 64 Commercial banks in the United States............. 8,448 8,416 8,085 8,010 8,108 8,014 8,058 8,182 8,119 65 Foreign governments, official institutions, and banks .............................................................. 6.340 6,336 6,375 6,418 6,355 6,055 6,064 6,218 6,305 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks............... 467 119 375 202 4,412 1,276 92 1,482 2,504 67 Treasury tax-and-loan notes.................................... 6,007 1,939 1,821 2,008 5,896 2,457 1,718 6,989 7,716 68 All other liabilities for borrowed money3............... 121,155 126,758 126,689 130,217 124,587 131,759 129,673 125,640 125,185 69 Other liabilities and subordinated notes and debentures.............................................................. 61,226 61,794 62,005 62,995 64,656 63,594 63,237 62,880 65,151 70 Total liabilities.................................................................. 695,427 704,257 700,076 717,645 703,773 714,271 706,425 711,080 704,579 71 Residual (total assets minus total liabilities)4............. 50,480 50,963 50,917 50,742 50,724 51,184 51,103 51,031 51,078 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 or Digitized for FRmAoSreE 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 Account Jan. 28 Feb. 4 Feb. 11 Feb. 18 Feb. 25p Mar. 4p Mar. 11 p Mar. 18 p Mar. 25p 1 Cash items in process of collection.............................. 47,152 50,478 46,611 59,087 48,066 54.281 50,697 52,741 49,358 2 Demand deposits due from banks in the United States ..................................................................... 19,680 18,579 18,868 21,565 19,370 19,971 19,223 21,028 19,002 3 All other cash and due from depository institutions.. 28,796 29,565 31,681 31,318 32,658 28,620 28,704 31.770 32,847 4 Total loans and securities................................................ 516,563 520,140 514,146 519,900 517,068 521,375 516,001 518,109 514,143 Securities 5 U.S. Treasury securities............................................... 36,973 38,281 37,318 37,575 37,871 39,636 38,984 38,160 36,393 6 Trading account........................................................ 6,258 7,452 6,410 6,671 7,034 8,473 7,787 7,348 5,922 7 Investment account, by maturity............................ 30,715 30,829 30,908 30,904 30,838 31,163 31,197 30,812 30,471 8 One year or less..................................................... 8,524 8,627 8,714 8,456 8.485 8.306 8,523 8.461 8,385 9 Over one through five years................................ 19,097 19,112 19,110 19,310 19.155 19.554 19,384 19,108 18,829 10 Over five years....................................................... 3,094 3,091 3,084 3,138 3,198 3,302 3,290 3.243 3,257 11 Other securities............................................................ 71.037 71,735 70,691 70,518 70,937 71,579 70,983 70.956 70,902 12 Trading account........................................................ 2,435 3,503 2,554 2,365 2,761 3,326 2,792 2.821 2,668 13 Investment account................................................... 68,602 68,232 68,137 68,153 68,176 68,252 68,192 68,134 68,234 14 U.S. government agencies.................................... 14,822 14,831 14,852 14,894 14,864 14.907 14,851 14.821 14,881 15 States and political subdivision, by maturity .... 51,096 50,798 50,659 50,632 50,691 50,717 50,748 50,690 50,714 16 One year or less................................................. 6,442 6,416 6,272 6,264 6,316 6,323 6,396 6.338 6,398 17 Over one year................................................... 44.654 44,382 44,387 44,368 44,374 44,395 44,352 44,351 44,316 18 Other bonds, corporate stocks and securities.... 2,684 2,603 2,625 2,627 2,621 2,628 2,592 2,623 2,639 Loans 19 Federal funds sold1....................................................... 24,058 24,497 23,312 26,554 25,461 25,249 25,062 26,586 24,812 20 To commercial banks............................................... 15,998 17,104 16,096 19,298 18,138 17,750 18,126 18.599 17,630 21 To nonbank brokers and dealers in securities........ 5.839 5,284 5,566 5,633 5,435 5,748 5,134 6.032 5,479 22 To others.................................................................... 2,221 2,108 1,650 1,623 1,889 1,751 1,801 1,956 1,703 23 Other loans, gross........................................................ 396,021 397,146 394,388 396,868 394,405 396,548 392,666 394,141 393,718 24 Commercial and industrial........................................ 162.587 163,151 161,424 161,619 160,779 161,262 160,233 160,851 160,943 25 Bankers acceptances and commercial paper........ 4,006 4,046 3,394 3,999 3.506 3,683 3,489 3,377 3,485 26 All other................................................................ 158,581 159,106 158,030 157,620 157,273 157,579 156,744 157,474 157,458 27 U.S. addressees................................................. 151,254 152,004 150,920 150,554 150,312 150,658 149,860 150,485 150,391 28 Non-U.S. addressees......................................... 7,327 7,102 7,110 7,066 6,960 6,921 6,884 6.989 7,067 29 Real estate................................................................ 106,457 106,720 106,893 107,103 107,182 107,318 107,486 107,688 107,777 30 To individuals for personal expenditures............... 63,352 63,106 62,834 62,808 62,705 62,606 62,471 62,409 62,387 To financial institutions 31 Commercial banks in the United States............. 4,101 3,785 4,214 4,524 4,266 4,417 4,309 4,476 4,272 32 Banks in foreign countries.................................... 8,962 8,926 8,544 9,110 8,327 8,569 8,489 8,316 8,464 33 Sales finance, personal finance companies, etc .. 9,814 9,767 9,689 9,743 9,622 9,536 9,273 9,386 9,445 34 Other financial institutions.................................... 14,924 15,009 14,892 14,965 14,775 14,805 14,601 14,573 14,646 35 To nonbank brokers and dealers in securities....... 5.469 5,508 5,137 5,255 5,848 6,309 5,251 5.888 5,045 36 To others for purchasing and carrying securities2 .. 1,964 1,977 1,991 2,047 2,049 2,030 2,046 2.038 2,033 37 To finance agricultural production.......................... 5,273 5,284 5,244 5,239 5,283 5,294 5,285 5.290 5,264 38 All other.................................................................... 13,117 13,912 13,525 14,455 13,568 14,403 13,222 13.226 13,442 39 Less: Unearned income............................................... 6,115 6,015 6,032 6,059 6,030 5,963 5,997 6,026 6,052 40 Loan loss reserve............................................... 5,411 5,504 5,531 5,556 5,575 5,674 5,696 5.709 5,631 41 Other loans, net............................................................ 384,495 385,627 382,824 385,253 382,799 384,911 380,972 382.406 382,035 42 Lease financing receivables......................................... 9,352 9,656 9,681 9,687 9,711 9,749 9,757 9,756 9,766 43 All other assets............................................................ 79,784 81,398 85,166 80,538 82,587 85,598 87,398 82.907 85,158 44 Total assets........................................................................ 701,328 709,816 706,153 722,096 709,460 719,594 711,780 716,312 710,273 Deposits 45 Demand deposits.......................................................... 174,186 179,821 177,225 189,415 172,112 183,751 179,510 180,118 171,825 46 Mutual savings banks............................................... 551 700 599 716 544 616 632 572 529 47 Individuals, partnerships, and corporations........... 119,048 121,014 118,876 128,026 115,082 122,894 121,827 120,532 116,459 48 States and political subdivisions.............................. 4,227 4,612 4,067 4,204 4,091 4,194 3,708 3,976 3,908 49 U.S. government....................................................... 1,477 3,214 1,799 1,474 1,412 2,963 1,834 2,844 1,486 50 Commercial banks in the United States................. 32,764 33,002 33,691 36,168 33,919 36,808 35,023 36,059 33,504 51 Banks in foreign countries........................................ 7,954 7,105 9,830 9,367 8,368 7,081 8,180 7,558 7,774 52 Foreign governments and official institutions......... 1,454 1,782 1,545 2,253 1,590 1,887 1,612 1,622 1,285 53 Certified and officers’ checks.................................. 6,709 8,392 6,817 7,207 7,106 7,308 6,695 6,956 6,880 54 Time and savings deposits........................................... 299,829 300,229 298,889 298,835 299,364 297.736 298,783 300,437 299,334 55 Savings....................................................................... 68,873 69,945 69,820 70,108 69,365 70,820 70,847 71.105 71,491 56 Individuals and nonprofit organizations............. 65,086 66,124 65,997 66,274 65,595 67,100 67,154 67,459 67,786 57 Partnerships and corporations operated for profit.............................................................. 3,200 3,190 3,193 3,219 3,148 3,130 3,156 3,101 3,161 58 Domestic governmental units.............................. 565 611 610 656 603 573 518 524 526 59 All other................................................................ 21 20 19 19 18 17 18 21 19 60 Time........................................................................... 230,957 230,284 229,069 228,727 229,999 226,916 227,937 229,332 227,843 61 Individuals, partnerships, and corporations........ 197,423 197,003 195,827 195,517 196,416 194,191 195,192 196,644 195,189 62 States and political subdivisions.......................... 18,782 18,569 18,827 18,812 19,178 18,716 18,682 18,394 18,314 63 U.S. government................................................... 294 283 283 294 290 283 280 257 263 64 Commercial banks in the United States............. 8,118 8,093 7,757 7,686 7,759 7,672 7,718 7,819 7,771 65 Foreign governments, official institutions, and banks .............................................................. 6,340 6,336 6,375 6,418 6,355 6,055 6,064 6,218 6,305 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks............... 368 72 375 97 4,272 1,244 92 1,364 2,407 67 Treasury tax-and-loan notes.................................... 5,541 1,759 1,710 1,821 5,520 2,285 1,614 6,545 7,222 68 All other liabilities for borrowed money3............... 114,398 119,898 119,792 122,960 117,608 124,585 122,198 118,745 118,041 69 Other liabilities and subordinated notes and debentures.......................................................... 59,832 60,340 60,547 61,513 63,177 62,122 61,783 61,381 63,706 70 Total liabilities.................................................................. 654,153 662,118 658,538 674,642 662,054 671,723 663,980 668,590 662,534 71 Residual (total assets minus total liabilities)4............. 47,175 47,698 47,616 47,453 47,407 47,871 47,800 47,721 47,740 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 □ April 1981 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1981 Jan. 28 Feb. 4 Feb. 11 Feb. 18 Feb. 25p Mar. 4p Mar. Up Mar. 18 p Mar. 25 p 1 Cash items in process of collection.............................. 18,644 18,772 17,906 19,549 18,827 20,929 20,711 21,220 20,624 2 Demand deposits due from banks in the United States ..................................................................... 14,527 12,841 13,247 15,089 14,232 14,156 14,577 15,771 14,037 3 All other cash and due from depository institutions.. 7,178 7,712 8,378 10,642 8,419 6,970 8,860 8,240 7,800 4 Total loans and securities1.............................................. 123,296 124,325 121,931 125,738 123,490 123,903 121,570 124,784 124,270 Securities 5 U.S. Treasurv securities2............................................. 6 Trading account2...................................................... 7 Investment account, by maturity............................ 7,985 8,004 7,975 8,266 8,120 8,517 8,345 8,000 7,864 8 One year or less..................................................... 1,614 1,666 1,653 1,612 1,598 1,590 1,590 1,427 1,470 9 Over one through five years................................ 5,834 5,809 5,807 6,085 5,952 6,268 6,070 5 Ml 5,759 10 Over five years...................................................... 537 529 515 570 570 658 685 626 635 11 Other securities2.......................................................... 1? 13 Investment account................................................... 13,675 13,617 13,525 13,532 13,561 13,629 13,589 13,564 13,510 14 U.S. government agencies.................................... 2,296 2,307 2,302 2,302 2,331 2,353 2,345 2,329 2,320 15 States and political subdivision, by maturity .... 10,757 10,685 10,612 10,613 10,627 10,671 10,646 10,617 10,552 16 One year or less................................................. 1,554 1,482 1,387 1,378 1,380 1,400 1,409 1,400 1,347 17 Over one year................................................... 9,203 9,202 9,225 9,234 9,247 9,271 9,237 9,217 9,205 18 Other bonds, corporate stocks and securities__ 622 626 611 618 602 606 598 617 638 Loans 19 Federal funds sold3...................................................... 7,254 6,979 6,112 8,738 7,823 6,672 6,228 9,332 9,410 20 To commercial banks............................................... 3,836 3,536 2,517 5,267 4,569 3,030 3,217 5,312 6,048 21 To nonbank brokers and dealers in securities....... 2,545 2,640 2,917 2,956 2,664 3,065 2,393 3,428 2,843 22 To others................................................................... 872 802 678 515 590 577 618 591 519 23 Other loans, gross........................................................ 97,385 98,709 97,327 98,230 97,030 98,124 96,494 97,002 96,549 24 Commercial and industrial....................................... 50,614 50,845 49,785 49,857 49,378 49,550 49,419 49,674 49,666 25 Bankers acceptances and commercial paper....... 1,056 1,155 680 1,037 886 932 989 862 1,018 26 All other................................................................ 49,558 49,690 49,105 48,820 48,491 48,617 48,430 48,812 48,648 27 U.S. addressees................................................. 46,944 47,077 46,496 46,231 45,951 46,105 45,961 46,339 46,178 28 Non-U.S. addressees......................................... 2,614 2,613 2,609 2,588 2,540 2,512 2,469 2,472 2,470 29 Real estate................................................................ 14,941 15,115 15,154 15,180 15,237 15,288 15,274 15,345 15,368 30 To individuals for personal expenditures............... 9,396 9,389 9,390 9,422 9,388 9,406 9,453 9,481 9,518 31To financial institutions Commercial banks in the United States............. 1,280 1,163 1,359 1,643 1,430 1,451 1,386 1,484 1,345 32 Banks in foreign countries.................................... 4,326 4,387 4,160 4,592 4,051 4,008 4,314 4,203 4,370 33 Sales finance, personal finance companies, etc... 4,181 4,300 4,273 4,232 4,162 4,142 4,050 4,066 4,050 34 Other financial institutions.................................... 4,454 4,541 4,434 4,432 4,380 4,452 4,298 4,278 4,391 35 To nonbank brokers and dealers in securities....... 3,024 3,207 3,068 3,075 3,563 4,126 3,099 3,646 3,003 36 To others for purchasing and carrying securities4 .. 472 489 489 507 504 487 498 500 492 37 To finance agricultural production.......................... 422 439 436 439 432 437 440 443 427 38 All other................................................................... 4,274 4,832 4,778 4,851 4,504 4,776 4,263 3,881 3,921 39Less: Unearned income............................................... 1,198 1,146 1,153 1,163 1,170 1,147 1,182 1,197 1,213 40 Loan loss reserve............................................... 1,804 1,839 1,856 1,866 1,874 1,892 1,903 1,917 1,850 41 Other loans, net............................................................ 94,382 95,724 94,318 95,201 93,986 95,084 93,408 93,888 93,486 42 Lease financing receivables......................................... 1,973 2,271 2,259 2,259 2,261 2,252 2,259 2,261 2,261 43 All other assets5............................................................ 34,615 37,144 39,498 35,403 36,713 38,782 40,299 35,792 35,423 44 Total assets........................................................................ 200,234 203,064 203,219 208,680 203,942 206,991 208,277 208,068 204,415 Deposits 45 Demand deposits.......................................................... 64,199 64,125 64,920 67,386 64,502 67,443 67,983 67,646 64,180 46 Mutual savings banks............................................... 285 362 331 381 292 297 323 288 272 47 Individuals, partnerships, and corporations........... 32,274 31,660 30,646 33,776 30,715 32,383 33,387 32,786 31,255 48 States and political subdivisions............................. 525 492 424 431 425 461 363 390 425 49 U.S. government....................................................... 352 831 426 306 240 799 496 872 435 50 Commercial banks in the United States................. 20,231 19,328 20,641 20,029 21,529 23,017 22,426 23,061 21,619 51 Banks in foreign countries.................................... . 6,184 5,517 8,028 7,561 6,583 5,376 6,471 5,874 6,055 52 Foreign governments and official institutions......... 1,160 1,501 1,277 1,925 1,329 1,617 1,348 1,106 993 53 Certified and officers’ checks.................................. 3,186 4,432 3,146 2,976 3,389 3,494 3,169 3,268 3,125 54 Time and savings deposits........................................... 58,096 58,201 57,318 56,444 55,707 55,976 56,230 56,970 57,081 55 Savings.................................................................. 9,150 9,239 9,217 9,231 9,147 9,243 9,227 9,239 9,270 56 Individuals and nonprofit organizations............ 8,746 8,823 8,787 8,797 8,721 8,833 8,832 8,851 8,887 57 Partnerships and corporations operated for profit.................................................................. . 289 290 289 287 288 285 285 274 275 58 Domestic governmental units.............................. 111 122 136 144 135 122 107 108 105 59 All other................................................................ 4 4 5 3 3 3 3 5 3 60 Time.......................................................................... 48,946 48,961 48,101 47,213 46,560 46,732 47,003 47,731 47,811 61 Individuals, partnerships, and corporations ... . 42,395 42,402 41,492 40,503 39,631 39,785 40,015 40,727 40,650 62 States and political subdivisions......................... 1,508 1,559 1,674 1,725 1,770 1,770 1,721 1,689 1,684 63 U.S. government............................................... . 24 32 37 38 36 36 48 44 44 64 Commercial banks in the United States......... . 2,347 2,304 2,196 2,213 2,258 2,386 2,440 2,434 2,520 65 Foreign governments, official institutions, and banks ..................................................................... 2,672 2,664 2,702 2,734 2,865 2,755 2,779 2,837 2,912 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks........... . 150 2,730 1,103 780 67 Treasury tax-and-loan notes.................................... 1 2 583 354 1,500 581 550 2,032 2,201 68 All other liabilities for borrowed money6............... 38,223 40,516 40,394 43,974 38,151 42,433 43,512 40,088 38,766 69 Other liabilities and subordinated notes and debentures.............................................................. 24,175 24,342 24,002 24,727 25,637 24,533 24,090 24,349 25,623 70 Total liabilities.................................................................. 184,695 187,187 187,367 192,884 188,227 190,966 192,365 192,188 188,632 71 Residual (total assets minus total liabilities)4............. 15,539 15,877 15,852 15,796 15,716 16,025 15,912 15,880 15,784 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 1981 Jan. 28 Feb. 4 Feb. 11 Feb. 18 Feb. 25p Mar. 4p Mar. 11p Mar. 18 p Mar. 25 p Banks with Assets of $750 Million or More 1 Total loans (gross) and securities adjusted1................ 543,354 546,170 540,579 542,952 541,411 546,093 540,495 542,053 539,337 2 Total loans (gross) adjusted1.......................................... 426,005 426,794 423,197 425,389 423,210 425,420 421,047 423,402 422,399 3 Demand deposits adjusted2............................................ 100,166 100,628 102,785 99,791 95,733 96,702 99,167 95,854 94,447 4 Time deposits in accounts of $100,000 or more.......... 162,414 161,311 160,058 159,546 160,011 157,039 157,408 158,716 157,529 5 Negotiable CDs............................................................ 117,698 116,453 114,752 114,292 114,208 111,804 112,208 113,452 112,612 6 Other time deposits...................................................... 44,717 44,858 45,306 45,254 45,804 45,235 45,200 45,264 44,917 7 Loans sold outright to affiliates3.................................. 2,760 2,785 2,793 2,883 2,760 2,740 2,783 2,788 2,746 8 Commercial and industrial.......................................... 1,850 1,878 1,884 1,977 1,846 1,835 1,864 1,888 1,855 9 Other.............................................................................. 910 906 909 906 913 905 919 900 891 Banks with Assets of $1 Billion or More 10 Total loans (gross) and securities; adjusted1................ 507,990 510,769 505,399 507,694 506,270 510,846 505,260 506,769 503,924 11 Total loans (gross) adjusted1.......................................... 399,980 400,753 397,390 399,600 397,462 399,631 395,292 397,653 396,628 12 Demand deposits adjusted2............................................ 92,792 93,127 95,124 92,686 88,715 89,699 91,956 88,473 87,476 13 Time deposits in accounts of $100,000 or more.......... 153,504 152,239 151,028 150,534 150,836 147,929 148,356 149,598 148,536 14 Negotiable CDs............................................................ 111,477 110,113 108,473 108,004 107,803 105,435 105,900 107,116 106,362 15 Other time deposits...................................................... 42,026 42,125 42,555 42,530 43,033 42,495 42,456 42,482 42,173 16 Loans sold outright to affiliates3.................................... 2,725 2,748 2,756 2,849 2,724 2,705 2,746 2,750 2,710 17 Commercial and industrial.......................................... 1,825 1,850 1,856 1,948 1,818 1,807 1,834 1,857 1,827 18 Other.............................................................................. 900 898 901 900 905 897 912 893 883 Banks in New York City 19 Total loans (gross) and securities adjusted14.............. 121,183 122,610 121,063 121,857 120,534 122,461 120,053 121,101 119,939 20 Total loans (gross) adjusted1.......................................... 99,522 100,988 99,563 100,058 98,854 100,315 98,119 99,537 98,566 21 Demand deposits adjusted2............................................ 24,972 25,194 25,946 27,502 23,906 22,699 24,350 22,493 21,502 22 Time deposits in accounts of $100,000 or more.......... 38,826 38,753 37,925 37,044 36,172 36,296 36,466 37,119 37,301 23 Negotiable CDs............................................................ 29,595 29,235 28,229 27,493 26,680 26,714 26,952 27,581 27,888 24 Other time deposits...................................................... 9,232 9,518 9,696 9,552 9,492 9,582 9,514 9,538 9,413 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 a 2. All demand deposits except U.S. government and domestic banks less cash 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 □ April 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 1981 ment bank1 Nov. 26 Dec. 31 Jan. 28 Feb. 25 Mar./5 Q4' Ql p Jan.' Feb. Mar.P 1 Durable goods manufacturing............. 24,088 24,676 24,383r 24,472 24.640 1,165 -39 -295 168 2 Nondurable goods manufacturing 20,804 20,506 19,359 18,937 19,401 972 - 1,103 -1,145 -422 464 3 Food, liquor, and tobacco............... 4,921 5,391 4,915 4,529 4,580 1,040 -807 -473 -386 52 4 Textiles, apparel, and leather......... 4,906 4,150 4,096 4,364 4,351 -1,054 200 -54 268 -13 5 Petroleum refining.......................... 3,129 3,635 3,185 2,929 2,982 949 -654 -450 -256 53 6 Chemicals and rubber..................... 4,158 3,917 3,782 3,673 3,838 184 -80 -135 -109 165 7 Other nondurable goods................. 3,690 3,412 3,381 3.442 3,650 -147 237 -32 61 208 8 Mining (including crude petroleum and natural gas)............................ 15,338 16,427 16,251 15.935 15,750 2,470 -678 -176 -316 -185 9 Trade.................................................... 27,050 26,239 25,552 25.245 25,620 1,290 -619 -687 -307 375 10 Commodity dealers.......................... 2,402 2,563 2,116 1,874 1,950 444 -613 -447 -242 76 11 Other wholesale.............................. 12,182 12,293 12,057 11,707 11,878 707 -415 -235 -350 171 12 Retail................................................. 12,467 11,384 11.378 11,663 11,792 138 409 -5 285 129 13 Transportation, communication, and other public utilities............. 20,099 21,304 20,741 20,270 19,971 2.081 -1,332 -561 -472 -299 14 Transportation.................................. 8,019 8,374 8,254 8,139 8,106 639 -266 -118 -114 -34 15 Communication................................ 3,161 3,319 3,184 3,097 3,160 326 -160 -136 -87 62 16 Other public utilities........................ 8,919 9,611 9,303 9,033 8,705 1,116 -906 -270 -328 17 Construction......................................... 5,992 5,994 5,950 6,109 6,225 -36 233 -42 159 116 -2 18 Services................................................. 22,160 22,857 23,242' 23,528 23,603 1,546 746 385 286 75 19 All other2............................................. 16,146 16,554 15,775' 15,817 15,181 1,152 -1,714 -1,120 42 -636 '341 ‘ 20 Total domestic loans.............................. 151,678 154,557 150,312 150,391 10,640 -4,505 -3,642 -942 339 21 Memo: Term loans (original maturity more than 1 year) included in do­ mestic loans .................................. 78,956 81,768 81,794 80.147 79,298 5,232 -2,467 -1,647 1. Adjustment bank amounts represent accumulated adjustments originally made Note. New series. The 134 large weekly reporting commercial banks with do­ to offset the cumulative effects of mergers. These adjustment amounts should be mestic assets of $1 billion or more as of December 31, 1977, are included in this added to outstanding data for any date in the year to establish comparability with series. The revised series is on a last-Wednesday-of-the-month basis. Partly esti­ 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. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Commercial paper (seasonally adjusted) 1 All issuers................................................. 65,051' 83,438' 112,809' 125,148' 122,969' 123,706' 123,009' 124,606' 125,148' 127,612' 129,333 Financial companies2 Dealer-placed, paper3 2 Total.................................................... 8,796' 12,181' 17,377' 19,631' 19,228' 19,477' 19,062' 19,591' 19,631' 19,886' 20,859 3 Bank-related....................................... 2,132 3,521 2,874 3,561 3,313 3,370 3,442 3,436 3,561 3,670 3,743 Directly placed paper4 4 Total..................................................... 40,574' 51,647' 64,748' 67,888' 64,780' 65,618' 66,612' 67,340' 67,888' 67,912' 67,963 5 Bank-related....................................... 7,102 12,314 17,598 22,382 19,909 19,692 21,146 21,939 22,382' 22,570 22,331 6 Nonfinancial companies5........................ 15,681' 19,610' 30,684' 37,629' 38,961' 38,611' 37,335' 37,675' 37,629' 39,814' 40,511 Bankers dollar acceptances (not seasonally adjusted) 7 Total........................................................ 25,450 33,700 45,321 54,744 54,486 55,774 56,610 55,226 54,744 54,465 58,084 Holder 8 Accepting banks...................................... 10,434 8,579 9,865 10,564 9,644 10,275 11,317 10,236 10,564 9,371 9,911 9 Own bills............................................. 8,915 7,653 8,327 8,963 8,544 9,004 9,808 8,837 8,963 7,951 8,770 10 Bills bought......................................... 1,519 927 1,538 1,601 1,100 1,270 1,509 1,399 1,601 1,420 1,141 Federal Reserve Banks 11 Own account....................................... 954 1 704 776 277 499 566 523 776 0 0 12 Foreign correspondents....................... 362 664 1,382 1,791 1,841 1,820 1,915 1,852 1,791 1,771 1,399 13 Others...................................................... 13,700 24,456 33,370 41,614 42,724 43,179 42,813 42,616 41,614 43,323 46,779 Basis 14 Imports into United States..................... 6,378 8,574 10,270 11,776 11,861 11,731 12,254 11,774 11,776 11,903 12,976 15 Exports from United States................... 5,863 7,586 9,640 12,712 12,582 12,991 13,445 13,670 12,712 12,816 12,979 16 All other................................................... 13,209 17,540 25,411 30,257 30,043 31,052 30,911 29,782 30,257 29,746 32,129 1. A change in reporting instructions results in offsetting shifts in the dealer-placed 3. Includes all financial company paper sold by dealers in the open market. 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 FotRheAr SinEveRstm ent activities. transportation, and reserves. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Financial Statistics □ April 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—Nov. 6................. 15.50 1981—Jan. 2................... 20.50 1980—Jan........................... 15.25 1980—Sept......................... 12.23 17................. 16.25 9................... 20.00 Feb.......................... 15.63 Oct.......................... 13.79 21................. 17.00 Feb. 3................... 19.50 Mar......................... 18.31 Nov.......................... 16.06 26................. 17.75 23................... 19.00 Apr.......................... 19.77 Dec.......................... 20.35 Dec. 2................. 18.50 Mar. 10................... 18.00 May........................ 16.57 5................. 19.00 17................... 17.50 June ....................... 12.63 1981—Jan........................... 20.16 10................. 20.00 July........................ 11.48 Feb.......................... 19.43 16................. 21.00 Aug......................... 11.12 Mar.......................... 18.05 19................. 21.50 1.34 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 2-7, 1981 Size of loan (in thousands of dollars) All Item 1,000 1-24 25-49 50-99 100-499 500-999 and over Short-Term Commercial and Industrial Loans 1 Amount of loans (thousands of dollars)........................ 16,985,777 817,631 521,319 918,372 2,501,018 751,196 11,476,241 2 Number of loans................................................................. 158,959 111,775 15,982 14,711 13,165 1,192 2,135 3 Weighted-average maturity (months)............................ 1.9 3.3 3.7 4.2 3.6 3.8 1.1 4 Weighted-average interest rate (percent per annum) . 19.91 19.59 19.53 19.77 20.18 20.87 19.83 5 Interquartile range1....................................................... 19.12-21.25 17.23-21.94 18.00-21.84 18.77-22.13 19.28-22.51 20.00-21.94 19.18-20.32 Percentage of amount of loans 6 With floating rate............................................................... 38.7 31.0 29.4 42.9 55.6 77.6 33.1 7 Made under commitment................................................. 43.0 23.9 22.1 37.6 39.7 65.8 44.9 8 With no stated maturity................................................ 18.1 10.2 11.7 24.6 18.0 36.9 17.2 Long-Term Commercial and Industrial Loans 9 Amount of loans (thousands of dollars)........................ 2,106,841 238,914 297.407 161,491 1,409,030 10 Number of loans................................................................. 19,309 17,320 1,355 245 389 11 Weighted-average maturity (months)............................ 47.8 33.4 61.8 40.1 48.2 12 Weighted-average interest rate (percent per annum) . 19.26 19.06 19.31 20.48 19.14 13 Interquartile range1....................................................... 17.92-21.00 17.00-21.00 16.25-21.00 20.00-21.86 18.28-20.75 Percentage of amount of loans 14 With floating rate............................................................... 73.8 39.4 88.1 85.0 75.4 15 Made under commitment................................................. 76.9 33.5 49.7 77.7 89.9 Construction and Land Development Loans 16 Amount of loans (thousands of dollars)....................... 584,021 55,418 124,270 68,475 133,859 201.999 17 Number of loans................................................................. 12,681 7,442 3,324 1,107 648 160 18 Weighted-average maturity (months)............................ 10.4 6.3 9.9 6.7 11.4 12.4 19 Weighted-average interest rate (percent per annum) 19.40 18.76 17.40 17.92 20.20 20.77 20 Interquartile range1....................................................... 16.00-22.19 16.64-21.50 13.65-22.04 13.28-21.94 20.00-22.50 20.50-22.19 Percentage of amount of loans 21 With floating rate........................................................... 63.9 36.0 31.2 42.1 70.5 94.8 22 Secured by real estate....................................................... 89.1 91.9 87.9 94.3 79.7 93.6 23 Made under commitment................................................. 74.5 57.7 84.4 77.0 73.8 72.7 24 With no stated maturity................................................... 10.7 28.6 3.8 6.2 14.0 9.5 Type of construction 25 1- to 4-family..................................................................... 40.3 77.4 54.2 63.7 25.4 23.4 26 Multifamily......................................................................... 15.1 4.7 2.1 9.3 15.0 27.9 27 Nonresidential..................................................................... 44.7 18.0 43.7 27.0 59.6 48.7 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)....................... 1,083,356 147,558 166,464 200,977 153,148 204,451 210,756 29 Number of loans................................................................ 60,769 39,249 11,339 5,871 2,456 1,457 398 30 Weighted-average maturity (months).......................... 6.2 6.4 6.2 5.9 6.8 4.8 7.5 31 Weighted-average interest rate (percent per annum) . 17.92 17.36 17.71 17.52 17.85 17.92 18.94 32 Interquartile range1................................................... 16.21-19.25 16.10-18.27 16.21-18.81 16.10-18.50 16.46-19.25 16.61-18.81 15.69-20.84 By purpose of loan 33 Feeder livestock............................................................ 17.79 17.54 17.87 18.14 17.37 16.81 18.55 34 Other livestock.............................................................. 17.45 16.34 18.06 17.20 17.85 (2) (2) 35 Other current operating expenses................................ 17.91 17.42 17.72 17.36 17.53 18.01 18.95 36 Farm machinery and equipment.................................. 17.37 17.52 17.16 17.58 17.66 (2) (2) 37 Other................................................................................... 18.31 17.63 17.85 17.22 18.84 18.06 20.52 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 Dec. Jan. Feb. Mar. Feb. 27 Mar. 6 Mar. 13 Mar. 20 Mar. 27 Money Market Rates 1 Federal funds1-2............................................ 7.93 11.19 13.36 18.90 19.08 15.93 14.70 14.96 15.73 15.53 14.13 13.48 Commercial paper3-4 2 1-month...................................................... 7.76 10.86 12.76 18.95 17.73 15.81 14.15 14.72 15.48 14.59 13.23 13.39 3 3-month...................................................... 7.94 10.97 12.66 18.07 16.58 15.49 13.94 14.68 15.23 14.42 13.06 13.24 4 6-month...................................................... 7.99 10.91 12.29 16.49 15.10 14.87 13.59 14.45 14.82 13.99 12.76 13.02 Finance paper, directly placed3-4 5 1-month...................................................... 7.73 10.78 12.44 17.87 16.97 15.52 13.78 14.29 15.08 14.49 12.71 12.81 6 3-month...................................................... 7.80 10.47 11.49 15.00 14.49 14.45 13.08 13.80 14.03 13.67 12.56 12.29 7 6-month...................................................... 7.78 10.25 11.28 14.78 14.09 14.05 12.89 13.60 13.78 13.43 12.42 12.17 Bankers acceptances4-5 8 3-month...................................................... 8.11 11.04 12.78 17.96 16.62 15.54 13.88 14.83 15.17 14.25 13.02 13.38 9 6-month...................................................... n.a. n.a. n.a. n.a. 14.88 14.89 13.49 14.55 14.77 13.83 12.62 13.04 Certificates of deposit, secondary market6 10 1-month...................................................... 7.88 11.03 12.91 19.24 17.99 16.11 14.33 14.96 15.58 14.90 13.46 13.58 11 3-month...................................................... 8.22 11.22 13.07 18.65 17.19 16.14 14.43 15.31 15.74 14.92 13.53 13.82 12 6-month...................................................... 8.61 11.44 12.99 17.10 15.92 16.00 14.48 15.59 15.84 14.91 13.52 13.97 13 Eurodollar deposits, 3-month2.................. 8.78 11.96 14.00 19.47 18.07 17.18 15.36 16.59 16.74 16.31 14.94 14.31 U.S. Treasury bills4 Secondary market7 14 3-month.................................................. 7.19 10.07 11.43 15.49 15.02 14.79 13.36 14.19 14.44 13.79 12.63 12.91 15 6-month.................................................. 7.58 10.06 11.37 14.64 14.08 14.05 12.81 13.76 14.00 13.10 11.92 12.51 16 1-year...................................................... 7.74 9.75 10.89 13.23 12.62 12.99 12.28 12.89 13.07 12.46 11.69 12.09 Auction average8 17 3-month.................................................. 7.221 10.041 , 11.506 15.661 14.724 14.905 13.478 14.103 14.463 13.996 12.758 12.695 18 6-month.................................................. 7.572 10.017 11.374 14.770 13.883 14.134 12.983 13.611 14.133 13.427 12.096 12.274 19 1-year...................................................... 7.678 9.817 10.748 13.261 12.554 12.801 11.481 12.801 11.481 Capital Market Rates U.S. Treasury notes and bonds9 Constant maturities10 20 1-year...................................................... 8.34 10.67 12.05 14.88 14.08 14.57 13.71 14.50 14.69 13.92 12.96 13.51 21 2-year...................................................... 8.34 10.12 11.77 14.08 13.26 13.92 13.57 14.02 14.16 13.70 12.99 13.54 22 2-v2*year11.............................................. 14.00 13.55 13.55 23 3-year...................................................... 8.29 9.71 11.55 13.65 13.01 13.65 13.51 13.80 13.95 13.55 ’ 13.06 13.57 24 5-year...................................................... 8.32 9.52 11.48 13.25 12.77 13.41 13.41 13.63 13.76 13.33 12.98 13.55 25 7-year...................................................... 8.36 9.48 11.43 13.00 12.66 13.28 13.24 13.45 13.56 13.14 12.83 13.42 26 10-year.................................................... 8.41 9.44 11.46 12.84 12.57 13.19 13.12 13.32 13.43 13.04 12.71 13.27 27 20-year.................................................... 8.48 9.33 11.39 12.49 12.29 12.98 12.94 13.10 13.21 12.87 12.54 13.11 28 30-year.................................................... 8.49 9.29 11.30 12.40 12.14 12.80 12.69 12.89 12.99 12.62 12.29 12.83 Composite12 29 Over 10 years (long-term).................. 7.89 8.74 10.81 11.89 11.65 12.23 12.15 12.32 12.42 12.07 11.77 12.29 State and local notes and bonds Moody’s series13 30 Aaa.......................................................... 5.52 5.92 7.85 9.44 8.98 9.46 9.50 9.65 9.80 9.80 9.20 9.20 31 Baa.......................................................... 6.27 6.73 9.01 10.64 9.90 10.15 10.40 10.20 10.40 10.40 10.40 10.40 32 Bond Buyer series14................................ 6.03 6.52 8.59 10.11 9.66 10.10 10.16 10.27 10.40 10.34 9.81 10.09 Corporate bonds Seasoned issues15 33 All industries........................................ 9.07 10.12 12.75 14.04 13.80 14.22 14.26 14.30 14.44 14.27 14.08 14.25 34 Aaa.......................................................... 8.73 9.63 11.94 13.21 12.81 13.35 13.33 13.45 13.61 13.31 13.06 13.32 35 Aa............................................................ 8.92 9.94 12.50 13.78 13.52 13.89 13.90 14.00 14.15 13.92 13.70 13.85 36 A.............................................................. 9.12 10.20 12.89 14.03 13.83 14.27 14.47 14.35 14.51 14.45 14.34 14.54 37 Baa.......................................................... 9.45 10.69 13.67 15.14 15.03 15.37 15.34 15.39 15.49 15.40 15.20 15.27 Aaa utility bonds16 38 New issue.............................................. 8.96 10.03 12.74 14.51 14.12 14.90 14.71 14.90 14.55 14.42 15.07 39 Recently offered issues........................ 8.97 10.02 12.70 14.38 14.17 14.58 14.41 14.85 14.53 14.18 13.98 14.71 Memo: Dividend/price ratio17 40 Preferred stocks........................................ 8.25 9.07 10.57 11.94 11.64 11.83 11.81 11.78 11.86 11.85 11.75 11.78 41 Common stocks........................................ 5.28 5.46 5.25 4.74 4.76 5.00 4.88 5.02 4.94 4.99 4.84 4.75 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. writerj>rice 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 □ April 1981 1.36 STOCK MARKET Selected Statistics 1980 1981 Indicator 1978 1979 1980 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Prices and trading (averages of dai ly figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) .. 53.76 55.67 68.06 73.12 75.17 78.15 76.69 76.24 73.52 76.46 2 Industrial................................................................ 58.30 61.82 78.64 84.92 88.00 92.32 90.37 89.23 85.74 89.39 3 Transportation........................................................ 43.25 45.20 60.52 65.89 70.76 77.22 75.74 74.43 72.76 77.09 4 Utility..................................................................... 39.23 36.46 37.35 38.77 38.44 38.35 37.84 38.53 37.59 37.78 5 Finance .................................................................... 56.74 58.65 64.28 69.33 68.29 67.21 67.46 70.04 68.48 72.82 6 Standard & Poor’s Corporation (1941-43 = 10)1... 96.11 98.34 118.71 126.49 130.22 135.65 133.48 132.97 128.40 133.19 7 American Stock Exchange (Aug. 31, 1973 = 100) . 144.56 186.56 300.94 337.01 350.08 349.97 347.56 344.21 338.28 347.07 Volume of trading (thousands of shares) 8 New York Stock Exchange........................................ 28,591 32,233 44,867 50,397 44,860 54,895 46,620 45,500 42,963 53,387 9 American Stock Exchange....................................... 3,622 4,182 6,377 7,880 7,087 7,852 6,410 6,024 4,816 5,682 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers/dealers2.............. 11,035 11,619 14,721 12,731 13,293 14,363 14,721 14,242 14,171 t 11 Margin stock3.............................................................. 10,830 11,450 14,500 12,520 13,080 14,140 14,500 14,020 13,950 12 Convertible bonds....................................................... 205 167 219 208 211 220 219 221 220 I 13 Subscription issues..................................................... 1 2 2 3 2 3 2 1 1 n.a. Free credit balances at brokers4 1 14 Margin-account.......................................................... 835 1,105 2,105 1,850 1,950 2,120 2,105 2,065 2,225 15 Cash-account.............................................................. 2,510 4,060 6,070 5,680 5,500 5,590 6,070 5,655 5,700 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 13.0 13.0 13.0 14.0 20.0 20.0 18 40-49.................................... 28.0 29.0 30.0 28.0 29.0 18.0 30.0 30.0 31.0 19 50-59.................................... 18.0 27.0 25.0 26.0 25.0 31.0 25.0 22.0 21.0 20 60-69.................................... 10.0 14.0 14.0 15.0 15.0 18.0 14.0 13.0 13.0 21 70-79.................................... 6.0 8.0 9.0 10.0 10.0 11.0 9.0 8.0 8.0 22 80 or more.......................... 5.0 7.0 8.0 8.0 8.0 9.0 8.0 7.0 7.0 Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)6............................ 13,092 16,150 21,690 19,283 19,929 21,600 21,690 21,686 21,861 f Distribution by equity status (percent) 1 24 Net credit status......................................................... 41.3 44.2 47.8 49.0 46.8 46.5 47.8 47.0 48.6 n.a. 25 De 6 b 0 t p s e ta rc tu e s n , t e o q r u m ity o o re f ................................................. 45.1 47.0 44.4 43.4 46.2 46.8 44.4 43.9 43.1 I1 26 Less than 60 percent............................................... 13.6 8.8 7.7 7.6 7.0 6.7 7.7 9.1 8.3 t Margin requirements (percent of market value and effective date)7 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1S»71 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 ceeds) occur. end-of-month data for member firms of the New York Stock Exchange. 7. Regulations G, T, and U of the Federal Reserve Board of Governors, pre­ In addition to assigning a current loan value to margin stock generally, Regu­ scribed in accordance with the Securities Exchange Act of 1934, limit the amount lations T and U permit special loan values for convertible bonds and stock acquired of credit to purchase and carry margin stocks that may be extended on securities through exercise of subscription rights. as collateral by prescribing a maximum, loan value, which is a specified percentage 3. A distribution of this total by equity class is shown on lines 17-22. of the market value of the collateral at the time the credit is extended. Margin 4. Free credit balances are in accounts with no unfulfilled commitments to the requirements are the difference between the market value (100 percent) and the brokers and are subject to withdrawal by customers on demand. maximum loan value. The term “margin stocks” is defined in the corresponding regulation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Thrift Institutions A ll 1.37 SAVINGS INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1980 1981 Account 1978 1979 May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb.P Savings and loan associations 1 Assets.............................................................. 523,542 578,962 592,931 594,397 596,620 603,295 609,320 617,773 623,939 629,829 631,228 634,346 2 Mortgages.................................................. 432,808 475,688 479,956 481,042 482,839 487,036 491,895 496,495 499,973 502,812 504,068 505,245 3 Cash and investment securities1............... 44,884 46,341 52,466 52,408 52,165 53,336 53,435 56,146 57,302 57,572 57,460 58,447 4 Other.......................................................... 45,850 56,933 60,509 60,947 61,616 62,923 63,990 65,132 66,664 69,445 69,700 70,654 5 Liabilities and net worth.............................. 523,542 578,962 592,931 594,397 596,620 603,295 609,320 617,773 623,939 629,829 631,228 634,346 6 Savings capital............................................. 430,953 470,004 481,411 486,680 488,896 497,403 496,991 500,861 503,365 510,959 512,946 515,166 7 Borrowed money....................................... 42,907 55,232 55,199 54,796 41,239 55,396 58,418 60,727 62,067 64,491 62,938 62,306 8 FHLBB.................................................. 31,990 40,441 41,529 40,613 39,882 41,005 42,547 44,325 45,505 47,045 46,629 46,388 9 Other...................................................... 10,917 14,791 13,670 14,183 13,579 14,391 15,871 16,402 16,562 17,446 16,309 15,918 10 Loans in process......................................... 10,721 9,582 7,185 7,031 7,112 7,540 8,243 8,654 8,853 8,783 8,120 7,821 11 Other.......................................................... 9,904 11,506 16,141 12,966 14,364 16,190 12,776 14,502 16,433 12,227 14,104 16,070 12 Net worth2.................................................. 29,057 32,638 32,995 32,924 32,787 32,766 32,892 33,029 33,221 33,319 33,120 32,983 13 Memo: Mortgage loan com­ mitments outstanding3........................ 18,911 16,007 13,931 15,368 18,020 20,278 20,311 19,077 17,979 16,102 15,972 16,176 Mutual savings banks4 14 Assets.............................................................. 158,174 163,405 166,340 166,982 167,959 168,752 169,409 170,432 171,126 171,594 172,001 Loans 15 Mortgage................................................ 95,157 98,908 99,163 99,176 99,301 99,289 99,306 99,523 99,677 99,891 99,900 16 Other...................................................... 7,195 9,253 10,543 11,148 11,390 11,122 11,415 11,382 11,477 11,770 12,222 Securities 17 U.S. government5.................................. 4,959 7,658 7,527 7,483 7,796 8,079 8,434 8,622 8,715 8,891 8,957 18 State and local government................... 3,333 2,930 2,727 2,706 2,702 2,709 2,728 2,754 2,736 2,379 2,367 19 Corporate and other6............................ 39,732 37,086 38,246 38,276 38,863 39,327 39,609 39,720 39,888 39,349 39,328 20 Cash............................................................ 3,665 3,156 3,588 3,561 3,260 3,456 3,153 3,592 3,717 4,330 4,135 n.a. 21 Other assets................................................. 4,131 4,412 4,547 4,631 4,648 4,770 4,764 4,839 4,916 4,983 5,091 22 Liabilities........................................................ 158,174 163,405 166,340 166,982 167,959 168,752 169,409 170,432 171,126 171,594 172,001 23 Deposits...................................................... 142,701 146,006 146,637 148,606 149,580 150,187 151,765 151,998 152,133 153,555 153,225 24 Regular7.................................................. 141,170 144,070 144,646 146,416 147,408 148,018 149,395 149,797 150,109 151,450 151,111 25 Ordinary savings.................................. 71,816 61,123 54,669 56,388 57,737 58,191 58,658 57,651 56,256 53,955 52,707 26 Time and other................................... 69,354 82,947 89,977 90,028 89,671 89,827 90,736 92,146 93,853 97,494 98,404 27 Other...................................................... 1,531 1,936 1,990 2,190 2,172 2,169 2,370 2,200 2,042 2,105 2,114 28 Other liabilities........................................... 4,565 5,873 8,161 6,898 6,964 7,211 6,299 7,117 7,644 6,665 7,455 29 General reserve accounts.......................... 10,907 11,525 11,542 11,478 11,416 11,353 11,344 11,317 11,349 11,374 11,321 30 Memo: Mortgage loan com­ mitments outstanding8........................ 4,400 3,182 1,883 1,898 1,939 1,849 1,883 1,817 1,682 1,476 1,316 Life insurance companies 31 Assets.......................................................... 389,924 432,282 447,020 450,858 455,759 459,362 464,483 468,057 473,529 476,190 463,150 Securities 32 Government........................................... 20,009 0,338 20,529 20,395 20,736 20,833 20,853 20,942 21,204 21,453 21,891 33 United States9...................................... 4,822 4,888 5,107 4,990 5,325 5,386 5,361 5,390 5,568 5,753 6,016 34 State and local.................................... 6,402 6,428 6,352 6,349 6,361 6,421 6,474 6,484 6,568 6,682 6,831 35 Foreign10............................................. 8,785 9,022 9,070 9,056 9,050 9,026 9,018 9,068 9,068 9,018 9,044 36 Business................................................... 198,105 222,332 223,556 224,874 228,645 230,477 233,652 236,115 239,150 238,048 240,630 n.a. 37 Bonds................................................... 162,587 178,371 183,356 184,329 186,385 187,839 189,586 191,229 191,753 191,090 194,889 38 Stocks................................................... 35,518 39,757 40,200 40,545 42,260 42,638 44,066 44,886 47,397 46,958 45,741 39 Mortgages................................................... 106,167 118,421 124,563 125,455 126,461 127,357 128,089 128,977 129,878 131,145 131,710 40 Real estate................................................... 11,764 13,007 13,981 14,085 14,164 14,184 14,460 14,702 15,183 15,247 15,235 41 Policy loans................................................. 30,146 34,825 38,890 39,354 39,649 39,925 40,258 40,548 40,878 41,411 42,032 42 Other assets................................................. 23,733 27,563 25,501 26,695 26,104 26,586 27,171 26,765 27,236 28,836 26,983 Credit unions 43 Total assets/liabilities and capital...................................................... 62,348 65,854 66,103 68,102 68,429 69,553 70,515 70,702 71,335 71,709 70,754 71,446 44 Federal........................................................ 34,760 35,934 36,341 37,555 37,573 38,168 39,219 39,155 39,428 39,801 39,142 39,636 45 State............................................................ 27,588 29,920 29,762 30,547 30,856 31,385 31,296 31,547 31,907 31,908 31,612 31,810 46 Loans outstanding...................................... 50,269 53,125 49,469 48,172 47,829 47,884 47,211 47,221 47,299 47,774 47,309 47,451 47 Federal..................................................... 27,687 28,698 26,550 25,773 25,435 25,401 25,381 25,288 25,273 25,627 25,272 25,376 48 State ........................................................ 22,582 24,426 22,919 22,399 22,394 22,483 21,830 21,933 22,026 22,147 22,037 22,075 49 Savings........................................................ 53,517 56,232 57,197 59,310 60,574 61,403 63,728 63,957 64,304 64,399 63,874 64,357 50 Federal (shares)...................................... 29,802 35,530 31,403 32,764 33,472 33,964 35,961 36,030 36,183 36,348 35,915 36,236 51 State (shares and deposits)..................... 23,715 25,702 25,794 26,546 27,102 27,439 27,767 27,927 28,121 28,051 27,959 28,121 For notes see bottom of page A28. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics □ April 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 Dec. Jan. Feb. U.S. budget 1 Receipts1..................................................... 401,997 465,940 520,050 233,952 270,864 262.152 48,903 52,214 38,394 2 Outlays1-2..................................................... 450,804 493,635 579,613 263,004 289,905 310.972 56,202 59,099 53,969 3 Surplus, or deficit( - ) ................................ -48,807 -27,694 -59,563 -29,052 -19,041 -48.821 -7,299 -6,884 -15,575 4 Trust funds............................................... 12,693 18,335 8,791 9,679 4,383 -2.551 5,661 -3,434 1,243 5 Federal funds3......................................... -61,532 -46,069 -67,752 -38,773 -23,418 -46.306 -12,960 -3,451 -16,819 Off-budget entities (surplus, or deficit 6 Federal Financing Bank outlays................. -10,661 -13,261 - 14,549 -5,909 -7,735 -7,552 -1,033 -960 -1,340 7 Other4.......................................................... 302 793 303 765 -522 376 463 -494 -148 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 -7,869 -8,339 - 17,063 Source or financing 9 Borrowing from the public..................... 59,106 33,641 70,515 31,320 24,435 54,764 13,667 6,772 13,916 10 Cash and monetary assets (decrease, or increase (- ))$.................................. -3,023 -408 -355 3,059 -3,482 -6,730 - 10,485 2,252 3,909 11 Other6....................................................... 3,083 6,929 3,648 -182 6,345 7,964 4,686 -685 762 Memo: 12 Treasury operating balance (level, end of period)............................................. 22,444 24,176 20,990 15,924 14,092 12,305 12,305 13,917 10,106 13 Federal Reserve Banks.......................... 16,647 6,489 4,102 4,075 3,199 3,062 3,062 3,038 2,284 14 Tax and loan accounts............................ 5,797 17,687 16,888 11,849 10,893 9,243 9,243 10,879 7,822 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. Before Life insurance companies: Estimates of the American Council of Life Insurance that date, this item was included in “Corporate and other.” for all life insurance companies in the United States. Annual figures are 6. Includes securities of foreign governments and international organizations annual-statement asset values, with bonds carried on an amortized basis and stocks and, prior to April 1979, nonguaranteed issues of U.S. government agencies. at year-end market value. Adjustments for interest due and accrued and for dif­ 7. Excludes checking, club, and school accounts. ferences between market and book values are not made on each item separately 8. Commitments outstanding (including loans in process) of banks in New York but 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 Dec. Jan. Feb. Receipts 1 All sources1..................................................... 401,997 465,955 520,050 233,952 270,864 262,152 48,903 52,214 38,394 2 Individual income taxes, net..................... 180,988 217,841 244,069 115,488 119,988 131,962 23,725 30,964 15,348 3 Withheld................................................. 165,215 195,295 223,763 105,764 110,394 120,924 22,844 20,896 19,076 4 Presidential Election Campaign Fund .. 39 36 39 3 34 4 0 1 4 5 Nonwithheld............................................ 47,804 56,215 63,746 12,355 49,707 14,592 1,150 10,121 1,134 6 Refunds1 ................................................. 32,070 33,705 43,479 2,634 40,147 3,559 269 54 4,867 Corporation income taxes 7 Gross receipts.......................................... 65,380 71,448 72,380 29,169 43,434 28,579 10,155 2,826 1,816 8 Refunds................................................... 5,428 5,771 7,780 3,306 4,064 4,518 768 667 1,252 9 Social insurance taxes and contributions, net......................................................... 123,410 141,591 160,747 71,031 86,597 77,262 11,078 14,363 17,211 10 Payroll employment taxes and contributions2.................................. 99,626 115,041 133,042 60,562 69,077 66,831 10,268 12,533 14,562 11 Self-employment taxes and contributions3.................................. 4,267 5,034 5,723 417 5,535 188 0 426 495 12 Unemployment insurance....................... 13,850 15,387 15,336 6,899 8,690 6,742 224 773 1,563 13 Other net receipts4.................................. 5,668 6,130 6,646 3,149 3,294 3,502 586 631 591 14 Excise taxes................................................. 18,376 18,745 24,329 9,675 11,383 15,332 2,391 2,523 3,273 15 Customs deposits........................................ 6,573 7,439 7,174 3,741 3,443 3,717 632 635 558 16 Estate and gift taxes.................................. 5,285 5,411 6,389 2,900 3,091 3,499 517 535 489 17 Miscellaneous receipts5.............................. 7,413 9,252 12,741 5,254 6,993 6,318 1,174 1,035 951 Outlays 18 All types1*6...................................................... 450,804 493,635 579,613 263,004 289,905 310,972 56,202 59,099 53,969 19 National defense.......................................... 105,186 117,681 135,856 62,002 69,132 72,457 12,605 12,682 12,841 20 International affairs.................................... 5,922 6,091 10,733 4,617 4,602 5,430 1,249 396 1,005 21 General science, space, and technology... 4,742 5,041 5,722 3,299 3,150 3,205 618 440 531 22 Energy......................................................... 5,861 6,856 6,313 3,281 3,126 3,997 845 915 826 23 Natural resources and environment......... 10,925 12,091 13,812 7,350 6,668 7,722 1,325 1,134 1,016 24 Agriculture ................................................. 7,731 6,238 4,762 1,709 3,193 1,892 1,355 2,984 352 25 Commerce and housing credit................... 3,324 2,565 7,782 3,002 3,878 3,163 1,051 988 -204 26 Transportation ............................................ 15,445 17,459 21,120 10,298 9,582 11,547 1,870 3,810 1,468 27 Community and regional development---- 11,039 9,482 10,068 4,855 5,302 5,370 872 867 620 28 Education, training, employment, social services................................................. 26,463 29,685 30,767 14,579 16,686 15,221 2,461 3,029 2,862 29 Health........................................................... 43,676 49,614 58,165 26,492 29,299 31,263 5,716 5,510 5,414 30 Income security1-6........................................ 146,180 160,159 193,100 85,967 94,605 107,912 18,944 19,299 18,795 31 Veterans benefits and services................... 18,974 19,928 21,183 10,113 9,758 11,731 3,032 1,923 1,955 32 Administration of justice ........................... 3,802 4,153 4,570 2,174 2,291 2,299 382 383 389 33 General government.................................. 3,737 4,153 4,505 2,103 2,422 2,432 464 356 425 34 General-purpose fiscal assistance............. 9,601 8,372 8,584 4,286 3,940 4,191 26 1,293 113 35 Interest7....................................................... 43,966 52,556 64,504 29,045 32,658 35,909 10,805 3,822 6,400 36 Undistributed offsetting receipts7 8........... -15,772 -18,489 -21,933 -12,164 -10,387 -14,769 -7,400 -732 -838 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 8. Consists of interest received by trust funds, rents and royalties on the Outer contributions, 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. o. 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 □ April 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 Nov. Dec. Jan. Feb. Mar. 1 Total gross public debt.......................................................... 653.5 718.9 789.2' 845.1' 913.8 930.2 934.1 950.5 964.5 By type 2 Interest-bearing debt........................................................ 652.5 715.2 782.4 844.0 909.4 928.9 929.8 946.5 963.2 3 Marketable......................................................................... 421.3 459.9 487.5 530.7 605.4 623.2 628.5 642.9 661.1 4 Bills................................................................................. 164.0 161.1 161.7 172.6 208.7 216.1 220.4 229.0 235.3 5 Notes............................................................................... 216.7 251.8 265.8 283.4 311.1 321.6 321.2 324.5 336.5 6 Bonds............................................................................. 40.6 47.0 60.0 74.7 85.5 85.4 86.9 89.4 89.3 7 Nonmarketable1................................................................ 231.2 255.3 294.8 313.2 304.0 305.7 301.3 303.5 302.1 8 Convertible bonds2........................................................ 2.3 2.2 2.2 2.2 9 State and local government series................................ 4.5 13.9 24.3 24.6 24.0 23.8 23.7 23.6 23.5 10 Foreign issues3................................................................ 22.3 22.2 29.6 28.8 24.5 24.0 23.8 24.0 24.2 11 Government................................................................ 20.8 21.0 28.0 23.6 18.1 17.6 17.4' 17.5 17.7 12 Public......................................................................... 1.5 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 72.8 72.5 71.4 70.7 70.3 14 Government account series4......................................... 129.7 139.8 157.5 177.5 182.4 185.1 182.2 185.0 183.8 15 Non-interest-bearing debt................................................. 1.1 3.7 6.8 1.2 4.4 1.3 4.2 4.0 1.3 By holder5 16 U.S. government agencies and trust funds...................... 147.1 154.8 170.0 187.1 189.7 192.5 189.5 17 Federal Reserve Banks..................................................... 97.0 102.8 109.6' 117.5 120.4 121.3 116.7 18 Private investors................................................................ 409.5 461.3 508.6 540.5 603.2 616.4 627.4 19 Commercial banks............................................................ 103.8 101.4 93.1' 91.5' 101.8 104.7 108.1 20 Mutual savings banks........................................................ 5.9 5.9 5.0 4.7' 5.6 5.8 5.8 21 Insurance companies........................................................ 12.7 15.1' 14.9 14.8' 15.4 15.2 15.3 22 Other companies................................................................ 27.7 22.7 21.2' 25.0' 24.8 24.6 22.8 n.a. n.a. 23 State and local governments............................................. 41.6 55.2' 64.4' 67.4' 74.6 74.7 73.0 Individuals 24 Savings bonds................................................................ 72.0 76.7 80.7 79.9 72.5 72.2' 71.4 25 Other securities.............................................................. 28.8 28.6 30.3' 36.2' 52.1 56.7 62.8 26 Foreign and international6................................................. 78.1 109.6 137.8 123.8 132.6 134.3 133.9 27 Other miscellaneous investors7......................................... 38.9 46.1' 58.2' 97.4' 123.4 127.9 134.3 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 \lti 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 1981 1980 1981 Type of holder 1978 1979 1978 1979 Dec. Jan. Dec. Jan. All maturities 1 to 5 years 1 All holders.............................................................................................. 487,546 530,731 623,186 628,482 162,886 164,198 197,409 192,893 2 U.S. government agencies and trust funds..................................... 12,695 11,047 9,564 9,527 3,310 2,555 1,990 1,990 3 Federal Reserve Banks................................................................... 109,616 117,458 121,328 116,708 31,283 28,469 35,835 34,043 4 Private investors............................................................................... 365,235 402,226 492,294 502,248 128,293 133,173 159,585 156,860 5 Commercial banks....................................................................... 68,890 69,076 77,868 80,451 38,390 38,346 44,482 43,436 6 Mutual savings banks........................................................................ 3,499 3,204 3,917 3,950 1,918 1,668 1,925 1,904 7 Insurance companies................................................................... 11,635 11,496 11,930 11,992 4,664 4,518 4,504 4,445 8 Nonfinancial corporations................................................................ 8,272 8,433 7,758 6,954 3,635 2,844 2,213 2,203 9 Savings and loan associations...................................................... 3,835 3,209 4,225 3,837 2,255 1,763 2,289 2,380 10 State and local governments........................................................ 18,815 15,735 21,058 20,500 3,997 3,487 4,595 4,553 11 All others...................................................................................... 250,288 291,072 365,539 374,563 73,433 80,546 99,577 97,941 Total, within 1 year 5 to 10 years 12 All holders.............................................................................................. 228,516 255,252 297,385 303,043 50,400 50,440 56,037 58,727 13 U.S. government agencies and trust funds..................................... 1,488 1,629 830 792 1,989 871 1,404 1,404 14 Federal Reserve Banks.................................................................... 52,801 63,219 56,858 54,308 14,809 12,977 13,458 13,354 15 Private investors............................................................................... 174,227 190,403 239,697 247,943 33,601 36,592 41,175 43,969 16 Commercial banks............................................................................ 20,608 20,171 25,197 28,049 7,490 8,086 5,793 6,367 17 Mutual savings banks........................................................................ 817 836 1,246 1,283 496 459 455 466 18 Insurance companies........................................................................ 1,838 2,016 1,940 1,977 2,899 2,815 3,037 3,090 19 Nonfinancial corporations................................................................ 4,048 4,933 4,281 3,476 369 308 357 392 20 Savings and loan associations...................................................... 1,414 1,301 1,646 1,236 89 69 216 159 21 State and local governments............................................................ 8,194 5,607 7,750 7,248 1,588 1,540 2,030 2,047 22 All others...................................................................................... 137,309 155,539 197,636 204,674 20,671 23,314 29,287 31,448 Bills, within 1 year 10 to 20 years 23 All holders.............................................................................................. 161,747 172,644 216,104 220,423 19,800 27,588 36,854 36,817 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 43,971 41,558 2,088 3,272 5,919 5,891 26 Private investors.................................................................................... 119,348 127,306 172,132 178,864 13,836 19,796 27,250 27,241 27 Commercial banks............................................................................ 5,707 5,938 9,856 11,868 956 993 1,071 1,115 28 Mutual savings banks........................................................................ 150 262 394 410 143 127 181 181 29 Insurance companies........................................................................ 753 473 672 685 1,460 1,305 1,718 1,758 30 Nonfinancial corporations................................................................ 12 2,793 2,363 1,717 86 218 431 440 31 Savings and loan associations.......................................................... 262 219 818 403 60 58 52 42 32 State and local governments............................................................ 5,524 3,100 5,413 4,932 1,420 1,762 3,597 3,629 33 All others............................................................................................ 105,161 114,522 152,616 158,848 9,711 15,332 20,200 20,075 Other, within 1 year Over 20 years 34 All holders.............................................................................................. 66,769 82,608 81,281 82,620 25,944 33,254 35,500 37,002 35 U.S. government agencies and trust funds...................................... 1,487 1,629 829 791 1,031 1,472 1,656 1,656 36 Federal Reserve Banks........................................................................ 10,404 17,882 12,888 12,750 8,635 9,520 9,258 10,767 37 Private investors.................................................................................... 54,879 63,097 67,565 69,079 15,278 22,262 24,587 26,235 38 Commercial banks............................................................................ 14,901 14,233 15,341 16,181 1,446 1,470 1,325 1,484 39 Mutual savings banks........................................................................ 667 574 852 873 126 113 110 116 40 Insurance companies........................................................................ 1,084 1,543 1,268 1,291 774 842 730 722 41 Nonfinancial corporations................................................................ 2,256 2,140 1,918 1,759 135 130 476 443 42 Savings and loan associations.......................................................... 1,152 1,081 828 833 17 19 21 21 43 State and local governments............................................................ 2,670 2,508 2,337 2,316 3,616 3,339 3,086 3,023 44 All others............................................................................................ 32,149 41,017 45,020 45,826 9,164 16,340 18,838 20,425 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) 411 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) 490 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 Jan. 31, 1981: (1) 5,350 commercial banks, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Financial Statistics □ April 1981 1.43 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1980 1981 1980, week ending Wednesday Item 1977 1978 1979 Nov. Jan. Nov. 19 Nov. 26 Dec. 3 Dec. 10 Dec. 17 Dec. 24 1 U.S. government securities 10,838 10,285 13,183 21,716 21,576 22,277 20,76? 19,061 19,794 21,449 23,656 By maturity 2 Bills................................... 6,746 6,173 7,915 13,768 13,840 14,3434 13,520 13,014 12,124 13,559 13,781 3 Other within 1 year......... 237 392 454 442 464 636 432 372 397 577 347 4 1-5 years............................ 2,320 1,889 2,417 3,699 3,461 3,494 3,942 3,186 2,257 3,492 5,409 5 5-10 years.......................... 1,148 965 1,121 1,640 1,806 1,594 943 850 2,840 1,706 1,800 6 Over 10 years..................... 388 867 1,276 2,167 2,005 2,211 1,933 1,639 2,175 2,115 2,320 By type of customer 7 U.S. government securities dealers........................ 1,268 1,135 1,448 1,745 1,807 1,687 2,095 1,525 1,172 1,712 2,098 8 U.S. government securities brokers...................... 3,709 3,838 5,170 9,536 8,382 9,773 8,872 8,387 8,835 8,851 9,060 9 Commercial banks........... 2,294 1,804 1,904 2,366 2,661 2,547 2,007 2,166 2,496 2,613 3,129 10 All others1........................ 3,567 3,508 4,660 8,069 8,726 8,271 7,795 6,984 7,290 8,273 9,369 11 Federal agency securities .. 1,729 1,894 2,723 3,074 2,789 3,656 2,751 2,462 2,667 3,058 3,281 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 of Note. Averages for transactions are based on number of trading days in the 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 1981 1980, week ending Wednesday Item 1977 1978 1979 Nov. Dec. Jan. Oct. 22 Oct. 29 Nov. 5 Nov. 12 Nov. 19 Nov. 26 Positions1 1 U.S. government securities.......... 5,172 2,656 3,223 3,279 4,042 2,517 3,299 2,719 4,212 4,055 1,910 f 2 Bills............................................... 4,772 2,452 3,813 3,132 4,081 2,569 2,566 2,852 3,210 3,874 2,310 3 Other within 1 year..................... 99 260 -325 -792 -1,394 1 -995 -712 -563 -646 -844 -924 4 1-5 years........................................ 60 -92 -455 -1213 -43 n.a. 229 970 261 712 -195 -791 5 5-10 years...................................... 92 40 160 -13 104 i -187 -342 -435 6 74 50 6 Over 10 years................................ 149 -4 30 1,075 1,294 1 902 813 603 932 1,146 1,267 7 Federal agency securities.............. 693 606 1,471 357 643 1,188 1,066 700 576 78 314 Financing2 Reverse repurchase agreements3 f f f 9 8 T O e v r e m rn i a g g h r t e a e n m d e c n o ts n . t . i .. n .. u .. i . n ... g .. . . . . . . . . . . . . . . 1 1 1 I 2 8 8 , , 9 2 1 6 6 6 3 1 4 2 , , 2 0 4 7 9 4 2 1 5 1 , , 7 7 5 62 0 23 7, , 0 6 0 1 9 0 2 7 4 , ,2 10 03 6 25 8, , 2 0 2 5 1 4 2 9 6 , , 2 9 9 7 2 9 2 9 9 , , 7 0 6 5 8 0 3 8 1 , , 3 9 8 8 1 0 Repurchase agreements4............. n.a. n.a. n.a. 10 Overnight and continuing....... I 1 1 23,191 25,303 31,613 22,376 22,080 23,967 22,702 26,210 19,884 11 Term agreements..................... \ \ 1 25,397 29,426 22,289 20,791 20,408 20,761 24,477 24,536 31,815 1. Net amounts fin 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 of commercial banks on a commitment, that is, make delivery on sales and those for which the securities obtained have been used trade-date basis, including any such securities that have been sold under agreements as collateral on borrowings. to 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 1981 Agency 1976 1977 1978 Aug. Sept. Oct. Nov. Dec. Jan. 1 Federal and federally sponsored agencies1........................ 103,848 112,472 137,063 179,545 182,713 188,076 188,743 193,229 195,056 2 Federal agencies................................................................. 22,419 22,760 23,488 26,930 27,618 27,797 27,941 28,606 28,769 3 Defense Department2................................................... 1,113 983 968 651 641 636 631 610 600 4 Export-import Bank3-4................................................. 8,574 8,671 8,711 10,232 10,728 10,715 10,696 11,250 11,239 5 Federal Housing Administration5................................ 575 581 588 508 495 490 486 477 476 6 Government National Mortgage Association participation certificates6........................................ 4,120 3,743 3,141 2,842 2,842 2,842 2,842 2,817 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 10,445 10,660 10,835 11,010 11,190 11,375 9 United States Railway Association7.............................. 104 336 356 482 482 509 506 492 492 10 Federally sponsored agencies1.......................................... 81,429 89,712 113,575 152,615 155,095 160,279 160,802 164,623 166,287 11 Federal Home Loan Banks............................................. 16,811 18,345 27,563 35,690 36,710 38,819 39,380 41,258 41,819 12 Federal Home Loan Mortgage Corporation................ 1,690 1,686 2,262 2,634 2,537 2,537 2,537 2,536 2,518 13 Federal National Mortgage Association....................... 30,565 31,890 41,080 52,001 52,382 53,889 53,643 55,185 54,605 14 Federal Land Banks........................................................... 17,127 19,118 20,360 12,765 12,765 12,365 12,365 12,365 11,507 15 Federal Intermediate Credit Banks.............................. 10,494 11,174 11,469 1,821 1,821 1,821 1,821 1,821 1,388 16 Banks for Cooperatives................................................. 4,330 4,434 4,843 584 584 584 584 584 584 17 Farm Credit Banks1....................................................... 2,548 5,081 44,824 45,950 47,888 48,021 48,153 50,645 18 Student Loan Marketing Association8......................... 410 515 915 2,295 2,345 2,375 2,450 2,720 3,220 19 Other.............................................................................. 2 2 2 1 1 1 1 1 1 Memo: 20 Federal Financing Bank debt7’9........................................... 28,711 38,580 51,298 80,024 82,559 83,903 85,440 87,460 88,420 Lending to federal and federally sponsored agencies 21 Export-import Bank4......................................................... 5,208 5,834 6,898 9,558 10,067 10,067 10,067 10,654 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 2,295 2,345 2,375 2,450 2,720 3,220 24 Tennessee Valley Authority................................................. 3,110 4,190 5,635 8,720 8,935 9,110 9,285 9,465 9,650 25 United States Railway Association7................................ 104 336 356 482 482 509 506 492 492 Other Lending10 26 Farmers Home Administration........................................ 10,750 16,095 23,825 37,403 37,961 38,466 39,431 39,431 39,271 27 Rural Electrification Administration ................................. 1,415 2,647 4,604 8,233 8,425 8,646 8,760 9,196 9,471 28 Other....................................................................................... 4,966 6,782 6,951 11,813 12,824 13,210 13,421 13,982 14,142 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 in 4. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter. the main portion oi 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 □ April 1981 1.46 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1980 1981 Type of issue or issuer. 1978 1979 1980 Aug/ Sept.' Oct/ Nov/ Dec. Jan. 1 All issues, new and refunding1..................................................... 48,607 43,490 48,462 3,957 4,532 4,496 2,928 3,859 2,587 Type of issue 2 General obligation....................................................................... 17,854 12,109 14.100 849 1,363 1,056 734 558 710 3 Revenue ........................................................................................ 30,658 31,256 34.267 3,097 3,160 3,419 2,183 3,297 1,865 4 Housing Assistance Administration2........................................... 5 U.S. government loans................................................................ 95 125 95 11 9 21 11 4 12 Type of issuer 6 State .............................................................................................. 6,632 4,314 5,304 303 643 195 323 127 478 7 Special district and statutory authority....................................... 24,156 23,434 26,972 2,282 2,792 2,863 1,638 2,332 1,383 8 Municipalities, counties, townships, school districts................... 17.718 15,617 16,090 1,361 1,088 1,416 955 1,395 714 9 Issues for new capital, total.......................................................... 37,629 41,505 46,736 3,929 3,894 4,472 2,715 3,760 2,573 Use of proceeds 10 Education...................................................................................... 5,003 5,130 4.572 274 433 470 211 198 323 11 Transportation............................................................................... 3,460 2,441 2,621 99 425 282 256 53 146 12 Utilities and conservation............................................................ 9.026 8,594 8,149 1,186 737 903 369 408 625 13 Social welfare................................................................................. 10,494 15,968 19,958 1,485 1,385 1,403 1,076 2,465 770 14 Industrial aid................................................................................. 3,526 3.836 3,974 393 375 595 412 295 316 15 Other purposes............................................................................. 6,120 5.536 7.462 492 539 819 391 341 393 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 1981 Type of issue or issuer. or use 1978 1979 1980 July Aug. Sept. Oct. Nov. Dec. Jan. 1 All issues1........................................................................ 47,230 51,533r 72,886 8,026' 5,437' 5,025' 5,728 3,827 5,376 5,573 2 Bonds................................................................................ 36,872 40,208' 52,523 6,652' 4,213' 2,916' 3,275 2,055 2,528 3,373 Type of offering 3 Public......................................................................... 19,815 25,814 41.545 5,354 3,843 2,421 2.756 1,405 1,719 2,928 4 Private placement....................................................... 17,057 14,394' 10.978 1,298' 370' 495' 519 650 809 445 Industry group 5 Manufacturing............................................................ 9,572 9,678' 15.217 2,867' 1,545' 553' 614 88 470 1,635 6 Commercial and miscellaneous.................................. 5.246 3,948' 6.463 999 206' 390' 312 432 302 231 7 Transportation............................................................ 2,007 3.119' 3.217 334' 346' 409' 236 86 110 353 8 Public utility................................................................ 7.092 8,153' 9.504 351' 971 569' 754 565 277 800 9 Communication.......................................................... 3,373 4,219 6.658 787 580 517 791 163 584 48 10 Real estate and financial........................................... 9,586 11,094' 11.464 1,314' 565' 477 568 722 784 306 11 Stocks .............................................................................. 10,358 11,325 20,363 1,374 1,224 2,109 2,453 1,772 2,848 2,200 Type 12 Preferred..................................................................... 2,832 3,574 3.624 360 101 392 535 256 241 369 13 Common..................................................................... 7,526 7,751 16.739 1,014' 1,123 1,717 1,918 1,516 2,607 1,831 Industry group 14 Manufacturing............................................................ 1,241 1,679 4.831 165' 293 502 848 418 839 614 15 Commercial and miscellaneous.................................. 1,816 2,623 5.166 390 238 569 321 509 904 603 16 Transportation............................................................ 263 255 472 32 54 117 53 18 124 17 Public utility................................................................ 5,140 5,171 6.230 714 463 633 526 227 669 562 18 Communication.......................................................... 264 303 567 46 6 67 113 65 14 19 Real estate and financial........................................... 1,631 12,931 3.095 104 152 345 574 452 348 284 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 July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Investment Companies1 1 Sales of own shares2................................................... 7,495 15,266 1,890 1,507 1,405 1,523 1,289 1,242 1,676' 1,347 2 Redemptions of own shares3..................................... 8,393 12,012 863 1,019 1,228 1,362 1,086 1,720 1,193 960 3 Net sales..................................................................... -898 3,254 1,027 488 177 161 203 -478 483' 387 4 Assets4....................................................................... 49,277 58,400 54,406 54,941 55,779 56,156 60,329 58,400 56,160 56,370 5 Cash position5........................................................ 4,983 5,321 5,629 5,619 5,481 5,460 5,467 5,321 4,636 4,882 6 Other....................................................................... 44,294 53,079 48,777 49,322 50,298 50,696 54,862 53,079 51,524 51,488 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 1978 1979 1980 Q2 Q3 Q4 Ql Q2 Q3 Q4 1 Profits before tax........................................................ 223.3 255.4 245.5 250.9 262.0 255.4 277.1 217.9 237.6 249.2 2 Profits tax liability...................................................... 83.0 87.6 82.3 86.4 88.4 87.2 94.2 71.5 78.5 85.1 3 Profits after tax.......................................................... 140.3 167.7 163.1 164.5 173.6 168.2 182.9 146.4 159.1 164.1 4 Dividends................................................................ 44.6' 50.2' 56.0 49.8' 50.2' 51.6' 53.9' 55.7' 56.7' 57.7 5 Undistributed profits............................................. 95.7' 117.6' 107.1 114.7' 123.4' 116.6' 129.0' 90.7' 102.4' 106.4 6 Capital consumption allowances................................ 122.9 139.5 158.3 137.2 142.6 146.4 151.7 155.4 160.5 165.4 7 Net cash flow.............................................................. 218.6' 257.1' 265.4 251.9' 266.0' 263.0' 280.7' 246.1' 267.9' 271.8 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 □ April 1981 1.50 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1979 1980 Account 1975 1976 1977 1978 Q2 Q3 Q4 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 1980 19812 Q4 Ql Q2 Q3 Q4 Ql2 Q22 1 Total nonfarm business.............................................. 270.46 295.63 325.72 284.30 291.89 294.36 296.23 299.58 310.10 317.29 Manufacturing 2 Durable goods industries .......................................... 51.07 58.91 66.47 55.03 58.28 59.38 58.19 59.77 61.67 63.84 3 Nondurable goods industries.................................... 47.61 56.90 63.38 51.55 53.49 56.32 58.21 58.86 59.51 62.84 Nonmanufacturing 4 Mining........................................................................ 11.38 13.51 15.87 11.86 11.89 12.81 13.86 15.28 15.36 15.57 Transportation 5 Railroad.................................................................. 4.03 4.25 4.40 4.24 4.46 4.06 3.98 4.54 3.87 4.46 6 Air............................................................................ 4.01 4.01 4.11 4.55 3.90 4.27 4.06 3.77 4.07 3.32 7 Other...................................................................... 4.31 3.82 4.36 4.41 4.11 3.76 4.18 3.39 4.06 4.05 Public utilities 8 Electric.................................................................... 27.65 28.12 30.24 27.16 28.98 27.91 28.14 27.54 28.90 29.26 9 Gas and other......................................................... 6.31 7.32 8.03 6.92 7.28 7.12 7.44 7.41 7.99 8.39 10 Trade and services..................................................... 79.26 81.79 86.93 82.69 82.17 81.07 81.19 82.91 84.33 84.17 11 Communication and other1........................................ 34.83 36.99 41.93 35.90 37.34 37.66 36.97 36.11 40.34 41.39 1. “Other” consists of construction; social services and membership organiza- 2. Anticipated by business, tions; 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 All other......................................................................... 12.0 11.8 12.6 14.3 17.3 9 Total assets................................................................. 79.6 81.6 89.2 104.3 122.4 140.9 141.7 145.1 144.7 150.1 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 receivable receivable Type ou J t a s n ta . n 3 d 1 i . n g 1980 1981 1980 1981 1980 1981 19811 i Nov. Dec. Jan. Nov. Dec. Jan. Nov. Dec. Jan. 1 Total........................................................................................... 72,289 410 1,982 702 15,681 18,308 16,811 15,271 16,326 16,109 2 Retail automotive (commercial vehicles).................................. 12.248 -169 - 151 - 126 908 923 921 1,077 1,074 1,047 3 Wholesale automotive............................................................... 11,782 299 434 -310 5.455 5.564 5,554 5,156 5,130 5,864 4 Retail paper on business, industrial and 1,106 farm equipment................................................................. 23,615 149 876 458 1.612 1,562 1.564 1,463 686 5 Loans on commercial accounts receivable and factored com­ mercial accounts receivable............................................... 7,626 -261 1,195 519 5,455 7.827 6,362 5,716 6,632 5,843 6 All other business credit............................................................ 17,018 392 -372 161 2,251 2,432 2,410 1,859 2,804 2,249 1. Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Financial Statistics □ April 1981 1.54 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1980 1981 Item 1978 1979 1980 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Terms and yields in primary and secondary markets Primary Markets Conventional mortgages on new homes Terms' 1 Purchase price (thousands of dollars)......... 62.6 74.4 83.5 83.7 84.0 77.1 90.1r 87.0' 90.3 90.6 2 Amount of loan (thousands of dollars)....... 45.9 53.3 59.3 58.7 61.3 56.1 63.0 63.0'- 65.6 64.4 3 Loan/price ratio (percent)............................ 75.3 73.9 73.3 72.2 75.0 75.2 72.9 75.6 75.6 74.0 4 Maturity (years)........................................... 28.0 28.5 28.2 27.6 28.2 27.6 28.2 29.1' 29.0 28.7 5 Fees and charges (percent of loan amount)2 1.39 1.66 2.10 2.10 2.16 2.15 2.40 2.40' 2.59 2.64 6 Contract rate (percent per annum)............. 9.30 10.48 12.25 11.95 12.20 12.62 12.80 12.80' 13.02 13.48 Yield (percent per annum) 7 FHLBB series3............................................. 9.54 10.77 12.65 12.35 12.60 13.04 13.28r 13.26' 13.54 14.02 8 HUD series4................................................... 9.68 11.15 13.95 13.70 14.10 14.70 15.05 14.95 15.10 n.a. Secondary Markets Yield (percent per annum) 9 FHA mortgages (HUD series)5................... 9.70 13.42 14.26 14.38 14.47 14.08 14.23 14.79 n.a. 10 GNMA securities6......................................... 8.98 12.55 12.84 12.91 13.55 13.62 13.50 14.13 14.22 FNMA auctions7 11 Government-underwritten loans............... 9.77 11.17 14.11 14.77 14.94 15.53 15.21 14.87r 15.24 15.67 12 Conventional loans.................................... 10.01 11.77 14.43 14.45 14.70 15.30 15.54 14.95 15.05 15.33 Activity in secondary markets Federal National Mortgage Association Mortgage holdings (end of period) 13 Total................................................................................ 43,311 51.091 57,327 55.632 56.188 56.619 57,327 57,390 57.434 1 15 4 F V H A A -g - u in a s r u a r n e t d ee .. d ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1 1 0 , .5 2 4 4 4 3 c 2 1 4 0, , 4 4 9 8 6 9 ( J38.969*' 37.5584 38.040£ 38.381• 38,969 < 38,955c' 38,972 <' 16 Conventional.............................................................. 11.524 16.106 18,358 18.074 18.148 18.238 < 18,358 18,435 18,462 Mortgage transactions (during period) 17 Purchases........................................................................ 12,303 10.805 8.100 500 771 579 855 185 161 18 Sales................................................................................ 9 0 0 0 0 0 0 0 0 Mortgage commitments9 19 Contracted (during period).......................................... 18,959 10.179 8.044 1.070 514 472 403 241 244 20 Outstanding (end of period)........................................ 9,185 6.409 3.278 4.789 4.399 3.963 3,278 3,063 2,683 Auction of 4-month commitments to buy Government-underwritten loans 21 Offered........................................................................ 12,978 8,860 8.605 907.0 427.8 252.0 242.1 210.7 154.2 22 Accepted...................................................................... 6,747.2 3,921 4.002 538.0 257.7 135.6 110.8 93.0 87.7 n.a. Conventional loans 23 Offered........................................................................ 9,933.0 4,495 3.639 347.7 107.6 81.6 84.8 32.0 108.6 24 Accepted...................................................................... 5,111 2,344 1.749 209.8 93.9 68.8 54.1 30.3 79.1 Federal Home Loan Mortgage Corporation Mortgage holdings (end of period)n) 25 Total................................................................................ 3,064 4,035 5.067 4.543 4.727 4,843 5.067 5,039 n.a. 26 FHA/VA...................................................................... 1,243 1,102 1,033 1.050 1.044 1.038 1.033 1,029 n.a. 27 Conventional.............................................................. 1,165 1.957 2,830 3.492 3.629 3,715 2.830 2,825 n.a. Mortgage transactions (during period) 28 Purchases ...................................................................... 6,525 5,717 3,722 521 398 231 285 152 n.a. 29 Sales................................................................................ 6,211 4,544 2,526 275 187 94 48 168 n.a. Mortgage commitments11 30 Contracted (during period).......................................... 7,451 5,542 3,859 218 222 180 126 203 n.a. 31 Outstanding (end of period)........................................ 1,410 797 447 934 726 653 447 487 n.a. 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 3. Average effective interest rates on loans closed, assuming prepayment at the 4-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 04 01 02 03 04 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-familv.............................................................. 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 26Federal 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 59Individual 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 □ April 1981 1.56 CONSUMER INSTALLMENT CREDIT* Total Outstanding, and Net Change Millions of dollars 1980 1981 Holder, and type of credit 1977 1978 1979 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Amounts outstanding (end of period) 1 Total............................................................ 230,564 273,645 312,024 305,763 306,926 307,222 308,051 313,435 310,554 309,188 Bv major holder 2 Commercial banks.................................. 112,373 136,016 154,177 146,548 146,362 145.895 145.147 145,765 143,749 142,030 3 Finance companies.................................. 44,868 54.298 68,318 74,433 74.823 74.985 75,690 76,756 77,131 78,090 4 Credit unions........................................... 37,605 44,334 46,517 43.347 43,562 43.518 43,606 44,041 43,601 43,776 5 Retailers2................................................. 23,490 25,987 28,119 24.918 25.301 25.703 26,469 29,410 28,300 27,329 6 Savings and loans.................................... 7,089 7,097 8,424 9.141 9.266 9.611 9,687 9,911 10,023 10,173 7 Gasoline companies................................ 2,963 3,220 3,729 4,710 4,872 4.736 4,662 4,717 4,929 4,958 8 Mutual savings banks.............................. 2,176 2,693 2,740 2,666 2.740 2.774 2.790 2,835 2,821 2,832 Bv major tvpe of credit 9 Automobile............................................. 82,911 101,647 116,362 116,868 116.781 116.657 116.517 116,327 115,262 115,677 10 Commercial banks.............................. 49,577 60.510 67,367 63,177 62.734 62,350 61,848 61.025 59,608 59,061 11 Indirect paper.................................. 27,379 33.850 38,338 36,047 35.768 35.572 35,284 34,857 33,947 33,667 12 Direct loans..................................... 22,198 26,660 29,029 27,130 26.966 26,778 26,564 26,168 25,661 25,394 13 Credit unions....................................... 18,099 21,200 22,244 20.728 20.831 20.810 20.852 21,060 20,850 20,933 14 Finance companies.............................. 15,235 19.937 26,751 32,963 33.216 33.497 33,817 34,242 34,804 35,683 15 Revolving................................................. 39,274 48,309 56,937 53.771 54.406 54.598 55,304 59,862 58,985 57,566 16 Commercial banks.............................. 18,374 24,341 29.862 28,305 28,403 28.331 28.360 30,001 29.952 29,412 17 Retailers............................................... 17,937 20.748 23,346 20.756 21.131 21.531 22,282 25.144 24,104 23,196 18 Gasoline companies............................ 2,963 3,220 3.729 4,710 4.872 4.736 4,662 4.717 4,929 4,958 19 Mobile home........................................... 14,945 15.235 16.838 17,068 17.113 17.276 17.293 17.327 17,244 17,189 20 Commercial banks.............................. 9,124 9.545 10.647 10,564 10.538 10,502 10.452 10.376 10,271 10,174 21 Finance companies.............................. 3,077 3,152 3.390 3.566 3.601 3.657 3.702 3,745 3,741 3,740 22 Savings and loans................................ 2,342 2,067 2,307 2.477 2.511 2.654 2.675 2,737 2,768 2,809 23 Credit unions....................................... 402 471 494 461 463 463 464 469 464 466 24 Other........................................................ 93,434 108,454 121.887 118.056 118.626 118.691 118,937 119,919 119,063 118,756 25 Commercial banks.............................. 35,298 41,620 46,301 44.502 44.687 44.712 44.487 44,363 43,918 43,383 26 Finance companies.............................. 26,556 31,209 38,177 37.904 38.006 37.831 38,171 38,769 38,586 38,667 27 Credit unions....................................... 19,104 22,663 23.779 22.158 22.268 22.245 22,290 22,512 22,287 22,377 28 Retailers............................................... 5,553 5,239 4,773 4.162 4,170 4.172 4.187 4,266 4,196 4,133 29 Savings and loans................................ 4,747 5,030 6,117 6.664 6.755 6.957 7,012 7,174 7,255 7,364 30 Mutual savings banks.......................... 2,176 2,693 2,740 2.666 2.740 2.774 2,790 2,835 2,821 2,832 Net change (during period)3 31 Total............................................................ 35,462 43,079 38,381 489 1,055 702 839 1,619 869 1,996 By major holder 32 Commercial banks.................................. 18,645 23,641 18,161 -682 -265 -336 -120 -276 -1,357 -544 33 Finance companies.................................. 5,949 9,430 14,020 387 613 454 594 860 1,113 1,530 34 Credit unions........................................... 6,436 6,729 2.185 465 36 63 218 378 288 444 35 Retailers2................................................. 2,654 2,497 2.132 160 456 134 52 316 409 103 36 Savings and loans.................................... 1.309 7 1.327 5 93 246 -14 190 232 254 37 Gasoline companies................................ 132 257 509 136 90 98 72 83 106 209 38 Mutual savings banks.............................. 337 518 47 18 32 43 37 68 78 0 By major type of credit 39 Automobile............................................. 15,204 18,736 14,715 355 84 201 245 302 -63 979 40 Commercial banks.............................. 9,956 10.933 6.857 -344 -362 -348 -138 -491 -1,253 -346 41 Indirect paper.................................. 5,307 6.471 4,488 -286 -282 -170 -44 -181 -839 -229 42 Direct loans..................................... 4,649 4,462 2,369 -58 -80 -178 -94 -310 -414 -117 43 Credit unions....................................... 2,861 3,101 1,044 215 10 18 101 174 206 211 44 Finance companies.............................. 2,387 4,702 6,814 484 436 531 282 619 984 1,114 45 Revolving................................................. 6,248 9,035 8.628 281 478 273 265 616 557 441 46 Commercial banks.............................. 4,015 5,967 5,521 -24 -81 -19 121 211 59 166 47 Retailers............................................... 2,101 2,811 2.598 169 469 194 72 322 392 66 48 Gasoline companies............................ 132 257 509 136 90 98 72 83 106 209 49 Mobile home........................................... 371 286 1.603 33 43 141 24 66 -24 -47 50 Commercial banks.............................. 387 419 1,102 -8 -22 -21 -33 -34 -85 -102 51 Finance companies.............................. -187 74 238 14 30 42 44 48 15 18 52 Savings and loans................................ 101 -276 240 21 35 120 11 47 46 31 53 Credit unions....................................... 70 69 23 6 0 0 2 5 0 6 54 Other........................................................ 13,639 15,022 13,435 -180 450 87 305 635 399 623 55 Commercial banks.............................. 4,287 6,322 4,681 -306 200 52 -70 38 -78 -262 56 Finance companies.............................. 3,749 4,654 6,968 -111 147 -119 268 193 114 398 57 Credit unions....................................... 3,505 3,559 1,118 244 26 45 115 199 82 227 58 Retailers............................................... 553 -314 -466 -9 -13 -60 -20 -6 17 37 59 Savings and loans................................ 1.208 283 1,087 -16 58 126 -25 143 186 223 60 Mutual savings bdiks.......................... 337 518 47 18 32 43 37 68 78 0 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 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Extensions 1 Total................................................................................ 257,600 297,668 324,777 26,176 27,064 27,365 25,991 27,149 27,059 28,706 By major holder 2 Commercial banks.................................................... 117,896 142,433 154,733 11,107 11,671 11,977 11,432 11,484 10,397 11,648 3 Finance companies.................................................... 41,989 50,505 61,518 5,155 5,355 5,323 4,852 5,185 5,904 6,193 4 Credit unions.............................................................. 34,028 38,111 34,926 3,085 2,752 2,872 2,795 3,035 2,994 3,167 5 Retailers1................................................................... 42,183 44,571 47,676 4,263 4,596 4,291 4,250 4,497 4,673 4,500 6 Savings and loans...................................................... 4,978 3,724 5,901 454 539 695 444 658 715 751 7 Gasoline companies.................................................. 14,617 16,017 18,005 1,941 1,965 2,009 2,024 2,061 2,130 2,284 8 Mutual savings banks................................................. 1,909 2,307 2,018 171 186 198 194 229 246 163 By major type of credit 9 Automobile............................................................... 75,641 87,981 93,901 7,400 7,518 7,544 7,117 7,234 7,237 8,333 10 Commercial banks................................................. 46,363 52,969 53,554 3,606 3,713 3,791 3,552 3,271 2,598 3,560 11 Indirect paper.................................................... 25,149 29,342 29,623 1,866 2,035 2,135 1,962 1,857 1,230 1,944 12 Direct loans........................................................ 21,214 23,627 23,931 1,740 1,678 1,656 1,590 1,414 1,368 1,616 13 Credit unions.......................................................... 16,616 18,539 17,397 1,570 1,455 1,457 1,402 1,538 1,592^ 1,613 14 Finance companies................................................. 12,662 16,473 22,950 2,224 2,350 2,296 2,163 2,425 3,047 3,160 15 Revolving................................................................... 87,596 105,125 120,174 10,700 11,143 11,124 10,953 11,614 11,483 11,867 16 Commercial banks................................................. 38,256 51,333 61,048 4,989 5,067 5,264 5,155 5,554 5,185 5,602 17 Retailers................................................................. 34,723 37,775 41,121 3,770 4,111 3,851 3,774 3,999 4,168 3,981 18 Gasoline companies............................................... 14,617 16,017 18,005 1,941 1,965 2,009 2,024 2,061 2,130 2,284 19 Mobile home.............................................................. 5,712 5,412 6,471 415 442 513 424 479 383 409 20 Commercial banks................................................. 3,466 3,697 4,542 263 250 257 243 254 171 185 21 Finance companies................................................. 644 886 797 56 84 89 93 89 81 88 22 Savings and loans................................................... 1,406 609 948 78 95 159 74 119 119 118 23 Credit unions.......................................................... 196 220 184 18 13 8 14 17 12 18 24 Other........................................................................... 88,651 99,150 104,231 7,661 7,961 8,184 7,497 7,822 7,956 8,097 25 Commercial banks................................................. 29,811 34,434 35,589 2,249 2,641 2,665 2,482 2,405 2,443 2,301 26 Finance companies................................................. 28,683 33,146 37,771 2,875 2,921 2,938 2,596 2,671 2,776 2,945 27 Credit unions.......................................................... 17,216 19,352 17,345 1,497 1,284 1,407 1,379 1,480 1,390 1,536 28 Retailers................................................................. 7,460 6,796 6,555 493 485 440 476 498 505 519 29 Savings and loans.................................................. 3,572 3,115 4,953 376 444 536 370 539 596 633 30 Mutual savings banks............................................. 1,909 2,307 2,018 171 186 198 194 229 246 163 Liquidations 31 Total................................................................................ 222,138 254,589 286,396 25,687 26,009 26,663 25,152 25,530 26,190 26,710 By major holder 32 Commercial banks.................................................... 99,251 118,792 136,572 11,789 11,936 12,313 11,552 11,760 11,754 12,192 33 Finance companies.................................................... 36,040 41,075 47,498 4,768 4,742 4,869 4,258 4,325 4,791 4,663 34 Credit unions.............................................................. 27,592 31,382 32,741 2,620 2,716 2,809 2,577 2,657 2,706 2,723 35 Retailers1................................................................... 39,529 42,074 45,544 4,103 4,140 4,157 4,198 4,181 4,264 4,397 36 Savings and loans...................................................... 3,669 3,717 4,574 449 446 449 458 468 483 497 37 Gasoline companies................................................... 14,485 15,760 17,496 1,805 1,875 1,911 1,952 1,978 2,024 2,075 38 Mutual savings banks................................................. 1,572 1,789 1,971 153 154 155 157 161 168 163 By major type of credit 39 Automobile................................................................ 60,437 69,245 79,186 7,045 7,434 7,343 6,872 6,932 7,300 7,354 40 Commercial banks................................................. 36,407 42,036 46,697 3,950 4,075 4,139 3,690 3,762 3,851 3,906 41 Indirect paper..................................................... 19,842 22,871 25,135 2,152 2,317 2,305 2,006 2,038 2,069 2,173 42 Direct loans........................................................ 16,565 19,165 21,562 1,798 1,758 1,834 1,684 1,724 1,782 1,733 43 Credit unions.......................................................... 13,755 15,438 16,353 1,355 1,445 1,439 1,301 1,364 1,386 1,402 44 Finance companies................................................. 10,275 11,771 16,136 1,740 1,914 1,765 1,881 1,806 2,063 2,046 45 Revolving.................................................................... 81,348 96,090 111,546 10,419 10,665 10,851 10,688 10,998 10,926 11,426 46 Commercial banks................................................. 34,241 45,366 55,527 5,013 5,148 5,283 5,034 5,343 5,126 5,436 47 Retailers.................................................................. 32,622 34,964 38,523 3,601 3,642 3,657 3,702 3,677 3,776 3,915 48 Gasoline companies............................................... 14,485 15,760 17,496 1,805 1,875 1,911 1,952 1,978 2,024 2,075 49 Mobile home.............................................................. 5,341 5,126 4,868 382 399 372 400 413 407 456 50 Commercial banks................................................. 3,079 3,278 3,440 271 272 278 276 288 256 287 51 Finance companies................................................. 831 812 559 42 54 47 49 41 66 70 52 Savings and loans................................................... 1,305 885 708 57 60 39 63 72 73 87 53 Credit unions.......................................................... 126 151 161 12 13 8 12 12 12 12 54 Other........................................................................... 75,012 84,128 90,796 7,841 7,511 8,097 7,192 7,187 7,557 7,474 55 Commercial banks................................................. 25,524 28,112 30,908 2,555 2,441 2,613 2,552 2,367 2,521 2,563 56 Finance companies................................................. 24,934 28,492 30,803 2,986 2,774 3,057 2,328 2,478 2,662 2,547 57 Credit unions.......................................................... 13,711 15,793 16,227 1,253 1,258 1,362 1,264 1,281 1,308 1,309 58 Retailers.................................................................. 6,907 7,110 7,021 502 498 500 496 504 488 482 59 Savings and loans................................................... 2,364 2,832 3,866 392 386 410 395 396 410 410 60 Mutual savings banks............................................. 1,572 1,789 1,971 153 154 155 157 161 168 163 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 □ April 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 21.6 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. 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 1.1 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 SO SnnncnrpH rreHit aopnries ............. 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 70 Open 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 Digitized for F7R1ASOEthRer loans............................................................ 8.7 15.3 25.2 38.6 39.5 32.6 34.6 42.5 39.4 39.5 28.3 36.8 http://fraser.stlouisfed.org/ 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 8.5 9.8 7.1 7.0 7.7 4.5 13.4 .5 .9 14.5 14.6 -5.6 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 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 -6.8 -7.7 -10.5 -5.6 2.1 8 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 3, 47. Mainly an offset to line 9. 13, and 33. 48. Lines 32 plus 38, or line 12 less line 27 plus 45. 12. Line.l 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 □ April 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 July Aug. Sept. Oct 1 Industrial production1.......................... Market groupings 2 Products, total....................................... 144.8 150.0 146.8' 142.8 143.8 145.3 147.2 148.7 149.9' 150.2 149.6 150.3 3 Final, total......................................... 135.9 147.2 145.4 142.4 142.8 143.9 145.8 147.5 148.3' 148.2 147.8 148.8 4 Consumer goods............................ 149.1 150.8 145.5 142.0 142.7 144.3 146.6 148.0 147.7 147.2 146.9 147.7 5 Equipment..................................... 132.8 142.2 145.1 142.9 142.9 143.2 144.8 146.7 149.1' 149.5 149.1 150.2 6 Intermediate....................................... 154.1 160.5 151.9 144.5 147.6 150.6 152.4 153.5 156.1 157.8 156.1 156.2 7 Materials................................................. 148.3 156.4 147.7' 136.5 138.6 142.4 146.4 150.5 152.6' 153.9 153.4 153.7 Industry groupings 8 Manufacturing....................................... 150.4 151.0 Capacity utilization (percent)12 9 Manufacturing.................................... 84.4 85.7 79.0 74.9 75.5 76.7 78.2 79.4 79.9 80.0 79.4 79.5 10 Industrial materials industries........... 85.6 87.4 79.8 73.7 74.6 76.4 78.4 80.4 81.3' 81.8 81.3 81.3 11 Construction contracts (1972 = 100)3.. 185.6 161.8 148.0 192.0 163.0 167.0 210.0 193.0 185.0 177.0 183.0 12 Nonagricultural employment, total4 ... 131. 136.6 137.8 136.6 137.0 137.4 137.9 138.2 138.5 139.0 139.3 139.3 13 Goods-producing, total..................... 109. 113.7 110.9 108.0 108.6 109.3 110.0 110.7 111.1 111.7 111.5 111.5 14 Manufacturing, total....................... 105. 108.3 104.7 102.0 102.5 103.1 103.7 104.3 104.4 104.6 104.8 104.7 15 Manufacturing, production-worker 103. 105.4 99.8 96.2 97.0 97.7 100.7 99.1 99.2 99.4 99.5 99.6 16 Service-producing.............................. 143. 149.2 152.5 152.3 152.6 152.7 153.1 153.3 153.5 154.0 154.5 154.5 17 Personal income, total.......................... 273. 308.5 342.9 343.0 345.9 350.1 354.7 358.3 361.4 364.9 367.3 n.a. 18 Wages and salary disbursements 258. 289.5 314.7 310.6 314.4 317.8 323.6 328.0 330.5 335.3 337.0 n.a. 19 Manufacturing................................ 223. 248.6 261.5 254.3 258.5 262.9 267.6 273.1 275.8 280.0 281.8 n.a. 20 Disposable personal income5............... 268. 301.5 334.5 338.0 348.4' 21 Retail sales6........................................... 253.8 281.6 300.0 299.1 300.0' 306.0 308.0 313.8 315.8 326.6 331.9 332.2 Prices7 22 Consumer........................................... 195.4 217.4 246.8 247.8 249.4 251.7 253.9 256.2 258.4 260.5 263.2 n.a. 23 Producer finished goods..................... 194.6 216.1 246.9 249.3 251.4 251.4 255.4 255.6 256.9 259.8 262.4 265.3 1. The industrial production and capacity utilization series have been revised 6. Based on Bureau of Census data 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 1981 1980 1981 1980 1981 Series Q2 Q3 Q4 Ql Q2 Q3 Q4 Ol 02 03 04 Ql Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Manufacturing........................................................ 143.9 141.0 148.7 150.8 184.8 186.3 187.8 189.3 77.9 75.7 79.2 79.7 2 Primary processing............................................. 145.0 139.6 153.1' 156.4 190.0 191.5 193.0 194.3 76.3 72.9 79.4' 80.5 3 Advanced processing......................................... 143.3 141.8 146.4 148.0 182.0 183.5 185.0 186.6 78.7 77.3 79.1 79.3 4 Materials.................................................................. 145.1 139.2 149.8 153.7 184.3 185.8 187.2 188.7 78.7 74.9 80.0 81.5 5 Durable goods.................................................... 140.6 131.5 145.1 150.0 188.6 190.0 191.5 192.8 74.6 69.2 75.8 77.8 6 Metal materials............................................... 100.6 86.6 109.9 116.6 140.8 140.9 141.0 141.1 71.4 61.5 78.0 82.6 7 Nondurable goods............................................... 166.0 161.9 175.5 179.4 202.0 204.3 206.5 208.5 82.2 79.2 85.0 86.0 8 Textile, paper, and chemical.......................... 171.9 165.6 182.7' 186.9 211.0 213.7 216.2 218.5 81.5 77.5 84.5 85.5 9 Textile.......................................................... 116.4 113.4 113.2' 110.9 139.2 139.6 140.0 140.3 83.7 81.2 80.9' 79.0 10 Paper............................................................ 142.1 142.9 148.9' 149.4 156.0 157.4 158.8 160.0 91.0 90.7 93.8' 93.4 11 Chemical...................................................... 208.3 197.9 226.9' 235.4 264.6 268.7 272.9 276.4 78.7 73.6 83.2' 85.2 12 Energy materials................................................. 130.0 129.6 129.5' 130.7 151.8 152.6 153.1 154.1 85.6 85.0 84.6' 84.8 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. Sept. Oct. Nov. Dec. Jan.' Feb.' Mar. Capacity utilization rate (percent) 13Manufacturing.................................................... 88.0 69.0 87.2 74.9 83.9 76.7 78.2 79.4 79.9 80.0 79.4 79.5 14 Primary processing......................................... 93.8 68.2 90.1 70.9 86.4 75.2 77.6 79.6 80.8' 81.3 80.4 79.8 15 Advanced processing..................................... 85.5 69.4 86.2 77.1 82.7 77.7 78.5 79.2 79.6 79.6 79.0 79.3 16Materials.............................................................. 92.6 69.4 88.8 73.7 86.1 76.4 78.4 80.4 81.3' 81.8 81.3 81.3 17 Durable goods................................................. 91.5 63.6 88.4 68.0 83.6 70.4 73.5 76.5 77.3 78.1 77.4 77.9 18 Metal materials........................................... 98.3 68.6 96.0 58.4 84.1 63.9 71.5 81.4 81.0 82.3 82.5 83.1 19 Nondurable goods........................................... 94.5 67.2 90.9 76.8 90.9 82.7 84.4 84.3 86.3 86.6 85.9 85.6 20 Textile, paper, and chemical...................... 95.1 65.3 91.4 74.5 91.2 81.6 83.8 83.7 85.9 86.0 85.5 85.0 21 Textile...................................................... 92.6 57.9 90.1 79.5 86.6 82.0 82.1 80.7 79.8' 79.2 78.9 79.0 22 Paper........................................................ 99.4 72.4 97.6 88.1 96.0 93.9 93.0 94.1 94.2' 93.7 93.5 92.9 23 Chemical.................................................. 95.5 64.2 91.2 69.6 91.2 78.7 82.1 82.0 85.4' 85.8 85.1 84.7 24 Energy materials............................................. 94.6 84.8 88.3 83.1 86.2 84.1 83.1 85.5 85.0' 84.8 85.3 84.4 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Household Survey Data 1 Noninstitutional population1...................... 161,058 163,620 166,246 166,789 167,005 167,201 167,396 167,585 167,747 167,902 2 Labor force (including Armed Forces)1 ... 102,537 104,996 106,821 107,101 107,288 107.404 107,191 107,668 107,802 108,305 3 Civilian labor force.................................... 100,420 102,908 104,719 104,980 105,167 105,285 105,067 105,543 105,681 106,177 Employment 4 Nonagricultural industries2.................. 91.031 93.648 93,960 93,781 93,887 93,999 93,888 94,294 94,646 95,136 5 Agriculture........................................... 3,342 3,297 3.310 3.399 3,319 3,340 3,394 3,403 3,281 3,276 Unemployment 6 Number................................................. 6,047 5.963 7,448 7,800 7,961 7.946 7,785 7,847 7,754 7,764 7 Rate (percent of civilian labor force) . 6.0 5.8 7.1 7.4 7.6 7.5 7.4 7.4 7.3 7.3 8 Not in labor force....................................... 58,521 58,623 59,425 59,687 59,717 59,797 60,205 59,917 59,946 59,598 Establishment Survey Data 9 Nonagricultural payroll employment3........ 86,697 89,886 90,652 90,384 90,710 90,961 91,125 91,481' 91,644' 91,645 10 Manufacturing................................................ 20,505 21,062 20,365 20.044 20,157 20,282 20,312 20,345' 20,373' 20,369 11 Mining.......................................................... 851 960 1,025 1,028 1,037 1,054 1.072 1,086' 1,094' 1,093 12 Contract construction.................................. 4,229 4,483 4,468 4,404 4,442 4,475 4.508 4,610' 4,520' 4,516 13 Transportation and public utilities............. 4,923 5,141 5,155 5,124 5,147 5,132 5.137 5,142' 5,147 5,153 14 Trade............................................................ 19,542 20,269 20,571 20,620 20,641 20.660 20.638 20,762' 20,886' 20,915 15 Finance ............................................................ 4,724 4,974 5,162 5,194 5,214 5,225 5,245 5,268' 5,274' 5,279 16 Service.......................................................... 16,252 17.078 17,736 17,861 17,913 17,969 18,068 18,133' 18,189' 18,216 17 Government.................................................... 15,672 15.920 16,171 16,109 16,159 16.164 16,145 16,135' 16,161' 16,104 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 □ April 1981 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data are seasonally adjusted. Grouping 1 p p 9 r o 6 o r 7 ­ ­ A 19 v 8 e 0 r­ 1980 1981 tion age Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Index (1967 = 100) Major Market 1 Total index.................................... 100.00 147.1 152.1 148.3 144.0 141.5 140.4 141.8 144.1 146.9 149.4 151.0 151.7 151.1 151.7 2 Products......................................... 60.71 146.8 150.0 146.6 143.7 142.5 142.8 143.8 145.3 147.2 148.7 149.9 150.2 149.6 150.3 3 Final products............................ 47.82 145.4 147.7 145.4 143.1 142.3 142.4 142.8 143.9 145.8 147.5 148.3 148.2 147.8 148.8 4 Consumer goods................... 27.68 145.5 148.6 145.3 142.4 142.1 142.0 142.7 144.3 146.6 148.0 147.7 147.2 146.9 147.7 5 Equipment............................ 20.14 145.1 146.6 145.6 144.0 142.6 142.9 142.9 143.2 144.8 146.7 149.1 149.5 149.1 150.2 6 Intermediate products............... 12.89 151.9 158.3 150.8 146.2 143.5 144.5 147.6 150.6 152.4 153.5 156.1 157.8 156.1 156.2 7 Materials....................................... 39.29 147.7 155.3 151.0 144.3 140.0 136.5 138.6 142.4 146.4 150.5 152.6 153.9 153.4 153.7 Consumer goods 8 Durable consumer goods............. 7.89 136.5 144.1 136.3 128.8 128.2 128.3 128.6 132.7 139.6 142.9 141.3 138.5 137.9 141.6 9 Automotive products............... 2.83 132.7 141.0 126.3 118.5 121.6 129.2 121.5 130.6 141.8 145.3 139.1 127.1 129.1 138.9 10 Autos and utility vehicles.... 2.03 109.9 122.0 102.3 92.6 97.1 106.4 94.1 105.5 120.2 124.3 115.9 99.8 103.6 117.2 11 Autos.................................. 1.90 103.4 114.9 97.1 88.4 95.7 105.2 91.3 98.0 110.7 114.3 105.3 90.0 96.0 108.3 12 Auto parts and allied goods.. 80 190.4 189.1 187.2 184.0 183.7 186.9 191.1 194.2 196.8 198.6 198.0 196.6 193.8 194.0 13 Home goods.............................. 5.06 138.7 145.8 142.0 134.6 132.0 127.7 132.6 134.0 138.3 141.5 142.6 144.9 142.8 143.1 14 Appliances, A/C, and TV ... 1.40 117.1 122.1 114.8 102.8 105.6 102.3 114.2 116.3 123.5 128.4 126.8 131.2 124.2 125.7 15 Appliances and TV........... 1.33 119.5 125.0 117.5 106.0 108.5 103.4 114.2 117.6 125.6 131.0 129.2 132.7 126.7 16 Carpeting and furniture....... 1.07 155.0 169.1 165.8 154.2 146.7 136.1 141.1 146.1 150.2 154.9 156.3 156.4 157.0 17 Miscellaneous home goods... 2.59 143.6 149.0 146.8 143.8 140.2 138.1 139.1 138.6 141.5 143.0 145.4 147.5 147.0 146.5 18 Nondurable consumer goods....... 19.79 149.1 150.3 148.8 147.7 147.6 147.4 148.3 148.9 149.4 150.1 150.2 150.7 150.5 150.2 19 Clothing..................................... 4.29 126.8 131.8 128.7 127.9 126.7 122.5 123.6 122.1 125.1 127.3 123.7 124.1 20 Consumer staples...................... 15.50 155.3 155.5 154.5 153.2 153.4 154.3 155.1 156.3 156.1 156.4 157.5 158.1 158.1 157.4 21 Consumer foods and tobacco 8.33 147.0 147.3 146.2 146.1 146.2 146.4 146.0 147.0 147.7 148.0 148.9 148.6 148.5 22 Nonfood staples..................... 7.17 165.0 165.0 164.0 161.5 161.7 163.6 165.7 167.1 165.9 166.2 167.6 169.1 169.2 168.4 23 Consumer chemical products...................... 2.63 208.7 208.9 206.9 203.0 202.6 204.3 209.3 213.0 210.2 210.0 212.5 214.5 215.6 24 Consumer paper products . 1.92 122.9 121.6 120.4 120.2 120.6 121.5 122.0 122.3 124.8 127.3 127.0 127.6 128.5 25 Consumer energy products 2.62 151.9 152.7 152.8 150.1 150.9 153.5 153.9 154.0 151.5 150.8 152.3 154.1 152.5 26 Residential utilities....... 1.45 171.2 169.6 172.5 169.8 170.1 176.5 178.6 178.3 175.0 171.8 171.2 174.4 Equipment 27 Business......................................... 12.63 173.3 176.1 174.2 171.9 169.8 170.1 170.3 170.5 172.3 174.5 177.8 178.5 178.0 179.5 28 Industrial................................... 6.77 157.0 159.3 159.3 157.8 155.2 154.8 154.5 154.2 154.4 157.1 160.7 164.1 165.3 167.1 29 Building and mining............. 1.44 241.3 235.6 239.5 242.2 241.0 244.4 243.6 243.4 244.3 250.1 255.7 267.5 274.0 282.4 30 Manufacturing...................... 3.85 128.5 133.1 131.9 129.5 126.1 126.0 124.4 123.9 123.9 126.4 130.6 131.1 130.6 130.9 31 Power..................................... 1.47 149.0 153.2 152.3 149.1 147.1 142.0 145.9 146.1 146.1 146.0 146.1 148.8 149.3 148.5 32 Commercial transit, farm......... 5.86 192.1 195.5 191.5 188.2 186.7 187.8 188.4 189.4 192.8 194.7 197.6 195.1 192.6 193.8 33 Commercial............................ 3.26 237.5 240.4 235.6 232.0 228.8 229.0 233.6 237.2 242.0 244.0 248.3 247.4 247.7 249.0 34 Transit................................... 1.93 139.4 142.5 143.0 136.3 138.0 140.9 138.4 133.8 135.0 136.6 137.9 131.7 124.7 125.8 35 Farm....................................... 67 123.2 129.7 116.4 124.6 121.6 122.5 112.7 116.8 120.2 121.9 123.1 122.9 120.3 36 Defense and space........................ 7.51 97.8 97.1 97.6 97.2 96.8 97.2 96.9 97.4 98.5 99.8 100.7 100.8 100.7 101.0 Intermediate products 37 Construction supplies................... 6.42 140.7 152.3 139.4 133.0 128.5 128.6 133.1 137.4 140.5 142.8 144.6 147.3 145.0 144.4 38 Business supplies.......................... 6.47 162.9 164.3 162.0 159.4 158.4 160.4 161.9 163.6 164.3 164.2 167.5 168.1 167.2 39 Commercial energy products... 1.14 173.6 174.1 174.8 172.0 168.7 172.1 173.7 175.2 174.6 174.0 179.4 179.2 176.0 Materials 40 Durable goods materials............... 20.35 143.1 154.2 148.2 139.8 133.8 129.0 131.3 134.2 140.4 146.6 148.4 150.2 149.3 150.5 41 Durable consumer parts........... 4.58 109.0 120.3 110.6 100.1 96.0 93.9 98.1 104.2 110.8 115.5 116.3 115.8 113.8 117.5 42 Equipment parts...................... 5.44 187.3 199.2 195.8 190.8 182.5 177.6 176.3 176.0 178.5 184.0 185.8 189.2 188.7 189.6 43 Durable materials n.e.c............ 10.34 135.0 145.5 139.8 130.5 125.0 118.9 122.4 125.4 133.4 140.6 142.9 144.8 144.2 144.5 44 Basic metal materials........... 5.57 104.6 116.6 109.3 100.0 95.9 84.7 89.4 91.7 102.0 114.4 115.0 116.8 117.0 45 Nondurable goods materials....... 10.47 170.7 177.0 173.2 165.2 159.6 156.2 159.8 169.7 173.7 174.1 178.8 180.0 179.2 179.0 46 Textile, paper, and chemical materials............................... 7.62 177.0 185.2 180.7 171.5 163.4 158.5 163.2 175.1 180.5 181.0 186.5 187.3 186.8 186.5 47 Textile materials................. 1.85 116.0 120.7 117.7 117.6 114.0 114.4 111.0 114.7 114.9 113.0 111.8 111.0 110.7 48 Paper materials.................... 1.62 145.1 144.2 141.2 141.7 143.4 138.4 142.0 148.2 147.3 149.5 150.0 149.6 149.7 49 Chemical materials............. 4.15 216.7 230.1 224.3 207.3 193.3 186.1 194.9 212.6 222.9 223.8 234.1 236.1 235.3 50 Containers, nondurable........... 1.70 165.1 167.1 166.8 155.8 157.7 159.0 158.8 167.2 168.6 166.6 169.7 172.9 172.2 51 Nondurable materials n.e.c. .. 1.14 137.3 137.4 133.0 136.4 136.8 136.6 137.9 137.2 135.7 139.1 141.1 142.2 138.8 52 Energy materials.......................... 8.48 130.0 130.9 130.1 129.6 130.4 130.4 130.0 128.4 127.2, 130.9 130.5 130.5 131.5 130.2 53 Primary energy........................ 4.65 115.1 115.6 116.4 116.2 117.3 115.6 114.0 114.3 113.7 114.5 115.0 114.0 115.9 54 Converted fuel materials......... 3.82 148.2 149.6 146.9 145.8 146.4 148.4 149.4 145.4 143.6 150.9 149.4 150.5 150.4 Supplementary groups 55 Home goods and clothing......... 9.35 133.2 139.4 135.9 131.5 129.5 125.3 128.5 128.5 132.2 135.0 133.9 135.3 133.7 134.3 56 Energy, total................................ 12.23 138.8 139.6 139.1 137.9 138.4 139.2 139.2 138.2 136.8 139.2 139.7 140.1 140.1 138.9 57 Products................................... 3.76 158.5 159.1 159.5 156.7 156.3 159.1 159.9 160.5 158.5 157.9 160.5 161.7 159.6 58 Materials................................. 8.48 130.0 130.9 130.1 129.6 130.4 130.4 130.0 128.4 127.2 130.9 130.5 130.5 131.5 130.2 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 r o o r­ ­ A 19 v 8 g 0 . code tion Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Index (1967 =- 100) Major Industry 12.05 150.4 151.4 150.1 149.6 150.1 150.1 150.5 150.5 150.2 152.8 154.0 155.4 155.8 156.1 6.36 132.9 133.0 133.1 133.4 132.9 130.6 129.6 130.5 132.1 136.0 139.3 141.4 143.3 143.7 5.69 169.9 172.0 169.1 167.7 169.3 171.8 173.8 172.7 170.4 171.5 170.3 171.0 169.7 169.9 4 Electric............................ 3.88 189.7 192.4 187.9 186.0 188.7 192.4 195.4 193.9 190.3 191.5 190.3 191.2 188.9 189.2 87.95 146.6 152.1 147.9 143.4 140.3 139.2 140.6 143.4 146.4 149.1 150.6 151.1 150.4 151.0 35.97 161.1 164.7 161.6 158.0 155.3 154.7 156.9 160.3 161.8 163.3 165.0 165.3 165.2 165.0 51.98 136.6 143.4 138.4 133.3 129.9 128.3 129.4 131.7 135.8 139.3 140.6 141.3 140.1 141.3 Mining 8 Metal....................................... 10 .51 109.1 132.7 123.5 120.8 120.0 83.1 71.2 73.1 90.8 107.2 122.2 127.1 127.9 9 Coal......................................... 11.12 .69 146.7 137.2 143.4 145.0 150.0 149.8 154.9 148.9 145.7 151.6 155.3 150.5 158.7 148.2 10 Oil and gas extraction........... 13 4.40 133.8 131.8 132.5 133.9 133.2 134.3 133.6 134.7 135.4 137.4 139.1 141.8 143.4 145.9 14 .75 131.7 136.0 133.1 128.1 123.9 123.7 123.5 128.2 129.0 133.0 137.8 140.1 139.3 Nondurable manufactures 12 Foods....................................... 20 8.75 149.2 149.3 147.8 149.5 149.0 148.9 148.3 148.6 149.4 150.5 150.7 150.6 151.2 13 Tobacco products................... 21 .67 119.8 122.2 121.9 116.2 113.9 119.6 117.4 119.1 123.1 125.1 118.8 122.9 22 2.68 136.8 142.0 139.9 137.1 133.6 132.5 132.6 133.0 133.8 135.0 133.9 133.1 132.8 15 Apparel products................... 23 3.31 128.6 136.1 131.3 128.6 127.2 121.5 123.8 126.7 127.5 128.0 125.1 125.5 16 Paper and products................. 26 3.21 151.0 152.7 148.2 145.7 146.2 143.6 147.1 152.3 153.0 154.4 156.8 157.0 156.5 155.8 17 Printing and publishing......... 27 4.72 139.6 139.2 136.5 135.5 135.4 138.6 140.3 140.3 141.5 142.7 144.9 145.5 146.7 146.6 18 Chemicals and products......... 28 7.74 206.7 213.6 209.1 199.2 191.1 190.3 197.8 206.8 209.1 212.0 218.8 219.4 218.5 19 Petroleum products................. 29 1.79 134.9 140.7 137.4 133.0 131.3 130.5 126.7 130.5 130.1 131.2 137.5 138.0 136.7 134.5 20 Rubber and plastic products.. 30 2.24 255.8 264.4 261.8 248.1 242.9 242.5 245.9 253.1 259.2 259.6 259.2 258.2 257.4 21 Leather and products............. 31 .86 70.1 72.8 69.9 70.1 68.5 67.8 67.7 67.2 70.2 71.2 67.8 68.9 69.2 Durable manufactures 22 Ordnance, private and government.................... 19.91 3.64 77.9 76.9 77.5 77.9 77.5 77.1 77.2 77.1 79.1 79.6 79.5 79.3 79.3 79.4 23 Lumber and products............. 24 1.64 119.3 125.3 105.2 104.5 109.7 112.8 121.7 122.6 122.2 124.9 122.0 125.3 122.0 24 Furniture and fixtures........... 25 1.37 150.0 159.5 157.1 149.5 143.1 138.6 141.1 144.8 147.2 147.2 149.0 149.6 149.9 25 Clay, glass, stone products ... 32 2.74 146.5 156.4 148.8 140.8 134.5 134.2 135.7 141.4 145.2 147.8 151.4 155.3 153.1 26 Primary metals........................ 33 6.57 101.6 113.7 106.4 96.1 90.4 81.7 86.0 90.1 100.6 113.4 112.1 113.9 113.5 113.7 27 Iron and steel...................... 331.2 4.21 91.7 105.7 97.4 84.4 75.4 68.1 75.3 79.8 93.3 107.4 103.5 108.0 107.4 28 Fabricated metal products.... 34 5.93 135.0 145.5 141.4 133.2 126.1 123.8 125.8 129.0 132.8 134.1 137.4 137.6 138.3 139.2 29 Nonelectrical machinery....... 35 9.15 162.8 166.5 163.2 162.1 158.3 158.5 158.8 159.1 161.1 163.4 167.5 168.9 168.1 169.0 30 Electrical machinery............... 36 8.05 172.7 179.2 177.0 171.4 166.6 165.0 166.7 167.5 170.0 173.0 174.9 177.6 174.6 175.8 31 Transportation equipment.... 37 9.27 116.8 123.8 115.1 109.8 110.0 110.7 108.3 112.9 118.8 121.7 120.6 117.1 115.1 119.3 32 Motor vehicles and parts... 371 4.50 118.8 130.1 114.7 105.9 106.7 107.9 104.4 113.4 124.2 129.0 126.3 118.8 117.6 127.0 33 Aerospace and miscella­ neous transportation equipment..................... 372-9 4.77 114.9 117.8 115.5 113.5 113.1 113.4 111.9 112.3 113.6 114.8 115.2 115.5 112.8 112.1 34 Instruments............................ 38 2.11 171.0 173.5 173.8 171.0 169.2 167.5 167.6 167.4 169.6 169.9 172.1 173.0 172.1 171.9 35 Miscellaneous manufactures .. 39 1.51 147.8 152.8 151.2 147.3 43.7 144.7 144.2 142.8 145.0 147.5 149.5 151.8 152.5 153.0 Gross value (billions of 1972 dollars, annual rates) Major Market 36 Products, total.......................... 507.4 602.1 619.0 599.5 588.6 585.0 586.7 585.9 593.3 604.7 610.9 615.5 614.7 611.8 614.5 ....................................... 390.92 465.4 475.9 464.5 457.3 374 5F5.i6nal456.9 453.0 58.0 467.7 473.0 475.5 472.6 470.9 474.1 38 Consumer goods................. 277.52 313.5 321.3 312.5 306.3 305.8 307.7 305.1 309.0 316.6 320.0 320.3 317.5 316.5 318.6 39 Equipment.......................... 113.42 151.9 154.6 152.0 151.0 149.8 149.2 147.9 149.0 151.1 153.0 155.2 155.1 154.4 155.5 40 Intermediate............................ 116.62 136.7 143.1 135.0 131.3 129.4 129.9 132.9 135.3 137.1 137.9 140.0 142.1 140.8 140.4 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 □ April 1981 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1980 1981 Item 1978 1979 1980r July Aug. Sept. Oct. Nov. Dec Feb. Private residential real estate activity (thousands of units) New Units 1 Permits authorized.............................. 1,801 1,552 1,171 1,236 1,361 1,564 1,333 1,355 1,235 1,228 1,143 2 1-family............................................. 1,183 981 704 781 857 914 819 812 743 715 672 3 2-or-more-family.............................. 618 570 467 455 504 650 514 543 492 513 471 4 Started................................................... 2,020 1,745 1,292 1,277 1,411 1,482 1.519 1,550 1,535 1,615 1,218 5 1-family............................................. 1,433 1,194 852 867 971 1,032 1,009 1,019 974 992 779 6 2-or-more-family.............................. 587 551 440 410 440 450 510 531 561 623 439 7 Under construction, end of period1. .. 1,310 1,140 856' 844' 864' 905r 918 945 n.a. 8 1-family............................................. 765 639 515 477' 474 495' 514' 529r 536 549 n.a. 9 2-or-more-family.............................. 546 501 383 379' 370' 369' 372' 376 382 396 n.a. 10 Completed........................................... 1,868 1,855 1,501 1,472' 1,429' 1,254' 1,287' 1,274' 1,364 1,219 n.a. 11 1-family............................................. 1,369 1,286 956 883' 924' 763' 823' 819' 889 868 n.a. 12 2-or-more-family.............................. 499 570 545 589' 505' 491' 464' 455r 475 351 n.a. 13 Mobile homes shipped........................ 207 236 261 233 Merchant builder activity in 1 -family units 14 Number sold....................................... 818 709 530 625 616 563 549 560' 513 514 487 15 Number for sale, end of period1....... 419 402 341 335 331 335 334 337' 336 333 338 Price (thousands of dollars)2 Median 16 Units sold......................................... 55.8 62.7 64.9 64.4 63.2 68.5 66.1 67.1' 67.4 67.4 67.1 Average 17 Units sold......................................... 62.7 71.9 76.6 76.8 76.5 80.3 77.7 82.2' 82.1 79.8 81.4 Existing Units (1-family) 18 Number sold....................................... 3,863' 3,701' 2,881 2,920 2,970 3,280 2,960 2,560 Price of units sold (thous. of dollars)2 19 Median................................................. 48.7 55.5 62.1 64.1 64.9 64.2 62.7 64.3 63.0 64.5 64.1 20 Average............................................... 55.1 64.0 72.7 75.7 76.2 75.5 73.4 74.9 74.0 76.1 75.7 Value of new construction3 (millions of dollars) Construction 21 Total put in place........................ 205,457 228.948 228,705 214,315 215,149 223,660 235,784' 247,403 261,942 252,468 22 Private........................................... 159,555 179.948 173,578 158,593 162,057 167,882 173,833r 182,182' 189,153 196,422 192,362 23 Residential................................ 93,423 99,029 86,903 74,277 78,632 84,378 89,207r 97,007' 100,216 103,176 101,025 24 Nonresidential, total................. 66,132 80,919 86,675 84,316 83,425 83,504 84,626' 85,175' 88,937 93,246 91,337 Buildings 25 Industrial.......................... 10,993 14,953 14,021 13,267 13,046 13,102 12,996 13,392 15,079 15,127 14,711 26 Commercial...................... 18,568 24,924 29,344 28,063 27,993 27,425 28,417 28,888 30,392 33,605 32,749 27 Other.................................. 6,739 7,427 8,533 8,115 8,095 8,447 8.760 8,799 9,086 9,931 9,469 28 Public utilities and other 29,832 33,615 34,777 34,871 34,291 34,530 34,453' 34,096' 34,380 34,583 34,408 29 Public........................................... 45,901 49,001 55,128 55,721 53,092 55,778 54,998' 53,602' 58,250 65,520 60,107 30 Military..................................... 1,501 1,641 1,853 2,041 2,315 1,717 2,069' 1,765' 1,705 2,063 1,990 31 Highway................................... 10,713 11,915 13,473 13,758 11,334 13,804 13,550 12,427 13,742 19,882 17,615 32 Conservation and development 4,457 4,586 5,083 5,896 4,353 5,091 4.763 5,109 5,626 6,242 6,188 33 Other......................................... 29,230 30,859 34,719 34,026 35,090 35,166 34,616' 34,301' 37,177 37,333 34,314 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-30-7&-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 Feb. Item 1980 1980 1981 1981 1980 1981 (1967 Feb. Feb. = 100)1 Mar. June Sept. Dec. Oct. Nov. Dec. Jan. Feb. Consumer Prices2 1 AH items.......................................................... 14.1 11.3 17.3 11.4 7.8 13.2 1.0 1.1 1.0 .7 1.0 263.2 2 Commodities............................................... 13.6 10.3 15.3 5.4 13.2 11.0 .9 1.0 .7 .6 1.1 248.3 3 Food ........................................................ 7.3 10.6 3.3 5.8 19.7 13.1 .9 1.2 1.0 -.1 .3 270.8 4 Commodities less food............................ 16.4 10.1 20.7 5.2 10.6 9.9 .9 .9 .6 1.0 1.4 235.4 5 Durable................................................. 10.1 9.0 8.2 7.5 15.2 11.8 1.1 1.3 .4 .3 -.3 220.3 6 Nondurable......................................... 24.8 11.4 38.1 3.8 5.0 6.2 .3 .5 .7 2.1 3.2 253.2 7 Services........................................................ 15.0 13.0 20.1 20.5 .7 16.8 1.2 1.3 1.4 .9 .8 290.1 8 Rent.......................................................... 8.5 8.8 8.3 10.0 8.6 9.6 1.0 .6 .7 .7 .5 201.9 9 Services less rent..................................... 16.0 13.6 21.7 22.1 -.3 17.8 1.2 1.4 1.5 .9 .9 306.9 Other groupings 10 All items less food..................................... 15.7 11.5 20.3 12.7 5.7 13.2 1.0 1.1 1.0 1.0 1.1 260.4 11 All items less food and energy................... 12.1 10.8 14.7 14.0 5.8 14.4 1.1 1.1 1.1 .6 .4 246.8 12 Homeownership......................................... 20.6 13.3 22.6 26.4 -3.5 23.1 2.0 1.7 1.5 .5 0 335.8 Producer Prices 13 Finished goods............................................. 13.6 10.4 17.5 8.4 13.5 7.8 .9 .5 .5 .9 .8 262.4 14 Consumer................................................ 14.7 10.1 18.8 7.6 14.5 6.9 .8 .5 .4 .8 .8 264.0 15 Foods.................................................... 3.0 8.1 -.9 -1.4 31.0 3.6 .7 .1 .1 0.0 -.6 250.9 16 Excluding foods.................................... 21.3 11.0 29.7 12.1 7.6 8.5 .8 .7 .5 1.2 1.3 264.3 17 Capital equipment.................................... 9.4 11.2 13.6 10.9 9.9 11.4 1.7 .1 .9 1.0 1.1 256.3 18 Intermediate materials3.............................. 19.6 9.5 23.7 6.2 7.8 12.6 .5 .8 1.7 1.3 .6 299.5 Crude materials 19 Nonfood.................................................. 29.5 22.0 18.9 .2 32.3 17.6 1.9 1.3 .8 -.8 11.5 481.7 20 Food ........................................................ 3.2 5.5 -16.6 -.3 73.9 -4.1 1.5 .2 -2.6 -1.1 -3.3 267.1 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 □ April 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 1980' Q4 Ql Q2 Q3 1 Q4r Gross National Product 1 Total........................................................................................................... 2,156.1 2,413.9 2,626.1 2.727.5 2,571.7 2,564.8 2,637.3 2,730.6 By source 2 Personal consumption expenditures................................................. 1,348.7 1,510.9 1,672.8 1,582.3 1,631.0 1,626.8 1,682.2 1,751.0 3 Durable goods.................................................................................. 199.3 212.3 211.9 675.4 220.9 194.4 208.8 223.3 4 Nondurable goods.......................................................................... 529.8 602.2 675.7 785.1 661.1 664.0 674.2 703.5 5 Services ........................................................................................... 619.6 696.3 785.2 727.0 749.0 768.4 799.2 824.2 6 Gross private domestic investment................................................... 375.3 415.8 395.3 410.0 415.6 390.9 377.1 397.7 7 Fixed investment ............................................................................ 353.2 398.3 401.2 108.6 413.1 383.5 393.2 415.1 8 Nonresidential............................................................................. 242.0 279.7 296.0 290.2 297.8 289.8 294.0 302.1 9 Structures.................................................................................. 78.7 96.3 108.8 105.1 108.2 108.4 107.3 111.5 10 Producers’ durable equipment............................................... 163.3 183.4 187.1 185.1 189.7 181.4 186.8 190.7 11 Residential structures ................................................................. 111.2 118.6 105.3 120.6 115.2 93.6 99.2 113.0 12 Nonfarm.................................................................................... 106.9 113.9 100.3 115.4 110.1 88.9 94.5 107.6 13 Change in business inventories..................................................... 22.2 17.5 -5.9 -.8 2.5 7.4 -16.0 -17.4 14 Nonfarm....................................................................................... 21.8 13.4 -4.7 -4.4 1.5 6.1 -12.3 -14.0 15 Net exports of goods and services..................................................... -0.6 13.4 23.3 7.6 8.2 17.1 44.5 23.3 16 Exports............................................................................................ 219.8 281.3 339.8 306.3 337.3 333.3 342.4 346.1 17 Imports............................................................................................ 220.4 267.9 316.5 298.7 329.1 316.2 297.9 322.7 18 Government purchases of goods and services.................................. 432.6 473.8 534.7 496.4 516.8 530.0 533.5 558.6 19 Federal............................................................................................ 153.4 167.9 198.9 178.1 190.0 198.7 194.9 212.0 20 State and local ................................................................................ 279.2 305.9 335.8 318.3 326.8 331.3 338.6 346.6 By major type of product 21 Final sales, total.................................................................................. 2,133.9 2,396.4 2,632.0 2,497.1 2,569.1 2,557.4 2,653.4 2,748.0 22 Goods............................................................................................... 946.6 1,055.9 1,130.4 1,078.4 1,116.9 1,106.4 1,129.4 1,169.0 23 Durable....................................................................................... 409.8 451.2 458.6 448.1 456.4 444.6 456.5 476.7 24 Nondurable.................................................................................. 536.8 604.7 671.9 630.3 660.5 661.8 672.9 698.2 25 Services ........................................................................................... 976.3 1,097.2 1,229.6 1,142.8 1,178.6 1,205.6 1,249.0 1,285.3 26 Structures........................................................................................ 233.2 260.8 266.0 275.1 276.2 252.8 258.9 276.4 27 Change in business inventories......................................................... 22.2 17.5 -5.9 -.8 2.5 7.4 -16.0 -17.4 28 Durable goods.................................................................................. 17.8 11.5 -4.0 -.4 -11.8 3.3 -8.4 .7 29 Nondurable goods.......................................................................... 4.4 6.0 -1.8 -.5 14.3 4.1 -7.7 -18.1 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 1,485.6 National Income 31 Total........................................................................................................... 1,745.4 1,963.3 2,121.4 2,031.3 2,088.5 2,070.0 2,122.4 2,214.5 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 1,661.8 33 Wages and salaries.......................................................................... 1,105.4 1,235.9 1,348.6 1,282.4 1,314.5 1,320.4 1,342.3 1,387.3 34 Government and government enterprises................................ 219.6 235.9 253.8 243.3 246.7 250.5 253.9 263.3 35 Other.......................................................................................... 885.7 1,000.0 1,090.0 1,039.1 1,067.9 1,069.9 1,088.4 1,134.0 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 .......................................................................... 117.1 131.6 130.6 136.3 133.7 124.9 129.7 134.0 40 Business and professional1............................................................. 91.0 100.7 107.2 106.8 107.9 101.6 107.6 111.6 41 Farm1............................................................................................... 26.1 30.8 23.4 29.5 25.7 23.3 22.1 22.5 42 Rental income of persons2................................................................. 27.4 30.5 31.8 31.0 31.2 31.5 32.0 32.4 43 Corporate profits1 .............................................................................. 199.0 196.8 182.6 189.4 200.2 169.3 177.9 183.0 44 Profits before tax3.......................................................................... 223.3 255.4 245.5 255.4 277.1 217.9 237.6 249.2 45 Inventory valuation adjustment..................................................... -24.3 -42.6 -45.7 -50.8 -61.4 -31.1 -41.7 -48.4 46 Capital consumption adjustment................................................... -13.5 -15.9 -17.2 -15.1 -15.4 -17.6 -17.9 -17.8 47 Net interest......................................................................................... 115.8 143.4 179.8 156.5 165.4 175.3 185.3 193.3 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 Ql Q2 Q3 Q4' 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 2,256.2 2 Wa^e and salary disbursements......................................................... 1,105.2 1,236.1 1,343.7 1,282.2 1,314.7 1,320.4 1,341.8 1,397.8 3 Commodity-producing industries................................................... 389.1 437.9 465.4 450.4 461.7 456.0 460.1 484.0 299.2 333.4 350.7 340.4 347 9 343 2 346 7 364 0 5 Distributive industries.................................................................... 270.5 303.0 328.9 315.0 322.6 323.2 329.2 340.6 6 Service industries............................................................................ 226.1 259.2 295.7 273.7 283.6 290.8 298.7 310.0 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 .......................................................................... 117.2 131.6 130.6 136.3 133.7 124.9 129.7 134.0 10 Business and professional1............................................................. 91.0 100.8 107.2 106.8 107.9 101.6 107.6 111.6 11 Farm1............................................................................................... 26.1 30.8 23.4 29.5 25.7 23.3 22.1 22.5 12 Rental income of persons2................................................................ 27.4 30.5 31.8 31.0 31.2 31.5 32.0 32.4 43.1 48.6 54.4 50.1 52.4 54 2 55.1 56.1 14 Personal interest income.................................................................... 173.2 209.6 256.3 225.7 239.9 253.6 261.8 269.7 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 2,256.2 19 Less: Personal tax and nontax payments...................................... 258.8 302.0 338.5 321.8 323.1 330.3 341.5 359.2 20 Equals: Disposable personal income .............................................. 1,462.9 1,641.7 1,821.7 1,710.1 1,765.1 1,784.1 1,840.6 1,897.0 21 Less: Personal outlays.................................................................... 1,386.6 1,555.5 1,720.4 1,629.4 1,678.7 1,674.1 1,729.2 1,799.4 22 Equals: Personal saving .................................................................. 76.3 86.2 101.3 80.7 86.4 110.0 111.4 97.6 Memo: Per capita (1972 dollars) 23 Gross national product.................................................................. 6,568 6,721 6,646 6,730 6,768 6,580 6,597 6,641 24 Personal consumption expenditures.............................................. 4,136 4,219 4,196 4,251 4,251 4,134 4,172 4,232 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 5.1 Gross Saving 27 Gross saving ............................................................................................. 355.2 412.0 401.8 402.0 404.5 394.5 402.0 406.5 28 Gross private saving............................................................................ 355.4 398.9 432.9 396.4 413.0 435.9 446.5 436.2 29 Personal saving.................................................................................... 76.3 86.2 101.3 80.7 86.4 110.0 111.4 97.6 30 Undistributed corporate profits1....................................................... 57.9 59.1 44.3 50.6 52.1 42.1 42.8 40.2 31 Corporate inventory valuation adjustment...................................... -24.3 -42.6 -45.7 -50.8 -61.4 -31.1 -41.7 -48.4 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 -32.2 4.4 1.7 -29.6 -45.6 -30.9 36 Federal............................................................................................. -29.2 -14.8 -61.2 -24.5 -36.3 -66.5 -74.2 -68.0 37 State and local ................................................................................ 29.0 26.7 29.1 28.9 26.6 23.9 28.6 37.1 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....................................................................................... 361.6 414.1 401.2 401.3 407.3 392.5 405.0 400.1 40 Gross private domestic...................................................................... 375.3 415.8 395.3 410.0 415.6 390.9 377.1 397.7 41 Net foreign ......................................................................................... -13.8 -1.7 5.9 -8.7 -8.3 1.7 27.8 2.3 42 Statistical discrepancy........................................................................ 6.4 2.2 -.6 -.7 2.8 -1.9 3.0 -6.4 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 □ April 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 1978 1979 1980P Q4 Ql Q2 Q3' Q4/> 1 Balance on current account..................................................... -14,259 -705' 118 -1,735' -2,621' -2,441' 4,493 687 2 Not seasonally adjusted....................................................... 553' -2,426' -681' 102 3,123 3 Merchandise trade balance2............................................... -33,759 -29,386' -27,354 -9,158' -10,848' -7,503' 2,858 -6,145 4 Merchandise exports......................................................... 142,054 182,068' 221,781 50,239' 54,604' 54,605' 56,181 56,391 5 Merchandise imports....................................................... -175,813 -211,454' -249,135 -59,397' - 55,452' -62,108' -59,039 -62,536 6 Military transactions, net..................................................... 886 -1,274 -3,309 -700 -922 -994 -636 -758 7 Investment income, net3..................................................... 20,899 32,509 32,534 8,833 10,062 6,102' 8,056 8,316 8 Other service transactions, net............................................ 2,769 3,112 5,206 792 899 1,280' 1,458 1,570 9 Memo: Balance on goods and services3 4.......................... -9,204 4,961 7,078 -183 -809 -1,115' 6,020 2,983 10 Remittances, pensions, and other transfers....................... -1,884 -2,142 -2,452 -665 -565 -564 -578 -747 11 U.S. government grants (excluding military)..................... -3,171 -3,524 -4,506 -887 -1,247 -762 -949 -1,549 12 Change in U.S. government assets, other than official re­ serve assets, net (increase, -)........................................ -4,644 -3,783 -5,111 -925 -1,467 -1,191 -1,374 -1,079 13 Change in U.S. official reserve assets (increase, -)........... 732 -1,132 -8,155 -649 -3,268 502 -1,109 -4,279 14 Gold..................................................................................... -65 -65 0 -65 0 0 0 0 15 Special drawing rights (SDRs)............................................ 1,269 -1,136 -16 0 -1,152 112 -261 1,285 16 Reserve position in International Monetary Fund........... 4,231 -189 -1,667 27 -34 -99 -294 -1,240 17 Foreign currencies................................................................. -4,683 257 -6,472 -611 -2,082 489 -554 -4,324 18 Change in U.S. private assets abroad (increase, -)3 ......... -57,279 -56,858 -71,236 -11,918 -7,971' -25,019' -16,652 -21,409 19 Bank-reported claims........................................................... -33,631 -25,868 -46,608 -7,213 -274 -21,051 -12,268 -13,015 20 Nonbank-reported claims ................................................... -3,853 -2,029 n.a. 410 -1,474 147 479 n.a. 21 U.S. purchase of foreign securities, net............................ -3,450 -4,643 -3,188 -986 -765 -1,246 -805 -371 22 U.S. direct investments abroad, net3 ................................ -16,345 -24,318 -20,592 -4,129 -5,458' -2,869' -4,058 -8,207 23 Change in foreign official assets in the United States (increase, + ).................................................................... 33,292 -14,270 16,179 -1,221 -7,215 7,775 7,991 7,628 24 U. S. Treasury securities....................................................... 23,523 -22,356 9,640 -5,769 -5,357 4,314 3,769 6,914 25 Other U.S. government obligations.................................... 666 465 2,187 41 801 250 549 587 26 Other U.S. government liabilities5 .................................... 2,220 -714 1,375 -924 181 737 242 215 27 Other U.S. liabilities reported by U.S. banks................... 5,488 7,219 -84 4,881 -3,185 1,652 2,006 -557 28 Other foreign official assets6................................................ 1,395 1,116 3,061 550 345 822 1,425 469 29 Change in foreign private assets in the United States (increase, + )3.................................................................. 30,804 51,845 31,446 5,246 14,409 174 3,772 13,092 30 U.S. bank-reported liabilities.............................................. 16,259 32,668 10,687 400 6,355 -4,208 194 8,346 31 U.S. nonbank-reported liabilities........................................ 1,640 1,692 n.a. 1,050 683 1,331 405 n.a. 32 Foreign private purchases of U.S. Treasury securities, net 2,197 4,830 2,693 920 3,278 -1,225 -254 894 33 Foreign purchases of other U.S. securities, net............... 2,811 2,942 7,443 313 2,427 1,194 990 2,832 34 Foreign direct investments in the United States, net3 .... 7,896 9,713 8,204 2,563 1,666 3,082 2,437 1,020 35 Allocation of SDRs ................................................................. 0 1,139 1,152 0 1,152 0 0 0 36 Discrepancy.............................................................................. 11,354 23,765' 35,605 11,202' 6,981' 20,200' 2,879 5,544 37 Owing to seasonal adjustments .......................................... 2,400 -93' 1,465' -4,032 2,658 38 Statistical discrepancy in recorded data before seasonal adjustment.................................................................... 11,354 23,765' 35,605 8,802' 7,074 18,735' 6,911 2,886 Memo: Changes in official assets 39 U.S. official reserve assets (increase, -)........................... 732 -1,132 -8,155 -649 -3,268 502 -1,109 -4,279 40 Foreign official assets in the United States (increase, + )................................................................. 31,072 -13,556 14,804 -297 -7,396 7,038 7,749 7,415 41 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 23 above) ................................................................................ -1,137 5,558' 12,985 5,005' 2,955' 4,749 4,391 890 42 Transfers under military grant programs (excluded from lines 4, 6, ai.d 11 above)................................................. 236 305 635 139 144 155 125 211 1. Seasonal factors are no longer calculated for lines 13 through 42. 5. Primarily associated with military sales contracts and other transactions ar­ 2. Data are on an international accounts (IA) basis. Differs from the Census ranged with or through foreign official agencies. basis data, shown in table 3.11, for reasons of coverage and timing; military exports 6. Consists of investments in U.S. corporate stocks and in debt securities of are excluded from merchandise data and are included in 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 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments......................................... 143,682 181,860 220,684 19,086 18,828 19,214 18,715 19,251 18,825 19,764 2 GENERAL IMPORTS including mer­ chandise for immediate consump­ tion plus entries into bonded warehouses....................................... 174,759 209,458 245,010 19,713 19,940 20,347 19,860 21,436 23,194 21,922 3 Trade balance......................................... -31,075 -27,598 -24,326 -626 -1,112 -1,134 -1,145 -2,185 -4,369 -2,158 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar .p 1 Total1...................................................... 18,650 18,956 26,756 22,994 23,967 25,673 26,756 28,316 29,682 30,410 2 Gold stock, including Exchange Stabili­ zation Fund1 ................................... 11,671 11,172 11,160 11.168 11.163 11,162 11,160 11.159 11,156 11,154 3 1,558 2,724 2.610 4,007 3.939 3,954 2,610 3,628 3,633 3,913 4 Reserve position in International Mone­ tary Fund2 ....................................... 1,047 1,253 2,852 1,665 1.671 1,822 2,852 2.867 3,110 3,448 5 4,374 3,807 10.134 6,154 7.194 8,735 10,134 10,662 11,783 11,895 1. Gold held under earmark at Federal Reserve Banks for foreign and inter­ 3. Includes allocations by the International Monetry 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. 1, 3.22. 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 □ April 1981 3.13 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1980 1981 Asset account 1977 19781 1979 July Aug. Sept. Oct. Nov. Dec. Jan.P All foreign countries 1 Total, all currencies................................ 258,897 306,795 364,233 377,877 386,467 385,884 333,178 389,011 396,939 394,192 2 Claims on United States........................ 11,623 17,340 32,302 29,085 36,864 29,341 30,476 30,617 28,432 29,500 3 Parent bank......................................... 7,806 12,811 25,929 17,552 26,711 19,685 21,440 22,254 20,719 20,652 4 Other.................................................... 3,817 4,529 6,373 11,533 10,153 9,656 9,036 8,363 7,713 8,848 5 Claims on foreigners................................ 238,848 278,135 317,175 331,329' 332,531' 339,204' 335,463' 340,690' 350,794 347,101 6 Other branches of parent bank......... 55,772 70,338 79,661 75,196 72,558 73,856 72,458 74,043 76,563 75,327 7 Banks................................................... 91,883 103,111 123,413 134,685' 136,590' 139,902' 138,259' 139,935' 144,579 143,891 8 Public borrowers2................................ 14,634 23,737 26,072 25,474 26,113 26,740 26,548 26,935 27,594 27,455 9 Nonbank foreigners............................ 76,560 80,949 88,029 95,974' 97,270' 98,706' 98,198' 99,777' 102,058 100,428 10 Other assets............................................. 8,425 11,324' 14,764' 17,471' 17,078' 17,349' 17,247' 17,708' 17,717 17,595 11 Total payable in U.S. dollars................... 193,764 224,940 267,711 275,783 283,974 282,171 279,689 284,269' 289,717 290,773 12 Claims on United States........................ 11,049 16,382 31,171 27,720 35,551 28,138 29,059 29,173 27,163 28,244 13 Parent bank......................................... 7,692. 12,625 25,632 17,236 26.390 19,414 21,043 21,853 20,368 20,360 14 Other..................................................... 3,357 3,757 5,539 10,484 9,161 8,724 8,016 7,320 6,795 7,884 15 Claims on foreigners................................ 178,896 203,498 229,118 239,290 239,561 245,588 242,018 246,238 253,401 253,046 16 Other branches of parent bank......... 44,256 55,408 61,525 57,813 55,106 56,603 55,230 57,219 58,284 58,569 17 Banks.................................................. 70,786 78,686 96,261 106,365' 108,073' 111,878' 199,411' 110,762' 115,942 116,104 18 Public borrowers2................................ 12,632 19,567 21,629 21,233 21,786 22,305 22,578 22,846 23,391 23,035 19 Nonbank foreigners............................ 51,222: 49,837 49,703 53,879' 54,596' 54,802' 54,799' 55,411' 55,784 55,338 20 Other assets............................................. 3,820 5,082' 7,438' 8,773 8,862 8,445 8,612 8,858' 9,155 9,483 United Kingdom 21 Total, all currencies................................ 90,933 106,593 130,873 135,669 136,467 137,447 138,158 140,715 142,781 142,716 22 Claims on United States........................ 4,341 5,370 11,117 8,366 8,465 8,022 8,216 8,771 7,491 7,716 23 Parent bank......................................... 3,518 4,448 9,338 5,705 6,023 5,788 5,969 6,552 5,792 5,278 24 Other.................................................... 823 922 1,779 2,661 2,442 2,234 2,247 2,219 1,699 2,438 25 Claims on foreigners................................ 84.016 98,137 115,123 120,914 121,805 123,369 123,854 125,859 129,249 129,107 26 Other branches of parent bank......... 22.017 27,830 34,291 32,231 31,607 30,858 31,431 32,267 34,538 35,127 27 Banks................................................... 39,899 45,013 51,343 54,824 55,530 57,066 56,723 57,423 57,658 57,975 28 Public borrowers2................................ 2,206 4,522 4,919 5,710 5,865 6,251 6,113 6,405 6,684 6,465 29 Nonbank foreigners............................ 19,895 20,772 24,570 28,149 28,803 29,194 29,587 29,764 30,369 29,540 30 Other assets............................................. 2,576 3,086 4,633 6,389 6,197 6,056 6,088 6,085 6,041 5,893 31 Total payable in U.S. dollars................... 66,635 75,860 94,287 93,158 93,720 94,784 95,287 97,246 98,913 99,930 32 Claims on United States........................ 4,100 5,113 10,746 7,831 7,954 7,656 7,647 8,233 7,098 7,293 33 Parent bank......................................... 3,431 4,386 9,297 5,629 5,960 5,744 5,817 6,410 5,701 5,221 34 Other.................................................... 669 727 1,449 2,202 1,994 1,912 1,830 1,823 1,397 2,072 35 Claims on foreigners................................ 61,408 69,416 81,294 82,434 82,705 84,355 84,849 86,246 88,967 89,615 36 Other branches of parent bank......... 18,947 22,838 28,928 26,083 25,565 24,913 25,593 26,710 28,231 28,759 37 Banks................................................... 28,530 31,482 36,760 38,471 39,070 40,917 40,312 40,542 41,373 42,373 38 Public borrowers2................................ 1,669 3,317 3,319 4,280 4,327 4,663 4,551 4,706 4,909 4,661 39 Nonbank foreigners............................ 12,263 11,779 12,287 13,600 13,743 13,862 14,393 14,288 14,454 13,822 40 Other assets............................................. 1,126 1,345' 2,261' 2,893 3,061 2,773 2,791 2,767 2,848 3,022 Bahamas and Caymans 41 Total, all currencies................................ 79,052 91,735 108,977 120,307 128,515 123,179 119,524 119,367 123,754 123,389 42 Claims on United States........................ 5,782 9,635 19,124 18,272 25,882 18,305 19,656 18,325 17,751 18,364 43 Parent bank......................................... 3,051 6,429 15,196 10,524 19,149 11,839 13,837 13,071 12,631 12,836 44 Other.................................................... 2,731 3,206 3,928 7,748 6,733 6,466 5,819 5,254 5,120 5,528 45 Claims on foreigners................................ 71,671 79,774 86,718 98,020 98,496 100,905 95,959 96,800 101,903 100,740 46 Other branches of parent bank......... 11,120 12,904 9,689 14,362 13,160 14,724 13,093 13,135 13,336 12,981 47 Banks.................................................. 27,939 33,677 43,189 50.832r 51,809' 52,749r 49,883' 50,609' 54,864 54,193 48 Public borrowers2................................ 9,109 11,514 12,905 11,627 12,055 12,078 12,441 12,213 12,574 12,558 49 Nonbank foreigners............................ 23,503 21,679 20,935 21,199' 21,472' 21,354' 20,542' 20,843' 21,129 21,008 50 Other assets............................................. 1,599 2,326 3,135 4,015 4,137 3,969 3,909 4,242 4,100 4,285 51 Total payable in U.S. dollars................... 73,987 85,417 102,368 114,538 122,667 117,245 113,683 113,560' 117,571 117,478 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 1981 Liability account 1977 19781 1979 July Aug. Sept. Oct. Nov. Dec. Jan.P All foreign countries 52 Total, all currencies................................ 258,897 306,795 364,233 377,877 386,467 385,884 383,178 389,011 396,939 394,192 53 To United States...................................... 44,154 58,012 66,686 83,244 87,606 84,068 84,152 86,580 90,874 92,109 54 Parent bank......................................... 24,542 28,654 24,530 35,423 37,466 38,490 37,187 36,957 39,058 38,430 5 5 5 6 N Ot o h n e b r a b n a k n s k .. s . .. i . n . .. U ... n .. i . t . e .. d .. .. S .. t . a .. t .. e .. s . . .. . .. . .. . . . .. . .. . . . . 19,613 1 1 2 7 , , 1 18 6 9 9 2 1 8 3 , , 1 9 8 6 8 8 3 1 6 1 , , 4 4 0 1 6 5 3 1 5 4 , , 4 7 1 2 5 5 3 1 2 2 , , 9 6 4 3 3 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 , , 5 2 3 3 6 5 4 1 0 3 , , 0 6 4 31 8 57 To foreigners........................................... 206,579 238,912 283,344 279,604 284,141 287,810 285,198 288,225 291,571 287,730 58 Other branches of parent bank......... 53,244 67,496 77,601 72,067 69,178 70,689 69,691 71,498 73,913 72,594 59 Banks................................................... 94,140 97,711 122,849 122,727 130,360 131,022 132,142 132,237 130,421 131,653 60 Official institutions.............................. 28,110 31,936 35,664 33,073 33,080 33,086 30,713 31,115r 32,438 28,831 61 Nonbank foreigners............................ 31,085 41,769 47,230 51,737 51,523 53,013 52,652 53,375' 54,799 54,652 62 Other liabilities....................................... 8,163 9,871 14,203 15,029 14,720 14,006 13,828 14,206 14,539 14,353 63 Total payable in U.S. dollars................... 198,572 230,810 273,819 283,090 291,873 289,163 287,177 292,425 300,850 301,264 64 To United States..................................... 42,881 55,811 64,530 80,657 84,698 81,125 81,255 83,764 88,054 89,526 65 Parent bank......................................... 24,213 27,519 23,403 33,977 35,906 36,825 35,431 35,243 37,418 36,855 6 67 6 N Ot o h n e b r a b n a k n s k .. s . .. i . n . .. U ... n .. i . t . e .. d .. .. S .. t . a .. t .. e .. s . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,669 1 1 1 6 , , 9 3 1 7 5 7 2 1 7 3 , , 3 7 5 71 6 3 1 5 1 , , 5 1 2 5 5 5 3 1 4 4 , , 3 4 7 1 3 9 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 , , 6 9 7 6 1 5 3 1 9 3 , , 2 4 5 2 1 0 68 To foreigners........................................... 151,363 169,927 201,476 194,359 198,971 200,281 198,541 200,814 204,630 203,547 69 Other branches of parent bank......... 43,268 53,396 60,513 56,206 53,355 55,146 53,695 55,543 56,941 56,494 70 Banks................................................... 64,872 63,000 80,691 78,930 86,420 85,387 86,961 86,525 86,491 88,233 71 Official institutions.............................. 23,972 26,404 29,048 26,177 26,165 25,659 23,364 23,840' 24,689 21,822 72 Nonbank foreigners............................ 19,251 27,127 31,224 33,046 33,031 34,089 34,521 34,906' 36,509 36,998 73 Other liabilities....................................... 4,328 5,072 7,813 8,074 8,204 7,757 7,381 7,847 8,166 8,191 United Kingdom 74 Total, all currencies................................ 90,933 106,593 130,873 135,669 136,467 137,447 138,158 140,715 142,781 142,716 75 To United States..................................... 7,753 9,730 20,986 21,404 20,608 19,343 19,157 20,594 21,735 23,183 76 Parent bank......................................... 1,451 1,887 3,104 3,275 2,542 2,951 2,712 3,198 4,176 4.228 7 7 7 8 N Ot o h n e b r a b n a k n s k .. s . .. i . n . .. U ... n .. i . t . e .. d .. .. S .. t . a .. t .. e .. s . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,302 4 3 , , 1 6 8 5 9 4 1 7 0 , , 6 1 9 8 3 9 1 5 2 , , 5 5 6 6 7 2 1 5 2 , , 9 1 1 5 0 6 1 5 1 , , 3 0 6 3 1 1 1 5 0 , , 8 6 0 4 0 5 1 5 1 , , 7 6 3 6 2 4 1 5 1 , , 7 8 1 4 6 3 1 5 3 , , 3 5 9 6 3 2 79 To foreigners........................................... 80,736 93,202 104,032 107,739 109,604 112,412 113,539 114,813 115,582 114,208 80 Other branches of parent bank......... 9,376 12,786 12,567 12,694 13,343 13,706 13,940 13,951 13,933 13,599 81 Banks................................................... 37,893 39,917 47,620 51,203 51,452 53,776 56,772 58,127 55,848 56,487 82 Official institutions.............................. 18,318 20,963 24,202 21,088 22,600 22,444 19,807 20,437 21,412 19,199 83 Nonbank foreigners............................ 15,149 19,536 19,643 22,754 22,209 22,486 23,020 22,298 24,389 24,923 84 Other liabilities....................................... 2,445 3,661 5,855 6,526 6,255 5,692 5,462 5,308 5,464 5,325 85 Total payable in U.S. dollars................... 67,573 77,030 95,449 95,314 96,453 96,832 97,055 99,135 102,300 103,015 86 To United States...................................... 7,480 9,328 20,552 20,843 20,007 18,687 18,551 19,978 21,080 22,554 87 Parent bank......................................... 1,416 1,836 3,054 3,238 2,496 2,892 2,634 3,101 4,078 4,126 8 8 8 9 N Ot o h n e b r a b n a k n s k .. s . .. i . n .. . U ... n .. i . t . e .. d .. .. S .. t .. a .. t . e .. s .. . . . . .. .. . . . . . . . . .. .. . . . . . 6,064 4 3 , , 1 3 0 9 1 1 7 9 , , 6 8 5 4 1 7 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 , ,2 7 0 1 3 4 1 5 1 , , 6 26 1 1 6 1 5 1 , , 6 3 2 7 6 6 1 5 3 , , 3 1 0 2 0 8 90 To foreigners........................................... 58,977 66,216 72,397 71,489 73,431 75,422 76,114 76,696 78,512 77,742 91 Other branches of parent bank......... 7,505 9,635 8,446 8,672 9,128 9,588 9,891 9,770 9,600 9,456 92 Banks................................................... 25,608 25,287 29,424 31,352 31,726 32,891 35,495 35,998 35,097 35,581 93 Official institutions.............................. 15,482 17,091 20,192 16,846 18,253 18,046 15,338 15,989 17,024 14,941 94 Nonbank foreigners............................ 10,382 14,203 14,335 14,619 14,324 14,897 15,390 14,939 16,791 17,764 95 Other liabilities....................................... 1,116 1,486 2,500 2,982 3,015 2,723 2,390 2,461 2,708 2,719 Bahamas and Caymans 96 Total, all currencies................................ 79,052 91,735 108,977 120,307 128,515 123,179 119,524 119,367 123,754 123,389 97 To United States...................................... 32,176 39,431 37,719 54,217 58,925 56,317 56,123 56,860 59,599 58,857 98 Parent bank......................................... 20,956 20,482 15,267 26,589 29,189 29,355 27,678 26,871 28,105 26,515 1 9 0 9 0 N Ot o h n e b r a b n a k n s k .. s . .. i . n . .. U ... n .. i . t . e .. d .. .. S .. t . a .. t .. e .. s . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,220 1 6 2 , , 0 8 7 7 3 6 1 5 7 , , 2 2 0 4 4 8 22 4, , 8 8 2 0 1 7 22 7 , , 2 4 7 6 6 0 2 6 0 , , 0 8 7 8 5 7 2 5 2 , , 9 5 4 0 5 0 2 6 3, , 4 5 7 1 1 8 24 7 , , 3 14 5 1 3 2 7 5 , , 1 1 7 6 3 9 101 To foreigners........................................... 45,292 50,447 68,598 63,208 66,630 63,966 60,593 59,492 61,203 61,595 102 Other branches of parent bank......... 12,816 16,094 20,875 20,409 18,081 17,079 16,720 15,878 17,040 17,819 103 Banks................................................... 24,717 23,104 33,631 27,145 34,100 32,185 29,202 28,933 29,893 30,070 104 Official institutions.............................. 3,000 4,208 4,866 5,525 4,119 4,250 4,610 4,368 4,361 4,184 105 Nonbank foreigners............................ 4,759 7,041 9,226 10,129 10,330 10,452 10.061 10,313 9,909 9,522 106 Other liabilities....................................... 1,584 1,857 2,660 2,882 2,960 2,896 2,808 3,015 2,952 2,937 107 Total payable in U.S. dollars................... 74,463 87,014 103,460 116,246 124,103 118,576 115,166 115,121 119,574 119,143 1. In May 1978 the exemption level for branches required to report was increased, eluding corporations that are majority owned by foreign governments, replaced which reduced the number of reporting branches. the previous, more narrowly defined claims on foreign official institutions. 2. In May 1978 a broader category of claims on foreign public borrowers, in- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics □ April 1981 3.14 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1980 1981 Item 1977 1978 1979 Aug. Sept. Oct. Nov. Dec. Jan .p Feb.P 1 Total i........................................................................... 131,097 162,589 149,481 154,674 156,899 157,385 163,196 164,332 162,690 162,193 By type 2 Liabilities reported by banks in the United States2 . 18,003 23,290 30.475 29,449 30,918 28.815 29,601 30,381 26,991 24,744 3 U.S. Treasury bills and certifcates3.......................... 47,820 67,671 47.666 49,811 49,361 50,392 55,104 56,243 56,522 56,829 U.S. Treasury bonds and notes 4 Marketable.............................................................. 32,164 35,894 37.590 39,801 40,799 41.463 41,764 41,431 42,294 43,698 5 Nonmarketable4..................................................... 20,443 20,970 17.387 15,654 15,254 15,254 15,254 14,654 14,654 14,494 6 U.S. securities other than U.S. Treasury securities5 12,667 14,764 16.363 19,959 20,567 21,461 21,473 21,623 22,229 22,428 By area 7 Western Europe1........................................................ 70,748 93,089 85.602 78,424 76,942 76.004 80,899 81,592 80,417 78,289 8 Canada ....................................................................... 2,334 2,486 1.898 2,156 1,901 1,736 1,433 1,562 1,174 1,089 9 Latin America and Caribbean.................................. 4,649 5,046 6.291 6,050 6,610 6,008 5,722 5.688 5,456 5,216 10 Asia............................................................................. 50,693 58,817 52.793 64,287 67,696 69.042 70,025 70,536 70.485 72,546 11 Africa......................................................................... 1,742 2,408 2.412 3,281 3,232 3,520 3,867 4.124 3,974 3,948 12 Other countries6........................................................ 931 743 485 476 518 1,075 1,250 830 1,184 1,105 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 3,747r 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 Aug. Sept. Oct. Nov. Dec. Jan. Feb.P 1 AH foreigners.................................................... 166,877 187,492 201,402 191,683 195,827 204,882 205,295' 202,093 201,333 2 Banks’ own liabilities....................................... 78,730 117,211 128,171 118,663 121,240 125,139 124,789' 122,609 121,599 3 Demand deposits........................................... 18,996 19,218 23,325 22,511 22,474 22,457 22,847 23,462' 22,149 23,614 4 Time deposits1............................................... 11,521 12,431 13,627 13,208 13,824 14,157 14,773 15,076' 15,677 15,543 5 Other2............................................................ 9,704 16,419 18,785 18,046 17,222 17,117 17,581' 14,906 13,641 6 Own foreign offices3..................................... 37,376 63,839 73,667 64,319 67,405 70,401 68,670' 69,876 68,801 7 Banks’ custody liabilities4................................ 88,147 70,281 73,231 73,020 74,587 79,743 80,506 79,484 79,734 8 U.S. Treasury bills and certificates5........... 48,906 68,202 48,573 51,505 50,731 51,990 56,484 57,595 57,689 58,361 9 Other negotiable and readily transferable instruments6........................................... 17,446 19,359 19,141 19,778 19,967 20,624 20,079 19,023 18,211 10 Other.............................................................. 2,499 2,350 2,586 2,511 2,630 2,635 2,832 2,773 3,162 11 Nonmonetary international and regional organizations7............................................. 3,274 2,607 2,820 2,549 2,734 2,476 2,342 1,961 2,003 12 Banks’ own liabilities....................................... 906 714 501 476 352 383 442 419 317 13 Demand deposits........................................... 231 330 260 171 141 115 187 146 212 186 14 Time deposits1............................................... 139 84 151 101 100 95 92 85 71 76 15 Other2............................................................ 492 303 229 235 143 104 211 137 54 16 Banks’ custody liabilities4................................ 1,701 1,643 2,319 2,073 2,382 2,093 1,900 1,542 1,687 17 U.S. Treasury bills and certificates............. 201 102 644 316 581 337 254 88 368 18 Other negotiable and readily transferable instruments6........................................... 1,499 1,538 1,675 1,757 1,800 1,756 1,646 1,453 1,319 19 Other.............................................................. 1 2 0 0 0 0 0 0 0 20 Official institutions8......................................... 90,706 78,142 79,260 80,279 79,207 84,706 86,624' 83,513 81,573 21 Banks’ own liabilities....................................... 12,129 18,228 17,591 18,548 16,182 16,897 17,826' 15,222 13,822 22 Demand deposits........................................... 3,528 3,390 4,704 3,898 4,348 3,406 3,553 3,771 3,869 3,579 23 Time deposits1............................................... 1,797 2,550 3,041 3,006 3,477 3,390 3,623 3,612' 3,343 2,977 24 Other2............................................................ 6,189 10,483 10,688 10,724 9,387 9,721 10,443 8,010 7,266 25 Banks’ custody liabilities4................................ 78,577 59,914 61,669 61,731 63,025 67,808 68,798 68,292 67,750 26 U.S. Treasury bills and certificates5........... 47,820 67,415 47,666 49,811 49,361 50,392 55,104 56,243 56,522 56,829 27 Other negotiable and readily transferable instruments6........................................... 10,992 12,196 11,805 12,307 12,542 12,648 12,501 11,740 10,794 28 Other.............................................................. 170 52 54 63 90 56 54 30 128 29 Banks9............................................................... 42,335 57,495 88.352 100,788 89,979 95,012 97,759' 96,415' 96,426 96,456 30 Banks’ own liabilities....................................... 52,705 83.352 95,475 84,737 89,653 91,880 90,456' 90,345 90,195 31 Unaffiliated foreign banks............................ 15,329 19,512 21,808 20,419 22,249 21,478 21,786' 20,469 21,394 32 Demand deposits....................................... 10,933 11,257 13,274 13,427 12,995 13,843 13,714 14,188' 12,889 14,289 33 Time deposits1........................................... 2,040 1,443 1,680 1,514 1,412 1,724 1,786 1,703' 1,857 1,833 34 Other2........................................................ 2,629 4,558 6,867 6,012 6,681 5,978 5,895' 5,723 5,272 35 Own foreign offices3..................................... 37,376 63,839 73,667 64,319 67,405 70,401 68,670' 69,876 68,801 36 Banks’ custody liabilities4................................ 4,790 5,000 5,313 5,241 5,359 5,880 5,959 6,081 6,261 37 U.S. Treasury bills and certificates............. 141 300 422 577 361 515 529 623 647 714 38 Other negotiable and readily transferable instruments6........................................... 2,425 2,405 2,435 2,533 2,417 2,883 2,748 2,856 2,792 39 Other.............................................................. 2.065 2,173 2,301 2,347 2,427 2,467 2,588 2,578 2,755 40 Other foreigners............................................... 14,736 16,070 18,642 18,533 18,876 18,874 19,941 19,914 20,193 21,301 41 Banks’ own liabilities....................................... 12,990 14,918 14,604 14,901 15,052 15,979 16,065 16,623 17,265 42 Demand deposits........................................... 4,304 4,242 5,087 5,014 4,991 5.093 5,393 5,356 5,179 5,559 43 Time deposits................................................. 7,546 8,353 8,755 8,588 8,836 8.948 9,272 9,676 10,407 10,657 44 Other2............................................................ 394 1,075 1,002 1,075 1,011 1,315 1,033 1,036 1,049 45 Banks’ custody liabilities4................................ 3,080 3,725 3,930 3,975 3,822 3,962 3,849 3,570 4,036 46 U.S. Treasury bills and certificates............. 285 382 473 693 502 513 474 432 451 47 Other negotiable and readily transferable instruments6........................................... 2,531 3,220 3,226 3,181 3,208 3,337 3,185 2,974 3,306 48 Other.............................................................. 264 123 231 100 112 112 190 164 279 49 Memo: Negotiable time certificates of deposit in custody for foreigners.......................... 11,007 10,974 10,433 10,704 10,799 10,553 10,745 10,112 9,754 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 □ April 1981 3.16 Continued 1980 1981 Area and country 1977 1978 1979 Aug. Sept. Oct. Nov. Dec. Jan. Feb.P 1Total................................................................................ 126,168 166,877 187,492 201,402 191,683 195,827 204,882 205,295r 202,093 201,333 2 Foreign countries............................................................ 122,893 164,270 185,136 198,582 189,134 193,093 202,406 202,953' 200,132 199,330 3 Europe....................................................................... 60,295 85,169 90,935 86,077 83,476 83,990 90,741 90,897 89,615 89,477 4 Austria................................................................... 318 513 413 390 432 460 519 523 554 553 5 Belgium-Luxembourg............................................. 2,531 2,550 2,375 3,673 3,696 3,322 3,696 4,019 4,062 4,821 6 Denmark.................................................................. 770 1,946 1,092 525 528 493 586 497 420 432 7 Finland................................................................... 323 346 398 403 311 307 363 455 264 355 8 France ..................................................................... 5,269 9,214 10,433 12,596 12,332 11,654 12,380 12,125 12,141 12,495 9 Germany.................................................................. 7,239 17,286 12,935 9,121 7,854 7,557 9,171 9,973' 10,336 9,294 10 Greece..................................................................... 603 826 635 642 591 643 711 670 524 562 11 Italy......................................................................... 6,857 7,739 7,782 6,530 5,969 6,796 7,308 7,572 6,743 5,987 12 Netherlands............................................................ 2,869 2,402 2,327 2,491 2,540 2,555 2,796 2,441 2,568 2,541 13 Norway................................................................... 944 1,271 1,267 1,040 1,074 1,381 1,444 1,344 899 1,037 14 Portugal.................................................................. 273 330 557 506 571 491 437 374 370 358 15 Spain....................................................................... 619 870 1,259 1,491 1,321 1,520 1,379 1,500 1,416 1,387 16 Sweden ................................................................... 2,712 3,121 2,005 1,861 1,826 1,813 1,811 1,737 1,365 2,078 17 Switzerland.............................................................. 12,343 18,225 17,954 14,252 13,524 13,695 16,574 16,689' 16,568 16,635 18 Turkey..................................................................... 130 157 120 147 237 171 257 242' 203 231 19 United Kingdom..................................................... 14,125 14,265 24,694 22,925 22,818 23,797 24,443 22,680 24,212 24,609 20 Yugoslavia.............................................................. 232 254 266 139 169 203 225 681 296 269 21 Other Western Europe1......................................... 1,804 3,440 4,070 7,002 7,250 6,880 6,161 6,939 6,225 5,385 22 U.S.S.R................................................................... 98 82 52 70 39 33 64 68 46 84 23 Other Eastern Europe2......................................... 236 330 302 271 392 220 416 370' 401 364 24 Canada ....................................................................... 4,607 6,969 7,379 9,187 10,234 9,992 9,871 10,031 9,802 9,131 25 Latin America and Caribbean.................................. 23,670 31,677 49,665 58,282 48,781 52,501 53,318 53,170' 53,050 52,025 26 Argentina................................................................ 1,416 1,484 1,582 1,880 1,875 1,996 1,996 2,132 1,857 1,998 27 Bahamas.................................................................. 3,596 6,752 15,255 21,179 13,924 17,567 16,803 16,372 16,164 15,656 28 Bermuda.................................................................. 321 428 430 559 677 595 555 670 475 793 29 Brazil....................................................................... 1,396 1,125 1,005 1,378 1,168 1,342 1,248 1.216 1,339 1,266 30 British West Indies................................................. 3,998 6,014 11,117 13,309 11,410 12,040 12,614 12,766' 12,609 11,953 31 Chile....................................................................... 360 398 468 475 431 448 456 460 501 431 32 Colombia................................................................ 1,221 1,756 2,617 2,893 2,916 3,037 2,962 3,077 3,095 3,087 33 Cuba....................................................................... 6 13 13 7 5 5 6 6 6 7 34 Ecuador ................................................................. 330 322 425 818 381 387 437 371 389 449 35 Guatemala3............................................................ 416 414 372 373 365 359 367 428 461 36 Jamaica3................................................................. 52 76 100 101 85 79 97 112 101 37 Mexico................................................................... 2,876 3,467 4,185 4,291 4,226 4,575 4,583 4,547 4,595 4,601 38 Netherlands Antilles............................................... 196 308 499 314 360 393 568 413 599 523 39 Panama................................................................... 2,331 2,967 4,483 4,617 3,894 3,595 4,575 4,718 4,460 4,194 40 Peru......................................................................... 287 363 383 401 355 380 345 403 401 447 41 Uruguay .................................................................. 243 231 202 241 199 220 244 254 290 266 42 Venezuela................................................................ 2,929 3,821 4,192 3,692 4,405 3,659 3,667 3,170 3,794 3,925 43 Other Latin America and Caribbean................... 2,167 1,760 2,318 1,755 2,080 1,811 1,819 2,132 1,936 1,869 44 Asia............................................................................. 30,488 36,492 33,013 39,880 41,847 40,880 41,999 42,420' 41,649 42,816 China 45 Mainland.............................................................. 53 67 49 37 38 46 62 49 55 55 46 Taiwan................................................................ 1,013 502 1,393 1,552 1,595 1,610 1,636 1,662 1,821 1,733 47 Hong Kong.............................................................. 1,094 1,256 1,672 1,994 2,204 2,150 2,410 2,548 2,764 3,052 48 India....................................................................... 961 790 527 631 529 485 438 416 437 602 49 Indonesia................................................................ 410 449 504 649 827 811 715 730 1,170 678 50 Israel ....................................................................... 559 688 707 569 534 530 548 883 523 557 51 Japan....................................................................... 14,616 21,927 8,907 14,059 15,414 15,354 15,720 16,281' 17,701 18,057 52 Korea..................................................................... 602 795 993 1,473 1,994 1,809 1,764 1,528 1,498 1,485 53 Philippines.............................................................. 687 644 795 778 814 838 803 919 849 1,057 54 Thailand.................................................................. 264 427 277 304 517 403 440 464 367 404 55 Middle-East oil-exporting countries4..................... 8,979 7,534 15,309 15,801 15,409 14,611 15,214 14,453 12,216 12,695 56 Other Asia.................................................*.......... 1,250 1,414 1,879 2,033 1,972 2,232 2,250 2,487 2,249 2,440 57 Africa......................................................................... 2,535 2,886 3,239 4,221 3,902 4,246 4,725 5,187 4,358 4,369 58 Egypt....................................................................... 404 404 475 350 322 269 374 485 313 496 59 Morocco................................................................. 66 32 33 47 32 57 38 33 42 30 60 South Africa............................................................ 174 168 184 404 354 288 332 288 327 258 61 Zaire....................................................................... 39 43 110 38 42 36 34 57 48 58 62 Oil-exporting countries5......................................... 1,155 1,525 1,635 2,685 2,459 2,911 3,211 3,540 2,921 2,833 63 Other Africa.......................................................... 698 715 804 697 694 685 735 783 707 695 64 Other countries.......................................................... 1,297 1,076 904 936 894 1,484 1,752 1,247 1,658 1,512 65 Australia.................................................................. 1,140 838 684 692 613 1,190 1,419 950 1,304 1,204 66 All other................................................................. 158 239 220 243 281 294 333 297 354 307 67 Nonmonetary international and regional organizations...................................................... 3,274 2,607 2,356 2,820 2,549 2,734 2,476 2,342 1,961 2,003 68 International.......................................................... 2,752 1,485 1,238 1,736 1,389 1,586 1,366 1,156 913 995 69 Latin American regional....................................... 278 808 806 800 837 841 801 890 769 745 70 Other regional6...................................................... 245 314 313 285 323 307 309 296 279 263 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 Aug. Sept. Oct. Nov. Dec. Jan. Feb./7 1 90,206 115,603 133,919 163,401 161,518 162,658 167,396 172,702' 167,311 166,007 2Foreign countries........................................................ 90,163 115,547 133,887 163,363 161,484 162,618 167,363 172,624' 167,262 165,928 3Europe....................................................................... 18,114 24,232 28,429 29,411 29,722 29,259 32,520 32,155' 30,657 30,928 4 Austria................................................................... 65 140 284 280 264 196 250 236 249 191 5 Belgium-Luxembourg............................................. 561 1,200 1,339 1,881 1,954 1,680 1,946 1,621 1,739 2,226 6 Denmark................................................................. 173 254 147 164 180 132 165 127 129 172 7 Finland................................................................... 172 305 202 215 184 253 248 460 322 337 8 France ..................................................................... 2,082 3,735 3,322 3,288 3,232 2,551 3,506 2,958 2,716 3,114 9 Germany................................................................. 644 845 1,179 1,131 1,018 987 1,506 948 985 1,096 10 Greece..................................................................... 206 164 154 265 221 278 265 256 264 248 11 Italy ......................................................................... 1,334 1,523 1,631 2,433 2,560 2,842 3,063 3,364 3,168 3,107 12 Netherlands............................................................ 338 677 514 632 546 557 749 575 642 523 13 Norway................................................................... 162 299 276 231 248 335 138 227 294 224 14 Portugal................................................................. 175 171 330 335 330 341 393 331 299 240 15 Spain....................................................................... 722 1,120 1,051 1,139 1,106 1,113 1,111 993 1,131 1,160 16 Sweden ................................................................... 218 537 542 558 716 763 633 783 688 733 17 Switzerland.............................................................. 564 1,283 1,165 1,581 1,337 1,564 1,932 1,446 1,753 1,735 18 Turkey.................................................................... 360 300 149 137 144 123 149 145 146 148 19 United Kingdom.................................................... 8,964 10,172 13,814 12,651 13,080 12,950 13,885 14,917' 13,175 12,892 20 Yugoslavia.............................................................. 311 363 611 647 682 684 689 853 863 859 21 Other Western Europe1......................................... 86 122 175 172 245 226 234 179 347 177 22 U.S.S.R................................................................... 413 366 290 232 241 257 271 281 249 249 23 Other Eastern Europe2......................................... 566 657 1,254 1,438 1,434 1,427 1,389 1,457 1,498 1,495 24Canada ....................................................................... 3,355 5.152 4,143 4,775 5,255 4,614 4,542 4,810 4,221 4,809 25Latin America and Caribbean.................................. 45,850 57,567 68,011 89,253 85,768 87,665 89,263 92.992' 90,815 88,476 26 Argentina............................................................... 1,478 2,281 4,389 5,393 5,629 5,859 6,270 5,689' 5,665 5,637 27 Bahamas................................................................. 19,858 21,555 18,918 31,866 30,269 30,275 29,679 29,419' 28,358 27,468 28 Bermuda................................................................. 232 184 496 256 216 399 260 218 267 364 29 Brazil....................................................................... 4,629 6,251 7,720 9,251 9,639 10,135 10,001 10,496' 10,260 9,810 30 British West Indies................................................. 6,481 9,692 9,822 14,570 11.980 12,630 13,674 15,661' 14,546 14,275 31 Chile....................................................................... 675 970 1,441 1,487 1,627 1,721 1,730 1,951 1,862 1,850 32 Colombia............................................................... 671 1,012 1,614 1,490 1,493 1,575 1,582 1,752' 1,665 1,435 33 Cuba....................................................................... 10 0 4 3 6 3 3 3 4 3 34 Ecuador ................................................................. 517 705 1,025 1,136 1,111 1,157 1,157 1,190 1,222 1,179 35 Guatemala3............................................................ 94 134 102 105 112 114 137 114 113 36 Jamaica3................................................................. 40 47 31 33 35 40 36 33 41 37 Mexico................................................................... 4,909 5,479 9,099 10,785 11,123 11,745 12,014 12,595' 12,687 12,533 38 Netherlands Antilles............................................... 224 273 248 725 710 799 816 821 835 760 39 Panama................................................................... 1,410 3,098 6,031 4,931 4,461 3,972 4,367 4,974 5,033 4,858 40 Peru......................................................................... 962 918 652 687 671 719 749 890 912 877 41 Uruguay ................................................................. 80 52 105 105 100 100 105 137 111 107 42 Venezuela................................................................ 2,318 3,474 4,669 4,737 4,879 4,710 5,113 5,438 5,515 5,514 43 Other Latin America and Caribbean................... 1,394 1.490 1,598 1,697 1,715 1,721 1,591 1,585 1,728 1,653 44Asia............................................................................. 19,236 25,386 30,652 36,927 37,620 37,806 37,961 39,123' 38,537 38,590 China 45 Mainland.............................................................. 10 4 35 50 117 126 187 195 225 193 46 Taiwan................................................................ 1,719 1,499 1,821 2,284 2,492 2,332 2,382 2,469 2,415 2,276 47 Hong Kong.............................................................. 543 1,479 1,804 2,063 2,099 1,980 2,094 2,247 2,250 2,212 48 India....................................................................... 53 54 92 118 84 103 125 142 110 142 49 Indonesia................................................................ 232 143 131 245 208 214 248 245 280 306 50 Israel....................................................................... 584 888 990 1,012 918 1,055 1,125 1,172' 1,081 829 51 Japan....................................................................... 9,839 12,671 16,946 21,205 20,663 20,607 20,323 21,361 21,187 22,314 52 Korea..................................................................... 2,336 2,282 3,798 5,464 5,574 5,885 5,844 5,697 5,877 5,325 53 Philippines.............................................................. 594 680 737 1,019 1,169 1,081 1,122 989 840 754 54 Thailand.................................................................. 633 758 935 947 947 925 974 876 810 808 55 Middle East oil-exporting countries4..................... 1,746 3,125 1,548 1,040 1,471 1,258 1,538 1,494 1,435 1,508 56 Other Asia.............................................................. 947 1,804 1,813 1,480 1,876 2,240 1,999 2,236 2,026 1,923 57Africa......................................................................... 2,518 2,221 1,797 1,977 2,029 2,090 1,933 2,377 1,910 1,981 58 Egypt....................................................................... 119 107 114 135 123 159 165 151 175 152 59 Morocco.................................................................. 43 82 103 180 166 119 146 223 186 115 60 South Africa............................................................ 1,066 860 445 469 535 440 375 370 337 421 61 Zaire....................................................................... 98 164 144 98 101 123 98 94 96 94 62 Oil-exporting countries5......................................... 510 452 391 349 374 469 402 805 410 425 63 Other....................................................................... 682 556 600 746 729 780 747 734 707 773 64Other countries.......................................................... 1,090 988 855 1,021 1,091 1,185 1,143 1.166 1,122 1,145 65 Australia.................................................................. 905 877 673 793 879 942 915 859 827 868 66 All other.................................................................. 186 111 196 228 213 243 228 307 295 277 67Nonmonetary international and regional organizations6..................................................... 43 56 32 38 34 40 34 78' 49 79 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 □ April 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 Type of claim 1977 1979 Aug. Sept. Oct. Dec. Jan. Feb .p 1 Total..................................................................... 90,206 126,851 154,017 187,008 198,807' 2 Banks’ own claims on foreigners........................ 115,603 133,919 163,401 161,518 162,658 167,396 172,702' 167,311 166,007 3 Foreign public borrowers...................................... 10,312 15,580 17,419 18,969 19,046 20,661 20,940' 20,988 20,191 4 Own foreign offices1............................................. 41,628 47,475 64,051 61,879 61,613 62,397 65,084' 63,974 63,904 5 Unaffiliated foreign banks.................................... 40,496 40,969 47,500 46,008 46,574 49,071 50,215' 46,360 45,762 6 Deposits............................................................ 5,428 6,253 7,250 7,216 7,136 7,579 8,254' 7,171 6,975 7 Other.................................................................. 35,067 34,716 40,250 38,792 39,438 41,493 41,962' 39,189 38,786 8 All other foreigners............................................. 23,167 29,896 34,431 34,661 35,425 35,267 36,463' 35,988 36,150 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 non­ banking business enterprises in the United States5................................................................ 13,162 21,578 24,245 22,075 22,696 24,516 21,396 25,407 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 nonbanks, 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 UNAFFILIATED FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period 1978 1979 1980 Maturity; by borrower and area 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 All other2............................................................................................. 569 524 493 627 724' 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 Banks1 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...................................................... 100.3 116.4 124.7 119.0 125.3 135.7 138.4 140.8 154.3 158.9 161.7 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 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 .3 42 Israel............................................................................................. 1.0 .9 1.0 1.0 .9 1.0 1.3 .9 1.2 l.’l 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 1.0 45 Philippines.................................................................................... 2.2 2.5 2.8 3.2 3.7 3.7 4.2 4.4 4.6 5.0 46 Thailand........................................................................................ .7 1.1 1.2 1.2 1.4 1.6 1.6 1.4 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 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) as foreign branch of the same banking institution. The data in this table combine 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. in this table include only banks’ own claims payable in dollars. For earlier dates Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics □ April 1981 3.21 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars 1980 1981 Country or area Jan.- Feb.p Aug. Sept. Oct. Nov. Dec. Jan. Feb.P Holdings (end of period)1 1 Estimated total2.......................................... 51,344 57,414^ 54,120 55,869 56,553 57,414'* 58,449 60,272 2 Foreign countries2.................................... 45,915 52,826' 49,992 51,173 52,075 52,867 52,826' 53,914 55,650 3 Europe2..................................................... 24,824 24,333 24,643 25,016 24,783 24,708 24,333 25,173 25,463 4 Belgium-Luxembourg.......................... 60 77 89 91 78 74 77 80 88 5 Germany2............................................. 14,056 12,335 13,097 13,110 12,823 12,758 12,335 12,791 12,915 6 Netherlands......................................... 1,466 1,884 1,522 1,640 1,658 1,777 1,884 1,954 1,944 7 Sweden................................................. 647 595 640 611 607 614 595 555 535 8 Switzerland2......................................... 1,868 1,485 1,675 1,566 1,517 1,489 1,485 1,561 1,524 9 United Kingdom.................................. 6,236 7,180 7,089 7,456 7,538 7,411 7,180 7,435 7,742 10 Other Western Europe....................... 491 777 531 542 562 584 777 796 714 11 Eastern Europe.................................... 0 0 0 0 0 0 0 0 12 Canada..................................................... 232 449 469 480 503 532 449 458 490 13 Latin America and Caribbean............... 466 999 706 768 768 942 999 998 1,074 14 Venezuela............................................. 103 292 261 302 292 292 292 292 292 15 Other Latin America and Caribbean . 200 285 240 241 255 278 285 281 341 16 Netherlands Antilles............................ 163 421 205 225 221 372 421 425 441 17 Asia.......................................................... 19,805 26,110 23,585 24,292 25,331 25,966 26,110 26,301 27,465 18 Japan..................................................... 11,175 9,479 9,465 9,444 9,503 9,547 9,479 9,519 9,543 19 Africa...................................................... 591 920' 592 617 685 715 920' 971 1,140 20 All other................................................... -3 14 -5 0 5 4 14 14 18 21 Nonmonetary international and regional organizations.................................... 5,429 4,588 4,128 4,696 4,478 4,350 4,588 4,535 4,622 22 International....................................... 5,388 4,548 4,066 4,632 4,430 4,302 4,548 4,505 4,586 23 Latin American regional..................... 37 36 60 65 44 44 36 26 36 Transactions (net purchases, or sales (-) during period) 24 Total2................................................................................ 6,397 6,070' 2,862 -767 1,752 681 665 196' 1,035 1,827 25 Foreign countries2...................................................... 6,099 6,911' 2,824 -598 1,181 903 792 -41' 1,088 1,736 26 Official institutions................................................. 1,697 3,839' 2,269 -745 998 664 302 -336' 865 1,404 27 Other foreign2......................................................... 4,403 3,073' 555 146 183 240 490 295' 223 332 28 Nonmonetary international and regional organizations....................................................... 301 -844' 38 -168 571 -222 -127 237' -53 91 Memo: Oil-exporting countries 29 Middle East3.......................................................................... -1,014 7,672 1,440 140 601 990 561 358 300 1,139 30 Africa4......................................................................... -100 328' 220 0 25 68 30 205' 51 169 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 l 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 Stales). 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' Sept. Oct. Nov. Dec. Jan. Feb. Mar.P 1 Deposits..................................................................... 367 429 411 460 368 368 411 573 422 474 Assets held in custody 2 U.S. Treasury securities1........................................... 117,126 95,075 102,417 96,221 98,121 102,786 102,417 104,490 106,389 111,859 3 Earmarked gold2........................................................ 15,463 15,169 14,965 14,987 14,986 14,968 14,965 14,893 14,892c 14,883 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 J F a e n b . . - Aug. Sept. Oct. Nov. Dec. Jan. Feb.p U.S. corporate securities Stocks 1 Foreign purchases...................................................... 22,781 40,320 6,140 3,505 3,569 4,438 4,457 4,345 3,422 2,718 2 Foreign sales.............................................................. 21,123 35,044 5,110 3,301 3,329 3,920 3,588 3,783 2,798 2,312 3 Net purchases, or sales (-).......................................... 1,658 5,276 1,029 203 241 519 869 562 624 406 4 Foreign countries............................................................ 1,642 5,258 1,015 205 246 524 867 540 612 403 5 Europe....................................................................... 217 3,036 695 42 -83 300 633 222 438 257 6 France ..................................................................... 122 479 103 30 -33 53 109 57 62 41 7 Germany................................................................. -221 184 42 -21 -18 35 121 7 24 18 8 Netherlands............................................................ -71 -328 45 -26 -38 -29 -58 -17 43 2 9 Switzerland.............................................................. -519 308 80 -127 -122 83 265 -88 105 -24 10 United Kingdom.................................................... 964 2,502 397 216 153 172 251 299 178 220 11 Canada ....................................................................... 552 847 117 13 -22 -66 263 230 26 91 12 Latin America and Caribbean.................................. -19 143 79 -32 -83 132 57 -12 101 -22 13 Middle East'.............................................................. 688 1,206 137 183 410 126 -109 177 63 74 14 Other Asia.................................................................. 211 -4 -16 -22 19 33 18 -68 -14 -2 15 Africa......................................................................... -14 -1 2 0 2 2 0 -2 2 0 16 Other countries.......................................................... 7 30 1 21 4 -3 5 -6 -5 7 17 Nonmonetary international and regional organizations.......................................................... 17 18 14 -2 -5 -6 2 22 12 2 Bonds2 18 Foreign purchases...................................................... 8,835 15,356 2,956 1,087 645 1,612 1.181 946 1,549 1,407 19 Foreign sales.............................................................. 7,602 9,968 1,684 589 481 739 902 826 817 868 20 Net purchases, or sales (-).......................................... 1,233 5,387 1,272 498 165 873 278 121 733 539 21 Foreign countries............................................................ 1,330 5,453 1,257 475 214 918 283 107 706 552 22 Europe....................................................................... 626 1,585 525 27 -23 284 151 -26 214 311 23 France ..................................................................... 11 143 -38 6 -2 16 12 12 4 -42 24 Germany.................................................................. 58 213 161 -11 4 30 13 22 49 112 25 Netherlands............................................................ -202 -65 17 -7 7 8 -7 17 6 12 26 Switzerland.............................................................. -118 54 34 -9 0 1 8 14 22 12 27 United Kingdom..................................................... 814 1,252 331 53 -5 235 154 -113 124 207 28 Canada....................................................................... 80 135 5 25 12 9 21 -7 7 -2 29 Latin America and Caribbean.................................. 109 185 24 32 18 7 11 -5 -3 26 30 Middle East*.............................................................. 424 3,416 692 382 194 594 105 113 492 201 31 Other Asia.................................................................. 88 117 16 9 14 24 -3 32 -1 17 32 Africa......................................................................... 1 5 0 0 0 0 0 0 0 0 33 Other countries.......................................................... 1 10 -4 0 -2 0 -1 0 -4 0 34 Nonmonetary international and regional organizations.......................................................... -96 -65 15 23 -49 -45 -4 14 27 -13 Foreign securities 35 Stocks, net purchases, or sales (-).......................... -786 -2,239 52 -201 -558 -335 129 -68 36 17 36 Foreign purchases................................................... 4,615 7,870 1.403 605 694 788 927 721 695 708 37 Foreign sales.......................................................... 5,401 10,108 1,350 805 1,253 1,143 798 788 659 691 38 Bonds, net purchases, or sales (-).......................... -3.855 -835 -318 -259 -84 -206 91 274 -235 -83 39 Foreign purchases................................................... 12,672 17,062 2,434 1,374 1,231 1,651 1,252 1.786 1,142 1,291 40 Foreign sales.......................................................... 16,527 17,898 2,752 1,634 1,316 1,857 1,161 1.512 1,378 1,374 41 Net purchases, or sales ( —), of stocks and bonds ... -4,641 -3,074 -266 -460 -643 -561 219 206 -200 -66 42 Foreign countries............................................................ -3,891 -3,950 -342 -384 -680 -576 196 -177 -259 -83 43 Europe....................................................................... -1.646 -958 -42 -176 -110 113 -30 -86 -116 74 44 Canada ....................................................................... -2,601 -2,094 57 42 -344 -651 327 24 -4 61 45 Latin America and Caribbean.................................. 347 126 11 -14 7 -35 -24 -11 51 -39 46 Asia............................................................................. 44 -1,131 -340 -313 -223 -16 -73 -84 -175 -165 47 Africa......................................................................... -61 24 -18 0 -4 29 -1 -13 -10 -8 48 Other countries.......................................................... 25 81 -10 76 -6 -16 -3 -7 -4 -6 49 Nonmonetary international and regional organizations.......................................................... -750 876 76 -76 37 15 23 383 59 17 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 □ April 1981 3.24 LIABILITIES TO UNAFFILIATED 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. 1 Total....................................................................................................... 14,869' 16,934' 15,510' 15,700 16,934' 17,349' 18,441' 18,581' 2 Payable in dollars................................................................................... 11,506' 13,916' 12,623' 12,692 13,916' 14,414' 15,075' 15,321' 3 Payable in foreign currencies2.............................................................. 3,363 3,018 2,888 3,008 3,018 2,936 3,366 3,260' By type 4 Financial liabilities................................................................................. 6,295' 7,296' 6,041' 6,131 7,296' 7,778' 8,276' 8,300' 5 Payable in dollars............................................................................... 3,831r 5,086' 3,867' 3,877 5,086' 5,594' 5,720' 5,825' 6 Payable in foreign currencies............................................................ 2,464 2,210 2,173 2,254 2,210 2,184 2,556 2,475' 7 Commercial 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 4,574' 3,582 3,713 4,574' 4,808' 5,387' 5,320' 13 Belgium-Luxembourg.................................................................... 289 345 355 317 345 360 422 417' 14 France.............................................................................................. 167 168 134 126 168 188 341 339' 366 497 283 381 497 520 657 557 390 828' 401 542 828' 795' 783 780' 17 Switzerland..................................................................................... 248 170' 235 190 170' 174' 233' 224 2,110 2,372 1,955 1,957 2,372 2,568 2,783 2,873' 19 Canada................................................................................................ 244 439' 290 304 439' 380' 482 508' 20 Latin America and Caribbean.......................................................... 1,357 1,483 1,395 1,347 1,483 1,764 1,633 1,733' 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............................................... ....................... 194 514 189 198 514 694 700 703' 25 Mexico.................................................................. ....................... 102 121 131 122 121 101 101 108 26 Venezuela............................................................ ....................... 49 72 68 71 72 70 72 74 27 Asia..................................................................................................... 780' 790' 764' 757 790' 805' 750' 707' 28 Japan .............................................................................................. 714 723 706 700 723 737 680 618' 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 All other5............................................................................................ 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................................................................................................ 667 868 663 717 868 720 591 590 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 Asia..................................................................................................... 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 UNAFFILIATED 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. 1 Total....................................................................................................... 27,864' 30,899' 30,318' 30,949 30,899' 31,894' 28,852 31,469' 2 Payable in dollars................................................................................... 24,881' 27.734' 27,418' 28,280 27,734' 28,984' 28,852' 28,251' 3 Payable in foreign currencies2 ............................................................. 2,984' 3,165' 2,900' 2,668 3,165' 3.000' 3,042 3,218' By type 4 Financial claims.................................................................................... 16,528' 18,139' 19,321' 19,176 18,139' 19,260' 18,543' 18,260' 5 Deposits.............................................................................................. 11.069' 12,493' 13,661' 13,730 12,493' 13,586' 12,702' 12,185' 6 Payable in dollars........................................................................... 10,000 11,584' 12,706 12,830 11.584' 12,612' 11,822' 11,025' 7 Payable in foreign currencies........................................................ 1,068' 909' 956' 901 909' 974' 879 1,159' 8 Other financial claims....................................................................... 5,459' 5,646 5,660 5,446 5,646 5,673' 5,841 6,075' 9 Payable in dollars........................................................................... 3,874' 3,803' 4,079' 4,030 3,803' 4,055' 4,103 4,399' 10 Payable in foreign currencies........................................................ 1.584' 1,843' 1,581' 1,416 1.843' 1,619' 1,737 1,676' 11 Commercial claims................................................................................ 11,337 12,760' 10,997' 11,773 12,760' 12,724' 13,352 13,210 12 Trade receivables............................................................................... 10,778 12,072' 10.368' 11.061 12.072' 12,079' 12,656 12,521 13 Advance payments and other claims............................................... 559 688 628 712 688 645 695 689 14 Payable in dollars............................................................................... 11,006 12,347' 10,633' 11,421 12,347' 12,317' 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 6,129' 5,640' 6,562 6,129' 5,840' 5,835 5,603' 17 Belgium-Luxembourg.................................................................... 48 32 54 33 32 19 23 14 18 France.............................................................................................. 178 177 183 191 177 290 307 409' 19 Germany........................................................................................ 510 409' 363' 393 409' 300' 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 5,064' 4,650 5,522 5,064' 4,790' 4,855 4,546' 23 Canada................................................................................................ 4.482 4,812 5,146 4.767 4,812 4,882 4,778 4,804 24 Latin America and Caribbean.......................................................... 5.672' 6,204' 7,448' 6,682 6.204' 7,516' 6,851' 6,733' 25 Bahamas.......................................................................................... 2,959 2,684' 3.648' 3,284 2,684' 3,450' 3.007' 2,807' 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 2,301' 29 Mexico............................................................................................ 163 158 159 156 158 169 178 192 30 Venezuela...................................................................................... 157' 143' 155' 139 143' 134' 139 128 31 Asia..................................................................................................... 920' 697' 800 818 697' 713' 758 792 32 Japan .............................................................................................. 305' 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 4,901' 3,833 4,127 4,901' 4,756' 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 2,855' 2,410' 2,595 2,855' 2,992' 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............................................................................................ 506 700' 588' 648 700' 835' 921 973 51 Venezuela...................................................................................... 292 342 296 346 342 349 394 384 52 Asia..................................................................................................... 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 All other5............................................................................................ 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 □ April 1981 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on Mar. 31, 1981 Rate on Mar. 31, 1981 Rate on Mar. 31, 1981 Country Country Country Per­ Month Per­ Month Per­ Month cent effective cent effective cent effective Argentina. 195.08 Mar. 1981 France1 ........................ 12.5 Mar. 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 . 16.0 Mar. 1981 Italy.............................. 19.0 Mar. 1981 United Kingdom............... 12.0 Mar. 1981 Brazil ... 40.0 June 1980 Japan .......................... 6.25 Mar. 1981 Venezuela......................... 10.0 July 1980 Canada.. 16.69 Mar. 1981 Netherlands................. 9.0 Mar. 1981 Denmark 11.00 Oct. 1980 Norway........................ 9.0 Nov. 1979 1. As from February 1981, the rate at which the Bank of France discounts government securities for commercial banks or brokers. For countries with Treasury bills for 7 to 10 days. more than one rate applicable i;o 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 Eurodollars.............................................. 8.74 11.96 14.00 12.07 13.55 16.46 19.47 18.07 17.18 15.36 2 United Kingdom...................................... 9.18 13.60 16.59 15.89 15.87 15.84 14.64 14.20 13.12 12.58 3 Canada ..................................................... 8.52 11.91 13.12 10.73 11.71 12.96 16.83 16.98 17.28 16.85 4 Germany................................................. 3.67 6.64 9.45 8.90 8.99 9.37 10.11 9.41 10.74 13.44 5 Switzerland.............................................. 0.74 2.04 5.79 5.57 5.40 5.53 6.61 5.68 7.09 8.33 6 Netherlands.............................................. 6.53 9.33 10.60 10.31 9.63 9.59 9.69 9.36 9.78 10.61 7 France....................................................... 8.10 9.44 12.18 11.81 11.69 11.26 11.52 11.38 11.87 12.56 8 Italy........................................................... 11.40 11.85 17.50 17.50 18.16 17.51 17.47 17.34 17.50 18.22 9 Belgium................................................... 7.14 10.48 14.06 12.35 12.24 12.40 12.75 12.41 12.52 13.93 10 Japan ....................................................... 4.75 6.10 11.45 11.46 10.98 9.74 9.60 9.00 8.52 7.87 Note. Rates are for 3-month interbank loans except for the following: Gensaki rate. Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, 3.28 FOREIGN EXCHANGE RATES Cents per unit of foreign currency 1980 1981 Country/currency 1978 1979 1980 Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 Australia/dollar......................... 114.41 111.77 114.00 117.04 117.43 116.75 116.86 118.19 116.26 116.29 2 Austria/schilling....................... 6.8958 7.4799 7.7349 7.8916 7.6714 7.3433 7.1549 7.0297 6.6033 6.6959 3 Belgium/franc........................... 3.1809 3.4098 3.4247 3.4844 3.3875 3.2457 3.1543 3.0962 2.8972 2.8966 4 Canada/dollar.......................... 87.729 85.386 85.530 85.861 85.538 84.286 83.560 83.974 83.442 83.936 5 Denmark/krone......................... 18.156 19.010 17.766 18.068 17.639 16.962 16.573 16.181 15.152 15.109 6 Finland/markka......................... 24.337 27.732 26.892 27.428 27.122 26.452 25.903 25.752 24.656 24.612 7 France/franc.............................. 22.218 23.504 23.694 24.056 23.489 22.515 21.925 21.539 20.142 20.147 8 Germany/deutsche mark......... 49.867 54.561 55.089 55.883 54.280 52.113 50.769 49.771 46.757 47.498 9 India/rupee .............................. 12.207 12.265 12.686 12.903 12.932 12.868 12.608 12.567 12.164 12.131 10 Ireland/pound........................... 191.84 204.65 205.77 210.34 203.88 194.59 189.01 185.54 173.31 173.25 11 Italy/lira.................................... .11782 .12035 .11694 .11742 .11441 .11000 .10704 .10478 .09807 .09699 12 Japan/yen.................................. .47981 .45834 .44311 .46644 .47777 .46928 .47747 .49419 .48615 .47897 13 Malaysia/ringgit......................... 43.210 45.720 45.967 47.127 46.902 46.187 45.406 44.994 44.196 43.830 14 Mexico/peso.............................. 4.3896 4.3826 4.3535 4.3443 4.3324 4.3166 4.3071 4.2792 4.2544 4.2238 15 Netherlands/guilder................. 46.284 49.843 50.369 51.398 50.052 48.102 46.730 45.810 42.870 42.912 16 New Zealand/dollar................. 103.64 102.23 97.337 98.309 98.069 96.770 95.404 96.137 93.414 91.999 17 Norway/krone.......................... 19.079 19.747 20.261 20.676 20.421 19.938 19.370 19.087 18.485 18.540 18 Portugal/escudo......................... 2.2782 2.0437 1.9980 2.0096 1.9756 1.9178 1.8773 1.8591 1.7722 1.7621 19 South Africa/rand..................... 115.01 118.72 128.54 132.73 133.13 133.20 132.83 133.69 129.27 126.50 20 Spain/peseta.............................. 1.3073 1.4896 1.3958 1.3639 1.3423 1.3085 1.2653 1.2409 1.1686 1.1672 21 Sri Lanka/rupee....................... 6.3834 6.4226 6.1947 6.3196 5.9707 5.8139 5.7379 5.9525 5.5975 5.5527 22 Sweden/krona........................... 22.139 23.323 23.647 24.072 23.845 23.240 22.722 22.490 21.734 21.704 23 Switzerland/franc..................... 56.283 60.121 59.697 61.012 60.185 57.942 56.022 54.907 51.502 52.043 24 United Kingdom/pound........... 191.84 212.24 232.58 240.12 241.64 239.41 234.59 240.29 229.41 223.19 Memo: 25 United States/dollar1............... 92.39 88.09 87.39 85.50 86.59 89.31 90.99 91.38 96.02 96.22 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 1975 = 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 G uide to Tabular P resentation 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. S tatistical R eleases 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 Commercial bank assets and liabilities, December 31, 1980 .............................................................................. April 1981 A72 Assets and liabilities of U.S. branches and agencies of foreign banks, September 30, 1980.......... April 1981 A78 Special tables begin on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Special Tables □ April 1981 4.10 TIME AND SAVINGS DEPOSITS Held by Insured Commercial Banks on Recent Survey Dates Deposits Types of deposits, denomination, Number of issuing banks Millions of dollars Percentage change and original maturity July 30, Oct. 29, Jan. 28, July 30, Oct. 29, Jan. 28, July. 30- Oct. 29- 1980 1980 1981 1980 1980 1981 Oct. 29 Jan. 28 Total time and savings deposits.............................................. 14,188 14,364 14,346 685,234 713,860 768,145 4.2 7.6 Savings................................................................................. 14,188 14,364 14,346 204,142 211,128 208,249 3.4 -1.4 Holder Individuals and nonprofit organizations........................ 14,188 14,364 14,346 190,040 19^,074 194,475 3.2 -0.8 Partnerships and corporations operated for profit (other than commercial banks)................................ 10,674 10,528 11,026 9,859 10,974 9,686 11.3 -11.7 Domestic governmental units......................................... 8,947 9,333 9,377 3,630 3,567 3,221 -1.7 -9.7 All other........................................................................... 2,092 1,530 1,720 612 512 866 -16.3 69.1 Interest-bearing time deposits, less than $100,000 .......... 14,073 14,246 14,223 269,179 274,507 301,007 2.0 9.7 Holder Domestic governmental units1....................................... 10,099 9,125 9,180 2,068 2,232 1,960 7.9 -12.2 14 up to 90 days.......................................................... 4,276 3,551 3,454 581 54i3 332 -6.9 -38.5 90 up to 180 days........................................................ 5,966 5,224 5,199 555 485 581 -12.5 19.6 180 days up to 1 year................................................... 5,020 3,756 3,960 428 335 278 -21.8 -17.0 1 year and over............................................................ 7,827 7,334 6,745 504 871 769 72.8 -11.7 Other than domestic governmental units1..................... 13,991 14,127 14,101 92,231 85,446 76,864 -7.4 -10.0 14 up to 90 days.......................................................... 4,800 4,360 3,902 1,568 1,404 1,083 -10.5 -22.8 90 up to 180 days........................................................ 10,444 10,583 10.771 16,448 15,262 13,933 -7.2 -8.7 180 days up to 1 year................................................... 7,716 7,802 7,632 1,980 1,895 2,311 -4.3 22.0 1 up to 2xk years.......................................................... 13,707 13,597 13,688 12,199 11,103 9,621 -8.9 -13.4 IVi up to 4 years.......................................................... 12,656 12,636 12,284 8,579 7,606 6,582 -11.3 -13.5 4 up to 6 years.............................................................. 13,443 13,496 13,258 30,586 27,866 24,568 -8.9 -11.8 6 up to 8 years.............................................................. 11,627 11,586 11,315 18,382 17,776 16,411 -3.3 -7.7 8 years and over.......................................................... 8,489 8,111 8,238 2,489 2,528 2,354 1.6 -6.9 IRA and Keogh Plan time deposits, with maturities of 3 years or more or variable ceiling rates............... 10,284 10,392 10,416 5,309 5,488 5,670 3.4 3.3 Money market certificates, $10,000 or more, with ma­ turities of exactly 6 months2.................................... 13,670 13,830 13,907 147,905 152,848 184,755 3.3 20.9 Variable interest rate ceiling time deposits of less than $100,000 with maturities of 2Vi years or more2-3..................................................................... 12,887 13,374 13,277 21,666 28,493 31,758 31.5 11.5 Interest-bearing time deposits, $100,000 or more............. 12,593 13,163 13,474 205,378 222,513 253,750 8.3 14.0 Non-interest-bearing time deposits.................................... 1,318 1,386 1,379 4,304 4,230 4,234 -1.7 0.1 Less than $100,000 .......................................................... 913 1,018 1,031 834 910 753 9.1 -17.3 $100,000 or more............................................................ 719 688 669 3,470 3,319 3,481 -4.3 4.9 Club accounts (Christmas savings, vacation, and the like) 8,963 8,375 9,070 2,233 1,483 906 -33.6 -38.9 1. Excludes all money market certificates, IRAs, and Keogh Plan accounts. Note. All banks that had either discontinued offering or never offered certain 2. Excludes accounts held in IRA and Keogh Plans. Such accounts are included types of deposits as of the survey date are not counted as issuing banks. However, in item above. small amounts of deposits held at banks that had discontinued issuing certain types 3. Effective Jan. 1, 1980, commercial banks, savings and loan associations, and of deposits are included in the amounts outstanding. mutual savings banks are authorized to offer variable ceiling accounts with no Details may not add to totals because of rounding. required minimum denomination and with maturities of 2V2 years or more. The maximum rate for commercial banks is percentage point below the yield on 2ty2-year U.S. Treasury securities: the ceiling rate for thrift institutions is V4 per­ centage point higher than that for commercial banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Time and Savings Deposits A69 4.11 SMALL-DENOMINATION TIME AND SAVINGS DEPOSITS Held by Insured Commercial Banks on Oct. 29, 1980, and Jan. 28, 1981, Compared with Previous Survey, by Type of Deposit, by Most Common Rate Paid on New Deposits in Each Category, and by Size of Bank Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) Deposit group, original All banks All banks ma ti t o u n r it o y f , d a e n p d o s d i i t s s t r b i y b u­ Less than 100 100 and over Less than 100 100 and over most common rate Jan. 28, Oct. 29, Jan. 28, Oct. 29, Jan. 28, Oct. 29, Jan. 28, Oct. 29, Jan. 28, Oct. 29, Jan. 28, Oct. 29, 1981 1980 1981 1980 1981 1980 1981 1980 1981 1980 1981 1980 Number of banks, or percentage distribution Amount o o r f p d e e r p c o e s n i t t a s g ( e i n d m ist i r ll i i b o u n t s io o n f dollars) Savings deposits Individuals and nonprofit organizations Issuing banks.............................. 14,346 14,364 12,997 13,042 1,349 1,322 194,475 196,074 66,842 68,819 127,633 127,255 Distribution, total................... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less.............................. 2.9 4.0 2.9 4.0 3.0 4.1 3.7 4.5 4.6 4.8 3.2 4.4 4.51-5.0 0 4.1 6.9 3.9 6.9 6.0 6.4 4.6 5.2 5.3 5.7 4.2 4.9 5.01-5.2 5 93.0 89.1 93.2 89.0 91.0 89.5 91.7 90.3 90.0 89.5 92.6 90.7 Memo: Paying ceiling rate1........ 93.0 89.1 93.2 89.0 91.0 89.5 91.7 90.3 90.0 89.5 92.6 90.7 Partnerships and corporations Issuing banks.............................. 11,026 10,528 9,705 9,232 1,322 1,296 9,686 10,974 3,109 3,199 6,578 7,775 Distribution, total....................... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less.............................. .9 1.1 .8 1.2 1.0 .8 .9 .8 1.0 .5 .8 .9 4.51-5.0 0 4.1 5.6 4.1 5.5 4.4 6.2 5.7 5.6 11.9 6.5 2.7 5.2 5.01-5.2 5 95.0 93.3 95.1 93.3 94.6 92.9 93.4 93.7 87.2 93.0 96.4 93.9 Memo: Paying ceiling rate1........ 95.0 93.3 95.1 93.3 94.6 92.9 93.4 93.7 87.2 93.0 96.4 93.9 Domestic governmental units Issuing banks.............................. 9,333 9,319 8,372 8,377 961 942 3,218 3,554 1,673 1,924 1,545 1,629 Distribution, total....................... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less.............................. 1.0 3.0 1.0 3.3 .5 .6 .3 2.0 .4 3.6 .2 .2 4.51-5.0 0 2.3 1.8 2.0 1.4 4.6 5.3 3.8 3.9 1.9 1.9 5.9 6.2 5.01-5.2 5 96.7 95.2 97.0 95.3 94.9 94.1 95.9 94.1 97.8 94.5 93.9 93.6 Memo: Paying ceiling rate1....... 96.7 95.2 97.0 95.3 94.9 94.1 95.9 94.1 97.8 94.5 93.9 93.6 All other Issuing banks.............................. 1,693 1,525 1,454 1,284 239 240 862 512 610 360 252 152 Distribution, total...................... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less.............................. 3.9 6.1 3.6 6.3 5.6 5.3 .5 1.0 (2) (2) 1.6 3.5 4.51-5.0 0 1.9 4.0 2.0 4.6 1.0 1.0 2.7 15.6 3.8 22.2 (2) (2) 5.01-5.2 5 94.2 89.9 94.4 89.2 93.4 93.7 96.8 83.4 96.2 77.8 98.4 96.5 Memo: Paying ceiling rate1....... 94.2 89.9 94.4 89.2 93.4 93.7 96.8 83.4 96.2 77.8 98.4 96.5 Time deposits less than $100,000 Domestic governmental units 14 up to 90 days Issuing banks.......................... 3,448 3,545 2,865 2,960 583 586 322 530 172 173 150 357 Distribution, total................... 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less.......................... 23.5 19.7 26.2 21.2 10.5 11.8 9.9 5.7 16.6 14.9 2.3 1.2 5.01-5.50 . ....................... 34.4 35.6 29.5 31.5 58.4 55.9 35.4 21.7 14.1 13.4 59.9 25.8 5.51-8.0 0 42.1 44.8 44.3 47.3 31.1 32.3 54.7 72.6 69.3 71.7 37.8 73.1 Memo: Paying ceiling rate1....... 36.4 37.5 38.1 39.2 27.9 28.9 50.8 67.7 65.0 64.0 34.5 69.4 90 up to 180 days Issuing banks.......................... 5,194 5,218 4,428 4,452 766 766 578 483 275 331 303 152 Distribution, total................... 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less.......................... 3.4 4.1 3.9 4.5 .4 1.8 .1 .7 .2 .6 (2) .8 5.01-5.5................................0 22.1 28.9 21.8 29.5 23.8 25.3 13.7 33.5 22.4 40.4 5.8 18.6 5.51-8.0 0 74.5 67.0 74.3 65.9 75.7 72.8 86.2 65.8 77.4 59.0 94.2 80.5 Memo: Paying ceiling rate1....... 25.6 21.6 26.0 21.1 23.0 24.7 22.1 29.5 36.8 33.4 8.8 20.9 180 days up to 1 year Issuing banks.......................... 3,960 3,756 3,318 3,181 642 575 278 335 104 155 174 180 Distribution, total................... 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less.......................... .7 1.6 .8 1.9 (2) (2) (2) .1 (2) .3 (2) (2) 5.01-5.5 0 27.9 27.4 29.7 28.6 18.7 20.9 14.7 14.7 25.9 16.2 8.1 13.5 5.51-8.0 0 71.4 71.0 69.5 69.5 81.3 79.1 85.3 85.2 74.1 83.6 91.9 86.5 Memo: Paying ceiling rate1........ 20.0 25.6 18.9 25.3 25.5 27.2 23.2 34.6 30.5 45.4 18.8 25.3 1 year and over Issuing banks.......................... 6,740 7,322 5,925 6,535 815 787 769 870 607 692 162 178 Distribution, total................... 100 100 100 100 100 100 100 100 100 100 100 100 5.50 or less.......................... 1.7 2.8 1.4 2.6 3.6 4.3 35.6 44.0 44.1 54.4 3.8 3.5 5.51-6.0 0 48.4 52.9 47.3 52.7 55.8 55.0 32.3 35.9 21.4 25.5 73.2 76.4 6.01-8.0 0 49.9 44.3 51.2 44.7 40.6 40.7 32.1 20.1 34.5 20.0 23.0 20.1 Memo: Paying ceiling rate1....... 16.9 11.5 16.5 10.2 20.2 22.4 17.7 7.3 18.7 5.6 13.8 14.0 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables □ April 1981 4.11 Continued Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) All banks All banks Deposit group, original maturity, and distribu­ Less than 100 100 and over Less than 100 100 and over tion of deposits by most common rate Jan. 28, Oct. 29, Jan. 28, Oct. 29, Jan. 28, Oct. 29, Jan. 28, Oct. 29, Jan. 28, Oct. 29, Jan. 28, Oct. 29, 1981 1980 1981 1980 1981 1980 1981 1980 1981 1980 1981 1980 Number of banks or percentage distribution Amount of deposits (in millions of dollars) or percentage distribution Time deposits less than $100,000 (cont.) Other than domestic governmental units 14 up to 90 days Issuing banks................................ 3,861 4,360 2,936 3,437 926 923 1,083 1,404 106 311 978 1,093 Distribution, total........................ 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less................................ 20.6 27.8 23.4 31.7 11.9 13.6 14.2 21.9 38.4 11.9 11.6 24.8 5.01-5.25.................................... 79.4 72.2 76.6 68.3 88.1 86.4 85.8 78.1 61.6 88.1 88.4 75.2 Memo: Paying ceiling rate1............. 79.4 72.2 76.6 68.3 88.1 86.4 85.8 78.1 61.6 88.1 88.4 75.2 90 up to 180 days Issuing banks................................ 10,654 10,578 9,327 9,288 1,328 1,290 13,918 15,245 4,533 4,947 9,385 10,298 Distribution, total......................... 100 100 100 100 100 100 100 100 100 100 100 100 4.99 or less................................ (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) 5.00-5.50.................................... 32.7 33.5 33.9 34.7 24.0 24.7 31.9 31.6 26.6 27.4 34.4 33.6 5.51-5.75.................................... 67.3 66.5 66.1 65.3 76.0 75.3 68.1 68.4 73.4 72.6 65.6 66.4 Memo: Paying ceiling rate1............. 67.3 66.5 66.1 65.3 76.0 74.9 68.1 68.3 73.4 72.6 65.6 66.3 180 days up to 1 year Issuing banks................................ 7,532 7,790 6,607 6,862 925 928 2.305 1,890 905 593 1,400 1,298 Distribution, total........................ 100 100 100 100 100 100 100 100 100 100 100 100 4.99 or less................................ .8 .8 .9 .9 (2) .1 (2) (2) (2) .1 (2) (2) 5.00-5.50.................................... 49.2 50.1 52.8 53.5 23.7 25.2 58.2 39.9 76.7 31.7 46.3 43.6 5.51-5.75.................................... 50.0 49.0 46.3 45.6 76.3 74.7 41.8 60.1 23.2 68.2 53.7 56.4 Memo: Paying ceiling rate1............. 50.0 49.0 46.3 45.6 76.3 74.7 41.8 60.1 23.2 68.2 53.7 56.4 1 up to 2 V2 years Issuing banks................................ 13,683 13,506 12,355 12,212 1,328 1,294 9,614 11,027 6,124 6,825 3,490 4,202 Distribution, total........................ 100 100 100 100 100 100 100 100 100 100 100 100 5.50 or less................................ .3 .1 2 (2) 1.4 1.0 .8 .7 .1 (2) 2.1 2.0 5.51-6.00.................................... 99.7 99.9 99^8 100.0 98.6 99.0 99.2 99.3 99.9 100.0 97.9 98.0 Memo: Paying ceiling rate1............. 99.2 99.5 99.3 99.6 98.2 98.7 98.7 98.9 99.8 100.0 96.9 97.1 21/? years up to 4 years issuing banks................................ 12,231 12,576 10,949 11,320 1,282 1,257 6,559 7,567 3,682 4,295 2,876 3,273 Distribution, total........................ 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less................................ 2.1 1.3 1.9 1.1 3.5 2.8 1.2 1.6 .5 1.0 2.1 2.4 6.01-6.50.................................... 97.9 98.7 98.1 98.9 96.5 97.2 98.8 98.4 99.5 99.0 97.9 97.6 Memo: Paying ceiling rate1............. 97.9 97.6 98.1 97.7 96.2 96.9 98.6 97.9 99.5 98.5 97.5 97.2 4 up to 6 years Issuing banks................................ 13,250 13,488 11.917 12,183 1,333 1,306 24,523 27,817 12,915 14,701 11,608 13,116 Distribution, total......................... 100 100 100 100 100 100 100 100 100 100 100 100 7.00 or less................................ 3.8 8.1 3.9 8.5 3.3 3.6 2.2 3.6 2.7 4.7 1.8 2.4 7.01-7.25.................................... 96.2 91.9 96.1 91.5 96.7 96.4 97.8 96.4 97.3 95.3 98.2 97.6 Memo. Paying ceiling rate1-3........... 96.1 91.9 96.1 91.5 95.9 95.6 97.7 96.3 97.3 95.3 98.1 97.4 6 up to 8 years Issuing banks................................ 11,307 11,532 10,034 10.287 1,272 1,244 16,303 17,647 7,048 7,496 9,254 10,151 Distribution, total........................ 100 100 100 100 100 100 100 100 100 100 100 100 7.25 or less................................ 2.4 2.4 2.5 2.5 2.0 1.2 1.6 1.0 1.0 .3 2.0 1.5 7.26-7.50.................................... 97.6 97.6 97.5 97.5 98.0 98.8 98.4 99.0 99.0 99.7 98.0 98.5 Memo: Paying ceiling rate1-3........... 97.3 97.3 97.2 97.2 98.0 98.8 98.4 99.0 99.0 99.7 98.0 98.5 8 years and over Issuing banks................................ 8,226 8,094 7,104 7,005 1,122 1,089 2,340 2,509 787 876 1,553 1,633 Distribution, total........................ 100 100 100 100 100 100 100 100 100 100 100 100 7.50 or less................................ 2.8 3.7 2.3 3.5 6.0 5.1 6.3 5.8 .3 .4 9.3 8.7 7.51-7.75.................................... 97.2 96.3 97.7 96.5 94.0 94.9 93.7 94.2 99.7 99.6 90.7 91.3 Memo: Paying ceiling rate1-3........... 97.2 96.3 97.7 96.5 94.0 94.9 93.7 94.2 99.7 99.6 90.7 91.3 IRA and Keogh Plan time deposits, with maturities of 3 years or more or variable ceiling rates Issuing banks................................... 10,292 10,056 9,033 8,833 1,259 1,223 5,668 5,433 1,866 1,817 3,803 3,616 Di 7 s . t 5 ri 0 b u o t r i o l n e , s s t . o .. t . a ... l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 7 0 .7 0 < ( 4 4 ) ; 1 1 9 0 .0 0 ( (4 4 ) ) 1 8 0 .5 0 i <4 l } 1 5 0 .6 0 ( ( 4 4) 1 8 0 .8 0 f 4 t 1 4 0 .1 0 ( (4 4) ) 7.51-8.00....................................... 41.7 (4) 40.2 (4) 52.6 4 47.2 (4) 33.3 ft 54.1 (4) Me 8 m .0 o 1 : - 1 P 4 a . y 7 i 2 n . g .. . c .. e .. i . l . i . n .. g .. . r .. a .. t . e .. 1 .. . . . . . . . . . . . . . . . . . . . . . . . . . 4 3 0 8. . 3 6 ( ( 4 4 ) ) 4 3 0 8 . . 8 8 3 34 8 . . 7 8 ( 4 4 ) ) 4 4 7 4 . . 2 8 ( ( 4 4) 5 5 7 5. . 5 9 f (4 t ) 4 3 1 9 . . 9 6 ( ( 4 4 ) ) Money market certificates, $10,000 or more, 6 months Issuing banks.................................... 13,907 13,704 12,559 12,384 1,348 1,321 184,755 152,821 80,414 67,347 104,341 85,474 Distribution, total............................ 100 (4) 100 (4) 100 (4) 100 (4) 100 (4) 100 (4) 14.00 or less.................................. 1.3 (4 1.3 4 1.2 4 .7 (4) 1.2 r) .2 r) 1 1 4 4. . 0 5 1 1 - - 1 14 4. .7 50 2. .. . . . . .. . . .. . . . . .. .. . . . . . . .. .. . . . . .. . . .. . . . . .. . . .. . . . . .. .. . . . . . . .. .. . . . 98 ( . 2 7 ) !4 4) 98 ( . 2 7 ) i 4 4} 98 ( . 2 8 ) i 4 l 99 ( . 2 3 ) f ( t l 98 ( . 2 8 ) r w ) 99 ( . 2 8 ) ( r 4 ) ) Memo: paying ceiling rate1............. 98.7 (4) 98.7 (4 98.8 (4 99.3 (4 98.8 r) 99.8 r) For notes see end of table. 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Time and Savings Deposits A71 4.11 Continued Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) Deposit group, original maturity, and distribu­ Less than 100 100 and over Less than 100 100 and over tion of deposits by most common rate Jan. 28, Oct. 29, Jan. 28, Oct. 29, Jan. 28, Oct. 29, Jan. 28, Oct. 29, Jan. 28, Oct. 29, Jan. 28, Oct. 29, 1981 1980 1981 1980 1981 1980 1981 1980 1981 1980 1981 1980 Time deposits less than $100,000 (cont.) Number of banks, or percentage distribution Amount of deposits (in millions of dollars) or percentage Variable interest rate ceiling time de­ distribution posits of less than $100,000 with maturities of 2!l2 years or more Issuing banks......................................... 13,188 13,285 11,862 11,988 1,326 1,297 31,723 28,419 16,956 14,768 13,166 Di 1 st 1 r . i 0 b 0 u t o i r o n le , s t s o . t .. a .. l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3 0 .7 0 ( ( 4 4 ) ) 1 3 0 .7 0 (4) 1 3 0 .8 0 $ 1 1 0 .7 0 ( ( 4 4 ) ) 1 1 0 .2 0 1 2 0 .3 0 ( (4 4 ) ) 11.01-11.5 0 2.3 (4 2.5 (4) (2) (4) .7 (4) 1.3 (2) (4) 11.51-11.7 5 94.0 (4) 93.8 (4) 96.2 $ 97.6 (4) 97.5 97.7 (4) Memo: Paying ceiling rate1................... 94.0 (4) 93.8 (4) 96.2 97.6 (4) 97.5 97.7 (4) Club accounts Issuing banks......................................... 5,919 5,468 5,445 5,025 474 443 495 709 264 363 232 346 Distribution, total.................................. 100 100 100 100 100 100 100 100 100 100 100 100 0.00.................................................... 56.1 48.2 57.2 48.7 43.4 41.6 29.6 26.0 37.1 19.4 21.0 32.9 0.01-4.00............................................. 25.5 29.1 25.5 29.6 25.0 22.9 26.7 24.9 30.7 30.8 22.1 18.6 4.01-4.5...............................................0 3.3 6.8 2.6 6.3 11.4 12.3 13.9 15.5 2.9 16.6 26.4 14.4 4.51-5.5...............................................0 15.2 15.9 14.7 15.3 20.2 23.2 29.9 33.6 29.3 33.2 30.5 34.0 1. See Bulletin table 1.16 for the ceiling rates that existed at the time of each Note. All banks that either had discontinued offering or had never offered survey. particular types of deposits as of the survey date are not counted as issuing banks. 2. Less than .05 percent. Moreover, the small amounts of deposits held at banks that had discontinued issuing 3. In October 1979 these deposit categories included the variable ceiling rate deposits are not included in the amounts outstanding. Therefore, the deposit amounts account of 4 years and over issued since July 1, 1979: the ceiling rate on such shown in table 4.10 may exceed the deposit amounts shown in this table. accounts was 7.60 percent in October. In January 1980 all variable ceiling accounts The most common interest rate for each instrument refers to the stated rate per were excluded from these categories and hence the fixed rate ceilings that apply annum (before compounding) that banks paid on the largest dollar volume of to each maturity category are shown in the table. deposit inflows during the 2-week period immediately preceding the survey date. 4. See the January 1981 Bulletin for a distribution in October 1980 of these Details may not add to totals because of rounding. accounts by size of bank and by the interest rates paid. 4.12 AVERAGE OF MOST COMMON INTEREST RATES PAID on Various Categories of Time and Savings Deposits at Insured Commercial Banks, January 28, 1981 Bank size (total deposit in millions of dollars) Type of deposit, holder, and original maturity All size Less 20 up 50 up 100 up 500 up 1,000 groups than 20 to 50 to 100 to 500 to 1.000 and over Savings and small-denomination time deposits............................................. 9.31 9.88 9.69 9.43 9.19 8.81 9.05 Savings, total.................................................................................................. 5.20 5.23 5.18 5.18 5.20 5.19 5.22 Individuals and nonprofit organizations................................................... 5.20 5.23 5.18 5.17 5.20 5.19 5.22 Partnerships and corporations.................................................................. 5.23 5.17 5.21 5.23 5.24 5.20 5.25 Domestic governmental units.................................................................... 5.23 5.25 5.23 5.25 5.21 5.23 5.23 All other..................................................................................................... 5.21 5.25 5.25 5.21 5.10 5.15 5.24 Other time deposits in denominations of less than $100,000, total........... 6.69 6.65 6.85 6.68 6.68 6.67 6.62 Domestic governmental units, total.......................................................... 6.27 6.79 6.93 5.72 5.85 6.43 6.20 14 up to 90 days..................................................................................... 6.48 6.53 7.48 6.96 5.14 6.33 6.20 90 up to 180 days................................................................................... 6.21 6.55 6.65 6.38 5.80 6.26 6.31 180 days up to 1 year............................................................................. 6.26 6.17 6.69 6.07 5.95 6.37 6.77 1 year and over...................................................................................... 6.23 7.13 6.93 5.50 6.80 6.73 5.94 Other than domestic government units, total......................................... 6.71 6.64 6.85 6.71 6.71 6.67 6.62 14 up to 90 days..................................................................................... 5.19 5.25 5.11 5.02 5.23 5.09 5.22 90 up to 180 days................................................................................... 5.66 5.64 5.68 5.61 5.67 5.62 5.66 180 days up to 1 year............................................................................. 5.59 5.43 5.71 5.51 5.66 5.70 5.59 1 up to 2'A years.................................................................................... 5.99 6.00 6.00 6.00 5.95 5.95 6.00 2'/2 up to 4 years..................................................................................... 6.47 6.49 6.46 6.50 6.44 6.47 6.48 4 up to 6 years........................................................................................ 7.23 7.24 7.24 7.24 7.20 7.23 7.21 6 up to 8 years........................................................................................ 7.45 7.50 7.50 7.32 7.48 7.49 7.43 8 years or more...................................................................................... 7.67 7.75 7.75 7.75 7.67 7.64 7.60 IRA and Keogh Plan time deposits, with maturities of 3 years or more or variable ceiling rates......................................................................... 9.80 9.80 10.18 10.23 9.77 9.83 9.44 Money market certificates, exactly 6 months1......................................... 14.61 14.57 14.45 14.65 14.63 14.66 14.70 Variable interest rate ceiling time deposits of less than $100,000 with maturities of 2‘/2 years or more2...................................................... 11.70 11.67 11.72 11.74 11.68 11.54 11.75 Club accounts3................................................................................................ 4.06 2.48 3.19 3.95 4.34 4.60 4.66 1. See note 2 in table 4.10. reported on each type of deposit at each bank by the amount of that type of deposit 2. See notes 2 and 3 in table 4.10 outstanding. All banks that had either discontinued offering or never offered par­ 3. Club accounts are excluded from all of the other categories. ticular types of deposit as of the survey date were excluded from the calculations for those specific types of deposits. Note. The average rates were calculated by weighting the most common rate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables □ April 1981 4.20 DOMESTIC AND FOREIGN OFFICES, Commercial Banks with Assets of $100 Million or over1/7 Consolidated Report of Condition; Dec. 31, 1980 Millions of dollars Banks with foreign offices2 Banks Item Insured without Total Foreign Domestic f o o f r f e ic ig e n s offices3 offices 1 Total assets 1,461,055 1,091,408 353,763 768,688 369,646 2 Cash and due from depository institutions . 293,791 249,317 130,527 118,790 44,474 Currency and coin (U.S. and foreign) . 14,345 8,421 308 8,113 5,924 4 Balances with Federal Reserve Banks....................................................................................... 26,623 20,062 389 19,674 6,560 5 Balances with other central banks............................................................................................... 2,800 2,800 2,741 59 N/A 6 Demand balances with commercial banks in United States..................................................... 37,600 26,316 4,656 21,660 11,283 7 All other balances with depository institutions in United States and with banks in foreign countries............................................................................................................................... 132,714 125,406 120,255 5,151 7,308 8 Time and savings balances with commercial banks in United States.................................. 6,648 2,472 1,422 1,050 4,177 9 Balances with other depository institutions in United States............................................... 500 200 122 178 200 10 Balances with banks in foreign countries............................................................................... 125,566 122,634 118,711 3,923 2,931 11 Foreign branches of other U.S. banks............................................................................... N/A 26,671 25,562 1,109 N/A 12 Other banks in foreign countries......................................................................................... N/A 95,963 93,149 2,814 N/A 13 Cash items in process of collection............................................................................................. 79,709 66,311 2,177 64,134 13,398 14 Total securities, loans, and lease financing receivables ................................................................ 1,069,341 758,717 197,752 560,965 310,623 15 Total securities, book value............................................................................................................ 220,205 126,332 10,489 115,843 93,872 16 U.S. Treasury............................................................................................................................. 65,634 34,930 403 34,527 30,704 Obligations of other U.S. government agencies and corporations......................................... 32,923 15,845 9 15,836 17,078 Obligations of states and political subdivisions in United States............................................. 99,165 55,808 751 55,057 43,356 All other securities....................................................................................................................... 22,483 19,749 9,326 10,423 2,734 Other bonds, notes, and debentures....................................................................................... 11,385 9,420 7,751 1,670 1,965 Federal Reserve and corporate stock..................................................................................... 1,717 1,279 168 1,111 439 Trading account securities ...................................................................................................... 9,380 9,050 1,408 7,643 330 23 Federal funds sold and securities purchased under agreements to resell................................... 47,735 26,833 306 26,528 20,901 24 Total loans, gross............................................................................................................................ 809,656 607,465 186,542 420,923 202,191 25 Less: Unearned income on loans................................................................................................. 13,873 7,984 1,678 6,307 5,889 26 Allowance for possible loan loss......................................................................................... 8,017 5,843 235 5,608 2,174 27 Equals: Loans,net...................................................................................................................... 787,766 593,638 184,629 409,009 194,129 Total loans, gross, by category 28 Real estate loans ................................................... 189,851 115,624 6,741 108,883 74,227 29 Construction and land development................. N.A. N.A. N.A. 23,009 8,194 30 Secured by farmland.......................................... N.A. N.A. N.A. 838 1,184 31 Secured by residential properties ..................... N.A. N.A. N.A. 63,511 41,876 32 1-to 4-family................................................... N.A. N.A. N.A. 60,271 39,886 33 FHA-insured or VA-guaranteed............... N.A. N.A. N.A. 3,887 2,034 34 Conventional.............................................. N.A. N.A. N.A. 56,384 37,853 35 Multifamily................................................... N.A. N.A. N.A. 3,240 1,990 36 FHA-insured.............................................. N.A. N.A. N.A. 221 99 37 Conventional.............................................. N.A. N.A. N.A. 3,019 1,891 38 Secured by nonfarm nonresidential properties . N.A. N.A. N.A. 21,524 22,972 39 Loans to financial institutions.............................. 79,811 76,095 35,003 41,092 3,717 40 REITs and mortgage companies in United States . 5,670 4,963 104 4,859 707 41 Commercial banks in United States....................... 7,283 6,081 678 5,403 1,202 42 U.S. branches and agencies of foreign banks . . . N.A. 2,482 282 2,200 N.A. 43 Other commercial banks...................................... N.A. 3,599 396 3,203 N.A. 44 Banks in foreign countries...................................... 37,054 36,708 26,751 9,956 347 45 Foreign branches of other U.S. banks............... N.A. 714 324 391 N.A. 46 Other.................................................................. N.A. 35,993 26,427 9,566 N.A. 47 Finance companies in United States....................... 10,725 10,268 382 9,886 457 48 Other financial institutions...................................... 19,080 18,075 7,088 10,987 1,004 49 Loans for purchasing or carrying securities.......................................... 13,084 11,254 1,259 9,995 1,830 50 Brokers and dealers in securities....................................................... 9,037 8,682 857 7,825 355 51 Other................................................................................................. 4,047 2,573 402 2,171 1,475 52 Loans to finance agricultural production and other loans to farmers. 9,898 5,983 709 5,273 3,915 53 Commercial and industrial loans........................................................... 342,227 283,238 109,401 173,837 58,990 54 U.S. addressees (domicile)................................................................. N.A. 171,776 6,255 165,521 N.A. 55 Non-U.S. addressees (domicile)....................................................... N.A. 111,461 103,146 8,316 N.A. 56 Loans to individuals for household, family, and other personal expenditures................. 129,461 73,514 6,448 67,066 55,947 57 Installment loans .............................................................................................................. N.A. N.A. N.A. 56,201 46,779 58 Passenger automobiles................................................................................................... N.A. N.A. N.A. 17,648 19,957 59 Credit cards and related plans....................................................................................... N.A. N.A. N.A. 19,344 9,152 60 Retail (charge account) credit card............................................................................ N.A. N.A. N.A. 15,797 7,813 61 Check and revolving credit......................................................................................... N.A. N.A. N.A. 3,546 1,339 62 Mobile homes................................................................................................................ N.A. N.A. N.A. 3,471 3,313 63 Other installment loans................................................................................................... N.A. N.A. N.A. 15,739 14,357 64 Other retail consumer goods..................................................................................... N.A. N.A. N.A. 4,300 3,308 65 Residential property repair and modernization ....................................................... N.A. N.A. N.A. 3,880 3,565 66 Other installment loans for household, family., and other personal expenditures . N.A. N.A. N.A. 7,559 7,484 67 Single-payment loans. N.A. N.A. N.A. 10,865 9,168 68 Allotfierr loans............... 45,323 41,757 26,980 14,777 3,566 69 Loans to foreign governments and official institutions N.A. 27,352 24,572 2,780 N.A. 70 Other N.A. 14,405 2,408 11,997 N.A. 71 Lease financing receivables ...................................................................................................... 13,635 11,914 2,328 9,586 1,721 72 Bank premises, furniture and fixtures, and other assets representing bank premises......... 18,891 11,578 1,199 10,379 7,313 73 Real estate owned other than bank premises.......................................................................... 1,614 1,127 127 1,001 487 74 All other assets........................................................................................................................... 77,418 70,669 24,158 77,553 6,749 75 Investment in unconsolidated subsidiaries and associated companies .............................. 1,345 1,307 838 468 38 76 Customers’ liability on acceptances outstanding.................................................................. 40,749 40,457 8,785 31,671 292 77 U.S. addressees (domicile)................................................................................................ N.A. 13,686 N.A. N.A. N.A. 78 Non-U.S. addressees (domicile)....................................................................................... N.A. 26,771 N.A. N.A. N.A. 79 Net due from foreign branches, foreign subsidiaries, Edge and agreement subsidiaries N.A. N.A. 3,980 27,063 N.A. 80 Other..................................................................................................................................... 35,324 28,906 10,554 18,351 6,418 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A73 4.20 Continued Banks with foreign offices2 Banks Item Insured Total F o o ff r i e c i e g s n 3 D o o f m fic e e s s tic w f o o i f r t f h e ic i o g e u n s t 81 Total liabilities and equity capital4............................................................................................................ 1,461,055 1,091,408 N.A. N.A. 369,646 82 Total liabilities excluding subordinated debt............................................................................................ 1,380,506 1,038,411 353,482 715,972 342,095 83 Total deposits..................................................................................................................................... 1,132,928 825,440 294,012 531,429 307,488 84 Individuals, partnerships, and corporations.................................................................................. 805,660 537,746 110,231 427,515 267,914 85 U.S. government............................................................................................................................. 2,565 1,731 225 1,506 834 86 States and political subdivisions in United States......................................................................... 51,699 26,101 560 25,541 25,598 87 All other........................................................................................................................................... 258,255 248,715 181,143 67,572 9,540 88 Foreign governments and official institutions........................................................................... 42,190 41,979 33,411 8,567 211 89 Commercial banks in United States.......................................................................................... 74,896 65,964 17,630 48,335 8,932 90 U.S. branches and agencies of foreign banks....................................................................... N.A. 11,633 4,626 7,007 N.A. 91 Other commercial banks in United States............................................................................. N.A. 54,331 13,004 41,328 N.A. 92 Banks in foreign countries........................................................................................................... 141,169 140,772 130,102 10,670 397 93 Foreign branches of other U.S. banks.................................................................................. N.A. 26,977 26,960 18 N.A. 94 Other banks in foreign countries............................................................................................ N.A. 113,794 103,143 10,652 N.A. 95 Certified and officers’ checks, travelers checks, and letters of credit sold for cash................... 14,749 11,148 1,853 9,295 3,601 96 Federal funds purchased and securities sold under agreements to repurchase in domestic offices and Edge and agreement subsidiaries........................................................................................ 127,559 103,070 810 102,260 24,489 97 Interest-bearing demand notes issued to U.S. Treasury and other liabilities for borrowed money........................................................................................................................................... 40,615 36,866 14,735 22,131 3,749 98 Interest-bearing demand notes (note balances) issued to U.S. Treasury................................... 8,633 6,412 N.A. . 6,412 2,221 99 Other liabilities for borrowed money............................................................................................ 31,982 30,453 14,735 15,719 1,529 100 Mortgage indebtedness and liability for capitalized leases............................................................. 1,850 1,244 13 1,231 606 101 All other liabilities............................................................................................................................. 77,555 71,792 43,913 58,922 5,763 102 Acceptances executed and outstanding.......................................................................................... 40,862 40,567 7,288 33,279 295 103 Net due to foreign branches, foreign subsidiaries, Edge and agreement subsidiaries............... N.A. N.A. 27,063 3,980 N.A. 104 Other................................................................................................................................................ 36,693 31,225 9,562 21,663 5,468 105 Subordinated notes and debentures................................................................................................... 5,724 4,035 282 3,754 1,689 106 Total equity capital4............................................................................................................................ 74,824 48,962 N.A. N.A. 25,862 107 Preferred stock............................................................................................................................... 96 10 N.A. N.A. 86 108 Common stock................................................................................................................................. 14,889 9,750 N.A. N.A. 5,140 109 Surplus............................................................................................................................................ 26,183 16,478 N.A. N.A. 9,705 110 Undivided profits and reserve for contingencies and other capital reserves.............................. 33,656 22,724 N.A. N.A. 10,931 Ill Undivided profits........................................................................................................................ 32,772 22,723 N.A. N.A. 10,499 112 Reserve for contingencies and other capital reserves............................................................... 884 451 N.A. N.A. 432 Memo Deposits in domestic offices 113 Total demand....................................................................................................................................... 328,411 224,736 0 224,736 103,674 114 Total savings....................................................................................................................................... 132,407 69,726 0 69,726 62,681 115 Total time............................................................................................................................................. 378,099 236,966 0 236,966 141,133 116 Time deposits of $100,000 or more................................................................................................... 214,012 158,821 0 158,821 55,191 117 Certificates of deposit (CDs) in denominations of $100,000 or more......................................... 198,020 146,533 0 146,533 51,487 118 Other................................................................................................................................................ 15,992 12,288 0 12,288 3,704 119 Savings deposits authorized for automatic transfer and now accounts........................................... 17,396 10,391 0 10,391 7,004 120 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26 weeks............................................................................................................................................ 100,307 49,268 0 49,268 51,038 121 Demand deposits adjusted5................................................................................................................ 202,170 119,806 0 119,806 82,364 122 Standby letters of credit, total........................................................................................................... 45,719 42,614 9,702 32,912 3,105 123 U.S. addressees (domicile)............................................................................................................ N.A. 28,330 N.A. N.A. N.A. 124 Non-U.S. addressees (domicile)..................................................................................................... N.A. 14,284 N.A. N.A. N.A. 125 Standby letters of credit conveyed to others through participations (included in total standby letters of credit)............................................................................................................................ 1,855 1,696 309 1,387 159 126 Holdings of commercial paper included in total gross loans............................................................ N.A. N.A. N.A. 335 560 Average for 30 calendar days (or calendar month) ending with report date 127 Total assets........................................................................................................................................... 1,420,879 1,059,707 319,870 739,837 361,172 128 Cash and due from depository institutions........................................................................................ 272,473 234,316 125,308 109,008 38,158 129 Federal funds sold and securities purchased under agreements to resell....................................... 47,267 26,252 372 25,880 21,015 130 Total loans........................................................................................................................................... 782,887 588,192 180,965 407,226 194,696 131 Total deposits..................................................................................................................................... 1,103,160 804,501 298,739 505,762 298,659 132 Time CDs in denominations of $100,000 or more in domestic offices........................................... 189,355 N.A. N.A. 139,815 49,540 133 Federal funds purchased and securities sold under agreements to repurchase.............................. 133,476 108,154 390 107,763 25,322 134 Other liabilities for borrowed money............................................................................................... 31,793 30,275 14,655 15,620 1,518 135 Number of banks............................................................................................................................... 1,419 178 178 178 1,241 For notes see page A77. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables □ April 1981 4.21 DOMESTIC OFFICES, Insured Commercial Banks with Assets of $100 Million or over1 Consolidated Report of Condition; Dec. 31, 1980 Millions of dollars Member banks Non­ Item Insured member insured Total National State 1Total assets.................................................................................................................................................... 1,138,335 974,984 733,060 241,924 163,350 2 Cash and due from depository institutions....................................................................................... 163,264 147,367 100,874 46,492 15,898 3 Currency and coin (U.S. and foreign)........................................................................................... 14,037 12,050 9,479 2,571 1,987 4 Balances with Federal Reserve Banks........................................................................................... 26,234 26,080 20,730 5,350 154 5 Balances with other central banks.................................................................................................. 59 59 58 * 0 6 Demand balances with commercial banks in United States......................................................... 32,944 25,717 14,519 11,198 7,227 7 All other balances with depository institutions in United States and with banks in foreign countries..................................................................................................................................... 12,458 8,459 6,580 1,879 3,999 8 Time and savings balances with commercial banks in United States...................................... 5,226 3,193 2,833 360 2,033 9 Balances with other depository institutions in United States................................................... 378 150 102 48 228 10 Balances with banks in foreign countries................................................................................... 6,854 5,115 3,645 1,471 1,739 11 Cash items in process of collection................................................................................................. 77,532 75,002 49,509 25,493 2,530 12 Total securities, loans, and lease financing receivables ........................................................................ 871,589 732,525 562,393 170,133 139,064 13 Total securities, book value................................................................................................................ 209,716 168,175 128,280 39,895 41,541 14 U.S. Treasury................................................................................................................................... 65,231 50,996 38,278 12,718 14,235 15 Obligations of other U.S. government agencies and corporations............................................. 32,914 25,022 20,087 4,935 7,892 16 Obligations of states and political subdivisions in United States................................................. 98,414 80,595 61,294 19,301 17,819 17 All other securities........................................................................................................................... 13,157 11,562 8,621 2,942 1,594 18 Other bonds, notes, and debentures........................................................................................... 3,634 2,330 1,775 554 1,305 19 Federal Reserve and corporate stock......................................................................................... 1,550 1,279 1,032 348 171 20 Trading account securities .......................................................................................................... 7,972 7,854 5,814 2,040 119 21 Federal funds sold and securities purchased under agreements to resell........................................ 47,429 40,695 30,988 9,707 6,734 22 Total loans, gross................................................................................................................................. 623,114 529,516 408,127 121,524 93,463 23 Less: Unearned income on loans...................................................................................................... 12,195 9,604 7,609 1,995 2,591 24 Allowance for possible loan loss............................................................................................ 7,781 6,821 5,129 1,691 961 25 Equals: Loans, net............................................................................................................................. 603,137 513,226 395,388 117,838 89,911 Total loans, gross, by category 26 Real estate loans ................................................................................................................................. 183,110 147,244 120,858 26,486 35,765 27 Construction and land development............................................................................................... 31,204 26,492 20,678 5,813 4,712 28 Secured by farmland....................................................................................................................... 2,023 1,541 1,411 130 481 29 Secured by residential properties .................................................................................................. 105,387 85,603 71,544 14,059 19,784 30 1-to 4-family................................................................................................................................. 100,158 81,447 68,357 13,090 18,711 31 FHA-insured or VA-guaranteed............................................................................................. 5,921 5,284 4,435 849 636 32 Conventional............................................................................................................................. 94,237 76,163 63,922 12,241 18,074 33 Multifamily................................................................................................................................... 5,230 4,156 3,187 969 1,074 34 FHA-insured............................................................................................................................. 320 253 144 109 68 35 Conventional............................................................................................................................. 4,909 3,903 3,043 860 1,006 36 Secured by nonfarm nonresidential properties............................................................................. 44,496 33,708 27,225 6,483 10,788 37 Loans to financial institutions........................................................................................................... 44,808 42,220 26,716 15,604 2,488 38 REITs and mortgage companies in United States ........................................................................ 5,566 5,261 4,109 1,152 305 39 Commercial banks in United States............................................................................................... 6,605 5,539 3,500 2,040 1,066 40 Banks in foreign countries............................................................................................................. 10,303 9,936 5,374 4,562 367 41 Finance companies in United States............................................................................................... 10,343 10,108 6,366 3,742 236 42 Other financial institutions.............................................................................................................. 11,991 11,477 7,368 4,109 514 43 Loans for purchasing or carrying securities...................................................................................... 11,825 11,153 6,126 5,027 672 44 Brokers and dealers in securities.................................................................................................... 8,180 7,852 3,547 4,305 328 45 Other...................................................................... ...................................................................... 3,645 3,202 2,579 722 344 46 Loans to finance agricultural production and other loans to farmers............................................. 9,189 8,221 7,616 705 867 47 Commercial and industrial loans........................................................................................................ 232,827 204,806 154,462 50,344 28,021 48 Loans to individuals for household, family, and other personal expenditures.............................. 123,013 98,944 81,081 17,863 24,069 49 Installment loans ............................................................................................................................. 102,980 82,665 68,158 14,508 20,315 50 Passenger automobiles.................................................................................................................. 37,605 28,738 23,647 5,091 8,867 51 Credit cards and related plans.................................................................................................... 28,496 25,592 21,033 4,559 2,904 52 Retail (charge account) credit card......................................................................................... 23,610 21,293 17,830 3,563 2,217 53 Check and revolving credit...................................................................................................... 4,886 4,199 3,203 996 687 54 Mobile homes............................................................................................................................... 6,783 5,523 5,033 490 1,261 55 Other installment loans................................................................................................................ 30,096 22,812 18,445 4,367 7,284 56 Other retail consumer goods.................................................................................................. 7,608 6,078 5,212 866 1,530 57 Residential property repair and modernization.................................................................... 7,445 5,483 4,502 981 1,962 58 Other installment loans for household, family, and other personal expenditures............. 15,043 11,251 8,731 2,521 3,792 59 Single-payment loans....................................................................................................................... 20,032 16,278 12,923 3,355 3,754 60 All other loans.................................................................................................................................... 18,343 16,762 11,267 5,495 1,581 61 Lease financing receivables ................................................................................................................ 11,307 10,429 7,736 2,692 878 63 Bank premises, furniture and fixtures, and other assets representing bank premises................... 17,692 14,472 11,795 2,677 3,220 63 Real estate owned other than bank premises.................................................................................. 1,487 1,281 1,029 252 206 64 All other assets.................................................................................................................................... 84,302 79,339 56,969 22,370 4,963 65 Investment in unconsolidated subsidiaries and associated companies ....................................... 507 4-80 452 28 26 66 Customers’ liability on acceptances outstanding........................................................................... 31,963 31,301 21,736 9,564 663 67 Net due from foreign branches, foreign subsidiaries, Edge and agreement subsidiaries......... 27,063 25,799 19,017 6,782 1,264 68 Other................................................................................................................................................ 24,770 21,760 15,764 5,996 3,010 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A75 4.21 Continued Member banks Non­ Item Insured member Total National State insured 69 Total liabilities and equity capital7............................................................................................................ 1,138,335 974,984 733,060 241,924 163,350 70 Total liabilities excluding subordinated debt............................................................................................ 1,058,067 906,748 681,273 225,475 151,319 71 Total deposits..................................................................................................................................... 838,916 700,638 531,727 168,910 138,278 72 Individuals, partnerships, and corporations.................................................................................. 695,429 574,434 447,282 127,152 120,995 73 U.S. government............................................................................................................................. 2,340 1,955 1,481 474 385 74 States and political subdivisions in United States......................................................................... 51,139 39,181 32,206 6,974 11,958 75 Allother.......................................................................................................................................... 77,112 74,212 43,883 30,329 2,900 76 Foreign governments and official institutions........................................................................... 8,778 8,485 5,531 2,955 293 77 Commercial banks in United States.......................................................................................... 57,267 55,183 33,795 21,388 2,084 78 Banks in foreign countries.......................................................................................................... 11,067 10,544 4,557 5,987 522 79 Certified and officers’ checks, travelers checks, and letters of credit sold for cash................... 12,896 10,856 6,876 3,981 2,040 80 Demand deposits................................................................................................................................ 328,411 285,123 201,264 83,859 43,288 81 Mutual savings banks...................................................................................................................... 1,146 1,007 542 465 138 82 Other individuals, partnerships, and corporations....................................................................... 241,630 204,661 153,241 51,420 36,968 83 U.S. government............................................................................................................................. 1,749 1,490 1,182 309 258 84 States and political subdivisions in United States......................................................................... 11,453 9,269 7,615 1,654 2,184 85 All other.......................................................................................................................................... 59,537 57,839 31,808 26,030 1,698 86 Foreign governments and official institutions........................................................................... 2,612 2,490 1,089 1,401 122 87 Commercial banks in United States.......................................................................................... 46,960 45,669 26,702 18,966 1,291 88 Banks in foreign countries........................................................................................................... 9,965 9,680 4,017 5,663 286 89 Certified and officers’ checks, travelers checks, and letters of credit sold for cash................... 12,896 10,856 6,876 3,981 2,040 90 Time deposits....................................................................................................................................... 378,099 310,595 246,394 64,201 67,504 91 Mutual savings banks...................................................................................................................... 660 651 455 196 9 92 Other individuals, partnerships, and corporations....................................................................... 321,213 264,473 209,944 54,529 56,740 93 U.S. government............................................................................................................................. 531 415 251 164 116 94 States and political subdivisions in United States......................................................................... 38,140 28,702 23,688 5,014 9,438 95 Allother....................................................................................................................................... 17,554 16,353 12,056 4,297 1,200 96 Foreign governments and official institutions........................................................................... 6,151 5,980 4,428 1,552 171 97 Commercial banks in United States.......................................................................................... 10,302 9,509 7,088 2,421 793 98 Banks in foreign countries........................................................................................................... 1,101 864 540 324 237 99 Savings deposits................................................................................................................................... 132,407 104,921 84,070 20,851 27,486 100 Mutual savings banks...................................................................................................................... * * * 0 0 101 Other individuals, partnerships, and corporations....................................................................... 130,781 103,641 83,100 20,541 27,139 102 Individuals and nonprofit organizations.................................................................................... 124,053 98,600 79,056 19,544 25,453 103 Corporations and other profit organizations............................................................................ 6,727 5,041 4,044 997 1,686 104 U.S. government............................................................................................................................. 60 50 48 2 10 105 States and political subdivisions in United States......................................................................... 1,545 1,210 903 306 336 106 AUother.......................................................................................................................................... 21 20 19 2 1 107 Foreign governments and official institutions........................................................................... 15 15 14 1 1 108 Commercial banks in United States.......................................................................................... 5 5 5 * * 109 Banks in foreign countries........................................................................................................... * * * * * 110 Federal funds purchased and securities sold under agreements to repurchase.............................. 126,750 118,795 88,966 29,829 7,955 Ill Interest-bearing demand notes issued to U.S. Treasury and other liabilities for borrowed money.......................................................................................................................................... 25,880 24,520 14,474 10,045 1,360 112 Interest-bearing demand notes (note balances) issued to U.S. Treasury................................... 8,633 7,809 5,578 2,231 824 113 Other liabilities for borrowed money........................................................................................... 17,247 16,711 8,8% 7,815 536 114 Mortgage indebtedness and liability for capitalized leases.............................................................. 1,837 1,520 1,243 277 317 115 All other liabilities............................................................................................................................. 64,684 61,275 44,862 16,413 3,409 116 Acceptances executed and outstanding.......................................................................................... 33,574 32,908 23,288 9,620 666 117 Net aue to foreign branches, foreign subsidiaries, Edge and agreement subsidiaries............... 3,980 3,734 3,168 566 246 118 Other................................................................................................................................................ 27,130 24,633 18,406 6,227 2,497 119 Subordinated notes and debentures................................................................................................... 5,443 4,329 3,143 1,185 1,114 120 Total equity capital7.................................................................................................................................... 74,825 63,908 48,643 15,264 10,917 Memo: 121 Time deposits of $100,000 or more................................................................................................... 214,012 182,949 140,104 42,845 31,063 122 Certificates of deposit (CDs) in denominations of $100,000 or more......................................... 198,020 168,387 129,248 39,139 29,633 123 Other................................................................................................................................................ 15,992 14,562 10,856 3,707 1,430 124 Savings deposits authorized for automatic transfer and NOW accounts......................................... 17,396 14,063 10,993 3,069 3,333 125 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26 weeks............................................................................................................................................ 100,307 78,603 65,643 12,960 21,704 126 Demand deposits adjusted5................................................................................................................ 202,170 162,962 123,871 39,091 39,208 127 Total standby letters of credit............................................................................................................ 36,017 34,333 22,979 11,353 1,685 128 Conveyed to others through participation (included in standby letters of credit)...................... 1,546 1,477 1,031 446 69 129 Holdings of commercial paper included in total gross loans............................................................ 895 580 499 81 315 Average for 30 calendar days (or calendar month) ending with report date 130 Total assets.......................................................................................................................................... 1,101,009 941,733 708,201 233,532 159,276 131 Cash and due from depository institutions........................................................................................ 147,165 133,633 88,970 44,663 13,533 132 Federal funds sold and securities purchased under agreements to resell....................................... 46,895 40,212 30,514 9,698 6,683 133 Total loans.......................................................................................................................................... 601,922 512,350 395,012 117,338 89,572 134 Total deposits..................................................................................................................................... 804,421 670,188 508,616 161,572 134,233 135 Time CDs in denominations of $100,000 or more in domestic offices........................................... 189,355 160,495 122,683 37,812 28,860 136 Federal funds purchased and securities sold under agreements to repurchase.............................. 133,086 124,905 92,668 32,237 8,181 137 Other liabilities for borrowed money............................................................................................... 17,138 16,599 8,782 7,817 539 138 Number of banks............................................................................................................................... 1,419 924 766 158 495 For notes see page A77. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Special Tables □ April 1981 4.22 DOMESTIC OFFICES, Insured Commercial Bank Assets and Liabilities1/7 Consolidated Report of Condition; Dec. 31, 1980 Millions of dollars Member banks Non- Item Insured member insured Total National State 1 Total assets...................................................................................................................................................... 1,526,679 1,136,795 869,571 267,224 389,884 2 Cash and due from depository institutions.......................................................................................... 199,234 163,74-0 114,845 48,895 35,494 3 Currency and coin (U.S. and foreign)............................................................................................ 19,802 14,700 11,728 2,971 5,103 4 Balances with Federal Reserve Banks............................................................................................ 29,993 29,795 23,892 5,903 198 5 Balances with other central banks................................................................................................... 59 59 58 * 0 6 Demand balances with commercial banks in United States.......................................................... 49,120 30,807 18,886 11,921 18,313 7 All other balances with depository institutions in United States and banks in foreign countries 19,471 11,205 8,996 2,209 8,266 8 Cash items in process of collection................................................................................................. 80,789 77,174 51,284 25,891 3,614 9 Total securities, loans, and lease financing receivables............................................................................ 1,209,610 872,074 679,918 192,156 337,536 10 Total securities, book value................................................................................................................ 322,617 214,948 167,808 47,140 107,669 11 U.S. Treasury................................................................................................................................... 103,491 66,608 51,231 15,377 36,884 12 Obligations of other U.S. government agencies and corporations................................................ 58,839 35,252 28,763 6,489 23,586 13 Obligations of states and political subdivisions in United States.................................................. 145,025 100,640 78,461 22,179 44,384 14 All other securities............................................................................................................................ 15,263 12,448 9,353 3,095 2,815 15 Federal funds sold and securities purchased under agreements to resell......................................... 69,905 50,268 39,034 11,234 19,638 16 Total loans, gross................................................................................................................................. 834,437 616,439 481,110 135,329 217,998 17 Less: Unearned income on loans....................................................................................................... 19,240 12,525 10,093 2,432 6,715 18 Allowance for possible loan loss............................................................................................... 9,774 7,670 5,850 1,819 2,105 19 Equals: Loans, net.............................................................................................................................. 805,423 596,245 465,167 131,078 209,178 Total loans, gross, by category 20 Real estate loans................................................................................................................................... 261,569 179,773 147,732 32,042 81,796 21 Construction and land development........................ ................................................................... 36,493 28,312 22,257 6,055 8,181 22 Secured by farmland......................................................................................................................... 8,545 3,751 3,164 586 4,794 23 Secured by residential properties.................................................................................................... 152,784 106,112 88,426 17,686 46,672 24 1- to 4-family................................................................................................................................. 146,305 101,470 84,837 16,633 44,836 25 Multifamily..................................................................................................................................... 6,479 4,643 3,589 1,054 1,836 26 Secured by nonfarm nonresidential properties.............................................................................. 63,748 41,599 33,885 7,714 22,149 27 Loans to financial institutions............................................................................................................. 46,119 42,880 27,210 15,669 3,239 28 Loans for purchasing or carrying securities........................................................................................ 12,443 11,350 6,296 5,054 1,093 29 Loans to finance agricultural production and other loans to farmers............................................... 31,544 17,006 14,731 2,275 14,538 30 Commercial and industrial loans......................................................................................................... 280,824 224,447 171,257 53,189 56,377 31 Loans to individuals for household, family, and other personal expenditures................................ 180,137 122,745 101,362 21,383 57,392 32 Installment loans.............................................................................................................................. 146,964 101,091 83,905 17,186 45,873 33 Passenger automobiles................................................................................................................. 61,502 38,725 32,195 6,530 22,778 34 Credit cards and related plans..................................................................................................... 29,755 26,192 21,564 4,628 3,563 35 Mobile homes............................................................................................................................... 10,375 7,143 6,432 711 3,231 36 All other installment loans for household, family, and other personal expenditures............... 45,332 29,031 23,714 5,317 16,301 37 Single-payment loans........................................................................................................................ 33,173 21,6:54 17,456 4,198 11,519 38 All other loans....................................................................................................................................... 21,802 18,239 12,522 5,717 3,563 39 Lease financing receivables.................................................................................................................. 11,665 10,614 7,910 2,704 1,051 40 Bank premises, furniture and fixtures, and other assets representing bank premises.................... 25,364 17,658 14,494 3,164 7,706 41 Real estate owned other than bank premises.................................................................................... 2,046 1,479 1,189 290 567 42 All other assets..................................................................................................................................... 90,424 81,844 59,125 22,719 8,580 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A ll 4.22 Continued Member banks Non- Item Insured member Total National State insured 43 Total liabilities and equity capital7....................................................................................................... 1,526,679 1,136,795 869,571 267,224 389,884 44 Total liabilities excluding subordinated debt.......................................................................... ................ 1,143,209 1,054,864 806,280 248,585 358,344 45 Total deposits....................................................................................................................................... 1,182,138 843,028 651,845 191,183 339,109 46 Individuals, partnerships, and corporations.................................................................................... 1,003,677 702,951 555,592 147,359 300,725 47 U.S. government............................................................................................................................... 3,236 2,316 1,794 522 920 48 States and political subdivisions in United States.......................................................................... 80,450 50,612 41,947 8,664 29,838 49 All other............................................................................................................................................. 78,403 74,883 44,446 30,437 3,521 50 Certified and officers’ checks, travelers checks, and letters of credit sold for cash..................... 16,372 12,267 8,066 4,201 4,105 51 Demand deposits................................................................................................................................... 430,295 327,697 237,654 90,043 102,598 52 Individuals, partnerships, and corporations.................................................................................... 332,864 243,147 185,858 57,289 89,718 53 U.S. government............................................................................................................................... 2,438 1,771 1,423 348 667 54 States and political subdivisions in United States........................................................................... 18,164 12,110 10,032 2,078 6,054 55 Allother............................................................................................................................................ 60,456 58,403 32,275 26,128 2,053 56 Certified and officers’ checks, travelers checks, and letters of credit sold for cash..................... 16,372 12,267 8,066 4,201 4,105 57 Time deposits..................................................................................................................................... 552,082 381,246 305,918 75,328 170,836 58 Other individuals, partnerships, and corporations......................................................................... 474,584 327,792 263,061 64,731 146,792 59 U.S. government............................................................................................................................... 721 488 317 171 233 60 States and political subdivisions in United States........................................................................... 58,872 36,517 30,398 6,120 22,355 61 All other............................................................................................................................................ 17,904 16,449 12,142 4,307 1,455 62 Savings deposits..................................................................................................................................... 199,762 134,086 108,273 25,812 65,676 63 Corporations and other profit organizations.................................................................................. 9,921 6,341 5,141 1,200 3,580 64 Other individuals, partnerships, and corporations......................................................................... 186,308 125,672 101,532 24,140 60,636 65 U.S. government............................................................................................................................... 76 57 54 3 19 66 States and political subdivisions in United States........................................................................... 3,414 1,984 1,517 467 1,429 67 All other............................................................................................................................................. 43 31 29 2 12 68 Federal funds purchased and securities sold under agreements to repurchase................................ 131,832 121,445 91,210 30,235 10,386 69 Interest-bearing demand notes (note balances) issued to U.S. Treasury and other liabilities for borrowed money............................................................................................................................ 27,399 25,371 15,220 10,151 2,028 70 Mortgage indebtedness and liability for capitalized leases............................................................... 2,207 1,660 1,354 306 547 71 All other liabilities............................................................................................................................... 69,633 63,359 46,650 16,710 6,274 72 Subordinated notes and debentures..................................................................................................... 6,213 4,645 3,423 1,222 1,568 73 Total equity capital7............................................................................................................................. 107,257 77,286 59,868 17,418 29,971 Memo 74 Time deposits of $100,000 or more..................................................................................................... 254,075 198,314 153,411 44,904 55,761 75 Certificates of deposit (CDs) in denominations of $100,000 or more........................................... 234,561 182,396 141,362 41,034 52,165 76 Other.................................................................................................................................................. 19,514 15,919 12,048 3,870 3,596 77 Savings deposits authorized for automatic transfer and now accounts............................................. 22,039 16,225 12,862 3,363 5,814 78 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26 weeks.............................................................................................................................................. 178,252 110,687 92,593 18,094 67,564 79 Demand deposits adjusted5................................................................................................................. 299,191 202,519 157,778 44,740 96,673 80 Total standby letters of credit.............................................................................................................. 37,215 34,779 23,366 11,413 2,436 Average for 30 calendar days (or calendar month) ending with report date 81 Total deposits....................................................................................................................................... 1,142,753 810,628 627,082 183,546 332,126 82 Number of banks................................................................................................................................. 14,421 5,422 4,425 997 8,999 1. Effective December 31, 1978, the report of condition was substantially revised 4. Equity capital is not allocated between the domestic and foreign offices of for commercial banks. Commercial banks with assets less than $100 million and banks with foreign offices. with domestic offices only were given the option to complete either the abbreviated 5. Demand deposits adjusted equal demand deposits other than domestic com­ of the standard set of reports. Banks with foreign offices began reporting in greater mercial interbank and U.S. government less cash items in process of collection. detail on a consolidated domestic and foreign basis. These tables reflect the varying 6. Domestic offices exclude branches in foreign countries and in U.S. territories levels of reporting detail. and possessions, subsidiaries in foreign countries, and all offices of Edge Act and 2. All transactions between domestic and foreign offices of a bank are reported agreement corporations wherever located. in “Net due from” and “Net due to” (lines 79 and 103). All other lines represent 7. This item contains the capital accounts of U.S. banks that have no Edge or transactions with parties other than the domestic and foreign offices of each bank. foreign operations and reflects the difference between domestic office assets and Since these intra-office transactions are erased by consolidation, total assets and liabilities of U.S. banks with Edge or foreign operations excluding the capital liabilities are the sum of all except intra-office: balances. accounts of their Edge or foreign subsidiaries. 3. Foreign offices include branches in foreign countries arid in U.S. territories N.A. This item is unavailable for all or some of the banks because of the lesser and possessions, subsidiaries in foreign countries, and all offices of Edge Act and detail available from banks without foreign offices, the inapplicability of certain agreement corporations wherever located. items to banks that have only domestic offices, and the absence of detail on a fully consolidated basis for banks with foreign offices. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Special Tables □ April 1981 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, Sept 30, 19801 Millions of dollars All states2 New York Other states2 Cali­ Illinois Item T fo o r t n a i P a Branches Total Branches Agencies Brariches Agencies Branches Agencies 1 Total assets4.......................................................................... 131,150 81,725 49,425 71,169 21,943 25,961 6,193 4,343 1,542 2 Cash and due from depository institutions..................... 16,915 14,036 2,880 13,154 2,645 208 777 105 26 3 Currency and coin (U.S. and foreign)....................... 15 13 2 11 1 1 1 2 0 4 Balances with Federal Reserve Banks....................... 0 0 0 0 0 0 0 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...................................................................... 8,121 6,259 1,862 6,180 1,770 85 42 37 7 7 All other balances with depository institutions in United States and with banks in foreign countries................................................................ 8,006 7,267 739 6,473 616 104 733 61 19 8 Time and savings balances with commercial banks in United States................................................. 3,990 3,661 329 3,482 268 49 120 59 11 9 Balances with other depository institutions in United States..................................................... 338 338 0 338 0 0 0 0 0 10 Balances with banks in foreign countries............... 3,678 3,268 410 2,653 348 55 612 2 8 11 Foreign branches of U.S. banks.......................... 635 465 170 335 166 3 127 2 1 12 Other banks in foreign countries........................ 3,043 2,803 240 2,318 182 52 485 0 7 13 Cash items in process of collection............................ 772 495 277 489 259 19 2 5 0 14 Total securities, loans, and lease financing receivables.. 83,517 55,432 28,085 47,577 13,727 12,946 5,081 2,760 1,426 15 Total securities, book value........................................... 3,383 2,055 1,328 1,771 1,172 157 170 113 0 16 U.S. Treasury.............................................................. 2,241 1,358 882 1,211 819 64 38 110 0 17 Obligations of other U.S. government agencies and corporations.......................................................... 299 70 229 67 202 27 2 1 0 18 Obligations of states and political subdivisions in United States........................................................ 166 122 44 93 1 43 26 2 0 19 Other bonds, notes, debentures and corporate stock 677 505 173 400 150 22 104 0 0 20 Federal funds sold and securities purchased under agreements to resell................................................. 5,874 3,454 2,420 3,334 2,060 351 101 20 8 By holder 21 Commercial banks in United States.......................... 5,538 3,212 2,325 3,123 1,972 349 69 20 5 22 Others........................................................................... 337 242 95 211 89 2 31 0 4 By type 23 One-day maturity or continuing contract................... 5,187 3,439 2,378 3,320 2,022 348 99 20 8 24 Securities purchased under agreements to resell... 159 65 93 40 50 44 25 1 0 25 Other......................................................................... 5,658 3,373 2,285 3,280 1,973 304 74 19 8 26 Other securities purchased under agreements to resell..................................................................... 58 16 42 15 38 4 1 0 0 27 Total loans, gk>ss............................................................ 80,222 53,432 26,790 45,858 12,568 12,810 4,913 2,647 1,426 28 Less: Unearned income on loans.................................... 90 56 33 54 12 21 1 1 0 29 Equals: Loans, net........................................................ 80,133 53,376 26,757 45,805 12,555 12,789 4,911 2,646 1,426 Total loans, gross, by category 30 Real estate loans.............................................................. 1,974 211 1,764 116 808 749 16 69 216 31 Loans to financial institutions......................................... 26,903 20,859 6,044 19,382 3,060 2,921 1,400 77 64 32 Commercial banks in United States.......................... 13,697 10,646 3,051 9,842 1,360 1,679 736 67 12 33 U.S. branches and agencies of other foreign banks 12,641 10,013 2,628 9,239 998 1,629 711 62 2 34 Other commercial banks..................... ................. 1,055 633 422 603 363 50 25 5 10 35 Banks in foreign countries........................................... 12,253 9,500 2,752 8,947 1,524 1,186 550 4 42 36 Foreign branches of U.S. banks.............................. 1,188 906 282 845 154 127 62 0 0 37 Other......................................................................... 11,065 8,594 2,471 8,102 1,370 1,059 488 4 42 38 Other financial institutions......................................... 953 712 241 593 176 55 114 6 10 39 Loans for purchasing or carrying securities................... 817 443 374 438 336 38 5 0 0 40 Commercial and industrial loans.................................... 41,659 25,453 16,206 19,740 6,891 8,229 3,280 2,431 1,088 41 U.S. addressees (domicile)......................................... 26,411 15,996 10,416 11,519 3,829 5,619 2,919 1,555 971 42 Non-U.S. addressees (domicile).................................. 15,248 9,457 5,791 8,220 3,063 2,611 361 876 117 43 Loans to individuals for household, family, and other personal expenditures............................................... 122 82 40 52 21 20 6 23 0 44 All other loans.................................................................. 8,747 6,385 2,362 6,131 1,451 853 206 48 58 45 Loans to foreign governments and official institutions............................................................ 7,617 5,401 2,217 5,188 1,344 815 194 19 57 46 Other............................................................................. 1,129 984 145 943 107 38 12 29 0 47 Lease financing receivables............................................. 1 1 0 1 0 0 0 0 0 48 All other assets................................................................ 24,843 8,803 16,041 7,104 3,510 12,455 234 1,459 82 49 Customers’ liability on acceptances outstanding....... 8,138 3,997 4,141 3,902 2,987 1,119 36 59 35 50 U.S. addressees (domicile)...................................... 4,045 2,139 1,906 2,107 973 907 21 11 26 51 Non-U.S. addressees (domicile).............................. 4,093 1,858 2,234 1,795 2,013 212 15 48 9 52 Net due from related banking institutions5............... 12,838 2,002 10,836 652 0 10,815 0 1,350 21 53 Other............................................................................. 3,868 2,803 1,065 2,551 523 521 198 49 26 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A79 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 54Total liabilities4.................................................................... 131,150 81,725 49,425 71,169 21,943 25,961 6,193 4,343 1,542 55Total deposits and credit balances.................................. 36,841 33,689 3,152 30,570 2,243 851 478 2,634 65 56 Individuals, partnerships, and corporations............... 19,738 19,008 730 16,204 260 433 259 2,538 43 57 U.S. addressees (domicile)...................................... 17,079 16,890 189 14,192 129 53 201 2,491 13 58 Non-U.S. addressees (domicile).............................. 2,658 2,117 541 2,012 130 381 58 47 30 59 U.S. government, states, and political subdivisions in United States.................................................... 87 87 0 27 0 0 2 58 0 60 All other....................................................................... 17,016 14,594 2,422 14,339 1,983 418 217 37 22 61 Foreign governments and official institutions....... 3,204 2,850 354 2,704 99 255 135 11 0 62 Commercial banks in United States...................... 5,277 4,910 367 4,895 352 0 10 5 14 63 U.S. branches and agencies of other foreign banks.............................................................. 1,803 1,790 13 1,788 2 0 1 0 11 64 Other commercial banks in United States......... 3,474 3,120 354 3,106 350 0 9 5 4 65 Banks in foreign countries....................................... 2,680 2,262 418 2,212 320 94 38 12 4 66 Foreign branches of U.S. banks.......................... 99 86 13 74 10 3 10 2 0 67 Other banks in foreign countries........................ 2,582 2,177 405 2,138 310 91 28 10 4 68 Certified and officers’ checks, travelers checks, and letters of credit sold for cash..................... 5,855 4,572 1,283 4,527 1,212 68 34 9 4 69Demand deposits.............................................................. 11,113 9,782 1,331 9,531 1,212 119 131 116 4 70 Individuals, partnerships, and corporations............... 1,577 1,546 31 1,352 0 33 88 104 0 71 U.S. addressees (domicile)..................................... 1,007 1,003 4 833 0 6 73 94 0 72 Non-U.S. addressees (domicile).............................. 570 543 27 519 0 27 15 9 0 73 U.S. government, states, and political subdivisions in United States..................................................... 14 14 0 13 0 0 0 0 0 74 All other....................................................................... 9,523 8,222 1,300 8,165 1,212 85 43 12 4 75 Foreign governments and official institutions....... 577 567 10 565 0 10 2 1 0 76 Commercial banks in United States...................... 2,321 2,321 0 2,317 0 0 2 2 0 77 U.S. branches and agencies of other foreign banks.............................................................. 662 662 0 662 0 0 0 0 0 78 Other commercial banks in United States......... 1,659 1,659 0 1,656 0 0 2 1 0 79 Banks in foreign countries........................................ 770 762 8 756 0 7 5 0 0 80 Certified and officers’ checks, travelers checks, and letters of credit sold for cash..................... 5,855 4,572 1,283 4,527 1,212 68 34 9 4 81Time deposits.................................................................... 24,166 23,547 619 20,735 0 621 325 2,485 0 82 Individual, partnerships, and corporations................. 17,426 17,102 324 14,549 0 326 149 2,402 0 83 U.S. addressees (domicile)...................................... 15,670 15,670 0 13,192 0 2 109 2,366 0 84 Non-U.S. addressees (domicile).............................. 1,756 1,432 324 1,356 0 324 40 36 0 85 U.S. government, states, and political subdivisions in United States..................................................... 73 73 0 14 0 0 2 58 0 86 All other....................................................................... 6,666 6,372 295 6,173 0 295 174 25 0 87 Foreign governments and official institutions....... 2,491 2,282 209 2,139 0 209 133 10 0 88 Commercial banks in United States....................... 2,589 2,589 0 2,577 0 0 8 3 0 89 U.S. branches and agencies of other foreign banks.............................................................. 1,128 1,128 0 1,127 0 0 1 0 0 90 Other commercial banks in United States......... 1,462 1,461 0 1,451 0 0 7 3 0 91 Banks in foreign countries....................................... 1,586 1,501 85 1,456 0 85 33 12 0 92Savings deposits................................................................ 389 360 29 304 0 30 22 33 0 93 Individuals, partnerships, and corporations............... 388 360 29 303 0 30 22 32 0 94 U.S. addressees (domicile)...................................... 218 218 0 167 0 2 19 30 0 95 Non-U.S. addressees (domicile).............................. 170 142 28 136 0 28 3 2 0 96 U.S. government, states, and political subdivisions in United States..................................................... 0 0 0 0 0 0 0 0 0 97 All other....................................................................... 1 1 0 1 0 0 0 0 0 98Credit balances................................................................ 1,175 0 1,174 0 1,031 81 0 0 62 99 Individuals, partnerships, and corporations............... 347 0 347 0 260 44 0 0 43 100 U.S. addressees (domicile)...................................... 186 0 186 0 129 42 0 0 12 101 Non-U.S. addressees (domicile)............................’. 162 0 162 0 130 2 0 0 31 102 U.S. government, states, and political subdivisions in United States..................................................... 0 0 0 0 0 0 0 0 0 103 All other....................................................................... 828 0 828 0 772 37 0 0 19 104 Foreign governments and official institutions....... 135 0 135 0 99 36 0 0 0 105 Commercial banks in United States....................... 367 0 367 0 352 0 0 0 15 106 U.S. branches and agencies of other foreign banks.............................................................. 13 0 13 0 2 0 0 0 11 107 Other commercial banks in United States......... 354 0 354 0 350 0 0 0 4 108 Banks in foreign countries....................................... 326 0 326 0 320 2 0 0 4 For notes see page A81. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Special Tables □ April 1981 4.30 Continued Item Total A B ll r a s n t c a h te e s s 2 Agencies Branc N he ew s 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 109 Federal funds purchased and sold under agreement to repurchase................................................................ 9,083 5,510 3,573 5,046 1,634 1,823 416 49 116 By holder 110 Commercial banks in United States.......................... 7,751 4,662 3,090 4,209 1,282 1,801 405 48 7 Ill Others........................................................................... 1,332 849 483 837 353 22 10 1 109 By type 112 One-day maturity or continuing contract................... 8,660 5,088 3,572 4,635 1,634 1,822 405 48 116 113 Securities sold under agreements to repurchase ... 450 438 12 438 0 12 0 0 0 114 Other......................................................................... 8,210 4,650 3,560 4,197 1,634 1,810 405 48 116 115 Other securities sold under agreements to repurchase............................................................ 423 422 1 411 0 1 10 1 0 116 Other liabilities for borrowed money............................ 36,502 13,611 22,890 11,340 4,185 18,652 1,741 530 53 117 Owed to banks............................................................ 33,353 11,876 21,477 9,829 3,905 17,519 1,692 355 53 118 U.S. addressees (domicile)...................................... 27,044 7,161 19,882 6,092 3,364 16,473 717 352 46 119 Non-U.S. addressees (domicile).............................. 6,310 4,715 1,595 3,737 541 1,047 975 3 7 120 Owed to others............................................................ 3,148 1,735 1,413 1,511 281 1,132 49 175 0 121 U.S. addressees (domicile)...................................... 2,386 1,307 1,079 1,110 67 1,013 37 160 0 122 Non-U.S. addressees (domicile).............................. 762 429 334 401 214 120 13 15 0 123 All other liabilities.......................................................... 48,724 28,901 19,823 24,213 13,880 4,635 3,558 1,130 1,308 124 Acceptances executed and outstanding...................... 8,894 4,068 4,825 3,981 3,048 1,742 40 47 36 125 Net due to related banking institutions5..................... 36,716 22,453 14,262 18,079 10,483 2,530 3,337 1,037 1,249 126 Other............................................................................. 3,115 2,380 735 2,153 349 363 181 45 23 Memo 127 Time deposits of $100,000 or more................................ 23,407 22,956 451 20,334 0 453 171 2,450 0 128 Certificates of deposit (CDs) in denominations of $100,000 or more................................................. 19,090 18,728 362 16,168 0 363 142 2,416 0 129 Other............................................................................. 4,319 4,229 90 4,166 0 90 29 34 0 130 Savings deposits authorized for automatic transfer and now accounts...................................................... 61 57 4 53 0 4 1 3 0 131 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26 weeks 104 100 5 65 0 5 13 20 0 132 Time certificates of deposit in denominations of $100,000 or more with remaining maturity of more than 12 months............................................... 1,142 1,060 80 946 0 80 13 100 0 133 Acceptances refinanced with a U.S.-chartered bank .. 1,520 824 695 753 375 321 0 72 0 134 Statutory or regulatory asset pledge requirement...... 55,558 44,173 11,384 39,315 11,338 47 4,809 49 0 135 Statutory or regulatory asset maintenance requirement 6,369 6,066 303 4,077 184 0 171 1,817 118 136 Commercial letters of credit........................................... 7,989 4,363 3,626 3,966 1,228 2,358 230 168 41 137 Standby letters of credit, total....................................... 4,444 3,288 1,156 2,969 503 521 216 104 132 138 U.S. addressees (domicile)..................................... 3,310 2,464 846 2,292 318 471 117 56 58 139 Non-U.S. addressees (domicile)............................. 1,134 824 309 677 185 50 99 48 74 140 Standby letters of credit conveyed to others through participations (included in total standby letters of credit)....................................................................... 186 151 35 142 3 31 7 2 1 141 Holdings of commercial paper included in total gross loans......................................................................... 716 588 128 583 75 53 5 0 0 142 Holdings of acceptances included in total commercial and industrial loans................................................... 4,332 2,080 2,253 2,012 990 1,259 22 46 3 143 Immediately available funds with a maturity greater than one day (included in other liabilities for bor­ rowed money).......................................................... 18,099 5,642 12,457 4,515 2,148 10,288 842 285 21 144 Gross due from related banking institutions5............... 44,460 17,664 26,796 15,364 12,574 14,112 345 1,954 111 145 U.S. addressees (domicile)......................................... 14,916 3,861 11,055 2,470 1,684 9,358 65 1,326 13 146 Branches and agencies in United States................. 14,656 3,689 10,967 2,300 1,669 9,285 63 1,326 13 147 In the same state as reporter.............................. 471 63 408 47 0 400 0 16 8 148 In other states....................................................... 14,185 3,626 10,599 2,253 1,669 8,885 63 1,310 5 149 U.S. banking subsidiaries6...................................... 260 172 88 170 15 73 2 0 0 150 Non-U.S. addressees (domicile).................................. 29,543 13,802 15,741 12,894 10,889 4,754 280 628 98 151 Head office and non-U.S. branches and agencies.. 27,367 12,791 14,577 11,902 9,733 4,746 262 627 98 152 Non-U.S. banking companies and offices............... 2,176 1,011 1,165 992 1,157 8 18 1 1 153 Gross due to related banking institutions5..................... 68,338 38,115 30,222 32,791 23,056 5,827 3,682 1,642 1,339 154 U.S. addressees (domicile)......................................... 15,272 7,518 7,754 4,745 5,124 2,106 1,682 1,090 524 155 Branches and agencies in United States................. 15,104 7,423 7,681 4,679 5,083 2,084 1,657 1,088 513 156 In the same state as reporter.............................. 464 69 395 52 0 395 0 16 0 157 In other states....................................................... 14,640 7,355 7,286 4,626 5,083 1,689 1,657 1,072 513 158 U.S. banking subsidiaries6...................................... 168 94 74 67 41 22 25 2 10 159 Non-U.S. addressees (domicile).................................. 53,065 30,597 22,469 28,046 17,932 3,721 2,000 551 816 160 Head office and non-U.S. branches and agencies.. 51,268 28,969 22,298 26,496 17,849 3,636 1,923 550 813 161 Non-U.S. banking companies and offices............... 1,798 1,628 170 1,550 83 85 77 1 3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A81 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 3 cies Average for 30 calendar days (or calendar month) ending with report date 162 Total assets....................................................................... 134,448 80,984 53,465 70,417 25,446 26,451 6,246 4,321 1,568 163 Cash and due from depository institutions..................... 14,940 12,287 2,653 11,386 2,417 215 801 100 22 164 Federal funds sold and securities purchased under agreements to resell................................................. 7,859 5,315 2,544 5,149 2,190 346 135 30 9 165 Total loans....................................................................... 77,973 51,779 26,194 44,448 12,319 12,549 4,790 2,529 1,338 166 Loans to banks in foreign countries.............................. 12,398 9,400 2,998 8,848 1,780 1,165 548 4 52 167 Total deposits and credit balances.................................. 34,183 30,694 3,489 27,740 2,651 772 456 2,498 66 168 Time CDs in denominations of $100,000 or more....... 18,195 17,751 444 15,311 81 353 150 2,290 10 169 Federal funds purchased and securities sold under agreements to repurchase........................................ 7,466 4,289 3,177 3,824 1,367 1,717 409 56 93 170 Other liabilities for borrowed money............................ 36,738 14,364 22,374 11,972 3,890 18,437 1,879 514 46 171 Number of reports filed7................................................. 314 138 176 81 63 88 31 25 26 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 Banks.” and total liabilities. Therefore, total asset and total liability figures in this table are This form was first used for reporting data as of June 30, 1980. From November not comparable to those in the G.ll tables. 1972 through May 1980, U.S. tranches and agencies of foreign banks had filed a 5. “Related banking institutions” includes the foreign head office and other U.S. monthly FR 886a report. Aggregate data from that report were available through and foreign branches and agencies of the bank, the bank’s parent holding company, the Federal Reserve statistical release G.ll, last issued on July 10, 1980. Data in and majority-owned banking subsidiaries of the bank and of its parent holding this table and in the G.ll tables are not strictly comparable because of differences company (including subsidiaries owned both directly and indirectly). Gross amounts 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-owned 3. Agencies account for virtually all of the assets and liabilities reported in by the foreign bank and by related foreign banks and includes U.S. offices of California. U.S.-chartered commercial banks, of Edge Act and Agreement corporations, and 4. Total assets and total liabilities include net balances, if any, due from or due 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

A82 Federal Reserve Board of Governors P aul A. V olcker, Chairman H enry C. W allich Frederick H. S ch u ltz, Vice Chairman J. C harles P artee Office of Board M embers O ffice of Staff D irector for M onetary and Financial Policy 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 D ivision D ivision 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 Michael E. Bleier, Assistant General Counsel Jared J. Enzler, Senior Deputy Associate Director Cornelius K. Hurley, Jr., Assistant General Counsel Eleanor J. Stockwell, Senior Deputy Associate Director Maryellen A- Brown, Assistant to the General Counsel Donald L. Kohn, Deputy Associate Director Charles R. McNeill, Assistant to the 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 *D. Michael Manies, Assistant Secretary Frederick M. Struble, Assistant Director Stephen P. Taylor, Assistant Director Levon H. Garabedian, Assistant Director (Administration) D ivision of Consum er and Com m unity A ffairs D ivision 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 Dolores S. Smith, Assistant Director Charles J. Siegman, Associate Director Samuel Pizer, Staff Adviser Dale W. Henderson, Assistant Director D ivision of Banking Larry J. Promisel, Assistant Director S upervision and R egulation 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

A83 and Official Staff N ancy H. Teeters Lyle E. Gramley Emmett J. Rice Office of Office of Staff D irector for Staff D irector for M anagem ent Federal R eserve Bank A ctivities 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 D ivision of Federal R eserve D ivision of D ata Processing Bank Operations Charles L. Hampton, Director Clyde H. Farnsworth, Jr., Director Bruce M. Beardsley, Associate Director W alter 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 D ivision of Personnel David L. Shannon, Director John R. Weis, Assistant Director Charles W. Wood, Assistant Director Office of the C ontroller John Kakalec, Controller George E. Livingston, Assistant Controller D ivision of S upport Services Donald E. Anderson, Director Walter W. Kreimann, Associate Director Robert E. Frazier, Assistant Director *On loan from the Federal Reserve Bank of Kansas City. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 Federal Reserve Bulletin □ April 1981 FOMC and Advisory Councils Federal Open M arket C ommittee Paul A. Volcker, Chairman Anthony M. Solomon, Vice Chairman Edward G. Boehne 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 Stephen H. Axilrod, Staff Director John P. Danforth, Associate Economist Murray Altmann, Secretary Richard G. Davis, Associate Economist Normand R. V. Bernard, Assistant Secretary Edward C. Ettin, Associate Economist Nancy M. Steele, Deputy Assistant Secretary George B. Henry, Associate Economist Neal L. Petersen, General Counsel Peter M. Keir, Associate Economist James H. Oltman, Deputy General Counsel Donald J. Mullineaux, Associate Economist Robert E. Mannion, Assistant General Counsel Michael J. Prell, Associate Economist James L. Kichline, Economist Karl L. Scheld, Associate Economist Alan R. Holmes, Adviser for Market Operations Edwin M. Truman, Associate Economist Joseph E. Burns, 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 A dvisory Council Merle E. Gilliand, Fourth District, President Chauncey E. Schmidt, Twelfth District, Vice President William S. Edgerly, First District Robert M. Surdam, Seventh District Donald C. Platten, Second District Ronald TeRry, Eighth District John W. Walther, Third District Clarence CL 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 A dvisory 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. DAgostino, 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

A85 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 John T. 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* .................23219 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 Vacancy 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 JohnB. Williams Los Angeles ............... 90051 Harvey A. Proctor Richard C. Dunn Portland........................ 97208 John C. Hampton Angelo S. Carella Salt Lake City............ 84130 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

A86 Federal Reserve Board Publications Copies are available from PUBLICATIONS SERVICES, payable to the order of the Board of Governors of the Federal Room MP-510, Board of Governors of the Federal Reserve Reserve System. Remittance from foreign residents should System, Washington, D.C. 20551. When a charge is indicat­ be drawn on a U.S. bank. Stamps and coupons are not ed, remittance should accompany request and be made accepted. The Federal Reserve System—Purposes and Func­ Report of the Joint Treasury-Federal Reserve Study tions. 1974. 125 pp. of the U.S. Government Securities Market. 1969. Annual Report. 48 pp. $.25 each; 10 or more to one address, $.20 each. Federal Reserve Bulletin. Monthly. $20.00 per year or Joint Treasury-Federal Reserve Study of the Gov­ $2.00 each in the United States, its possessions, Canada, ernment Securities Market; Staff Studies—Part and Mexico; 10 or more of same issue to one address, 1. 1970. 86 pp. $.50 each; 10 or more to one address, $.40 $18.00 per year or $1.75 each. Elsewhere, $24.00 per each. Part 2,1971. 153 pp. and Part 3,1973. 131 pp. Each year or $2.50 each. volume $1.00; 10 or more to one address, $.85 each. Banking and Monetary Statistics. 1914-1941. (Reprint Open Market Policies and Operating Procedures— of Part I only) 1976. 682 pp. $5.00. Staff Studies. 1971. 218 pp. $2.00 each; 10 or more to Banking and Monetary Statistics, 1941-1970. 1976. one address, $1.75 each. 1,168 pp. $15.00. Reappraisal of the Federal Reserve Discount Mecha­ Annual Statistical Digest nism. Vol. I. 1971. 276 pp. Vol. 2. 1971. 173 pp. Vol. 3. 1971-75. 1976. 339 pp. $4.00 per copy for each paid sub­ 1972. 220 pp. Each volume $3.00; 10 or more to one ad­ scription to Federal Reserve Bulletin; all others $5.00 dress, $2.50 each. each. The Econometrics of Price Determination Confer­ 1972-76. 1977. 377 pp. $10.00 per copy. ence, October 30-31, 1970, Washington, D.C. 1972. 397 1973-77. 1978. 361 pp. $12.00 per copy. pp. Cloth ed. $5.00 each; 10 or more to one address, 1974-78. 1980. 305 pp. $10.00 per copy. $4.50 each. Paper ed. $4.00 each; 10 or more to one ad­ Federal Reserve Chart Book. Issued four times a year in dress, $3.60 each. February, May, August, and November. Subscription Federal Reserve Staff Study: Ways to Moderate includes one issue of Historical Chart Book. $7.00 per Fluctuations in Housing Construction. 1972. 487 year or $2.00 each in the United States, its possessions, pp. $4.00 each; 10 or more to one address, $3.60 each. Canada, and Mexico. Elsewhere, $10.00 per year or Lending Functions of the Federal Reserve Banks. $3.00 each. 1973. 271 pp. $3.50 each; 10 or more to one address, Historical Chart Book. Issued annually in Sept. Subscrip­ $3.00 each. tion to Federal Reserve Chart Book includes one issue. Improving the Monetary Aggregates: Report of the $1.25 each in the United States, its possessions, Canada, Advisory Committee on Monetary Statistics. and Mexico; 10 or more to one address, $1.00 each. Else­ 1976. 43 pp. $1.00 each; 10 or more to one address, $.85 where, $1.50 each. each. Capital Market Developments. Weekly. $15.00 per year Annual Percentage Rate Tables (Truth in Lending— or $.40 each in the United States, its possessions, Cana­ Regulation Z) Vol. I (Regular Transactions). 1969. 100 da, and Mexico; 10 or more of same issue to one address, pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each $13.50 per year or $.35 each. Elsewhere, $20.00 per year volume $1.00; 10 or more of same volume to one ad­ or $.50 each. dress, $.85 each. Selected Interest and Exchange Rates—Weekly Se­ Federal Reserve Measures of Capacity and Capacity ries of Charts. Weekly. $15.00 per year or $.40 each in Utilization. 1978. 40 pp. $1.75 each; 10 or more to one the United States, its possessions, Canada, and Mexico; address, $1.50 each. 10 or more of same issue to one address, $13.50 per year or $.35 each. Elsewhere, $20.00 per year or $.50 each. The Bank Holding Company Movement to 1978: A The Federal Reserve Act, as amended through December Compendium. 1978. 289 pp. $2.50 each; 10 or more to one address, $2.25 each. 1976, with an appendix containing provisions of certain other statutes affecting the Federal Reserve System. 307 Improving the Monetary Aggregates: Staff Papers. 1978. 170 pp. $4.00 each; 10 or more to one address, pp. $2.50. Regulations of the Board of Governors of the Fed­ $3.75 each. eral Reserve System 1977 Consumer Credit Survey. 1978. 119 pp. $2.00 each. Published Interpretations of the Board of Gover­ Flow of Funds Accounts. 1949-1978. 1979. 171 pp. $1.75 nors, as of June 30, 1980. $7.50. 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. Survey of Changes in Family Finances. 1968. 321 pp. $1.00 each; 10 or more to one address, $.85 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A87 Consum er 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 Printed in Full in the Bulletin The Equal Credit Opportunity Act and . . . Women Fair Credit Billing An Assessment of Bank Holding Companies, by Robert The Federal Open Market Committee J. Lawrence and Samuel H. Talley. January 1976. Federal Reserve Bank Board of Directors Federal Reserve Banks Federal Reserve Glossary Reprints How to File A Consumer Credit Complaint Most of the articles reprinted do not exceed 12 pages. If You Borrow To Buy Stock If You Use A Credit Card Measures of Security Credit. 12/70. Truth in Leasing Revision of Bank Credit Series. 12/71. U.S. Currency Assets and Liabilities of Foreign Branches of U.S. Banks. What Truth in Lending Means to You 2/72. Bank Debits, Deposits, and Deposit Turnover—Revised Se­ ries. 7/72. Staff Studies Rates on Consumer Instalment Loans. 9/73. Studies and papers on economic and financial subjects that New Series for Large Manufacturing Corporations. 10/73. are of general interest. The Structure of Margin Credit. 4/75. Industrial Electric Power Use. 1/76. Summaries Only Printed in the Bulletin Revised Series for Member Bank Deposits and Aggregate Re­ Requests to obtain single copies of the full text or to be serves. 4/76. added to the mailing list for the series may be sent to Pub­ Industrial Production—1976 Revision. 6/76. lications Services. Federal Reserve Operations in Payment Mechanisms: A Summary. 6/76. Tie-ins Between the Granting of Credit and Sales of The Commercial Paper Market. 6/77. Insurance by Bank Holding Companies and Other The Federal Budget in the 1970’s. 9/78. Lenders, by Robert A. Eisenbeis and Paul R. Schweit­ Redefining the Monetary Aggregates. 1/79. zer. Feb. 1979. 75 pp. Implementation of the International Banking Act. 10/79. Innovations in Bank Loan Contracting: Recent Evi­ U.S. International Transactions in 1979: Another Round of dence by Paul W. Boltz and Tim S. Campbell. May Oil Price Increases. 4/80. 1979. 40 pp. Perspectives on Personal Saving. 8/80. Measurement of Capacity Utilization: Problems and The Impact of Rising Oil Prices on the Major Foreign Indus­ Tasks, by Frank de Leeuw, Lawrence R. Forest, Jr., trial Countries. 10/80. Richard D. Raddock, and Zoltan E. Kenessey. July 1979. 264 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A88 Index to Statistical Tables References are to pages A-3 through A-81 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, 72-77 Deposits (See also specific types) Domestic finance companies, 37 Banks, by classes, 3, 17, 18-21, 27, 68-71, 73, 75, 77 Federal Reserve Banks, 11 Federal Reserve Banks, 4,11 Foreign banks, U.S. branches and agencies, 78-81 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, 72, 74, 76 Eurodollars, 25 (See also Foreigners) Banks for Cooperatives, 33 FARM mortgage loans, 39 Bonds (See also U.S. government securities) Farmers Home Administration, 39 New issues, 34 Federal agency obligations, 4,10, 11, 12, 32 Yields, 3 Federal and federally sponsored credit agencies, 33 Branch banks, 15, 21, 54, 78-81 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, 73, 75, 77 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, 68-71, 72-77 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, 73, 75, 77 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, 78—81 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, 72, 74, 76 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, 73, 75, 77 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

A89 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 Insured commercial banks, 68—71 Reserve requirements, member banks, 8 Interbank loans and deposits, 17 Reserves Interest rates Commercial banks, 17, 72, 74, 76 Bonds, 3 Federal Reserve Banks, 11 Business loans of banks, 24 Member banks, 3, 4, 5, 14,17 Federal Reserve Banks, 3,7 U.S. reserve assets, 53 Foreign countries, 66 Residential mortgage loans, 38 Money and capital markets, 3, 25 Retail credit and retail sales, 40,41,44 Mortgages, 3, 38 Prime rate, commercial banks, 24 SAVING Time and savings deposits, 9, 71 Flow of funds, 42,43 International capital transactions of the National income accounts, 51 United States, 54-65 Savings and loan assns., 3, 9,27, 31, 39,42 International organizations, 54-59, 62-65 Savings deposits (See Time deposits) Inventories, 50 Savings institutions, selected assets, 27 Investment companies, issues and assets, 35 Securities (See also U.S. government securities) Investments (See also specific types) Federal and federally sponsored agencies, 33 Banks, by classes, 17, 27 Foreign transactions, 63 Commercial banks, 3, 15, 17, 18-20, 72, 74, 76 New issues, 34 Federal Reserve Banks, 11,12 Prices, 26 Life insurance companies, 27 Special drawing rights, 4,11,52, 53 Savings and loan associations, 27 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, 72, 74, 76 Yields of securities, 3 Federal Reserve Banks, 3,4, 5,7,11,12 Stock market, 26 Insurance companies, 27, 39 Stocks (See also Securities) Insured or guaranteed by United States, 38, 39 New issues, 34 Savings and loan associations, 27 Prices, 26 MANUFACTURING TAX receipts, federal, 29 Capacity utilization, 44 Time deposits, 3, 9, 12, 14, 17, 18-21, 68-71, 73, 75, 77 Production, 44,47 Trade, foreign, 53 Margin requirements, 26 Treasury currency, Treasury cash, 4 Member banks Treasury deposits, 4,11,28 Assets and liabilities, by classes, 17 Treasury operating balance, 28 Borrowings at Federal Reserve Banks, 5,11 Federal funds and repurchase agreements, 6 UNEMPLOYMENT, 45 Number, 17 U.S. balance of payments, 52 Reserve requirements, 8 U.S. government balances Reserves and related items, 3, 4, 5, 14 Commercial bank holdings, 18, 19, 20 Mining production, 47 Member bank holdings, 14 Mobile home shipments, 48 Treasury deposits at Reserve Banks, 4,11, 28 Monetary aggregates, 3, 14 U.S. government securities Money and capital market rates (See Interest rates) Bank holdings, 17, 18-20, 27, 30, 31, 72, 74, 76 Money stock measures and components, 3,13 Dealer transactions, positions, and financing, 32 Mortgages (See Real estate loans) Federal Reserve Bank holdings, 4,11,12, 30, 31 Mutual funds (See Investment companies) Foreign and international holdings and transactions, 11, Mutual savings banks, 3, 9,18-20, 27, 30, 31, 39 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

A90 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories Minneapolis<^ 5 Detroit Chicagi \s°lt Lake City Omaha* T*c*sco Denver Kansas City Louisville ALASKA HAWAII L e g e n d mm~ Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories * Federal Reserve Bank Facility © Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis