Federal Reserve Bulletin, 1981-05

V olum e 67 □ N um ber 5 □ M ay 1981 FEDERAL RESERVE BULLETIN Board of Governors of the Federal Reserve System Washington, D.C. Publications Committee Joseph R. Coyne, Chairman □ Stephen H. Axilrod □ John M. Denkler Janet O. Hart □ James L. Kichline □ Neal L. Petersen □ Edwin M. Truman Naomi P. Salus, Coordinator The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. The artwork is provided by the Graphic Communications Section under the direction of Peter G. Thomas. Editorial support is furnished by the Economic Editing Unit headed by Mendelle T. Berenson. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents 389 The Recent Infla tion Experience and legislative timetables to the credit bud­ get as apply to the rest of the budget, before Inflation has worsened over the past three the House Committee on Banking, Finance years, but developments suggest improve­ and Urban Affairs, April 30, 1981. ment ahead. 398 Survey of Finance Companies, 1980 430 Announcements Change in discount rate. The survey reveals a high rate of growth in receivables held by finance companies over Amendment to Regulation D. (See Legal the 1975-80 period compared with the find­ Developments.) ings of the survey five years earlier. Deferral of reserve requirements for non­ member depository institutions with total 410 Domestic Financial Developments deposits of less than $2 million. in the First Quarter of 1981 Proposed interpretation of the Board’s rules The expansion of money moderated in the to clarify what depositors are eligible to first quarter despite a further pickup in hold interest-bearing checking accounts at economic activity and continued rapid infla­ member banks; proposed amendments to tion. Regulation J to implement portions of the Monetary Control Act and to make various 417 Industrial Production technical changes. Output rose 0.4 percent in April. Availability of quarterly Agricultural Fi­ nance Databook. 419 Statements to Congress Adoption of policy statement on the dispo­ Frederick H. Schultz, Vice Chairman, sition of income from the sale of credit life Board of Governors, briefly discusses the insurance. condition of the banking system, regulation of banking, and the views of the Board on Changes in Board staff. recently enacted legislation affecting the Updating of seasonal adjustment factors for banking industry, before the Senate Com­ components of the monetary aggregates. mittee on Banking, Housing, and Urban Affairs, April 28, 1981. 424 Nancy H. Teeters, Member, Board of Gov­ 434 Legal Developments ernors, presents the views of the Board on federally assisted credit and says that the Amendment to Regulation D; various bank Board supports a recent legislative proposal holding company and bank merger orders; to apply the same enforcement procedures and pending cases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Al Financial and Business Statistics A70 Federal Open Market Committee and Staff; Advisory Councils A3 Domestic Financial Statistics A44 Domestic Nonfinancial Statistics A71 Federal Reserve Banks, A52 International Statistics Branches, and Offices A67 Guide to Tabular Presentation, A72 Federal Reserve Board Statistical Releases, and Special Publications Tables A74 /NZ)£X TO STATISTICAL FABLES A68 Board of Governors and Staff A76 Map of Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Recent Inflation Experience James E. Glassman and Ronald A. Sege of the achieve gains in real income that exceeded Wages, Prices, and Productivity Section of the growth in productivity aggravated cost pres­ Board's Division of Research and Statistics pre­ sures. A sequence of supply disturbances, in­ pared this article. cluding weather-related agricultural losses and the second major petroleum-price shock of the The continued rapid rise in prices over 1978-80 decade, lent further strong impetus to wage and marks those years as one of the worst periods of price inflation. Finally, increases in the costs of inflation in the postwar era. By most aggregate government regulation and sharp declines in the measures, the rate of price increase about dou­ value of the dollar over much of the last three bled between 1976 and 1979; and increases con­ years added to price pressures. tinued at or close to double-digit rates in 1980 There were signs that the rate of price increase (chart 1). had moderated slightly in early 1981. In particu­ A number of factors combined to produce the lar, the rate of increase in food prices slackened rapid inflation of the past three years. As the in response to improved supplies, and energy economy recovered from the deep 1973-75 re­ prices eased following the surge that accompa­ cession, labor and product markets reflected the nied deregulation of domestic crude oil. stronger demand, and by 1978 wages and prices The outlook for energy prices also appears began to accelerate measurably. Although the somewhat more favorable now than in the recent pace of economic activity, on balance, then past. Domestic consumption of energy has been began to taper off, the momentum of wage and cut sharply, and such cuts may have a damping price increases persisted as the expectations of effect on any future shocks to petroleum prices. both workers and firms quickly responded to the In addition, the recent appreciation of the dollar inflationary environment. Workers’ attempts to has partially reversed earlier declines and could, if sustained, provide further relief. Upward pres­ sure from wages and labor costs remains intense. 1. Acceleration of prices But the impact of a continued restrictive mone­ tary policy, accompanied by fiscal austerity, Percentage change should ease demand pressures on wages and prices and help deflate inflation expectations. Consumer price index Personal consumption Survey of Recent Price Developments The rapid inflation of the past three years has been pervasive. Consumer prices, which had dipped to a 5 percent rate of increase in 1976 after the 1973-75 recession, accelerated sharply in 1978 and reached double-digit rates in 1979 and 1980 (see the table). The acceleration in prices at the producer level was even more pronounced: the rate of price increases for fin­ Consumer price index, Department of Labor data. Gross domestic business product fixed-weight index and personal consumption expen­ ished goods more than doubled between 1976 ditures fixed-weight index, Department of Commerce data. In all and 1978 to 83/4 percent and then jumped to \2Vi charts, except when otherwise indicated, “percentage change” is from four quarters earlier. percent on average in 1979 and 1980. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

390 Federal Reserve Bulletin □ May 1981 Consumer and producer prices per barrel at the end of 1980. Generally, prices Percentage change from fourth quarter to fourth quarter, except as for other energy items also rose rapidly during noted this period, and the CPI for these items climbed at an average annual rate of 27 percent over the Item 1976 A 197819791980 1981 iQl1 1979-80 period. CPI, all items...................... 5.0 6.6 9.0 12.7 12.6 11.2 The CPI measure of homeownership costs has Food................................. .9 7.7 11.5 9.9 10.3 10.3 outpaced the overall inflation rate in every year Energy.............................. 6.2 8.2 7.5 36.5 18.9 16.0 Homeownership.............. 4.5 8.5 12.7 18.3 16.7 13.2 since 1977, reflecting sharp increases both in Other ................................ 7.0 5.5 6.9 7.3 9.9 9.4 Commodities2.............. 4.5 4.6 5.2 6.4 8.4 7.3 home prices and in mortgage interest rates. Be­ Used cars...................... 16.8 -2.5 11.5 2.1 15.3 19.7 Services........................ 8.5 7.0 7.6 8.6 10.4 10.0 tween 1977 and 1980, home prices in the CPI rose PPI, finished goods............ 3.3 7.1 8.7 12.7 12.4 10.6 at an average annual pace of 13 percent, although Capital equipment.......... 6.4 7.3 7.8 8.8 11.7 11.0 very recently they have declined in response to 1. Change from 1980:Q1. weak sales. Over the 1978-79 period, the index 2. Excluding used cars. Source. Bureau of Labor Statistics. of mortgage rates rose fairly steadily, also at a 13 percent annual rate. Despite a sharp dip in the In the consumer sector, month-to-month summer of last year, the index for mortgage rates movements in prices often were dominated by in the CPI has continued to rise at about the same developments in food and energy markets and in rate since early 1980. the costs of homeownership. On balance, prices The exceptionally rapid increases in prices for for these items have increased more rapidly than food, energy, and homeownership contrasted the overall rate of inflation since 1977. Price sharply with the slower, though steady, accelera­ increases for most other items, particularly con­ tion in prices for other consumer goods and sumer goods such as clothing and autos, moved services. Prices for consumer commodities other up less rapidly than the overall consumer price than food, energy, and homes accelerated to an index. 8V2 percent rate last year. Price increases for Food prices, which trended up more rapidly consumer services other than energy and home than most other prices earlier in the 1970s, financing costs moved up from 7’/2 percent dur­ slowed in 1975 and 1976, but accelerated again ing 1978 to IOV2 percent in 1980. The rise includ­ by the end of 1977. The run-up in food prices was ed large increases for rents, medical care, and particularly intense in 1978 and early 1979 be­ public transportation in the second half of 1979, cause a cyclical decline in cattle inventories led increases that in part may have reflected the to a sharp drop in beef production. Food prices spillover of sharply higher energy costs. then slowed somewhat until mid-1980, when In the business sector, prices for capital equip­ pork and poultry production turned down and a ment rose at a much slower pace than the overall severe drought damaged agricultural output and rate of inflation until 1980, when they accelerated prospects across the country. Still, since mid- to double-digit rates. The recent acceleration in 1979 total food prices have risen at a rate below prices for capital equipment was widespread. It the overall inflation rate. was in part the result of strong demand in the Energy prices exploded in early 1979 after a defense and petroleum sectors as well as in the general price acceleration was already under automobile industry, which underwent a major way, and ended a four-year respite in which retooling to produce smaller, more fuel-efficient energy costs rose no faster than the overall pace models. of inflation. The acceleration was led by a surge in prices of imported crude oil and by the initia­ tion of price decontrol for domestic crude oil. Perspectives on Recent Price The effort to bring the price of domestic crude oil Behavior in line with world prices began in the spring of 1979, when the Carter administration adopted a Aggregate Demand deregulation schedule. The average price paid by refiners for crude petroleum jumped from less The economy quickly regained the ground lost than $14 per barrel in early 1979 to more than $30 during the 1973-75 recession, and the expansion Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Recent Inflation Experience 391 remained fairly robust until 1979. Real gross employment budget deficit, which measures the national product advanced at an average annual impact of discretionary fiscal policy, indicates rate of 3 percent from the peak in activity during that tax and spending policies were expansionary 1973 to the end of 1979. In the aggregate, this in 1977 and 1978. By 1979, however, changes in pace was very near the estimate by the Council the high-employment budget suggested that fis­ of Economic Advisers of a 3'/2 percent annual cal policy generally was providing less thrust to rate of growth in potential GNP (chart 2). economic activity. As the slack in economic utilization was taken As for monetary expansion, the rate of money up, signs appeared that price pressure was build­ growth, measured by M-1B, accelerated between ing in labor and product markets. In 1979, the the end of 1975 and the end of 1978. Since 1979, unemployment rate averaged 53A percent, down money growth has been slowing and, along with from 8V2 percent four years earlier. While jobless a significant drain on real income resulting from rates for less experienced workers remained high sharply higher prices of imported petroleum, has in 1979, the labor market for skilled workers, acted to reduce growth in aggregate demand. among whom shortages usually appear first, ap­ proached the taut conditions of earlier periods 3. Money growth and inflation and encouraged a bidding up of wages. Percentage change At the same time, capacity utilization in manu­ facturing reached about 86 percent, just below the 1973 average. The expansion in activity brought a sharp jump in prices for demandsensitive industrial materials. Producer prices for crude nonfood materials excluding energy in­ creased at an average annual rate of more than 20 percent during 1978 and 1979. Monetary and fiscal policies were an important influence on aggregate demand both during the expansion and later, when the economy was hit by a series of supply disturbances. The high- 2. Real aggregate activity Money supply (M-1B), Federal Reserve data. Gross national prod­ Billions of 1972 dollars uct fixed-weight index, Department of Commerce data. Changes are average annual rates for period indicated. As chart 3 shows, there has been a broad consistency in the movements of money and Potential GNP prices, with a general acceleration since the mid- Gross national product 1960s. Nevertheless, short-run movements in prices often bear only a loose relation, if any, to variations in monetary expansion. In particular, price disturbances arising from supply shocks, Percent such as those that hit the food and energy sectors in recent years, are one source of divergence between money growth and inflation. These sup­ Capacity utilization ply disruptions also can generate pressures for monetary and fiscal accommodation; otherwise, inertia in wages and prices causes financial ten­ sions and imposes the risk of extensive layoffs Potential gross national product, Council of Economic Advisers and production losses. In this way, disturbances estimate. Gross national product, Department of Commerce data. originating in the “real” sector can spur infla­ Capacity utilization, Federal Reserve data. “Real” is in terms of 1972 dollars. tionary monetary growth. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

392 Federal Reserve Bulletin □ May 1981 Labor Costs tions that led firms to compete for a relatively scarce supply of desirable workers; where the Beginning in 1975, the recovery in aggregate job outlook was not favorable, wage demands demand buttressed efforts by workers to secure may have been damped. real wage gains; even when demand slackened, Employers attempted to keep actual wages in the upward momentum of wages persisted. The line with their workers’ aspirations not only to index of average hourly earnings, which mea­ remain competitive for labor but also to maintain sures trends in wage rates for production work­ high levels of work performance, to avoid costly ers, rose at a 7Vi percent annual rate throughout work stoppages, and to minimize the costs of the 1975-77 period, moved up at an SV2 percent hiring and training new workers. When increases average rate over the next two years, and rose in wages were not matched by increases in 93/4 percent in 1980. Hourly compensation, which productivity, labor costs rose; as long as demand includes fringe benefits and payroll taxes, traced in general was sufficient, employers passed cost a similar pattern of acceleration during the peri­ increases along in the form of higher prices. od. These increases in wages were not matched Wages have responded to prices largely by growth in productivity, and labor costs, a through informal wage-setting practices; but for­ major factor determining price trends, acceler­ mal collective bargaining, though it covers only ated steadily (chart 4). Measures of labor costs, one-fifth of the workforce, provides a visible adjusted for the trend in productivity growth, example of the wage-price interaction. Wage and accelerated from an annual rate of increase of 7 benefit settlements in major collective bargaining percent in 1975 to W2 percent in 1980. units, in particular, have not been influenced Upward pressure on nominal wages came from strongly by current labor market conditions, but, several sources. When workers perceived a gen­ rather, have tended to reflect wage adjustments eral erosion in their purchasing power, they that have assured workers their traditional stan­ attempted to adjust their nominal wage rate dards of real wage improvement. Moreover, costupward for several reasons: (1) to make up their of-living adjustment clauses (COLAs), which losses to inflation; (2) perhaps to incorporate are included in many major collective bargaining expectations of future price increases into their contracts, have offered an explicit guarantee that nominal wage adjustments; and (3) in some cas­ negotiated nominal wages would recover part of es, to secure the real wage increases to which their losses to inflation. While COLAs have they had become accustomed. In general, wage reduced the costs of renegotiation and of uncer­ demands were reinforced by labor market condi- tainty for both the employer and the employee, they also have contributed to a relatively quick passthrough of prices into wages. 4. Worker compensation and unit labor costs Increases in the wages of union workers, as measured by the employment cost index, re­ mained at an annual rate of about 8 percent between 1976 and 1978, when labor markets were tightening and the wages of nonunionized workers were beginning to accelerate (chart 5). Wage rates rose more rapidly for both groups in 1979. The next year, when demand slackened, nonunion rates eased off a bit to 8 percent while union rates accelerated further to almost 11 percent. Factors outside of the wage determination process also exerted pressure on payroll costs. Government programs such as social security, unemployment compensation, and the minimum wage may have been principal contributors. Al- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Recent Inflation Experience 393 5. Relative wages Percentage change from 1975 Percentage change from 1975 EMPLOYMENT COST INDEX AVERAGE HOURLY EARNINGS Total nonagricultural Bureau of Labor Statistics data. Percentage change is cumulative, beginning in 1975:Q4. Auto wages based on SIC 3711; steel wages on SIC 3312. though, in the aggregate, the impact of these A lower trend of productivity growth in recent programs on annual increases in labor costs years resulted in nominal wage increases putting appears to have been relatively small, they had a more upward pressure on labor costs and in turn differentially large impact on some sectors of the on prices than they did earlier in the postwar economy. Increases in the social security tax and period. The long-run deterioration in the growth in contributions for unemployment compensa­ of output per hour can be observed by comparing tion have tended to boost relatively the labor the average rates of productivity growth between costs of firms employing low-income workers. business cycle peaks. Between 1960 and 1969, Changes in the minimum wage rate have had the output per hour grew at about 2 Vi percent per greatest impact on sectors, such as retail trade, year, but since early 1974 the trend growth in with a large concentration of workers earning at productivity apparently has dropped dramatical­ or close to that rate. ly, to less than 1 percent annually. Reflecting the 6. Productivity trends and cycles and real wage growth Percentage change Trend growth in productivity * Real wage growth 1955 1960 1965 1970 1975 1980' 1953 Q2 1957 Q3 1960 Ql- 1969 Q3— 1973 Q4- __________________________________________________1957 03 1960 01 1969 03 1973 04 1980 01 Labor productivity and total compensation, Bureau of Labor Statis- product fixed-weight price index later. Gross domestic business tics data. Real wage constructed by deflating nominal wage by gross product price indexes, Department of Commerce data, domestic business product deflator before 1960 and by gross domestic Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

394 Federal Reserve Bulletin □ May 1981 declining trend in productivity advances, growth The inflationary effect of the energy price in real wages slowed from 23A percent in the eruption percolated through all sectors of the 1960s to 2'U percent in the early 1970s, and then economy. The most immediate effect surfaced at to less than 1 percent in the most recent business the retail level in items purchased directly by cycle (chart 6). consumers. Gasoline and fuel oil prices rose at an average annual rate of 35 percent during 1979 and 1980. Increases in prices of natural gas and Energy Prices electricity were not far behind, as utilities passed on their higher costs. Moreover, a wide variety Increases in energy prices, which were relatively of indirect effects followed as petroleum costs moderate between 1976 and the end of 1978, spilled over into other sectors, raising both ener­ became a significant factor in the inflation proc­ gy costs and prices for petroleum-based feed­ ess during the past two years (chart 7). Political stocks. For example, while price increases for upheaval in Iran during the winter of 1978-79 led energy products consumed directly by individ­ to a sharp reduction in oil shipments, and spot uals peaked early in 1980, their effect lingered as market prices began to rise well above long-term they were passed on into other prices, such as contract rates. In response to these conditions, those for industrial materials and public trans­ the members of the Organization of Petroleum portation. Exporting Countries increased their prices. The price of imported crude oil rose steadily from 7. Refiners’ acquisition cost of crude petroleum less than $15 per barrel in late 1978 to $25 per barrel by the fall of 1979. By the summer of 1980, the price had stabilized at about $34 per barrel, as demand weakened and inventories rose. The large stocks helped to cushion the impact of sharp curtailments in production by Iraq and Iran during the autumn, but by year-end the world price of petroleum stood at $36 per barrel. Along with OPEC price increases, the phased deregulation of prices for domestic crude petro­ leum that ended in January 1981 exacerbated the rise in energy costs. Moreover, the rise in petro­ leum product prices led to increased pressures for competing fuels. Overall, consumer energy prices rose at an average annual rate of nearly 30 percent in the 1979-80 period. Although prices of imported crude oil rose more rapidly in 1973-74 than in 1979-80, the Food Prices recent episode probably had a greater impact on the overall inflation rate. Sharply increasing To a considerable extent price developments in prices, matched with relatively inelastic demand, the food sector have reflected the steady, sys­ gave petroleum greater importance in total ex­ tematic influence of inflationary processes simi­ penditures. Expenditures for oil, which includes lar to those in other sectors of the economy. petroleum consumed directly and petroleum Production costs rose rapidly, productivity used in the production of goods and services by lagged, and producers sought special arrange­ business, increased from 3^2 percent of nominal ments to protect incomes against the deleterious GNP in 1974 to 6 percent in 1980 as a result of the effects of inflation (chart 8). At the farm level, recent price explosion. Lately, however, indica­ the prices farmers paid for production inputs tions are that the share of energy in total expen­ rose at a 13 percent rate during the three years ditures is receding slowly. This development beginning in 1978; the sharpest increase occurred reflects increasing efficiency in the use of energy. in 1979, when these prices were boosted by the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Recent Inflation Experience 395 8. Food production costs 1973-74, nevertheless significantly affected farm and food prices. For example, in 1978, heavy Percentage change Prices paid by farmers for production inputs rains in California affected production of lettuce and other items. In 1980, a severe drought in the j Marketing costs Midwest and South reduced supplies of agricul­ tural products and pushed up prices for a number of farm products; increases in prices for crops and some fruits and vegetables were especially large. Freeze damage to Florida crops in early 1981 caused a sharp upturn in the prices of orange juice and fresh vegetables. Generally, price increases for fruits and vegetables soon were reversed partially or fully so that, over the 1978-80 period as a whole, prices for these items increased less rapidly than overall prices. When supply disruptions in the farm sector Prices paid by farmers for production inputs and food marketing cost index, Department of Agriculture. CPI food excludes meats, fish, cannot be offset quickly they can have signifi­ poultry, eggs, and fruits and vegetables; calculated by the Federal Reserve using Bureau of Labor Statistics data. cant bearing on the price performance of the total economy. Because of the long biological lags in soaring costs of petroleum-based production in­ the livestock sector, for example, even brief puts. Similarly, food marketing costs, which disruptions in feed supplies can affect food prices account for roughly two-thirds of retail food over long periods of time. For instance, the costs, rose at an annual rate of III/2 percent over severity of the drawdown in cattle inventories in the three-year period; the largest increases oc­ the late 1970s stemmed in part from the poor curred in 1979 and 1980. These cost increases harvests and high crop prices of the 1973-75 were aggravated by slower productivity growth period. For a time in the late 1970s this draw­ in recent years following an era in which technol­ down in inventories dominated other develop­ ogy improved rapidly. A variety of government ments in food prices. In 1978 in particular, with price supports and financing programs designed beef production falling, the CPI for meats, poul­ to protect the incomes of farmers limited the try, fish, and eggs increased more than 20 per­ downward flexibility of prices in the traditionally cent, far more than the general inflation rate. price-flexible farm sector. Record levels of pork production in 1979 and Against a backdrop of inflationary pressures in 1980 helped offset reduced levels of beef produc­ food markets, special developments, including tion; but over the three years as a whole, the CPI weather-related disruptions and biological con­ for meats and related items still rose at an straints on livestock production, have resulted in average annual rate of more than 12 percent. volatile short-run price movements that often have obscured more fundamental influences. In­ creased susceptibility to disruptions in agricul­ Government Regulations tural supply characterized the 1970s. In earlier decades, large grain inventories and idle agricul­ Certain government activities intensified cost tural capacity helped mitigate the effects of such pressures in the recent period, either directly or disruptions. In the 1970s, by contrast, world by increasing business operating costs. Price demand for U.S. grain soared, idle acreage was supports, trigger-price mechanisms, and import returned to production, and grain inventories taxes led directly to price increases. Regulations relative to consumption were lower on average aimed at improving the environment and protect­ than in earlier decades. Hence farm prices were ing worker health and welfare generally raised highly sensitive to changes in crop conditions costs, which in turn put upward pressure on here and abroad. prices. While these programs added to cost pres­ Disruptions in crop supply in the 1978-80 sures mostly over a short span, they contributed period, while generally not so severe as those of indirectly to inflationary trends as subsequent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

396 Federal Reserve Bulletin □ May 1981 adjustments in the prices of products and serv­ tic prices. Exchange rate developments are ices were absorbed in the economy. transmitted to the domestic price level through The number of regulations issued by such several channels. First, prices of imported goods agencies as the Environmental Protection Agen­ and services consumed directly tend to rise with cy and the Occupational Health and Safety Ad­ a depreciation of the dollar. Second, price ministration has increased dramatically in the changes for these products affect the prices of last five years. Research on the impact of these domestically produced products that compete regulations has indicated that their costs are with imports. Third, exchange rate develop­ high. For example, the Council on Environmen­ ments influence the costs of producing domestic tal Quality estimated that in 1979 about $37 goods and services that use imported materials billion, or 1.5 percent of GNP, was spent to as inputs. A Federal Reserve study has estimated comply with EPA requirements; another study, that, with everything else equal, the 20 percent by Resources for the Future, suggests that pollu­ decline in the weighted-average exchange rate tion control efforts in the 1973-75 period may for the dollar over the four years ending in midhave been responsible for 5 to 15 percent of the 1980 may have boosted the CPI index 3A of a measured slowdown in labor productivity during percentage point on average in each year of the those years. 1976-80 period. If the recent appreciation of the Unfortunately, a good deal of judgment enters dollar is sustained, more than half of those price into any estimate of the inflationary impact of increases will be reversed (chart 9). regulations. Measuring the costs of regulatory activities is fairly straightforward, but evaluating 9. Trade-weighted exchange value of the dollar the benefits to society of cleaner air, purer water, March 1973 =100 and safer work places is not easy. A particularly difficult issue is whether quality changes are appropriately considered in inflation measures. For example, in constructing its measure of new car prices, the Bureau of Labor Statistics does not include price increases resulting from added costs of safety or pollution control equipment; in effect it assumes that the benefits of the devices are equal to their costs. On the other hand, increases in the costs of clean-air devices for factories are measured as price increases once these costs are passed on into higher prices. Price supports, import taxes, and trigger-price 1977____________ 197?___________1981 mechanisms may have added directly to price Exchange value of the U.S. dollar is the index of weighted-average pressures by increasing product prices above the exchange value of the U.S. dollar against currencies of other Group of Ten countries plus Switzerland using 1972-76 total trade weights. levels that would have been determined in an unrestricted market. For example, steel trigger prices, which determine the level below which Taking a broader perspective, however, the imported steel may not be sold in the United depreciation of the dollar may have been a States without initiating “dumping” investiga­ symptom of a more general set of factors that tions, may have impaired domestic price compe­ also led to domestic price inflation. To the extent tition. that the depreciation was the result of a relatively more rapid rate of money growth at home than abroad, it would be difficult to argue that the Exchange Rates subsequent increase in domestic prices was the result of the depreciation. In such a framework The sharp depreciation of the dollar between the role of the exchange rate as a causal factor in mid-1976 and mid-1980 may have raised domes­ domestic inflation becomes less clear. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Recent Inflation Experience 397 Outlook Scattered signs suggest that wage demands may be beginning to respond to the changing Looking ahead, several developments suggest economic environment. Wage concessions, such some improvement in the rate of inflation. First, as those recently negotiated at Chrysler, while although increased pressures from food prices not widespread or likely to spill over into nonre­ again are in prospect and depend critically on lated industries, may be signaling an underlying uncertain agricultural supply conditions, oil price responsiveness of wages to profit margins. In developments are not likely to play as significant addition, as slack demand continues to charac­ a role in the near term as in 1979 and 1980. terize the labor market and as workers recognize Substantial world inventories of crude petroleum it as more than a transitory phenomenon, com­ are likely to frustrate further efforts by exporting petitive forces may restrain wage rates and labor nations to raise petroleum prices by very much in costs. the near term. Second, current efforts to ease regulatory burdens, coupled with smaller legis­ 10. Profit share, nonfinancial corporations lated increases in social security payroll taxes over the next four years, should help reduce upward cost pressures. Third, the recent signifi­ cant improvement in the value of the dollar, if sustained, could ease price pressures. Finally, monetary policy is on a course of restraining the expansion of money and credit; the resulting moderation in the growth of aggregate demand and the impact on expectations should have a damping effect on wages and prices. Current price behavior indicates that the re­ cent austere policies may have begun to have some effects. The most immediate effect of the slackening in aggregate demand on price behav­ 1969 1971 1973 1975 1977 1979 1981 ior has been a squeeze on profit margins, which Department of Commerce data. Profit share is calculated as a have dropped well below historical levels (chart fraction of gross domestic business product. Shaded areas represent 10). However, the slower growth in aggregate periods of business recession as designated by the National Bureau of Economic Research. demand and the concomitant rise in unemploy­ ment have not as yet resulted in an observable Improvement in the trend growth of productiv­ slowing of wage increases. Evidence suggests ity also would help alleviate labor cost pressures, that reductions in demand do in general tend to but a significant brightening of the labor cost moderate the size of wage increases, but achiev­ picture at the current pace of wage increases ing a rapid response would likely be associated would require an improvement in productivity to with large costs in terms of lost jobs and reduced rates not experienced for more than a decade. output. Significant progress without incurring Because labor productivity depends importantly such heavy costs requires an adjustment in work­ on additions to the nation’s capital stock, such a ers’ expectations of inflation. sharp turnaround is not likely to occur soon. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

398 Survey of Finance Companies, 1980 This article was prepared by Evelyn M. Hurley of when economic conditions were especially un­ the Board’s Division of Research and Statistics. settled. The midyear survey date marked the close of a quarter in which real gross national Every five years since June 1955 the Federal product posted its largest single-quarter decline Reserve System has conducted a survey of the of the postwar period. Seeond, in conjunction assets and liabilities of finance companies that with a broad anti-inflation program set forth by supply specialized short- and intermediate-term the administration, the Board on March 14 had financing to consumers and businesses. This announced a credit restraint program aimed at article summarizes the results of the most recent curbing excessive growth in money and credit. survey, which covered the entire industry, al­ Both consumer and business credit at finance most 2,800 companies.1 companies were covered under this program.3 The surveys are designed primarily to estab­ Whatever the influence of these develop­ lish benchmark data for series that are published ments, the dominant characteristic of the 1980 regularly on short- and intermediate-term con­ survey appears to be the high rate of growth in sumer and business credit outstanding at and receivables held by finance companies over the extended by finance companies. In addition, 1975-80 interval compared with the 1970-75 pe­ because detailed balance-sheet data are collect­ riod. A number of factors can account for this ed, the surveys have provided information on the acceleration. The mid-1975 survey had been tak­ changing composition of loan portfolios of fi­ en shortly after the trough of a severe and nance companies as well as on the companies’ prolonged recession that had greatly depressed major sources of funds. Because the data are demands for both consumer and business credit collected as of a single day—June 30—they pro­ and thus limited the expansion in finance compa­ vide only a limited perspective on industry be­ ny activities relative to the levels reported in the havior during the period between surveys.2 June 1970 survey. By comparison, a sustained Several developments undoubtedly reduced growth in aggregate demand characterized virtu­ the volume of credit outstanding on June 30. ally the entire period between mid-1975 and mid- First, the most recent survey was taken at a time 1980, and in the latter part of the period unusual­ ly rapid and persistent inflation further boosted Note. Erling Thoresen, Samuel Slowinski, Linda Gunter, demands for credit in nominal terms. At the end Edith Collis, Rena Carlton, and other members of the Divi­ sions of Research and Statistics and of Data Processing of June 1980 total gross receivables outstanding helped with the survey and preparation of the report. In at finance companies were 113 percent larger addition, the survey was conducted with the cooperation and assistance of the Federal Reserve Banks and of industry trade associations. 3. Consumer lending was restrained through a special non- 1. Previous Federal Reserve surveys of finance companies interest-bearing deposit requirement tied to increases above a were made on June 30 of 1955, 1960, 1965, 1970, and 1975; base amount in certain types of consumer receivables. These articles describing these surveys were published in the Fed­ included revolving credit balances, unsecured personal cash eral Reserve Bulletin for April 1957, October 1961, April loans, and loans collateralized by goods not purchased with 1967, November 1972, and March 1976 respectively. The the loan proceeds. All creditors with more than $2 million of 1980 survey consisted of a presurvey questionnaire mailed to such credit outstanding were subject to the program. Guide­ about 5,850 companies and a survey form mailed to a sample lines were separately established for overall credit growth, of 749 companies. See the technical note at the end of the including business loans at commercial banks and finance article for detail on the coverage of the survey. companies. Each institution was to contain its expansion of 2. Moreover, because the surveys are conducted as of total lending to a rate consistent with the Federal Reserve’s June 30, the results may be biased by the temporary adjust­ monetary growth targets, of about 6 to 9 percent annually. ments to the balance sheet that usually occur at the close of Creditors were asked especially to curtail financing of corpo­ an accounting period. rate takeovers and speculative holdings of commodities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Finance Companies, 1980 399 than five years earlier, whereas in the preceding term interest rates fell appreciably, after two half decade they had expanded only 51 percent. quarters of historical highs, encouraging finance Against a background of restrictive state lend­ companies once again to issue record amounts of ing laws, heavy demands for credit and high rates long-term debt (see chart). of interest also may have spurred finance compa­ nies to extend their lending operations more rapidly into new areas of financing than they had Diversification of done in the previous five-year interval. These Finance Company Activities newer techniques tended to lengthen the average maturity of loan portfolios. On the other hand, Between 1975 and 1980 finance companies accel­ the proportions of funds raised by finance com­ erated their lending activities in relatively new panies through long- and short-term sources re­ areas, such as revolving credit, loans secured by mained relatively unchanged between the two junior liens on real estate, and leasing. One major surveys. This latter phenomenon probably re­ effect of this diversification was that real estate flected special circumstances in credit markets credit, mainly loans secured by second mort­ preceding each survey date as well as the length­ gages, exhibited the greatest relative growth in ening of maturities on the asset side of the finance company portfolios.4 This growth came balance sheet. In late 1974 and early 1975 finance largely at the expense of traditional forms of companies, like many other enterprises, engaged consumer credit, whose declining relative impor­ in a major restructuring of their balance sheets, tance reinforced a trend that had emerged before issuing unprecedented amounts of long-term 1975. In contrast, the proportion of total receiv­ debt to rebuild liquidity and to refund heavy ables held in business credit rose only fractional­ short-term borrowing during the tight-money pe­ ly, but for the first time this class of assets riod of 1973-74. More recently, as demands for accounted for a larger portion of finance compa­ short- and intermediate-term consumer and busi­ ny receivables than consumer credit. ness credit dropped sharply in the second quarter Although real estate loans were still a relative­ of 1980, in response to the recession and to credit ly minor item in the portfolios of finance compa­ restraints, finance companies found little need to nies in 1980, the share of total lending by these seek short-term funds. At the same time, long­ institutions almost tripled in the intersurvey peri­ od, from 2V4 percent in 1975 to 6‘/2 percent in Selected interest rates 1980 (table 1). Nearly all of this increase was January 1975-December 1980 attributable to cash loans secured by junior liens Percent on real estate, which rose from $1.9 billion, or 2 percent, of finance company business in the earlier survey, to $10.5 billion, or 6 percent, more recently (table 1). One reason for the growing popularity of second mortgage loans may have been that consumers were able through these secured loans to borrow larger sums of money than most state laws governing traditional forms of consumer credit permit; moreover, the secured nature of these loans generally permit them to bear lower interest rates. As a consequence, second mortgage loans, which in the survey are classified as real estate rather than consumer credit, displaced personal cash lending to some extent, and thus probably Directly placed finance company paper rate is monthly average of daily rates. Moody’s corporate bonds are monthly 4. These loans have been included in the Board’s consum­ averages of weekly figures. er credit statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

400 Federal Reserve Bulletin □ May 1981 accounted for a significant part of the concomi­ grams, in part in reaction to the restrictions tant drop in the importance of non-real-estate placed on growth of bank lending in the credit credit to consumers in finance company busi­ restraint program and in part because of state ness. usury laws that limited the amount of interest With the growth of lending secured by second chat-ged on such loans. Finance company subsid­ mortgages, traditional types of personal cash iaries of auto manufacturers, seeking to bolster lending declined in importance, from 36 percent auto sales for parent companies, were less con­ of the consumer credit outstanding at finance cerned with interest rate spreads and acquired companies in June 1975 to 28 percent in June much of the auto lending relinquished by the 1980 (table 1). In the 1980 survey, retail auto banks. credit surfaced as the most important type of Nonautomotive retail credit also increased its consumer credit, regaining the prominence that share in the consumer lending of finance compa­ had been evident in the 1950s and early 1960s. In nies in the 1975-80 period, and by the end of this the intervening period, banks and credit unions interval was rivaling personal cash loans as the had aggressively competed with finance compa­ second most important consumer receivable. nies in the auto financing market, and the share This type of credit rose from 17 percent of of finance companies in that market had de­ finance company consumer receivables in June clined. Before the 1980 survey, however, many 1975 to 29 percent in the 1980 survey, as a result banks deemphasized their auto lending pro­ of growth in revolving credit (table 1). One 1. Gross receivables at finance companies1 Percentage change Amount (billions of dollars) Share of total (percent) Type between surveys Mid-1975 Mid-1980 1970-75 1975-80 Mid-1975 Mid-1980 Gross receivables Consumer.......................................... 40.8 77.3 28.5 89.3 47.5 42.1 Business............................................ 39.3 86.1 70.8 119.1 45.7 46.9 Real estate........................................ 1.92 11.8 n.a. n.a. 2.3 6.5 Other .................................................. 3.9 8.2 68.6 107.3 4.6 4.5 Total.................................................... 86.0 183.3 50.6 113.2 100.0 100.0 Consumer receivables Retail passenger cars...................... 9.9 27.1 7.4 172.9 24.3 35.1 Mobile homes.................................... 3.5 4.8 48.7 39.6 8.5 6.3 Revolving credit................................ 5.8 16.8 n.a. 191.2 14.1 21.7 In personal cash loans................ n.a. .6 n.a. n.a. n.a. .8 In other consumer goods............ n.a. 16.2 n.a. n.a. n.a. 20.9 Other personal cash loans.............. 14.83 22.0 19.3 49.1 36.2 28.5 All other consumer loans................ 6.9 6.5 -11.8 -5.1 16.9 8.5 Total.................................................... 40.8 77.3 28.5 89.3 100.0 100.0 Business receivables Wholesale.......................................... 10.9 21.7 46.6 98.6 27.9 25.3 Retail.................................................. 11.1 26.3 68.6 137.8 28.2 30.6 Leasing.............................................. 8.1 23.3 112.1 188.4 20.5 27.0 Other business credit...................... 9.2 14.7 78.2 60.2 23.4 17.1 Total.................................................... 39.3 86.1 70.8 119.1 100.0 100.0 Real estate receivables Secured by first liens...................... n.a. 1.4 n.a. n.a. n.a. 11.7 Secured by junior liens.................... 1.9 10.5 n.a. 437.1 n.a. 88.3 Total.................................................... n.a. 11.8 n.a. n.a. n.a. 100.0 1. For this and all other tables, details may not add to totals due to 3. May include small amounts of revolving credit outstanding, rounding. n.a. Not available. 2. Includes only amount secured by junior liens; amount secured by first liens not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Finance Companies, 1980 401 reason for the growing popularity of revolving stockholders’ equity represented about one-sev­ credit over the 1975-80 period may have been enth of total liabilities and capital of finance the extension of the payment period and conse­ companies, about the same as in 1975 (table A5). quent reduction in the monthly repayment of Although finance companies traditionally have debt that it allows. obtained most of their funds through short-term In the 1980 survey, lending to business ac­ borrowing, that kind of debt has accounted for counted for 47 percent of gross finance company only slightly more than half of total debt in the receivables, 1 percent higher than the proportion last two surveys (table 2). Both surveys revealed reported in the 1975 survey (table 1). There were that almost three-fourths of the short-term debt several similarities between business lending in was in the form of commercial paper. Commer­ the 1975 and 1980 surveys. First, paper secured cial paper—unsecured short-term promissory by durable goods, both wholesale and retail, notes—has been the dominant short-term liabil­ remained the dominant type.5 Second, the per­ ity of finance companies since the 1960s. The centage of business credit represented by whole­ most rapid growth in commercial paper as a sale auto paper continued to drop as automobile source of funds for finance companies came after dealers attempted to keep auto inventories low the tight-money period of 1966, when many during a prolonged period of depressed sales and companies entered the market for the first time high interest rates. Third, lease paper continued to hedge against a curtailment in bank credit to grow significantly in importance. That growth lines. By mid-1975, investors had developed seri­ was probably the result of a longstanding effort ous concerns over the quality of paper because by businesses to reduce commitment of their of business conditions; consequently, the num­ own resources, to limit the expansion of balance- ber of finance companies that reported outstand­ sheet debt, and to benefit from the tax incentive ing commercial paper dropped to 128 in that year to the lender. from 138 in 1970 (table 3). By mid-1980, howev­ er, the number had risen to 179 companies with $52.3 billion of paper outstanding. Sources of Financing in Mid-1980 Because commercial paper is unsecured, only large, well-known firms can sell these notes Finance companies traditionally operate on a readily in the open market. As a result, 95 firms, relatively narrow capital base. In mid-1980, each reporting receivables of $100 million or more, accounted for 97 percent of the finance 5. Includes transactions between manufacturers and deal­ company paper outstanding at the end of June ers secured by passenger cars and commercial vehicles, 1980. The bulk of this paper—83 percent in midmobile homes, passenger car trailers, motor homes, boats, airplanes, helicopters, business, industrial, and farm equip­ 1980—is sold directly by the issuing company to ment; other wholesale operations not elsewhere classified; the lender, usually at a cost lower than that for and retail credit arising from the sale (or purchase) of bank credit. The direct selling of paper, howev­ business, industrial, and farm equipment, and commercial vehicles (including fleet sales). er, requires a company to set up and maintain a 2. Finance company debt, midyear 1975 and 1980 Debt outstanding Percentage change Share of total debt (percent) Type of debt (billions of dollars) between surveys Mid-1975 Mid-1980 1970-75 1975-80 Mid-1975 Mid-1980 Long-term............................ 29.7 60.5 80.5 103.4 44.8 46.1 Short-term1.......................... 36.6 70.8 23.6 93.4 55.2 54.0 Bank.................................. 7.9 7.9 20.0 -.2 11.9 6.0 Commercial paper.......... 25.9 52.3 17.4 102.0 39.0 39.9 Directly placed............ 23.7 43.2 23.1 82.5 35.7 32.9 Dealer placed.............. 2.2 9.1 -21.5 310.1 3.3 6.9 Total...................................... 66.4 131.3 43.9 97.9 100.0 100.0 1. Includes short-term debt not elsewhere classified and not shown separately. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

402 Federal Reserve Bulletin □ May 1981 well-trained marketing department. Indirect Concentration of Receivables, sales through dealers are used mostly by issuers Debt, and Equity whose needs are only seasonal, or that are not known well enough to sell directly. In general, Like surveys in previous years, the 1980 survey such paper carries a somewhat higher interest revealed a highly concentrated industry. Finance yield than paper placed directly; and the issuer companies with $25 million or more in receiv­ always pays a service fee of up to V8 of a ables made up only 11 percent of all finance percentage point to the dealer. companies; yet these firms held 97 percent of the value of all consumer receivables and 98 percent 3. Finance companies reporting commercial paper of the value of business receivables (table A6). In liabilities, midyears 1975 and 1980 contrast, companies with less than $5 million in receivables accounted for 80 percent of the com­ Number of companies panies in the current survey, but held only 2 Size of company, by consumer and business Issuing commercial percent of the value of consumer receivables and loans outstanding, in paper In size category thousands of dollars less than 1 percent of the value of business 1975 1980 1975 1980 receivables. In the recent survey, the larger companies 100,000 and over.......... 67 95 88 148 25,000-99,999.............. 34 46 102 156 continued to diversify their portfolios of receiv­ 5,000-24,999.............. 19 30 204 239 1,000-4,999................ 8 10 500 484 ables, a trend first noted in 1970. In contrast, the Under 1,000 .................. 2,482 1,749 smaller companies remained highly concentrated Total number................ 128 179 3,376 2,775 in consumer receivables, especially personal cash loans. Neither the larger companies nor the In part the shift in the patterns of borrowing by smaller firms had changed significantly the matu­ finance companies in credit markets toward long­ rity distribution of their debt since the 1975 er-term debt appears to be the result of condi­ survey (table A7). The larger companies contin­ tions that had prevailed in the months immedi­ ued to have a larger percentage of their liabilities ately before the survey dates. In 1974 and 1975, in long-term debt than did the smaller compa­ finance companies undertook a major restructur­ nies. These smaller companies are less well ing of debt as long-term rates declined following known and do not have the ready access to long­ a period of stringent credit conditions. More term capital markets that larger, nationally based recently, the recession and the credit restraint companies enjoy. With a smaller degree of diver­ program in early 1980 had a similar effect on the sification and a smaller portion of their liabilities borrowing patterns of finance companies. Also, in long-term debt, the smaller companies re­ newer lending techniques such as second mort­ mained less highly leveraged than the larger gage lending and leasing tended to lengthen the ones. Equity accounted for about half the liabil­ average maturity of finance company lending, ities of the smaller companies in the 1980 survey perhaps inducing finance companies to rely more whereas it was only about one-seventh of the heavily on long-term debt. liabilities of the larger companies. □ Technical Note The 1980 Survey of Finance Companies was of companies that submitted presurvey question­ designed to collect data on the major assets and naires. liabilities of the universe of finance companies In the survey, a finance company was defined engaged in making short- and intermediate-term as a company (including Morris Plan companies installment loans to consumers or businesses. but excluding banks, credit unions, savings and This survey differed from previous surveys in loan associations, banks for cooperatives, and that a statistical sample was selected from the list mutual savings banks) the largest portion of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Finance Companies, 1980 403 whose assets is in one or more of the following to the questionnaire with information that kinds of receivables: showed that they were out of business or were 1. Sales finance receivables. Installment pa­ not a finance company or a subsidiary of a per arising from retail sales of passenger cars and finance company were removed from the list. mobile homes, and of other consumer goods, From the 2,377 usable responses, a stratified such as general merchandise, apparel, furniture random sample of 749 companies was selected and household appliances, or from outlays for for the 1980 survey. The stratification was based home improvement loans not secured by real on size of total receivables (seven groups) and estate. primary activity type (five groups) to yield 35 2. Personal cash loans to individuals and fam­ strata. All finance companies with more than $25 ilies. Unsecured cash loans (including loans to million in total receivables were included in the pay for insurance policies) or cash loans secured sample. Proportional allocation was used to ob­ by insurance policies, autos already paid for, and tain sample sizes in the remaining strata with other collateral. some judgmental adjustments to ensure that all 3. Short- and intermediate-term business re­ types and sizes were represented. ceivables. Loans on commercial accounts re­ The following table summarizes the response ceivable, inventory loans, factoring, lease fi­ from the sample. nancing, retail installment sales (or purchases) of commercial, industrial, and farm equipment and Disposition of Number of Percent of commercial vehicles, and wholesale financing of forms companies forms mailed consumer and business goods. Total mailed.................................. 749 100.0 4. Junior liens on real estate. Loans, whatev­ Returned.................................... 523 69.8 Usable.................................... 469 62.6 er the purpose, secured by junior liens (for Not usable.............................. 46 6.1 Out of business.................. 6 .8 example, equity loans, second mortgages) on Subsidiaries of other real estate as evidenced by junior mortgages, finance companies ... 13 1.7 Subsidiaries of banks___ 10 1.3 deeds of trust, land contracts, or other instru­ Out of scope...................... 17 2.3 Refusals to answer................ 8 1.1 ments. Presurvey questionnaires were mailed to 5,851 Not returned.............................. 226 30.2 names appearing on the mailing list.6 The num­ ber of presurvey forms mailed and the major In order to obtain estimates of assets and categories into which the responses fell are liabilities for the approximately 1,300 companies shown in the accompanying table. Information that did not return presurvey forms, a stratified random sample of 165 nonrespondents was se­ lected. It was decided to spread out the collec­ Disposition of Number of Percent of tion process somewhat uniformly across Federal forms companies forms mailed Reserve Districts, but giving those districts with Total mailed........................ 5,851 100.0 greater nonresponse slightly larger sample sizes. Returned.......................... 4,534 77.5 Usable.......................... 2,377 40.6 The results of the sample were 48 that were Not usable.................... 2,157 36.9 Postal return............ 991 16.9 usable, 97 that did not belong in the finance Inactive.................... 93 1.6 Out of business___ 474 8.1 company universe, and 20 in existence that re­ Sold to another fused to supply information. Estimates of the firm.................... 282 4.8 Out of scope............ 317 5.4 number of nonrespondents in existence as well Not returned.................... 1,317 22.5 as their sizes were generated from these results. Final universe estimates of assets and liabil­ was gathered on the size of the company, mea­ ities were derived by expanding the data report­ sured by total receivables and the primary type ed by the stratified sample of 469. The heavy of activity—that is, sales receivables, personal concentration of receivables in a few large com­ cash loans, and so on. Companies that responded panies, all of which are included in the sample, makes the dollar aggregates reasonably accurate 6. The mailing list for the 1980 presurvey questionnaire estimates of the amount and type of financing was derived from the 1975 survey mailing list, trade associa­ tion rosters, trade journals, and newspapers. extended by the industry. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

404 Federal Reserve Bulletin □ May 1981 Al. Assets and liabilities outstanding at finance companies by size of receivables, June 30, 1980 Millions of dollars Size of company (in millions of dollars of short- and All finance intermediate-term loans outstanding) Balance sheet item companies 500 and over 100-499 25-99 5-24 1-4 Under 1 Assets Consumer receivables................................................ 77,260 65,128 7,310 2,671 1,029 687 436 Retail passenger car paper.................................... 27,118 25,948 324 427 208 175 36 Mobile homes.......................................................... 4,832 4,363 248 153 56 10 2 Retail consumer goods.......................................... 22,702 18,978 3,054 306 240 69 56 Revolving credit.................................................. 16,161 13,766 2,257 3 135 0 0 Other retail consumer goods paper................ 6,541 5,212 797 303 105 69 56 Personal cash loans................................................ 22,609 15,838 3,684 1,784 525 434 343 Revolving credit.................................................. 589 382 16 118 68 3 3 Other personal cash loans................................ 22,021 15,457 3,668 1,667 457 432 340 Business receivables 86,067 65,157 14,743 4,620 1,211 264 71 Wholesale paper...................................................... 21,741 18,952 2,036 674 28 44 7 Automobiles........................................................ 12,373 12,226 118 6 8 15 0 Business, industrial, and farm equipment.... 5,072 3,983 585 495 4 5 0 All other................................................................ 4,296 2,743 1,333 173 17 24 7 Retail paper.............................................................. 26,318 22,348 3,179 712 28 49 2 Commercial vehicles.......................................... 10,088 9,241 780 49 2 14 2 Business, industrial, and farm equipment___ 16,230 13,107 2,399 663 26 35 0 Lease paper.............................................................. 23,261 14,916 5,277 2,042 949 62 16 Auto paper............................................................ 6,194 5,858 151 17 161 5 3 Business, industrial, and farm equipment___ 16,937 9,058 5,064 2,001 744 56 13 All other............................................................... 130 0 62 24 44 0 0 Other business credit.............................................. 14,747 8,941 4,252 1,192 206 110 46 Short-term............................................................ 8,325 3,614 3,550 931 146 54 31 Intermediate-term................................................ 6,422 5,328 702 262 61 55 15 Real estate loans.......................................................... 11,831 9,144 1,357 739 455 105 31 Secured by first liens.............................................. 1,380 915 289 116 39 8 13 Secured by junior liens.......................................... 10,451 8,229 1,068 623 415 97 19 Other accounts and notes receivable...................... 8,183 7,590 313 216 25 16 23 Total receivables, gross............................................ 183,341 147,019 23,722 8,246 2,719 1,072 561 Less reserves for unearned income.................... 21,251 16,404 3,122 1,096 470 111 49 Less reserves for losses........................................ 2,981 2,303 418 160 51 30 20 Total receivables, net................................................ 159,108 128,311 20,183 6,991 2,198 932 492 All other assets............................................................ 15,917 11,636 2,535 954 329 147 316 Total assets, net............................................................ 175,025 139,947 22,718 7,944 2,527 1,079 809 Liabilities and Capital Loans and notes payable to banks.......................... 15,458 7,677 4,018 2,439 969 272 83 Short-term............................................................... 7,885 4,036 1,691 1,456 477 168 58 Long-term............................................................... 7,573 3,641 2,327 983 492 104 25 Commercial paper...................................................... 52,328 45,662 5,277 1,227 143 14 4 Directly placed........................................................ 43,232 41,537 1,320 262 95 14 4 Dealer placed.......................................................... 9,095 4,125 3,957 965 49 0 0 Other short-term debt................................................ 10,627 6,747 2,250 1,136 257 156 81 Other long-term debt.................................................. 52,898 46,367 4,702 1,186 400 156 87 All other liabilities...................................................... 18,363 14,574 2,615 719 283 136 36 Capital, surplus, and undivided profits.................. 25,350 18,919 3,856 1,238 475 345 517 Total liabilities, capital, and surplus........................ 175,025 139,947 22,718 7,944 2,527 1,079 809 Memo: Short-term debt........................................................... 70,840 56,445 9,218 3,818 877 338 143 Long-term debt........................................................... 60,471 50,008 7,029 2,169 892 260 112 Number of companies................................................ 2,775 48 100 156 239 484 1,749 For definitions see pages 408-09. 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Survey of Finance Companies, 1980 405 A2. Direct loans made and paper purchased by finance companies during June 1980 millions of dollars Size of company (in millions of dollars of short- and Type of loan All finance intermediate-term loans outstanding) companies 500 and over 100-499 25-99 5-24 1-4 Under 1 Consumer receivables............................................ 5,675 4,538 651 272 96 65 53 Retail passenger car paper................................ 1,800 1,723 12 35 15 11 3 Mobile homes...................................................... 103 87 9 5 2 0 0 Retail consumer goods...................................... 2,224 1,784 358 30 34 9 9 Revolving credit.............................................. 1,621 1,315 282 0 25 0 0 Other retail consumer goods paper............ 603 469 76 30 9 9 9 Personal cash loans............................................ 1,547 944 271 201 45 44 41 Revolving credit.............................................. 41 12 0 23 6 0 0 Other personal cash loans............................ 1.507 932 271 178 40 44 41 Business receivables.............................................. 15,306 11,564 2,717 695 170 140 19 Wholesale paper.................................................. 6,169 5,595 349 200 2 20 2 Automobiles.................................................... 4,577 4,534 37 1 2 3 0 Business, industrial, and farm equipment . 754 512 71 168 0 2 0 All other............................................................ 838 549 240 31 1 15 2 Retail paper.......................................................... 1,577 1,361 170 41 3 2 1 Commercial vehicles...................................... 529 489 35 2 0 1 1 Business, industrial, and farm equipment . 1,048 871 135 39 3 1 0 Lease paper.......................................................... 970 546 180 66 87 91 0 Auto paper........................................................ 272 257 4 2 9 1 0 Business, industrial, and farm equipment . 691 289 174 63 75 90 0 All other............................................................ 7 0 2 1 3 0 0 Other business credit.......................................... 6,590 4,062 2,019 389 78 27 15 Short-term........................................................ 5,617 3,167 1,978 360 73 24 14 Intermediate-term............................................ 973 895 41 28 5 3 1 Real estate loans...................................................... 530 378 60 53 26 11 1 Secured by first liens.......................................... 92 64 13 11 2 1 0 Secured by junior liens...................................... 438 314 47 42 24 11 1 Other accounts and notes receivable.................. 1,068 1,013 43 11 1 0 0 Total receivables, gross.......................................... 22,578 17,493 3,472 1,030 293 216 74 For definitions see pages 408-09. A3. Consumer receivables outstanding at finance companies, midyears 1970, 1975, and 1980 Amount outstanding Percentage of consumer Type of consumer receivable Millions of dollars Percentage change receivables Mid-1970 Mid-1975 Mid-1980 1970-75 1975-80 Mid-1975 Mid-1980 Retail passenger cars................ 9,250 9,938 27,118 7.4 172.9 24.3 35.1 Mobile homes.............................. 2,327 3,461 4,832 48.7 39.6 8.5 6.3 Revolving credit........................ n.a. 5,752 16,750 n.a. 191.2 14.1 21.7 In personal cash loans.......... n.a. n.a. 589 n.a. n.a. n.a. .8 In other consumer goods___ n.a. n.a. 16,161 n.a. n.a. n.a. 20.9 Other personal cash loans........ 12,380* 14,7692 22,021 19.3 49.1 36.2 28.5 All other consumer loans........ 7,8162 6,895 6,541 -11.8 -5.1 16.9 8.5 Total consumer credit................ 31,773 40,814 77,260 28.5 89.3 100.0 100.0 1. May include small amounts of real estate receivables secured by n.a. Not available. junior liens. For definitions see pages 408-09. 2. May include small amounts of revolving credit outstanding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

406 Federal Reserve Bulletin □ May 1981 A4. Business receivables outstanding at finance companies, midyears 1970, 1975, and 1980 Amount outstanding rerceni oi loiai ousiness Type of business receivable Millions of dollars Percentage change receivables Mid-1970 Mid-1975 Mid-1980 1970-75 1975-80 Mid-1975 Mid-1980 Wholesale paper.......................... 7,468 10,945 21,741 46.6 98.6 27.9 25.3 Automobiles............................ 5,053 7,713 12,373 52.6 60.4 19.6 14.4 Business, industrial, and farm equipment........................ 1,739 1,960 5,072 12.7 158.8 5.0 5.9 All other.................................... 676 1,273 4,296 88.3 237.5 3.2 5.0 Retail paper.................................. 6,563 11,067 26,318 68.6 137.8 28.2 30.6 Commercial vehicles.............. 3,090 5,012 10,088 62.2 101.3 12.8 11.7 Business, industrial, and farm equipment........................ 3,473 6,055 16,230 74.3 168.0 15.4 18.9 Lease paper.................................. 3,802 8,065 23,261 112.1 188.4 20.5 27.0 Automobiles............................ 1,403 2,343 6,194 67.0 164.4 6.0 7.2 Business, industrial, and farm equipment........................ 2,299 3,950 16,937 71.8 328.8 10.1 19.7 All other.................................... 99 1,772 130 1,689.9 -92.7 4.5 .2 Other business credit.................. 5,166 9,208 14,747 78.2 60.2 23.4 17.1 Short-term................................ 2,974 4,991 8,325 67.8 66.8 12.7 9.7 Intermediate-term.................... 2,192 4,218 6,422 92.4 52.2 10.7 7.5 Total business receivables.......... 22,999 39,286 86,067 70.8 119.1 100.0 100.0 For definitions see pages 408-09. A5. Liabilities and capital outstanding at finance companies, midyears 1970, 1975, and 1980 Amount outstanding Percentage of total Type of liability Millions of dollars Percentage chlainabgielities and capital Mid-1970 Mid-1975 Mid-1980 1970-75 1975-80 Mid-1975 Mid-1980 Bank loans................................ 7,551 8,617 15,458 14.1 79.4 9.7 8.8 Short-term.............................. 6,581 7,900 7,885 20.0 -0.2 8.9 4.5 Long-term.............................. 969 718 7,573 -25.9 954.7 0.8 4.3 Commercial paper.................... 22,073 25,905 52,328 17.4 102.0 29.2 29.9 Directly placed...................... 19,247 23,686 43,232 23.1 82.5 26.7 24.7 Dealer placed........................ 2,826 2,218 9,095 -21.5 310.1 2.5 5.2 Other short-term debt.............. 975 2,815 10,627 188.7 277.5 3.2 6.1 Other long-term debt.............. 15,501 29,013 52,898 87.2 82.3 32.7 30.2 All other liabilities.................... 4,531 8,416 18,363 85.7 118.2 9.5 10.5 Capital and surplus.................. 9,947 13,951 25,350 40.3 81.7 15.7 14.5 Total liabilities and capital.... 60,577 88,716 175,025 46.5 97.3 100.0 100.0 Memo: Short-term debt........................ 29,629 36,620 70,840 23.6 93.4 41.3 40.5 Long-term debt........................ 16,470 29,730 60,471 80.5 103.4 33.5 34.5 Total debt.................................. 46,100 66,350 131,311 43.9 97.9 74.8 75.0 For definitions see pages 408-09. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Finance Companies, 1980 407 A6. Receivables outstanding at finance companies, midyears 1975 and 1980 Amount outstanding, millions of dollars Size of company (gross receivables outstanding, millions of dollars) Type of receivable All companies 25 and over 5 to 25 Under 5 1975 1980 1975 1980 1975 1980 1975 1980 Consumer receivables.............................................. 40,814 77,260 38,577 75,109 989 1,029 1,248 1,123 Retail passenger car paper.................................. 9,938 27,118 9,641 26,699 91 208 205 211 Mobile homes........................................................ 3,461 4,832 3,417 4,764 30 56 14 12 Revolving consumer installment credit............ 5,752 16,750 5,699 16,542 36 203 16 6 In personal cash loans...................................... n.a. 589 n.a. 516 n.a. 68 n.a. 6 In other consumer goods................................ n.a. 16,161 n.a. 16,026 n.a. 135 n.a. Other personal cash loans.................................... 14,769 22,021 13,271 20,792 631 457 867 772 All other consumer installment loans.................... 6,895 6,541 6,550 6,312 200 105 145 125 Business credit.......................................................... 39,286 86,067 38,078 84,520 904 1,211 304 335 Wholesale paper.................................................... 10,945 21,741 10,829 21,662 60 28 57 51 Automobiles........................................................ 7,713 12,373 7,690 12,350 13 8 10 15 Business, industrial, and farm equipment... 1,960 5,072 1,914 5,063 21 4 25 5 All other.............................................................. 1,273 4,296 1,224 4,249 26 17 22 31 Retail paper............................................................ 11,067 26,318 10,898 26,239 122 28 47 51 Commercial vehicles........................................ 5,012 10,088 4,971 10,070 22 2 18 16 Business, industrial, and farm equipment... 6,055 16,230 5,927 16,169 100 26 28 35 Lease paper............................................................ 8,065 23,261 7,868 22,235 151 949 46 78 Automobile........................................................ 2,343 6,194 2,320 6,026 18 161 4 8 Business, industrial, and farm equipment... 3,950 16,937 3,805 16,123 106 744 38 69 All other.............................................................. 1,772 130 1,742 86 28 44 3 Other business credit............................................ 9,208 14,742 8,483 14,385 572 206 155 156 Short-term.......................................................... 4,991 8,325 4,533 8,095 333 146 125 85 Intermediate-term.............................................. 4,218 6,422 3,950 6,292 239 61 29 70 Real estate receivables............................................ 1,946 11,831 1,513 11,240 264 455 169 136 Secured by first liens............................................ 1,380 1,320 39 21 Secured by second liens...................................... 1,946 10,451 1,513 9,920 264 415 169 116 Other receivables...................................................... 3,948 8,183 3,875 8,119 37 25 36 39 Total receivables, gross............................................ 85,994 183,341 82,042 178,987 2,195 2,719 1,758 1,633 Number of companies.............................................. 3,376 2,775 190 304 204 239 2,982 2,233 For definitions see pages 408-09. Al. Liabilities and capital outstanding at finance companies, midyears 1975 and 1980 Amount outstanding, millions of dollars Size of company (gross receivables outstanding, millions of dollars) All companies 25 and over 5 to 25 Under 5 Type of liability 1975 1980 1975 1980 1975 1980 1975 1980 Loans and notes payable to banks___ 8,617 15,458 7,314 14,134 783 969 519 355 Short-term............................................ 7,900 7,885 6,869 7,183 654 477 377 226 Long-term............................................ 718 7,573 446 6,951 130 492 141 129 Commercial paper.................................. 25,905 52,328 25,799 52,166 85 143 20 18 Directly placed.................................... 23,686 43,232 23,607 43,119 59 95 20 18 Dealer placed...................................... 2,218 9,095 2,192 9,047 26 49 * * Other short-term debt............................ 2,815 10,627 2,288 10,133 351 257 176 237 Other long-term debt.............................. 29,013 52,898 28,429 52,255 292 400 291 243 All other liabilities.................................. 8,416 18,363 7,867 17,908 257 283 291 172 Capital and surplus................................ 13,951 25,350 12,911 24,013 423 475 618 862 Total liabilities and surplus.................... 88,716 175,025 84,609 170,609 2,193 2,527 1,915 1,888 Memo: Short-term debt...................................... 36,620 70,840 34,955 69,481 1,090 877 576 481 Long-term debt...................................... 29,730 60,471 28,875 59,206 422 892 433 372 Total debt.................................................. 66,350 131,311 63,831 128,687 1,512 1,769 1,009 853 For definitions see pages 408-09. *Less than $500,000. 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408 Federal Reserve Bulletin □ May 1981 Definitions 1. Receivables include direct loans and paper purchased from b. Business, industrial, and farm equipment includes credit aris­ manufacturers, wholesalers, and retailers before deduction of re­ ing from the retail sale to business of (or from the purchase of) serves for unearned income and losses. They include bulk purchases business, industrial, and farm equipment. It includes all “off-theof paper from vendors. road” equipment for which motor vehicle licensing is not required. It 2. Retail passenger car paper consists of credit arising from retail also includes airplanes, helicopters, and boats purchased for business sales of passenger cars to consumers. It excludes lease paper, fleet use. Loans may be secured by chattel mortgages or conditional sales sales, personal cash loans secured by automobiles already paid for, contracts (purchased money security agreements) on the machinery or and loans to finance the purchase of commercial vehicles and farm equipment. It excludes loans to purchase commercial land vehicles for equipment. which motor vehicle licensing is required and loans secured by real 3. Mobile homes credit consists of paper arising from the retail sale estate. It also excludes lease financing. of complete dwelling units built on a chassis and capable at time of 8. Lease paper. initial purchase of being towed over the highway by truck but not by a. Autos consist of credit arising from leasing of passenger cars car. It excludes paper secured by real estate, lease paper, and paper and commercial land vehicles. It excludes leasing of mobile homes, arising from retail sale of travel trailers. campers, motor trailers, boats, airplanes, helicopters, and business, 4. Retail consumer goods consist of credit arising from retail sales industrial, and farm equipment. of consumer goods other than passenger cars and mobile homes. Such b. Business, industrial, and farm equipment consists of credit goods include general merchandise, apparel, furniture, household arising from the leasing of business, industrial, and farm equipment. It appliances, and so forth. They also include campers and trailers not includes lease financing of all “off-the-road” equipment for which usable as homes as well as motorcycles, airplanes, helicopters, and motor vehicle licensing is not required. It also includes lease financing boats purchased for personal use as well as revolving credit retail of airplanes, helicopters, and boats leased for business use. It ex­ paper and automobile repair paper. Also included in this paper is cludes lease financing of airplanes, helicopters, and boats leased for credit to finance alterations or improvements in existing residential personal or family use. properties occupied by the borrower. Wholesale financing and lease c. All other is all other lease financing including credit arising financing as well as loans secured by real estate are excluded. from the leasing of mobile homes, campers, and travel trailers. a. Revolving credit consists of retail credit that is extended on a 9. Other business credit. credit-line basis and that arises from the sale of consumer goods other a. Other short-term business credit includes business credit with than passenger cars and mobile homes. A single contract governs original maturities of less than one year. It includes loans secured by multiple use of the account and purchases may be made with a credit commercial accounts receivable less the balances withheld from card. Generally, credit extensions can be made at the consumer’s customers pending collection of receivables. It also includes commer­ discretion, provided that they do not cause the outstanding balance of cial accounts receivable purchased from factored clients less any the account to exceed a prearranged “credit limit.” amount due and payable to factored clients. It includes secured and b. Other retail consumer goods consist of all credit arising from unsecured advances of funds to factored clients. retail sales of consumer goods other than passenger cars and mobile b. Other intermediate-term business credit consists of business homes that is not extended on a revolving credit line basis. credit with original maturities of 1 to 15 years. It includes dealer 5. Personal cash loans to individuals and families are secured and capital loans, small loans used primarily for business or farm pur­ unsecured loans made directly to the borrower for household, family, poses, multi-collateral loans, rediscounted receivables of other fi­ or other personal expenses. They include unsecured loans to purchase nance companies less balances withheld, and all other business loans auto insurance policies as well as loans secured by insurance policies, not elsewhere classified. It excludes loans secured by real estate automobiles already paid for, and other collateral. They exclude loans unless included as part of a multicollateral loan. for business purposes, rediscounted loans, and loans secured by real 10. Loans secured by real estate includes all loans secured by estate. junior liens on real estate as well as any first mortgage loans secured a. Revolving credit is cash loans extended on a credit-line basis by real estate. and perhaps with the use of a credit card. Generally, credit extensions a. Secured by first liens includes all loans, whatever the purpose, can be made at the consumer’s discretion, provided that they do not secured by first liens on real estate as evidenced by first mortgages, cause the outstanding balance of the account to exceed a prearranged deeds of trust, land contracts, or other instruments. “credit limit.” b. Secured by junior liens includes all loans, whatever the b. Other personal cash loans consist of all secured and unse­ purpose, secured by junior liens (for example, “equity loans,” or cured loans made directly to the borrower for household, family, or “second mortgages”) on real estate as evidenced by junior mortgages, other personal expenses that are not extended on a revolving credit deeds of trust, land contracts, or other instruments. line basis. 11. Other accounts and notes receivable consist of all other receiv­ 6. Wholesale financing. ables not directly connected with domestic credit operations of the a. Autos are credit arising from transactions between manufac­ consolidated finance companies. turers and dealers or other “floor plan” loans secured by passenger 12. Amount of unearned income included above includes unearned cars and commercial land vehicles. It excludes paper secured by discounts and service charges on the above receivables. mobile homes, passenger car trailers, boats, airplanes, and helicop­ 13. Allowance for losses consists of allowances for bad debts, ters, and business, industrial, and farm equipment. unallocated charge-oflfs, and any other valuation allowances except b. Business, industrial, and farm equipment consists of credit the amount of unearned income applicable to the receivables included arising from transactions between manufacturers and dealers or other above. “floor plan” loans secured by business, industrial, and farm equip­ 14. All other assets include all assets not already included above ment. It includes all “off-the-road” equipment for which motor such as consolidated companies’ investments in nonconsolidated vehicle licensing is not required. It also includes airplanes, helicop­ foreign and domestic subsidiaries and affiliates. Nonconsolidated ters, and boats. subsidiary and affiliate company claims on consolidated companies c. All other includes all other wholesale financing including should be netted against the consolidated companies’ investment. “floor planning” transactions between manufacturers and dealers Overdrafts are excluded. with mobile homes, campers, and travel trailers as security. 15. Bank loans consist of short- and long-term loans and notes 7. Retail paper. payable to banks. They include overdrafts, but exclude commercial a. Commercial vehicles consists of credit arising from retail sales paper and bank portions of participation loans. of commercial land vehicles to business. It includes trucks, buses, 16. Directly placed commercial paper includes negotiable promis­ taxicabs, truck-trailers, and other “on-the-road” vehicles for which sory notes of large denominations sold directly to the investor and motor vehicle licensing is required. It also includes fleet sales of issued for not longer than 270 days. It includes short-term “master” passenger cars. It excludes lease financing and paper on business, notes. industrial, and farm equipment. 17. Dealer placed commercial paper consists of negotiable promis­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Finance Companies, 1980 409 sory notes sold to or through commercial paper dealers and issued for classified as long-term debt even if the time remaining to maturity is not longer than 270 days. It includes documented discount notes, that less than one year. is, commercial paper accompanied by an irrevocable letter of credit 20. All other liabilities are all liabilities not already reported above issued by a bank. or netted against assets. They include dealer reserves, all tax accruals, 18. Short-term debt not elsewhere classified includes all other short-term certificates of thrift or investment, and deposit liabilities short-term notes and loans payable. (Debt with an original maturity of (other than those not withdrawable during term of loan) and all other less than one year is classified as short-term). It excludes maturities of liabilities. They exclude liabilities of consolidated companies to non­ long-term debt due in less than one year. consolidated subsidiary and affiliated companies. They exclude bor­ 19. Other long-term debt consists of senior and subordinated long­ rower repayment deposits accumulated but not credited against term loans, notes, certificates, negotiable paper, or other indebted­ indebtedness until repayment is made in full. Such deposits should be ness not elsewhere classified, including that portion maturing in less netted against appropriate receivables in the assets section. than one year. Debt with original maturity of one year or more is 21. Capital, surplus, and undivided profits consist of all common and preferred stock and other capital or surplus accounts, including undivided profits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

410 Domestic Financial Developments in the First Quarter of 1981 This report, which was sent to the Joint Econom­ gates were little changed from the previous quar­ ic Committee of the U.S. Congress on May 12, ter and below the ranges set by the Federal Open 1981, highlights the important developments in Market Committee for growth from the fourth domestic financial markets during the winter and quarter of 1980 to the fourth quarter of 1981. The early spring. rate of expansion of M-2 rose a bit in the first quarter, as growth in its nontransaction compo­ The expansion of money moderated in the first nent remained comparatively strong. The aver­ quarter despite a further pickup in economic age level of M-2 for the quarter was near the activity and continued rapid inflation. The nar­ midpoint of its annual growth range. rowly defined monetary aggregates, M-l A and During the first quarter, the credit demands of M-1B, were affected substantially by movements the U.S. Treasury surged above the already of funds to negotiable order of withdrawal elevated level of the fourth quarter, but borrow­ (NOW) accounts, authorized nationwide at the ing by other domestic sectors was generally at or start of the year under the Monetary Control Act slightly below the pace of late last year. Nonfi­ of 1980. Adjusted for such shifting of balances, nancial businesses markedly increased their issu­ average first-quarter levels of the narrow aggre- ance of bonds and reduced the growth of short- Interest rates Percent 21 SHORTTERM LONG-TERM 19 17 Conventional mortgages HUD 15 13 11 9 Treasury bills Federal Reserve 3-month discount rate U.S. government bonds 7 State and local government bonds 5 Monthly averages except for Federal Reserve discount rate and Housing and Urban Development; Aaa utility bonds, weighted aver­ conventional mortgages (based on quotations for one day each ages of new publicly offered bonds rated Aaa, Aa, and A by Moody’s month). Yields: U.S. Treasury bills, market yields on three-month Investors Service and adjusted to Aaa basis; U.S. government bonds, issues; prime commercial paper, dealer offering rates; conventional market yields adjusted to 20-year constant maturity by U.S. Treasury; mortgages, rates on first mortgages in primary markets, unweighted state and local government bonds (20 issues, mixed quality), Bond and rounded to nearest 5 basis points, from U.S. Department of Buyer. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments 1981 :Q1 411 Changes in reserves and monetary aggregates Based on seasonally adjusted data unless otherwise noted, in percent1 1980 1981 Item 1978 1979 1980 Ql Q2 Q3 Q4 Ql Member bank reserves2 Total............................................................. 6.2 2.6 6.8 4.1 -.5 9.1 13.8 0 Nonborrowed.............................................. 6.3 .3 7.3 3.3 11.7 10.3 3.3 5.5 Required...................................................... 6.3 2.4 6.5 4.9 -.2 8.2 12.5 .5 Monetary base3.......................................... 9.1 7.8 8.7 8.3 5.3 10.1 9.9 5.0 Concepts of money4 M-1A........................................................... 7.4 5.0 5.0 5.2 -4.8 11.5 8.0 -18.6 Adjusted5.................................................. .3 M-1B............................................................ 8.1 7.6 7.3 6.8 -2.9 13.9 10.9 6.6 Adjusted5.................................................. 1.1 M-2............................................................... 8.3 8.9 9.9 ' ’ 8.9 5.4 15.7 8.1 8.2 M-3............................................................... 11.2 9.7 10.0 9.1 6.0 13.1 10.3 11.9 Nontransaction components of M-2 Total (M-2 minus M-1B).......................... 8.3 9.4 10.7 9.7 8.1 16.4 7.2 8.7 Small time deposits................................ 16.1 23.0 15.4 17.9 23.4 3.4 13.8 23.2 Savings deposits...................................... -.7 -12.0 -4.6 -16.4 -23.1 22.7 -.5 -31.0 Money market mutual fund shares (n.s.a.)................................. 163.9 324.2 90.3 151.9 82.7 75.7 -15.5 84.5 Overnight RPs and overnight Eurodollar deposits (n.s.a.).......... 25.4 17.2 21.8 9.0 -57.4 135.6 15.4 -12.3 Memo (change in billions of dollars) Managed liabilities at commercial banks ........................................................ 77.6 57.5 15.3 10.3 -2.2 -10.2 17.4 25.7 Large time deposits, gross........................ 50.2 19.4 21.8 5.3 7.3 -2.0 11.2 21.3 Nondeposit funds........................................ 27.4 38.1 -6.5 5.0 -9.5 -8.2 6.2 4.4 Net due to foreign related institutions........................................ 6.9 25.1 -22.9 -2.3 -8.6 -11.5 -.5 -2.6 Other6........................................................ 20.5 13.0 16.4 7.3 -.9 3.2 6.8 7.0 U.S. government deposits at commercial banks.............................. 3.6 1.1 .6 1.8 -1.4 1.8 -1.6 -.5 1. Changes are calculated from the average amounts outstanding in depository institutions. M-3 is M-2 plus large time deposits at all each quarter. depository institutions and term RPs issued by commercial banks and 2. Annual rates of change in reserve measures have been adjusted savings and loan associations. for regulatory changes in reserve requirements and, in 1980 and 1981, 5. The observed data for M-l A and M-1B in the first quarter were for distorting effects of changes in the level of weekend Eurodollar affected by shifts of funds to NOW accounts, introduced nationwide at transactions. the start of the year. The observed series must be adjusted to measure 3. Consists of total reserves (member bank reserve balances in the the underlying behavior of the narrow money supply, abstracting from current week plus vault cash held two weeks earlier), currency in such shifts. Information currently available suggests that, on average circulation (currency outside the U.S. Treasury, Federal Reserve in the first quarter, roughly three-fourths of the increase in other Banks, and the vaults of commercial banks), and vault cash of checkable deposits in excess of “trend” came from demand deposits nonmember banks. and the remainder came from savings accounts and other sources. 4. M-l A is currency plus private demand deposits net of deposits These estimates of shift-adjusted M-l A and M-1B growth are subject due to foreign commercial banks and official institutions. M-1B is M- to revision as more information becomes available. 1A plus other checkable deposits (negotiable order of withdrawal 6. Consists of borrowings from other than commercial banks accounts, accounts subject to automatic transfer service, credit union through federal funds purchased and securities sold under repurchase share draft balances, and demand deposits at mutual savings banks). agreements plus loans sold to affiliates, loans sold under repurchase M-2 is M-1B plus overnight repurchase agreements (RPs) issued by agreements, and other borrowings. Changes after October 1980 esti­ commercial banks, overnight Eurodollar deposits held by U.S. non­ mated using partial data. bank residents at Caribbean branches of U.S. banks, money market mutual fund shares, and savings and small time deposits at all n.s.a. Not seasonally adjusted. term debt—borrowing in total about as much as residential mortgage flows more than offset an in the preceding quarter. The shift toward long­ increase in the growth of consumer installment term borrowing by business firms apparently credit. Despite a sharp curtailment of offerings of reflected the desire to strengthen balance sheets, mortgage revenue bonds, total borrowing by with the cost of long-term borrowing remaining state and local governments declined only slighthigh through the quarter. In light of prevailing lyinterest rate relationships, demand for short­ Given the behavior of the money stock—and term business credit moved to the commerical particularly of reservable deposits—expansion of paper market, and business lending at U.S. nonborrowed reserves outpaced bank demands banks decelerated sharply. Borrowing by house­ for reserves through most of the quarter. Conse­ holds diminished over the quarter; a drop-off in quently, discount-window advances fell consid- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

412 Federal Reserve Bulletin □ May 1981 erably, and the federal funds rate declined from Components of Major categories of more than 20 percent in early January to less bank credit bank loans than 13^2 percent in late March before returning Change, billions of dollars to the area of 15 to 16 percent in early April. TREASURY SECURITIES BUSINESS 16 Other short-term market rates fell 4 to 7 percent­ age points by late March and then rose moderate­ n 11 n ly. Intermediate- and long-term interest rates 0 posted comparatively small movements over the OTHER SECURITIES 8 + n 0 quarter, despite the large declines in short-term n n n . B II interest rates. Many bond yields reached all-time 0 highs in early April, reflecting investor concern TOTAL LOANS 40 about inflation, uncertainty about the features of 32 the economic policies of the new administration, REAL ESTATE and the heavy long-term credit demands of both 24 a im private and public borrowers. In mortgage mar­ kets, interest rates on funds committed to con­ 16 CONSUMER ventional loans moved up about Vi percentage point to 15 Vi percent in early April. + IT 0 w M onetary Aggregates and Bank Credit 8 NONBANK financial 4 The massive shifts of funds to NOW accounts in -.11,1,1u1 -..o ...n _, + 0 the first quarter caused a sharp divergence in the growth rates of M-1A, which does not include I 24 NOW accounts, and M-1B, which does. Survey Ql Q2 Q3 Q4 Ql Ql Q2 Q3 Q4 Ql 1980 1981 1980 1981 data from depository institutions and households suggest that roughly three-fourths of the spurt of Seasonally adjusted. Total loans and business loans are adjusted for transfers between banks and their holding companies, affiliates, growth in NOW balances came from funds previ­ subsidiaries, or foreign branches. ously held in demand deposits, thus severely depressing the observed growth of M-1A. When quarter were much weaker than would have been adjustment is made for this effect, the average expected on the basis of historical relationships level of M-1A is about unchanged from the among money, interest rates, and income. The preceding quarter. A similar adjustment can be advent of NOW accounts and record interest made to the level of M-1B to deduct balances rates quite conceivably stimulated some reas­ that would have been held in savings deposits sessment by the public of its cash management and other assets had NOWs not become avail­ practices, similar to that following the introduc­ able nationwide. So adjusted, M-1B also would tion in late 1978 of automatic transfers from have been about unchanged from its fourth- savings accounts (ATS). quarter level. M-2 in the first quarter grew slightly more The weakness in the narrow monetary aggre­ rapidly than in the preceding quarter due to gates, so adjusted, occurred during a period of higher growth in the nontransaction component rapid increase in nominal spending—indeed, the of this measure. Savings deposits, little changed rise in the velocity of the M-l measures (that is, in the fourth quarter, fell sharply, but on a GNP divided by adjusted M-1A or M-1B) was the quarterly average basis, growth of small-denomilargest in 30 years. In part, this behavior may nation time deposits accelerated owing to large have reflected an ordinary lagged response to the inflows early in the quarter. As market interest rise in interest rates late in 1980. However, the rates declined, however, inflows to small time adjusted narrow monetary measures in the first deposits—including those with market-linked Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments 1981 :Q1 413 yields—dropped off at both banks and thrift Business Finance institutions. With growth of total savings and small time deposits slower than in the fourth Gross public offerings of corporate notes and quarter, expansion in the nontransaction compo­ bonds totaled $45 billion at a seasonally adjusted nent of M-2 was largely sustained by the resump­ annual rate in the first quarter, substantially tion of growth in shares of money market mutual higher than the fourth-quarter pace. Nonfinan­ funds. Such shares accounted for about three- cial businesses, principally industrial concerns, quarters of the growth of M-2 between December accounted for all of the increase, roughly matchand March. M-3 expanded in the first quarter somewhat Gross offerings of new security issues above the strong pace of the previous quarter, as Seasonally adjusted annual rates, in billions of dollars banks stepped up issuance of large-denomination 1980 1981 time deposits to finance credit expansion in the Type of security face of weakness in consumer-type deposits. Qi Q2 Q3 Q4 Qle However, when demand for bank loans weak­ Domestic corporate........................ 65 82 76 61 71 ened through the quarter, banks reduced their Publicly offered bonds.............. 29 56 44 28 45 Nonfinancial............................ 25 41 36 18 37 issuance of large time deposits and by March Financial.................................. 4 15 8 10 8 Privately offered bonds.............. 18 9 10 8 6 were paying down some of these deposits as they Stocks............................................ 18 17 22 25 20 matured. Foreign.............................................. 2 6 3 3 2 State and local On a quarterly average basis, total reserves government bonds.................. 32 58 57 43 36 available to banks and thrift institutions did not e. Estimated. increase during the first three months of the year, reflecting weakening demands for reserves as ing the decline in their borrowing in short- and growth in deposits slowed and excess reserves intermediate-term markets. The issuance of returned to more normal levels. Holdings of ex­ bonds was heavy throughout the quarter despite cess reserves had risen in late 1980, apparently in the high levels of bond yields, suggesting that association with implementation in November of corporations either did not expect a substantial the reserve aspects of the Monetary Control Act. near-term decline in rates or were unable to The System provided nonborrowed reserves in delay such borrowing. Some funding of short­ the first quarter at a slightly greater pace than term debt with capital market offerings was ac­ that of the preceding quarter. Thus, with de­ complished during the brief downturn in eco­ mands for reserves by depository institutions nomic activity in 1980, but the volume of bond declining over the quarter, borrowing at the offerings then was insufficient to alter apprecia­ Federal Reserve discount window fell from bly corporate reliance on short-term obligations. about $1.7 billion in December to less than $1 Many corporate borrowers adjusted the terms of billion by mid-March. their debt offerings in the first quarter to try to Growth in bank credit slowed in the first limit their costs of funds. The adjustments in­ quarter to about half its rapid fourth-quarter cluded a shortening in maturities, an increased pace; indeed, a small contraction occurred in volume of convertible debentures, and the use of March. The weakness in bank credit largely deeply discounted bonds.1 reflected a sharp deceleration in growth of busi­ In contrast to publicly offered debt securities, ness loans from domestic offices of U.S. banks. private placements of corporate bonds are esti­ Real estate lending slowed only slightly in the mated to have remained sluggish in the opening first quarter, while consumer lending contracted quarter of the year, as life insurance compaas it had during most of 1980. Bank acquisitions of U.S. Treasury obligations rose a bit in the quarter, in part reflecting a substantial buildup in January and February of holdings in trading 1. “Deep discount’ ’ or “original issue discount” bonds are attractive to some investors because the discount implicitly accounts at dealer banks. Bank purchases of provides substantial call protection and the below-market other securities declined during the quarter. coupon reduces reinvestment risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

414 Federal Reserve Bulletin □ May 1981 Business loans and short- and intermediate-term prime rate and rapidly falling paper rates. Out­ business credit standing commercial paper rose in the first quar­ Seasonally adjusted annual rates of change, in percent1 ter after having contracted in the preceding two quarters when the spread of the prime rate over Short- and Business loans Period at banks2 intermediate-term the commercial paper rate was exceptionally business credit3 narrow. 1974................. 19.3 23.5 As demands for business loans softened, some 1975................. -3.8 -4.0 1976................. 1.2 4.5 large banks eased their compensating balance 1977................. 10.5 13.6 1978................. 16.0 18.3 requirements and in some cases reduced mark­ 1979................. 18.1 20.5 ups over the prime rate, according to the senior 1980................. 11.4 12.4 loan officer opinion survey on bank lending prac­ 1979-Q1 21.0 21.1 Q2......... 18.1 19.8 tices taken in mid-February. To a small extent, Q3......... 20.4 26.5 Q4......... 8.6 8.9 banks also met the competition from the com­ mercial paper market more directly by increasing 1980-Q1 17.5 22.2 Q2......... -9.3 .9 their below-prime lending, according to the quar­ Q3......... 15.3 9.3 Q4......... 21.1 15.5 terly survey of terms of bank lending. Such loans typically are large, short-term credits—often 1981-Q1 8.1 13.1 overnight—to firms that have access to the com­ 1. Growth rates calculated between last months of period. mercial paper market. Nonetheless, business 2. Based on monthly averages of Wednesday data for domestically chartered banks and an average of current and previous month-end loans at large banks contracted in the first quar­ data for foreign-related institutions. Adjusted for outstanding amounts ter. Some of the decline in lending booked do­ of loans sold to affiliates. Includes holdings of bankers acceptances. 3. Short- and intermediate-term business credit is business loans of mestically was offset by increased loans to U.S.commercial banks plus nonfinancial commercial paper plus finance domiciled business firms by foreign branches of company loans to businesses and bankers acceptances outstanding outside banks. Commercial paper is prorated average of Wednesday U.S. banks, as firms took advantage of relatively data. Finance company loans and bankers acceptances outstanding attractive Eurodollar rates that, like commercial are averages of current and previous month-end data. paper rates, fell more quickly than the prime rate in the first quarter. nies—the principal suppliers of private place­ ment financing—continued to experience liquid­ ity pressures. A continuing high level of policy Government Finance loans, together with uncertainty regarding future rate movements, has made insurers reluctant to The gross volume of bonds issued by state and acquire long-term fixed-rate assets. At the begin­ local governments fell about 15 percent in the ning of this year, the amount of outstanding first three months of this year, with the weakness insurance company commitments to buy bonds concentrated in housing-related issues. The vol­ was less than half its level at the beginning of ume of mortgage revenue bonds brought to mar­ 1980. ket fell from an average of $3.2 billion per quarter Following a dip early in the quarter, stock last year to $700 million in the first quarter, as prices moved sharply higher in March; the major statutory restrictions on these offerings took indexes finished the quarter 1 to 4 percentage effect on January 1, 1981.2 The volume of non­ points above year-end levels. In this environ­ housing issues increased in the first quarter with ment, corporations continued to issue large the sale of a number of issues that had been amounts of equity shares in the first quarter—$20 billion at a seasonally adjusted annual rate—with industrial firms accounting for roughly half of the 2. The restrictions establish several criteria that must be met if interest paid on a mortgage revenue bond is to remain total. exempt from the federal income tax. The criteria include In short-term markets, businesses found bor­ limitations on the volume of mortgage revenue bonds issued rowing through the issuance of commercial paper by governmental units, restrictions on the spread between mortgage rates and the original cost of borrowing, and increasingly attractive during the first quarter as various other limitations on eligibility with respect to the the spread widened between the slowly declining value and location of homes and the types of homebuyers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments 1981 :Q1 415 deferred from the fourth quarter when housing- mitments at or above market rates on mortgages. related issues dominated municipal market activ­ Borrowing by the Federal Home Loan Banks, ity and municipal bond rates reached record about $1.5 billion, was at the same first-quarter levels. Yields on municipal bonds fell sharply in pace as in recent years. The Federal Home Loan late December and early January, but throughout Banks used this borrowing to rebuild liquidity the rest of the quarter the yields retraced much of and to finance advances of about $200 million that decline. over the quarter. (The increase in advances In the first quarter, the combined federal bud­ outstanding was quite sizable on a seasonally get deficit exceeded $38 billion, and the Trea­ adjusted basis, reflecting the weakness of deposit sury’s financing needs were augmented $2 billion flows at thrift institutions.) by redemptions of savings bonds. The Treasury raised about $38 billion by selling marketable securities in the first three months of the year, Mortgage and Consumer Finance meeting the rest of its requirements with a fur­ ther rundown in its cash balance. The net in­ Net mortgage formation dropped sharply in the crease in marketable debt was about evenly first quarter. Much of this reduction reflected divided between coupon and bill issues; about cutbacks in lending by thrift institutions, which half of the bills were scheduled to mature in the in the aggregate experienced net outflows of second quarter with the seasonal rise in Treasury deposits before crediting interest to deposits and tax receipts. a further erosion of earnings positions. Commer­ Federally sponsored credit agencies borrowed cial banks reduced their net mortgage lending $2.6 billion (not seasonally adjusted) in the first about one-third, after a strong pickup in the quarter, less than half of the average for the first fourth quarter. quarter in the past few years. The slowing in The higher cost and relative scarcity of mort­ agency borrowing was substantial at the Federal gage credit have encouraged the use of a number Farm Credit Banks and the Federal National of “creative” financing techniques. Arrange­ Mortgage Association (FNMA). Cutting its bor­ ments whereby individual home sellers “take rowing almost $1 billion, FNMA made virtually back” a second mortgage in order to facilitate no net mortgage purchases in the first quarter. the assumption of low-rate first trusts have be­ This reflected both low levels of outstanding come increasingly widespread. In addition, lend­ commitments by FNMA and rates on these com­ ing institutions have used “wraparound” agree­ Federal government borrowing and cash balance Not seasonally adjusted, in billions of dollars 1979 1980 1981 Item Qi Ql Q2 Q3 Q4 Ql Treasury financings Budget surplus, or deficit (-).......... -20.4 -27.1 8.1 -15.4 -33.6 -32.1 Off-budget deficit1................................ -3.0 -3.8 -4.4 -4.9 -2.2 -6.4 Combined deficit................................ -23.4 -30.9 3.7 -20.3 -35.8 -38.5 New cash borrowings, or repayments (-)............................ 10.62 -19.1 5.4 27.1 27.7 35.8 Other means of financing3.................. 4.2 4.1 -3.2 .1 -.6 1.1 Change in cash balance...................... -8.6 -7.7 5.9 6.9 -8.7 -1.6 Federally sponsored credit agencies, net cash borrowings4.................. 6.3 8.6 5.1 2.2 8.9 2.6e 1. Includes outlays of the Pension Benefit Guaranty Corporation, 3. Checks issued less checks paid, accrued items, and other trans­ Postal Service Fund, Rural Electrification and Telephone Revolving actions. Fund, Rural Telephone Bank, Housing for the Elderly or Handi­ 4. Includes debt of the Federal Home Loan Mortgage Corporation, capped Fund, and Federal Financing Bank. All data have been Federal Home Loan Banks, Federal Land Banks, Federal Intermedi­ adjusted to reflect the return of the Export-Import Bank to the unified ate Credit Banks, Banks for Cooperatives, and Federal National budget. Mortgage Association. 2. Includes $2.6 billion of borrowing from the Federal Reserve on e. Estimated. March 31, which was repaid April 4 after enactment of a new debtceiling bill. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

416 Federal Reserve Bulletin □ May 1981 ments that combine existing first mortgages with Net change in mortgage debt outstanding new second mortgages at higher interest rates to Seasonally adjusted annual rates, in billions of dollars achieve overall financing packages below current 1980 1981 rates on new mortgages. However, the use of Mortgage debt assumptions and other creative financing tech­ Ql Q2 Q3 Q4 Qie niques that allow low-rate loans to remain out­ By type of debt standing has been limited in some states by Total.......................................... 151 74 123 152 128 Residential............................ 104 44 95 116 94 lender enforcement of “due-on-sale” clauses in Other1.................................... 47 30 28 36 34 By type of holder first mortgages that terminate the mortgage Commercial banks.................. 32 5 12 29 20 Savings and loans.................. 26 * 39 45 33 agreement on sale of the property used in secur­ Mutual savings banks............ 2 * -1 1 1 ing the loan. Life insurance companies ... 16 13 11 10 10 FNMA and GNMA................ 12 8 * 9 4 New mortgage lending commitments by de­ GNMA mortgage pools........ 18 17 19 16 14 FHLMC and FHLMC pools . 3 3 5 1 2 pository institutions also were down substantial­ Other2........................................ 42 28 38 41 44 ly from the fourth-quarter pace. The volume of 1. Includes commercial and other nonresidential as well as farm new commitments at savings and loan associa­ properties. tions in March was only about half the Septem­ 2. Includes mortgage companies, real estate investment trusts, state and local credit agencies, state and local retirement funds, ber 1980 peak. By early April, the average inter­ noninsured pension funds, credit unions, Farmers Home Administra­ est rate on new commitments for conventional, tion and Farmers Home Administration pools, Federal Land Banks, Federal Housing Administration, Veterans Administration, and indi­ fixed-rate home mortgages had risen to 15 V2 viduals. percent, and the ceiling rate for level-payment e. Partially estimated. * Between $0.5 billion and $-0.5 billion. mortgages underwritten by the Federal Housing Administration and the Veterans Administration was raised from 13 V2 percent in March and to posting a 21 percent rate of increase. At commer­ 141/2 percent in April. cial banks, consumer lending contracted again as Consumer installment credit outstanding ex­ bank rates for installment loans—especially for panded at about a 6 percent annual rate in the automobile financing—rose sharply during the first quarter, extending the slow recovery in first quarter to about the record level of last consumer credit into its third consecutive quar­ spring. Loan rates at automotive finance compa­ ter. Finance companies, led by subsidiaries of nies increased less, probably because of efforts automobile manufacturers, paced the growth, to bolster car sales by the parent firms. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

417 Industrial Production Released for publication May 15 coal output. Output of durable goods materials rose nearly 1 percent in April; this advance, Industrial production increased an estimated 0.4 reflecting gains in the output of parts for consum­ percent in April, after upward revised changes in er durables and for equipment, was not quite so February and March of -0.1 and 0.5 percent large as that in March. Production of nondurable respectively. In April, increases in output were goods materials, such as paper and textiles, widespread among most market groupings, but increased slightly in April, after declines in the the coal strike reduced the growth in the total Seasonally adjusted, ratio scale, 1967= 100 index about 0.3 percentage point. At 152.8 per­ cent of the 1967 average, the April index was 3.0 percent above its level a year earlier and 0.5 percent below its prerecession peak in March 1979. In market groupings, output of consumer goods rose 0.8 percent in April, as auto assem­ blies increased about 5 percent to an annual rate of 6.8 million units. Production of home goods, such as appliances, edged off, but output of consumer nondurable goods advanced further. Production of business equipment, particularly manufacturing, commercial, and building and mining equipment, increased sharply in both March and April. The rise in defense equipment also was large in April. Output of construction supplies was little changed for the third succes­ sive month; production of these supplies was about 8 percent below the level in March 1979. Production of total materials declined 0.3 per­ Federal Reserve indexes, seasonally adjusted. Latest figures: April. cent in April, reflecting a drop of 50 percent in Auto sales and stocks include imports. 1967 = 100 Percentage change from preceding month Percentage change, Grouping 1981 1980 1981 Apr. 1980 to Mar.p Apr.e Dec. Jan. Feb. Mar. Apr. Apr. 1981 Total industrial production ... 152.2 152.8 1.1 .5 -.1 .5 .4 3.0 Products, total........................ 151.2 152.4 .8 .3 -.2 .8 .8 4.0 Final products...................... 149.4 150.9 .5 .0 -.3 1.0 1.0 3.8 Consumer goods.............. 148.5 149.7 -.2 -.3 -.1 1.0 .8 3.0 Durable.......................... 142.8 143.8 -1.1 -1.8 .1 2.7 .7 5.5 Nondurable.................. 150.8 152.0 .1 .2 -.2 .4 .8 2.2 Business equipment........ 180.4 182.6 1.9 .6 -.4 1.2 1.2 4.8 Defense and space.......... 100.8 102.0 .9 .3 -.6 .4 1.2 4.5 Intermediate products........ 157.7 158.1 1.7 1.0 -.1 .1 .3 4.8 Construction supplies ... 147.6 147.5 1.3 1.9 -.1 .2 -.1 5.8 Materials.................................. 153.9 153.4 1.4 .8 .1 -.1 -.3 1.6 p Preliminary. e Estimated. Note. Indexes are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

418 Federal Reserve Bulletin □ May 1981 Major market groupings 1967 = 100 Percentage change from preceding month Percentage change, Grouping 1981 1980 1981 Apr. 1980 to Mar.p Apr.e Dec. Jan. Feb. Mar. Apr. Apr. 1981 Manufacturing.......................... 151.9 152.8 1.0 .3 .0 .5 .6 3.3 Durable.................................. 142.4 143.6 .9 .6 -.6 1.3 .8 3.8 Nondurable.......................... 165.6 166.2 1.0 .1 .7 -.4 .4 2.8 Mining....................................... 142.9 135.9 2.4 1.3 1.1 .1 -4.9 2.1 Utilities...................................... 169.3 170.2 -.7 .4 -1.7 .7 .5 .7 p Preliminary. e Estimated. Note. Indexes are seasonally adjusted. two preceding months. Output of energy materi­ production of machinery, fabricated metals, and als excluding coal was about unchanged; includ­ autos and related parts. Production by nondura­ ing coal, it declined 4.5 percent. ble goods industries increased 0.4 percent, after In industry groupings, manufacturing output a decline of that magnitude in March. Mining increased 0.6 percent in April, after a similar rise output fell almost 5 percent because of the coal in March. Durable goods manufacturing ad­ strike. Output of utilities increased 0.5 percent in vanced 0.8 percent in April, reflecting rises in April. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

419 Statements to Congress Statement by Frederick H. Schultz, Vice Chair­ fortunately proved to be short lived, it still left man, Board of Governors of the Federal Reserve banks with some problem credits. This past year System, before the Committee on Banking, banks also have had to contend with unusually Housing, and Urban Affairs, U.S. Senate, volatile interest rates. These volatile rates have April 28, 1981. severely tested the ability of bank management to maintain interest margins through a careful It is a pleasure to appear before this committee to balancing of rate-sensitive assets and rate-sensidiscuss briefly the condition of the banking sys­ tive liabilities. Banks also have had to cope with tem, to make some general remarks about the the nationwide introduction of interest-bearing regulation of banking, and to present the Federal negotiable order of withdrawal (NOW) accounts, Reserve Board’s views concerning recently en­ as well as a continuing shift from low-cost sav­ acted statutes affecting the banking industry. ings deposits to much higher-cost money market As you know, quite a number of major pieces certificates. Finally, banks have encountered of banking legislation have been enacted into law sharply increased competition from money mar­ over the past several years. Some of these new ket mutual funds, foreign banks, thrift institu­ laws are already having a far-reaching effect on tions, and the commercial paper market. This financial institutions and will cause even greater increased competition has tended to put down­ changes in the years ahead. Others will have less ward pressure on bank profit margins. dramatic impact on the structure of our financial Overall, commercial banks appear to have system, but will affect, on an ongoing basis, the come through these difficult times quite well. day-to-day conduct of business. It is, of course, The number of bank failures last year was below not possible to assess fully the impact of these the level experienced in the mid-1970s, and con­ laws at this early date. However, we can provide tinues to be well within the acceptable range. some general thoughts on our experience and can Moreover, our examinations of state member identify some areas where adjustments may be banks last year revealed that these banks were in needed. This discussion appears in the appen­ generally good financial condition, with only 2 dix.1 I will confine my remarks to the condition percent receiving an unsatisfactory overall ex­ of the banking system and the general—and very amination rating. Also, even in the face of the difficult—issue of the appropriate extent of gov­ considerable adversity that banks experienced ernment regulation of banking. this past year, bank earnings in 1980 reached an all-time high of $14 billion, up 9 percent over 1979. Condition of the Banking System Amid these generally favorable results, how­ ever, several recent unfavorable developments During the past year or so, commercial banks have occurred that should not be ignored. First, have had to operate in a particularly difficult evidence exists of some deterioration in the economic and financial environment. In the quality of bank loan portfolios. This deteriora­ spring of last year, the economy was subjected to tion was reflected in a 40 percent increase in an unusually sharp recession and a rapid rise in banks’ net loan charge-offs last year. Major unemployment. While this economic downturn factors contributing to higher charge-offs were sizable write-downs of several large corporate credits and a sharp rise in consumer loan de­ 1. The appendix to this statement is available on request faults. Problems in the consumer credit area are from Publications Services, Board of Governors of the Feder­ al Reserve System, Washington, D.C. 20551. due partly to higher unemployment and heavier Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

420 Federal Reserve Bulletin □ May 1981 debt service burdens, and partly to the recently Thrift Industry Problems liberalized personal bankruptcy laws. Some con­ cern has been expressed about the continuing Your letter of invitation also requested informa­ large balance of payments deficits and financing tion on the problems currently faced by thrift needs of some countries that are already heavily institutions. The Federal Reserve’s primary su­ indebted to U.S. or to other banks. Over the near pervisory responsibility, of course, is with com­ term, loans to several of these countries may mercial banks, and I am sure that the other have to be rescheduled. However, it should be regulators here today will provide much informa­ noted that U.S. bank loan losses in the interna­ tion on the current and prospective state of the tional area have been relatively low in recent thrift institutions. I would note only that the high years, and that the exposure of U.S. banks to level of interest rates induced by inflation in developing countries that are not members of the combination with large amounts of low-rate, Organization of Petroleum Exporting Countries, long-term assets on the books of many of these relative to their capital, has not increased signifi­ institutions has brought deteriorating earnings cantly in the last several years. All in all, given for thrift institutions in 1980 and so far in 1981. the continuing high level of consumer bankrupt­ As market interest rates have risen, virtually all cies and the financial problems experienced by of the deposit growth at these institutions has some relatively large as well as small businesses, been in the form of instruments whose rates are it seems possible that loan losses this year may tied to market rates. Deposit costs have conse­ well equal or exceed the 1980 experience. quently risen sharply, leading first to reduced A second area of concern is the continuing earnings and, most recently, to outright operat­ attrition in the capital ratios of many of our ing losses for a good many institutions. In the largest banks. This downtrend, while apparently meantime, thrift institutions, in the aggregate, slowing, has continued with little interruption for have maintained relatively strong liquid asset the last decade or so. Though earnings capacity holdings, in part to minimize operating losses provides the first line of defense against unex­ given downward sloping yield curves, and in pected asset problems, shrinking capital ratios particular to bolster liquidity in the event that also mean that a smaller cushion exists to absorb deposit outflows were to occur. large losses and protect those who have supplied Thus, although deposit inflows to the thrift funds—many in amounts well above insurance institutions have slowed in recent months, the protection by the Federal Deposit Insurance basic problem facing the industry is still earnings Corporation—to these large banks. Given the rather than liquidity. This earnings pressure pri­ difficult economic and financial environment, the marily reflects the mismatch in the asset liability Board believes that further declines in the al­ structure of thrift institutions, and the pressure ready low capital ratios of large banks generally will be lessened only by slowing inflation or by a must be resisted as a matter of regulatory policy. basic restructuring of thrift institution asset port­ Indeed, we should strive for some improvement folios, both of which will take some time. The over the next few years. Federal Reserve, the other regulatory agencies, It is, of course, difficult for many banking and the administration have been discussing organizations to go to the equity capital markets ways of dealing with any particular problems that in view of the depressed stock prices relative to may arise during the period ahead, including book value. However, these banks have a num­ legislative changes that may be necessary to ber of ways to improve their capital ratios— assure that the appropriate regulatory agencies including slowing down their rate of growth. This have fully adequate power. deceleration not only would improve capital ra­ tios but also would tend to dissuade banks from extending credit to more marginal borrowers at The Problem of Banking Regulation questionable spreads. I might also add that a deceleration in asset expansion by the large A general perception exists, which I share to a banks would be consistent with the national goal considerable degree, that the regulation of finan­ of getting our inflation under control. cial institutions has become too pervasive and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 421 that the cumulative effect of the numerous spe­ the total context of existing government require­ cific laws and regulations—each well inten- ments. Each of these laws, taken on its own, has tioned—has become so burdensome as to raise seemed reasonable, responsive to a general prob­ questions as to whether the effects on competi­ lem, and not overly costly. But the effects have tion and efficiency are not counterproductive. been cumulative, and adding one seemingly man­ Some danger exists that worst-case effects may ageable burden on top of another has created a be cited from time to time as justification for regulatory burden that may, in the aggregate, not elimination of regulation that truly fulfills a legiti­ be manageable, particularly for smaller and me­ mate purpose. Nevertheless, I am concerned dium-sized institutions. that we may have gone too far in certain areas, The problem is the same one that for years and have not adequately focused on the full plagued the budget process when each appropri­ extent of the government regulations that apply ation was considered separately. In calling for to an individual institution. We also may need to individual appropriations of business resources appraise realistically the new competitive forces to government regulations, we have not been arising in the marketplace and consider whether mindful enough of the limits on the total available some of the historic restrictions on banking ac­ resource budget. In the future, we will need to tivity are still justified. make sure that we examine new proposals in the Even a small bank, for example, is covered not total context of the aggregate regulatory burden only by rules of the banking agencies, but it now being carried—and we must be certain that would also be subject to regulations issued by the in attacking one admitted problem, or in re­ Treasury Department, the Labor Department, sponding to the concerns of one constituency, the Department of Housing and Urban Develop­ we are not imposing across-the-board burdens at ment, the Department of Health and Human a cost that outweighs the benefits of the rule. Services, the Securities and Exchange Commis­ sion, and at least 10 other federal agencies. It may also be subject to various state and local ordinances. Possible New Approaches Of course, the bank is only theoretically sub­ ject to some of these rules because it may not be We will also need to search more diligently for engaging in all the particular practices that they new ideas for the administration of regulations address. But even if a particular rule has little and be prepared to rely on alternatives—most relevance to the bank’s operations, someone fundamentally the competition that often can must determine this and in some cases must provide the needed discipline now provided by monitor the bank to insure that some change in government rules. Without necessarily endorsing its operations does not subject it to the rule. them, let me mention a few ideas that the com­ Even if the bank’s operations do not change, the mittee might wish to explore as a legislative federal rules are very likely to. Most federal response to the problem. regulations are amended from time to time—and The fact that no orderly process exists to some quite often. By our count, a small national review and evaluate periodically the current bank received more than 100 pieces of proposed body of banking law surely contributes to the or final regulatory material last year from the regulatory problem. One possible approach banking agencies alone. In summary, we have would be to set a firm schedule for reviewing— probably placed burdens on some institutions— statute by statute—the entire body of banking particularly small ones—that they cannot ade­ law. Specific expiration dates might even be quately shoulder. attached to some, but certainly not all, provi­ The regulatory problem probably begins with sions. Although the Board has serious reserva­ our fundamental approach to new rules. In gen­ tions about any across-the-board sunset provi­ eral, we tend to focus on each one in isolation. sions that would create uncertainty in the When new laws are considered, the burden of implementation of monetary policy, oversight of each statute is evaluated—often quite thorough­ the Federal Reserve Banks, or supervision of ly, but nearly always separately rather than in member banks or bank holding companies, even Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

422 Federal Reserve Bulletin □ May 1981 these laws could benefit from reexamination subject. The Board is well aware that a bolder according to a set schedule. approach to federal preemption in the consumer The designated review might be coupled with credit field runs counter to some of the current the call for a regulatory impact study before the sentiment for less federal involvement in local review date—a time, in fact, more appropriate matters. One response, of course, would be for than the current timing of such studies, which is federal authorities to refrain from legislating in generally before enactment of the implementing certain areas, or to withdraw from some areas in regulation and therefore usually before the avail­ which it has legislated, leaving consumer regula­ ability of any real data on operational costs. tion solely to the states. The defect in this Another technique that might be considered approach is the damage it would do to the would be to have the Congress attach a specific nationwide comparability of credit terms, and authorization to certain provisions of law giving the increased compliance burdens this might the rulewriting agency the power to suspend the place, in some cases, on interstate business. provision on an experimental basis. The agency While the issue is certainly a complex one, and could act if it believed that the congressional would require careful study, the Board believes purpose behind the statute was likely to be that it may be time to consider a more sweeping generally met without continuing a particular preemption of state consumer laws in the areas in government requirement. Such an authorization which the Congress has chosen to regulate. might be attached to existing legislation when the Any rethinking of the proper approach to Congress thought that it would be premature, regulation must take account of the increased and perhaps unwise, to totally repeal legislation competition we now see developing among but when there were some doubts about its banks, between banks and other financial institu­ necessity. Acting under such authority, the agen­ tions, and between banks and nonbanks that are cy might suspend particular provisions long offering expanded financial services. The Depos­ enough to see whether the “right” behavior itory Institutions Deregulation and Monetary would continue without the cost and rigidity of Control Act has radically changed the possibility the governmental mandate. Should this not be for “regulation” through the pressures of a com­ the case, the provision could then be reimposed. petitive marketplace rather than government ac­ Since the burden of regulation falls most heavily tion. It allows both banks and thrift institutions on small institutions, special attention needs to be to offer checkable interest-bearing accounts to given to this area. The Congress probably should consumers; it broadens the range of permissible consider authorizing special treatment—or even lending activities for thrift institutions; and it exemptions—more frequently for small institutions provides for the dismantling of interest-rate ceil­ in connection with new legislation. Existing stat­ ings. It has increased the number of institutions utes should also be reviewed to explore the possi­ offering bank-like services to consumers from bility of adding such provisions. Not all legislation, about 14,000 to about 40,000. In doing so it has by any means, will lend itself to such an approach, raised new questions about whether all the his­ but certainly there are possibilities. We have iden­ toric limits on branching by banks and thrift tified one with regard to the Monetary Control institutions, the chartering of new depository Act—a small-institution exemption. We previously institutions, and mergers and acquisitions are have suggested to this committee that a small- appropriate, and whether they too should be business exemption be provided in the Home reexamined with an eye to further intensifying Mortgage Disclosure Act by refocusing the current the competitive environment. $10 million exemption from a total asset test to a Competition to attract deposits, to make loans, mortgage portfolio test (coupled with provisions and to provide other financial products will en­ to require reporting by large institutions—say, courage the provision of services and informa­ more than $100 million in assets—regardless of the tion that many bank customers need and are size of the portfolio). willing to pay for. Competition will not insure Finally, one of the continuing problems—par­ perfect results, as measured relative to some ticularly in consumer legislation—is the overlap ideal, but neither does regulation. Competition of state and federal law that covers the same itself may offer results that are acceptable when Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 423 measured against the cost and imperfect success tives, the statutory and regulatory constraints of government-regulated behavior, particularly have taken a variety of forms. They can be when the benefits from freedom-induced innova­ broken down roughly into four categories. tion over time are taken into account. If enough First are the limits on market entry, and prod­ customers of all types are willing to pay for a uct and geographic diversification, which have service or disclosure, some institution will prob­ long been a part of the banking landscape. These ably try to enhance its competitive position by restrictions were designed to implement the his­ offering such a service. This has been the case, toric separation of banking and commerce (and for example, with the provision of credit docu­ of banking and investment banking), which has ments in “plain English,” which in several local­ been the cornerstone of our approach to banking ities preceded the mandatory introduction of the in this country. In addition, these restrictions requirement. have sought to protect local markets and local institutions from competition, which was per­ ceived to be adverse; they are found in the The Proper Role of Regulation National Bank, Glass-Steagall, and Bank Hold­ ing Company Acts—most recently in the Interna­ Although we have reached a point where we tional Banking Act—and in other bedrock pieces must be rigorous in examining the need for all the of banking legislation. Regulation Q restraints, various regulations—and must explore the possi­ which were extended to protect thrift institutions bility of less costly alternatives—we must not and to promote the flow of funds to housing at lose sight of the important objectives that low rates in the mid-1960s, might also be consid­ prompted many of the rules under which finan­ ered to be in this category. The Depository cial institutions operate. Many regulations serve Institutions Deregulation Act has, of course, set legitimate—even vital—functions that the Con­ in motion a gradual phaseout of this last deposit gress has decided could not be served in any regulation. other way. These laws and regulations create Although the Board does not foresee any need rights and provide protections that we cannot to question the underlying premise that banking otherwise be assured of having. Our banking and true commerce should be separated, certain regulations, like all regulations, set a minimum events—like the phenomenal growth of money standard of conduct that we expect of our depos­ market funds and the recent large, hybrid finan­ itory institutions. It may be that good business cial marriages—compel a reexamination of some practice, or a sense of fairness, would induce the of our traditional notions of what constraints same behavior on the part of the vast majority of should be placed on the banking industry’s abili­ institutions without the burdensome costs of ty to offer a broad array of financial services. In some of these rules. Much of the debate about addition, it is time to give serious consideration deregulation will undoubtedly be spent speculat­ to whether all the geographic restrictions on the ing about whether government rules are truly banking industry, which were enacted in a far needed. But none of us can say for sure that different economic environment, are still suitable “fairness” or “common sense” or “good busi­ today—particularly given the nationwide pres­ ness”—or even more vigorous competition—will ence of some nonbank competitors. give us the benefits that regulation, for all its The second general category of banking regu­ burdens, now insures for us. There is no question lation might be termed the “prudential” regula­ that financial institutions are carrying a heavy tions. These laws are designed to insure the load of regulations, but we must not be too quick safety and soundness of financial institutions. to assume that because the burden at times is They include many of the restrictions found in heavy, all of it is necessarily uncalled for. the National Bank Act, the Federal Reserve Act, Banking has been a highly regulated industry and the Federal Deposit Insurance Act. The because of the unique role banks play in the provisions in the Financial Institutions Regula­ economy. The structure of that regulation has tory and Interest Rate Control Act (FIRA) deal­ been evolving for more than 100 years. Because ing with such matters as insider loans, over­ they have been directed to quite different objec­ drafts, and the misuse of correspondent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

424 Federal Reserve Bulletin □ May 1981 relationships also fall within this category. In to deal with the perceived inequities in the provi­ general, we do not foresee the need for a major sion of financial services to women, minorities, overhaul of the safety and soundness require­ and low- and moderate-income individuals. We ments, although we have identified some of the have recently concluded a major revision of the more technical changes that could improve some Truth in Lending regulations, pursuant to the titles of FIRA. Truth in Lending Simplification and Reform Act, The third category of regulation includes the which we believe will improve substantially one legislation imposing reserve requirements and of the major categories of consumer regulations. related restrictions to facilitate the conduct of Some other possibilities for change may also be monetary policy. Our most recent embodiment worth exploring—for example, in the Electronic of this is, of course, the Monetary Control Act, Fund Transfer Act. which has considerably expanded the relation­ This has been, of course, the briefest over­ ship between the Federal Reserve and the na­ view. All of the possible changes I have touched tion’s financial institutions. In the rapidly chang­ on would need to be examined in some detail, ing environment we are in, we will need to and we would, of course, be pleased to partici­ observe developments very closely to determine pate in that effort. In the appendix we have if any changes should be made to this legislation, focused more specifically on our experience with other than possibly an exemption of small institu­ recent legislation. In some cases, we have made tions from reserve requirements. specific suggestions for improvement. We would Fourth is the large body of consumer protec­ welcome the committee’s guidance on its prior­ tion legislation of the past decade, which was ities for legislative review, and I can assure you passed to insure important consumer rights and of our full cooperation in that process. □ Statement by Nancy H. Teeters, Member, Board attracted less public attention. Two basic rea­ of Governors of the Federal Reserve System, sons for this lack of attention exist, I believe. before the Subcommittee on Economic Stabiliza­ First, the economic impacts of federal credit tion of the Committee on Banking, Finance and programs are not generally well understood. Sec­ Urban Affairs, U.S. House of Representatives, ond, even though a credit control system and a April 30, 1981. credit budget are now published in the budget documents and reviewed by the Congress, they It is a pleasure to be here to present the Federal still receive relatively little publicity compared Reserve Board’s view on the budgeting and with that given to unified budget outlays. As a control of federally assisted credit. This is a result, the public is not so acutely aware of the particularly propitious time to consider such recent rapid growth of such programs. programs. Given the serious inflation problem currently plaguing our nation, it is imperative that growth in money and credit be held to a Growth of moderate pace. And thus, within this context, Federal Credit Programs every effort must be made to insure that federal credit as well as federal spending is carefully As you know, Mr. Chairman, federal credit evaluated and appropriately constrained in order programs have expanded enormously, both in to avoid creating serious dislocations in financial amount and in scope in recent years. Direct loans markets. and loan guarantees outstanding, for example, Wide public recognition now exists of the need are projected to total more than $540 billion in to impose effective discipline over the budget. the fiscal year ending this September. This This is reflected in the strong support that has amount is nearly triple the $190 billion level been given to the President’s proposed spending reached just 10 years ago. In addition, loans held cuts. The need to impose tighter controls on by government-sponsored agencies now are pro­ federal credit programs, on the other hand, has jected to run about $170 billion at the end of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 425 fiscal year 1981, up $20 billion from last year and the interest subsidy on new direct loan obliga­ more than four times the level of 10 years earlier. tions and commitments to guarantee loans in the Federal credit activities, moreover, are projected current fiscal year will amount to almost $27 to continue growing rapidly in the years ahead. billion. In contrast to the home mortgage area, The January budget projected that net credit moreover, the default rate in some of these advanced under federal auspices—direct, guar­ programs—such as student loans and assistance anteed, and sponsored—would total more than for low-income housing—has been comparative­ $100 billion during fiscal year 1982. The new ly high. Thus, the government has had to absorb administration has announced its intention to sizable default losses in addition to providing a reduce this growth. Even so, if total credit flows very large interest rate subsidy to borrowers. In in the coming years were to roughly match those the past few years, the federal government has of the past year, funds obtained under federal also guaranteed sizable loans—that carry a large credit assistance will account for more than one- potential for default—to corporate and municipal fourth of the total net funds raised by nonfinan­ borrowers. cial borrowers. The widening range of economic activities assisted by federal programs is also noteworthy. Impacts of In the late 1950s, the home mortgage guarantee Federal Credit Programs programs of the Federal Housing Administration (FHA) and the Veterans Administration (VA) Since the general purpose of federal credit pro­ accounted for 90 percent of the total volume grams, obviously, is to enable individual borrow­ outstanding of guaranteed and insured loans. ers or groups of borrowers to obtain credit that This proportion has since trended down and is would otherwise be unavailable to them or only expected to reach about 73 percent at the end of available at a higher cost, it follows that these the fiscal year, mainly because of an expansion programs will generally tend to increase credit of loan guarantees into new areas—such as mili­ use by program beneficiaries and to reduce the tary sales and student loans. availability of credit to others. The extent to The provision of federal credit assistance which “crowding out” takes place, however, through direct loans and loan guarantees to depends importantly on the state of conditions in achieve particular social and economic objec­ the economy and financial markets. During re­ tives has been widely recognized as a legitimate cessionary periods when credit supplies are and valuable activity. Many credit programs readily available, credit assistance may work originally were established to correct imperfec­ mainly to enable borrowers to obtain additional tions in capital markets that denied credit to funds that can be used to increase demands for some groups or made its cost prohibitive. For goods or services. example, the FHA-insured loan programs were Thus, in these periods the net result of such devised during the Great Depression to reduce programs may, to a great extent, promote a more the risks perceived by lenders. By pooling risks intense use of resources and an expansion in across a large number of loans issued in a stan­ economic activity rather than a transfer of credit dard fashion, the government program encour­ (and resulting effective demand) from one bor­ aged private lenders to advance credit at a lower rower to another. In times when less slack exists cost to borrowers and on less restrictive terms in resource utilization and credit market condi­ than would otherwise have been possible. Over tions are relatively tight, however, a much great­ time, these more liberal terms gained general er tendency exists for credit extended under acceptance among all types of private lenders. federal auspices to channel loanable funds, and Many other federal credit assistance programs therefore command over real resources, toward have been introduced over subsequent years to assisted borrowers and away from others. In foster social objectives. Increasingly, these pro­ other words, just as private borrowers can, at grams have involved substantial interest subsi­ times, be crowded out of credit markets when dies. According to estimates by the Office of federal outlays are financed through the issuance Management and Budget, the present value of of Treasury debt, so can they when selected Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

426 Federal Reserve Bulletin □ May 1981 borrowers obtain loans with the assistance of the subsidy indicates that net demands on real re­ federal government. sources and credit markets are relatively little That last comparison is worth further consid­ affected by the guarantee program. Many cases eration because it demonstrates that federal obviously fall somewhere between these two credit assistance, in some cases, serves as a extremes. Compare the effects of direct federal close substitute for debt-financed federal spend­ loans and outright grants-in-aid. In both cases ing. Consider, for example, a situation in which beneficiaries gain immediate command over the Congress was contemplating expanding the goods and services. But the major difference program in which the federal government guar­ between the two approaches—that in the case of antees debt issued by state and local authorities the loan the government obtains a claim on the who then use the proceeds to provide low-cost beneficiary while it does not with the grant—is housing to the poor. Many of the end results of an important distinction. It is, of course, a dis­ such an expansion would be quite similar to tinction without substance in those cases when those that would be observed if the federal the borrower defaults. government were, alternatively, to increase its In general, those credit programs that, when direct spending to undertake the construction of carefully analyzed, have characteristics most the rental units and were then to rent space on a closely analogous with those produced by federal subsidized basis. Note that under either ap­ outlays will also tend to have similar impacts on proach construction funds would be provided by total spending in the economy and on credit private investors either through the acquisition market pressures in the short run. The closeness of federally guaranteed securities or by acquiring of the analogy, moreover, appears to depend less more Treasury securities than otherwise; the on whether the aid in question is provided same essential type and volume of productive through direct loans or loan guarantees than on resources would be used to construct the rental such things as creditworthiness of beneficiaries, units; and low-income families would be provid­ the size and riskiness of the undertaking, and the ed with better housing than they are otherwise relative ability of the beneficiaries to tap private able to obtain. While stressing basic similarities, credit sources on their own. however, I should also note some important Nevertheless, it should be clear that all credit differences. The most important is that loans programs, to a greater or lesser degree, have the must be paid back. In addition, responsibility for potential to affect the size and composition of construction of the rental units and for the subse­ demands for goods and services in the economy, quent supervision of their operation is vested to realign the flow of credit funds in the econo­ with state and local governments under the credit my, and to add to strains on credit markets. programs and thus important advantages, gained Accordingly, these programs should be given the by familiarity with local conditions, are probably same careful attention that the Congress devotes obtained. On the other hand, interest paid on the to on-budget federal spending. debt instruments issued by states and localities under the program is not subject to federal tax as it would be on a direct debt issue of the federal Budgetary Control government, so that net tax revenues are re­ of Federal Credit Activities duced. Of course, other credit programs have much As you know, Mr. Chairman, congressional re­ less similarity to noncredit federal spending. For view and control of federal credit activities have example, homebuyers who take out mortgages been evolving over time. The utilization of the under federal guarantees could, in most in­ “unified budget” concept, beginning with the stances, obtain private credit without the guaran­ 1969 budget, is one notable watershed. At that tee, albeit at a slightly higher rate. Providing time, the government adopted for control pur­ roughly equivalent assistance through direct fed­ poses a budget framework that was, in most eral spending in this case would require the respects, a cash accounting system. In making federal government to give homebuyers only a this choice, it decided (after considerable debate) modest interest subsidy. The small size of this to include the net outlays of all direct lending Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 427 programs on the budget. This new approach, and presented in the budget for gross new direct however, was uncomfortably silent on how fed­ loan obligations and new loan guarantee commit­ eral loan guarantees were to be treated. In the ments. Also components of the credit budget early 1970s, moreover, there was some backslid­ total have been shown in respective budget func­ ing from the comprehensive coverage of the tions and have been subdivided by agency and unified budget, as a number of agencies were program in the special analysis accompanying removed from the budget and newly established the budget and in the budget appendix. One agencies were accorded off-budget status. result of this innovation is that loan guarantee In 1974, largely because of the trend to move programs, even though they involve no immedi­ agencies off the budget, the Federal Financing ate direct cash outlays, are now given much Bank (FFB) was established to help rationalize more detailed attention, and all direct loan pro­ the procedures used by federal agencies in rais­ grams are more carefully reviewed regardless of ing funds to finance their activities. Before this on-budget or off-budget status. Also, the outlays innovation, various agencies of the federal gov­ of the FFB (direct loans and loan-asset pur­ ernment had been issuing their own securities. chases) are now attributed to the originating This activity created problems for the Treasury agency, which in my view eliminates the tenden­ in monitoring and controlling the timing of feder­ cy for the operation of the agency to obscure the al borrowing and tended at times to generate nature of credit programs. congestion in the market for federally related Moreover, the Congress, in addition to focus­ securities. Moreover, the multiplicity of agency ing on net changes in federally assisted credit, issues created problems for the investing public now gives much greater attention to the gross in interpreting the status and creditworthiness of volume of new loan extensions and guarantee the various securities. These problems thus tend­ commitments, and this gives a clearer picture of ed to raise interest costs for borrowing agencies the magnitude of these programs. A final impor­ and possibly also for the Treasury. tant step taken by the Congress last year was to The advantage gained through creation of the have the budget resolutions include target ceil­ FFB, however, had an unfortunate side effect. ings for total new obligations and total new Since the FFB’s activities have been off-budget guarantee commitments and to distribute these from the outset, its acquisition of loans is not totals by budget function. reflected on the budget. Accordingly, the budget­ Both the past and the current administrations ary scrutiny intended to apply to direct loan have also proposed that a substantial proportion programs as a result of the comprehensive cover­ of the credit budget totals be made subject to age of the unified budget tended to be eroded. annual appropriations limitations. The January Furthermore, agencies that made direct, on-bud­ budget proposed that 63.8 percent of the credit get loans to the public were able to sell these budget for fiscal year 1982 be so limited. Those loans to the FFB and thereby were able to extend programs exempted are limited to the following: new loans without constraint. unambiguous entitlements that cannot be effec­ In the past five years, a number of important tively limited by appropriations; programs that steps have been taken to make coverage of the provide for unforeseeable contingencies, such as unified budget more comprehensive and to im­ deposit insurance; guarantees of certificates of prove controls of credit programs. Some agen­ beneficial ownership that are sold by the Farm­ cies previously removed from the budget have ers Home Administration and Rural Electrifica­ been returned. And payments to some off-budget tion Administration; and a catchall of programs, federal enterprises (for example, the U.S. Rail­ such as export promotion loans by the Commod­ way Association and the Synthetic Fuels Corpo­ ity Credit Corporation, that the last administra­ ration) have been reflected in the unified budget. tion believed inappropriate for curtailment due to In addition to these incremental improvements economic circumstances. That final area of ex­ in budget coverage, major strides have also been emption, in particular, deserves careful evalua­ taken in the development of a separate credit tion by the Congress. budget process to parallel the unified budget. In Broadening the coverage of the unified budget the past two years, totals have been calculated and the formulation of a separate but parallel Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

428 Federal Reserve Bulletin □ May 1981 credit budget set the stage for a number of serve better in the unified budget. If most loan further steps in implementing an effective proc­ programs are of this latter type, placing all direct ess to bring credit programs under systematic loan programs only in the separate credit budget review and control. As you noted in your letter might be preferable. I have no fixed view on this to me, Mr. Chairman, legislation has been pro­ question. I do feel strongly, however, that as a posed by Congressmen Mineta and Bethune to practical matter the current haphazard treatment formalize the credit budget process implemented of direct loans, with some reflected on the uni­ on an experimental basis last year. This bill fied budget and others not, should be ended. would amend the Budget Act to apply to the Either all direct loans of federal agencies should credit budget the same enforcement procedures be included in the unified budget or none should and legislative timetables that apply to the rest of be so included. In the latter case a comprehen­ the budget. The Board of Governors, in general, sive and enforceable credit budget would be even enthusiastically endorses the establishment of more important. these formal procedures. The Board’s view, The same set of considerations also applies to however, is that the section of this bill pertaining federal loan guarantees. Many of these programs to appropriations limitations should be modified. are not operated on an actuarially sound basis Limitations are, of course, central to the budget­ and involve an element of subsidy (because the ary control process proposed by the previous premiums charged by the government for insur­ administration and endorsed by the present ad­ ing the loans are set below the levels required to ministration. However, exemption of at least cover operating costs and expected losses). some emergency assistance and entitlement pro­ Moreover, some guarantee programs charge no grams appears warranted, and the Board sug­ insurance premiums at all. For all of these pro­ gests that all such programs continue to be grams, it would be appropriate to include an exempted from appropriations limitations at least estimate of the potential subsidy or expected until more experience is gained with the new future outlay in the unified budget. In the case of budget process. other programs, however, which are run on an actuarially sound basis, such as FHA insurance or VA loan guarantees, no entry at all need be Other Issues made on the unified budget. The appropriate classification of guarantee programs needs to be While much progress has been made recently in carefully studied and resolved. developing effective procedures for review and With regard to your proposal to put the Feder­ control of federally assisted credit, many issues al Financing Bank on the budget, Mr. Chairman, remain. Although the magnitude of all credit the Board does not see any compelling argu­ activities should be made explicit in the credit ments for such treatment. In essence, the func­ budget, the issue remains as to whether or to tion of the FFB is to serve as an intermediary to what extent these activities should also be re­ assist other credit programs that are responsible flected in the unified budget. As discussed earli­ for effects on the economy. Resolution of the er, some direct loans have characteristics similar other on-budget-off-budget issues that I have to government purchases and, accordingly, just discussed and a tight credit budget proce­ might logically be included in the unified budget. dure should achieve many of the objectives that I Also, some loans for which repayment is far from expect you intended to accomplish. The Board’s certain, such as for foreign security assistance, view is further based on the recognition that might be treated as direct grants. current budget procedures require that all loans Because all direct loans involve an outlay of acquired by the bank be attributed back to the cash, it could be argued that they should be agency originating the transaction and the suppo­ placed uniformly on the unified budget. For sition that these procedures will be continued. many programs, however, such as those that Since these procedures eliminate the problem of channel funds to students, veterans, and hous­ not giving proper accountability to federal credit ing, an estimate of the implicit and explicit programs, leaving the FFB itself off the budget interest subsidy provided by the program might seems appropriate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 429 Another thorny issue related to budgetary con­ impact of federal credit activities with income trol of federal credit programs is the treatment of maintenance and other “transfer payments” or transactions that have substantial credit ele­ with federal purchases depends on answers to ments such as lease or price guarantees. Price this question. guarantees, for example, involve a contingent Finally, a complex question remains concern­ liability on the part of the federal government ing the extent to which funds raised by the and very likely affect the terms on which a federal government and lent directly by the gov­ private beneficiary can obtain credit. Thus, they ernment to the private sector or funds raised are very similar to loan guarantees, and further directly by the private sector under the auspices analysis should be directed to the subject of their of federal guarantees reduce the credit that can treatment in regard to the credit budget. be obtained by other borrowers. The answer to Further work also needs to be done to deter­ this question is important for assessing such mine the best approach for achieving certain allocational issues as whether, for example, fed­ desired objectives. That is, whether direct eral credit programs supporting housing or agri­ spending (grants) or direct loans, or loan guaran­ culture reduce the availability of credit for busi­ tees or beneficial tax treatment (tax expendi­ ness capital investment. And ultimately, the tures), can most effectively achieve a particular effect of federal credit programs, in the aggre­ program objective. The congressional budget gate, on total spending in the economy depends process that has been developing since the Bud­ on the answer. get Act of 1974 and that is now being augmented When I appeared before the Senate Committee by the credit budget has the great advantage of on Banking, Housing, and Urban Affairs a little distributing by budget function all of these types over two years ago, I concluded my remarks by of federal activities. Thus, this type of compari­ calling for the establishment of a new budget son is encouraged and it should be actively commission that would be charged with the pursued. responsibility of carefully analyzing and, it is In addition, two other lines of inquiry seem hoped, effectively resolving all of the unan­ important. First, by how much does the en­ swered questions pertaining to proper account­ hanced availability of credit and the implicit or ing and control of federal credit programs. In my explicit subsidy associated with a given credit view the passage of time has not reduced the program actually increase private sector spend­ advisability of establishing such a commission. ing? Analyses of this question have been under­ Fully unambiguous answers to some of these taken in some areas but not in others, and little questions may not be possible, but a systematic comprehensive literature and professional con­ analysis would clarify many confusions and sensus on these issues are available. Putting would provide some guidance on reasonable precise quantitative dimensions on these effects courses to pursue in dealing with credit pro­ may not be possible, but comparison of the grams. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

430 Announcements Change in Discount Rate lished in conformity with subtitle D of the Inter­ nal Revenue Act of 1978. Under the Board’s The Federal Reserve Board announced, effective ruling, such time deposits will be regarded as May 5, 1981, an increase in the basic discount personal time deposits and consequently will be rate from 13 percent to 14 percent and raised the free of reserve requirements. Previously, time surcharge that applies to large, frequent borrow­ deposits representing unfunded deferred com­ ers from 3 to 4 percentage points. pensation plans had been regarded as nonperson­ These actions were taken in light of the current al time deposits subject to reserve requirements. levels in short-term market interest rates and the An unfunded deferred compensation plan is one need to maintain restraint in the monetary and in which the deposits are held by the employer credit aggregates. rather than being placed in a trust or being In approving the increases, the Board acted on similarly “funded.” requests from the directors of the Federal Re­ serve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, St. Louis, Min­ Deferral of Reserve Requirements neapolis, Kansas City, Dallas, and San Francis­ co, and effective May 8, 1981, Chicago. The The Federal Reserve Board has extended for six discount rate is the interest rate that is charged months the deferral of reserve requirements for for borrowings from the district Federal Reserve nonmember depository institutions with total de­ Banks. The surcharge applies only to borrowings posits of less than $2 million. for short-term adjustment credit by institutions The Monetary Control Act of 1980 made cer­ with deposits of $500 million or more. It is tain deposits of nonmember as well as member charged when discount borrowing occurs in two depository institutions subject to federal reserve or more successive weeks in a calendar quarter requirements. To lessen the burden for very or when borrowing takes place in more than four small institutions and in view of operational weeks in a calendar quarter. considerations, the Board deferred until May 1981, and now until November 1981, reserve requirements for institutions with less than $2 Regulation D: Amendment million total deposits, as of December 31, 1979. The Board extended the deferral period to pro­ The Federal Reserve Board has amended its vide the Reserve Banks with additional time for Regulation D (Reserve Requirements of Deposi­ implementation of the Monetary Control Act. tory Institutions) to exempt from reserve re­ Institutions now deferred whose deposits grew quirements certain kinds of time deposits repre­ by the end of 1980 to $15 million or more must senting funds of deferred compensation plans, begin to report deposits for the seven-day re­ effective April 30, 1981. Deferred compensation serve computation period beginning May 21, plans allow delayed receipt of presently earned 1981, and maintain reserves during the seven-day income to a future time, and thus the Board’s period beginning June 4, 1981. action is expected to result in more even applica­ The deferral affects nearly 18,000 depository tion of reserve requirements to time deposits institutions, including about 17,000 credit representing retirement income. unions. These institutions are estimated to hold The exemption is for nontransferable time Vi to 1 percent of all deposits. Those offering deposits held by an employer as part of an transaction accounts or nonpersonal time depos­ unfunded deferred compensation plan estab­ its are subject to reserve requirements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

431 The Board indicated that it likely will seek, in ready been receiving the Databook, or that re­ the near future, authorization from the Congress ceived the April 1981 issue, will remain on the to establish a permanent exemption from reserve new distribution list. Others may obtain the April requirements for smaller depository institutions. issue or may be added to the distribution list by contacting Publications Services, Board of Gov­ ernors of the Federal Reserve System, Washing­ Proposed A ctions ton, D.C. 20551. The Federal Reserve Board has proposed an interpretation of its rules to clarify which deposi­ Policy Statement on Income from Sale tors are eligible to hold interest-bearing checking of Credit Life Insurance accounts at member banks. The Board asked for comment by June 15, 1981. The Federal Reserve Board has adopted a policy The Federal Reserve Board has proposed four statement generally prohibiting employees, offi­ amendments of its Regulation J (Collection of cers, directors, or others associated with a state Checks and Other Items and Transfers of Funds) member bank from profiting personally from the to implement portions of the Monetary Con­ sale of life insurance in connection with loans trol Act of 1980 and to make certain techni­ made by the bank. cal changes. The Board requested comment by The policy adopted by the Board, effective June 19, 1981. May 1, 1981, calls for such income to be credited to the bank, or alternatively to a bank holding company or other affiliate of the bank so long as Quarterly Release on Agricultural the bank receives reasonable compensation for Finance its role in selling the insurance. The policy permits state member banks to The Agricultural Finance Databook—Quarterly allow their employees and officers to participate Series is now available for general distribution. in the income under a bonus or incentive plan not Designated statistical release E.15 (125), it will to exceed more than 5 percent of the recipient’s be dated January, April, July, and October, and annual salary. The policy statement calls for issued in the following month. The Databook compliance within two years unless there is a presents national data on outstanding farm debt; further delay for clearly demonstrated hardship. the farm lending operations and experience of The policy statement, which was recommend­ the production credit associations, federal land ed to the Board and to the other federal regula­ banks, and life insurance companies; interest tors of financial institutions represented on the rates and other terms of bank lending to farmers; Council by the Federal Financial Institutions and farm income and expenses. In addition, it Examination Council, follows: includes data from the regional quarterly surveys of agricultural credit conditions made by the For the purposes of helping to preserve the safety Federal Reserve Banks of Richmond, Chicago, and soundness of financial institutions, the Board of Governors of the Federal Reserve System establishes Minneapolis, Kansas City, and Dallas. the policies set forth below on the disposition of The Databook is designed to facilitate analysis income1 from the sale of credit life, health and acci­ of current developments in agricultural finance. dent, and mortgage life insurance (credit life insur­ Historical data are provided for up to 20 years, if ance) related to loans made by state member banks. available, permitting ready comparison of cur­ 1. Individual employees, officers, directors, and principal shareholders of a state member bank should rent cyclical or other developments with those of not personally profit by retaining commissions or past periods. Numerous quarterly and annual other income from the sale of credit life insurance to changes, percentage distributions, moving aver­ the institution's loan customers. However, employees ages, and analytical ratios are included. Some and officers may participate in a bonus or incentive series are also shown on a seasonally adjusted basis. 1. “Income” includes commissions and experience-rating credits; it does not refer to that portion of the premium Individuals and organizations that have al­ required to cover the underwriting risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

432 Federal Reserve Bulletin □ May 1981 plan under which payments based in whole or in part Officer of Farmers and Merchants State Bank in on credit life insurance sales are made in cash or in Fredericksburg, Virginia, and a consultant to kind out of the state member bank’s funds in an financial institutions, Mr. Green holds a B.A. amount not exceeding in any one year 5 percent of the from Virginia Polytechnic Institute and State recipient’s annual salary. Such payments may not be made to employees and officers more often than University and an M.B.A. from the University of quarterly. Richmond. 2. As an accounting and operations matter, income Elliott C. McEntee appointed Assistant Direc­ derived from credit life insurance sales to loan custom­ tor. Mr. McEntee, who joined the Board’s staff ers should be credited to the income accounts of the in 1973 from the Federal Reserve Bank of New state member bank and not to the state member bank’s individual employees, officers, directors, or principal York, holds a B.S. from San Jose State College. shareholders, to their interests, or to other affiliates. Lorin S. Meeder from Assistant Director to However, such income may be credited to an affiliate Associate Director. operating under the Bank Holding Company Act or, in Raymond L. Teed from Assistant Director to the case of an individual shareholder, to a trust for the Associate Director. benefit of all shareholders, provided that the state member bank receives reasonable compensation in P. Donald Ring from Assistant Director to recognition of the role played by its personnel, pre­ Adviser. mises, and good will in credit life insurance sales.2 3. When state insurance laws or other legal consid­ Division of Data Processing, effective April erations preclude a financial institution from using a 27, 1981. particular procedure for selling credit life insurance or from disposing of the income in a particular manner, a Neal H. Hillerman appointed Assistant Direc­ state member bank that wishes to provide this service tor. Mr. Hillerman, who joined the Board’s staff to its loan customers shall seek and utilize an alterna­ in April 1972, holds a B.S. from the University of tive method that complies with paragraphs 1 and 2 Michigan, an M.S. from the University of Mary­ above. land, and a Ph.D. from American University. 4. The proper method for the distribution to share­ holders of income derived from credit life insurance is C. William Schleicher, Jr., appointed Assist­ through a declaration of dividends in conformity with ant Director. Mr. Schleicher came to the Board law, rule, regulation, and prudent financial practices. in November 1969 from the Federal Reserve 5. State member banks should be in compliance Bank of Atlanta; he holds a B.B.A. and an with paragraphs 1 and 2 above within two years M.B.A. from Ohio University and is a graduate following publication in the Federal Register of this policy statement. Modifications beyond that time will of the Stonier School of Banking. be granted only when a clear hardship exists and Bruce M. Beardsley from Associate Director satisfactory assurance is provided that compliance to Deputy Director. with paragraphs 1 and 2 will be achieved within an Uyless D. Black from Assistant Director to appropriate time period. Associate Director. Money Stock Seasonal Factors Changes in Board Staff On May 1, 1981, the Board published updated The Board of Governors has announced the seasonal adjustment factors for the monetary following changes in its official staff. aggregates. It also revised seasonally adjusted M-1B and the broader monetary aggregates to Division of Federal Reserve Bank Operations, include other checkable deposits (negotiable or­ effective April 15, 1981. der of withdrawal and similar accounts) on a Richard B. Green appointed Assistant Direc­ seasonally adjusted rather than a not seasonally tor. Formerly the President and Chief Executive adjusted basis. (A description of the revisions appears in the Board’s monetary aggregates 2. As a general rule, “reasonable compensation” means press release, H.6 (508), dated May 1, 1981.) an amount equivalent to at least 20 percent of the affiliate’s Monthly seasonal factors for currency and for net income attributable to the financial institution’s credit life deposit components of the monetary aggregates insurance sales. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 433 at commercial banks and thrift institutions are The revised seasonally adjusted data are avail­ shown for 1981 in an accompanying table. In able on request from the Banking Section, Board addition, weekly seasonal factors for currency of Governors of the Federal Reserve System, and commercial bank components are shown. Washington, D.C. 20551. Money stock seasonal factors, 1981 Mutual savings Savings and loan Credit Commercial banks banks associations unions Currency co D m d ( e M e p m p o l o a - n s A n e it d n t) a D d n c e o e d f m r m m o O a a m in n C n g d d D d S e a p v o in si g t s s d i S n e t m a n im t o a io m e ll n - - d i L n e t a a n im r t o i g o m e e n - - d S e a p v o in si g t s s d i S n e t m a n im t o a io m e ll n - - d S e a p v o in si g t s s d i S n e t m a n im t o a io m e ll n - - d i L n e t a a n im r t o i g o m e e n - ­ d s e a N p v o i e n s t g it s s deposits deposits deposits deposits deposits Jan.. .9930 1.0190 1.0190 .9950 .9980 1.0150 .9924 1.0059 1.0035 .9866 .9918 Feb. .9880 .9720 .9720 .9890 1.0060 1.0140 .9861 1.0078 .9810 1.0050 .9820 .9858 Mar. .9910 .9770 .9770 .9940 1.0060 1.0150 .9938 1.0095 .9896 1.0073 .9855 .9953 Apr. .9960 1.0150 1.013b 1.0010 1.0040 .9970 .9975 1.0084 .9938 1.0088 .9871 .9989 May. .9960 .9800 .9780 .9970 1.0060 .9960 .9970 1.0019 .9944 1.0013 .9988 .9964 June 1.0000 .9960 .9980 1.0020 1.0050 .9750 1.0050 .9993 1.0048 .9990 1.0070 1.0089 July. 1.0050 1.0040 1.0050 1.0090 .9990 .9790 1.0093 .9970 1.0151 .9970 1.0178 1.0133 Aug. 1.0020 .9910 .9920 1.0080 .9950 .9840 1.0090 .9909 1.0118 .9929 1.0218 1.0049 Sept. .9990 1.0000 1.0010 1.0050 .9940 .9870 1.0107 .9873 1.0141 .9911 1.0218 1.0057 Oct.. 1.0000 1.0060 1.0070 1.0100 .9970 .9950 1.0072 .9917 1.0135 .9956 1.0110 1.0042 Nov. 1.0080 1.0060 1.0070 .9960 .9930 1.0150 .9962 .9969 1.0001 .9967 .9941 .9976 Dec. 1.0200 1.0290 1.0290 .9920 .9940 1.0250 .9947 1.0014 .9914 1.0001 .9841 .9966 Commercial banks Demand and Week Currency (M De l- m A a n co d m d p e o p n o e s n it t ) f O ro C m D d c e o m m a i n n d g d S e a p v o in si g t s s d ti e m n e o S m m de i a n p ll a o - t s i i o t n s d ti e m n e L o m a d r e i g n p e a o - t s i i o t n s Jan. 7............................ 1.0080 1.0620 1.0620 .9988 .9971 1.0134 14............................ .9985 1.0400 1.0390 .9981 .9967 1.0143 21............................ .9895 1.0130 1.0130 .9949 .9980 1.0160 28............................ .9790 .9750 .9760 .9906 .9990 1.0165 Feb. 4.......................... .9850 .9870 .9880 .9884 1.0019 1.0140 11.......................... .9960 .9810 .9810 .9886 1.0049 1.0125 18.......................... .9920 .9750 .9760 .9890 1.0060 1.0120 25.......................... .9780 .9520 .9500 .9894 1.0057 1.0127 Mar. 4.......................... .9870 .9730 .9730 .9902 1.0050 1.0161 11.......................... .9990 .9820 .9840 .9925 1.0071 1.0167 18.......................... .9940 .9840 .9820 .9939 1.0070 1.0136 25.......................... .9880 .9650 .9650 .9962 1.0055 1.0134 Apr. 1.......................... .9860 .9790 .9820 1.0015 1.0041 1.0099 8.......................... 1.0060 1.0130 1.0130 1.0089 1.0032 1.0010 15.......................... 1.0040 1.0310 1.0300 1.0063 1.0030 .9957 22.......................... .9930 1.0280 1.0250 .9988 1.0047 .9915 29.......................... .9830 .9940 .9910 .9946 1.0053 .9943 May 6............................ 1.0000 .9920 .9900 .9949 1.0062 .9947 13............................ 1.0010 .9830 .9820 .9972 1.0063 .9964 20............................ .9950 .9790 .9770 .9992 1.0057 .9979 27............................ .9900 .9620 .9600 .9990 1.0056 .9988 June 3 .......................... .9980 .9880 .9890 1.0005 1.0061 .9880 10.......................... 1.0100 1.0010 1.0010 1.0037 1.0062 .9787 17.......................... 1.0020 1.0080 1.0090 1.0033 1.0056 .9737 24.......................... .9960 .9840 .9860 1.0022 1.0044 .9715 July 1............................ .9940 .9970 .9970 1.0041 1.0031 .9761 8............................ 1.0190 1.0150 1.0150 1.0098 1.0009 .9780 15............................ 1.0100 1.0190 1.0200 1.0107 .9991 .9764 22............................ 1.0020 1.0030 1.0030 1.0094 .9984 .9793 29............................ .9920 .9810 .9830 1.0072 .9976 .9817 Aug. 5.......................... 1.0040 .9970 .9990 1.0076 .9964 .9799 12.......................... 1.0120 .9980 1.0000 1.0082 .9951 .9837 19.......................... 1.0050 .9950 .9950 1.0070 .9952 .9857 26.......................... .9940 .9750 .9750 1.0064 .9944 .9876 Sept. 2.......................... .9950 .9910 .9920 1.0057 .9942 .9875 9.......................... 1.0120 1.0090 1.0100 1.0071 .9944 .9865 16.......................... 1.0010 1.0200 1.0200 1.0050 .9943 .9854 23.......................... .9950 .9920 .9920 1.0028 .9953 .9875 30.......................... .9870 .9810 .9820 1.0050 .9962 .9929 Oct. 7............................ 1.0070 1.0160 1.0170 1.0137 .9980 .9942 14............................ 1.0060 1.0160 1.0180 1.0135 .9996 .9947 21............................ .9980 1.0020 1.0030 1.0101 .9978 .9941 28............................ .9890 .9880 .9880 1.0059 .9971 .9984 Nov. 4.......................... .9990 1.0140 1.0160 1.0007 .9957 1.0029 11.......................... 1.0150 1.0130 1.0140 .9973 .9942 1.0084 18.......................... 1.0090 1.0100 1.0110 .9945 .9927 1.0147 25.......................... 1.0070 .9900 .9890 .9949 .9913 1.0209 Dec. 2.......................... 1.0090 1.0100 1.0120 .9956 .9927 1.0194 9.......................... 1.0230 1.0220 1.0220 .9971 .9926 1.0216 16.......................... 1.0190 1.0310 1.0300 .9951 .9920 1.0236 23.......................... 1.0250 1.0280 1.0290 .9877 .9955 1.0296 30.......................... 1.0160 1.0360 1.0360 .9876 .9960 1.0265 OCD. Other checkable deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

434 Legal Developments Amendment to Regulation D Dakota County Bancshares, Inc., Mendota Heights, Minnesota Part 204—Reserve Requirements of Depository Institutions Order Denying Formation of a Bank Holding Company Time Deposits of Deferred Compensation Plans Dakota County Bancshares, Inc., Mendota Heights, The Board of Governors of the Federal Reserve Sys­ Minnesota, has applied for the Board’s approval under tem has amended its Regulation D—Reserve Require­ section 3(a)(1) of the Bank Holding Company Act ments of Depository Institutions (12 CFR Part 204), (12 U.S.C. § 1842(a)(1)) of formation of a bank holding which imposes federal reserve requirements on depos­ company by acquiring 100 percent of the voting shares itory institutions that maintain transaction accounts or of Dakota County State Bank, Mendota Heights, nonpersonal time deposits. Under the amendment, Minnesota (“Bank”). nontransferable time deposits representing funds of Notice of the application, affording opportunity for deferred compensation plans established pursuant to interested persons to submit comments and views, has subtitle D of the Revenue Act of 1978, Pub. L. No. 95- been given in accordance with section 3(b) of the Act. 600, 92 Stat. 2763 (1978), will be regarded as personal The time for filing comments and views has expired, time deposits, and thus will not be subject to reserve and the Board has considered the application and all requirements. comments received in light of the factors set forth in Effective April 30, 1981, Section 204.2(f), subpara­ section 3(c) of the Act (12 U.S.C. § 1842(c)). graph (2) of Regulation D is amended to read as Applicant, a nonoperating Minnesota corporation follows: with no subsidiaries, was organized for the purpose of becoming a bank holding company by acquiring Bank, Section 204.2—Definitions which holds deposits of $16.1 million.1 Upon acquisi­ tion of Bank, Applicant would control the 197th largest bank in Minnesota and would hold approximately 0.07 percent of the total deposits in commercial banks in ^ * * * the state. (2) “Nonpersonal time deposit” does not include Bank is the 61st largest of 117 banking organizations nontransferable time deposits to the credit of or in in the relevant banking market and holds approximate­ which the entire beneficial interest is held by an ly 0.15 percent of the total deposits in commercial individual pursuant to an Individual Retirement Ac­ banks in the market.2 One principal of Applicant and count or Keogh (H.R. 10) Plan under 26 U.S.C. Bank holds a small ownership interest in a one bank (I.R.C. 1954) §§ 408, 401, or nontransferable time holding company located in Illinois, outside Bank’s deposits held by an employer as part of an unfunded banking market. Another principal of Applicant and defered compensation plan established pursuant to Bank holds a small ownership interest in a multibank subtitle D of the Revenue Act of 1978 (Pub. L. No. holding company within Bank’s market area. Howev­ 95-600, 92 Stat. 2763). er, this principal’s ownership interest amounts to less than five percent of the outstanding shares of the multibank holding company, he holds no management ^ s}: * position with that company, the combined market Bank Holding Company and Bank Merger Orders Issued by the Board of Governors 1. All banking data are as of December 31, 1979, unless otherwise indicated. Orders Under Section 3 of Bank Holding 2. The relevant banking market is approximated by the Minne­ apolis/St. Paul RMA, adjusted to include all of Carver County, Minne­ Company Act sota. Market data are as of September 30, 1979. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 435 share of Bank and the banks controlled by that compa­ By order of the Board of Governors, effective ny is relatively small, and there are a large number of April 8, 1981. banking alternatives within the market. It appears from these facts and other facts of record that consum­ Voting for this action: Vice Chairman Schultz and Gover­ mation of the proposal would not result in any adverse nors Wallich, Partee, Rice, and Gramley. Absent and not effects upon competition or increase the concentration voting: Chairman Volcker and Governor Teeters. of banking resources in any relevant area. According­ ly, the Board concludes that competitive consider­ (Signed) James M cAfee, ations are consistent 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 El Pueblo Bancorporation cial and managerial strength to its subsidiary banks, Espanola, New Mexico and that the Board would closely examine the condi­ tion of an applicant in each case with this consider­ Order Denying Formation of Bank Holding Company ation in mind. In this case, the Board concludes that while the managerial resources of Applicant and Bank El Pueblo Bancorporation, Espanola, New Mexico, are generally satisfactory, the financial resources and has applied for the Board’s approval under section future prospects of Applicant warrant denial of this 3(a)(1) of the Bank Holding Company Act (12 U.S.C. application. § 1842(a)(1)) of formation of a bank holding company With regard to Applicant’s and Bank’s financial by acquiring 80 percent or more of the voting shares of resources and future prospects, the Board notes that El Pueblo State Bank (“Bank”), Espanola, New Mex­ Applicant would incur a sizeable debt in connection ico. with this proposal. Applicant proposes to service this Notice of the application, affording opportunity for debt through dividends to be declared by Bank and tax interested persons to submit comments, has been benefits to be derived from filing consolidated tax given in accordance with section 3(b) of the Act. The returns. While Bank has experienced recent improve­ time for filing comments has expired, and the Board ments in earnings, nevertheless, in light of current has considered the application and all comments re­ economic conditions, the amount of debt involved in ceived in light of the factors set forth in section 3(c) of the proposal, and the Bank’s historical earnings and the Act (12 U.S.C. § 1842(c)). growth performance, the Board believes that Appli­ Applicant is a nonoperating company organized for cant would lack sufficient flexibility to service its debt, the purpose of becoming a bank holding company by maintain adequate capital in Bank, and meet any acquiring Bank. Bank, the sixty-fifth largest bank in unforeseen problems that might arise at Bank. Accord­ New Mexico, has total deposits of $18.5 million, ingly, the Board concludes that considerations relating representing approximately 0.4 percent of the total to the financial resources and future prospects of deposits in commercial banks in the state.1 Bank is the Applicant and Bank weigh against approval of the smallest of three banking organizations in the relevant application. banking market,2 and holds 25.5 percent of total No significant changes in the services offered by deposits in commercial banks in that market. None of Bank are expected to follow from consummation of Applicant’s principals is associated with any other the proposed transaction. Consequently, convenience banking organization, and it appears from the facts of and needs factors are consistent with, but lend no record that consummation of the proposal would not weight toward, approval of this application. have any adverse effects on existing or potential On the basis of the circumstances concerning this competition, or on the concentration of banking re­ application, the Board concludes that the banking sources, in any relevant area. Accordingly, the Board considerations involved in this proposal present ad­ concludes that competitive considerations are consist­ verse factors bearing upon the financial resources and ent with approval of the application. future prospects of Applicant and Bank. Such adverse The Board has indicated on previous occasions that factors are not outweighed by any procompetitive a holding company should serve as a source of finan­ effects or by benefits to the convenience and needs of cial and managerial strength to its subsidiary bank(s), the community. Accordingly, it is the Board’s judg­ and that the Board would closely examine the condi­ ment that approval of the application would not be in the public interest and the application should be de­ nied. 1. All banking data are as of December 31, 1979. On the basis of the facts of record, the application is 2. The relevant banking market is approximated by Rio Arriba denied for the reasons summarized above. County, New Mexico. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

436 Federal Reserve Bulletin □ May 1981 tion of an applicant in each case with this consider­ factors associated with this proposal, since the bene­ ation in mind. Comments were received noting that fits associated with the new branch and new services approval of the application would result in benefits to will be offset by the adverse financial factors men­ Bank and its community. While the Board recognizes tioned above. Indeed, the proposed new branch can that some benefits would result from the proposal, reasonably be expected to further increase Bank’s these benefits must be viewed in the context of other deposit growth, thereby placing additional strain on factors, such as the level of debt to be serviced, and Bank’s capital. reasonable projections of the capital-to-asset ratio of On the basis of all the facts of record, the Board Bank. In this case the Board concludes that consider­ concludes that the banking considerations involved in ations relating to the financial resources and future this proposal present significant adverse factors bear­ prospects of Applicant and Bank warrant denial of the ing upon the financial resources and future prospects application. of Applicant and Bank. Such adverse factors are not With respect to Applicant’s and Bank’s financial outweighed by any procompetitive effects or by bene­ considerations and future prospects, the Board notes fits that would result in better serving the convenience that although Bank’s condition is generally satisfac­ and needs of the community. Accordingly, it is the tory, Applicant would incur a sizeable debt. Applicant Board’s judgment that approval of the application proposes to service the debt through dividends to be would not be in the public interest and that the declared by Bank and tax benefits to be derived from application should be denied. filing consolidated tax returns. Applicant has also On the basis of the facts of record, the application is proposed a capital injection for Bank. Although the denied for the reasons summarized above. funds used to provide this capital injection will also be By order of the Board of Governors, effective borrowed, Applicant anticipates that this capital injec­ April 1, 1981. tion and projected improvements in Bank’s condition Voting for this action: Chairman Volcker and Governors will allow Applicant to service all of its indebtedness Schultz, Wallich, Partee, and Rice. Absent and not voting: while maintaining an adequate capital level in Bank. Governors Teeters and Gramley. Thus, Applicant projects reaching a debt-to-equity ratio of less than 30 percent within 9 years while (Signed) James McAfee, maintaining Bank’s capital. However, in light of the [seal] Assistant Secretary of the Board. recent performance of Bank and the historical per­ formance of the banks in the area. Applicant’s earn­ ings and growth projections for Bank appear to be unrealistic. In particular, Applicant’s projections of Bank’s earnings are overly optimistic, while its growth Independent Bank Corporation, projections, in light of all the facts of record including Ionia, Michigan future growth prospects of Rio Arriba County, are low. Thus, based upon the record in this case, it is the Order Denying Acquisition of Bank Board’s view that Bank is unlikely to generate suffi­ cient earnings to enable Applicant to service its debt Independent Bank Corporation, Ionia, Michigan, a while maintaining adequate capital in Bank, as well as bank holding company within the meaning of the Bank affording Applicant the flexibility to meet any unfore­ Holding Company Act, has applied for the Board’s seen circumstances that might arise at Bank. Accord­ approval under section 3(a)(3) of the Act (12 U.S.C. ingly, the Board concludes that considerations relating § 1842(a)(3)) to acquire 100 percent of the voting to the financial resources and future prospects of shares of the successor by consolidation to The Old Applicant and Bank lend significant weight toward State Bank of Fremont, Fremont, Michigan (“Bank”). denial of this application. The bank to be created and the entity with which Bank The managerial resources of Applicant and Bank are is to be consolidated has no significance except as a satisfactory and consistent with, but lend no weight means of facilitating the acquisition of the voting toward, approval of this application. Applicant pro­ shares of Bank. Accordingly, the proposed transaction poses to open a new branch office of Bank as well as is treated in this Order as a proposed acquisition of offer a number of new services if this proposal is shares of Bank. approved. Accordingly, factors associated with conve­ Notice of the application, affording opportunity for nience and needs of the community to be served lend interested persons to submit comments and views has some weight to approval of this proposal. However, been given in accordance with section 3(b) of the Act. the Board does not view such considerations as being The time for filing comments and views has expired, significant when compared to the adverse financial and the Board has considered the application and all Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 437 comments received, in light of the factors set forth in the total deposits in commercial banks in the state.4 section 3(c) of the Act (12 U.S.C. § 1842 (c)).1 Bank (deposits of $25.2 million) is the 227th largest The Board has previously considered a proposal by bank in Michigan, representing 0.06 percent of total Applicant to acquire Bank. By Order dated Septem­ deposits in commercial banks in the state. Upon ber 21, 1979 (“September 21 Order”), the Board denied consummation of the proposed transaction, Applicant Applicant’s proposed acquisition of Bank based upon would become the 31st largest commercial banking its determination that the bank to be acquired operated organization in Michigan and its share of statewide in the same banking market as two of Applicant’s commercial bank deposits would increase to 0.43 existing subsidiary banks and that the elimination of percent. substantial existing competition between Applicant’s Applicant continues to urge the Board to re-evaluate subsidiaries and the bank to be acquired was a sub­ its earlier determination concerning the relevant geo­ stantially adverse factor that was not outweighed by graphic banking market in which to consider the convenience and needs considerations. In its Septem­ competitive effects of this proposal. In support of its ber 21 Order, the Board determined that the relevant position Applicant makes a number of arguments.5 banking market was the Fremont-Newaygo banking Applicant asserts that since there is little service area market, approximated by the southern two-thirds of overlap between Bank and Newaygo Bank, consum­ Newaygo County. The Board noted that this view was mation of this proposal would have no anticompetitive consistent with the Board’s and Applicant’s assess­ effect. Applicant claims also that the “competitive ment of the relevant market in connection with a prior effect of this transaction must be measured in some proposal by Applicant to acquire its subsidiary, West­ other geographic market”—namely a larger, regional ern State Bank.2 market comprised of Kent, Muskegon, Ottawa and In its September 21 Order the Board stated that Newaygo Counties.6 Bank (deposits of $23.8 million) was the largest bank­ The Supreme Court has articulated a number of ing organization in the Fremont-Newaygo banking factors to be considered in determining a geographic market, controlling 27.6 percent of that market’s de­ banking market. See, United States v. Philadelphia posits in commercial banks.3 The record indicated also National Bank, 374 U.S. 321 (1963); United States v. that Applicant, through its control of The First State Phillipsburg National Bank & Trust Co., 399 U.S. 350 Bank of Newaygo, Newaygo, Michigan (“Newaygo (1970); See also Mid-Nebraska Bancshares v. Board Bank”), and the branch of Western State Bank, How­ of Governors, 627 F.2d 266 (D.C. Cir. 1980). These ard City, Michigan, located in Croton Township cases indicate that the competitive effects of a pro­ (“Western State Branch”), was the third largest bank­ posed merger or acquisition should be judged on a ing organization in the Fremont-Newaygo market, localized market in which banks offer their services controlling 16.8 percent of total commercial bank and to which local customers can practicably turn for deposits in the market. The Board found that consum­ alternatives. The Supreme Court has stated in this mation of the transaction would increase Applicant’s regard that “the proper question is not where the share of total market deposits in commercial banks to parties to the merger do business or even where they 44.4 percent and that Applicant would become the compete, but where, within the area of competitive largest banking organization in the market. In addi­ overlap, the effect of the merger on competition will be tion, as a result of consummation, Bank would be direct and immediate.” United States v. Philadelphia eliminated as an independent banking organization, National Bank, supra at 357. In determining what this thereby reducing the number of independent banking area is, the Supreme Court sought “to delineate the organizations in the market from six to five. areas in which bank customers that are neither very The record before the Board at this time indicates large or very small find it practical to do their banking that Applicant is the 33rd largest banking organization in Michigan, controlling six banks with aggregate 4. All banking data are as of December 31, 1979, unless otherwise deposits of $148.2 million, representing 0.37 percent of indicated, and reflect approval of Applicant’s application to acquire Peoples Bank of Leslie, Leslie, Michigan, on January 16, 1981. 5. During the processing of this application, Applicant has had numerous discussions concerning these very issues with the staffs of 1. Applicant has requested the opportunity to present oral argu­ the Federal Reserve Bank of Chicago (“Reserve Bank”) and the ment to the Board. The Board has reviewed the record in this case and Board, including a meeting on February 26, 1981, between Applicant’s concludes that Applicant has been provided numerous opportunities representatives and members of the staffs of the Reserve Bank and to present its views and that an oral presentation would serve no Board. purpose. Accordingly, Applicant’s request is hereby denied. 6. While Applicant points out that in other cases the Board has 2. Independent Bank Corporation (63 Federal Reserve Bulle­ defined markets to include more than one county or to include rural tin 153 (1977)). areas as part of contiguous urban markets, in every case the Board 3. The banking data relied on by the Board in its September 21 looks at the relevant empirical data and determines the appropriate Order were as of June 30, 1978. geographic market based on such data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

438 Federal Reserve Bulletin □ May 1981 business, ...” United States v. Philadelphia Nation­ competitors were banks in Fremont, Newaygo, and al Bank, supra at 359. White Cloud, and that he did not view Muskegon and A number of these factors indicate that the southern Grand Rapids banks as his competitors. Bank presi­ two-thirds of Newaygo County is the relevant geo­ dents in Newaygo, White Cloud and Hesperia all graphic market within which to consider the competi­ indicated that their primary competitors were other tive effects of this proposal. The record indicates that Newaygo County banks.10 On balance, the Board Bank and Newaygo Bank are only 13 miles apart and believes that despite the influence of banks located are directly connected by a highway, making these two outside of Newaygo County, the evidence shows that organizations practical alternatives to customers in the banks in Newaygo County view each other as their either town. In contrast, the other metropolitan areas principal competitors. to which customers might turn are significantly farther The Board has considered also the area from which away; Fremont is approximately 30 miles from Muske­ Newaygo County banks seek and derive their busi­ gon and 50 miles from Grand Rapids, while Newaygo ness. A Reserve Bank survey indicates that only is approximately 37 miles from Grand Rapids and 43 Newaygo County banks advertise on a regular basis in miles from Muskegon. The close proximity of the Fremont newspaper and that these banks advertise Newaygo and Fremont is consistent with Applicant’s very little in newspapers outside of Newaygo County. submission showing that residents of Fremont are The Board notes that the circulation area of the customers of Newaygo Bank and that residents of Fremont newspaper approximates Newaygo County, Newaygo are customers of Bank.7 Other evidence in supporting the view that Newaygo County banks seek the record indicates that Fremont is the economic and business primarily within Newaygo County. More­ trade center of Newaygo County; Gerber Products over, the application shows that the deposit and loan Company, the principal employer in the county, is business of Bank and Newaygo Bank is confined to located in Fremont and residents from other parts of Newaygo County. A Reserve Bank survey indicates Newaygo County commute to Fremont;8 the principal that this is also true of other Newaygo County banks.11 newspaper in Newaygo county is published in Fre­ The Board concludes that the actual business transact­ mont and the only radio station in the county is also ed by Newaygo County banks is largely within located in Fremont; finally, Fremont is the largest Newaygo County. town in Newaygo County and the only one with two Finally, in response to a Reserve Bank survey, banks.9 several bankers in Muskegon and Grand Rapids indi­ Other evidence in the record, including the percep­ cated that their primary competitors are located in tions of bank presidents in Newaygo County, support their own counties, that they do not derive significant the Board’s market definition. In response to a Re­ mortgage loan business from Newaygo County, and serve Bank survey, the president of the only other that they are not influenced by the Newaygo County commercial bank in Fremont stated that his primary banks.12 The evidence also shows that banks outside 7. For example, data submitted by Applicant show that Bank 10. Applicant has provided letters from the presidents of both the derives some $715 thousand in deposits and 13 percent of its install­ Newaygo and White Cloud banks stating that advertising in the Grand ment loans from the service area of Newaygo Bank. Bank also draws Rapids media did exert some influence over their services. In addi­ $999 thousand in loans, representing 10 percent of Newaygo Bank’s tion, Applicant has submitted a letter from the president of the bank in loan portfolio, from Newaygo Bank’s service area (as defined by Grant (the town closest to the Newaygo/Kent County border), stating Applicant). The Board believes these figures show that for a signifi­ that in addition to competing with other banks in Newaygo County, he cant number of Newaygo residents, Bank is a practical alternative to viewed some banks outside Newaygo County as his competitors. The Newaygo Bank. Board does not believe these submissions are inconsistent with its 8. Although the data Applicant has submitted indicates that some view that banks in Newaygo County compete primarily with each Newaygo County residents work outside the county in various other. Geographic banking markets are not usually totally devoid of adjoining and contiguous counties, this data does not include the some influence from adjacent markets. substantial number of Newaygo County residents employed in agricul­ 11. Applicant has offered a number of calculations in support of its ture or domestic work; nor does it include those who are self- contention that Newaygo County residents deposit substantial sums at employed and, therefore, significantly overstates the percentage of banks outside Newaygo County. These calculations do not represent a the county’s residents who are employed outside of Newaygo County. tested methodology for estimating deposit outflows, and the Board Taking into account all employed Newaygo County residents, the believes that reliance upon the results of such calculations is not record shows that well over 70 percent of Newaygo County residents warranted. In any event, even if the Board shaded the geographic work in Newaygo County. Applicant has also submitted data reflect­ market to take into account such deposits, the application shows that ing its survey of the banking and shopping patterns of a small number Bank and Applicant’s combined share of the resulting market would of Newaygo County residents. In view of all the facts of record, the still be substantial. limited number of persons surveyed cannot be regarded as determina­ 12. Applicant does provide evidence showing that the three largest tive on this issue. banks in the four-county market hold several million dollars in 9. Applicant’s earlier application to acquire Bank revealed that individual, partnership and corporate deposits with addresses in Fremont offers professional and retail services not to be found in Newaygo County. The Board recognizes that some customers located Newaygo and that there is a substantial amount of daily traffic in one geographic market will bank outside of that market, since large between Fremont and Newaygo. customers are not locally constrained and certain individuals may Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 439 Newaygo County do not regularly advertise in the vant market, thereby eliminating substantial existing Fremont newspaper. competition. Accordingly, the Board concludes that Based upon the foregoing, and all the evidence of even if thrifts were included in an analysis of the record, the Board is persuaded that the effect of this product market, denial of the proposal would be transaction on competition would be direct and imme­ warranted. diate in the Fremont-Newaygo banking market as The financial and managerial resources and future previously defined. prospects of Applicant and its banking subsidiaries Under section 3(c) of the Bank Holding Company and Bank are regarded as satisfactory. Accordingly, Act, the Board is precluded from approving any pro­ considerations relating to banking factors are consis­ posed acquisition of a bank that in any part of the tent with, but lend no weight toward approval of the country may substantially lessen competition or tend application. While Applicant proposes to assist Bank to create a monopoly or be in restraint of trade in any in offering additional services there is no indication banking market, unless the Board finds that such that the needs of Bank’s customers are not currently anticompetitive effects are clearly outweighed by the being met. Accordingly, the Board finds that consider­ convenience and needs of the community to be served. ations relating to the convenience and needs of the Bank (with deposits of $25.2 million) is the largest community to be served do not outweigh the substan­ banking organization in the Newaygo County banking tially adverse competitive effects that would result market as defined herein, controlling 26.8 percent of from Applicant’s acquisition of Bank. the market’s commercial bank deposits. Applicant, On the basis of the foregoing and other consider­ through its control of Newaygo Bank and Western ations reflected in the record, it is the Board’s judg­ State Branch (combined deposits of $15.0 million) is ment that consummation of the proposed transaction the third largest banking organization in the relevant would not be in the public interest, and the application banking market, controlling 15.9 percent of total com­ is hereby denied. mercial bank deposits in the Newaygo County banking By Order of the Board of Governors, effective market. In view of the definition of the relevant April 14, 1981. banking market adopted herein, upon consummation Voting for this action: Chairman Volcker and Governors of the proposed transaction Applicant would become Schultz, Partee, Rice, and Gramley. Voting against this the largest banking organization in the Fremont- action: Governor Wallich. Absent and not voting: Governor Newaygo banking market, controlling four of the nine Teeters. banking offices in that market, representing 42.7 per­ (Signed) D. M ichael M anies, cent of the market’s commercial bank deposits. Thus, [seal] Assistant Secretary of the Board. the Board concludes based upon the above analysis and all the facts of record that the effects of this proposal on competition in this market would be substantially adverse.13 Dissenting Statement of Governor Wallich Applicant contends that thrift institutions should be included by the Board in assessing the competitive I dissented from the Board’s denial of Applicant’s effects of this proposal. The Board concludes that prior proposal to acquire Bank because in my view, a there is no evidence that thrifts in Michigan currently simple comparison of market shares among commer­ compete actively with commercial banks over a suffi­ cial banking organizations in the southern two-thirds cient range of financial services to such a degree that of Newaygo County failed to consider adequately the they should be included in an analysis of the relevant geographic, functional, and organizational characteris­ product market. Moreover, even if thrifts were includ­ tics of this portion of western Michigan. I believe that ed in the analysis, upon consummation of the transac­ the Board’s continued adherence to its original analy­ tion Applicant would control 35.3 percent of the sis of this case fails to account adequately for econom­ deposits in commercial banks and thrifts in the rele­ ic reality. With respect to the delineation of an appropriate geographic market, I believe there is some merit to each of the various alternatives presented by Appli­ choose to bank with a particular institution based on personal relation­ cant. Moreover, Applicant’s inability to establish con­ ships with the organization. On balance, the Board does not believe clusively one alternative market definition is not due that the existence of these accounts outweighs the evidence in support of the Board’s definition of the relevant banking market being to a lack of evidence, but rather is a function of the approximated by the southern two-thirds of Newaygo County. difficulty of measuring precisely economic activity in 13. With regard to the meaning of the phrase “substantially ad­ rural areas located on the outskirts of larger urban verse”, the Board uses this phrase to indicate a violation of the antitrust laws would result. See, e.g., 12 C.F.R. § 250.182 (1980)., areas. In my earlier dissent, I described at length the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

440 Federal Reserve Bulletin □ May 1981 factors which I believe weigh in favor of an alternative pired. The Board has considered the application and to the Board’s view of the relevant geographic mar­ all comments received in light of the factors set forth in ket.1 In connection with this application, Applicant section 3(c) of the Act (12 U.S.C. § 1842(c)). has submitted demographic data suggesting that the Applicant, the largest banking organization in Mich­ connectors between Newaygo County and the adja­ igan, controls 12 banks with aggregate deposits of $6.3 cent areas have continued to increase.2 Moreover, billion, representing 15.7 percent of total deposits in Applicant’s evidence indicates that Old Kent Financial commercial banks in the state.1 Acquisition of NAAC, Corporation, a statewide banking organization, has a the 23d largest banking organization in the state with significant presence throughout the four-county mar­ two subsidiary banks having combined aggregate de­ ket suggested by Applicant. In addition, recent legisla­ posits of $223.8 million, would increase Applicant’s tion has increased the powers of thrifts, thereby ex­ share of total deposits in commercial banks in Michi­ panding the area of functional overlap between the gan by 0.6 percent. Given the structure of banking in various kinds of depository institutions and I believe Michigan, it does not appear that approval of this that the presence of thrifts in Newaygo County miti­ application would have any significantly adverse ef­ gates the Board’s finding of substantially adverse fects upon the concentration of banking resources in competitive effects. the state. On balance, I continue to believe the competitive None of Applicant’s banking subsidiaries is located effects resulting from consummation of this proposal in banking markets where NAAC’s two banking sub­ would be only slightly adverse and that the new sidiaries are located.2 Accordingly, the Board con­ services Applicant proposes to introduce at Bank cludes that no significant existing competition would outweigh such anticompetitive effects. For these rea­ be eliminated upon consummation of the proposal. sons, I would approve this application. The Board has also examined the effects of the proposal on potential competition with respect to April 14, 1981 markets where NAAC’s subsidiary banks are located, the Ann Arbor and Monroe banking markets.3 Nation­ al Bank holds commercial banking deposits of $203.1 National Detroit Corporation, million, representing 20.5 percent of deposits in the Detroit, Michigan Ann Arbor banking market and is the second largest of 15 banking organizations in the market. However, the Order Approving Acquisition of a Bank Holding Board notes that the market does not appear to be Company highly concentrated and is only mildly attractive for de novo entry. Moreover, the possible adverse effects of National Detroit Corporation, Detroit, Michigan, a the proposal on potential competition are mitigated by bank holding company within the meaning of the Bank the presence of a large number of sizable commercial Holding Company Act, has applied for the Board’s banking competitors in the market. Monroe Bank approval under section 3(a)(3) of the Act (12 U.S.C. holds commercial banking deposits of $15.2 million, § 1842(a)(3)) to acquire 80 percent or more of the representing 5.2 percent of deposits in the Monroe voting shares of the successor by merger to National banking market, and is the fourth largest of six banking Ann Arbor Corporation, Ann Arbor, Michigan organizations in the market. With the two largest (“NAAC”), thereby indirectly acquiring 100 percent banking organizations in the market holding a com­ of the voting shares, less directors’ qualifying shares, bined share of market deposits of almost 75 percent, of National Bank and Trust Company of Ann Arbor, the Monroe market appears to be highly concentrated. Ann Arbor, Michigan (“National Bank”), and Monroe In view of the relative and absolute size of Monroe County Bank, Dundee, Michigan (“Monroe Bank”). Bank in the market, the Board regards Applicant’s Notice of the application, affording opportunity for interested persons to submit comments and views, has been given in accordance with section 3 of the Act, and the time for filing comments and views has ex- 1. All banking data are as of June 30, 1980. 2. Applicant has subsidiary banks located in the Detroit, Cadillac, Big Rapids, Grand Rapids, Kalamazoo-Battle Creek, Benton Harbor, Lansing, Port Huron, Bay City-Saginaw, and Alpena banking mar­ 1. See 65 Federal Reserve Bulletin 869 (1979). kets. NAAC, on the other hand, has subsidiary banks in the Ann 2. In particular, Applicant has submitted data indicating that em­ Arbor and Monroe banking markets. ployment opportunities continue to grow outside Newaygo County 3. The Ann Arbor banking market is approximated by Washtenaw and that these opportunities serve as a draw on Newaygo County County, Michigan (minus Salem township) and Putnam, Hamburg and residents. In addition, highway patterns suggest that commuting from Green Oak townships in Livingston County. The Monroe banking Newaygo County to adjacent areas for employment and other pur­ market is approximated by all of Monroe County except for Whiteposes is substantial. ford, Bedford, Erie, Ida, Ash, and Berlin townships. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 441 entry into the Monroe market as having a positive percent of the voting shares, less directors’ qualifying effect on competition in that market. In view of all the shares, of the successor by merger to Gulfway Nation­ facts of record, including the structure of the Ann al Bank of Corpus Christi, Corpus Christi, Texas Arbor and Monroe banking markets, the Board con­ (“Gulfway”). Applicant has also applied for approval cludes that consummation of the proposal would have under section 3(a)(3) to acquire 100 percent of the no significantly adverse effects upon potential compe­ voting shares, less directors’ qualifying shares, of the tition in these markets. successor by merger to The Mercantile National Bank The financial and managerial resources of Appli­ of Corpus Christi, Corpus Christi, Texas (“Mercan­ cant, its subsidiaries and NAAC are regarded as tile”). In each application the bank into which Bank satisfactory and the future prospects of Applicant and would be merged has no significance except as a its subsidiaries appear favorable. Following consum­ means to facilitate the acquisition of Bank’s voting mation of this proposal, Applicant proposes to expand shares. the services of NAAC’s banking subsidiaries by offer­ Notice of the applications, affording interested per­ ing continuous interest compounding on time certifi­ sons opportunity to submit comments and views, has cates, making available limited-term rollover mort­ been given in accordance with section 3(b) of the Act. gages, installing ATMs at Monroe Bank’s location, The time for filing comments and views has expired, and making available to NAAC specialized financial and the Board has considered the applications and all services provided by Applicant and its nonbank sub­ comments received in light of the factors set forth in sidiaries. Thus, the Board concludes that consider­ section 3(c) of the Act, 12 U.S.C. § 1842(c). ations relating to the convenience and needs of the Applicant is the third largest banking organization in community to be served lend sufficient weight toward Texas controlling 41 banks with aggregate deposits of approval to outweigh any adverse competitive effects $6.3 billion, which represents 8.2 percent of deposits associated with this proposal. in the state.1 Gulfway, with 0.04 percent of statewide Based upon the foregoing and other considerations deposits ($27.3 million), is the 417th largest banking reflected in the record, it is the Board’s judgment that organization in the state. Mercantile is the 196th the proposed acquisition is in the public interest and largest banking organization in Texas, with 0.06 per­ that the application should be approved. cent of statewide deposits ($47.0 million). Upon con­ On the basis of the record, the application is ap­ summation of both of these proposals, Applicant proved for the reasons summarized above. The trans­ would continue to rank third among Texas banking action shall not be made before the thirtieth calendar organizations, controlling 8.3 percent of the state’s day following the effective date of this Order or later deposits. Therefore, acquisition of both banks by than three months after the effective date of this Applicant would not materially alter statewide deposit Order, unless such period is extended for good cause concentration or the structure of the banking system in by the Board, or by the Federal Reserve Bank of Texas. Chicago pursuant to delegated authority. Both banks are located in the Corpus Christi bank­ By order of the Board of Governors, effective ing market.2 Gulfway is the 13th largest of 15 banking April 20, 1981. organizations in the market with two percent of its deposits; Mercantile is seventh largest with 3.5 per­ Voting for this action: Chairman Volcker and Governors cent of market deposits. Although both Banks operate Schultz, Wallich, Partee, Teeters, Rice, and Gramley. in the same market, the Board notes that they share a long history of common ownership: Gulfway was (Signed) James M cAfee, established by Mercantile’s major shareowners; cur­ [seal] Assistant Secretary of the Board. rently, the same shareholders own 65.6 percent of Mercantile and 71.8 percent of Gulfway; senior man­ agement at both Banks is similar; and four persons Texas Commerce Bancshares, Inc., hold directorship at both Banks. Because of these Houston, Texas relationships, it appears that no meaningful competi­ tion currently exists between Mercantile and Gulfway Order Regarding Proposed Acquisition of Banks Texas Commerce Bancshares, Inc., Houston, Texas 1. Unless otherwise indicated, all banking data are as of Decem­ (“Applicant”), a bank holding company within the ber 31, 1979, and reflect bank holding company formations and meaning of the Bank Holding Company Act, has acquisitions approved as of December 31, 1980. 2. The Corpus Christi banking market is approximated by the applied for the Board’s approval under section 3(a)(3) Corpus Christi Standard Metropolitan Statistical Area, which consists of the Act, 12 U.S.C. § 1842(a)(3), to acquire 100 of Nueces and San Patricio counties in Texas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

442 Federal Reserve Bulletin □ May 1981 and, accordingly, acquisition of both by a bank holding to only slightly adverse competitive effects. In such a company would not eliminate any significant existing case, Applicant would still move from fourth to third competition between them. place among banking organizations in the market, but Applicant is represented in the market by its subsid­ its market share would increase by only two percent. iary, Guaranty National Bank and Trust, Corpus The four-firm concentration ratio would also grow, but Christi, Texas (“Guaranty”), which is the fourth larg­ only to 60 percent. Further, Applicant’s purchase of est banking organization in the market, with $89.7 Gulfway would require bank’s disaffiliation from Mer­ million in deposits, representing 6.7 percent of the cantile,4 leaving the market with the same number of deposits in the market. competitors, and leaving Mercantile as a potential Viewed as a single banking organization because of entry vehicle for other Texas bank holding companies common control, Mercantile and Gulfway control 5.5 not yet represented in the market. percent of market deposits. Acquisition of both banks Acquisition of both Banks by Applicant would pro­ by Applicant would increase Applicant’s market share vide the acquirees with investment assistance from to 12.2 percent, making it the third largest banking Applicant, expanded lending capabilities resulting organization in the market and increase the market from ability to arrange loan participations, and access share of the four largest firms in the market from 58.0 to specialized services and personnel of the holding percent to 63.5 percent, an increase that would repre­ company, all of which would enable Banks to serve sent a reversal of recent trends toward deconcentra­ their customers more effectively. Furthermore, Appli­ tion in the market. The Board notes that such an cant plans to expand Gulfway Bank’s existing facili­ increase would also exceed the limits specified in the ties. However, it appears that these benefits are al­ Department of Justice’s merger guidelines. Acquisi­ ready being provided in the market by Applicant, and tion of both banks would eliminate a significant there is no evidence that the anticipated improvements amount of existing competition between Applicant on at Banks could not be obtained by their acquisition by the one hand and banks on the other. Guaranty and another bank holding company not currently repre­ Mercantile are located three miles apart, and an analy­ sented in the market, or through internal growth and sis of loan and deposit figures reveals that Mercantile expansion. On balance, therefore, the Board finds that and Gulfway obtain a substantial amount of their these considerations relating to the convenience and deposits and loans from Guaranty’s service area and needs of the community to be served lend weight Guaranty receives a significant portion of deposits and toward approval that is sufficient to outweigh the loans from the service areas of Mercantile and Gulf­ slightly adverse effects associated with the acquisition way. While the Board recognizes that a service area of Gulfway, but not sufficient to outweigh the substan­ overlap analysis represents at best an imprecise mea­ tially adverse effects which would result from acquisi­ sure of competition within a geographical market, the tion of both Banks. figures noted above demonstrate that each of the three The financial and managerial sources and future banks does a significant amount of business through­ prospects of Applicant, its subsidiaries, and Banks are out the Corpus Christi market. regarded as generally satisfactory, and the Board finds In view of these facts, the Board regards the com­ that banking factors are consistent with approval. petitive effects of Applicant’s acquisition of both Based on the foregoing and other considerations Banks as substantially adverse.3 These effects require reflected in the record, it is the Board’s judgment that denial of the applications unless they are clearly the proposed acquisition of Mercantile and Gulfway, outweighed in the public interest by the probable effect when viewed as a unit because of common control is of the transaction in meeting the convenience and not in the public interest and should be denied. Also on needs of the community to be served. the basis of the facts recited above and other consider­ Acquisition of Gulfway alone, however, would lead ations reflected in the record, the proposed acquisition of Gulfway is in the public interest and should be, and hereby is, approved. The proposed acquisition of 3. In consideration of the competitive effects of the proposals, the Mercantile is denied. The acquisition of Gulfway shall Board also considered competition provided by thrift institutions in not be made before the 30th calendar day following the the Corpus Christi banking market. A field investigation by the staff of effective date of this Order or later than three months the Federal Reserve Bank of Dallas revealed that while all savings and loan associations in the market would begin offering NOW accounts after that date, unless such period is extended for good and some were prepared to offer consumer loans, none were prepared cause by the Board or by the Federal Reserve Bank of to offer commercial loans, and only one of the larger associations was prepared to offer other services allowed by recent legislation. Because Dallas, pursuant to delegated authority. of these factors, the Board concludes that thrift institutions in the Corpus Christi market do not provide sufficient competition to alter the Board’s conclusions regarding the competitive effects of these proposals in any significant way. 4. See 12 C.F.R. § 212.6. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 443 By order of the Board of Governors, effective such findings would have on the question of unfair April 10, 1981. competition generally, and voluntary tie-ins in particu­ lar, and ultimately, on the net public benefits determi­ Voting for this action: Vice Chairman Schultz and Gover­ nation under section 4(c)(8) of the Act (12 U.S.C. nors Wallich, Partee, Rice, and Gramley. Absent and not § 1843(c)(8)).2 In response to the Court’s remand, the voting: Chairman Volcker and Governor Teeters. Board directed Citicorp to supplement the record on (Signed) James McAfee, these issues and at the same time afforded Protestants [seal] Assistant Secretary of the Board. an opportunity to comment on these issues and on Citicorp’s submissions. The Board has re-examined the record as supplemented, and, based on that re­ view, makes the following findings as to facts, and Orders Under Section 4 of Bank Holding conclusions drawn therefrom. Company Act Background Citicorp, New York, New York On September 26, 1978, Citicorp filed with the Federal Reserve Bank of New York notice of its proposal to Order Granting Determination Under the Bank establish a de novo office of its indirect subsidiary Holding Company Act Person-to-Person,3 and thereby engage in consumer, mortgage and business lending in a five-county area in On May 25, 1979, the Board approved the application Connecticut.4 Protestants submitted comments in op­ of Citicorp, New York, New York (“Citicorp”), filed position to Citicorp’s proposal based on the following: pursuant to section 4(c)(8) of the Bank Holding Com­ (1) the structural, managerial, and operational inter­ pany Act (12 U.S.C. § 1843(c)(8)) (the “Act”), and relationship among Citicorp, Citibank, N.A. (a whollysection 225.4(b)(1) of the Board’s Regulation Y (12 owned subsidiary of Citicorp), Nationwide, and Per- C.F.R. § 225.4(b)(1)), to engage de novo through its son-to-Person indicated that the operation of the indirect subsidiary, Citicorp Person-to-Person Finan­ Westport office of Person-to-Person would constitute cial Center of Connecticut, Inc., in Westport, Con­ a unitary operation and, therefore, branch banking in necticut (“Person-to-Person”), in second-mortgage violation of Connecticut and federal law and, (2) lending and in credit-related insurance agency activi­ approval of the proposal would result in undue con­ ties. The application had been protested by the Con­ centration of economic resources, diminution of com­ necticut Bankers Association and The Connecticut petition, and potential unfair competition against Con­ Bank and Trust Company, both of Hartford, Connecti­ necticut banks, and that these adverse effects were not cut (together, “Protestants”), who subsequently peti­ outweighed by the public benefits. tioned for judicial review of the Board’s Order. On May 25, 1979, the Board denied Protestants’ On February 7, 1980, the United States Court of request for a hearing and approved Citicorp’s applica­ Appeals for the District of Columbia Circuit affirmed tion. The Board rejected Protestants’ contention that in substantial part the Board’s Order.1 However, the operation of Person-to-Person would constitute Court found the administrative record did not contain branch banking and found that approval of the applica­ sufficient evidence to support the Board’s finding that tion would result in net public benefits. Citicorp would not engage in unfair competitive prac­ In response to the Board’s approval, on May 30, tices in its promotion of the Westport office of Person- 1979, Protestants filed a petition for judicial review of to-Person. Accordingly, the Court instructed the the Board’s Order in the United States Court of Board to supplement the record on this question and to Appeals for the District of Columbia Circuit, alleging determine whether there were any material disputed that the Board erroneously deprived them of their factual issues concerning unfair competitive practices statutory right to an evidentiary hearing. On Febru­ by Citicorp requiring an evidentiary hearing. Specifi­ ary 7, 1980, the Court issued an opinion ordering a cally, the Court ordered a limited remand of the administrative record of the case to the Board, direct­ 2. Connecticut Bankers Association and The Connecticut Bank and ing the Board to explore the manner in which this de Trust Company v. Board of Governors of the Federal Reserve System, novo subsidiary would be promoted and represented 627 F.2d 245 (D.C. Cir. 1980). 3. Person-to-Person is a direct subsidiary of Citicorp Person-toto the public, and to determine what effect, if any, Person Financial Center, Inc., St. Louis, Missouri, originally Nation­ wide Financial Services, Inc., also of St. Louis, Missouri. 4. Subsequently Citicorp amended its proposal to include only 1. The Court did not vacate the Board’s Order and Person-to-Person second-mortgage lending and credit-related insurance agency activi­ has commenced operations. ties. 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444 Federal Reserve Bulletin □ May 1981 limited remand of the administrative record in this should be considered by the Board in connection with matter to the Board to further explore the manner in its determination of the net public benefits question. In which this office would be promoted and represented addition, the Court instructed the Board to consider to the public and how this would affect the net public the impact of the uniqueness of this Citicorp proposal benefits question. since the office “would be located in a ‘bedroom With respect to the branch banking question, the community’ of New York City, the home of Citicorp Court concluded that the Board properly denied Pro­ and Citibank.” testants’ request for a hearing. The Court found that Protestants had not submitted any evidence that would Possibility of Unfair Competitive Practices indicate Person-to-Person would be engaged in the banking business or be a branch of Citibank. In response to the Court’s remand, the Board request­ The Court also considered the Board’s determina­ ed Citicorp to submit information concerning its pro­ tion whether the public benefits of the proposed activi­ motional efforts on behalf of the Westport office of ty were reasonably likely to outweigh its adverse Person-to-Person, as well as information relating to its effects. Initially, the Court noted that the Board’s promotional efforts on behalf of other Person-to-Perreasoned determination that second-mortgage lending son offices. The Board also requested Citicorp to and the sale of credit-related insurance would result describe whether the operation of Person-to-Person generally in net public benefits was entitled to a would result in voluntary tie-ins in light of the geo­ presumption of validity. Moreover, the Court agreed graphic proximity of Westport to Citibank’s offices in with the Board’s conclusion that the fact this proposal New York City. The Board also asked Citicorp wheth­ represented de novo entry by Citicorp constituted a er Person-to-Person, or its employees, would be com­ public benefit within the meaning of section 4(c)(8). pensated if one of its customers subsequently became However, with respect to the possibility of adverse a customer of Citibank, or whether Citibank would be effects the Court found that Protestants had “pro­ provided in mailing list of customers of Person-toduced some evidence as to the size of Citicorp, the Person. Lastly, the Board inquired what action Citi­ proliferation of its lending subsidiaries, and the precar­ corp would be willing to take in the event the Board ious, competitive position of the Connecticut banking determined voluntary tie-ins might result from this industry.” Despite the evidence submitted by Protes­ proposal. tants, the Court concluded the Board properly denied Citicorp has submitted detailed responses to each of a hearing on this issue since the record did not show the Board’s inquiries concerning its promotional ef­ that a hearing would produce any additional meaning­ forts on behalf of Person-to-Person. Citicorp has stipu­ ful facts. The Court also agreed with the Board that a lated that Person-to-Person would be operated inde­ hearing concerning potential undue concentration of pendently of Citibank and that it would be contrary to resources was not warranted and that the Board’s general corporate policy to compensate Person-tofinding that the proposal “shall have a salutary effect Person or its employees in the event a customer on competition” was proper. subsequently utilized the services of Citibank. In Lastly, the Court considered whether the Board addition, Citicorp has provided advertising copy to be adequately addressed the issue of Citicorp’s potential used in promoting the Westport and other Person-tounfair competitive practices. With respect to this issue Person offices. Moreover, Citicorp has committed that the Court found that while the merits of the question Person-to-Person will insert the following language as were for the Board to resolve, the record did not part of the documentation of every loan transaction: disclose that the Board had a sufficient basis upon which to conclude that Citicorp would not engage in Customers of Citicorp Person-to-Person Financial Center, unfair competitive practices. In particular, the Court Inc. are not obliged to take services from Citibank, and the noted that Citicorp might exploit the “Citicorp” or fact that you may or may not have a relationship with Citibank will have absolutely no bearing on the granting of a “Citibank” name in connection with its promotion of loan to you by Citicorp Person-to-Person Financial Center of the Westport office of Person-to-Person, and that Connecticut, Inc. operation of that office raised the question of the possibility of “voluntary tying” of services offered by In considering applications filed pursuant to section Person-to-Person and Citibank. Accordingly, the 4(c)(8) of the Act, one of the factors the Board must Court remanded the administrative record to the consider is whether the public benefits of the proposed Board with the direction to supplement the record activity are reasonably likely to outweigh its possible concerning Citicorp’s proposed promotional efforts. In adverse effects such as the undue concentration of so doing, the Court observed that the legislative con­ resources, decreased competition and unfair competi­ cern for the misuse of bank holding company power tive practices. The Court upheld the Board’s conclu­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 445 sions that operation of Person-to-Person would not materials do not reference the geographic proximity of result in undue concentration of resources, or de­ Person-to-Person to Citibank.6 The Board notes also creased competition while remanding the case to the that since Person-to-Person has commenced opera­ Board solely with respect to potential unfair competi­ tions, there is no evidence indicating that Applicant tive practices by Citicorp in connection with its pro­ has promoted Person-to-Person by unfair means. Ac­ motional efforts on behalf of Person-to-Person. In so cordingly, the Board concludes that the products being doing, the Court instructed the Board to investigate offered by Person-to-Person are being marketed inde­ whether Citicorp will make excessive use of the Citi­ pendently of the products offered by Citibank. In corp or Citibank name in promoting the office and addition, the Board finds that the promotional materi­ whether this has the potential to result in voluntary tie- als relating to Person-to-Person cannot be construed ins between Person-to-Person and Citibank and if so, as promoting the services offered by Citibank or any how these factors would affect the Board’s determina­ other Citicorp affiliate. tion of net public benefits. The Board has examined the promotional materials In order to investigate these matters the Board has submitted by Citicorp with respect to other potential considered the language of section 4(c)(8) of the Act, unfair competitive practices, particularly the potential its legislative history, the results of the Board’s experi­ exploitation or excessive use of the Citicorp name. ence in administering section 4(c)(8) of the Act, and Some of these materials do reference the fact that the administrative record in this matter. While the Person-to-Person is a subsidiary of Citicorp; however, statute does not expressly mention the potential for the size of typeset used and its placement indicate “voluntary tie-ins” as a factor affecting the net public relatively little emphasis on the “Citicorp” logo. benefits calculus, the legislative history indicates Con­ Moreover, the main thrust of these materials is “Per­ gress intended the Board to consider whether such a son-to-Person” and little or no mention is made of the finding would affect this determination. Specifically, fact that the company’s name is “Citicorp Person-to- Congress was concerned that a customer’s realization Person Financial Center of Connecticut, Inc.” Ac­ that he stands a better chance of securing a rare and cordingly, the Board concludes that there is no evi­ important commodity (such as credit) by “volunteer­ dence in the record indicating Citicorp intends to ing” to accept other products or services would induce engage in any unfair competitive practices in connec­ the customer to purchase other services as well. tion with its promotion of Person-to-Person. More­ Congress’ intent in this regard was to insure that a over, the language made a part of the documentation customer did not purchase a product unless he volun­ of every loan transaction clearly informs the borrower tarily chose to do so. The legislative history to section that the likelihood of his receiving a loan from Person- 4(c)(8) indicates that Congress viewed the potential for to-Person is in no way dependent on a relationship “voluntary tie-ins” as “basically structural”, i.e. in­ with Citibank. The Board finds that the promotional herent in the market structure for a particular product, activities of Person-to-Person do not significantly link and in the nature of a multiproduct organization. Person-to-Person with Citibank. Thus, the Board con­ Congress noted also that banks have the unique ability cludes that the Person-to-Person proposal has not to extend commercial credit.5 resulted in, and for this reason is not likely to result in, The Board has reviewed the promotional materials voluntary tie-ins or any other adverse effect. Even relating to the Westport office of Person-to-Person as apart from possible misuse of the promotional materi­ well as those relating to other offices of Person-to- als the Board finds the possibility of voluntary tie-ins Person. These materials reflect the type of services unlikely in this case. being offered by Person-to-Person and do not indicate The Board notes that Congress did not prohibit all what other additional services are available from Citi­ bank holding company expansion into nonbank activi­ bank or any other affiliate of Citicorp. Moreover, the ties, but rather directed the Board to evaluate the public benefits associated with such expansion. More­ over, Congress did not determine that a finding of 5. H.R. Rep. No. 1747, 91st Cong. 2nd Sess. (1970), Congressional voluntary tie-ins would require denial of a particular Record S6909 (May 11, 1970) (remarks of Sen. Brooke). While the potential for “voluntary tying” is not limited to bank credit, the legislative history to section 4(c)(8) indicates Congress was particular­ ly concerned that bank holding companies could induce bank custom­ 6. In its response to Citicorp’s submission Protestants do not show ers to accept other products or services from non-bank affiliates based how these materials or any actions on the part of Person-to-Person on the unique ability of banks to extend commercial credit. To the employees are intended to induce customers to purchase products extent recent legislation has expanded the powers of other financial from Citibank and, in fact, acknowledge there is no evidence of such institutions to extend commercial credit, this “unique ability” has conduct. Moreover, since the Court’s remand of this matter to the been reduced. Moreover, this is an application to engage in second- Board, Protestants have not provided the Board any evidence or mortgage lending, a consumer-finance product offered by various example of a voluntary tie-in that has occurred in connection with the financial institutions. operation of the Westport office of Person-to-Person. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

446 Federal Reserve Bulletin □ May 1981 proposal, merely that such arrangements were a factor decision and that are disputed by the relevant parties.8 for the Board to consider in making its “public bene­ While a hearing request may not be lightly denied, fits” determination. The Board is of the view that the “. . .an agency is not required to hold an evidentiary potential for “voluntary tying” is structural; that is, hearing when it can serve absolutely no purpose”.9In based upon the nature of competition in the relevant this regard, the Court in Connecticut Bankers held that market areas, and that voluntary tying is not a problem under section 4(c)(8) “a Protestant does not become in competitive markets.7 Moreover, the fact that indi­ entitled to an evidentiary hearing merely on request, viduals purchase more than one product from a firm is or on a bald or conclusory allegation that such a not necessarily evidence of “voluntary” tying. In dispute exists”. In response to the Board’s concerns Alabama Association of Insurance Agents v. Board of regarding the potential for adverse effects associated Governors of the Federal Reserve System 533 F2 224 with Citicorp’s promotional efforts on behalf of the (5th Cir. 1976) the Court noted that a borrower’s Westport office of Person-to-Person, Citicorp has purchase of insurance from his lender may be the committed to insert a written statement in each loan result of “greater convenience, a strong personal document closed by Person-to-Person, disclaiming relationship with the lender or better price or service” any connection between the granting of the loan and and not necessarily the result of “voluntary tie-ins”. any services the customer may choose to take from Second mortgage loans are a kind of consumer finance Citibank. Moreover, Citicorp has stated that this office product offered by various financial institutions, in­ will be operated as an independent entity and that it cluding Protestants, and there is little likelihood that will not provide Citibank with any information con­ the Westport office of Person-to-Person would be in a cerning its customers. Protestants have not provided position to encourage its customers to utilize the any evidence indicating that Citicorp will conduct the services of Citibank. The Board has determined previ­ office of Person-to-Person in a contrary manner. Nor ously there are no significant adverse effects such as have Protestants provided any evidence that Citi­ voluntary tying, inherent in the performance of a corp’s promotional efforts on behalf of Person-tononbanking activity by a bank holding company on a Person might result in any adverse effects warranting de novo basis. In a market where a number of alterna­ further investigation by the Board. Protestants do not tive sources for a product are available, the possibility dispute the evidence Citicorp has submitted concern­ of voluntary tying is most unlikely. ing its promotional efforts on behalf of Person-to- The Board has thoroughly considered the issues that Person and indicate as much in their response to formed the basis of the Court’s remand, Protestants’ Citicorp’s submission. The objections Protestants claims and submissions, and all other evidence of raise at this time have no relevance to the issues raised record. Based upon this review the Board concludes by the Court’s remand.10 that the manner in which Citicorp will promote Per­ Lastly, Protestants assert that the record is inade­ son-to-Person does not involve excessive use of the quate at this time and that there are a number of Citicorp name and that there is no evidence of volun­ questions still unresolved. With this contention the tary tie-ins between Person-to-Person and Citibank. Board is unable to agree. The unresolved questions The Board further concludes, based on all the facts of raised by Protestants at this time are not relevant to record including the fact there is no evidence Citicorp the issues raised by the Court’s remand or the require­ has engaged in unfair competitive practices in operat­ ments of section 4(c)(8) of the Act. Nor do Protestants’ ing its other nonbanking subsidiaries that engage in the conclusions concerning the potential for voluntary tiesame or similar activities as Person-to-Person, that there is no evidence Citicorp will engage in other 8. Connecticut Bankers Association, supra. 9. Independent Bankers Association v. Board of Governors 516 F2d unfair competitive practices in connection with its 1206, (D.C. Cir. 1975). promotion of this office. Public benefits continue to 10. Specifically, Protestants raise the following questions concern­ outweigh any potential adverse effects. ing the operation of Person-to-Person: (1) the size of Citicorp and the impact this would have on the perceptions of potential customers of Person-to-Person; (2) the reference to Citicorp in the advertisements Need for a Hearing promoting Person-to-Person, particularly the statement that Citicorp is a banking organization; and (3) the failure to specify in certain advertisements that Person-to-Person would engage only in second- Under section 4(c)(8) of the Act, the Board is only mortgage lending. Lastly, Protestants contend that the answers pro­ required to hold a hearing when the record indicates vided by Citicorp “address only one-half of the equation of unfair there are issues of fact that are material to the Board’s competitive practices [and that the Board should consider] activities by Citicorp Person-to-Person which would promote the business of Citibank”. Accordingly, the Board should inquire into “the extent to 7. For example, see Staff Study 101, Tie-Ins Between the Granting which activities by Citibank, directly or indirectly, may be used to of Credit and Sale of Insurance by Bank Holding Companies and unfairly promote the business of Citicorp Person-to-Person in Con­ Other Lenders by Robert A. Eisenbeis and Paul R. Schweitzer, Board necticut.” Thus, Protestants conclude the Board should order an of Governors of the Federal Reserve System, 1979. evidentiary hearing on these questions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 447 ins or other unfair competitive practices by Citicorp meaning of the Bank Holding Company Act (“Act”), warrant an adjudicatory hearing inasmuch as these are has applied pursuant to section 4(c)(8) of the Act matters Congress has indicated are for the Board’s (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(1) of the judgment.11 Accordingly, the Board is of the view that Board’s Regulation Y (12 C.F.R. § 225.4(b)(1)), for a hearing on this application would serve no purpose permission to engage in data processing activities and is not warranted. through its wholly-owned subsidiary, Conifer Comput­ Review of the record at this time indicates that there er Services, Inc., Worcester, Massachusetts (“CCS”). are no material issues in dispute concerning the man­ The Board has determined that data processing activi­ ner in which this office will be promoted and repre­ ties are closely related to banking and therefore sented to the public. Moreover, the Board concludes permissible for bank holding companies (12 C.F.R. that the record at this time contains sufficient facts for § 225.4(a)(8)). the Board to reach these conclusions.12 Notice of the application, affording opportunity for Accordingly, on the basis of the entire record in this interested persons to submit comments on the public matter, including the record and findings made with interest factors, has been duly published.1 (45 Federal respect to the Board’s May 25, 1979 Order, it is the Register 31,202 (1980)). Comments were received Board’s judgment that Citicorp’s application continues from Applied Data Incorporated, North Haven, Con­ to warrant approval. This determination is subject to necticut (“Applied Data”), the Association of Data the conditions set forth in section 225.4(c) of the Processing Service Organizations, Arlington, Virginia Board’s Regulation Y and to the Board’s authority to (“ADAPSO”), and Information Systems Incorporat­ require such modification or termination of the activi­ ed, Pawtucket, Rhode Island (collectively, “Protes­ ties of a holding company or any of its subsidiaries as tants”). The time for filing comments has expired, and the Board finds necessary to assure compliance with the Board has considered all of the comments received the provisions and purposes of the Act and the Board’s in light of the considerations specified in section regulations issued thereunder, or to prevent evasion 4(c)(8) of the Act. thereof. The application of Citicorp is again approved. Applicant, which controls three subsidiary banks By Order of the Board of Governors, effective with aggregate deposits of $443.1 million and is the April 16, 1981. ninth largest commercial banking organization in Mas­ sachusetts,2 proposes that CCS will provide data proc­ Voting for this action: Chairman Volcker and Governors essing services for the holding company, its subsidiar­ Partee, Rice, and Gramley. Present and abstaining: Gover­ ies, certain customers of its banking subsidiaries, and nors Schultz and Wallich. Absent and not voting: Governor other commercial and savings banks. These services Teeters. are currently being provided to the holding company and its subsidiaries through two of Applicant’s subsid­ (Signed) James McAfee, iary banks: Guaranty Bank and Trust Company, [seal] Assistant Secretary of the Board. Worcester, Massachusetts, and Berkshire Bank and Trust Company, Pittsfield, Massachusetts. This appli­ The Conifer Group, Inc., cation is therefore partially a reorganization of existing Worcester, Massachusetts operations. However, Applicant also proposes that CCS will directly market its services to the general public. CCS will have offices in Worcester and Pitts­ field, Massachusetts, and serve the state of Massachu­ Order Approving Data Processing Activities setts.3 Section 4(c)(8) of the Act provides that the Board The Conifer Group, Inc., Worcester, Massachusetts may approve a bank holding company’s application to (“Applicant”), a bank holding company within the 1. This application was initially being processed under the proce­ 11. Protestants question also whether Citibank would engage in dures set forth in section 225.4(b)(1) of Regulation Y (12 C.F.R. unfair competitive practices on behalf of Person-to-Person in West­ § 225.4(b)(1)) as a proposal to engage de novo in activities determined port. There is no evidence in the record that would indicate undertak­ by the Board to be closely related to banking. Because of the nature of ing such an investigation at this time is warranted. the protests filed, it was determined that the application should be 12. The Court’s opinion states: “In making its net public benefits processed by the Board. determination, the Board’s reasoned judgments are entitled to some 2. Banking data are as of March 31, 1980. deference in view of its considerable expertise and experience in 3. The application states that Applicant plans expansion into other administering the Bank Holding Company Act. In addition, although New England states and New York. However, as Applicant has the Board’s inquiry must proceed with rigor, we cannot require it to informed the Board that such expansion is being considered only for investigate every potential adverse contingency which a protestant the distant future, this Order relates only to Applicant’s activities in hypothesizes.” Connecticut Bankers supra at 254. See also Alabama Massachusetts. Further expansion by Applicant must receive addi­ Association of Insurance Agents, supra at 251. tional approval by the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

448 Federal Reserve Bulletin □ May 1981 engage in nonbanking activity only after the Board has and accommodating their customers. (12 C.F.R. determined that the proposed activity is closely related § 225.123). The activities contemplated by this appli­ to banking and that the performance of the proposed cation fall squarely within the language of Regulation activities by a nonbanking subsidiary of a bank holding Y and are clearly permissible for bank holding compa­ company can reasonably be expected to provide bene­ nies. Protestants have not provided any evidence that fits to the public such as greater convenience, in­ Applicant will go beyond the bounds of the Board’s creased competition, or gains in efficiency, that out­ data processing regulation.4 weigh possible adverse effects, such as undue concentration of resources, decreased or unfair com­ Absence of Adverse Effects petition, conflicts of interests, or unsound banking practices. Protestants assert that approval of this application will Protestants have generally alleged that the activities result in giving Applicant an unfair advantage over Applicant proposes to engage in are not permissible independent data processing service providers be­ for bank holding companies, that Applicant will possi­ cause the proposal gives rise to the likelihood of bly be able to compete unfairly with independent data “voluntary tying” and “cross subsidization.” processing service companies, and that there are no “Voluntary tying” could result if Applicant’s cus­ public benefits which attend this proposal to outweigh tomers believed that they could increase the likelihood the asserted possible adverse effects. Discussion of of being granted credit or some other service that is in these issues follows. short supply, by purchasing other services from the holding company. It is quite difficult to determine Permissibility whether voluntary tying actually occurs in a given transaction. Indeed, Protestants have submitted no Applicant has requested permission to engage in the evidence to demonstrate that any voluntary tying has following activities: payroll processing, accounts re­ in fact been associated with Applicant’s operations in ceivable processing, accounts payable processing, the past. However, Applicant has volunteered to make automated lock box activities, item processing, and a number of commitments with respect to the activities the provision of automated accounting services. Appli­ CCS will engage in on its own account, which are cant is presently offering these services through its designed to eliminate the possibility that voluntary subsidiary banks. Applicant proposes to continue to tying might be associated with this proposal. offer them in the same manner, but to transfer the Protestants also fear that Applicant will be able to personnel and equipment now providing these services offer its data processing services at less than market to CCS. Applicant’s banking subsidiaries will continue rates because these operations will be financially sup­ to offer these services to their customers as part of a ported by Applicant’s banking subsidiaries. Again, total package of banking services. CCS will provide Applicant has indicated its willingness to make certain the necessary computer services to the banks. To the commitments which will eliminate the possibility that extent that CCS’s proposed activities amount to noth­ it will be able to compete unfairly because of such ing more than a reorganization of existing operations “cross subsidization.”5 The Board regards Appli­ so that the new subsidiary will merely be providing cant’s commitments regarding voluntary tying and services for Applicant and its subsidiary banks, the proposal is permissible under section 4(c)(1)(C) of the Act and therefore requires no Board permission. 4. ADAPSO has sought to raise, with regard to this application, However, Applicant also proposes that CCS take many of the same concerns regarding permissibility that it raised advantage of selected opportunities to provide data regarding the pending application of Citicorp to engage in data processing activities through a subsidiary to be known Citishare processing services to the general public, an activity Corporation. Citicorp, 66 Federal Reserve Bulletin 585 (1980) which would require Board approval under section (hearing order). However, these applications are not comparable. Citicorp proposed a range of data processing activities broader than 4(c)(8). With respect to those activities for which those contemplated by Conifer. 4(c)(8) approval is sought, the Board has determined The Citicorp proceeding also involves the issue of the permissible by regulation that “storing and processing other bank­ scope of data processing activities for bank holding companies. To the extent that the Board should determine, as a result of that proceeding, ing, financial, or related economic data, such as per­ to modify its data processing regulation, the Board is empowered to forming payroll, accounts receivable or payable, or require Applicant to conform its activities to the amended regulation. billing services” are permissible nonbank activities, 5. Cross subsidization is a somewhat amorphous concept. The ability to offer services at lower rates could be attributable to a (12 C.F.R. § 225.4(a)(8)). This provision of Regulation number of factors, including economies of scale. Furthermore, it is Y was adopted to enable bank holding companies to not clear that Protestant’s assertions would represent an adverse process the kinds of data that banks have traditionally effect even if true. See, e.g., Automobile Leasing as an Activity for Bank Holding Companies, 62 Federal Reserve Bulletin 930, 939 processed in conducting their internal operations (1976). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 449 cross subsidization as significant, and has relied on alone sufficient to outweigh the speculative adverse them in acting upon this application. On the basis of effects that Protestants have alleged. these commitments, the Board concludes that volun­ Based upon the foregoing and other considerations tary tying and cross subsidization are unlikely to be reflected in the record, the Board has determined that associated with this proposal. the balance of the public interest factors that the Board is required to consider under section 4(c)(8) is favor­ Reasonably Expected Public Benefits able. Accordingly, the application is hereby approved. This determination is subject to the conditions set Approval of this application would allow Applicant to forth in section 225.4(c) of Regulation Y, and to the create an entity within its organization which would Board’s authority to require such modification or specialize in providing computer services to the hold­ termination of the activities of a bank holding compa­ ing company, its subsidiaries, and the public; it also ny as the Board finds necessary to assure compliance would permit expansion of computer activities through with the provisions and purposes of the Act and the CCS’s own resources so that Applicant’s computer Board’s regulations and orders issued thereunder, or operations would not be dependent on the resources to prevent evasion thereof. and budgetary restrictions of the affiliated banks The transaction shall be made not later than three which have been providing data processing services. months after the effective date of this Order, unless CCS should be able to enhance its future prospects such period is extended for good cause by the Board or through increased marketing of its services as a spe­ by the Federal Reserve Bank of Boston, pursuant to cialized computer firm and be in a better position to delegated authority. expand and provide additional services to the public. By order of the Board of Governors, effective Applicant proposes that CCS begin operations April 2, 1981. de novo and take on activities started by its other subsidiaries de novo. In the absence of evidence to the Voting for this action: Chairman Volcker and Governors contrary, the Board regards de novo expansion as Schultz, Partee, and Rice. Present and not voting: Governor Wallich. Absent and not voting: Governors Teeters and being procompetitive because it provides the market Gramley. with an additional source of competition.6 Further­ more, Congress has authorized the Board to differenti­ (Signed) James McAfee, ate between nonbank activities commenced de novo [seal] Assistant Secretary of the Board. and activities commenced by the acquisition, in whole or in part, of a going concern because Congress regarded de novo entry as having beneficial effects on competition.7 The Board thus concludes, based on Deutsche Bank AG, economic theory, congressional instruction, and its Frankfurt, Germany own experience in administering the Act, that the de novo character of the proposal represents a clear Order Approving Proposed Bookkeeping and Data public benefit.8 The Board further finds that the public Processing Activities and Denying Proposed benefits outlined above are sufficient to outweigh the Finance, Loan Servicing, Leasing and Insurance speculative adverse effects alleged by Protestants, Activities adverse effects that the Board has found are not likely to occur. Indeed, the de novo nature of this proposal is Deutsche Bank AG, Frankfurt, Federal Republic of Germany, a foreign bank subject to certain provisions of the Bank Holding Company Act of 1956 (“Act”),1 has applied for the Board’s approval, pursuant to 6. E.g., Virginia National Bankshares, 66 Federal Reserve Bul­ section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and letin 668, 671 (1980). section 225.4(b)(2) of the Board’s Regulation Y 7. See S. Rep. No. 91-1084, 91st Cong., 2d Sess. 15, 16 (1970). 8. ADAPSO has pointed out, citing Independent Bankers Ass’n of (12 C.F.R. § 225.4(b)(2)) to expand de novo the activi­ Georgia v. Board of Governors of the Federal Reserve System, 170 ties of Applicant’s indirect subsidiary, Fiat Credit U.S. App. D.C. 278, 516 F.2d 1206, 1226 n. 86 (1975), that the Corporation (“Corporation”), Bannockburn, Illinois. procompetitive nature of de novo entry may be contradicted by evidence that the proposal will decrease competition, result in undue Corporation is the wholly-owned subsidiary of Fiat concentration of resources, or cause other anticompetitive effects. No evidence has been submitted to establish that approval of this applica­ tion will decrease competition or result in undue concentration of resources. Protestants have asserted that the possibility of voluntary 1. Applicant, a foreign bank operating a branch in New York, New tying and cross subsidization may lead to unfair competition. These York, is subject to certain provisions of the Act by operation of assertions have been discussed above and do not undermine the section 8(a) of the International Banking Act of 1978, (12 U.S.C. procompetitive nature of this proposal. § 3106 (1978)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

450 Federal Reserve Bulletin □ May 1981 Credit Services, Inc. (“Services”), Deerfield, Illinois. regional offices located in Pittsburgh, Pennsylvania; Applicant, through its subsidiary, Deutsche Bank Dallas, Texas; Atlanta, Georgia; Walnut Creek, Cali­ Compagnie Financiere Luxembourg, Luxembourg, fornia; and Libertyville, Illinois. Since this application owns 50 percent of the voting shares of Services, while represents de novo entry, no existing competition the remaining shares are held by a subsidiary of Fiat would be eliminated between Corporation and the S.p.A. (“Fiat”), Turin, Italy. Corporation would en­ subsidiaries of either Applicant or Fiat.5 gage de novo in providing bookkeeping, data process­ Applicant’s proposed de novo data processing and ing and other services related to the administration of bookkeeping services for Fiat dealers would involve receivables financed by Corporation for the subsidiar­ an expansion of the joint venture’s current activities. ies of Fiat in the United States. In addition, Corpora­ By engaging in these additional activities, Corporation tion would engage de novo in a broad range of financ­ would provide to existing customers an incidental ing activities; act as agent or broker for life, accident additional service that would most likely not be pro­ and health and physical damage insurance related to vided independently by Applicant or Fiat. Therefore, its extensions of credit; service loans and other exten­ the Board finds that consummation of that portion of sions of credit; and engage in personal and real proper­ the proposal concerning data processing and book­ ty leasing activities. These proposed activities have keeping services would result in some public benefits. been determined by the Board to be closely related to Applicant’s proposed data processing and bookkeep­ banking (12 C.F.R. § 225.4(a)(1), (3), (6), (8) and (9). ing activities would provide dealers in Fiat products in Notice of the application, affording opportunity for the United States with the capability to develop and interested persons to submit comments and views, has maintain detailed dealer and inventory data. These been duly published (45 Federal Register 66,208 data could be used to provide Fiat’s affiliates with (1980)). The time for filing comments and views has statistical and financial information for improved oper­ expired, and the Board has considered the application ational efficiency and better customer service. Fur­ and all comments received in light of the public thermore, there is no evidence in the record indicating interest factors set forth in section 4(c)(8) of the Act. that consummation of the proposal regarding these Applicant is the largest bank in Germany and the activities would result in any undue concentration of third largest in the free world, with consolidated assets resources, unfair competition, conflicts of interests, equivalent to approximately $91.7 billion.2 Fiat is a unsound banking practices or other adverse effects. major diversified industrial corporation based in Italy, Applicant’s proposed diversified finance company with consolidated assets equivalent to approximately activities, including financing, insurance, loan servic­ $8.1 billion.3 Fiat manufactures automobiles, trucks, ing and leasing activities to be offered to the general tractors, agricultural equipment, aircraft parts, and public, represent, however, a departure from the nar­ construction machinery; it also operates in other in­ row scope of the joint venture’s current activities. dustries, including steel and energy production, con­ Applicant believes that expanding Corporation’s fi­ struction of civil engineering projects, and the provi­ nancing activities from those of a captive finance sion of tourist services. Fiat’s affiliates include Fiat company for Fiat dealers and their customers to those Motors of North America, Inc., Fiat-Allis Construc­ of a diversified finance company offering its services tion Machinery, Inc., Hesston Corporation, and Iveco to the general public would enable Corporation to Trucks of North America, Incorporated. achieve economies of scale and gains in efficiency; to Applicant now engages, through Corporation, in borrow money at more favorable rates; to compete on dealer inventory financing for dealers of affiliates of Fiat in the United States, retail financing for purchas­ ers and lessees of products from such dealers,4 and 5. Applicant’s New York branch is engaged primarily in wholesale acts as insurance agent or broker for credit life, and banking and is not engaged in the proposed activities with the credit accident and health insurance, and physical exception of certain types of commercial lending. Applicant owns damage insurance related to such financing. Corpora­ indirectly through its subsidiary, German American Capital Corpora­ tion, 20.1 percent of the shares of European-American Bancorp, tion engages in these finance and insurance activities which controls European-American Bank and Trust Company from its head office in Bannockburn, Illinois, and (“EAB&T”), both of New York, New York. The Board noted in its Order approving the acquisition of EAB&T (European-American Bancorp, 63 Federal Reserve Bulletin 595 (1977)) that Applicant was not a bank holding company with respect to EAB&T. EAB&T 2. Unless otherwise indicated, all banking data are as of Decem­ engages in commercial lending, personal property leasing, limited loan ber 31, 1979. servicing, and wholesale and retail sales financing in the New York 3. Data as of December 31, 1978. metropolitan banking market (which consists of New York City, 4. The Board approved the Applicant’s-acquisition of 50 percent of Nassau, Westchester, Putnam, and Rockland Counties and western Corporation and the financing activities related to the lease and sale of Suffolk County in New York; the northern two-thirds of Bergen Fiat products in 1979. Deutsche Bank AG, 65 Federal Reserve County and eastern Hudson County in New Jersey ; and southwestern Bulletin 436 (1979). Fairfield County in Connecticut). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 451 a more equal footing with general finance companies; ities in several countries, has ample financial re­ and to become more financially sound. sources and technical expertise to engage in these While the introduction of services de novo by a joint activities and achieve on its own the benefits of de venture generally has pro-competitive effects where novo entry into financing activities in the United both joint venturers are not likely entrants into the States. Moreover, it appears that Fiat’s contribution to market, the Board is concerned where a large banking the proposed financing, insurance, loan servicing and and a large commercial organization propose to engage leasing activities would not be substantial. According­ jointly in the provision of a wide range of activities. In ly, the Board’s examination of Applicant’s proposal this respect, the Board believes that approval of finds that the benefits to be gained by the proposed Applicant’s proposed financing activities would repre­ joint venture could be achieved, with the exception of sent a significant departure from past Board decisions the data processing and bookkeeping activities dis­ involving joint ventures. The Board has in the past cussed above, without expansion of the joint venture. expressed its concern6 over the possible undesirable Since the Board is of the opinion that the proposed effects associated with joint venture proposals,7 and expansion of the joint venture between these co­ has generally approved joint venture applications only venturers would have adverse effects and believes that if the joint venture involved a small co-venturer on a the same result can be achieved absent this expansion, narrowly construed activity, or both. In a substantial the Board finds no tangible net public benefits associ­ number of cases the co-venturers were not likely to ated with the proposed transaction and concludes that engage in the activity. In the latter two respects, the proposed expanded financing, insurance, loan ser­ Applicant’s original formation of Corporation is con­ vicing and leasing activities should not be approved. sistent with the Board’s former decisions regarding Based upon the foregoing and the other facts of joint ventures. However, the proposal to engage in a record it is the Board’s judgment that concerning broad range of activities such as general financing, Applicant’s proposed data processing and bookkeep­ insurance, loan servicing, and leasing activities is ing activities the balance of the public interest factors beyond the scope of the joint venture activities previ­ the Board is required to consider under section 4(c)(8) ously approved by the Board. Furthermore, the Board of the Act is favorable. Accordingly, this portion of the has also found that close working relationships be­ application is approved. This determination is subject tween large U.S. banking and non-banking organiza­ to the conditions set forth in section 225.4(c) of tions could lead to an undue concentration of econom­ Regulation Y and to the Board’s authority to require ic resources, and that such possible adverse effects such modification or termination of such activities as would not be consistent with the purposes of the Bank the Board finds necessary to assure compliance with Holding Company Act, or in the public interest.8 The the provisions and purposes of the Act and the Board’s Board believes that a joint venture involving large regulations and orders issued thereunder, or to pre­ banking and commercial organizations engaged in a vent evasion thereof. The Board concludes that ap­ broad range of financial activities in the United States proval of the balance of the application would not be in is similarly inconsistent with the purposes of the Bank the public interest and that portion of the application Holding Company Act. concerning expanded finance activities, insurance, In this instance, the record suggests that Applicant, loan servicing and leasing activities should be, and which is engaged in diversified finance company activ- hereby is, denied. The activities approved by the Board shall be com­ menced not later than three months after the effective date of this Order, unless such period is extended for good cause by the Board or by the Federal Reserve 6. Maryland National Corporation (GECC and MN Leasing Cor­ poration), 65 Federal Reserve Bulletin 271 (1979); Bankshares of Bank of New York pursuant to delegated authority. Nebraska, Inc., 64 Federal Reserve Bulletin (1978); and The Fort By order of the Board of Governors, effective Worth National Corporation and Shawmut Association, Inc., 60 April 29, 1981. Federal Reserve Bulletin 382 (1974). 7. The undesirable long term effects that may flow from joint ventures in general include the possibility that potential competition Voting for these actions: Governors Schultz, Partee, Tee­ may be eliminated; that a banking organization might favor its co­ ters, Rice, and Gramley. Voting for approval of the entire venturer and discriminate against a co-venturer’s rivals and other applicants for credit; that cooperation between the joint venturers application: Chairman Volcker and Governor Wallich, except may lead to adverse competitive effects in other markets; and that the that Governor Wallich abstained from voting on the credit life firm resulting from such a joint venture might be unduly strengthened insurance and data processing activities. relative to its competitors. 8. Bank America Corporation (Allstate International, S.A.), 60 O Fe v d er e s r e a a l s R In e v s e e s r tm ve e n B t u C l o l r e p t o i r n a t 5 io 1 n 7 , ( 5 C 1 o 9 m ( p 19 a 7 n 4 h ) i ; a F d i e r st S N eg a u t r io o n s a A l r C g i o ty s (Signed) James McAfee, Fluminense, S.A.), 60 Federal Reserve Bulletin 521, 522 (1974). [seal] Assistant Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

452 Federal Reserve Bulletin □ May 1981 The Hongkong and Shanghai Banking companies formed to facilitate the acquisition by Corporation, HSBC of shares of Marine.1 Marine, which does not Hong Kong, B.C.C. engage directly in any activity except holding shares of its subsidiaries, is the 12th largest commercial banking organization in the United States. Bank is the eighth Kellett, N.V., largest commercial banking organization in New York Curacao, Netherlands Antilles state with consolidated deposits of $14.2 billion, as of December 31, 1980. Marmid will engage in the activity of underwriting, HSBC Holdings, B.V., as reinsurer, credit life and credit accident and health Amsterdam, The Netherlands insurance directly related to extensions of credit by Bank. Applicants do not currently engage in insurance underwriting activities in the United States, and the Marine Midland Banks, Inc., proposed affiliation between Applicants and Marmid, Buffalo, New York a de novo company, would have no adverse effects on competition in any relevant area. In adding credit insurance underwriting to the list of Order Approving Acquisition of Mar mid Life permissible activities for bank holding companies, the Insurance Company Board stated that, “To assure that engaging in the underwriting of credit life and credit accident and The Hongkong and Shanghai Banking Corporation, health insurance can reasonably be expected to be in Hong Kong, B.C.C. (“HSBC”); Kellett, N.V., Cura­ the public interest, the Board will only approve appli­ cao, Netherlands Antilles; HSBC Holdings, B.V., cations in which an applicant demonstrates that ap­ Amsterdam, The Netherlands (“Holdings”); and Ma­ proval will benefit the consumer or result in other rine Midland Banks, Inc., Buffalo, New York (“Ma­ public benefits. Normally such a showing would be rine”) (collectively, the “Applicants”), bank holding made by a projected reduction in rates or an increase companies within the meaning of the Bank Holding in policy benefits due to bank holding company per­ Company Act, have applied for the Board’s approval formance of this service.” (12 C.F.R. § 225.4(a)(10) under section 4(c)(8) of the Act (12 U.S.C. fn. 8). With respect to credit life insurance, Applicant § 225.4(b)(2)) of the Board’s Regulation Y (12 C.F.R. has stated that the proposed reinsurance subsidiary § 225.4(b)(2)) to acquire all of the voting shares of and the direct insurer, which issues the credit life and Marmid Life Insurance Company, Phoenix, Arizona credit accident and health insurance policies made (“Marmid”), a proposed de novo company, and there­ available by Bank, will reduce credit life insurance by to engage in underwriting, as reinsurer, credit life premium rates by 1.3 percent below the state prima and credit accident and health insurance directly relat­ facie rates in New York and Pennsylvania. These ed to extensions of credit by Applicants’ subsidiary, reductions appear to be sufficient to assure public Marine Midland Bank, N.A., Buffalo, New York benefits that would warrant approval of the applica­ (“Bank”), in New York state, and credit life insurance tions. related to extensions of credit by Bank in Pennsylva­ With respect to reinsurance of credit accident and nia. Such activity has been determined by the Board health insurance, which will be offered only in New to be closely related to banking (12 C.F.R. York, Applicants have committed to provide a 2.5 § 225.4(a)(10)). percent reduction from the New York prima facie rate. Notice of the applications, affording opportunity for In the past, the Board generally has determined that, interested persons to submit comments and views on in order to provide meaningful benefits to the public, the public interest factors, has been duly published (46 and in the absence of other increases in policy bene­ Federal Register 11601). The time for filing comments fits, a bank holding company should commit to reduce and views has expired and the Board has considered its premium rate for credit accident and health insur­ all comments received in light of the public interest ance by five percent below a state’s prima facie rate. factors set forth in section 4(c)(8) of the Act. At the time the Board added the activity of underwrit­ HSBC, the largest bank incorporated in Hong Kong ing credit-related insurance to the list of permissible and the 41st largest banking organization in the world, activities and for some time thereafter, most states had with consolidated assets of approximately $37.2 billion (as of December 31, 1979), engages worldwide in an 1. By Order dated March 16, 1979, the Board approved the extensive range of banking and financially related applications of HSBC, Kellett and Holdings to become bank holding services. Kellett and Holdings are intermediate shell companies through acquisition of Marine. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 453 established a premium rate structure based on a such period is extended for good cause by the Board or benchmark loss ratio of 50 percent, (that is, 50 percent by the Federal Reserve Bank of New York, pursuant of earned premiums paid out in claims), and it is in to delegated authority. light of such a rate structure that bank holding compa­ By order of the Board of Governors, effective nies generally have offered a five percent rate reduc­ April 27, 1981. tion on credit disability premiums. However, in 1980, Voting for this action: Chairman Volcker and Governors New York established new credit insurance rates that Schultz, Partee, Teeters, and Gramley. Present and abstain­ set benchmark loss ratios of between 73 and 78 percent ing: Governor Wallich. Absent and not voting: Governor for credit accident and health insurance premiums. Rice. Thus, a bank holding company that underwrites credit (Signed) James McAfee, disability insurance in New York, experiences a great­ [seal] Assistant Secretary of the Board. er reduction in its margin of premiums over claims than if it reinsured the same insurance in another state. The subject proposal, accordingly, would result in the same percentage reduction in margin to the holding Societe Generale, company as would a larger rate reduction in a state Paris, France with a lower benchmark loss ratio. In light of these facts, the Board is of the view that approval of Order Approving Finance and Leasing Activities proposals permitting a reduction of 2.5 percent below the prima facie rate in New York will enable bank Societe Generale, Paris, France, a foreign bank sub­ holding companies to continue to offer reinsurance ject to certain provisions of the Bank Holding Compa­ services in New York for credit disability insurance at ny Act (the “Act”),1 has applied for the Board’s a rate below that which would ordinarily be charged to approval under section 4(c)(8) of the Act (12 U.S.C. the customer. Thus, the Board finds that the proposal § 1843(c)(8)) and section 225.4(b)(2) of the Board’s to underwrite credit accident and health insurance in Regulation Y (12 C.F.R. § 225.4(b)(2)), to engage de New York will produce public benefits that would be novo through its subsidiary, Sogelease Corp. (“Sogeconsistent with approval of the application. lease”), New York, New York, in commercial finance It is the Board’s judgment that the provision of and leasing activities. Such activities include making credit life and credit accident and health insurance at and acquiring, for its own account or for the account of reduced premiums is in the public interest. There is no others, commercial loans and other extensions of evidence in the record indicating that consummation credit; making leases of real and personal property, of the proposal would result in any undue concentra­ where such leasing is in accordance with section tion of resources, adverse effects on competition, 225.4(a)(6) of Regulation Y (12 C.F.R. § 225.4(a)(6)); conflicts of interests, unsound banking practices, or and acting as agent, broker, or adviser with respect to other effects that would be adverse to the public such extensions of credit and leasing. These activities interest. have been determined by the Board to be closely Based upon the foregoing and other considerations related to banking (12 C.F.R. § 225.4(a)(1) and (6)). reflected in the record, including Applicant’s commit­ Notice of the application, affording opportunity for ment to maintain on a continuing basis the public interested persons to submit comments, has been duly benefits that the Board has found to be reasonably published (46 Federal Register 11707 (1981)). The time expected to result from this proposal, and upon which for filing comments has expired, and the Board has the approval of this proposal is based, the Board has considered the application and all comments in light of determined that the balance of the public interest the public interest factors set forth in section 4(c)(8) of factors the Board is required to consider under the Act. § 4(c)(8) is favorable. Accordingly, the application is The majority of the outstanding voting shares of hereby approved. This determination is subject to the Societe Generale are owned by the French govern­ conditions set forth in § 225.4(c) of Regulation Y and ment. Societe Generale is the fourth largest bank in to the Board’s authority to require such modification France, with consolidated assets of approximately $84 or termination of the activities of a holding company or billion.2 Societe Generale engages in general securities any of its subsidiaries as the Board finds necessary to assure compliance with the provisions and purposes of the Act and the Board’s regulations and orders issued 1. Societe Generale, a foreign bank operating a branch in New thereunder, or to prevent evasion thereof. York, New York, is subject to certain provisions of the Act by operation of section 8(a) of the International Banking Act of 1978 The transaction shall be made not later than three (12 U.S.C. § 3106(a)) (the “IBA”). months after the effective date of this Order, unless 2. Banking data are as of December 31, 1979. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

454 Federal Reserve Bulletin □ May 1981 activities in the United States through its subsidiary, By order of the Board of Governors, effective Hudson Securities, Inc., New York, New York.3 April 28, 1981. Sogelease would provide its services throughout the world, and would become part of Societe Generale’s Voting for this action: Chairman Volcker and Governors worldwide leasing network. Schultz, Wallich, Partee, Teeters, and Gramley. Absent and not voting: Governor Rice. To approve this application, the Board must find that Societe Generale’s performance of the activities (Signed) James McAfee, through Sogelease “can reasonably be expected to [seal] Assistant Secretary of the Board. produce benefits to the public, such as greater conve­ nience, increased competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair com­ Federal Reserve A ct Order petition, conflicts of interest, or unsound banking Issued by the Board of Governors practices.” The Board views de novo entry as procompetitive and a positive public benefit since such Order Under Section 25(a) of entry provides an additional source of competition in a Federal Reserve Act market.4 Accordingly, the Board views the entry of Sogelease as a competitor into the commercial finance Republic International Bank and leasing markets it would serve as a public benefit. of New York (California), Societe Generale’s initial investment in Sogelease Los Angeles, California ($5.0 million) represents a minimal percentage of So­ ciete Generale’s consolidated assets, and it appears Order Denying Additional Activities Under Section that the proposal would have no significant effect upon 25(a) of the Federal Reserve Act its financial condition. There is no evidence that the conduct of these activities would result in undue Republic International Bank of New York (California) concentration of resources, decreased or unfair com­ (“RIBNY”), Los Angeles, California, has applied for petition, conflicts of interests, unsound banking prac­ the Board’s consent under section 25(a) of the Federal tices, or other adverse effects on the public interest. Reserve Act (12 U.S.C. § 616) (the “Edge Act”) Based upon the facts of record, the Board has and section 211.4(e)(5) of the Board’s Regulation K determined that the balance of the public interest (12 C.F.R. § 211.4(e)(5)) to engage in the activities of factors the Board is required to consider under section (1) maintaining an inventory of gold coin and bullion 4(c)(8) is favorable. Accordingly, the application is for its parent, Republic National Bank of New York hereby approved. This determination is subject to the (“Bank”), New York, New York, and receiving and conditions set forth in section 225.4(c) of Regulation Y making deliveries of gold coin and bullion upon the and to the Board’s authority to require such modifica­ instruction of Bank; and (2) buying and selling gold tion or termination of the activities of a holding and silver coin and bullion on a spot, forward, and company or any of its subsidiaries as the Board finds futures basis. necessary to assure compliance -with the provisions RIBNY is a corporation organized under section and purposes of the Act and the Board’s regulations 25(a) of the Federal Reserve Act (an “Edge Corpora­ and orders issued thereunder, or to prevent evasion tion”) and is a wholly-owned subsidiary of Bank. thereof. Bank, a wholly-owned subsidiary of Republic New The activities shall be commenced not later than York Corporation, New York, New York, had assets three months after the effective date of this Order, on December 31, 1980, of $6.2 billion. unless such period is extended for good cause by the Edge Corporations are organized for the purpose of Board or by the Federal Reserve Bank of New York, engaging in international or foreign banking or other pursuant to delegated authority. international or foreign financial operations. The Edge Act (12 U.S.C § 616) provides that an Edge Corpora­ 3. A foreign bank is required to cease impermissible nonbanking tion may engage in the United States only in those activities in the United States within two years after establishing a activities that the Board determines are incidental to U.S. branch, agency, or commercial lending company. The Board has advised Societe Generale that, in the Board’s view, Societe Generale the Edge Corporation’s international or foreign busi­ must divest Hudson Securities, Inc., but has extended the time for ness. In amending its Regulation K in June 1979, the divestiture from January 2, 1981, until January 2, 1982. 4. E.g. Virginia National Bancshares, Inc., 66 Federal Reserve Board included a list of general activities that it Bulletin 668, 671 (1980). The United States Court of Appeals for the determined to be incidental to an Edge Corporation’s District of Columbia Circuit affirmed the Board’s conclusions regard­ international or foreign business. The Board’s regula­ ing the procompetitive nature of de novo entry in Connecticut Bankers Ass’n v. Board of Governors, No. 79-1554 (D.C. Cir. Feb. 7, 1980). tion provides, however, that an Edge Corporation that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 455 is of the opinion that other activities in the United gold in foreign and domestic markets and to sell gold States would be incidental to its international or for­ primarily to domestic customers, the Board does not eign business may apply to the Board for such a regard this proposed activity as incidental to any determination. As in the case of an application by a international or foreign business of RIBNY. bank holding company to engage in a new activity RIBNY contends that purchasing and selling gold under section 4(c)(8) of the Bank Holding Company and silver should be regarded as incidental to interna­ Act (12 U.S.C. § 1843(c)(8)), the Board may either tional or foreign business. It asserts that these activi­ deny the application or, if it determines to approve the ties are functionally similar to the activities of buying application, may do so by issuing an order permitting and selling foreign exchange, which the Board has the specific proposal or by undertaking to revise its determined are incidental to international or foreign regulation to indicate the general permissibility of the business in section 211.4(e)(4) (xiii) of Regulation K activity in the United States. (12 C.F.R. § 211.4(e) (4) (xiii).) RIBNY also contends RIBNY asserts that approval of its request for that the activities of Republic New York Corporation, permission to maintain inventories of gold for Bank Bank, and RIBNY in gold and silver coin and bullion would not be inconsistent with the policy of preventing are unique among U.S. banking organizations, and, Edge Corporations from competing with U.S. banks that the organization’s expertise in these activities is for domestic banking business. It appears, however, incidental to RIBNY’s international and foreign busi­ that RIBNY would be instrumental in furthering ness.2 These views assume, however, that gold and Bank’s domestic gold business in California. The silver activities are inherently international in charac­ Board finds that the activity has no relationship to ter. The Board does not believe that purchases and RIBNY’s international or foreign business, and that sales of gold and silver are sufficiently different from the request should be denied with respect to this other commodities transactions to warrant such a activity. conclusion. In contending that it should be permitted to buy and Based upon the foregoing and other considerations sell gold coin and bullion in the United States, RIBNY reflected in the record, the Board concludes that the notes that the Edge Act (12 U.S.C. § 615(a)) provides proposed activities would not be incidental to that an Edge Corporation has the power, subject to RIBNY’s international or foreign business, and would such rules and regulations as the Board may prescribe, not be consistent with the purposes of the Federal to exercise various banking powers, including pur­ Reserve Act; therefore, the application is denied. chasing and selling “coin, bullion, and exchange.” By order of the Board of Governors, effective RIBNY relies on this language in support of its conten­ April 27, 1981. tion that it may engage in the proposed activities in the United States. The Board believes, however, that the banking Voting for this action: Chairman Volcker and Governors powers authorized for Edge Corporations are gov­ Schultz, Wallich, Partee, Teeters, and Gramley. Absent and erned by the provision of the Edge Act limiting an not voting: Governor Rice. Edge Corporation’s U.S. activities to those incidental to its international or foreign business. The Board has previously considered the matter of an Edge Corpora­ (Signed) James McAfee, tion buying and selling gold in the United States, and [seal] Assistant Secretary of the Board. in that instance indicated that such activity must be incidental to an Edge Corporation’s international or foreign business.1 Since RIBNY proposes to purchase 2. The Board recognized the experience and competence of Repub­ lic New York Corporation in the coin and bullion field when it approved the application under section 4(c)(8) of the Bank Holding 1. See Board letter of December 2, 1968, to American International Company Act of Republic New York Corporation to engage through a Bank, New York, New York. The Board ruled that American subsidiary in the activity of acting as a futures commision merchant to International Bank could purchase gold for resale to domestic users so execute futures contracts covering gold and silver coin and bullion. long as no more than 15 percent of its gold purchases would be from Republic New York Corporation, 63 Federal Reserve Bulletin domestic sources. That ruling was limited to the specific facts in that 951, 953 (1977). The Board’s action on this application has no effect on case, and did not authorize Edge Corporations generally to engage in the approval previously granted under the Bank Holding Company the activities in the United States. Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

456 Federal Reserve Bulletin □ May 1981 Orders Approving Applications Under the Bank Holding Company Act and Bank Merger A ct By the Board of Governors During April 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., Greenspoint Bank, April 14, 1981 Dallas, Texas Houston, Texas The Fischer Corporation, First State Bank of Wykoff, April 14, 1981 Lewiston, Minnesota Wykoff, Minnesota Griswold State Bancshares, Inc., Lary Insurance Agency, April 21, 1981 Griswold, Iowa Griswold, Iowa 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 Alsip Bancorporation, Inc., Alsip Bank and Trust, Chicago April 22, 1981 Alsip, Illinois Alsip, Illinois B & M Bancshares, Inc., State Bank of Fairmont, Minneapolis April 14, 1981 Fairmont, Minnesota Fairmont, Minnesota Brighton Bancshares Corporation, Brighton Bank, St. Louis April 23, 1981 Brighton, Tennessee Brighton, Tennessee Cardinal Bancorp, Dakota County State Bank, Kansas City April 10, 1981 South Sioux City, Nebraska South Sioux City, Nebraska Centinel Bank Shares, Inc., Centinel Bank of Taos, Kansas City March 26, 1981 Taos, New Mexico Taos, New Mexico Chisholm Trail Financial Corp., Chisholm Trail State Bank, Kansas City March 26, 1981 Wichita, Kansas Wichita, Kansas Colbert Bancshares, Inc. The First Nation Bank of Colbert Dallas April 17, 1981 Colbert, Oklahoma Colbert, Oklahoma Colonial Bancorporation, Inc., Colonial Bank, Chicago April 22, 1981 Thiensville, Wisconsin Thiensville, Wisconsin Richfield State Bank, Richfield, Wisconsin Commerce BancShares of Wyo­ Security Bank of Gillette, Kansas City April 10, 1981 ming, Inc., Gillette, Wyoming Sheridan, Wyoming Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 457 Section 3—Continued A .. n w x Reserve Effective Apphcant Bank(s) Bank date Commercial Bancshares, Inc. The Commercial Bank of Chicago April 10, 1981 Champaign, Illinois Champaign, Champaign, Illinois De Witt Bancorp, Inc., De Witt Bank & Trust Co., Chicago April 17, 1981 De Witt, Iowa De Witt, Iowa Faribault Bankshares, Inc., The State Bank of Faribault, Minneapolis April 23, 1981 Faribault, Minnesota Faribault, Minnesota First American Bancshares, Inc., American Bank of Union Star, Kansas City April 10, 1981 Kingston, Missouri Union Star, Missouri First Bancorp of N.H., Inc., White Mountain National Bank, Boston April 22, 1981 Manchester, New Hampshire North Conway, New Hampshire First Bancshares of Louisiana, Louisiana National Bank of Atlanta April 9, 1981 Inc., Baton Rouge, Baton Rouge, Louisiana Baton Route, Louisiana First Banc of Indiana Holding The First Bank of Madison, St. Louis April 9, 1981 Company, Inc., Madison, Indiana Madison, Indiana First Bellevue Bancshares Co., First National Bank of Bellevue, Kansas City April 10, 1981 Bellevue, Nebraska Bellevue, Nebraska First City Holding Corporation, City National Bank and Trust Kansas City March 27, 198 Oklahoma City, Oklahoma Company, Oklahoma City, Oklahoma First Jersey National Corporation, Perth Amboy National Bank, New York April 2, 1981 Jersey City, New Jersey Perth Amboy, New Jersey First Marlow Bancshares, Inc., The First National Bank in Kansas City April 10, 1981 Marlow, Oklahoma Marlow, Marlow, Oklahoma First Nocona Bancshares, Inc., First National Bank of Nocona, Dallas April 1, 1981 Nocona, Texas Nocona, Texas Freeport Bancshares, Inc., Midwest Bank of Freeport Chicago April 21, 1981 Freeport, Illinois Freeport, Illinois Gebsco, Inc., Cochrane State Bank, Minneapolis April 10, 1981 Cochrane, Wisconsin Cochrane, Wisconsin Guthrie County Investment Co., Guthrie County State Bank, Chicago April 10, 1981 Guthrie Center, Iowa Guthrie Center, Iowa Hull State Bancshares, Inc., Hull State Bank, Dallas April 9, 1981 Hull, Texas Hull, Texas Intercounty Bancshares, Inc., Clinton County National Bank and Cleveland April 17, 1981 Wilmington, Ohio Trust Company, Wilmington, Ohio Live Oak Bancshares Corporation, First National Bank in George Dallas April 21, 1981 George West, Texas West, George West, Texas McCamey Bancshares, Inc., Security State Bank, Dallas April 10, 1981 McCamey, Texas McCamey, Texas Madison Lake Bancorporation, Peoples State Bank of Madison Minneapolis April 9, 1981 Inc., Lake, Madison Lake, Minnesota Madison Lake, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

458 Federal Reserve Bulletin □ May 1981 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Mark Twain Bancshares, Inc., Mid-Continent Bank of Kansas St. Louis April 14, 1981 St. Louis, Missouri City, Kansas City, Missouri Montgomery County Financial The Independence State Bank of Kansas City April 10, 1981 Corporation, Independence, Kansas, Independence, Kansas Independence, Kansas Oak Hill Financial, Inc., The Oak Hill Savings Bank Com­ Cleveland April 17, 1981 Oak Hill, Ohio pany, Oak Hill, Ohio Ohio Citizens Bancorp, Inc., The Farmers & Merchants Deposit Cleveland April 23, 1981 Toledo, Ohio Company, Swanton, Ohio Old Kent Financial Corporation, Gaylord State Bank, Chicago March 27, 1981 Grand Rapids, Michigan Gaylord, Michigan Pawnee Bancshares, Inc., Pawnee National Bank, Kansas City March 27, 1981 Pawnee, Oklahoma Pawnee, Oklahoma Pedernales Investment Corpora­ Pedernales-Blanco Corporation, Dallas April 23, 1981 tion, Dallas, Texas Dallas, Texas Persons Banking Company, Inc., The Bank of Perry, Atlanta April 17, 1981 Forsyth, Georgia Perry, Georgia Pikes Peak National Company, The Pikes Peak National Bank of Kansas City April 3, 1981 Colorado Springs, Colorado Colorado Springs, Colorado Springs, Colorado Southern Bancshares, Inc., The Farmers Bank, Atlanta March 31, 1981 Douglas, Georgia Douglas, Georgia, The Farmers Bank, Locust Grove, Georgia South First National Corporation, First National Bank of the South, Atlanta March 30, 1981 Ocean Springs, Mississippi Ocean Springs, Mississippi South Texas Bancshares, Inc., The Commercial National Bank of Dallas April 24, 1981 Beeville, Texas Beeville, Beeville, Texas First State Bank of Mathis, Mathis, Texas Welcome Bancshares, Inc., Welcome State Bank, Minneapolis April 6, 1981 Welcome, Minnesota Welcome, Minnesota Sections 3 and 4 Nonbanking Reserve Effective Applicant Bank(s) company Bank date (or activity) Delhi Bancshares, Inc., Delhi Savings Bank to engage in general in- Chicago April 21, 1981 Delhi, Iowa Delhi, Iowa surance activities Delhi Insurance Agency Delhi, Iowa Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 459 Sections 3 and 4—Continued Reserve Effective Applicant Bank(s) Bank date Valley National Corpo­ The Valley National to engage in the sale of San Francisco April 1, 1981 ration, Bank of Arizona, credit life insurance Phoenix, Arizona Phoenix, Arizona and credit accident Concho Investment and health insurance Corporation directly related to ex­ Phoenix, Arizona tensions of credit. Section 4 . t Nonbanking Effectiye Applicant company , (or activity) a e Irwin Union Corporation, Inland Mortgage Company, Inc., April 17, 1981 Columbus, Indiana Indianapolis, Indiana Orders Approved Under Bank Merger Act By the Board of Governors Reserve Effective Applicant Bank(s) Bank date First Virginia Bank-Colonial, The Peoples Bank of Hanover Richmond April 28, 1981 Richmond, Virginia County, Mechanicsville, Virginia Pending Cases Involving the Board of Governors* *This list of pending cases does not include suits Option Advisory Service, Inc. v. Board of Governors, against the Federal Reserve Banks in which the Board et al., filed February 1981, U.S.C.A. for the Second of Governors is not named a party. Circuit. 9 to 5 Organization for Women Office Workers v. Wilshire Oil Company of Texas v. Board of Gover­ Board of Governors, filed December 1980, nors, et al., filed April 1981, U.S.C.A. for the Third U.S.D.C. for the District of Massachusetts. Circuit. Securities Industry Association v. Board of Gover­ People of the State of Arkansas v. Board of Gover­ nors, et al., filed October 1980, U.S.D.C. for the nors, et al., filed March 1981, U.S.C.A. for the District of Columbia. Western District of Arkansas. Securities Industry Association v. Board of Gover­ First Bank & Trust Company v. Board of Governors, nors, et al., filed October 1980, U.S.C.A. for the filed February 1981, U.S.D.C. for the Eastern Dis­ District of Columbia. trict of Kentucky. A. G. Becker, Inc. v. Board of Governors, et al., filed Ellis E. St. Rose & James H. Sibbet v. Board of October 1980, U.S.D.C. for the District of Colum­ Governors, filed February 1981, U.S.D.C. for the bia. District of Columbia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

460 Federal Reserve Bulletin □ May 1981 A. G. Becker, Inc. v. Board of Governors, et al., filed Mercantile Texas Corporation v. Board of Governors, October 1980, U.S.C.A. for the District of Colum­ filed May 1980, U.S.C.A. for the Fifth Circuit. bia. Corbin, Trustee v. United States, filed May 1980, Independent Insurance Agents of America and Inde­ United States Court of Claims. pendent Insurance Agents of Missouri v. Board of Louis J. Roussel v. Board of Governors, filed April Governors, filed September 1980, U.S.C.A. for the 1980, U.S.D.C. for the District of Columbia. Eighth Circuit. Ulyssess S. Crockett v. United States, et al., filed Independent Insurance Agents of America and Inde­ April 1980, U.S.D.C. for the Eastern District of pendent Insurance Agents of Virginia v. Board of North Carolina. Governors, filed September 1980, U.S.C.A. for the County National Bancorporation and TGB Co. v. Fourth Circuit. Board of Governors, filed September 1979, Nebraska Bankers Association, et al. v. Board of U.S.C.A. for the Eighth Circuit. Governors, et al., filed September 1980, U.S.D.C. Gregory v. Board of Governors, filed July 1979, for the District of Nebraska. U.S.D.C. for the District of Columbia. Republic of Texas Corporation v. Board of Governors, Donald W. Riegel, Jr. v. Federal Open Market Com­ filed September 1980, U.S.C.A. for the Fifth Cir­ mittee, filed July 1979, U.S.D.C. for the District of cuit. Columbia. A. G. Becker, Inc. v. Board of Governors, et al., filed Security Bancorp and Security National Bank v. August 1980, U.S.D.C. for the District of Columbia. Board of Governors, filed March 1978, U.S.C.A. for Otero Savings and Loan Association v. Board of the Ninth Circuit. Governors, filed August 1980, U.S.D.C. for the Roberts Farms, Inc. v. Comptroller of the Currency, District of Columbia. et al., filed November 1975, U.S.D.C. for the South­ Edwin F. Gordon v. Board of Governors, et al., filed ern District of California. August 1980, U.S.C.A. for the Fifth Circuit. David Merrill, et al. v. Federal Open Market Commit­ U.S. League of Savings Associations v. Depository tee, filed May 1975, U.S.D.C. for the District of Institutions Deregulation Committee, et al., filed Columbia. June 1980, U.S.D.C. for the District of Columbia. Berkovitz, et al. v. Government of Iran, et al., filed June 1980, U.S.D.C. for the Northern District of California. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics Contents Domestic Financial Statistics Weekly Reporting Commercial Banks A3 Monetary aggregates and interest rates Assets and liabilities A4 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 A7 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 A27 Savings institutions—Selected assets and holdings liabilities M onetary 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 □ May 1981 Securities Markets and International Statistics Corporate Finance A52 U.S. international transactions—Summary A34 New security issues—State and local A53 U.S. foreign trade governments and corporations A53 U.S. reserve assets A35 Open-end investment companies—Net sales and A54 Foreign branches of U.S. banks—Balance sheet asset position data A35 Corporate profits and their distribution A56 Selected U.S. liabilities to foreign official A36 Nonfinancial corporations—Assets and liabilities institutions A36 Total nonfarm business expenditures on new plant and equipment A37 Domestic finance companies—Assets and Reported by Banks in the United States liabilities; business credit A56 Liabilities to and claims on foreigners A57 Liabilities to foreigners Real Estate A59 Banks’ own claims on foreigners A60 Banks’ own and domestic customers’ claims on A38 Mortgage markets foreigners A39 Mortgage debt outstanding A60 Banks’ own claims on unaffiliated foreigners A61 Claims on foreign countries—Combined domestic offices and foreign branches Consumer Installment Credit A40 Total outstanding and net change Securities Holdings and Transactions A41 Extensions and liquidations A62 Marketable U.S. Treasury bonds and notes— Foreign holdings and transactions Flow of Funds A62 Foreign official assets held at Federal Reserve Banks A42 Funds raised in U.S. credit markets A63 Foreign transactions in securities A43 Direct and indirect sources of funds to credit markets Reported by N onbanking Business Enterprises in the United States Domestic Nonfinancial Statistics A64 Liabilities to unaffiliated foreigners A44 Nonfinancial business activity—Selected A65 Claims on unaffiliated foreigners measures A44 Output, capacity, and capacity utilization A45 Labor force, employment, and unemployment Interest and Exchange Rates A46 Industrial production—Indexes and gross value A48 Housing and construction A66 Discount rates of foreign central banks A49 Consumer and producer prices A66 Foreign short-term interest rates A50 Gross national product and income A66 Foreign exchange rates A51 Personal income and saving A67 Guide to Tabular Presentation, Statistical Releases, and Special Tables Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Statistics A3 1.10 MONETARY AGGREGATES AND INTEREST RATES* 1980 1981 1980 1981 Item 02 Q3 Q4 Ql Nov. Dec. Jan. Feb. Mar. Monetary and credit aggregates (annual rates of change, seasonally adjustedin percent)1 Reserves of depository institutions 1 Total............................................................................................................... .4 6.7 16.5 2.0 35.9 1.6 - 1.0 -14.6 11.9 2 Required........................................................................................................ .7 5.8 15.2 2.5 27.0 -0.1 -0.7 -3.9 5.9 3 Nonborrowed............................................................................................... 7.4 12.4 7.2 6.8 13.2 13.4 8.2 -12.4 21.9 4 Monetary base2........................................................................................... 5.6 9.5 10.6 5.6 15.0 4.9 4.4 2.3 7.3 Concepts of money and liquid assets3 5 M-1A............................................................................................................. -4.8 11.5 8.0 -18.6 5.6 -11.7'’ -34.7r -21.5 -5.2 6 M-1B............................................................................................................... -2.9 13.9 10.9 6.6 9.0 -9.8 13.7 8.7 11.2 7 M-2................................................................................................................. 5.4 15.7 8.1 8.4 9.8 1.2 9.3 9.8 15.2 8 M-3................................................................................................................. 6.0 13.1 10.3 \2.0r 13.1 6.9 16.2 10.8 9.3 9 L........................................................................................................................ 6.8 9.9 10.7 n.a. 15.4 9.5 16.7 11.5 n.a. Time and savings deposits Commercial banks 10 Total.......................................................................................................... 10.8 5.8 12.9 15.4 20.7 18.9 21.0 7.7 0.6 11 Savings4...................................................................................................... -21.4 22.9 1.7 -31.2 5.0 -38.8 -53.0 -23.0 -9.7 12 Small-denomination time5................................................................... 33.2 2.9 15.4 30.0 24.5 35.4 41.4 14.2 16.0 13 Large-denomination time6................................................................... 12.6 -3.3 18.8 34.2 28.8 44.6 51.4 20.1 - 10.1 14 Thrift institutions7....................................................................................... 4.7 10.1 9.7 5.0 9.9 10.0 3.9 1.3 .8 15 Total loans and securities at commercial banks8............................. .0' 6.7 14.7 11.8 17.6r 12.8' 15.7' 8.1 -.6 1980 1981 1980 1981 Q2 03 Q4 Ql Dec. Jan. Feb. Mar. Apr. Interest rates (levels, percent per annum) Short-term rates 16 Federal funds9............................................................................................. 12.69 9.83 15.85 16.57 18.90 19.08 15.93 14.70 15.72 17 Discount window borrowing10.............................................................. 12.45 10.35 11.78 13.00 12.87 13.00 13.00 13.00 13.00 18 Treasury bills (3-month market yield)11............................................ 9.62 9.15 13.61 14.39 15.49 15.02 14.79 13.36 13.69 19 Commercial paper (3-month)1112........................................................ 11.18 9.65 15.26 15.34 18.07 16.58 15.49 13.94 14.56 Long-term rates Bonds 20 U.S. government13................................................................................ 10.58 10.95 12.23 12.74 12.49 12.29 12.98 12.94 13.46 21 State and local government14............................................................ 7.95 8.58 9.59 9.97 10.11 9.66 10.10 10.16 10.62 22 Aaa utility (new issue)15..................................................................... 11.77 12.20 13.49 14.45 14.51 14.12 14.90 14.71 15.68 23 Conventional mortgages16....................................................................... 12.70 13.12 14.62 n.a. 15.05 14.95 15.10 15.25 15.70 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-l A: Averages of daily figures for (1) demand deposits at all commercial 10. Rate for the Federal Reserve Bank of New York. banks other than those due to domestic banks, the U.S. government, and foreign 11. Quoted on a bank-discount basis. banks and official institutions less cash items in the process of collection and Federal 12. Unweighted average of offering rates quoted by at least five dealers. Reserve float; and (2) currency outside the Treasury, Federal Reserve Banks, and 13. Market yields adjusted to a 20-year maturity by the U.S. Treasury. the vaults of commercial banks. 14. Bond Buyer series for 20 issues of mixed quality. M-1B: M-l A plus negotiable order of withdrawal and automated transfer service 15. Weighted averages of new publicly offered bonds rated Aaa, Aa, and A by accounts at banks and thrift institutions, credit union share draft accounts, and Moody’s Investors Service and adjusted to an Aaa basis. Federal Reserve com­ demand deposits at mutual savings banks. pilations. M-2: M-1B plus savings and small-denomination time deposits at all depository 16. Average rates on new commitments for conventional first mortgages on new institutions, overnight repurchase agreements at commercial banks, overnight Eu­ homes in primary markets, unweighted and rounded to nearest 5 basis points, from rodollars held by U.S. residents other than banks at Caribbean branches of member Dept, of Housing and Urban Development. banks, and money market mutual fund shares. AThe monetary aggregates and their components have been revised due to new M-3: M-2 plus large-denomination time deposits at all depository institutions seasonal adjustment factors. 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 □ May 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 Feb. Mar. Apr. Mar. 18 Mar. 25 Apr. 1 Apr. 8 Apr. 15 Apr. 22 Apr. 29 Supplying Reserve Funds 1 Reserve Bank credit outstanding.................. 140,373 140,919 143,592 141,557 141,445 141,741 140,957 143,214 145,885 144,630 2 U.S. government securities1............................. 116.509 118,098 120,008 118.711 118,667 118,546 118.396 119.785 122,542 119,678 3 Bought outright................................................. 116.509 118,033 119,468 118.711 118,515 118,381 118.396 119.785 120,841 119,095 65 540 152 165 1,701 583 5 Federal agency securities.................................... 8.739 8,751 8,775 8.733 8,793 8,753 8.722 8.720 8,839 8,835 6 Bought outright................................................. 8.739 8,734 8,720 8.733 8,733 8,730 8.722 8.720 8,720 8,720 17 55 60 23 119 115 35 69 38 143 156 112 9 Loans........................................................................ 1,278 1,004 1,343 774 888 1,464 887 1,142 864 2,278 10 Float ......................................................................... 3,755 2,925 3,139 3,262 2,836 2,536 2,852 3,419 3,201 3,244 11 Other Federal Reserve assets........................... 10,092 10,106 10,258 10,077 10,223 10,298 10,100 10,147 10,283 10,483 12 Gold stock.............................................................. 11,159 11,156 11,154 11,156 11,155 11,155 11,154 11,154 11,154 11,154 13 Special drawing rights certificate account... 2,518 2,653 2,818 2,647 2,732 2,818 2,818 2,818 2,818 2,818 14 Treasury currency outstanding......................... 13,498 13,506 13,521 13,489 13,493 13,575 13,512 13,516 13,524 13,530 Absorbing Reserve Funds 15 Currency in circulation........................................ 131,879 132,553 134,536 132,765 132,630 133,023 133,905 134,983 135,045 134,344 16 Treasury cash holdings........................................ 451 472 498 472 477 483 492 496 500 503 Deposits, other than member bank reserves, with Federal Reserve Banks 17 Treasury.............................................................. 3,297 3,045 3,353 3,131 3,242 2,887 2,863 3,033 3,969 3,536 18 Foreign................................................................. 319 319 411 391 272 334 329 347 393 580 19 Other..................................................................... 401 342 295 352 328 322 255 285 320 301 20 Other Federal Reserve liabilities and capital.............................................................. 4,609 4,782 4,875 4,774 4,719 4,832 4,854 4,893 4,897 4,927 21 Reserve accounts2................................................. 26,591 26,722 27,117 26,963 27,158 27,409 25,743 26,665 28,258 27,940 End-of-month figures Wednesday figures 1981 1981 Feb. Mar. Apr. Mar. 18 Mar. 25 Apr. 1 Apr. 8 Apr. 15 Apr. 22 Apr. 29 Supplying Reserve Funds 22 Reserve bank credit outstanding.................... 139,199 141,272 143,452 143,791 145,343 141,787 142,810 146,497 150,722 156,848 23 U.S. government securities1............................. 117.621 118,043 119.687 119.561 119,606 117,750 119.495 120.036 126,168 122,897 24 Bought outright................................................. 117.621 117,666 119.687 119.561 118,541 117,533 119.495 120.036 120,465 120,037 25 Held under repurchase agreements........... 377 1,065 217 5,703 2,860 26 Federal agency securities.................................... 8.737 8,779 8.720 8.733 9,151 8,752 8.722 8.720 9,152 9,286 27 Bought outright................................................. 8.737 8,722 8.720 8.733 8,733 8,722 8.722 8.720 8,720 8,720 28 Held under repurchase agreements........... 57 418 30 432 566 29 Acceptances............................................................ 298 267 191 446 549 30 Loans......................................................................... 1,249 656 2,333 1,912 3,229 1,758 467 3,208 1,306 8,572 31 Float.......................................................................... 1,545 3,261 2,156 3,350 2,743 3,035 4,031 4,205 3,160 4,926 32 Other Federal Reserve assets........................... 10,047 10,235 10,556 10,235 10,347 10,301 10,095 10,328 10,490 10,618 33 Gold stock.............................................................. 11,156 11,154 11,154 11,156 11,155 11,154 11,154 11,154 11,154 11,154 34 Special drawing rights certificate account... 2,518 2,818 2,818 2,668 2,818 2,818 2,818 2,818 2,818 2,818 35 Treasury currency outstanding......................... 13,939 14,002 13,534 13,489 13,502 13,509 13,516 13,516 13,529 13,534 Absorbing Reserve Funds 36 Currency in circulation........................................ 131,833 133,915 134,465 132,994 133,031 133,612 134,836 135,496 135,078 134,701 37 Treasury cash holdings........................................ 464 494 508 474 476 483 494 497 498 508 Deposits, other than member bank reserves, with Federal Reserve Banks 38 Treasury.............................................................. 2,284 3,032 4,460 2,858 2,609 2,305 2,406 2,296 3,089 5,737 39 Foreign................................................................. 422 474 476 261 244 320 292 388 319 326 40 Other..................................................................... 337 313 311 392 369 407 284 341 316 266 41 Other Federal Reserve liabilities and capital.............................................................. 4,737 4,855 4,674 4,621 4,670 4,614 4,769 4,650 4,965 5,002 42 Reserve accounts2................................................. 26,734 26,164 26,063 29,504 31,419 27,527 27,217 30,317 33,957 37,813 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 1981 Aug. Sept. Feb.P Mar.P Apr.P 1 Reserve balances with Reserve Banks1......... 32,473 28,923 29,164 29,976 29,215 26,664 27,114 26,591 26,722 27,117 2 Total vault cash (estimated)............................. 15,311 18,149 19,293 17,824 17,327 17,189 3 Vault cash at institutions with required reserve balances2...................................... 11,344 11,262 11,811 11,678 11,876 12,602 13,587 12,187 11,687 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 1,204 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 4,298 6 Reserve balances + total vault cash4........... 43,972 40,373 41,164 41,815 44,674 44.940 46,520 44,524 44,155 44,395 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 40,097 8 Required reserves (estimated)........................ 43,578 40,071 40,908 41,498 40,723 40,067 41,025 39,448 39,372 40,071 9 Excess reserve balances at Reserve Banks4 6 . 394 302 256 317 955 30 489 202 380 26 10 Total borrowings at Reserve Banks........... 1,473 659 1,311 1,335 2,156 1,617 1,405 1,278 1,004 1,343 11 Seasonal borrowings at Reserve Banks 82 10 26 67 99 116 120 148 197 161 Large commercial banks 12 Reserves held.......................................................... 24.940 26,267 24,874 24,772 24,894 13 Required.............................................................. 25,819 26,605 25,328 25,145 25,519 14 Excess................................................................... -879 -338 -454 -373 -625 Small commercial banks 15 Reserves held.......................................................... 13,719 13,935 13,305 13,386 13,628 16 Required.............................................................. 13,523 13,690 13,235 13,229 13,558 17 Excess................................................................... 196 245 70 157 70 U.S. agencies and branches 18 Reserves held.......................................................... 260 253 388 461 444 19 Required.............................................................. 230 228 366 450 432 20 Excess................................................................... 30 25 22 11 12 All other institutions 21 Reserves held.......................................................... 494 513 502 605 611 2 2 2 3 E R x eq c u es ir s e .. d ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-915 50 1 2 1 - 5 1 1 7 9 54 5 8 7 56 49 2 Weekly averages of daily figures for week ending Feb. 25p Mar. 4p Mar. Up Mar. 18p Mar. 25 P Apr. Ip Apr. 8p Apr. 15 p Apr. 22p Apr. 29p 24 Reserve balances with Reserve Banks1......... 26,765 27,122 25,217 26,963 27,158 27,409 25,743 26,665 28,258 27,940 25 Total vault cash (estimated)............................. 16,820 17,415 18,457 17,144 16,496 17,135 17,467 17,681 16,155 17,353 26 Vault cash at institutions with required reserve balances2...................................... 11,464 11,640 12,506 11,538 11,152 11,560 11,873 11,991 10,971 11,845 27 Vault cash equal to required reserves at other institutions...................................... 700 1,285 1,269 1,226 1,208 1,217 1,184 1,194 1,186 1,238 28 Surplus vault cash at other institutions3 .. 4,656 4,490 4,682 4,380 4,136 4,358 4,410 4,496 3,998 4,270 29 Reserve balances + total vault cash4........... 43,693 44,644 43,780 44,214 43,760 44,650 43,298 44,434 44,503 45,379 30 Reserve balances + total vault cash used to satisfy reserve requirements4 5........... 39,037 40,154 39,098 39,834 39,624 40,292 38,888 39,938 40,505 41,109 31 Required reserves (estimated)......................... 39,202 39,479 38,868 39,491 39,464 39,642 38,837 39,620 40,739 41,004 32 Excess reserve balances at Reserve Banks4-6 . -165 675 230 343 160 650 51 318 -234 105 33 Total borrowings at Reserve Banks........... 1,713 1,299 768 774 888 1,464 887 1,142 864 2,278 34 Seasonal borrowings at Reserve Banks 160 176 185 193 200 220 162 149 149 175 Large commercial banks 35 Reserves held.......................................................... 23,669 24,946 24,595 24,583 24,348 25,592 24,263 24,949 24,806 25,501 36 Required.............................................................. 25,041 25,283 24,831 25,302 25,066 25,324 24,701 25,344 25,935 26,031 37 Excess................................................................... -1,372 -337 -236 -719 -718 268 -438 -395 -1,129 -530 Small commercial banks 38 Reserves held.......................................................... 13,180 13,376 13,224 13,315 13,492 13,584 13,267 13,363 13,696 14,131 39 Required.............................................................. 13,226 13,206 13,027 13,191 13,387 13,340 13,163 13,269 13,787 13,990 40 Excess................................................................... -46 170 197 124 105 244 104 94 -91 141 U.S. agencies and branches 41 Reserves held.......................................................... 482 490 470 470 444 440 446 455 436 435 42 Required.............................................................. 440 463 455 446 460 431 437 443 430 422 43 Excess................................................................... 42 27 15 24 -16 9 9 12 6 13 All other institutions 44 Reserves held.......................................................... 485 625 587 589 626 570 583 624 611 630 45 Required.............................................................. 495 527 555 552 551 547 536 564 587 561 46 Excess................................................................... -10 98 32 37 75 23 47 60 24 69 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 □ May 1981 1.13 FEDERAL FUNDS AND REPURCHASE AGREEMENTS Large Member Banks' Averages of daily figures, in millions of dollars 1981, week ending Wednesday By maturity and source Mar. 4 Mar. 11 Mar. 18 Mar. 25 r Apr. 1 Apr. 8 Apr. 15 Apr. 22 Apr. 29 One day and continuing contract 1 Commercial banks in United States...................................... 49,384 53,647 49,104 47,575 48,803 57,586 56,645 53,824 49,944 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 14,060 15,595 15,548 15,698 14,932 14,318 13,549 12,735 13,021 3 Nonbank securities dealers........................................................ 2,759 2,887 2,179 2,104 2,832 2,778 2,582 2,206 3,162 4 All other........................................................................................... 20,076 19,514 19,180 18,753 19,608 19,050 19,324 16,284 20,205 All other maturities 5 Commercial banks in United States...................................... 3,669 3,475 3,531 3,629 3,475 3,210 3,481 4,749 3,608 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies . 7,430 7,552 7,664 7,972 7,327 7,159 7,229 7,864 7,678 7 Nonbank securities dealers........................................................ 4,146 4,314 4,144 4,556 5,013 4,474 4,371 4,340 4,464 8 All other........................................................................................... 10,681 10,938 10,581 10,238 10,414 9,961 10,077 13,363 10,329 Memo: Federal funds and resale agreement loans in ma­ turities of one day or continuing contract 9 Commercial banks in United States...................................... 15,554 15,117 17,058 15,983 15,985 17,068 14,963 16,101 14,351 10 Nonbank securities dealers........................................................ 2,719 2,651 3,258 3,065 3,066 3,364 2,947 2,984 2,988 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 A7 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 4/30/81 date rate 4/30/81 date rate 4/30/81 date rate 4/30/81 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 Vi 5 Vi 1974— Apr. 25...................... 7 Vi-8 8 1978— July 10...................... V/4 V/4 1971— Jan. 8................................. 51/4-5 Vi 51/4 30...................... 8 8 Aug. 21...................... V/4 V/4 15................................. 5V4 51/4 Dec. 9...................... 73/4-8 73/4 Sept. 22...................... 8 8 19................................. 5-5V4 5>/4 16...................... 73/4 73/4 Oct. 16...................... 8-81/2 81/2 22................................. 5-51/4 5 20...................... 8 Vi m 29________________ 5 5 1975— Jan. 6...................... IV4 V/4 Nov. 1...................... 8 Vi-9 V^ 9l/i rc 'w 43/4-5 5 10...................... IV'4 71/4 3...................... 91/2 9 Vi 19................................. 43/4 43/4 24...................... IV4 V/4 July 16................................. 43/4-5 5 Feb. 5...................... 63/4-71/4 63/4 1979— July 20...................... 10 10 23................................. 5 5 7...................... 63/4 63/4 Aug. 17...................... 10-10^ lOVi Nov. 11................................. 43/4-5 5 Mar. 10...................... 6V4-63/4 61/4 20...................... lOVi 10 Vi 19................................. 43/4 43/4 14...................... 6!/4 6'/4 Sept. 19...................... io^-ii 11 Dec. 13................................. 41/2-43/4 43/4 May 16...................... 6-6 >/4 6 21...................... 11 11 17................................. 41/2—43/4 4 Vi Oct. 8...................... 11-12 12 24................................. 4Vi 4 Vi 1976— Jan. 19...................... 5 Vi-6 5 Vi 10...................... 12 12 23...................... 5 Vi 5 Vi 1973— Jan. 15................................. 5 5 Nov. 22...................... 51/4-5 Vi 5{A 1980— Feb. 15...................... 12-13 13 Feb. 26................................. 5-5 Vi 5Vi 26...................... 51/4 51/4 19...................... 13 13 Mar. 2................................. 5 Vi 5 Vi May 29...................... 12-13 13 Apr. 23................................. 5 ^-53/4 5l/i 1977— Aug. 30...................... 51/4—53/4 51/4 30...................... 12 12 May 4................................. 53/4 53/4 31...................... 5!/4-53/4 53/4 June 13...................... 11-12 11 11................................. 53/4-6 6 Sept. 2...................... 53/4 53/4 16...................... 11 11 18................................. 6 6 Oct. 26...................... 6 6 July 28...................... 10-11 10 June 11................................. 6-6 Vl 6 Vi 29...................... 10 10 15................................. 6 Vi 6 Vi 1978— Jan. 9...................... 6-6 Vi 6V1 Sept. 26...................... 11 11 July 2................................. 7 7 20...................... 6 Vi 6 Vi Nov. 17...................... 12 12 Aug. 14................................. 7-7‘/2 7 Vi May 11...................... 6 Vi-7 7 Dec. 5...................... 12-13 13 23.................................. 7Vi 7 Vi 12...................... 7 7 8...................... 13 13 July 3...................... 7-71/4 V/4 In effect Apr. 30, 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- 2. Applicable to advances when exceptional circumstances or practices involve 1976, 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 □ May 1981 1.15 DEPOSITORY INSTITUTIONS RESERVE REQUIREMENTS' Percent of deposits Member bank requirements Depository institution requirements before implementation of the after implementation of the Type of deposit, and deposit interval Monetary Control Act Type of deposit, and Monetary Control Act5 in millions of dollars deposit interval Percent Effective date Percent Effective date Net demand2 Net transaction accounts6 0-2........................................................ 7 12/30/76 $0-$25 million...................... 3 11/13/80 2 10 -1 -1 0 0 .. 0 ... . . ... . .. . ... . .. . ... . .. . ... . .. . ... . .. . ... . ... . .. . .. . ... . .... 9Vi 12/30/76 Over $25 million.................. 12 11/13/80 ll3/4 12/30/76 100-400............................. 123/4 12/30/76 Nonpersonal time deposits1 Over 400.......................... WA 12/30/76 By original maturity Less than 4 years............. 11/13/80 Time and savings2 3 4 years or more................ 11/13/80 Savings............................. 3/16/67 Eurocurrency liabilities Time4 All types............................. 11/13/80 0-5, by maturity 30-179 days ........... 3 3/16/67 180 days to 4 years 21 VS 1/8/76 4 years or more... 10/30/75 Over 5, by maturity 30-179 days ........... 621A 12/12/74 180 days to 4 years 1 1/8/76 4 years or more ... 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, federal funds borrowings from non­ to that part of the deposits of each bank. Demand deposits subject to reserve member institutions, and certain other obligations. In general, the base for the requirements 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, by which a bank having 20,1980, the base was lowered by (a) 7 percent or (b) the decrease in an institution’s net demand deposits of more than $400 million was considered to have the character U.S. office gross loans to foreigners and gross balances due from foreign offices of business of a reserve city bank. The presence of the head office of such a bank of other institutions between the base period (Sept. 13-26, 1979) and the week constituted designation of that place as a reserve city. Cities in which there were ending Mar. 12,1980, whichever was greater. For the computation period beginning Federal Reserve Banks or branches were also reserve cities. Any banks having net May 29,1980, the base was increased by 7'/2 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 oanks 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 period 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 as orders of withdrawal, and telephone and preauthorized transfers (in excess of three 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 may maintain reserves on a pass-through basis with certain approved institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions Percent per annum Commercial banks Savings and loan associations and mutual savings banks Type and maturity of deposit In effect Apr. 30, 1981 Previous maximum In effect Apr. 30. 1981 Previous maximum Percent Effective Percent Effective Percent Effective Percent Effective date date date date 1 Savings........................................................................................... 5'/4 7/1/79 7/1/73 5 Vi 7/1/79 5 Vi 0) 2 Negotiable order of withdrawal accounts 2...................... 5>/4 12/31/80 1/1/74 5 Vi 12/31/80 5 1/1/74 Time accounts 3 3 F 14 ix - e 8 d 9 c d e a il y i s n g 5 . r . a ... t . e .. s . .. b .. y .. .. m .... a .. t . u ... r .. i . t . y .. .. 4 ........................................... 5 Vi 8/1/79 5 7/1/73 (6) (6) . 6 4 5 9 2 1 0 t t o o d a 2 2 y V s y l e t y a o e r a s 1 r ' y s e . 7 .. a .. . r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53/4 7 1 / / 1 1 / / 7 8 3 0 55 5 V' 3 / /4 2i 1 1 7 / / 2 2 /1 1 1 / / / 7 7 7 3 0 0 6 6V2 1 0 /1 ) /80 6 5 5 3 3/ /4 4 1 1 / / 2 2 0 1 1 ) / / 7 7 0 0 7 2l/i to 4 years 7....................................................................... 6>/2 7/1/73 53/4 1/21/70 63/4 (') 6 1/21/70 1 9 8 0 8 6 4 y t t o o e a 6 8 r s y y e e o a a r r r m s s 8 8 or . . . . e . . . . . . 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 7 7 1 3 ! / / / 4 2 4 12 1 6 / 1 2 / / 1 3 1 / / / 7 7 73 8 4 (6) 71 , /4 ii/i/73 7 V V A i 12 1 6 / 1 2 / / 1 3 1 / / / 7 7 7 3 4 8 ( (6 9 ) )I V , 2 ii/1/73 11 Issued to governmental units (all maturities) 10......... 6/1/78 73/4 '12/23/74' 6/1/78 V/i ’ 12/23/74' 12 Individual retirement accounts and Keogh (H.R. 10) plans (3 years or more) 1011...................................... 6/1/78 73/4 7/6/77 6/1/78 73/4 7/6/77 Special variable ceiling rates by maturity 13 6-month money market time deposits i2........................ (13) 14 2 Vi years or more.................................................................. (14) (,4) $ 1. July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loan or less. Thrift institutions may pay a maximum 9 percent when the six-month bill associations. rate is between 83/4 and 9 percent. Also effective March 15, 1979, interest com­ 2. For authorized states only, federally insured commercial banks, savings and pounding was prohibited on six-month money market time deposits at all offering loan associations, cooperative banks, and mutual savings banks in Massachusetts institutions. The maximum allowable rates in April for commercial banks and thrift and New Hampshire were first permitted to offer negotiable order of withdrawal institutions were as follows: Apr. 2, 12.328; Apr. 7, 14.033; Apr. 14, 13.896; Apr. (NOW) accounts on Jan. 1, 1974. Authorization to issue NOW accounts was ex­ 21, 13.871; Apr. 28, 14.292. Effective for all six-month money market certificates tended to similar institutions throughout New England on Feb. 27, 1976, and in issued beginning June 5, 1980, the interest rate ceilings will be determined by the New York State on Nov. 10, 1978, and in New Jersey on Dec. 28, 1979. Author­ discount rate (auction average) of most recently issued six-month U.S. Treasury ization to issue NOW accounts was extended to similar institutions nationwide bills as 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 + Vi percent bill rate + Vi percent Reserve Bulletin for October 1962 (p. 1279), August 1965 (p. 1084), and Feb­ 8.50 to 8.75 bill rate + Vi percent 9.00 ruary 1968 (p. 167). 7.50 to 8.50 bill rate + Vi percent bill rate + x/i percent 4. Effective Nov. 10, 1980, the minimum notice period for public unit accounts 7.25 to 7.50 7.75 bill rate + x/i 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 2Vl 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 Vi percentage point higher than that for commercial banks. Effective Mar. 1, 7. No minimum denomination. Until July 1, 1979, a minimum of $1,000 was 1980, a temporary ceiling of ll3/4 percent was placed on these accounts at com­ required for savings and loan associations, except in areas where mutual savings mercial banks; the temporary ceiling is 12 percent at savings and loan associations banks permitted lower minimum denominations. This restriction was removed for and mutual savings banks. Effective for all variable ceiling nonnegotiable time deposits maturing in less than 1 year, effective Nov. 1, 1973. deposits with maturities of 2l/i 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- Vi percent Treasury yield in December 1975 and November 1976 respectively. Below 9.50 9.25 9.50 9. Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for certificates Interest may be compounded on these time deposits. The ceiling rates of interest maturing in 4 years or more with minimum denominations of $1,000; however, the at which these accounts may be offered vary biweekly. The maximum allowable amount of such certificates that an institution could issue was limited to 5 percent rates in April for commercial banks were as follows: Apr. 2, 11.75; Apr. 14, 11.75; of its total time and savings deposits. Sales in excess of that amount, as well as Apr. 28, 11.75. The maximum allowable rates in April for thrift institutions were certificates of less than $1,000, were limited to the 6x/i percent ceiling on time as follows: Apr. 2, 12.10; Apr. 14, 12.00; Apr. 28, 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 l!/4 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 Vi 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 2'/5-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 V4 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 ^-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 □ May 1981 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1980 1981 Type of transaction 1978 1979 1980 Sept. Oct. Nov. Dec. Jan. Feb. Mar. U.S. Government Securities Outright transactions (excluding matched salepurchase transactions) Treasury bills 1 Gross purchases............................................................ 16.628 15.998 7.668 200 991 0 1.331 1.100 0 1.607 2 Gross sales..................................................................... 13.725 6.855 7.331 237 531 600 0 3.865 357 0 3 Exchange ....................................................................... 0 0 0 0 0 0 0 0 0 0 4 Redemptions................................................................ 2.033 2.900 3.389 0 700 500 49 1.000 0 0 Others within 1 Year1 5 Gross purchases............................................................ 1.184 3.203 912 0 0 0 100 0 0 0 6 Gross sales..................................................................... 0 0 0 0 0 0 0 0 23 0 7 Maturity shift................................................................ -5.170 17.339 12.427 589 596 2.368 754 462 990 878 8 Exchange ....................................................................... - 11.308 - 18.251 - 1.459 -420 -879 -967 0 -1.936 -1.385 9 Redemptions................................................................ } " 2.600 0 0 0 0 0 0 0 0 I to 5 vears 10 Gross purchases............................................................ 4.188 2.148 2.138 0 0 0 0 0 0 0 11 Gross sales..................................................................... 0 0 0 0 0 0 0 0 0 0 1 1 3 2 M Ex a c t h u a ri n t g y e s h .. i .. f . t .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | - 178 - 1 7 2 . . 5 6 0 93 8 -8 13 .9 .4 0 1 9 2 - 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 - 1 8 .3 7 8 8 5 5 to 10 vears 14 Gross purchases............................................................ 1.526 523 703 0 0 0 0 0 0 0 15 Gross sales..................................................................... 0 0 0 0 0 0 0 0 0 0 1 1 6 7 M Ex a c t h u a ri n t g y e s h .. i .. f . t .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J 2.803 -4 2 .6 .1 4 8 6 1 -3 2 .0 .9 9 7 2 0 0 0 0 0 220 0 0 0 0 0 400 0 0 0 Over 10 years 18 Gross purchases............................................................ 1.063 454 811 0 0 0 0 0 0 0 19 Gross sales..................................................................... 0 0 0 0 0 0 0 0 0 0 2 21 0 M Ex a c t h u a ri n t g y e s h ... i . f . t .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J 2.545 1.619 0 - 1 4 .8 2 6 6 9 0 0 0 0 15 0 9 0 0 0 0 325 0 0 0 All maturities' 22 Gross purchases............................................................ 24.591 2”> 325 12.232 200 991 (1 1.431 1.1(H) 0 1.607 23 Gross sales..................................................................... 13.725 6.855 7.331 237 531 600 0 3.865 380 0 24 Redemptions................................................................ 2.033 5.500 3.389 0 700 500 49 1.000 0 0 Matched transactions 25 Gross sales..................................................................... 511.126 627.350 674.000 55.766 55.787 40.944 79.754 61.427 30.819 32.003 510.854 624.192 675.496 56.207 56.462 41.129 78.734 63.062 31.651 30.441 Repurchase agreements 27 Gross purchases............................................................ 151.618 107.051 113.902 3.203 20.145 24.169 11.534 6.108 0 1.623 28 Gross sales..................................................................... 152.436 106.968 113.040 2.743 19.808 23.924 11.381 8.137 0 1.246 29 Net change in U.S. government securities.............. 7.743 6.896 3.869 863 771 -670 516 -4.159 452 422 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 15 Repurchase agreements 33 Gross purchases............................................................ 40.567 37.321 28.895 977 S.922 4.825 1.889 652 0 494 34 Gross sales..................................................................... 40.885 36.960 28.863 1.188 5.734 4.880 1.767 1.177 0 437 35 Net change in federal agencv obligations................ -426 681 555 -302 167 -55 99 - 525 -3 42 Bankers Acceptances 36 Outright transactions, net............................................ 0 0 0 0 0 0 0 0 0 0 37 Repurchase agreements, net........................................ - 366 116 73 222 67 -43 253 -776 0 298 38 Net change in bankers acceptances........................... - 366 116 73 22"* 67 -43 253 -776 0 298 39 Total net change in System Open Market Account....................................................................... 6,951 7,693 4.497 784 1,005 -768 868 -5,460 450 762 1. Both gross purchases and redemptions include special certificates created Noil. 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 Apr. 1 Apr. Apr. 15 Apr. 22 Apr. 29 Apr. Consolidated condition statement Assets 1 Gold certificate account............................................................ 11', 154 11,154 11,154 11,154 11,154 11,156 11,154 11,154 2 Special drawing rights certificate account........................... 2,818 2,818 2,818 2,818 2,818 2,518 2,818 2,818 3 Coin.................................................................................................. 467 460 445 429 412 495 468 412 Loans 4 To depository institutions................................................... 1,758 467 3,208 1,306 8,572 1,249 656 2,333 5 Other........................................................................................... 0 0 0 0 0 0 0 0 Acceptances 6 Held under repurchase agreements................................. 191 0 0 446 549 0 298 0 Federal agency obligations 7 Bought outright....................................................................... 8,722 8,722 8,720 8,720 8,720 8,737 8,722 8,720 8 Held under repurchase agreements................................. 30 0 0 432 566 0 57 0 U.S. government securities Bought outright 9 Bills......................................................................................... 41,945 43,907 43,612 44,041 43,613 42,033 42,078 43,263 10 Notes....................................................................................... 58,370 58,370 59,118 59,118 59,118 58,370 58,370 59,118 11 Bonds..................................................................................... 17,218 17,218 17,306 17,306 17,306 17,218 17,218 17,306 12 Total1..................................................................................... 117,533 119.495 120.036 120,465 120,037 117.621 117,666 119.687 13 Held under repurchase agreements................................. 217 0 0 5,703 2,860 0 377 0 14 Total U.S. government securities.......................................... 117,750 119.495 120.036 126,168 122,897 117.621 118,043 119.687 15 Total loans and securities.......................................................... 128,451 128,684 131,964 137,072 141,304 127,607 127,776 130,740 16 Cash items in process of collection...................................... 9,544 10,197 11,662 10,307 11,946 7,473 11,107 9,224 17 Bank premises.............................................................................. 465 466 466 468 469 461 465 467 Other assets 18 Denominated in foreign currencies2............................... 7,038 6,849 6,849 6,846 6,848 7,086 7,060 6,768 19 Allother.................................................................................... 2,798 2,780 3,013 3,176 3,301 2,500 2,710 3,321 20 Total assets..................................................................................... 162,735 163,408 168,371 172,270 178,252 159,296 163,558 164,904 Liabilities 21 Federal Reserve notes.............................................................. 121,053 122,274 122,922 122,477 122,088 118,854 120,874 121,852 Deposits 22 Depository institutions.......................................................... 27,527 27,217 30,317 33,957 37,813 26,734 26,164 26,063 23 U.S. Treasury—General account...................................... 2,305 2,406 2,296 3,089 5,737 2,284 3,032 4,460 24 Foreign—Official accounts................................................. 320 292 388 319 326 422 474 476 25 Other........................................................................................... 407 284 341 316 266 337 313 311 26 Total deposits............................................................................... 30,559 30,199 33,342 37,681 44,142 29,777 29,983 31,310 27 Deferred availability cash items............................................. 6,509 6,166 7,457 7,147 7,020 5,928 7,846 7,068 28 Other liabilities and accrued dividends3............................. 1,943 2,055 1,923 2,252 2,273 1,958 1,952 1,971 29 Total liabilities.............................................................................. 160,064 160,694 165,644 169,557 175,523 156,517 160,655 162,201 Capital Accounts 30 Capital paid in.............................................................................. 1,227 1,229 1,230 1,232 1,233 1,222 1,227 1,233 31 Surplus........................................................................................... 1,203 1,203 1,203 1,203 1,203 1,203 1,203 1,203 32 Other capital accounts.............................................................. 241 282 294 278 293 354 473 267 33 Total liabilities and capital accounts.................................... 162,735 163,408 168,371 172,270 178,252 159,296 163,558 164,904 34 Memo: Marketable U.S. government securities held in custody for foreign and international account......... 100,720 100,038 100,171 100,591 101,725 94,658 101,214 100,546 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to bank) ... 142,265 142,587 143,023 143,324 143,634 141,297 142,182 143,716 36 Less-held by bank4............................................................ 21,212 20,313 20,101 20,847 21,546 22,443 21,308 21,864 37 Federal Reserve notes, net............................................. 121,053 122,274 122,922 122,477 122,088 118,854 120,874 121,852 Collateral for Federal Reserve notes 38 Gold certificate account........................................................ 11,154 11,154 11,154 11,154 11,154 11,156 11,154 11,154 39 Special drawing rights certificate account...................... 2,818 2,818 2,818 2,818 2,818 2,518 2,818 2,818 40 Other eligible assets............................................................... 0 0 0 0 0 0 0 0 41 U.S. government and agency securities......................... 107,081 108,302 108,950 108,505 108,116 105,180 106,902 107,880 42 Total collateral.............................................................................. 121,053 122,274 122,922 122,477 122,088 118,854 120,874 121,852 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 □ May 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 Apr. 1 Apr. 8 Apr. 15 Apr. 22 Apr. 29 Feb. 28 Mar. 31 Apr. 30 1Loans—Total................................................................................... 1,758 467 3,208 1,306 8,572 1,249 656 2,333 2 Within 15 days............................................................................ 1,700 392 3,121 1,290 8,558 1,199 616 1,905 3 16 days to 90 days..................................................................... 58 75 80 16 14 50 40 428 4 91 days to 1 year....................................................................... 0 0 7 0 0 0 0 0 5 Acceptances—Total..................................................................... 191 0 0 446 549 0 298 0 6 Within 15 days............................................................................ 191 0 0 446 549 0 298 0 7 16 days to 90 days..................................................................... 0 0 0 0 0 0 0 0 8 91 days to 1 year....................................................................... 0 0 0 0 0 0 0 0 9 U.S. government securities—Total........................................ 117,750 119,495 120,036 126,168 122,897 117,621 118,043 119,687 10 Within 15 days1.......................................................................... 2,943 4,971 4,634 9,559 5,771 3,101 2,265 2,098 11 16 days to 90 days..................................................................... 22,345 21,849 21,917 23,097 22,573 23,245 22,904 21,291 12 91 days to 1 year....................................................................... 28,608 28,821 28,911 28,937 29,978 27,385 29,020 31,983 13 Over 1 year to 5 years............................................................ 34,772 34,772 35,241 35,241 35,241 34,809 34,772 34,981 14 Over 5 years to 10 years........................................................ 13,755 13,755 13,918 13,918 13,918 13,754 13,755 13,918 15 Over 10 years.............................................................................. 15,327 15,327 15,415 15,416 15,416 15,327 15,327 15,416 16 Federal agency obligations—Total.......................................... 8,752 8,722 8,720 9,152 9,286 8,737 8,779 8,720 17 Within 15 days1.......................................................................... 51 40 19 501 635 128 266 69 18 16 days to 90 days..................................................................... 410 595 598 575 615 439 397 615 19 91 days to 1 year....................................................................... 1,962 1,758 1,824 1,792 1,752 1,843 1,834 1,752 20 Over 1 year to 5 years............................................................ 4,690 4,690 4,658 4,658 4,658 4,621 4,613 4,658 21 Over 5 years to 10 years........................................................ 954 954 936 982 982 1,030 975 982 22 Over 10 years.............................................................................. 685 685 685 644 644 685 685 644 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' Debits to demand deposits1 (seasonally adjusted) 1 All commercial banks............... 34,322.8 40,297.8 49,775.0 67,621.4 69.950.2 72.402.3 73,174.6 75.487.3 2 Major New York City banks 13,860.6 15,008.7 18,512.7 26,821.8 27.352.2 29,656.0 29,752.0 30,276.0 3 Other banks............................... 20,462.2 25,289.1 31,262.3 40,799.6 42,598.0 42.746.3 43,422.5 45.211.3 Debits to savings deposits2 (not seasonally adjusted) 4 ATS/NOW3 5.5 17.1 83.3 173.4 218.3 529.3 526.6 668.7 5 Business4 .. 21.7 56.7 77.3 95.6 119.2 108.2 93.4 112.8 6 Others5___ 152.3 359.7 515.2 573.7 704.2 685.7 553.1 556.8 7 All accounts 179.5 432.9 675.8 842.8 1,041.6 1,323.2 1,173.1 1,338.3 Demand deposit turnover1 (seasonally adjusted) 8 All commercial banks............. 129.2 139.4 163.5 211.6 222:7 244.6 253.6 262.9 9 Major New York City banks 503.0 541.9 646.2 842.2 865.8 956.2 952.6 959.5 10 Other banks............................... 85.9 96.8 113.3 141.8 150.8 161.3 168.7 176.9 Savings deposit turnover2 (not seasonally adjusted) 11 ATS/NO W3 6.5 7.0 7.8 8.4 10.4 15.1 12.5 14.2 12 Business4... 4.1 5.1 7.2 8.5 11.3 10.9 9.8 11.3 13 Others5___ 1.5 1.7 2.7 3.2 4.1 4.1 3.4 3.5 14 All accounts 1.7 1.9 3.1 4.0 5.1 6.3 5.5 6.1 1. Represents accounts of individuals, partnerships, and corporations, and of Note. Historical data for the period 1970 through June 1977 have been estimated; states and political subdivisions. these estimates are based in part on the debits series for 233 SMSAs, which were 2. Excludes special club accounts, such as Christmas and vacation clubs. available through June 1977. Back data are available from Publications Services, 3. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts Division of Administrative Services, Board of Governors of the Federal Reserve authorized for automatic transfer to demand deposits (ATS). ATS data availability System, Washington, D.C. 20551. Debits and turnover data for savings deposits starts with December 1978. are not available before July 1977. 4. Represents corporations and other profit-seeking organizations (excluding commercial banks but including savings ana loan associations, mutual savings banks, credit unions, the Export-Import Bank, and federally sponsored lending agencies). 5. Savings accounts other than NOW; business; and, from December 1978, ATS. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Aggregates A13 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures 1980' 1981 1977 1978 1979 1980 Item Dec. Dec. Dec. Dec.r Oct. Nov. Dec. Jan.r Feb.r Seasonally adjusted Measures1 1 M-1A........................................................ 328.4 351.6 369.8 384.4 386.4 388.2 384.4 373.3 366.6 365.0 2 M-1B........................................................ 332.6 360.1 386.9 411.3 411.6 414.7 411.3 416.0 419.0 422.9 3 M-2.......................................................... 1.294.1 1.401.5 1,526.0 1,668.7 1,653.6 1,667.1 1,668.7 1,681.7 1.695.4 1,713.8 4 M-3.......................................................... 1,460.3 1.623.6 1,775.5 1.952.2 1.920.0 1,941.0 1.952.2 1,978.6 1.996.4 2,011.6 5 L2.............................................................. 1.720.2 1,934.9 2,151.8 2.365.3 2.317.0 2,346.7 2.365.3 2,398.2 2,421.2 n.a. Components 6 Currency................................................. 88.7 97.6 106.3 116.2 114.9 115.6 116.2 116.6 117.3 117.9 7 Demand deposits.................................. 239.7 253.9 263.5 268.2 271.5 272.6 268.2 256.7 249.3 247.1 8 Savings deposits.................................... 486.4 475.8 417.0 393.8 408.8 406.8 393.8 377.7 370.5 367.5 9 Small-denomination time deposits3 454.9 533.8 656.2 759.0 726.5 739.3 759.0 777.9 785.1 791.2 10 Large-denomination time deposits4 145.2 194.7 219.0 247.0 231.0 237.4 247.0 258.1 263.1 262.1 Not seasonally adjusted Measures1 11 M-l A................................................................... 337.2 360.9 379.4 394.7 388.0 391.1 394.7 377.3 358.2 358.3 12 M-1B.................................................................. 341.4 369.5 396.4 421.8 413.7 417.7 421.8 420.6 409.4 415.1 13 M-2..................................................................... 1,295.9 1,403.6 1,527.7 1,674.7 1,656.9 1,665.7 1,674.7 1,684.7 1,685.0 1,708.8 14 M-3..................................................................... 1,464.5 1,629.2 1,780.8 1,962.8 1,923.1 1,942.1 1,962.8 1,984.3 1,988.3 2,009.3 15 L2......................................................................... 1,723.2 1,938.3 2,154.3 2,372.0 2,318.0 2,344.7 2,372.0 2,401.2 2,414.4 n.a. Components 16 Currency............................................................ 90.3 99.4 108.3 118.5 114.9 116.6 118.5 115.8 115.9 116.8 17 Demand deposits............................................ 247.0 261.5 271.2 276.2 273.1 274.5 276.2 261.5 242.3 241.4 18 Other checkable deposits5........................... 4.2 8.6 17.0 27.1 25.7 26.6 27.1 43.3 51.2 56.8 19 Overnight RPs and Eurodollars6............. 18.6 23.9 25.3 32.2 32.5 32.6 32.2 32.5 31.6 29.8 20 Money market mutual funds...................... 3.8 10.3 43.6 75.8 77.4 77.0 75.8 80.7 92.4 105.6 21 Savings deposits............................................... 483.1 472.6 414.1 390.9 412.9 405.8 390.9 374.9 365.3 364.9 22 Small-denomination time deposits3......... 451.3 529.8 651.2 757.4 723.7 735.9 757.4 779.1 789.5 796.6 23 Large-denomination time deposits4......... 147.7 198.2 222.6 251.5 230.7 240.0 251.5 260.7 265.4 264.7 1. Composition of the money stock measures is as follows: 3. Small-denomination time deposits are those issued in amounts of less than M-1A: Averages of daily figures for (1) demand deposits at all commercial banks $100,000. other than those due to domestic banks, the U.S. government, and foreign banks 4. Large-denomination time deposits are those issued in amounts of $100,000 and official institutions less cash items in the process of collection and Federal or more and are net of the holdings of domestic banks, thrift institutions, the U.S. Reserve float; and (2) currency outside the Treasury, Federal Reserve Banks, and government, money market mutual funds, and foreign banks and official institu­ the vaults of commercial banks. tions. M-1B: M-1A plus negotiable order of withdrawal (NOW) and automatic transfer 5. Includes ATS and NOW balances at all institutions, credit union share draft service (ATS) accounts at banks and thrift institutions, credit union share draft balances, and demand deposits at mutual savings banks. accounts, and demand deposits at mutual savings banks. 6. Overnight (and continuing contract) RPs are those issued by commercial M-2: M-1B plus savings and small-denomination time deposits at all depository banks to the nonbank public, and overnight Eurodollars are those issued by Ca­ institutions, overnight repurchase agreements at commercial banks, overnight Eu­ ribbean branches of member banks to U.S. nonbank customers. rodollars held by U.S. residents other than banks at Caribbean branches of member Note. Latest monthly and weekly figures are available from the Board’s H.6(508) banks, and money market mutual fund shares. release. Back data are available from the Banking Section, Division of Research M-3: M-2 plus large-denomination time deposits at all depository institutions and Statistics. The monetary aggregates and their components have been revised and term RPs at commercial banks and savings and loan associations. due to new seasonal adjustment factors 2. 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

A14 Domestic Financial Statistics □ May 1981 1.22 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS' AND MEMBER BANK DEPOSITS Billions of dollars, averages of daily figures 1980 1981 Item D 19 e 7 c 8 . D 19 e 7 c 9 . D 19 e 8 c 0 . Sept. Oct. Nov.2 Dec. Jan. Feb. Mar. Seasonally adjusted 1 Total reserves3............................................................................................................. 41.16 43.46 40.13 41.52 41.73 41.23 40.13 40.10 39.76 40.25 2 Nonborrowed reserves............................................................................................. 40.29 41.98 38.44 40.21 40.42 39.17 38.44 38.70 38.45 39.25 3 Required reserves...................................................................................................... 40.93 43.13 39.58 41.26 41.52 40.73 39.58 39.56 39.58 39.87 4 Monetary base4........................................................................................................... 142.2 153.7 159.8 159.5 160.9 160.7 159.8 160.1 160.6 161.3 5 Member bank deposits subject to reserve requirements5............................. 616.1 644.5 701.8 678.2 684.7 694.3 701.8 703.8 704.3 703.6 6 Time and savings............. ....................................................................................... 428.7 451.2 485.6 482.0 485.5 475.4 485.6 517.4 523.3 524.7 Demand 7 Private........................................................................................................................ 185.1 191.5 196.0 194.5 195.6 198.1 196.0 184.1 178.9 176.8 8 U.S. government.................................................................................................... 2.2 1.8 1.9 1.8 2.4 2.2 1.9 2.3 2.1 2.0 Not seasonally adjusted 9 Monetary base4........................................................................................................... 144.6 156.2 162.5 58.0 159.0 160.6 161.5 162.5 158.9 159.6 10 Member bank deposits subject to reserve requirements5............................. 624.0 652.7 710.3 675.6 684.2 694.6 710.3 712.6 701.5 703.1 11 Time and savings........................................................................................................ 429.6 452.1 486.5 479.6 485.7'- 493.0r 505.0'- 520.5'- 524.8r 527.9 Demand 12 Private........................................................................................................................ 191.9 198.6 203.2 193.9 196.4 199.6 203.2 189.9 174.6 173.2 13 U.S. government.................................................................................................... 2.5 2.0 2.1 2.1 2.1 1.9 2.1 2.1 2.0 2.1 1. Reserves of depository institutions series reflect actual reserve requirement 2. Reserve measures for November reflect increases in required reserves asso­ rcentages with no adjustment to eliminate the effect of changes in Regulations ciated with the reduction of weekend avoidance activities of a 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.” This action raised required 4. Includes reserve balances at Federal Reserve Banks in the current week plus reserves about $320 million. Effective Mar. 12, 1980, the 8 percentage point mar­ vault cash held two weeks earlier used to satisfy reserve requirements at all ginal reserve requirement was raised to 10 percentage points. In addition the base depository institutions plus currency outside the U.S. Treasury, Federal Reserve upon which the marginal reserve requirement was calculated was reduced. This Banks, the vaults of depository institutions, and surplus vault cash at depository action increased required reserves about $1.7 million in the week ending Apr. 2, institutions. 1980. Effective May 29, 1980, the marginal reserve requirement was reduced from 5. Includes total time and savings deposits and net demand deposits as defined 10 to 5 percentage points and the base upon which the marginal reserve requirement by Regulation D. Private demand deposits include all demand deposits except 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. Feb. Mar. Feb. Mar. Seasonally adjusted Not seasonally adjusted 1 Total loans and securities2.............................. 1,013.43 1,134.6“ 1,237.3 1,262.95 1,262.1 1,022.53 1,145.(H 1,248.9 1,250.95 1,255.9 2 U.S. Treasury securities...................................... 93.3 93.8 110.7 115.3 114.9 94.5 95.0 112.1 116.1 117.1 3 Other securities..................................................... 173.23 191.8 213.9 217.2 218.2 173.93 192.6 214.8 216.1 217.5 4 Total loans and leases2........................................ 746.93 848.94 912.7 930.35 929.0 754.23 857.44 922.1 918.75 921.2 5 Commercial and industrial loans................ 246.16 291.I4 324.9 331.55 332.3 247.76 293.04 327.0 327.85 330.4 6 Real estate loans............................................... 210.5 241.34 260.6 264.75 266.6 210.9 241.84 261.1 263.65 265.0 7 Loans to individuals........................................ 164.7 184.9 175.2 174.3 174.6 165.6 186.0 176.2 172.7 172.0 8 Security loans...................................................... 19.3 18.6 17.6 18.2 18.6 20.6 19.8 18.8 17.8 18.5 9 Loans to nonbank financial institutions .. 27.17 28.84 28.7 28.95 28.7 27.67 29.34 29.2 28.35 28.1 10 Agricultural loans............................................. 28.2 31.1 31.6 32.2 32.6 28.1 30.9 31.4 31.6 32.0 11 Lease financing receivables........................... 7.5 9.3 10.9 11.9 11.9 7.5 9.3 10.9 11.9 11.9 12 All other loans................................................... 43.63 44.0 63.4 68.8 63.7 46.23 47.3 67.5 65.1 63.3 Memo: 13 Total loans and securities plus loans sold2-9 1,017.13 1,137.64* 1,240.0 1,265.75 1,264.8 1,026.23 1,148.(H8 1,251.6 1,253.75 1,258.6 14 Total loans plus loans sold2 9........................... 750.63 851.94.8 915.5 933.15 931.7 757.93 860.44.8 924.8 921.55 924.0 15 Total loans sold to affiliates9........................... 3.7 3.08 2.7 2.8 2.8 3.7 3.08 2.7 2.8 2.8 16 Commercial and industrial loans plus loans sold9................................................................... 248.06-io 293.14.8 326.6 333.45 334.1 249.66.io 295.04.8 328.8 329.75 332.2 17 Commercial and industrial loans sold9 ... 1.9^0 2.08 1.8 1.9 1.9 1.910 2.08 1.8 1.9 1.9 18 Acceptances held............................................. 6.6 8.2 8.1 9.0 8.8 7.3 9.1 8.8 8.9 8.8 19 Other commercial and industrial loans... 239.5 282.9 316.7 322.5 323.5 240.4 283.9 318.2 319.0 321.5 20 To U.S. addressees11................................. 226.0 264.1 295.2 297.6 297.9 225.9 264.1 295.2 294.1 296.3 21 To non-U.S. addressees............................. 13.5 18.8 21.5 24.9 25.6 14.5 19.8 23.0 24.9 25.2 22 Loans to foreign banks...................................... 21.5 18.5 23.2 24.6 22.8 23.2 20.0 24.9 23.1 22.2 1. Includes domestically chartered banks; U.S. branches and agencies of foreign 7. As of Dec. 31, 1978, nonbank financial loans were reduced $0.1 billion as banks, New York investment companies majority owned by foreign banks, and the result of reclassification. Edge Act corporations owned by domestically chartered and foreign banks. 8. As of Dec. 1, 1979, loans sold to affiliates were reduced $800 million and 2. Excludes loans to commercial banks in the United States. commercial and industrial loans sold were reduced $700 million due to corrections 3. As of Dec. 31, 1978, total loans and securities were reduced by $0.1 billion. of two banks in New York City. “Other securities” were increased by $1.5 billion and total loans were reduced by 9. Loans sold are those sold outright to a bank’s own foreign branches, non­ $1.6 billion largely as the result of reclassifications of certain tax-exempt obligations. consolidated nonbank affiliates of the bank, the bank’s holding company (if not a Most of the loan reduction was in “all other loans.” bank), and nonconsolidated nonbank subsidiaries of the holding company. 4. As of Jan. 3, 1979, as the result of reclassifications, total loans and securities 10. As of Dec. 31, 1978, commercial and industrial loans sold outright were and total loans were increased by $0.6 billion. Business loans were increased by increased $0.7 billion as the result of reclassifications, but $0.1 billion of this amount $0.4 billion and real estate loans by $0.5 billion. Nonbank financial loans were was offset by a balance sheet reduction of $0.1 billion as noted above. reduced by $0.3 billion. 11. United States includes the 50 states and the District of Columbia. 5. Absorption of a nonbank affiliate by a large commercial bank added the following to February figures: total loans and securities, $1.0 billion; total loans Note. Data are prorated averages of Wednesday estimates for domestically and leases, $1.0 billion; commercial and industrial loans, $.5 billion; real estate chartered banks, based on weekly reports of a sample of domestically chartered loans, $.1 billion; nonbank financial, $.1 billion. banks and quarterly reports of all domestically chartered banks. For foreign related 6. As of Dec. 31,1978, commercial and industrial loans were reduced $0.1 billion institutions, data are averages of month-end estimates based on weekly reports as a result of reclassifications. from large agencies and branches and quarterly reports from all agencies, branches, investment companies, and Edge Act corporations engaged in banking. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics □ May 1981 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS > Monthly averages, billions of dollars December outstanding Outstanding in 1980 and 1981 Source 1977 1978 1979 July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Total nondeposit funds 1 Seasonally adjusted2............................................... 61.5 91.2 121.1 114.6 109.4 114.0 119.9 116.4 120.3 125.8 124.3 119.8 2 Not seasonally adjusted.......................................... 60.1 90.2 119.8 118.6 112.3 114.5 120.8 119.6 119.8 123.3 123.5 119.5 Federal funds, RPs, and other borrowings from non-banks3 3 Seasonally adjusted................................................. 58.4 80.7 90.0 100.9 96.2 102.2 105.7 104.9 109.4 114.7 113.1 113.2 4 Not seasonally adjusted.......................................... 57.0 79.7 88.7 104.9 99.1 102.7 106.6 108.1 108.9 112.2 112.3 112.9 5 Net balances due to foreign-related institutions, not seasonally adjusted...................................... -1.5 6.8 28.1 10.9 10.3 8.9 11.4 8.9' 8.2' 8.3 8.4' 3.8 6 Loans sold to affiliates, not seasonally adjusted4-5.............................................................. 4.7 3.7 3.0 2.8 2.9 2.9 2.8 2.6 2.7 2.8 2.8 2.8 Memo 7 Domestically chartered banks net positions with own foreign branches, not seasonally adjusted6................................................................ -12.5 - 10.2 6.5 -8.4 -10.3 -14.5 -12.9 -14.2 -14.7 -16.2 -14.8 -17.0 8 Gross due from balances........................................ 21.1 24.9 22.8 32.7 35.8 38.2 38.3 37.2 37.5 37.4 36.4 39.0 9 Gross due to balances............................................ 8.6 14.7 29.3 24.3 25.5 23.7 25.5 23.0 22.7 21.2 21.6 21.9 10 Foreign-related institutions net positions with directly related institutions, not seasonally adjusted7................................................................ 10.9 17.0 21.6 19.3 20.6 23.3 24.3 23.1' 22.9' 24.5 23.1 20.9 11 Gross due from balances........................................ 10.7 14.3 28.9 30.8 30.9 30.3 30.8 31.0' 32.5' 31.4 31.7 31.7 12 Gross due to balances............................................. 21.7 31.3 50.5 50.1 51.6 53.6 55.2 54.1' 55.4 55.9 54.8 52.6 Security RP borrowings 13 Seasonally adjusted*............................................... 36.0 44.8 49.2 55.0 57.5 56.2 59.7 58.8 63.4 68.7 67.0 67.1 14 Not seasonally adjusted.......................................... 35.1 43.6 47.9 54.7 59.1 58.7 59.5 60.9 61.7 65.0 65.2 65.8 U.S. Treasury demand balances9 15 Seasonally adjusted................................................. 4.4 8.7 8.9' 10.4' 11.3' 11.3' 11.7' 8.1' 8.3' 6.9' 8.1' 11.6 16 Not seasonally adjusted.......................................... 5.1 10.3 9.7 9.3 9.3 14.2 12.7 6.6 9.0 7.9 8.1 10.2 Time deposits, $100,000 or more10 17 Seasonally adjusted................................................. 162.0 213.0 227.1' 235.7' 237.1' 240.3' 242.0' 247.8' 257.0' 268.0' 272.5' 270.2 18 Not seasonally adjusted.......................................... 165.4 217.9 232.8 230.0 232.1 236.7 241.1 250.8 263.4 272.8 276.8 274.8 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 ana 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. Movement of federal funds, RPs, and other borrowings from nonbanks, This includes borrowings from Federal Reserve Banks and from foreign banks, (lines 3 and 4) is based on fluctuations in security RP borrowings (lines 13 and 14). term federal funds, overdrawn due from bank balances, loan RPs, and participa­ In addition, lines 15 and 17 have been revised because of new seasonal factors. tions in pooled loans. Includes averages of daily figures for member banks and averages of current and previous month-end data for foreign-related institutions. 4. Loans initially booked by the bank and later sold to affiliates that are still held by affiliates. Averages of Wednesday data. 5. As of Dec. 1, 1979, loans sold to affiliates were reduced $800 million due to corrections of two New York City banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A17 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1980 1981 Account June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Domestically Chartered Commercial Banks1 1 Loans and investments, excluding interbank................................................. 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 1,187.8 2 Loans, excluding interbank......................... 793.2 793.4 801.9 809.1 821.6 832.8 851.4 840.2 839.0 840.8 855.4 3 Commercial and industrial.................... 256.9 257.1 259.5 263.9 269.0 275.7 281.5 277.6 276.3 277.7 285.4 4 Other.............................................................. 536.4 536.3 542.4 545.2 552.6 557.1 569.9 562.6 562.7 563.1 570.1 5 U.S. Treasury securities............................... 96.2 98.7 101.4 103.2 104.4 107.1 111.2 112.0 113.7 112.8 115.8 6 Other securities............................................... 201.1 203.3 205.2 205.6 208.9 210.9 214.6 213.8 214.3 216.2 216.6 7 Cash assets, total............................................. 150.6 154.3 148.8 156.6 155.9 175.6 194.2 159.3 165.9 166.4 181.8 8 Currency and coin...................................... 17.3 17.5 18.2 17.8 18.3 16.9 19.9 18.7 18.6 17.8 18.8 9 Reserves with Federal Reserve Banks 29.5 32.2 29.0 31.1 31.7 30.4 28.2 25.2 30.4 31.7 38.3 10 Balances with depository institutions . 45.8 45.0 45.9 46.8 47.2 56.1 63.0 54.9 54.6 53.6 57.3 11 Cash items in process of collection ... 58.1 59.6 55.8 60.9 58.8 72.2 83.0 60.5 62.3 63.3 67.4 12 Other assets2................................................... 143.8 143.5 150.3 154.4 151.3 151.3 165.6 155.8 160.1 164.9 167.7 13 Total assets/total liabilities and capital... 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 1,537.3 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 1,151.7 15 Demand........................................................ 358.1 363.5 363.4 369.7 375.7 393.0 432.2 351.1 345.5 345.4 356.8 16 Savings.......................................................... 197.7 205.5 208.5 209.1 210.9 209.5 201.3 211.9 214.3 220.6 222.7 17 Time............................................................... 492.4 484.2 490.9 498.5 506.2 523.7 553.8 565.7 572.3 570.7 572.2 18 Borrowings........................................................ 151.0 157.0 158.5 163.7 161.7 157.3 156.4 156.4 163.2 163.7 179.5 19 Other liabilities............................................... 75.9 74.0 75.4 75.6 74.7 78.1 79.0 76.7 80.3 80.7 81.8 20 Residual (assets less liabilities).................. 109.8 109.0 111.0 112.3 112.7 116.1 114.2 119.3 117.5 120.0 124.3 Memo: 21 U.S. Treasury note balances included in borrowing................................................. 13.3 7.6 8.7 15.7 11.5 4.4 10.2 9.5 8.5 10.2 16.9 22 Number of banks.......................................... 14,646 14,658 14,666 14,678 14,760 14,692 14,693 14,689 14,696 14,701 14,713 All Commercial Banking Institutions3 23 Loans and investments, excluding interbank................................................. 1,161.0'' 1,194.3' 1,262.4' 24 Loans, excluding interbank......................... 860.2 881.5' 932.5 25 Commercial and industrial.................... 297.8' 308.1 330.6 26 Other.............................................................. 562.4' 573.4' 601.9 27 U.S. Treasury securities............................... 98.3 105.6 113.6' 28 Other securities............................................... 202.5 207.2 216.3 29 Cash assets, total............................................. 172.2 178.2' 218.6 30 Currency and coin...................................... 17.3 17.8 20.0' 31 Reserves with Federal Reserve Banks 30.3 31.6' 29.0' 32 Balances with depository institutions . 64.9' n.a. n.a. 66.4' n.a. n.a. 85.0' n.a. n.a. n.a. n.a. 33 Cash items in process of collection ... 59.7 62.4' 84.7 34 Other assets2................................................... 191.0 204.3' 222.7' 35 Total assets/total liabilities and capital... 1,524.3' 1,576.8' 1,703.7' 36 Deposits............................................................ 1,091.6' 1,122.1' 1,239.9 37 Demand........................................................ 378.9' 388.8' 453.6 38 Savings.......................................................... 198.1 209.5 201.6 39 Time.............................................................. 514.7' 523.9' 584.7 40 Borrowings........................................................ 197.6 211.0 210.4' 41 Other liabilities............................................... 123.6' 129.7' 135.5 42 Residual (assets less liabilities).................. 111.4 113.9 117.9' Memo: 43 U.S. Treasury note balances included in borrowing................................................. 13.3 15.7 9.5' 44 Number of banks.......................................... 15,037' 15,084' 15,120' 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 □ May 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 1981 Account Mar. 4 Mar. 11 Mar. 18 Mar. 25 Apr. Ip Apr. 8p Apr. 15 p Apr. 22p Apr. 29p 1 Cash items in process of collection.................................... 57,382 53,553 55,438 52,064 60,595 53,422 62,801 55,985 55,513 2 Demand deposits due from banks in the United States................................................................................ 20,717 19,908 21,720 19,620 21,632 19,832 21,235 18,794 19,503 3 All other cash and due from depository institutions.. 30,543 30,776 33,998 35,225 31,893 31,794 35,502 38,058 42,589 4 Total loans and securities................................................ 558,629 553,421 555,505 551,056 564,930 559,173 563,475 559,650 558,811 Securities 5 U.S. Treasury securities........................................................ 42,629 41,986 41,233 39,577 41,764 41,786 41,021 40,718 39,720 6 Trading account................................................................... 8,557 7,843 7,429 6,017 7,865 7,247 6,300 6,023 5,440 7 Investment account, by maturity................................. 34,072 34,143 33,804 33,561 33,898 34,539 34,720 34,695 34,280 8 One year or less.............................................................. 9,051 9,254 9,178 9,074 9,650 10,094 10,143 10,078 9,997 9 Over one through five years...................................... 21,359 21,236 21,012 20,855 20,677 20,520 20,651 20,666 20,447 10 Over five years................................................................. 3,662 3,654 3,614 3,631 3,571 3,926 3,926 3,951 3,836 11 Other securities....................................................................... 78,043 77,462 77,417 77,360 78,383 77,697 77,418 77,555 77,514 12 Trading account................................................................... 3,389 2,860 2,882 2,735 3,637 2,976 2,747 2,768 2,671 13 Investment account............................................................ 74,654 74,601 74,535 74,626 74,745 74,720 74,670 74,787 74,843 14 U.S. government agencies.......................................... 16,167 16,109 16,072 16,104 16,513 16,506 16,356 16,369 16,395 15 States and political subdivision, by maturity___ 55,690 55,731 55,670 55,711 55,394 55,397 55,472 55,546 55,558 16 One year or less.......................................................... 7,130 7,208 7,160 7,229 7,048 7,122 7,172 7,208 7,243 17 Over one year............................................................ 48,560 48,522 48,510 48,482 48,346 48,275 48,299 48,338 48,315 18 Other bonds, corporate stocks and securities----- 2,797 2,761 2,793 2,810 2,838 2,817 2,843 2,872 2,890 Loans 19 Federal funds sold1................................................................. 28,511 28,561 29,965 27,592 30,531 30,268 32,661 29,867 26,696 20 To commercial banks........................................................ 20,516 21,096 21,504 19,916 21,216 21,700 23,696 21,014 17,853 21 To nonbank brokers and dealers in securities......... 6,224 5,643 6,487 5,947 7,552 6,660 7,087 6,792 6,605 22 To others................................................................................ 1,771 1,822 1,973 1,729 1,762 1,907 1,877 2,062 2,238 23 Other loans, gross................................................................... 422,059 418,085 419,606 419,184 425,893 421,179 424,138 423,316 426,707 24 Commercial and industrial............................................... 169,929 168,912 169,582 169,682 172,830 171,252 171,090 172,365 174,661 25 Bankers acceptances and commercial paper......... 3,865 3,658 3,544 3,668 4,570 4,267 4,184 4,388 4,550 26 All other............................................................................ 166,064 165,255 166,037 166,014 168,260 166,985 166,907 167,977 170,111 27 U.S. addressees.......................................................... 159,067 158,294 158,972 158,873 160,780 159,817 159,829 160,929 162,925 28 Non-U.S. addressees................................................. 6,997 6,960 7,066 7,141 7,480 7,168 7,077 7,048 7,186 29 Real estate................................................................................ 113,733 113,946 114,165 114,249 114,471 114,552 114,784 115,076 115,358 30 To individuals for personal expenditures.................. 71,062 70,848 70,788 70,774 70,216 70,058 70,229 70,493 70,607 To financial institutions 31 Commercial banks in the United States................ 4,634 4,502 4,664 4,461 4,932 4,881 5,114 4,688 4,907 32 Banks in foreign countries.......................................... 8,637 8,554 8,396 8,529 8,557 8,647 8,395 8,283 8,056 33 Sales finance, personal finance companies, etc .. 9,675 9,414 9,530 9,588 9,525 9,650 9,663 9,674 10,095 34 Other financial institutions.......................................... 15,178 14,959 14,930 14,998 15,227 15,061 15,255 14,963 15,243 35 To nonbank brokers and dealers in securities......... 6,385 5,341 5,972 5,123 7,803 5,664 6,814 6,107 6,351 36 To others for purchasing and carrying securities2 .. 2,247 2,269 2,257 2,252 2,351 2,365 2,374 2,369 2,339 37 To finance agricultural...................................................... 5,432 5,426 5,431 5,401 5,498 5,502 5,567 5,561 5,589 38 All other................................................................................ 15,145 13,912 13,891 14,125 14,481 13,546 14,852 13,735 13,499 39 Less: Unearned income........................................................ 6,589 6,626 6,656 6,681 5,733 5,810 5,809 5,833 5,840 40 Loan loss reserve........................................................ 6,024 6,046 6,059 5,977 5,907 5,946 5,953 5,973 5,986 41 Other loans, net....................................................................... 409,446 405,412 406,890 406,526 414,253 409,423 412,376 411,509 414,881 42 Lease financing receivables................................................. 10,025 10,033 10,032 10,040 10,120 10,130 10,112 10,145 10,154 43 All other assets....................................................................... 88,167 89,840 85,389 87,652 93,605 91,970 91,003 92,756 91,531 44 Total assets........................................................................ 765,464 757,531 762,083 755,657 782,776 766,322 784,128 775,387 778,102 Deposits 45 Demand deposits..................................................................... 195,703 191,191 191,786 182,968 206,625 192,308 213,752 191,894 189,015 46 Mutual savings banks........................................................ 645 658 595 549 774 737 731 581 599 47 Individuals, partnerships, and corporations............. 132,047 131,054 129,448 125,203 139,814 131,582 140,674 131,652 128,838 48 States and political subdivisions.................................... 4,708 4,173 4,748 4,479 4,946 4,235 5,428 4,539 4,456 49 U.S. government................................................................. 3,266 2,109 3,122 1,662 1,005 1,986 7,846 2,864 2,881 50 Commercial banks in the United States.................... 38,359 36,361 37,389 34,794 38,663 36,020 39,412 34,011 33,028 51 Banks in foreign countries............................................... 7,150 8,245 7,616 7,841 8,797 7,650 8,802 8,306 8,561 52 Foreign governments and official institutions........... 1,930 1,614 1,632 1,287 1,940 1,944 2,043 1,966 1,987 53 Certified and officers’ checks........................................ 7,597 6,978 7,234 7,151 10,686 8,153 8,814 7,975 8,664 54 Time and savings deposits................................................... 319,484 320,514 322,278 321,059 321,801 321,934 322,957 323,343 322,986 55 Savings..................................................................................... 76,702 76,718 77,001 77,415 79,344 80,846 81,139 79,891 77,893 56 Individuals and nonprofit organizations................ 72,654 72,715 73,052 73,410 75,245 76,733 77,063 75,904 73,883 57 Partnerships and corporations operated for profit.......................................................................... 3,396 3,412 3,353 3,414 3,450 3,486 3,400 3,379 3,396 58 Domestic governmental units.................................... 635 573 576 572 631 607 661 590 597 59 All other............................................................................ 17 18 21 19 18 20 16 18 17 60 Time......................................................................................... 242,782 243,796 245,277 243,644 242,457 241,088 241,818 243,452 245,092 61 Individuals, partnerships, and corporations......... 207,722 208,737 210,207 208,647 208,370 207,317 208,237 209,625 211,051 62 States and political subdivisions............................... 20,692 20,641 20,394 20,286 19,672 19,656 19,590 19,752 19,924 63 U.S. government............................................................ 299 296 276 282 282 283 264 228 228 64 Commercial banks in the United States................ 8,014 8,058 8,182 8,119 7,849 7,741 7,730 7,835 7,833 65 Foreign governments, official institutions, and banks ......................................................................... 6,055 6,064 6,218 6,310 6,283 6,090 5,9% 6,011 6,057 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks.................. 1,276 92 1,482 2,504 1,122 138 2,739 741 7,478 67 Treasury tax-and-loan notes.......................................... 2,457 1,718 6,989 7,716 8,901 1,871 660 11,468 12,449 68 All other liabilities for borrowed money3.................. 131,759 129,673 125,642 125,194 128,985 136,349 130,642 131,347 128,742 69 Other liabilities and subordinated notes and debentures.......................................................................... 63,601 63,237 62,873 65,138 63,839 62,213 62,056 65,377 66,309 70 Total liabilities.................................................................. 714,280 706,425 711,052 704,579 731,273 714,812 732,806 724,168 726,979 71 Residual (total assets minus total liabilities)4................ 51,184 51,105 51,031 51,078 51,503 51,510 51,322 51,219 51,123 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 more on Dec. 31, 1977, see table 1.13. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks 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 Mar. 4 Mar. 11 Mar. 18 Mar. 25 Apr. 1 p Apr. 8p Apr. 15 p Apr. 22p Apr. 29p 1 Cash items in process of collection.................................... 54,290 50,696 52,735 49,358 57,592 50,624 59,301 52,571 52,330 2 Demand deposits due from banks in the United States .................................................................................. 19,971 19,224 20,996 19,002 20,841 19,151 20,468 18,054 18,854 3 All other cash and due from depository institutions.. 28,620 28,706 31,782 32,847 29,704 29,842 33,478 35,443 39,933 4 Total loans and securities................................................ 521,375 516,001 518,109 514,143 527,294 521,346 525,504 522,122 521,872 Securities 5 U.S. Treasury securities........................................................ 39,636 38,984 38,160 36,393 38,420 38,386 37,622 37,276 36,264 6 Trading account................................................................... 8,473 7,787 7,348 5,922 7,748 7,150 6,204 5,933 5,370 7 Investment account, by maturity................................. 31,163 31,197 30,812 30,471 30,672 31,235 31,418 31,342 30,894 8 One year or less............................................................... 8,306 8,523 8,461 8,376 8,958 9,393 9,439 9,299 9,183 9 Over one through five years...................................... 19,554 19,384 19,108 18,838 18,518 18,297 18,428 18,467 18,250 10 Over five years................................................................. 3,302 3,290 3,243 3,257 3,196 3,545 3,552 3,577 3,461 11 Other securities........................................................................ 71,579 70,983 70,956 70,902 72,011 71,353 71,152 71,281 71,251 12 Trading account................................................................... 3,326 2,792 2,821 2,668 3,553 2,900 2,679 2,699 2,583 13 Investment account............................................................ 68,252 68,192 68,134 68,234 68,458 68,454 68,473 68,582 68,668 14 U.S. government agencies.......................................... 14,907 14,851 14,821 14,881 15,238 15,227 15,142 15,159 15,199 15 States and political subdivision, by maturity___ 50,717 50,748 50,690 50,714 50,553 50,580 50,659 50,722 50,750 16 One year or less.......................................................... 6,323 6,396 6,338 6,398 6,358 6,443 6,489 6,516 6,541 17 Over one year............................................................ 44,395 44,352 44,351 44,316 44,195 44,136 44,170 44,207 44,209 18 Other bonds, corporate stocks and securities.... 2,628 2,592 2,623 2,639 2,667 2,647 2,672 2,701 2,218 Loans 19 Federal funds sold1................................................................. 25,152 24,977 26,502 24,732 27,189 26,734 28,956 26,767 24,144 20 To commercial banks........................................................ 17,652 18,041 18,514 17,550 18,366 18,632 20,523 18,448 15,779 21 To nonbank brokers and dealers in securities......... 5,748 5,134 6,032 5,479 7,081 6,214 6,580 6,281 6,145 22 To others................................................................................ 1,751 1,801 1,956 1,703 1,742 1,888 1,854 2,039 2,220 23 Other loans, gross................................................................... 396,646 392,751 394,226 393,798 400,339 395,652 398,554 397,619 401,059 24 Commercial and industrial............................................... 161,260 160,230 160,849 160,940 164,019 164,474 162,304 163,477 165,792 25 Bankers acceptances and commercial paper......... 3,683 3,489 3,377 3,485 4,392 4,080 4,010 4,213 4,367 26 All other............................................................................ 157,576 156,741 157,472 157,455 159,627 158,395 158,294 159,264 161,425 27 U.S. addressees.......................................................... 150,656 149,858 150,483 150,388 152,220 151,302 151,286 152,284 154,306 28 Non-U.S. addressees................................................. 6,921 6,884 6,989 7,067 7,406 7,093 7,008 6,980 7,119 29 Real estate............................................................................ 107,303 107,505 107,707 107,796 108,006 108,046 108,245 108,523 108,825 30 To individuals for personal expenditures.................. 62,620 62,452 62,390 62,368 61,794 61,650 61,819 62,046 62,124 To financial institutions 31 Commercial banks in the United States................ 4,514 4,394 4,561 4,352 4,819 4,774 5,008 4,579 4,807 32 Banks in foreign countries.......................................... 8,569 8,489 8,316 8,464 8,495 8,582 8,308 8,177 8,006 33 Sales finance, personal finance companies, etc .. 9,536 9,273 9,386 9,445 9,364 9,492 9,511 9,524 9,952 34 Other financial institutions.......................................... 14,808 14,603 14,576 14,648 14,866 14,713 14,903 14,603 14,885 35 To nonbank brokers and dealers in securities......... 6,309 5,251 5,888 5,045 7,719 5,574 6,721 6,020 6,250 36 To others for purchasing and carrying securities2 .. 2,030 2,046 2,038 2,033 2,138 2,154 2,170 2,164 2,134 37 To finance agricultural production............................... 5,294 5,285 5,290 5,264 5,361 5,365 5,429 5,422 5,449 38 All other................................................................................ 14,403 13,222 13,226 13,442 13,757 12,828 14,136 13,084 12,834 39 Less; Unearned income........................................................ 5,963 5,997 6,026 6,052 5,106 5,180 5,176 5,197 5,210 40 Loan loss reserve........................................................ 5,674 5,696 5,709 5,631 5,560 5,599 5,604 5,625 5,637 41 Other loans, net....................................................................... 385,008 381,057 382,491 382,115 389,673 384,873 387,774 386,798 390,213 42 Lease financing receivables................................................. 9,749 9,757 9,756 9,766 9,838 9,848 9,822 9,855 9,864 43 All other assets....................................................................... 85,598 87,398 82,905 85,158 90,806 89,299 88,401 90,091 88,702 44 Total assets........................................................................ 719,603 711,782 716,284 710,273 736,076 720,110 736,974 728,138 731,556 Deposits 45 Demand deposits..................................................................... 183,753 179,510 180,095 171,825 194,252 180,475 200,639 179,220 176,954 46 Mutual savings banks........................................................ 616 632 572 529 744 707 697 554 577 47 Individuals, partnerships, and corporations............. 122,896 121,827 120,513 116,459 130,291 122,332 130,869 122,198 119,698 48 States and political subdivisions.................................... 4,194 3,708 3,976 3,908 4,354 3,724 4,862 3,936 3,901 49 U.S. government................................................................ 2,963 1,834 2,844 1,486 865 1,709 7,078 2,106 2,221 50 Commercial banks in the United States.................... 36,808 35,023 36,060 33,504 37,030 34,643 37,923 32,555 31,742 51 Banks in foreign countries............................................... 7,081 8,180 7,554 7,774 8,717 7,576 8,725 8,234 8,484 52 Foreign governments and official institutions........... 1,887 1,612 1,622 1,285 1,924 1,942 2,042 1,964 1,983 53 Certified and officers’ checks........................................ 7,308 6,695 6,956 6,880 10,327 7,842 8,442 7,673 8,348 54 Time and savings deposits................................................... 297,736 298,784 300,437 299,339 300,238 300,368 301,572 302,062 301,825 55 Savings..................................................................................... 70,820 70,847 71,105 71,491 73,286 74,629 74,813 73,715 71,903 56 Individuals and nonprofit organizations................ 67,100 67,161 67,472 67,802 69,512 70,848 71,115 70,045 68,217 57 Partnerships and corporations operated for profit.......................................................................... 3,130 3,150 3,088 3,144 3,178 3,216 3,133 3,115 3,128 58 Domestic governmental units.................................... 573 518 524 526 577 546 550 536 540 59 All other............................................................................ 17 18 21 19 18 20 16 18 17 60 Time......................................................................................... 226,916 227,937 229,332 227,848 226,952 225,739 226,758 228,348 229,922 61 Individuals, partnerships, and corporations......... 194,191 195,192 196,644 195,189 195,061 194,113 195,242 196,585 197,998 62 States and political subdivisions............................... 18,716 18,682 18,394 18,314 17,828 17,856 17,865 18,023 18,154 63 U.S. government............................................................ 283 280 257 263 264 264 246 209 207 64 Commercial banks in the United States................ 7,672 7,718 7,819 7,771 7,516 7,416 7,408 7,519 7,506 65 Foreign governments, official institutions, and banks .......................................................................... 6,055 6,064 6,218 6,310 6,283 6,090 5,996 6,011 6,057 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks.................. 1,244 92 1,364 2,407 1,083 133 2,679 711 7,176 67 Treasury tax-and-loan notes.......................................... 2,285 1,614 6,545 7,222 8,335 1,716 586 10,710 11,576 68 All other liabilities for borrowed money3.................. 124,585 122,198 118,747 118,050 121,744 128,471 122,854 123,643 121,432 69 Other liabilities and subordinated notes and debentures..................................................................... 62,129 61,783 61,374 63,692 62,315 60,784 60,682 63,937 64,876 70 Total liabilities.................................................................. 671,732 663,980 668,562 662,534 687,966 671,947 689,013 680,284 683,839 71 Residual (total assets minus total liabilities)4................ 47,871 47,802 47,721 47,740 48,109 48,163 47,961 47,853 47,717 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 □ May 1981 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1981 Mar. 4 Mar. 11 Mar. 18 Mar. 25 Apr. 1 p Apr. 8p Apr. 15 p Apr. 22p Apr. 29p 1 Cash items in process of collection.................................... 20,929 20,711 21,220 20,624 24,500 20,788 24,272 20,915 21,805 2 Demand deposits due from banks in the United States.................................................................................. 14,156 14,577 15,771 14,037 15,457 13,946 14,942 12,757 13,486 3 All other cash and due from depository institutions.. 6,970 8,860 8,240 7,800 8,016 7,980 9,634 8,114 9,721 4 Total loans and securities1.............................................. 123,903 121,570 124,784 124,270 127,325 123,605 127,576 126,513 126,707 Securities 6 7 Investment account, by maturity................................. 8,517 8,345 8,000 7,864 8,385 8,753 8,935 8,937 8,735 8 One year or less.............................................................. 1,590 1,590 1,427 1,470 1,735 2,036 2,115 2,100 2,079 9 Over one through five years...................................... 6,268 6,070 5,947 5,759 6,082 5,849 5,941 5,933 5,831 10 Over five years................................................................. 658 685 626 635 568 867 879 904 824 11 V 13 Investment account............................................................ 13,629 13,589 13,564 13,510 13,851 13,916 14,001 14,028 14,031 14 U.S. government agencies.......................................... 2,353 2,345 2,329 2,320 2,635 2,634 2,637 2,648 2,637 15 States and political subdivision, by maturity .... 10,671 10,646 10,617 10,552 10,596 10,645 10,722 10,736 10,756 16 One year or less.......................................................... 1,400 1,409 1,400 1,347 1,362 1,412 1,437 1,460 1,484 17 Over one year............................................................ 9,271 9,237 9,217 9,205 9,234 9,232 9,285 9,276 9,272 18 Other bonds, corporate stocks and securities.... 606 598 617 638 621 638 642 643 638 Loans 19 Federal funds sold3...................................................................... 6,672 6,228 9,332 9,410 7,793 6,547 8,638 8,764 8,034 20 To commercial banks........................................................ 3,030 3,217 5,312 6,048 3,569 2,829 4,636 4,707 3,751 21 To nonbank brokers and dealers in securities......... 3,065 2,393 3,428 2,843 3,678 3,079 3,276 3,270 3,323 22 To others................................................................................ 577 618 591 519 545 640 726 787 960 23 Other loans, gross................................................................... 98,124 96,494 97,002 96,549 100,319 97,462 99,083 97,880 99,025 24 Commercial and industrial............................................... 49,550 49,419 49,674 49,666 51,025 50,323 50,124 50,642 51,431 25 Bankers acceptances and commercial paper......... 932 989 862 1,018 1,494 1,240 1,068 1,156 1,248 26 All other............................................................................ 48,617 48,430 48,812 48,648 49,532 49,083 49,055 49,485 50,183 27 U.S. addressees.......................................................... 46,105 45,961 46,339 46,178 46,942 46,562 46,623 47,058 47,661 28 Non-U.S. addressees................................................. 2,512 2,469 2,472 2,470 2,590 2,521 2,432 2,427 2,522 29 Real estate............................................................................ 15,254 15,274 15,345 15,368 15,432 15,448 15,469 15,502 15,571 30 To individuals for personal expenditures.................. 9,440 9,453 9,481 9,518 9,550 9,548 9,566 9,699 9,700 31 To financial institutions Commercial banks in the United States................ 1,451 1,386 1,484 1,345 1,205 1,274 1,459 1,355 1,373 32 Banks in foreign countries.......................................... 4,008 4,314 4,203 4,370 4,251 4,409 4,077 4,073 3,804 33 Sales finance, personal finance companies, etc... 4,142 4,050 4,066 4,050 3,954 4,081 4,079 3,894 4,174 34 Other financial institutions.......................................... 4,452 4,298 4,278 4,391 4,399 4,221 4,231 4,167 4,203 35 To nonbank brokers and dealers in securities......... 4,126 3,099 3,646 3,003 5,370 3,359 4,512 3,743 3,780 36 To others for purchasing and carrying securities4 .. 487 498 500 492 497 483 489 482 468 37 To finance agricultural production............................... 437 440 443 427 458 442 448 434 434 38 All other................................................................................ 4,776 4,263 3,881 3,921 4,178 3,874 4,628 3,889 4,088 39 Less: Unearned income........................................................ 1,147 1,182 1,197 1,213 1,171 1,217 1,210 1,222 1,238 40 Loan loss reserve........................................................ 1,892 1,903 1,917 1,850 1,852 1,856 1,871 1,873 1,880 41 Other loans, net....................................................................... 95,084 93,408 93,888 93,486 97,296 94,389 96,001 94,784 95,908 42 Lease financing receivables................................................. 2,252 2,259 2,261 2,261 2,251 2,253 2,252 2,254 2,255 43 All other assets5....................................................................... 38,782 40,299 35,792 35,423 41,025 39,285 35,721 37,588 36,528 44 Total assets........................................................................ 206,991 208,277 208,068 204,415 218,575 207,858 214,397 208,141 210,502 Deposits 45 Demand deposits..................................................................... 67,443 67,983 67,646 64,180 74,168 65,830 75,578 64,805 64,988 46 Mutual savings banks........................................................ 297 323 288 272 398 391 376 277 295 47 Individuals, partnerships, and corporations............. 32,383 33,387 32,786 31,255 36,998 32,272 34,904 31,816 31,422 48 States and political subdivisions.................................... 461 363 390 425 470 379 908 362 368 49 U.S. government................................................................. 799 496 872 435 155 373 2,539 744 605 50 Commercial banks in the United States.................... 23,017 22,426 23,061 21,619 22,134 21,264 24,035 19,791 19,540 51 Banks in foreign countries............................................... 5,376 6,471 5,874 6,055 6,945 5,959 6,962 6,381 6,748 52 Foreign governments and official institutions........... 1,617 1,348 1,106 993 1,633 1,546 1,736 1,629 1,626 53 Certified and officers’ checks........................................ 3,494 3,169 3,268 3,125 5,434 3,646 4,118 3,805 4,383 54 Time and savings deposits................................................... 55,976 56,230 56,970 57,081 56,985 57,220 58,003 57,831 57,480 55 Savings..................................................................................... 9,243 9,227 9,239 9,270 9,560 9,811 9,908 9,760 9,427 56 Individuals and nonprofit organizations................ 8,833 8,832 8,851 8,887 9,171 9,414 9,511 9,374 9,044 57 Partnerships and corporations operated for profit.................................................................................. 285 285 274 275 279 278 278 277 272 58 Domestic governmental units.................................... 122 107 108 105 108 114 116 106 107 59 All other............................................................................ 3 3 5 3 2 4 2 3 2 60 Time......................................................................................... 46,732 47,003 47,731 47,811 47,424 47,409 48,096 48,070 48,053 61 Individuals, partnerships, and corporations......... 39,785 40,015 40,727 40,650 40,423 40,438 41,061 40,975 40,791 62 States and political subdivisions............................... 1,770 1,721 1,689 1,684 1,606 1,598 1,636 1,685 1,797 63 U.S. government............................................................ 36 48 44 44 37 37 33 33 38 64 Commercial banks in the United States................ 2,386 2,440 2,434 2,520 2,481 2,498 2,538 2,540 2,568 65 Foreign governments, official institutions, and banks .................................................................................. 2,755 2,779 2,837 2,912 2,876 2,838 2,827 2,837 2,859 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks.................. 1,103 780 1,860 315 3,162 67 Treasury tax-and-loan notes.......................................... 581 550 2,032 2,201 2,249 473 149 2,983 3,019 68 All other liabilities for borrowed money6.................. 42,433 43,512 40,088 38,766 44,770 44,674 38,925 39,540 39,973 69 Other liabilities and subordinated notes and debentures.......................................................................... 24,533 24,090 24,349 25,623 24,307 23,576 23,900 26,775 26,150 70 Total liabilities.................................................................. 190,966 192,365 192,188 188,632 202,479 191,774 198,417 192,249 194,772 71 Residual (total assets minus total liabilities)4................ 16,025 15,912 15,880 15,784 16,096 16,084 15,980 15,892 15,730 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 Mar. 4 Mar. 11 Mar. 18 Mar. 25 Apr. 1 p Apr. 8p Apr. 15 p Apr. 22p Apr. 29p Banks with Assets of $750 Million or More 1 Total loans (gross} and securities adjusted1.................. 546,093 540,495 542,053 539,337 550,422 544,348 546,427 545,754 547,877 2 Total loans (gross) adjusted1............................................... 425,420 421,047 423,402 422,399 430,275 424,865 427,989 427,481 430,643 3 Demand deposits adjusted2................................................. 96,695 99,168 95,836 94,447 106,362 100,880 103,692 99,034 97,593 4 Time deposits in accounts of $100,000 or more........... 157,040 157,408 158,716 157,529 156,180 155,340 155,604 157,290 158,944 5 Negotiable CDs................................................................... 111,804 112,208 113,452 112,612 111,542 110,971 111,658 113,056 114,178 6 Other time deposits............................................................ 45,235 45,200 45,265 44,918 44,638 44,370 43,945 44,234 44,766 7 Loans sold outright to affiliates3........................................ 2,740 2,783 2,788 2,746 2,730 2,710 2,716 2,691 2,748 8 Commercial and industrial............................................... 1,835 1,864 1,888 1,855 1,842 1,849 1,846 1,854 1,880 9 Other....................................................................................... 905 919 900 891 889 861 870 838 868 Banks with Assets of $1 Billion or More 10 Total loans (gross} and securities adjusted1.................. 510,846 505,260 506,769 503,924 514,775 508,720 510,754 509,917 512,132 11 Total loans (gross) adjusted1............................................... 399,631 395,292 397,653 396,628 404,343 398,981 401,980 401,360 404,617 12 Demand deposits adjusted2................................................. 89,692 91,957 88,456 87,476 98,764 93,498 96,337 91,989 90,660 13 Time deposits in accounts of $100,000 or more........... 147,930 148,356 149,598 148,536 147,506 146,789 147,370 149,037 150,616 14 Negotiable CDs................................................................... 105,435 105,900 107,116 106,362 105,534 105,054 106,026 107,379 108,474 15 Other time deposits............................................................ 42,495 42,457 42,482 42,174 41,973 41,735 41,344 41,658 42,142 16 Loans sold outright to affiliates3........................................ 2,705 2,746 2,750 2,710 2,692 2,675 2,680 2,647 2,692 17 Commercial and industrial............................................... 1,807 1,834 1,857 1,827 1,813 1,822 1,819 1,823 1,842 18 Other....................................................................................... 897 912 893 883 880 852 862 824 850 Banks in New York City 19 Total loans (gross} and securities adjusted1-4................ 122,461 120,053 121,101 119,939 125,575 122,576 124,562 123,547 124,700 20 Total loans (gross) adjusted1............................................... 100,315 98,119 99,537 98,566 103,338 99,907 101,626 100,582 101,935 21 Demand deposits adjusted2................................................. 22,699 24,350 22,493 21,502 27,379 23,406 24,733 23,355 23,038 22 Time deposits in accounts of $100,000 or more........... 36,296 36,466 37,119 37,301 36,907 36,950 37,688 37,763 37,775 23 Negotiable CDs................................................................... 26,714 26,952 27,581 27,888 27,358 27,416 28,194 28,301 28,308 24 Other time deposits............................................................ 9,582 9,514 9,538 9,413 9,548 9,533 9,494 9,463 9,467 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 □ May 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 1981 1981 ment bank1 Dec. 31 Jan. 28 Feb. 25 Mar. 25p Apr. 29p Q4 Ql Mar. Apr.P 1 Durable goods manufacturing................ 24,676 24,383 24,472 24,640 24,588 1,165 -39 168 -52 2 Nondurable goods manufacturing----- 20,506 19,359 18,937 19,401 19,882 972 -1,103 -422 464 480 3 Food, liquor, and tobacco.................. 5,391 4,915 4,529 4,580 4,414 1,040 -807 -386 52 -166 4 Textiles, apparel, and leather........... 4,150 4,096 4,364 4,351 4,482 -1,054 200 268 -13 131 5 Petroleum refining............................... 3,635 3,185 2,929 2,982 3,300 949 -654 -256 53 319 6 Chemicals and rubber......................... 3,917 3,782 3,673 3,838 4,039 184 -80 -109 165 201 7 Other nondurable goods.................... 3,412 3,381 3,442 3,650 3,646 -147 237 61 208 -4 8 Mining (including crude petroleum and natural gas)................................. 16,427 16,251 15,935 15,750 16,747 2,470 -678 -316 -185 998 9 Trade.............................................................. 26,239 25,550' 25,242 25,617 26,777 1,290 -622' -307 375 1,160 10 Commodity dealers............................... 2,563 2,116 1,874 1,950 2,337 444 -613 -242 76 387 11 Other wholesale.................................... 12,293 12,055' 11,704' 11,875' 12,242 707 -417 -350 170 367 12 Retail.......................................................... 11,384 11,378 11,663 11,792 12,197 138 409 285 129 406 13 Transportation, communication, and other public utilities................ 21,304 20,741 20,270 19,971 20,354 2,081 -1,332 -472 -299 383 -2 14 Transportation........................................ 8,374 8,254 8,139 8,106 8,163 639 -266 -114 -34 57 -2 15 Communication...................................... 3,319 3,184 3,097 3,160 3,276 326 -160 -87 62 116 16 Other public utilities............................. 9,611 9,303 9,033 8,705 8,914 1,116 -906 -270 -328 209 17 Construction................................................. 5,994 5,950 6,109 6,225 6,469 -36 233 159 116 244 -2 18 Services.......................................................... 22,857 23,242 23,528 23,603 24,069 1,546 746 286 75 465 19 All other2..................................................... 16,554 15,775 15,817 15,181 15,421 1,152 -1,714 42 -636 240 341 20 Total domestic loans................................. 154,557 151,252' 150,310' 150,388' 154,306 10,640 -4,508' 78 3,918 339 21 Memo: Term loans (original maturity more than 1 year) included in do­ mestic loans ........................................ 81,768 81,794 1,147 79,298 80,403 5,232 -2,467 -1,647 -849 1,105 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 old and new banks and are not comparable with earlier data. The following estimates in billions reporting sample, the following estimates in billions of dollars for December 1978 of dollars for December 1978 have been constructed for the new large-bank panel; have been constructed using the new smaller sample; financial business, 27.0; financial business, 18.2; nonfinancial business, 67.2; consumer, 32.8; foreign, 2.5; nonfinancial business, 146.9; consumer, 98.3; foreign, 2.8; and other, 15.1. other, 6.8. 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1980 1981 Instrument 1977 1978 19791 1980 Dec. Dec. Dec. Dec. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Commercial paper (seasonally adjusted) 1 All issuers.......................................................... 65,051 83,438 112,809 125,148 123,706 123,009 124,606 125,148 128,656r 130,306 r 132,702 Financial companies2 Dealer-placed paper3 2 Total.............................................................. 8,796 12,181 17,377 19,631 19,477 19,062 19,591 19,631 19,886 20,859 22,643 3 Bank-related............................................... 2,132 3,521 2,874 3,561 3,370 3,442 3,436 3,561 3,670 3,742' 4,163 Directly placed paper4 4 Total.............................................................. 40,574 51,647 64,748 67,888 65,618 66,612 67,340 67,888 68,956' 68,936' 69,461 5 Bank-related.......................................... 7,102 12,314 17,598 22,382 19,692 21,146 21,939 22,382 22,570 22,331 21,604 6 Nonfinancial companies5.......................... 15,681 19,610 30,684 37,629 38,611 37,335 37,675 37,629 39,814 40,511 40,598 Bankers dollar acceptances (not seasonally adjusted) 7 Total................................................................... 25,450 33,700 45,321 54,744 55,774 56,610 55,226 54,744 54,465 58,084 60,089 Holder 8 Accepting banks............................................. 10,434 8,579 9,865 10,564 10,275 11,317 10,236 10,564 9,371 9,911 10,117 9 Own bills..................................................... 8,915 7,653 8,327 8,963 9,004 9,808 8,837 8,963 7,951 8,770 8,735 10 Bills bought................................................. 1,519 927 1,538 1,601 1,270 1,509 1,399 1,601 1,420 1,141 1,382 Federal Reserve Banks 11 Own account............................................... 954 1 704 776 499 566 523 776 0 0 298 12 Foreign correspondents........................ 362 664 1,382 1,791 1,820 1,915 1,852 1,791 1,771 1,399 1,372 13 Others.......................................................... 13,700 24,456 33,370 41,614 43,179 42,813 42,616 41,614 43,323 46,779 48,303 Basis 14 Imports into United States......................... 6,378 8,574 10,270 11,776 11,731 12,254 11,774 11,776 11,903 12,976 13,292 15 Exports from United States...................... 5,863 7,586 9,640 12,712 12,991 13,445 13,670 12,712 12,816 12,979 13,451 16 All other...................................................... 13,209 17,540 25,411 30,257 31,052 30,911 29,782 30,257 29,746 32,129 33,347 1. A change in reporting instructions results in offsetting shifts in the dealer- 3. Includes all financial company paper sold by dealers in the open market. placed and directly placed financial company paper in October 1979. 4. As reported by financial companies that place their paper directly with inves­ 2. Institutions engaged primarily in activities such as, but not limited to, com­ tors. mercial, savings, and mortgage banking; sales, personal, and mortgage financing; 5. Includes public utilities and firms engaged primarily in such activities as com­ factoring, finance leasing, and other business lending; insurance underwriting; and munications, construction, manufacturing, mining, wholesale and retail trade, other investment activities. transportation, and services. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Financial Statistics □ May 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—Oct............................... 13.79 17.................... 16.25 9...................... 20.00 Feb............................... 15.63 Nov.............................. 16.06 21.................... 17.00 Feb. 3...................... 19.50 Mar.............................. 18.31 Dec............................... 20.35 26 . ... 17.75 23...................... 19.00 Apr.............................. 19.77 Dec. 2 .................... 18.50 Mar. 10...................... 18.00 May............................. 16.57 1981—Jan................................ 20.16 5 .................... 19.00 17...................... 17.50 June ........................... 12.63 Feb............................... 19.43 10.................... 20.00 Apr. 2 .................... 17.00 July............................. 11.48 18.05 16.................... 21.00 24.................... 17.50 Aug.............................. 11.12 Apr.............................. 17.15 19.................... 21.50 30.................... 18.00 12.23 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 sizes 1,000 1-24 25-49 50-99 100-499 500-999 and over Short-Term Commercial and Industrial Loans 1 Amount of loans (thousands of dollars)........................... 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. 1981 1981, week ending Instrument 1978 1979 1980 Jan. Feb. Mar. Apr. Apr. 3 Apr. 10 Apr. 17 Apr. 24 May 1 Money Market Rates 1 Federal funds1 -2................................................. 7.93 11.19 13.36 19.08 15.93 14.70 15.72 14.93 15.43 15.33 15.55 16.28 Commercial paper3,4 2 1-month............................................................ 7.76 10.86 12.76 17.73 15.81 14.15 14.79 13.82 14.68 14.92 14.97 15.70 3 3-month............................................................ 7.94 10.97 12.66 16.58 15.49 13.94 14.56 13.32 14.39 14.81 14.85 15.39 4 6-month............................................................ 7.99 10.91 12.29 15.10 14.87 13.59 14.17 12.93 13.95 14.44 14.50 14.94 Finance paper, directly placed3-4 5 1-month............................................................ 7.73 10.78 12.44 16.97 15.52 13.78 14.24 13.39 14.01 14.44 14.53 15.06 6 3-month............................................................ 7.80 10.47 11.49 14.49 14.45 13.08 13.28 12.50 12.83 13.45 13.63 13.89 7 6-month............................................................ 7.78 10.25 11.28 14.09 14.05 12.89 12.94 12.25 12.56 13.05 13.13 13.63 Bankers acceptances4-5 8 3-month............................................................ 8.11 11.04 12.78 16.62 15.54 13.88 14.65 13.26 14.52 14.83 14.84 15.49 9 6-month............................................................ n.a. n.a. n.a. 14.88 14.89 13.49 14.19 12.84 13.99 14.35 14.48 14.93 Certificates of deposit, secondary market6 10 1-month............................................................ 7.88 11.03 12.91 17.99 16.11 14.33 14.92 13.74 14.80 15.15 15.19 15.73 11 3-month............................................................ 8.22 11.22 13.07 17.19 16.14 14.43 15.08 13.65 14.89 15.38 15.37 15.95 12 6-month............................................................ 8.61 11.44 12.99 15.92 16.00 14.48 15.12 13.61 14.86 15.39 15.50 16.03 13 Eurodollar deposits, 3-month2.................... 8.78 11.96 14.00 18.07 17.18 15.36 15.95 14.78 14.96 16.16 16.44 16.38 U.S. Treasury bills4 Secondary market7 14 3-month........................................................ 7.19 10.07 11.43 15.02 14.79 13.36 13.69 12.60 13.67 13.66 13.74 14.52 15 6-month........................................................ 7.58 10.06 11.37 14.08 14.05 12.81 13.45 12.18 13.36 13.50 13.72 14.09 16 1-year............................................................ 7.74 9.75 10.89 12.62 12.99 12.28 12.79 11.86 12.53 12.80 13.05 13.41 Auction average8 17 3-month........................................................ 7.221 10.041 11.506 14.724 14.905 13.478 13.635 12.501 14.147 13.783 13.553 14.190 18 6-month........................................................ 7.572 10.017 11.374 13.883 14.134 12.983 13.434 12.078 13.783 13.646 13.621 14.042 19 1-year............................................................ 7.678 9.817 10.748 12.554 12.801 11.481 12.991 12.991 Capital Market Rates U.S. Treasury notes and bonds9 Constant maturities10 20 1-year............................................................ 8.34 10.67 12.05 14.08 14.57 13.71 14.32 13.20 13.98 14.27 14.70 15.11 21 2-year............................................................ 8.34 10.12 11.77 13.26 13.92 13.57 14.15 13.33 13.90 14.10 14.45 14.72 22 2-V2-year11................................................... 13.90 14.45 23 3-year............................................................ 8.29 9.71 11.55 13.01 13.65 13.51 14.09 13.40 13.89 14.07 14.33 14.57 24 5-year............................................................ 8.32 9.52 11.48 12.77 13.41 13.41 13.99 13.46 13.84 14.01 14.14 14.36 25 7-year............................................................ 8.36 9.48 11.43 12.66 13.28 13.24 13.85 13.36 13.73 13.89 13.96 14.17 26 10-year.......................................................... 8.41 9.44 11.46 12.57 13.19 13.12 13.68 13.23 13.56 13.70 13.78 14.01 27 20-year.......................................................... 8.48 9.33 11.39 12.29 12.98 12.94 13.46 13.05 13.38 13.52 13.51 13.75 28 30-year.......................................................... 8.49 9.29 11.30 12.14 12.80 12.69 13.20 12.77 13.12 13.24 13.25 13.50 Composite12 29 Over 10 years (long-term).................... 7.89 8.74 10.81 11.65 12.23 12.15 12.62 12.25 12.56 12.66 12.65 12.89 State and local notes and bonds Moody’s series13 30 Aaa................................................................. 5.52 5.92 7.85 8.98 9.46 9.50 9.78 9.50 9.80 9.80 10.00 10.00 31 Baa................................................................. 6.27 6.73 9.01 9.90 10.15 10.40 10.85 10.60 10.80 10.80 11.20 11.40 32 Bond Buyer series14.................................... 6.03 6.52 8.59 9.66 10.10 10.16 10.62 10.21 10.45 10.70 10.80 10.94 Corporate bonds Seasoned issues15 33 All industries............................................. 9.07 10.12 12.75 13.80 14.22 14.26 14.66 14.29 14.50 14.67 14.81 14.99 34 Aaa................................................................. 8.73 9.63 11.94 12.81 13.35 13.33 13.88 13.41 13.72 13.89 14.02 14.26 35 Aa................................................................... 8.92 9.94 12.50 13.52 13.89 13.90 14.39 13.90 14.22 14.38 14.59 14.79 36 A..................................................................... 9.12 10.20 12.89 13.83 14.27 14.47 14.82 14.58 14.65 14.82 14.94 15.08 37 Baa................................................................. 9.45 10.69 13.67 15.03 15.37 15.34 15.56 15.25 15.42 15.61 15.71 15.80 Aaa utility bonds16 38 New issue................................................... 8.96 10.03 12.74 14.12 14.90 14.71 15.68 14.87 15.85 16.12 39 Recently offered issues........................... 8.97 10.02 12.70 14.17 14.58 14.41 15.48 14.89 15.19 15.36 15.78 16.26 Memo: Dividend/price ratio17 40 Preferred stocks............................................. 8.25 9.07 10.57 11.64 11.83 11.81 11.80 11.78 11.90 11.69 11.82 11.88 41 Common stocks............................................. 5.28 5.46 5.25 4.76 5.00 4.88 4.84 4.77 4.86 4.86 4.87 4.92 1. Weekly and monthly figures are averages of all calendar days, where the rate 11. Each weekly figure is calculated on a biweekly basis and is the average of for a weekend or holiday is taken to be the rate prevailing on the preceding business five business days ending on the Monday following the calendar week. The biweekly day. The daily rate is the average of the rates on a given day weighted by the rate is used to determine the maximum interest rate payable in the following twovolume of transactions at these rates. week period on small saver certificates. (See table 1.16.) 2. Weekly figures are statement week averages—that is, averages for the week 12. Unweighted averages for all outstanding notes and bonds neither due nor ending Wednesday. callable in less than 10 years, including several very low yielding “flower” bonds. 3. Unweighted average of offering rates quoted by at least five dealers (in the 13. General obligations only, based on figures for Thursday, from Moody’s case of commercial paper), or finance companies (in the case of finance paper). Investors Service. Before November 1979, maturities for data shown are 30-59 days, 90—119 days, 14. General obligations only, with 20 years to maturity, issued by 20 state and and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 150— local governmental units of mixed quality. Based on figures for Thursday. 179 days for finance paper. 15. Daily figures from Moody’s Investors Service. Based on yields to maturity 4. Yields are quoted on a bank-discount basis, rather than an investment yield on selected long-term bonds. basis (which would give a higher figure). 16. Compilation of the Federal Reserve. Issues included are long-term (20 years 5. Dealer closing offered rates for top-rated banks. Most representative rate or more). New-issue yields are based on quotations on date of offering; those on (which may be, but need not be, the average of the rates quoted by the dealers). recently offered issues (included only for first 4 weeks after termination of under­ 6. Unweighted average of offered rates quoted by at least five dealers early in writer price restrictions), on Friday close-of-business quotations. the day. 17. Standard and Poor’s corporate series. Preferred stock ratio based on a sample 7. Unweighted average of closing bid rates quoted by at least five dealers. of ten issues: four public utilities, four industrials, one financial, and one trans­ 8. Rates are recorded in the week in which bills are issued. portation. Common stock ratios on the 500 stocks in the price index. 9. Yields (not compounded) are based on closing bid prices quoted by at least five dealers. 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 □ May 1981 1.36 STOCK MARKET Selected Statistics 1980 1981 Indicator 1978 1980 Oct. Nov. Apr. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) .. 53.76 55.67 68.06 75.17 78.15 76.69 76.24 73.52 76.46 77.60 2 Industrial........................................................................... 58.30 61.82 78.64 88.00 92.32 90.37 89.23 85.74 89.39 90.57 3 Transportation................................................................... 43.25 45.20 60.52 70.76 77.22 75.74 74.43 72.76 77.09 80.63 4 Utility.................................................................................. 39.23 36.46 37.35 38.44 38.35 37.84 38.53 37.59 37.78 38.34 5 Finance ................................................................................ 56.74 58.65 64.28 68.29 67.21 67.46 70.04 68.48 72.82 74.59 6 Standard & Poor’s Corporation (1941-43 = 10)1... 96.11 107.94 118.71 130.22 135.65 133.48 132.97 128.40 133.19 134.43 7 American Stock Exchange (Aug. 31, 1973 = 100) . 144.56 186.56 300.94 350.08 349.97 347.56 344.21 338.28 347.07 363.09 Volume of trading (thousands of shares) 8 New York Stock Exchange............................................... 28,591 32,233 44.867 44,860 54,895 46,620 45,500 42,963 53,387 54,124 9 American Stock Exchange............................................... 3,622 4,182 6.377 7,087 7,852 6,410 6,024 4,816 5,682 6,339 Customer financing (end-of-period balances.in millions of dollars) 10 Regulated margin credit at brokers/dealers2.............. 11,035 11,619 14,721 13,293 14,363 14,721 14,242 14,171 14,243 t 11 Margin stock3......................................................................... 10,830 11,450 14.500 13,080 14,140 14,500 14,020 13,950 14,020 12 Convertible bonds................................................................ 205 167 219 211 220 219 221 220 222 1 13 Subscription issues.............................................................. 1 2 2 2 3 2 1 1 1 n.a. Free credit balances at brokers4 14 Margin-account..................................................................... 835 1,105 2.105 1,950 2,120 2,105 2,065 2,225 2,340 15 Cash-account......................................................................... 2,510 4,060 6.070 5,500 5,590 6,070 5,655 5,700 6,530 1 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 14.0 20.0 20.0 16.0 18 40-49.......................................... 28.0 29.0 30.0 29.0 18.0 30.0 30.0 31.0 28.0 19 50-59.......................................... 18.0 27.0 25.0 25.0 31.0 25.0 22.0 21.0 26.0 20 60-69.......................................... 10.0 14.0 14.0 15.0 18.0 14.0 13.0 13.0 14.0 21 70-79.......................................... 6.0 8.0 9.0 10.0 11.0 9.0 8.0 8.0 9.0 22 80 or more............................... 5.0 7.0 8.0 8.0 9.0 8.0 7.0 7.0 8.0 Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)6............................ 13,092 16,150 21,690 19,929 21,600 21,690 21,686 21,861 22,548 t Distribution by equity status (percent) 1 24 Net credit status.................................................................. 41.3 44.2 47.8 46.8 46.5 47.8 47.0 48.6 50.9 n.a. Debt status, equity of 1 25 60 percent or more.......................................................... 45.1 47.0 44.4 46.2 46.8 44.4 43.9 43.1 41.5 26 Less than 60 percent....................................................... 13.6 8.8 7.7 7.0 6.7 7.7 9.1 8.3 7.6 Margin requirements (percent of market value and effective date)7 Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 27 Margin stocks......... 70 80 65 55 65 50 28 Convertible bonds. 50 60 50 50 50 50 29 Short sales............. 70 80 65 55 65 50 1. Effective July 1976, includes a new financial group, banks and insurance 5. Each customer’s equity in his collateral (market value of collateral less net companies. With this change the index includes 400 industrial stocks (formerly debit balance) is expressed as a percentage of current collateral values. 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 6. Balances that may be used by customers as the margin deposit required for financial. additional purchases. Balances may arise as transfers based on loan values of other 2. Margin credit includes all credit extended to purchase or carry stocks or related collateral in the customer's margin account or deposits of cash (usually sales pro­ equity instruments and secured at least in part by stock. Credit extended is end- ceeds) occur. oi-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 June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar .p Savings and loan associations 1 Assets.............................................................. 523,542 578,962 594,397 596,620 603,295 609,320 617,773 623,939 629,829 631,228 634,405 636,636 2 Mortgages............................................................ 432,808 475,688 481,042 482,839 487,036 491,895 496,495 499,973 502,812 504,068 505,309 507,030 3 Cash and investment securities1.................. 44,884 46,341 52,408 52,165 53,336 53,435 56,146 57,302 57,572 57,460 58,401 58,410 4 Other..................................................................... 45,850 56,933 60,947 61,616 62,923 63,990 65,132 66,664 69,445 69,700 70,695 71,196 5 Liabilities and net worth.............................. 523,542 578,962 594,397 596,620 603,295 609,320 617,773 623,939 629,829 631,228 634,405 636,636 6 Savings capital...................................................... 430,953 470,004 486,680 488,896 497,403 496,991 500,861 503,365 510,959 512,946 515,250 518,873 7 Borrowed money............................................... 42,907 55,232 54,796 41,239 55,396 58,418 60,727 62,067 64,491 62,938 62,270 64,088 8 FHLBB............................................................ 31,990 40,441 40,613 39,882 41,005 42,547 44,325 45,505 47,045 46,629 46,360 47,292 9 Other................................................................. 10,917 14,791 14,183 13,579 14,391 15,871 16,402 16,562 17,446 16,309 15,910 16,796 10 Loans in process................................................. 10,721 9,582 7,031 7,112 7,540 8,243 8,654 8,853 8,783 8,120 7,833 7,711 11 Other ..................................................................... 9,904 11,506 12,966 14,364 16,190 12,776 14,502 16,433 12,227 14,104 16,071 13,334 12 Net worth2............................................................ 29,057 32,638 32,924 32,787 32,766 32,892 33,029 33,221 33,319 33,120 32,981 32,630 13 Memo: Mortgage loan com­ mitments outstanding3............................. 18,911 16,007 15,368 18,020 20,278 20,311 19,077 17,979 16,102 15,972 16,279 17,288 Mutual savings banks4 14 Assets.............................................................. 158,174 163,405 166,982 167,959 168,752 169,409 170,432 171,126 171,495' 171,891' 172,349 Loans 15 Mortgage.......................................................... 95,157 98,908 99,176 99,301 99,289 99,306 99,523 99,677 99,813' 99,816' 99,739 16 Other................................................................. 7,195 9,253 11,148 11,390 11,122 11,415 11,382 11,477 11,730' 12,199' 12,598 Securities 17 U.S. government5........................................ 4,959 7,658 7,483 7,796 8,079 8,434 8,622 8,715 8,947' 9,000' 9,032 18 State and local government...................... 3,333 2,930 2,706 2,702 2,709 2,728 2,754 2,736 2,390' 2,378' 2,376 19 Corporate and other6.................................... 39,732 37,086 38,276 38,863 39,327 39,609 39,720 39,888 39,274' 39,256' 39,223 20 Cash....................................................................... 3,665 3,156 3,561 3,260 3,456 3,153 3,592 3,717 4,333' 4,133' 4,205 21 Other assets.......................................................... 4,131 4,412 4,631 4,648 4,770 4,764 4,839 4,916 5,009' 5,107' 5,177 n.a. 22 Liabilities........................................................ 158,174 163,405 166,982 167,959 168,752 169,409 170,432 171,126 171,495' 171,891' 172,3491 23 Deposits................................................................. 142,701 146,006 148,606 149,580 150,187 151,765 151,998 152,133 153,439' 153,143' 153,332 24 Regular7............................................................ 141,170 144,070 146,416 147,408 148,018 149,395 149,797 150,109 151,355' 151,051' 151,346 25 Ordinary savings........................................ 71,816 61,123 56,388 57,737 58,191 58,658 57,651 56,256 53,942' 52,737' 52,035 26 Time and other.......................................... 69,354 82,947 90,028 89,671 89,827 90,736 92,146 93,853 97,413' 98,314' 99,311 27 Other ................................................................. 1,531 1,936 2,190 2,172 2,169 2,370 2,200 2,042 2,084' 2,092' 1,986 28 Other liabilities................................................... 4,565 5,873 6,898 6,964 7,211 6,299 7,117 7,644 6,692' 7,426' 7,753 29 General reserve accounts............................... 10,907 11,525 11,478 11,416 11,353 11,344 11,317 11,349 12,967' 12,957' 13,412 30 Memo: Mortgage loan com­ mitments outstanding8............................. 4,400 3,182 1,898 1,939 1,849 1,883 1,817 1,682 1,476 1,316 1,331 Life insurance companies 31 Assets.............................................................. 389,924 432,282 450,858 455,759 459,362 464,483 468,057 473,529 476,190 463,150 482,264 Securities 32 Government................................................... 20,009 0,338 20,395 20,736 20,833 20,853 20,942 21,204 21,453 21,891 22,092 33 United States9............................................. 4,822 4,888 4,990 5,325 5,386 5,361 5,390 5,568 5,753 6,016 6,066 34 State and local.......................................... 6,402 6,428 6,349 6,361 6,421 6,474 6,484 6,568 6,682 6,831 6,900 35 Foreign10...................................................... 8,785 9,022 9,056 9,050 9,026 9,018 9,068 9,068 9,018 9,044 9,126 36 Business............................................................ 198,105 222,332 224,874 228,645 230,477 233,652 236,115 239,150 238,048 240,630 241,600 n.a. 37 Bonds............................................................ 162,587 178,371 184,329 186,385 187,839 189,586 191,229 191,753 191,090 194,889 195,521 38 Stocks............................................................ 35,518 39,757 40,545 42,260 42,638 44,066 44,886 47,397 46,958 45,741 46,079 39 Mortgages............................................................ 106,167 118,421 125,455 126,461 127,357 128,089 128,977 129,878 131,145 131,710 132,445 40 Real estate............................................................ 11,764 13,007 14,085 14,164 14,184 14,460 14,702 15,183 15,247 15,235 16,026 41 Policy loans.......................................................... 30,146 34,825 39,354 39,649 39,925 40,258 40,548 40,878 41,411 42,032 42,604 42 Other assets.......................................................... 23,733 27,563 26,695 26,104 26,586 27,171 26,765 27,236 28,836 26,983 27,497 Credit unions 43 Total assets/liabilities and capital...................................................... 62,348 65,854 68,102 68,429 69,553 70,515 70,702 71,335 71,709 70,754 71,446 73,214 44 Federal................................................................... 34,760 35,934 37,555 37,573 38,168 39,219 39,155 39,428 39,801 39,142 39,636 40,624 45 State....................................................................... 27,588 29,920 30,547 30,856 31,385 31,296 31,547 31,907 31,908 31,612 31,810 32,590 46 Loans outstanding............................................. 50,269 53,125 48,172 47,829 47,884 47,211 47,221 47,299 47,774 47,309 47,451 47,815 47 Federal............................................................... 27,687 28,698 25,773 25,435 25,401 25,381 25,288' 25,273 25,627 25,272 25,376 25,618 48 State................................................................... 22,582 24,426 22,399 22,394 22,483 21,830 21,933 22,026 22,147 22,037 22,075 22,197 49 Savings................................................................... 53,517 56,232 59,310 60,574 61,403 63,728 63,957 64,304 64,399 63,874 64,357 65,744 50 Federal (shares)............................................. 29,802 35,530 32,764 33,472 33,964 35,961 36,030 36,183 36,348 35,915 36,236 36,898 51 State (shares and deposits)......................... 23,715 25,702 26,546 27,102 27,439 27,767 27,927 28,121 28,051 27,959 28,121 28,846 For notes see bottom of page A28. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics □ May 1981 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year Fiscal Type of account or operation year year year 1979 1980 1981 1978 1979 1980 H2 HI H2 Jan. Feb. Mar. U.S. budget 1 Receipts*............................................................... 401,997 465,940 520,050 233,952 270,864 262,152 52,214 38,394 44,623 2 Outlays1-2.............................................................. 450,804 493,635 579,613 263,004 289,905 310,972 59,099 53,969 54,217 3 Surplus, or deficit( - ) ...................................... -48,807 -27,694 -59,563 -29,052 -19,041 -48,821 -6,884 -15,575 -9,593 4 Trust funds........................................................ 12,693 18,335 8,791 9,679 4,383 -2,551 -3,434 1,243 -601 5 Federal funds3................................................. -61,532 -46,069 -67,752 -38,773 -23,418 -46,306 -3,451 -16,819 -8,992 Off-budget entities (surplus, or deficit 6 Federal Financing Bank outlays.................... -10,661 -13,261 -14,549 -5,909 -7,735 -7,552 -960 -1,340 -3,420 7 Other4..................................................................... 302 793 303 765 -522 376 -494 -148 -35 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 -8,339 -17,063 -13,048 Source or financing 9 Borrowing from the public......................... 59,106 33,641 70,515 31,320 24,435 54,764 6,772 13,916 15,138 10 Cash and monetary assets (decrease, or increase (- ))^........................................ -3,023 -408 -355 3,059 -3,482 -6,730 2,252 3,909 -5,852 11 Other6................................................................. 3,083 6,929 3,648 -182 6,345 7,964 -685 762 3,762 Memo: 12 Treasury operating balance (level, end of period)...................................................... 22,444 24,176 20,990 15,924 14,092 12,305 13,917 10,106 10,717 13 Federal Reserve Banks............................... 16,647 6,489 4,102 4,075 3,199 3,062 3,038 2,284 3,032 14 Tax and loan accounts.................................. 5,797 17,687 16,888 11,849 10,893 9,243 10,879 7,822 7,685 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 annual- 6. Includes securities of foreign governments and international organizations statement asset values, with bonds carried on an amortized basis and stocks at and, prior to April 1979, nonguaranteed issues of U.S. government agencies. year-end market value. Adjustments for interest due and accrued and for differ­ 7. Excludes checking, club, and school accounts. ences between market and book values are not made on each item separately but 8. Commitments outstanding (including loans in process) of banks in New York are included, in total, in “other assets.” State as reported to the Savings Banks Association of the state of New York. Credit unions: Estimates by the National Credit Union Administration for a 9. Direct and guaranteed obligations. Excludes federal agency issues not guar­ group of federal and state-chartered credit unions that account for about 30 percent anteed, which are shown in the table under “Business” securities. of credit union assets. Figures are preliminary and revised annually to incorporate recent benchmark data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A29 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year Fiscal Fiscal Fiscal Source or type year year year 1979 1980 1981 1978 1979 1980 H2 HI H2 Jan. Feb. Mar. Receipts 1 All sources1...................................................... 401,997 465,955 520,050 233,952 270,864 262,152 52,214 38,394 44,623 2 Individual income taxes, net........................... 180,988 217,841 244,069 115,488 119,988 131,962 30,964 15,348 13,693 3 Withheld............................................................ 165,215 195,295 223,763 105,764 110,394 120,924 20,896 19,076 22,337 4 Presidential Election Campaign Fund... 39 36 39 3 34 4 1 4 11 5 Nonwithheld...................................................... 47,804 56,215 63,746 12,355 49,707 14,592 10,121 1,134 3,754 6 Refunds1............................................................ 32,070 33,705 43,479 2,634 40,147 3,559 54 4,867 12,410 Corporation income taxes 7 Gross receipts................................................. 65,380 71,448 72,380 29,169 43,434 28,579 2,826 1,816 10,203 8 Refunds............................................................... 5,428 5,771 7,780 3,306 4,064 4,518 667 1,252 1,617 9 Social insurance taxes and contributions, net................................................................... 123,410 141,591 160,747 71,031 86,597 77,262 14,363 17,211 15,784 10 Payroll employment taxes and contributions2.......................................... 99,626 115,041 133,042 60,562 69,077 66,831 12,533 14,562 14,579 11 Self-employment taxes and contributions3.......................................... 4,267 5,034 5,723 417 5,535 188 426 495 419 12 Unemployment insurance........................... 13,850 15,387 15,336 6,899 8,690 6,742 773 1,563 174 13 Other net receipts4........................................ 5,668 6,130 6,646 3,149 3,294 3,502 631 591 613 14 Excise taxes.......................................................... 18,376 18,745 24,329 9,675 11,383 15,332 2,523 3,273 4,210 15 Customs deposits................................................. 6,573 7,439 7,174 3,741 3,443 3,717 635 558 661 16 Estate and gift taxes........................................... 5,285 5,411 6,389 2,900 3,091 3,499 535 489 572 17 Miscellaneous receipts5.................................... 7,413 9,252 12,741 5,254 6,993 6,318 1,035 951 1,117 Outlays 18 All types1’6...................................................... 450,804 493,635 579,613 263,004 289,905 310,972 59,099 53,969 54,217 19 National defense................................................. 105,186 117,681 135,856 62,002 69,132 72,457 12,682 12,841 13,560 20 International affairs........................................... 5,922 6,091 10,733 4,617 4,602 5,430 396 1,005 808 21 General science, space, and technology ... 4,742 5,041 5,722 3,299 3,150 3,205 440 531 692 22 Energy..................................................................... 5,861 6,856 6,313 3,281 3,126 3,997 915 826 475 23 Natural resources and environment.............. 10,925 12,091 13,812 7,350 6,668 7,722 1,134 1,016 1,093 24 Agriculture............................................................ 7,731 6,238 4,762 1,709 3,193 1,892 2,984 352 -54 25 Commerce and housing credit...................... 3,324 2,565 7,782 3,002 3,878 3,163 988 -204 377 26 Transportation...................................................... 15,445 17,459 21,120 10,298 9,582 11,547 3,810 1,468 1,605 27 Community and regional development.... 11,039 9,482 10,068 4,855 5,302 5,370 867 620 782 28 Education, training, employment, social services .......................................................... 26,463 29,685 30,767 14,579 16,686 15,221 3,029 2,862 2,666 29 Health..................................................................... 43,676 49,614 58,165 26,492 29,299 31,263 5,510 5,414 5,757 30 Income security16............................................... 146,180 160,159 193,100 85,967 94,605 107,912 19,299 18,795 19,242 31 Veterans benefits and services...................... 18,974 19,928 21,183 10,113 9,758 11,731 1,923 1,955 1,028 32 Administration of justice.................................. 3,802 4,153 4,570 2,174 2,291 2,299 383 389 377 33 General government........................................... 3,737 4,153 4,505 2,103 2,422 2,432 356 425 749 34 General-purpose fiscal assistance.................. 9,601 8,372 8,584 4,286 3,940 4,191 1,293 113 98 35 Interest7................................................................. 43,966 52,556 64,504 29,045 32,658 35,909 3,822 6,400 5,835 36 Undistributed offsetting receipts7-8............. -15,772 -18,489 -21,933 -12,164 -10,387 -14,769 -732 -838 -875 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 □ May 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 Dec. Jan. Feb. Mar. Apr. 1 Total gross public debt.......................................................... 653.5 718.9 789.2 845.1 930.2 934.1 950.5 964.5 964.0 By type 2 Interest-bearing debt................................................................... 652.5 715.2 782.4 844.0 928.9 929.8 946.5 963.2 962.8 3 Marketable....................................................................................... 421.3 459.9 487.5 530.7 623.2 628.5 642.9 661.1 657.9 4 Bills................................................................................................ 164.0 161.1 161.7 172.6 216.1 220.4 229.0 235.3 225.8 5 Notes.............................................................................................. 216.7 251.8 265.8 283.4 321.6 321.2 324.5 336.5 341.1 6 Bonds........................................................................................... 40.6 47.0 60.0 74.7 85.4 86.9 89.4 89.3 91.0 7 Nonmarketable1............................................................................ 231.2 255.3 294.8 313.2 305.7 301.3 303.5 302.1 304.9 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 23.8 23.7 23.6 23.5 23.4 10 Foreign issues3............................................................................ 22.3 22.2 29.6 28.8 24.0 23.8 24.0 24.2 24.4 11 Government............................................................................ 20.8 21.0 28.0 23.6 17.6 17.4 17.5 17.7 18.0 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 72.5 71.4 70.7 70.3 69.8 14 Government account series4................................................. 129.7 139.8 157.5 177.5 185.1 182.2 185.0 183.8 187.0 15 Non-interest-bearing debt.......................................................... 1.1 3.7 6.8 1.2 1.3 4.2 4.0 1.3 1.2 By holder5 16 U.S. government agencies and trust funds........................... 147.1 154.8 170.0 187.1 192.5 189.5 192.0 17 Federal Reserve Banks.............................................................. 97.0 102.8 109.6 117.5 121.3 116.7 118.4 18 Private investors............................................................................ 409.5 461.3 508.6 540.5 616.4 627.4 639.6 19 Commercial banks....................................................................... 103.8 101.4 93.1 91.5 104.7 108.1 107.4 20 Mutual savings banks................................................................... 5.9 5.9 5.0 4.7 5.8 5.8 5.8 21 Insurance companies................................................................... 12.7 15.1 14.9 14.8 15.2 15.3 15.0 22 Other companies............................................................................ 27.7 22.7 21.2 25.0 24.6 22.8 22.4 n.a. n.a. 23 State and local governments..................................................... 41.6 55.2 64.4 67.4 74.7 73.0 76.0 Individuals 24 Savings bonds............................................................................ 72.0 76.7 80.7 79.9 72.2 71.4 70.7 25 Other securities.......................................................................... 28.8 28.6 30.3 36.2 56.7 62.8 65.5 26 Foreign and international6.......................................................... 78.1 109.6 137.8 123.8 134.3 133.9 136.7 27 Other miscellaneous investors7................................................. 38.9 46.1 58.2 97.4 127.9 134.3 140.0 1. Includes (not shown separately): Securities issued to the Rural Electrification 6. Consists of investments of foreign balances and international accounts in the Administration, depository bonds, retirement plan bonds, and individual retire­ United States. Beginning with July 1974, the figures exclude non-interest-bearing ment bonds. notes issued to the International Monetary Fund. 2. These nonmarketable bonds, also known as Investment Series B Bonds, may 7. Includes savings and loan associations, nonprofit institutions, corporate pen­ be exchanged (or converted) at the owner’s option for 1 lh 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 1981 1981 Type of holder 1979 1980 1979 1980 Jan. Feb. Jan. Feb. All maturities 1 to 5 years 1 All holders.............................................................................................. 530,731 623,186 628,482 642,905 164,198 197,409 192,893 196,029 2 U.S. government agencies and trust funds............................................ 11,047 9,564 9,527 9,293 2,555 1,990 1,990 1,360 3 Federal Reserve Banks................................................................................ 117,458 121,328 116,708 118,435 28,469 35,835 34,043 34,492 4 Private investors............................................................................................. 402,226 492,294 502,248 515,178 133,173 159,585 156,860 160,177 5 Commercial banks.................................................................................... 69,076 77,868 80,451 79,931 38,346 44,482 43,436 42,253 6 Mutual savings banks................................................................................ 3,204 3,917 3,950 3,930 1,668 1,925 1,904 1,853 7 Insurance companies................................................................................ 11,496 11,930 11,992 11,838 4,518 4,504 4,445 4,148 8 Nonfinancial corporations....................................................................... 8,433 7,758 6,954 7,600 2,844 2,213 2,203 1,841 9 Savings and loan associations................................................................ 3,209 4,225 3,837 4,103 1,763 2,289 2,380 2,496 10 State and local governments................................................................... 15,735 21,058 20,500 21,646 3,487 4,595 4,553 4,711 11 All others...................................................................................................... 291,072 365,539 374,563 386,130 80,546 99,577 97,941 102,875 Total, within 1 year 5 to 10 years 12 All holders.............................................................................................. 255,252 297,385 303,043 311,965 50,440 56,037 58,727 58,556 13 U.S. government agencies and trust funds............................................ 1,629 830 792 1,188 871 1,404 1,404 1,404 14 Federal Reserve Banks................................................................................ 63,219 56,858 54,308 54,785 12,977 13,458 13,354 13,770 15 Private investors............................................................................................. 190,403 239,697 247,943 255,992 36,592 41,175 43,969 43,382 16 Commercial banks..................................................................................... 20,171 25,197 28,049 28,949 8,086 5,793 6,367 6,054 17 Mutual savings banks................................................................................ 836 1,246 1,283 1,289 459 455 466 481 18 Insurance companies................................................................................ 2,016 1,940 1,977 2,250 2,815 3,037 3,090 3,000 19 Nonfinancial corporations....................................................................... 4,933 4,281 3,476 4,337 308 357 392 393 20 Savings and loan associations................................................................ 1,301 1,646 1,236 1,453 69 216 159 88 21 State and local governments................................................................... 5,607 7,750 7,248 7,974 1,540 2,030 2,047 2,092 22 All others...................................................................................................... 155,539 197,636 204,674 209,740 23,314 29,287 31,448 31,275 Bills, within 1 year 10 to 20 years 23 AH holders.............................................................................................. 172,644 216,104 220,423 228,972 27,588 36,854 36,817 38,278 24 U.S. government agencies and trust funds............................................. 0 1 * 1 4,520 3,686 3,686 3,686 25 Federal Reserve Banks................................................................................ 45,337 43,971 41,558 42,781 3,272 5,919 5,891 5,903 26 Private investors............................................................................................. 127,306 172,132 178,864 186,190 19,796 27,250 27,241 28,690 27 Commercial banks..................................................................................... 5,938 9,856 11,868 12,803 993 1,071 1,115 1,174 28 Mutual savings banks................................................................................ 262 394 410 410 127 181 181 184 29 Insurance companies................................................................................ 473 672 685 854 1,305 1,718 1,758 1,664 30 Nonfinancial corporations....................................................................... 2,793 2,363 1,717 2,212 218 431 440 436 31 Savings and loan associations................................................................ 219 818 403 510 58 52 42 44 32 State and local governments................................................................... 3,100 5,413 4,932 5,154 1,762 3,597 3,629 3,822 33 All others...................................................................................................... 114,522 152,616 158,848 164,246 15,332 20,200 20,075 21,365 Other, within 1 year Over 20 years 34 All holders.............................................................................................. 82,608 81,281 82,620 82,993 33,254 35,500 37,002 38,076 35 U.S. government agencies and trust funds............................................ 1,629 829 791 1,187 1,472 1,656 1,656 1,656 36 Federal Reserve Banks................................................................................ 17,882 12,888 12,750 12,004 9,520 9,258 10,767 9,484 37 Private investors............................................................................................. 63,097 67,565 69,079 69,802 22,262 24,587 26,235 26,936 38 Commercial banks..................................................................................... 14,233 15,341 16,181 16,146 1,470 1,325 1,484 1,501 39 Mutual savings banks................................................................................ 574 852 873 879 113 110 116 123 40 Insurance companies................................................................................ 1,543 1,268 1,291 1,396 842 730 722 776 41 Nonfinancial corporations....................................................................... 2,140 1,918 1,759 2,124 130 476 443 593 42 Savings and loan associations................................................................. 1,081 828 833 943 19 21 21 22 43 State and local governments................................................................... 2,508 2,337 2,316 2,820 3,339 3,086 3,023 3,047 44 All others...................................................................................................... 41,017 45,020 45,826 45,493 16,340 18,838 20,425 20,875 Note. Direct public issues only. Based on Treasury Survey of Ownership from 459 mutual savings banks, and 724 insurance companies, each about 80 percent; Treasury Bulletin (U.S. Treasury Department). (2) 411 nonfinancial corporations and 476 savings and loan associations, each about Data complete for U.S. government agencies and trust funds and Federal Reserve 50 percent; and (3) 489 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 Feb. 28, 1981: (1) 5,347 commercial banks, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Financial Statistics □ May 1981 1.43 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1980 1981 1980 and 1981, week ending Wednesday Item Feb. Dec. 10 Dec. 17 Dec. 24 Dec. 31 Jan. 7 Jan. 14 1 U.S. government securities . 10,838 10,285 13,183 21,576 19,794 21,449 23,656 21,858 By maturity 2 Bills............................... 6,746 6,173 7,915 13,840 12,124 13,559 13,781 16,183 3 Other within 1 year . 237 392 454 464 397 577 347 638 4 1-5 years...................... 2,320 1,889 2,417 3,461 2,257 3,492 5,409 2,384 5 5-10 years.................... 1,148 965 1,121 1,806 2,840 1,706 1,800 1,275 6 Over 10 years............. 867 1,276 2,005 2,175 2,115 2,320 1,378 By type of customer 7 U.S. government securities dealers............................... 1,268 1,135 1,448 1,807 1,172 2,098 2,408 8 U.S. government securities brokers............................. 3,709 3,838 5,170 8,382 8,835 8,851 9.060 5,723 9 Commercial banks............... 2,294 1,804 1,904 2.661 2,496 2,613 3,129 2,565 10 All others1............................... 3,567 3,508 4,660 8,726 7,290 8,273 9.369 11,163 11 Federal agency securities . 1,894 2,723 2,667 3,058 3,281 2,230 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 1977 1978 Feb. Nov. 19 Nov. 26 Dec. 3 Dec. 10 Dec. 17 Dec. 24 Positions1 1 U.S. government securities 5,172 2,656 3,223 4,042 4,055 1,910 3,539 4,266 2,927 4,432 2 Bills.......................................... 4.772 2,452 3,813 4.081 3,874 2.310 3.526 4.066 3.935 4.146 3 Other within 1 year........... 99 260 -325 -1.394 -844 -924 -920 -920 -1.652 -1,751 4 1-5 years................................. 60 -92 -455 -43 -195 -791 -415 -716 -683 913 5 5-10 years............................... 92 40 160 104 74 50 30 431 3 -198 6 Over 10 years........................ 149 -4 30 1.294 1.146 1.267 1.318 1.405 1.324 1,323 7 Federal agency securities .. 693 606 1,471 643 78 314 591 542 406 668 Financing2 f f | Reverse repurchase agreements3 . T 8 Overnight and continuing......... 1 1 1 12.074 11.762 8.232 9.768 8.381 10.503 12,925 11.091 10.697 9 Term agreements........................ 34.249 25.750 25.008 29,050 31.980 30.993 32,422 33.633 38,899 Repurchase agreements4................ n.1a. n.a. n.1a. 1 11 0 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 t n s. t .. i . n ... u .. i .. n .. g ... . . . . . . . . . . . . . . . . . \ 1 I \ 2 29 5. . 3 4 0 2 3 6 2 3 2 1 . . 2 61 8 3 9 2 2 8 6 . . 5 2 2 5 3 6 2 2 4 6 , . 5 2 3 1 6 0 3 1 1 9 . . 8 8 1 8 5 4 2 2 4 6 . . 9 3 8 4 6 0 2 2 7 7 , , 2 6 6 4 2 2 2 2 5 9 . . 4 5 9 0 5 0 3 2 8 0 . , 5 0 1 9 5 5 1. Net amounts (in terms of par values) of securities owned by nonbank dealer 3. Includes all reverse agreements, including those that have been arranged to firms and dealer departments of commercial banks on a commitment, that is. trade- make delivery on sales and those for which the securities obtained have been used date basis, including any such securities that have been sold under agreements to as collateral on borrowings. repurchase. The maturities of some repurchase agreements are sufficiently long, 4. Includes both repurchase agreements undertaken to finance positions and however, to suggest that the securities involved are not available for trading pur­ “matched book" repurchase agreements. poses. Securities owned, and hence dealer positions, do not include securities purchased under agreement to resell. Notl. 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 Sept. Oct. Nov. Dec. Jan. Feb. 1 Federal and federally sponsored agencies1........................ 103,848 112.472 137,063 182,713 188,076 188,743 193,229 195,056 194,926 2 Federal agencies........................................................................... 22.419 22.760 23.488 27.618 27.797 27.941 28.606 28.769 28.596 3 Defense Department-.............................................................. 1.113 983 968 641 636 631 610 600 591 8.574 8.671 8.711 10.728 10.715 10.696 11.250 11.239 11.201 5 Federal Housing Administration5...................................... 575 581 588 495 490 486 477 476 468 6 Government National Mortgage Association participation certificates6............................................... 4.120 3.743 3.141 2.842 2.842 2.842 2.817 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 Valiev Authority................................................. 4.935 6.015 7.460 10.660 10.835 11.010 11.190 11.375 11.550 9 United States Railway Association7................................. 104 336 356 482 509 506 492 492 199 10 Federally sponsored agencies1................................................. 81.429 89.712 113.575 155.095 160.279 160.802 164.623 166.287 166.330 11 Federal Home Loan Banks................................................... 16.811 18.345 27.563 36.710 38.819 39.380 41.258 41.819 42.275 12 Federal Home Loan Mortgage Corporation.................. 1.690 1.686 2.262 2.537 2.537 2.537 2.536 2.518 2.514 13 Federal National Mortgage Association........................... 30.565 31.890 41.080 52.382 53.889 53.643 55.185 54.605 54.110 14 Federal Land Banks................................................................ 17.127 19.118 20.360 12.765 12.365 12.365 12.365 11.507 11.507 15 Federal Intermediate Credit Banks................................... 10.494 11.174 11.469 1.821 1.821 1.821 1.821 1.388 1.388 16 Banks for Cooperatives.......................................................... 4.330 4.434 4.843 584 584 584 584 584 584 17 Farm Credit Banks*................................................................ 2.548 5.081 45.950 47.888 48.021 48.153 50.645 50.675 18 Student Loan Marketing Association8............................. 410 515 915 2.345 2.375 2.450 2.720 3.220 3.275 19 Other.................................".......................................................... 2 2 2 1 1 1 1 1 2 Mlmo: 20 Federal Financing Bank debt7-9.......................................... 28,711 38,580 51,298 82,559 83,903 85,440 87,460 88,420 89,444 Lending to federal and federally sponsored agencies 21 Export-Import Bank4................................................................... 5.208 5.834 6.898 10.067 10.067 10.067 10.654 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 ^45 2.375 2.450 2.720 3.220 3.275 24 Tennessee Valley Authority..................................................... 3.110 4.190 5.635 8.935 9.110 9.285 9.465 9.650 9.825 25 United States Railway Association7...................................... 104 336 356 482 509 506 492 492 199 Other Lending10 26 Farmers Home Administration................................................. 10.750 16.095 23.825 37.961 38.466 39.431 39.431 39.271 39.851 27 Rural Electrification Administration...................................... 1.415 2.647 4.604 8.425 8.646 8.760 9.196 9.471 10.212 28 Other.................................................................................................. 4.966 6.782 6.951 12.824 13.210 13.421 13.982 14.142 13.908 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 of the table in order to avoid double counting. 5. Consists of debentures issued in payment of Federal Housing Administration 10. Includes FFB purchases of agency assets and guaranteed loans; the latter insurance claims. Once issued, these securities may be sold privately on the se­ contain loans guaranteed by numerous agencies with the guarantees of any partic­ curities market. ular agency being generally small. The Farmers Home Administration item consists 6. Certificates of participation issued prior to fiscal 1969 by the Government exclusively of agency assets, while the Rural Electrification Administration entry National Mortgage Association acting as trustee for the Farmers Home Admin­ contains both agency assets and guaranteed loans. istration; Department of Health. Education, and Welfare; Department Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Financial Statistics □ May 1981 1.46 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1980 1981 Type of issue or issuer, or use 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 Administration^....................................................... 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 tne local authority. 1.47 NEW SECURITY ISSUES of Corporations Millions of dollars 1980 1981 Type of issue or issuer. 1978 1979 1980 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 All issues*........................................................................ 47,230 51,533 72.886 5,437 5,025 5,728 3,827 5,376 5,573 4,157 2 Bonds............................................................................... 36,872 40,208 52,523 4,213 2,916 3,275 2,055 2,528 3,373 2,834 Type of offering 3 Public...................................................................................... 19.815 25.814 41.545 3.843 2.421 2.756 1.405 1.719 2.928 2.408 4 Private placement................................................................ 17.057 14.394 10.978 370 495 519 650 809 445 426 Industry group 5 Manufacturing....................................................................... 9.572 9.678 15.217 1.545 553 614 88 470 1.635 1.140 6 Commercial and miscellaneous........................................ 5.246 3.948 6.463 206 390 312 432 302 231 356 7 Transportation....................................................................... 2.007 3.119 3.217 346 409 236 86 110 353 45 8 Public utility........................................................................... 7.092 8.153 9.504 971 569 754 565 277 800 593 9 Communication..................................................................... 3.373 4.219 6.658 580 517 791 163 584 48 272 10 Real estate and financial................................................... 9.586 11.094 11.464 565 477 568 722 784 306 430 11 Stocks ............................................................................. 10,358 11,325 20.363 1,224 2,109 2,453 1,772 2,848 2,200 1,323 Type 12 Preferred.................................................................................. 2.832 3.574 3.624 101 392 535 256 241 369 149 13 Common.................................................................................. 7.526 7.751 16.739 1.123 1.717 1.918 1.516 2.607 1.831 1.174 Industry group 14 Manufacturing....................................................................... 1.241 1.679 4.831 293 502 848 418 839 614 204 15 Commercial and miscellaneous........................................ 1,816 2.623 5.166 238 569 321 509 904 603 589 16 Transportation....................................................................... 263 255 472 32 54 117 53 18 124 81 17 Public utility........................................................................... 5.140 5.171 6.230 463 633 526 227 669 562 260 18 Communication.................................................................... 264 303 567 46 6 67 113 65 14 31 19 Real estate and financial................................................... 1.631 12.931 3.095 152 345 574 452 348 284 159 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 $1 ()().()()(). 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 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Investment Companies1 1 Sales of own shares2............................................................ 7,495 15,266 1,507 1,405 1,523 1,289 1,242 1,676 1,347 1,696 2 Redemptions of own shares3............................................. 8,393 12,012 1,019 1,228 1,362 1,086 1,720 1,193 960 1,112 3 Net sales.................................................................................. -898 3,254 488 177 161 203 -478 483 387 584 4 Assets4.................................................................................... 49,277 58,400 54,941 55,779 56,156 60,329 58,400 56,160 56,452' 59,146 5 Cash position5................................................................... 4,983 5,321 5,619 5,481 5,460 5,467 5,321 4,636 4,882 4,971 6 Other.................................................................................... 44,294 53,079 49,322 50,298 50,696 54,862 53,079 51,524 51,570' 54,175 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 □ May 1981 1.50 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1979 1980 Account 1975 1976 1977 1978 03 Q4 Ql Q2 Q3 Q4 1 Current assets....................................................................... 759.0 826.8 902.1 1,030.0 1,169.5 1,200.9 1,235.2 1,233.8 1,255.8 1,279.9 2 Cash........................................................................................... 82.1 88.2 95.8 104.5 103.7 116.1 110.2 111.5 113.2 120.8 3 U.S. government securities............................................... 19.0 23.4 17.6 16.3 15.8 15.6 15.1 13.8 16.3 17.0 4 Notes and accounts receivable........................................ 272.1 292.8 324.7 383.8 453.0 456.8 471.2 464.2 479.2 491.1 5 Inventories.............................................................................. 315.9 342.4 374.8 426.9 489.4 501.7 519.5 525.7 525.1 525.1 6 Other......................................................................................... 69.9 80.1 89.2 98.5 107.7 110.8 119.3 118.7 122.0 125.9 7 Current liabilities................................................................. 451.6 494.7 549.4 665.5 777.8 809.1 838.3 828.1 852.1 877.2 8 Notes and accounts payable............................................. 264.2 281.9 313.2 373.7 438.8 456.3 467.9 463.1 477.3 498.2 9 Other......................................................................................... 187.4 212.8 236.2 291.7 339.0 352.8 370.4 364.9 374.8 379.0 10 Net working capital.............................................................. 307.4 332.2 352.7 364.6 391.7 391.8 397.0 405.7 403.7 402.7 11 Memo: Current ratio 1........................................................ 1.681 1.672 1.642 1.548 1.504 1.484 1.474 1.490 1.474 1.459 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 198U 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 other2............................................... 34.83 36.99 41.93 35.90 37.34 37.66 36.97 36.11 40.34 41.39 1. Anticipated by business. Source. Survey of Current Business (U.S. Dept, of Commerce). 2. “Other” consists of construction; social services and membership organiza­ tions; and forestry, fisheries, and agricultural services. 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 24.9' 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 receivable Accounts receivable Type ou F t e st b a . n 2 d 8 in , g 1980 1981 1980 1981 1980 1981 19811 Dec. Jan. Feb. Dec. Jan. Feb. Dec. Jan. Feb. 1 Total.................................................................................................. 72,932 1,982 702 280 18,308 16,811 18,207 16,326 16,109 17,927 2 Retail automotive (commercial vehicles)........................................ 11,968 -151 -126 -160 923 921 885 1,074 1,047 1,045 3 Wholesale automotive............................................................................ 11,691 434 -310 -494 5,564 5,554 5,351 5,130 5,864 5,845 4 Retail paper on business, industrial and farm equipment.............................................................................. 23,657 876 458 591 1,562 1.564 1,800 686 1,106 1,209 5 Loans on commercial accounts receivable and factored com­ mercial accounts receivable........................................................ 7,650 1,195 519 -262 7,827 6,362 7,792 6,632 5,843 8,054 6 All other business credit....................................................................... 17,966 -372 161 605 2,432 2,410 2,379 2,804 2,249 1,774 1. Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Financial Statistics □ May 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 Terms1 1 Purchase price (thousands of dollars)........................... 62.6 74.4 83.5 83.7 84.0 77.1 90.1' 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 series*..................................................................... 9.54 10.77 12.65 12.35 12.60 13.04 13.28' 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 15.25 Secondary Markets Yield (percent per annum) 9 FHA mortgages (HUD series)5...................................... 9.70 10.87 13.42 14.26 14.38 14.47 14.08 14.23 14.79 15.04 10 GNMA securities6................................................................. 8.98 10.22 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 14.87' 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) 43,311 51,091 57,327 c 55,632 56,188 56,619 57,327 57,390 57,434 57,362 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 3c 2 1 4 0, , 4 4 9 8 6 9 c 38,9698, c 37,558c 38,040c 38,381c 38,969c 38,955c 38,972c 38,878 16 Conventional..................................................................... 11,524 16,106 18,358 18,074 18,148 18,238c 18,358 18,435 18,462 18,484 Mortgage transactions (during period) 17 Purchases................................................................................ 12,303 10,805 8,100 500 771 579 855 185 161 87 18 Sales......................................................................................... 9 0 0 0 0 0 0 0 0 0 Mortgage commitments9 19 Contracted (during period).......................................... 18,959 10,179 8,044 1,070 514 472 403 241 244 320 20 Outstanding (end of period)............................................. 9,185 6,409 3,278 4,789 4,399 3,963 3,278 3,063 2,683 2,173 Auction of 4-month commitments to buy Government-underwritten loans 21 Offered................................................................................ 12,978 8,860 8,605 907.0 427.8 252.0 242.1 210.7 155.3 139.1 22 Accepted.............................................................................. 6,747.2 3,921 4,002 538.0 257.7 135.6 110.8 93.0 104.7 114.5 Conventional loans 23 Offered................................................................................ 9,933.0 4,495 3,639 347.7 107.6 81.6 84.8 32.0 149.2 126.9 24 Accepted...................................................................... 5,111 2,344 1,749 209.8 93.9 68.8 54.1 30.3 97.6 92.0 Federal Home Loan Mortgage Corporation Mortgage holdings (end of period)10 25 Total......................................................................................... 3,064 4,035 5,067 4,543 4,727 4,843 5,067 5,039 5,107 5,161 26 FHA/VA.............................................................................. 1,243 1,102 1,033 1,050 1,044 1,038 1,033 1,029 1,025 1,021 27 Conventional..................................................................... 1,165 1,957 2,830 3,492 3,629 3,715 2,830 2,825 2,883 2,931 Mortgage transactions (during period) 28 Purchases................................................................................ 6,525 5,717 3,722 521 398 231 285 152 174 148 29 Sales......................................................................................... 6,211 4,544 2,526 275 187 94 48 168 94 127 Mortgage commitments11 30 Contracted (during period)............................................... 7,451 5,542 3,859 218 222 180 126 203 294 768 31 Outstanding (end of period)............................................. 1,410 797 447 934 726 653 447 487 394 699 1. Weighted averages based on sample surveys of mortgages originated by major assuming prepayment in 12 years on pools of 30-year FHA/VA mortgages carrying institutional lender groups. Compiled by the Federal Home Loan Bank Board in the prevailing ceiling rate. Monthly figures are unweighted averages of Monday cooperation with the Federal Deposit Insurance Corporation. quotations for the month. 2. Includes all fees, commissions, discounts, and “points” paid (by the borrower 7. Average gross yields (before deduction of 38 basis points for mortgage serv­ or the seller) in order to obtain a loan. icing) on accepted bids in Federal National Mortgage Association’s auctions of 4- 3. Average effective interest rates on loans closed, assuming prepayment at the month commitments to purchase home mortgages, assuming prepayment in 12 end of 10 years. years for 30-year mortgages. No adjustments are made for FNMA commitment 4. Average contract rates on new commitments for conventional first mortgages, fees or stock related requirements. Monthly figures are unweighted averages for rounded to the nearest 5 basis points; from Department of Housing and Urban auctions conducted within the month. Development. 8. Beginning March 1980, FHA-insured and VA-guaranteed mortgage holdings 5. Average gross yields on 30-year, minimum-downpayment, Federal Housing in lines 14 and 15 are combined. Administration-insured first mortgages for immediate delivery in the private sec­ 9. Includes some multifamily and nonprofit hospital loan commitments in ad­ ondary market. Any gaps in data are due to periods of adjustment to changes in dition to 1- to 4-family loan commitments accepted in FNMA’s free market auction maximum permissible contract rates. system, and through the FNMA-GNMA tandem plans. 6. Average net yields to investors on Government National Mortgage Associ­ 10. Includes participation as well as whole loans. ation guaranteed, mortgage-backed, fully modified pass-through securities, 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 1980 1981 Type of holder, and type of property 1978 1979 1980' Ql Q2 Q3 Q4' Ql 1All holders.............................................................................. 1,169,412' 1,326,750' 1,451,840 1,357,660' 1,380,928' 1,414,881' 1,451,840 1,473,919 2 1- to 4-family.................................................................................. 765,217' 878,931' 960,422 897,608' 910,286' 935,393' 960,422 972,687 3 Multifamily....................................................................................... 121,138' 128,852' 136,580 130,363' 132,194' 134,193' 136,580 139,048 4 Commercial.................................................................................... 211,851' 236,451' 258,338 242,776' 247,444' 251,651' 258,338 261,943 5 Farm................................................................................................. 71,206 82,516 96,500 86,913 91,004 93,644 96,500 100,241 6 Major financial institutions....................................................... 848,177 938,567' 998,386 951,276' 958,750' 977,281' 998,386 1,007,266 7 Commercial banks1................................................................... 214,045 245,187 264,602 250,702 253,103 258,003 264,602 267,103 8 1- to 4-family......................................................................... 129,167 149,460 160,746 152,553 153,753 156,737 160,746 161,873 9 Multifamily.............................................................................. 10,266 11,180 12,304 11,557 11,764 11,997 12,304 12,467 10 Commercial........................................................................... 66,115 75,957 82,688 77,993 79,110 80,626 82,688 83,782 11 Farm......................................................................................... 8,497 8,590 8,864 8,599 8,476 8,643 8,864 8,981 12 Mutual savings banks.............................................................. 95,157 98,908 99,827 99,151 99,150 99,306 99,827 99,840 13 1- to 4-family......................................................................... 62,252 64,706 65,307 64,865 64,864 64,966 65,307 65,316 14 Multifamily.............................................................................. 16,529 17,340 17,180 17,223 17,223 17,249 17,340 17,342 15 Commercial........................................................................... 16,319 16,963 17,120 17,004 17,004 17,031 17,120 17,122 16 Farm......................................................................................... 57 59 60 59 59 60 60 60 17 Savings and loan associations............................................... 432,808 475,688' 502,812 478,952' 481,042' 491,895' 502,812 507,040 18 1- to 4-family......................................................................... 356,114 394,345' 419,446 398,009' 399,746' 409,896' 419,446 422,964 19 Multifamily.............................................................................. 36,053 37,579' 38,113 37,215' 37,329' 37,728' 38,113 38,443 20 Commercial........................................................................... 40,461 43,764' 45,253 43,728' 43,967' 44,271' 45,253 45,633 21 Life insurance companies..................................................... 106,167 118,784 131,145 122,471 125,455 128,077 131,145 133,283 22 1- to 4-family......................................................................... 14,436 16,193 17,911 16,850 17,796 17,996 17,911 18,203 23 Multifamily.............................................................................. 19,000 19,274 19,614 19,590 19,284 19,357 19,614 19,934 24 Commercial............................................................................ 62,232 71,137 80,776 73,618 75,693 77,995 80,776 82,093 25 Farm......................................................................................... 10,499 12,180 12,844 12,413 12,682 12,729 12,844 13,053 26 Federal and related agencies..................................................... 81,739' 97,084' 114,300 103,921' 108,539' 110,526' 114,300 117,011 27 Government National Mortgage Association.................. 3,509 3,852 4,642 3,919' 4,466' 4,389' 4,642 4,966 28 1- to 4-family......................................................................... 877 763 704 749' 736' 719' 704 730 29 Multifamily.............................................................................. 2,632 3,089 3,938 3,170' 3,730' 3,670 3,938 4,236 30 Farmers Home Administration............................................ 926 1,274 3,492 2,845' 3,375' 3,525' 3,492 3,542 31 1- to 4-family......................................................................... 288 417 916 1,139' 1,383' 978' 916 926 32 Multifamily.............................................................................. 320 71 610 408' 636' 774' 610 620 33 Commercial............................................................................ 101 174 411 409' 402' 370' 411 426 34 Farm......................................................................................... 217 612 1,555 889' 954' 1,403' 1,555 1,570 35 Federal Housing and Veterans Administration............. 5,305' 5,555' 5,640 5,621' 5,691' 5,600' 5,640 5,723 36 1- to 4-family......................................................................... 1,673' 1,955' 2,051 2,022' 2,085' 1,986' 2,051 2,098 37 Multifamily.............................................................................. 3,632' 3,600' 3,589 3,599' 3,606' 3,614' 3,589 3,625 38 Federal National Mortgage Association........................... 43,311 51,091' 57,327 53,990 55,419 55,632 57,327 57,362 39 1- to 4-family......................................................................... 37,579 45,488' 51,775 48,394 49,837 50,071 51,775 51,842 40 Multifamily.............................................................................. 5,732 5,603' 5,552 5,596 5,582 5,561 5,552 5,520 41 Federal Land Banks................................................................ 25,624 31,277 38,131 33,311 35,574 36,837 38,131 40,258 42 1- to 4-family......................................................................... 927 1,552 2,099 1,708 1,893 1,985 2,099 2,228 43 Farm......................................................................................... 24,697 29,725 36,032 31,603 33,681 34,852 36,032 38,030 44 Federal Home Loan Mortgage Corporation.................. 3,064 4,035 5,068 4,235 4,014 4,543 5,068 5,160 45 1- to 4-family......................................................................... 2,407 3,059 3,873 3,210 3,037 3,459 3,873 3,952 46 Multifamily.............................................................................. 657 976 1,195 1,025 977 1,084 1,195 1,208 47 Mortgage pools or trusts2.......................................................... 88,633 119,278 142,258 124,632 129,647 136,583 142,258 146,814 48 Government National Mortgage Association.................. 54,347 76,401 93,874 80,843 84,282 89,452 93,874 97,184 49 1- to 4-family......................................................................... 52,732 74,546 91,602 78,872 82,208 87,276 91,602 94,810 50 Multifamily.............................................................................. 1,615 1,855 2,272 1,971 2,074 2,176 2,272 2,374 51 Federal Home Loan Mortgage Corporation.................. 11,892 15,180 16,854 15,454 16,120 16,659 16,854 17,100 52 1- to 4-family......................................................................... 9,657 12,149 13,471 12,359 12,886 13,318 13,471 13,680 53 Multifamily.............................................................................. 2,235 3,031 3,383 3,095 3,234 3,341 3,383 3,420 54 Farmers Home Administration............................................. 22,394 27,697 31,530 28,335 29,245 30,472 31,530 32,530 55 1- to 4-family......................................................................... 13,400 14,884 16,683 14,926 15,224 . 16,226 16,683 17,212 56 Multifamily.............................................................................. 1,116 2,163 2,612 2,159 2,159 2,235 2,612 2,695 57 Commercial................................. ...................................... 3,560 4,328 5,271 4,495 4,763 5,059 5,271 5,438 58 Farm......................................................................................... 4,318 6,322 6,964 6,755 7,099 6,952 6,964 7,185 59 Individual and others3................................................................ 150,863' 171,821' 196,896 177,831' 183,992' 190,491' 196,896 202,828 60 1- to 4-family.............................................................................. 83,708' 99,414' 113,838 101,952' 104,838' 109,780' 113,838 116,853 61 Multifamily.................................................................................. 21,351' 23,251' 26,058 23,755' 24,596' 25,407' 26,058 27,164 62 Commercial................................................................................ 22,883' 24,128' 26,819 25,529' 26,505' 26,299' 26,819 27,449 63 Farm............................................................................................. 22,921 25,028 30,181 26,595 28,053 29,005 30,181 31,362 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 □ May 1981 1.56 CONSUMER INSTALLMENT CREDIT' Total Outstanding, and Net Change Millions of dollars 1980 1981 Holder, and type of credit 1977 1978 1979 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Amounts outstanding (end of period) 1 Total............................................................ 230,564 273,645 312,024 306,926 307,222 308,051 313,435 310,554 309,188 310,766 By major holder 2 Commercial banks........................................ 112,373 136.016 154,177 146,362 145,895 145,147 145,765 143,749 142,030 141,897 3 Finance companies........................................ 44,868 54.298 68.318 74,823 74,985 75,690 76,756 77,131 78,090 79,490 4 Credit unions................................................... 37,605 44.334 46,517 43,562 43,518 43.606 44,041 43,601 43,776 44,212 5 Retailers2.......................................................... 23,490 25.987 28,119 25,301 25,703 26,469 29,410 28,300 27,329 26,965 6 Savings and loans.......................................... 7,089 7.097 8.424 9,266 9,611 9,687 9,911 10,023 10,173 10,458 7 Gasoline companies...................................... 2,963 3.220 3,729 4,872 4.736 4,662 4,717 4,929 4,958 4,898 8 Mutual savings banks.................................... 2,176 2.693 2,740 2,740 2,774 2,790 2,835 2,821 2,832 2,846 By major type of credit 9 Automobile..................................................... 82,911 101.647 116.362 116,781 116,657 116,517 116,327 115,262 115,677 117,517 10 Commercial banks.................................... 49,577 60.510 67,367 62,734 62,350 61,848 61,025 59,608 59,061 59,378 11 Indirect paper........................................ 27,379 33.850 38.338 35,768 35.572 35,284 34,857 33,947 33,667 34,016 12 Direct loans............................................ 22,198 26.660 29,029 26,966 26,778 26,564 26,168 25,661 25,394 25,362 13 Credit unions............................................... 18,099 21.200 22,244 20,831 20.810 20,852 21,060 20,850 20,933 21,142 14 Finance companies.................................... 15,235 19.937 26,751 33,216 33,497 33,817 34,242 34,804 35,683 36,997 15 Revolving.......................................................... 39,274 48.309 56,937 54,406 54,598 55,304 59,862 58,985 57,566 56,831 16 Commercial banks.................................... 18,374 24.341 29,862 28,403 28.331 28,360 30,001 29,952 29,412 29,051 17 Retailers....................................................... 17,937 20.748 23,346 21,131 21.531 22,282 25,144 24,104 23,196 22,882 18 Gasoline companies................................. 2.963 3.220 3,729 4,872 4,736 4,662 4,717 4,929 4,958 4,898 19 Mobile home................................................... 14,945 15.235 16,838 17,113 17,276 17,293 17,327 17,244 17,189 17,273 20 Commercial banks.................................... 9,124 9.545 10,647 10,538 10.502 10,452 10,376 10,271 10,174 10,153 21 Finance companies.................................... 3,077 3.152 3,390 3.601 3,657 3,702 3,745 3,741 3,740 3,762 22 Savings and loans...................................... 2,342 2.067 2,307 2,511 2,654 2.675 2,737 2,768 2,809 2,888 23 Credit unions............................................... 402 471 494 463 463 464 469 464 466 470 24 Other.................................................................. 93,434 108.454 121,887 118,626 118,691 118.937 119,919 119,063 118,756 119,145 25 Commercial banks.................................... 35,298 41.620 46.301 44,687 44.712 44.487 44,363 43,918 43,383 43,315 26 Finance companies.................................... 26,556 31.209 38,177 38,006 37,831 38,171 38,769 38,586 38,667 38,731 27 Credit unions............................................... 19,104 22.663 23,779 22,268 22.245 22,290 22,512 22,287 22,377 22,600 28 Retailers....................................................... 5,553 5.239 4,773 4,170 4.172 4,187 4,266 4,196 4,133 4,083 29 Savings and loans...................................... 4,747 5.030 6,117 6,755 6,957 7,012 7,174 7,255 7,364 7,570 30 Mutual savings banks............................... 2,176 2.693 2,740 2.740 2,774 2,790 2,835 2,821 2,832 2,846 Net change (during period)3 31 Total............................................................ 35,462 43,079 38,381 1,055 702 839 1,619 869 1,996 3,108 By major holder 32 Commercial banks........................................ 18,645 23.641 18,161 -265 -336 -120 -276 -1,357 -544 612 33 Finance companies........................................ 5,949 9.430 14,020 613 454 594 860 1,113 1,530 1,539 34 Credit unions................................................... 6,436 6.729 2,185 36 63 218 378 288 444 287 35 Retailers2.......................................................... 2,654 2.497 2,132 456 134 52 316 409 103 253 36 Savings and loans.......................................... 1,309 7 1,327 93 246 -14 190 232 254 418 37 Gasoline companies...................................... 132 257 509 90 98 72 83 106 209 -6 38 Mutual savings banks................................... 337 518 47 32 43 37 68 78 0 5 By major type of credit 39 Automobile..................................................... 15,204 18.736 14,715 84 201 245 302 -63 979 1,682 40 Commercial banks.................................... 9,956 10.933 6,857 -362 -348 -138 -491 -1,253 -346 229 41 Indirect paper........................................ 5,307 6.471 4,488 -282 -170 -44 -181 -839 -229 268 42 Direct loans............................................ 4,649 4.462 2,369 -80 -178 -94 -310 -414 -117 -39 43 Credit unions............................................... 2,861 3.101 1,044 10 18 101 174 206 211 132 44 Finance companies.................................... 2,387 4.702 6,814 436 531 282 619 984 1,114 1,321 45 Revolving......................................................... 6,248 9.035 8,628 478 273 265 616 557 441 587 46 Commercial banks.................................... 4,015 5.967 5,521 -81 -19 121 211 59 166 346 47 Retailers....................................................... 2,101 2,811 2,598 469 194 72 322 392 66 247 48 Gasoline companies................................. 132 257 509 90 98 72 83 106 209 -6 49 Mobile home................................................... 371 286 1,603 43 141 24 66 -24 -47 88 50 Commercial banks.................................... 387 419 1,102 -22 -21 -33 -34 -85 -102 -35 51 Finance companies.................................... -187 74 238 30 42 44 48 15 18 25 52 Savings and loans...................................... 101 -276 240 35 120 11 47 46 31 97 53 Credit unions............................................... 70 69 23 0 0 2 5 0 6 1 54 Other.................................................................. 13,639 15,022 13,435 450 87 305 635 399 623 751 55 Commercial banks................................... 4,287 6.322 4,681 200 52 -70 38 -78 -262 72 56 Finance companies.................................... 3,749 4.654 6,968 147 -119 268 193 114 398 193 57 Credit unions............................................... 3,505 3.559 1,118 26 45 115 199 82 227 154 58 Retailers....................................................... 553 -314 -466 -13 -60 -20 -6 17 37 6 59 Savings and loans...................................... 1,208 283 1,087 58 126 -25 143 186 223 321 60 Mutual savings banks............................... 337 518 47 32 43 37 68 78 0 5 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Extensions 1 Total............................................................................... 257,600 297,668 324,777 27,064 27,365 25,991 27,149 27,059 28,706 29,822 Bv major holder 2 Commercial banks.............................................................. 117,896 142,433 154.733 11.671 11,977 11,432 11,484 10,397 11,648 12,676 3 Finance companies.............................................................. 41,989 50,505 61.518 5,355 5,323 4,852 5,185 5.904 6,193 5,911 4 Credit unions......................................................................... 34,028 38,111 34.926 2,752 2,872 2,795 3,035 2.994 3,167 3,153 5 Retailers1................................................................................ 42,183 44,571 47.676 4,596 4,291 4,250 4,497 4,673 4,500 4,685 6 Savings and loans................................................................ 4,978 3,724 5.901 539 695 444 658 715 751 1,038 7 Gasoline companies............................................................ 14,617 16.017 18.005 1,965 2,009 2,024 2,061 2,130 2,284 2,180 8 Mutual savings banks.......................................................... 1.909 2.307 2.018 186 198 194 229 246 163 179 Bv major tvpe of credit 9 Automobile........................................................................... 75,641 87.981 93.901 7,518 7,544 7,117 7,234 7,237 8,333 8,700 10 Commercial banks.......................................................... 46,363 52,969 53.554 3,713 3,791 3,552 3,271 2,598 3,560 4,117 11 Indirect paper.............................................................. 25,149 29,342 29.623 2.035 2,135 1,962 1,857 1,230 1,944 2,365 12 Direct loans................................................................... 21.214 23.627 23.931 1.678 1,656 1,590 1,414 1,368 1,616 1,752 13 Credit unions..................................................................... 16,616 18,539 17.397 1,455 1,457 1,402 1,538 1,592c 1,613 1,586 14 Finance companies.......................................................... 12,662 16,473 22.950 2,350 2,296 2,163 2,425 3,047 3,160 2,997 15 Revolving................................................................................ 87.596 105.125 120.174 11,143 11,124 10,953 11,614 11,483 11,867 12,071 16 Commercial banks.......................................................... 38.256 51,333 61.048 5,067 5,264 5,155 5,554 5,185 5,602 5,695 17 Retailers............................................................................. 34,723 37,775 41.121 4,111 3,851 3,774 3,999 4,168 3,981 4,196 18 Gasoline companies....................................................... 14,617 16.017 18.005 1,965 2,009 2,024 2,061 2,130 2,284 2,180 19 Mobile home......................................................................... 5,712 5,412 6.471 442 513 424 479 383 409 641 20 Commercial banks.......................................................... 3,466 3,697 4.542 250 257 243 254 171 185 259 21 Finance companies.......................................................... 644 886 797 84 89 93 89 81 88 88 22 Savings and loans............................................................ 1.406 609 948 95 159 74 119 119 118 269 23 Credit unions..................................................................... 196 220 184 13 8 14 17 12 18 25 24 Other......................................................................................... 88.651 99,150 104.231 7,961 8,184 7,497 7,822 7,956 8,097 8,410 25 Commercial banks.......................................................... 29,811 34,434 35.589 2,641 2,665 2,482 2,405 2,443 2,301 2,605 26 Finance companies.......................................................... 28,683 33,146 37.771 2.921 2,938 2,596 2,671 2,776 2,945 2,826 27 Credit unions..................................................................... 17,216 19,352 17.345 1,284 1,407 1,379 1,480 1,390 1,536 1,542 28 Retailers.............................................................................. 7,460 6,796 6.555 485 440 476 498 505 519 489 29 Savings and loans............................................................ 3,572 3,115 4.953 444 536 370 539 596 633 769 30 Mutual savings banks..................................................... 1,909 2,307 2.018 186 198 194 229 246 163 179 Liquidations 31 Total................................................................................ 222,138 254,589 286,396 26,009 26,663 25,152 25,530 26,190 26,710 26,714 By major holder 32 Commercial banks.............................................................. 99,251 118,792 136.572 11,936 12,313 11,552 11,760 11,754 12,192 12,064 33 Finance companies.............................................................. 36,040 41,075 47.498 4,742 4,869 4,258 4,325 4,791 4,663 4,372 34 Credit unions......................................................................... 27,592 31,382 32.741 2,716 2,809 2,577 2,657 2,706 2,723 2,866 35 Retailers1................................................................................ 39,529 42,074 45.544 4,140 4,157 4,198 4,181 4,264 4,397 4,432 36 Savings and loans................................................................ 3,669 3,717 4.574 446 449 458 468 483 497 620 37 Gasoline companies............................................................ 14,485 15,760 17.496 1,875 1,911 1,952 1,978 2,024 2,075 2,186 38 Mutual savings banks.......................................................... 1,572 1,789 1.971 154 155 157 161 168 163 174 By major type of credit 39 Automobile........................................................................... 60.437 69,245 79.186 7.434 7,343 6,872 6,932 7.300 7,354 7,018 40 Commercial banks.......................................................... 36,407 42,036 46.697 4,075 4,139 3,690 3,762 3,851 3,906 3,888 41 Indirect paper.............................................................. 19,842 22,871 25.135 2,317 2,305 2,006 2,038 2,069 2,173 2,097 42 Direct loans................................................................... 16,565 19,165 21.562 1,758 1,834 1,684 1,724 1,782 1,733 1,791 43 Credit unions..................................................................... 13,755 15,438 16.353 1,445 1,439 1,301 1,364 1,386 1,402 1,454 44 Finance companies.......................................................... 10,275 11,771 16.136 1,914 1,765 1,881 1,806 2,063 2,046 1,676 45 Revolving................................................................................ 81,348 96,090 111.546 10,665 10,851 10,688 10,998 10,926 11,426 11,484 46 Commercial banks.......................................................... 34,241 45,366 55.527 5,148 5,283 5,034 5,343 5,126 5,436 5,349 47 Retailers............................................................................. 32,622 34,964 38.523 3,642 3,657 3,702 3,677 3,776 3,915 3,949 48 Gasoline companies....................................................... 14,485 15,760 17.496 1,875 1,911 1,952 1,978 2,024 2,075 2,186 49 Mobile home......................................................................... 5,341 5,126 4.868 399 372 400 413 407 456 553 50 Commercial banks.......................................................... 3,079 3,278 3.440 272 278 276 288 256 287 294 51 Finance companies.......................................................... 831 812 559 54 47 49 41 66 70 63 52 Savings and loans............................................................ 1,305 885 708 60 39 63 72 73 87 172 53 Credit unions..................................................................... 126 151 161 13 8 12 12 12 12 24 54 Other........................................................................................ 75,012 84,128 90.796 7,511 8,097 7,192 7,187 7,557 7,474 7,659 55 Commercial banks.......................................................... 25,524 28,112 30,908 2,441 2,613 2,552 2,367 2,521 2,563 2,533 56 Finance companies.......................................................... 24,934 28,492 30.803 2,774 3,057 2,328 2,478 2,662 2,547 2,633 57 Credit unions..................................................................... 13,711 15,793 16.227 1,258 1,362 1,264 1,281 1,308 1,309 1,388 58 Retailers............................................................................. 6,907 7,110 7.021 498 500 496 504 488 482 483 59 Savings and loans............................................................ 2,364 2,832 3.866 386 410 395 396 410 410 448 60 Mutual savings banks..................................................... 1,572 1,789 1.971 154 155 157 161 168 163 174 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 □ May 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 1 Total funds raised................................................................. 210.8 271.9 338.5 400.4 394.9 363.3 384.8 416.0 380.5 408.2 321.1 405.6 2 Excluding equities................................................................. 200.7 261.0 335.3 398.3 390.6 349.8 387.4 409.2 377.7 402.3 313.0 386.5 By sector and instrument 3 U.S. government................................................................... 85.4 69.0 56.8 53.7 37.4 79.2 61.4 46.0 28.6 46.1 64.5 93.8 4 Treasury securities.......................................................... 85.8 69.1 57.6 55.1 38.8 79.8 62.3 47.9 30.9 46.6 65.2 94.4 5 Agency issues and mortgages...................................... -.4 -.1 -.9 -1.4 -1.4 -.6 -.9 -1.9 -2.3 -.5 -.6 -.6 6 All other nonfinancial sectors.......................................... 125.4 202.8 281.7 346.7 357.6 284.1 323.4 370.0 351.9 362.1 256.5 311.7 7 Corporate equities.......................................................... 10.1 10.8 3.1 2.1 4.3 13.6 -2.6 6.8 2.8 5.9 8.0 19.1 8 Debt instruments.............................................................. 115.3 192.0 278.6 344.6 353.2 270.6 326.0 363.2 349.1 356.2 248.5 292.7 9 Private domestic nonfinancial sectors...................... 112.1 182.0 267.8 314.4 336.4 254.2 302.8 326.1 338.6 333.0 227.0 281.5 10 Corporate equities..................................................... 9.9 10.5 2.7 2.6 3.5 11.4 -1.8 7.0 2.8 4.1 6.0 16.8 11 Debt instruments.......................................................... 102.2 171.5 265.1 311.8 333.0 242.8 304.6 319.1 335.8 328.9 221.0 264.7 12 Debt capital instruments...................................... 98.4 123.5 175.6 196.6 199.9 175.6 188.3 205.0 198.8 201.1 169.1 182.1 13 State and local obligations............................... 16.1 15.7 23.7 28.3 18.9 22.2 27.8 28.7 16.0 21.8 18.0 26.4 14 Corporate bonds................................................. 27.2 22.8 21.0 20.1 21.2 27.6 20.6 19.6 22.4 19.9 33.4 21.9 15 Home................................................................. 39.5 63.6 96.3 104.6 109.1 81.5 100.1 109.1 109.8 108.5 73.6 89.3 16 Multifamily residential................................. * 1.8 7.4 10.2 8.9 8.7 9.3 11.2 8.1 9.7 6.5 11.0 17 Commercial..................................................... 11.0 13.4 18.4 23.3 25.7 21.6 21.2 25.4 26.0 25.4 22.1 21.1 18 Farm................................................................... 4.6 6.1 8.8 10.2 16.2 14.0 9.3 11.1 16.6 15.9 15.5 12.4 19 Other debt instruments........................................ 3.8 48.0 89.5 115.2 133.0 67.2 116.3 114.1 137.0 127.8 51.9 82.5 20 Consumer credit................................................. 9.7 25.6 40.6 50.6 44.2 3.1 50.1 51.0 48.3 39.0 -6.4 12.5 21 Bank loans n.e.c.................................................. -12.3 4.0 27.0 37.3 50.6 37.9 43.1 31.4 48.2 52.9 9.6 66.1 22 Open market paper.......................................... -2.6 4.0 2.9 5.2 10.9 5.8 5.3 5.1 12.0 9.7 29.7 -18.1 23 Other....................................................................... 9.0 14.4 19.0 22.2 27.3 20.4 17.8 26.5 28.4 26.2 18.9 22.0 24 By borrowing sector................................................... 112.1 182.0 267.8 314.4 336.4 254.2 302.8 326.1 338.6 333.0 227.0 281.5 25 State and local governments............................... 13.7 15.2 20.4 23.6 15.5 20.7 21.0 26.1 13.0 18.0 16.2 25.3 26 Households................................................................. 49.7 90.5 139.9 162.6 164.9 100.8 156.1 169.1 167.6 161.2 89.8 111.9 27 Farm............................................................................ 8.8 10.9 14.7 18.1 25.8 19.0 15.3 20.8 23.5 28.1 21.1 16.9 28 Nonfarm noncorporate.......................................... 2.0 4.7 12.9 15.4 15.9 12.5 16.4 14.4 15.5 15.9 9.0 16.0 29 Corporate................................................................... 37.9 60.7 79.9 94.8 114.3 101.1 93.9 95.7 118.9 109.7 90.9 111.3 30 Foreign................................................................................ 13.3 20.8 13.9 32.3 21.2 29.9 20.6 43.9 13.3 29.1 29.5 30.3 31 Corporate equities..................................................... .2 .3 .4 -.5 .9 2.2 -.8 -.2 * 1.7 2.1 2.3 32 Debt instruments.......................................................... 13.2 20.5 13.5 32.8 20.3 27.7 21.4 44.1 13.3 27.3 27.5 28.0 33 Bonds......................................................................... 6.2 8.6 5.1 4.0 3.9 .8 5.0 3.0 3.0 4.7 2.0 -.4 34 Bank loans n.e.c...................................................... 3.9 6.8 3.1 18.3 2.3 11.8 9.3 27.3 1.0 3.5 4.4 19.3 35 Open market paper............................................... .3 1.9 2.4 6.6 11.2 10.1 3.6 9.6 6.1 16.3 15.7 4.5 36 U.S. government loans........................................ 2.8 3.3 3.0 3.9 3.0 5.0 3.6 4.2 3.1 2.8 5.4 4.6 Financial sectors 37 Total funds raised................................................................ 12.7 24.1 54.0 81.4 88.5 70.8 80.7 82.1 86.3 90.7 54.0 87.6 By instrument 38 U.S. government related................................................... 13.5 18.6 26.3 41.4 52.4 47.5 38.5 44.3 45.8 59.0 45.8 49.2 39 Sponsored credit agency securities............................. 2.3 3.3 7.0 23.1 24.3 24.3 21.9 24.3 21.5 27.0 25.1 23.5 40 Mortgage pool securities............................................... 10.3 15.7 20.5 18.3 28.1 23.2 16.6 20.1- 24.2 32.0 20.7 25.7 41 Loans from U.S. government...................................... .9 -.4 -1.2 - - - - - - - 42 Private financial sectors..................................................... -.8 5.5 27.7 40.0 36.1 23.3 42.2 37.8 40.5 31.7 8.1 38.4 43 Corporate equities.......................................................... .6 1.0 .9 1.7 2.3 3.4 2.2 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 50 Sponsored credit agencies................................................. 3.2 2.9 5.8 23.1 24.3 24.3 21.9 24.3 21.5 27.0 25.1 23.5 51 Mortgage pools..................................................................... 10.3 15.7 20.5 18.3 28.1 23.2 16.6 20.1 24.2 32.0 20.7 25.7 52 Private financial sectors...................................................... -.8 5.5 27.7 40.0 36.1 23.3 42.2 37.8 40.5 31.7 8.1 38.4 53 Commercial banks.......................................................... 1.2 2.3 1.1 1.3 1.6 .6 1.5 1.1 1.3 1.8 .8 .3 54 Bank affiliates................................................................... .3 -.8 1.3 6.7 4.5 5.6 5.8 7.6 6.2 2.9 4.5 6.6 55 Savings and loan associations...................................... -2.3 .1 9.9 14.3 11.4 6.4 16.4 12.2 9.9 12.9 -4.7 17.6 56 Other insurance companies.......................................... 1.0 .9 .9 1.1 1.0 .8 1.0 1.1 1.0 .9 .8 .7 57 Finance companies.......................................................... .5 6.4 17.6 18.6 18.9 8.8 18.9 18.2 23.5 14.3 6.8 10.8 58 REITs.................................................................................. -1.4 -2.4 -2.2 -1.0 -.4 -.9 -1.0 -1.0 -.6 -.1 -1.4 -.3 59 Open-end investment companies............................... -.1 -1.0 -.9 -1.0 -1.0 2.0 -.5 -1.5 -1.0 -.9 1.4 2.7 All sectors 60 Total funds raised, by instrument.................................. 223.6 295.9 392.5 481.8 483.4 434.1 465.5 498.1 466.7 498.9 375.0 493.2 61 Investment company shares............................................. -.1 -1.0 -.9 -1.0 -1.0 2.0 -.5 -1.5 -1.0 -.9 1.4 2.7 62 Other corporate equities................................................... 10.8 12.9 4.9 4.7 7.6 15.0 .1 9.4 5.8 9.3 9.8 20.2 63 Debt instruments................................................................... 212.9 284.1 388.5 478.1 476.8 417.1 465.9 490.2 461.9 490.5 363.9 470.4 64 U.S. government securities.......................................... 98.2 88.1 84.3 95.2 89.9 126.8 100.0 90.4 74.5 105.2 110.5 143.2 65 State and local obligations............................................. 16.1 15.7 23.7 28.3 18.9 22.2 27.8 28.7 16.0 21.8 18.0 26.4 66 Corporate and foreign bonds...................................... 36.4 37.2 36.1 31.6 32.9 35.6 34.2 29.1 34.1 31.5 45.7 25.5 67 Mortgages............................................................................ 57.2 87.0 133.9 149.1 158.6 124.8 141.9 156.3 159.8 157.4 110.8 138.8 68 Consumer credit.............................................................. 9.7 25.6 40.6 50.6 44.2 3.1 50.1 51.0 48.3 39.0 -6.4 12.5 69 Bank loans n.e.c............................................................... -12.2 7.0 29.8 58.4 52.5 50.7 54.9 61.8 48.6 56.2 15.0 86.4 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 71 Other 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 Digitized for FRASER 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 9 Monetary authorities................................................................... 8.5 9.8 7.1 7.0 7.7 4.5 13.4 .5 .9 14.5 14.6 -5.6 10 Foreign.............................................................................................. 6.1 15.2 39.4 37.7 -7.7 16.7 30.6 44.9 -27.0 11.7 13.9 19.5 11 Agency borrowing not included in line 1............................. 13.5 18.6 26.3 41.4 52.4 47.5 38.5 44.3 45.8 59.0 45.8 49.2 Private domestic funds advanced 12 Total net advances........................................................................ 169.7 225.4 276.5 330.0 362.9 301.5 323.2 336.9 375.9 348.8 257.1 345.8 13 U.S. government securities................................................... 75.7 61.3 44.1 51.3 87.9 104.6 56.3 46.4 96.6 79.1 85.6 123.5 14 State and local obligations...................................................... 16.1 15.7 23.7 28.3 18.9 22.2 27.8 28.7 16.0 21.8 18.0 26.4 15 Corporate and foreign bonds............................................... 32.8 30.5 22.5 22.5 25.6 25.5 24.1 20.9 26.9 24.3 32.4 18.7 16 Residential mortgages............................................................ 23.2 52.6 83.3 88.2 81.8 58.1 87.1 89.5 85.1 78.5 46.5 69.8 17 Other mortgages and loans................................................... 17.9 63.3 107.3 152.2 157.9 98.2 141.1 163.3 159.1 155.6 78.6 117.7 18 Less: Federal Home Loan Bank advances...................... -4.0 -2.0 4.3 12.5 9.2 7.1 13.2 11.8 7.8 10.5 4.1 10.2 Private financial intermediation 19 Credit market funds advanced by private financial institutions.............................................................................. 122.5 190.1 257.0 296.9 292.5 265.6 301.7 292.0 307.5 277.4 229.6 301.8 20 Commercial banking................................................................. 29.4 59.6 87.6 128.7 121.1 103.5 132.5 125.0 124.6 117.6 57.2 149.9 21 Savings institutions................................................................... 53.5 70.8 82.0 75.9 56.3 57.6 75.8 75.9 57.7 54.9 31.4 83.8 22 Insurance and pension funds................................................. 40.6 49.9 67.9 73.5 70.4 76.4 76.9 70.2 75.4 65.5 84.6 68.2 23 Other finance.............................................................................. -1.0 9.8 19.6 18.7 44.7 28.1 16.6 20.9 49.8 39.6 56.3 -.1 24 Sources of funds............................................................................ 122.5 190.1 257.0 296.9 292.5 265.6 301.7 292.0 307.5 277.4 229.6 301.8 25 Private domestic deposits...................................................... 92.0 124.6 141.2 142.5 136.7 163.9 138.3 146.7 121.7 151.6 147.7 180.1 26 Credit market borrowing........................................................ -1.4 4.4 26.9 38.3 33.8 19.8 40.0 36.7 38.4 29.2 5.1 34.6 27 Other sources.............................................................................. 32.0 61.0 89.0 116.0 122.0 81.9 123.5 108.6 147.3 96.6 76.8 87.1 28 Foreign funds.......................................................................... -8.7 -4.6 1.2 6.3 26.3 -20.0 5.7 6.9 49.4 3.2 -18.1 -21.8 29 Treasury balances................................................................. -1.7 -.1 4.3 6.8 .4 -2.0 1.9 11.6 5.1 -4.3 -2.5 -1.5 30 Insurance and pension reserves...................................... 29.7 34.5 49.4 62.7 49.0 58.5 66.2 59.2 53.9 44.0 59.6 57.4 31 Other, net................................................................................ 12.7 31.2 34.1 40.3 46.3 45.4 49.6 31.0 38.9 53.7 37.9 53.1 Private domestic nonfinancial investors 32 Direct lending in credit markets............................................... 45.8 39.7 46.3 71.5 104.2 55.7 61.4 81.6 106.8 100.5 32.6 78.7 33 U.S. government securities................................................... 24.1 16.1 23.0 33.2 57.8 30.7 32.1 34.4 64.1 51.5 13.2 48.2 34 State and local obligations...................................................... 8.4 3.8 2.6 4.5 -2.5 -1.8 7.0 2.0 -2.3 -2.7 -2.9 -.8 35 Corporate and foreign bonds............................................... 8.4 5.8 -3.3 -1.4 11.1 5.4 -3.7 1.0 7.8 14.2 8.3 2.4 36 Commercial paper..................................................................... -1.3 1.9 9.5 16.3 10.7 -2.4 8.2 24.4 12.5 9.0 -6.2 1.3 37 Other.............................................................................................. 6.2 12.0 14.5 18.8 27.1 23.9 17.8 19.8 24.7 28.5 20.2 27.6 38 Deposits and currency................................................................. 98.1 131.9 149.5 151.8 144.7 173.5 148.7 154.8 131.1 158.1 156.7 190.1 39 Security RPs................................................................................ .2 2.3 2.2 7.5 6.6 4.7 9.8 5.1 18.5 -5.3 5.3 4.0 40 Money market fund shares................................................... 1.3 .2 6.9 34.4 29.2 6.1 7.7 30.2 38.6 61.9 -3.4 41 Time and savings accounts................................................... 84.0 113.5 121.0 115.2 84.7 131.8 110.7 119.8 71.4 97.9 91.9 171.7 42 Large at commercial banks............................................... -15.8 -13.2 23.0 45.9 .4 12.7 33.9 57.9 -25.3 26.0 -12.0 37.4 43 Other at commercial banks............................................... 40.3 57.6 29.0 8.2 39.3 62.9 18.4 -1.9 41.3 37.3 60.6 65.2 44 At savings institutions........................................................ 59.4 69.1 69.0 61.1 45.1 56.2 58.5 63.8 55.4 34.7 43.4 69.1 45 Money........................................................................................... 12.6 16.1 26.1 22.2 18.9 7.8 22.1 22.3 10.9 26.8 -2.4 17.9 46 Demand deposits................................................................... 6.4 8.8 17.8 12.9 11.0 -1.8 11.6 14.2 1.6 20.3 -11.4 7.8 47 Currency................................................................................... 6.2 7.3 8.3 9.3 7.9 9.6 10.5 8.1 9.3 6.5 9.0 10.1 48 Total of credit market instruments, deposits and currency.......................................................................... 143.9 171.6 195.8 223.3 248.9 229.1 210.1 236.4 237.9 258.7 189.3 268.8 49 Public support rate (in percent).......................................... 22.2 20.8 25.4 27.5 20.5 27.4 26.5 28.5 12.6 28.0 32.5 23.3 50 Private financial intermediation (in percent).................. 72.2 84.3 93.0 90.0 80.6 88.1 93.4 86.7 81.8 79.5 89.3 87.3 51 Total foreign funds................................................................... -2.6 10.6 40.5 44.0 18.6 -3.3 36.3 51.8 22.4 14.9 -4.2 -2.3 Memo: Corporate equities not included above 52 Total net issues...................................................................... 10.7 11.9 4.0 3.7 6.6 17.0 -.4 7.9 4.8 8.4 11.1 22.8 53 Mutual fund shares................................................................... -.1 -1.0 -.9 -1.0 -1.0 -2.0 -.5 -1.5 -1.0 -.9 1.4 2.7 54 Other equities............................................................................ 10.8 12.9 4.9 4.7 7.6 15.0 .1 9.4 5.8 9.3 9.8 20.2 55 Acquisitions by financial institutions...................................... 9.6 12.3 7.4 7.6 15.7 18.7 .4 14.7 12.5 18.9 16.7 20.7 56 Other net purchases..................................................................... 1.1 -.4 -3.4 -3.8 -9.1 -1.7 -.8 -6.8 -7.7 -10.5 -5.6 2.1 Notes by line number. 30. Excludes net investment of these reserves in corporate equities. 1. Line 2 of p. A42. 31. Mainly retained earnings and net miscellaneous liabilities. 2. Sum of lines 3-6 or 7-10. 32. Line 12 less line 19 plus line 26. 6. Includes farm and commercial mortgages. 33-37. Lines 13-17 less amounts acquired by private finance. Line 37 includes 11. Credit market funds raised by federally sponsored credit agencies, and net mortgages. issues of federally related mortgage pool securities. Included below in lines 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 1 less line 2 plus line 11. Also line 19 less line 26 plus line 32. Also sum 49. Line 2/line 1. of lines 27, 32, 39, 40, 41, and 46. 50. Line 19/line 12. 17. Includes farm and commercial mortgages. 51. Sum of lines 10 and 28. 25. Sum of lines 39, 40, 41, and 46. 52. 54. Includes issues by financial institutions. 26. Excludes equity issues and investment company shares. Includes line 18. Note. Full statements for sectors and transaction types quarterly, and annually 28. Foreign deposits at commercial banks, bank oorrowings 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 □ May 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 Aug. Sept. Oct. Nov. Dec. Jan. Feb.' Mar.' Apr. 1 Industrial production1.......................................... 146.1 152.5 147.1 141.8 144.1 146.9 149.4 151.0 151.7 151.5 152.2 152.8 Market groupings 2 Products, total........................................................ 144.8 150.0 146.8 143.8 145.3 147.2 148.7 149.9 150.3' 150.0 151.2 152.4 3 Final, total.......................................................... 135.9 147.2 145.4 142.8 143.9 145.8 147.5 148.3 148.3' 147.9 149.4 150.9 4 Consumer goods............................................ 149.1 150.8 145.5 142.7 144.3 146.6 148.0 147.7 147.2 147.0 148.5 149.7 5 Equipment...................................................... 132.8 142.2 145.1 142.9 143.2 144.8 146.7 149.1 149.8' 149.2 150.7 152.5 6 Intermediate........................................................ 154.1 160.5 151.9 147.6 150.6 152.4 153.5 156.1 157.7' 157.5 157.7 158.1 7 Materials.................................................................. 148.3 156.4 147.7 138.6 142.4 146.4 150.5 152.6 153.8' 154.0 153.9 153.4 Industry groupings 8 Manufacturing........................................................ 146.8 153.6 146.6 140.6 143.4 146.4 149.1 150.6 151.1 151.1 151.9 152.8 Capacity utilization (percent)1-2 9 Manufacturing.................................................... 84.4 85.7 79.0 75.5 76.7 78.2 79.4 79.9 80.0 79.8 80.0 80.3 10 Industrial materials industries.......................... 85.6 87.4 79.8 74.6 76.4 78.4 80.4 81.3 81.7' 81.6 81.4 81.0 11 Construction contracts (1972 = 100)3................ 174.1 185.6 161.8 192.0 163.0 167.0 210.0 193.0 185.0 177.0 183.0 n.a 12 Nonagricultural employment, total4.................. 131.8 136.6 137.8 137.0 137.4 137.9 138.2 138.5 139.0 139.3 139.4 139.0 13 Goods-producing, total.................................... 109.8 113.7 110.9 108.6 109.3 110.0 110.7 111.1 111.7 111.5 111.6 110.8 14 Manufacturing, total...................................... 105.4 108.3 104.7 102.5 103.1 103.7 104.3 104.4 104.6 104.8 104.9 105.2 15 Manufacturing, production-worker............ 103.0 105.4 99.8 97.0 97.7 100.7 99.1 99.2 99.4 99.5 99.7 100.0 16 Service-producing.............................................. 143.8 149.2 152.5 152.6 152.7 153.1 153.3 153.5 154.0 154.5 154.6 154.5 17 Personal income, total.......................................... 273.3 308.5 342.9 345.9 350.1 354.7 358.3 361.4 365.2' 367.8 370.6 n.a. 18 Wages and salary disbursements.................... 258.8 289.5 314.7 314.4 317.8 323.6 328.0 330.5 335.6' 337.7 340.1 n.a. 19 Manufacturing................................................ 223.1 248.6 261.5 258.5 262.9 267.6 273.1 275.8 280.1' 281.1 282.3 n.a. 20 Disposable personal income5.............................. 268.7 301.5 334.5 338.0 348.4 357.3 21 Retail sales6............................................................ 253.8 281.6 300.0 300.0 306.0 308.0 313.8 315.8 326.6 331.7 333.1 329.8 Prices7 22 Consumer............................................................ 195.4 217.4 246.8 249.4 251.7 253.9 256.2 258.4 260.5 263.2 265.1 n.a. 23 Producer finished goods.................................... 194.6 216.1 246.9 251.4 251.4 255.4 255.6 256.9 259.8 262.4 265.3 267.7 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 02 03 Q4 Ql' Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql' Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Manufacturing........................................................ 143.9 141.0 148.7 151.4 184.8 186.3 187.8 189.3 77.9 75.7 79.2 79.9 2 Primary processing................................................ 145.0 139.6 153.1 157.0 190.0 191.5 193.0 194.3 76.3 72.9 79.4 80.8 3 Advanced processing............................................ 143.3 141.8 146.4 148.4 182.0 183.5 185.0 186.6 78.7 77.3 79.1 79.5 4 Materials.................................................................. 145.1 139.2 149.8 153.9 184.3 185.8 187.2 188.7 78.7 74.9 80.0 81.6 5 Durable goods........................................................ 140.6 131.5 145.1 150.9 188.6 190.0 191.5 192.8 74.6 69.2 75.8 78.3 6 Metal materials.................................................. 100.6 86.6 109.9 117.2 140.8 140.9 141.0 141.1 71.4 61.5 78.0 83.1 7 Nondurable goods.................................................. 166.0 161.9 175.5 178.9 202.0 204.3 206.5 208.5 82.2 79.2 85.0 85.8 8 Textile, paper, and chemical............................ 171.9 165.6 182.7 186.6 211.0 213.7 216.2 218.5 81.5 77.5 84.5 85.4 9 Textile.............................................................. 116.4 113.4 113.2 111.2 139.2 139.6 140.0 140.3 83.7 81.2 80.9 79.2 10 Paper................................................................ 142.1 142.9 148.9 151.1 156.0 157.4 158.8 160.0 91.0 90.7 93.8 94.5 11 Chemical.......................................................... 208.3 197.9 226.9 234.1 264.6 268.7 272.9 276.4 78.7 73.6 83.2 84.7 12 Energy materials.................................................... 130.0 129.6 129.5 130.3 151.8 152.6 153.1 154.1 85.6 85.0 84.6 84.6 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 April Oct. Nov. Dec. Jan.r Feb.r Mar.r Apr. Capacity utilization rate (percent) 13Manufacturing........................................................ 88.0 69.0 87.2 74.9 80.3 78.2 79.4 79.9 80.0 79.8 80.0 80.3 14 Primary processing............................................ 93.8 68.2 90.1 70.9 80.5 77.6 79.6 80.8 81.2 81.1 80.2 80.5 15 Advanced processing........................................ 85.5 69.4 86.2 77.1 80.1 78.5 79.2 79.6 79.5 79.2 79.9 80.2 16Materials.................................................................. 92.6 69.4 88.8 73.7 82.1 78.4 80.4 81.3 81.7 81.6 81.4 * 81.0 17 Durable goods.................................................... 91.5 63.6 88.4 68.0 78.8 73.5 76.5 77.3 78.0 78.0 78.8 79.2 18 Metal materials.............................................. 98.3 68.6 96.0 58.4 77.2 71.5 81.4 81.0 82.0 83.0 84.2 83.8 19 Nondurable goods.............................................. 94.5 67.2 90.9 76.8 86.1 84.4 84.3 86.3 86.7 86.1 84.6 84.6 20 Textile, paper, and chemical........................ 95.1 65.3 91.4 74.5 86.0 83.8 83.7 85.9 86.2 85.8 84.2 84.0 21 Textile.......................................................... 92.6 57.9 90.1 79.5 84.6 82.1 80.7 79.8 79.8 79.2 78.6 79.2 22 Paper............................................................ 99.4 72.4 97.6 88.1 90.7 93.0 94.1 94.2 93.7 94.8 94.8 95.4 23 Chemical...................................................... 95.5 64.2 91.2 69.6 85.2 82.1 82.0 85.4 85.9 85.2 83.1 82.5 24 Energy materials................................................ 94.6 84.8 88.3 83.1 85.8 83.1 85.5 85.0 84.6 85.1 84.0 80.1 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 Oct. Nov. Dec. Jan. Feb.r Mar.r Apr. Household Survey Data 1 Noninstitutional population1........................ 161,058 163,620 166,246 167,005 167,201 167,396 167,585 167,747 167,902 168,071 2 Labor force (including Armed Forces)1 ... 102,537 104,996 106,821 107.288 107.404 107,191 107,668 107.802 108,305 108,851 3 Civilian labor force........................................ 100,420 102,908 104,719 105.167 105,285 105,067 105,543 105.681 106,177 106,722 Employment 4 Nonagricultural industries2.................... 91,031 93,648 93.960 93.887 93.999 93,888 94,294 94,646 95,136 95,513 5 Agriculture.............................................. 3,342 3,297 3.310 3.319 3,340 3,394 3,403 3,281 3,276 3,463 Unemployment 6 Number.................................................... 6,047 5,963 7,448 7.961 7,946 7,785 7.847 7,754 7,764 7,746 7 Rate (percent of civilian labor force) . 6.0 5.8 7.1 7.6 7.5 7.4 7.4 7.3 7.3 7.3 8 Not in labor force.......................................... 58,521 58,623 59,425 59.717 59,797 60,205 59,917 59,946 59,598 59,219 Establishment Survey Data 9 Nonagricultural payroll employment3........ 86,697 89,886 90,652 90,710 90,961 91,125 91,481 91,652 91,714 91,494 10 Manufacturing..................................................... 20,505 21,062 20.365 20.157 20,282 20,312 20,345 20,374 20,400 20,455 11 Mining..................................................................... 851 960 1,025 1,037 1.054 1,072 1,086 1,095 1,102 950 12 Contract construction.................................... 4,229 4,483 4,468 4.442 4,475 4,508 4.610 4.518 4,508 4,426 13 Transportation and public utilities.............. 4,923 5,141 5,155 5.147 5.132 5,137 5,142 5,156 5,158 5,145 14 Trade................................................................ 19,542 20,269 20,571 20.641 20.660 20.638 20,762 20,885 20,932 20,808 15 Finance ................................................................... 4,724 4,974 5,162 5,214 5,225 5,245 5,268 5,277 5,285 5,300 16 Service.............................................................. 16,252 17,078 17,736 17.913 17,969 18,068 18,133 18,181 18,216 18,278 17 Government.......................................................... 15,672 15,920 16,171 16.159 16,164 16,145 16,135 13,372 13,324 13,345 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 □ May 1981 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value Monthly data are seasonally adjusted. Grouping 1 p p ti 9 r o o 6 o r n 7 ­ ­ A 1 a 9 v g 8 e e 0 r­ Apr. May June July A 19 u 8 g 0 . Sept. Oct. Nov. Dec. Jan. Feb. 1981 Mar. Apr. Index (1967 = 100) Major Market 1 Total index...................................... 100.00 147.1 148.3 144.0 141.5 140.4 141.8 144.1 146.9 149.4 151.0 151.7 151.5 152.2 152.8 2 Products............................................ 60.71 146.8 146.6 143.7 142.5 142.8 143.8 145.3 147.2 148.7 149.9 150.3 150.0 151.2 152.4 3 Final products.............................. 47.82 145.4 145.4 143.1 142.3 142.4 142.8 143.9 145.8 147.5 148.3 148.3 147.9 149.4 150.9 4 Consumer goods.................... 27.68 145.5 145.3 142.4 142.1 142.0 142.7 144.3 146.6 148.0 147.7 147.2 147.0 148.5 149.7 5 Equipment.............................. 20.14 145.1 145.6 144.0 142.6 142.9 142.9 143.2 144.8 146.7 149.1 149.8 149.2 150.7 152.5 6 Intermediate products................ 12.89 151.9 150.8 146.2 143.5 144.5 147.6 150.6 152.4 153.5 156.1 157.7 157.5 157.7 158.1 7 Materials.......................................... 39.29 147.7 151.0 144.3 140.0 136.5 138.6 142.4 146.4 150.5 152.6 153.8 154.0 153.9 153.4 Consumer goods 8 Durable consumer goods.............. 7.89 136.5 136.3 128.8 128.2 128.3 128.6 132.7 139.6 142.9 141.3 138.8 139.0 142.8 143.8 9 Automotive products................ 2.83 132.7 126.3 118.5 121.6 129.2 121.5 130.6 141.8 145.3 139.1 127.1 129.2 138.0 141.3 10 Autos and utility vehicles___ 2.03 109.9 102.3 92.6 97.1 106.4 94.1 105.5 120.2 124.3 115.9 99.8 103.7 116.6 120.2 11 Autos.................................... 1.90 103.4 97.1 88.4 95.7 105.2 91.3 98.0 110.7 114.3 105.3 90.0 96.0 108.3 113.2 12 Auto parts and allied goods.. 80 190.4 187.2 184.0 183.7 186.9 191.1 194.2 196.8 198.6 198.0 196.6 193.9 192.2 194.7 13 Home goods................................ 5.06 138.7 142.0 134.6 132.0 127.7 132.6 134.0 138.3 141.5 142.6 145.4 144.4 145.5 145.3 14 Appliances, A/C, and TV ... 1.40 117.1 122.1 102.8 105.6 102.3 114.2 116.3 123.5 128.4 126.8 131.2 124.2 127.2 124.3 15 Appliances and TV............ 1.33 119.5 117.5 106.0 108.5 103.4 114.2 117.6 125.6 131.0 129.2 132.7 126.7 129.2 16 Carpeting and furniture........ 1.07 155.0 165.8 154.2 146.7 136.1 141.1 146.1 150.2 154.9 156.3 156.8 159.9 161.0 17 Miscellaneous home goods... 2.59 143.6 146.8 143.8 140.2 138.1 139.1 138.6 141.5 143.0 145.4 148.4 149.0 149.0 149.5 18 Nondurable consumer goods........ 19.79 149.1 148.8 147.7 147.6 147.4 148.3 148.9 149.4 150.1 150.2 150.5 150.2 150.8 152.0 19 Clothing........................................ 4.29 126.8 128.7 127.9 126.7 122.5 123.6 122.1 125.1 127.3 123.7 122.3 120.8 20 Consumer staples........................ 15.50 155.3 154.5 153.2 153.4 154.3 155.1 156.3 156.1 156.4 157.5 158.3 158.4 159.0 160.2 21 Consumer foods and tobacco 8.33 147.0 146.2 146.1 146.2 146.4 146.0 147.0 147.7 148.0 148.9 148.7 149.0 149.6 22 Nonfood staples...................... 7.17 165.0 164.0 161.5 161.7 163.6 165.7 167.1 165.9 166.2 167.6 169.5 169.2 170.0 171.3 23 Consumer chemical products........................ 2.63 208.7 206.9 203.0 202.6 204.3 209.3 213.0 210.2 210.0 212.5 214.7 217.6 220.0 24 Consumer paper products . 1.92 122.9 120.4 120.2 120.6 121.5 122.0 122.3 124.8 127.3 127.0 127.6 129.5 130.0 25 Consumer energy products 2.62 151.9 152.8 150.1 150.9 153.5 153.9 154.0 151.5 150.8 152.3 154.8 149.7 149.2 26 Residential utilities........ 1.45 171.2 172.5 169.8 170.1 176.5 178.6 178.3 175.0 171.8 171.2 174.4 167.0 Equipment 27 Business............................................ 12.63 173.3 174.2 171.9 169.8 170.1 170.3 170.5 172.3 174.5 177.8 178.9 178.2 180.4 182.6 28 Industrial...................................... 6.77 157.0 159.3 157.8 155.2 154.8 154.5 154.2 154.4 157.1 160.7 163.8 165.1 167.2 169.1 29 Building and mining.............. 1.44 241.3 239.5 242.2 241.0 244.4 243.6 243.4 244.3 250.1 255.7 265.9 272.2 279.9 285.1 30 Manufacturing........................ 3.85 128.5 131.9 129.5 126.1 126.0 124.4 123.9 123.9 126.4 130.6 131.1 130.8 131.5 132.6 31 Power........................................ 1.47 149.0 152.3 149.1 147.1 142.0 145.9 146.1 146.1 146.0 146.1 149.1 149.9 149.9 150.7 32 Commercial transit, farm.......... 5.86 192.1 191.5 188.2 186.7 187.8 188.4 189.4 192.8 194.7 197.6 196.3 193.4 195.6 198.3 33 Commercial.............................. 3.26 237.5 235.6 232.0 228.8 229.0 233.6 237.2 242.0 244.0 248.3 249.6 250.9 252.2 254.4 34 Transit...................................... 1.93 139.4 143.0 136.3 138.0 140.9 138.4 133.8 135.0 136.6 137.9 131.7 123.1 127.6 130.9 35 Farm........................................ 67 123.2 116.4 124.6 121.6 122.5 112.7 116.8 120.2 121.9 123.1 122.9 116.4 116.3 36 Defense and space.......................... 7.51 97.8 97.6 97.2 96.8 97.2 96.9 97.4 98.5 99.8 100.7 101.0 100.4 100.8 102.0 Intermediate products 37 Construction supplies.................. 6.42 140.7 139.4 133.0 128.5 128.6 133.1 137.4 140.5 142.8 144.6 147.4 147.3 147.6 147.5 38 Business supplies.......................... 6.47 162.9 162.0 159.4 158.4 160.4 161.9 163.6 164.3 164.2 167.5 168.0 167.7 167.7 39 Commercial energy products.. 1.14 173.6 174.8 172.0 168.7 172.1 173.7 175.2 174.6 174.0 179.4 178.3 175.5 176.6 Materials 40 Durable goods materials.............. 20.35 143.1 148.2 139.8 133.8 129.0 131.3 134.2 140.4 146.6 148.4 150.2 150.4 152.2 153.5 41 Durable consumer parts.......... 4.58 109.0 110.6 100.1 96.0 93.9 98.1 104.2 110.8 115.5 116.3 116.2 114.8 119.0 121.9 42 Equipment parts...................... 5.44 187.3 195.8 190.8 182.5 177.6 176.3 176.0 178.5 184.0 185.8 189.2 188.9 191.5 193.4 43 Durable materials n.e.c............ 10.34 135.0 139.8 130.5 125.0 118.9 122.4 125.4 133.4 140.6 142.9 144.6 145.8 146.1 146.5 44 Basic metal materials.......... 5.57 104.6 109.3 100.0 95.9 84.7 89.4 91.7 102.0 114.4 115.0 116.3 117.8 118.3 45 Nondurable goods materials----- 10.47 170.7 173.2 165.2 159.6 156.2 159.8 169.7 173.7 174.1 178.8 180.2 179.5 176.9 177.3 46 Textile, paper, and chemical materials................................ 7.62 177.0 180.7 171.5 163.4 158.5 163.2 175.1 180.5 181.0 186.5 187.7 187.4 184.6 184.7 47 Textile materials.................. 1.85 116.0 117.7 117.6 114.0 114.4 111.0 114.7 114.9 113.0 111.8 111.9 111.1 110.5 48 Paper materials.................... 1.62 145.1 141.2 141.7 143.4 138.4 142.0 148.2 147.3 149.5 150.0 149.6 151.7 152.1 49 Chemical materials.............. 4.15 216.7 224.3 207.3 193.3 186.1 194.9 212.6 222.9 223.8 234.1 236.4 235.5 230.5 50 Containers, nondurable.......... 1.70 165.1 166.8 155.8 157.7 159.0 158.8 167.2 168.6 166.6 169.7 172.1 171.0 167.8 51 Nondurable materials n.e.c. .. 1.14 137.3 133.0 136.4 136.8 136.6 137.9 137.2 135.7 139.1 141.1 142.0 139.0 138.8 52 Energy materials.......................... 8.48 130.0 130.1 129.6 130.4 130.4 130.0 128.4 127.2 130.9 130.5 130.2 131.1 129.6 123.8 53 Primary energy.......................... 4.65 115.1 116.4 116.2 117.3 115.6 114.0 114.3 113.7 114.5 115.0 114.4 117.6 116.9 54 Converted fuel materials........ 3.82 148.2 146.9 145.8 146.4 148.4 149.4 145.4 143.6 150.9 149.4 149.4 147.6 145.1 Supplementary groups 55 Home goods and clothing.......... 9.35 133.2 135.9 131.5 129.5 125.3 128.5 128.5 132.2 135.0 133.9 134.8 133.6 134.3 134.8 56 Energy, total.................................. 12.23 138.8 139.1 137.9 138.4 139.2 139.2 138.2 136.8 139.2 139.7 139.9 139.2 138.2 134.4 57 Products...................................... 3.76 158.5 159.5 156.7 156.3 159.1 159.9 160.5 158.5 157.9 160.5 161.9 157.5 157.5 58 Materials.................................... 8.48 130.0 130.1 129.6 130.4 130.4 130.0 128.4 127.2 130.9 130.5 130.2 131.1 129.6 123.8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Output A47 2.13 Continued 1967 1980 1981 Grouping c S o I d C e p p r o o r­ ­ A 19 v 8 g 0 . tion Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Index (1967 == 100) Major Industry 12.05 150.4 150.1 149.6 150.1 150.1 150.5 150.5 150.2 152.8 154.0 155.2 154.7 155.4 152.1 2 Mining.................................... 6.36 132.9 133.1 133.4 132.9 130.6 129.6 130.5 132.1 136.0 139.3 141.1 142.7 142.9 135.9 5.69 169.9 169.1 167.7 169.3 171.8 173.8 172.7 170.4 171.5 170.3 171.0 168.1 169.3 170.2 3.88 189.7 187.9 186.0 188.7 192.4 195.4 193.9 190.3 191.5 190.3 191.1 186.8 188.6 189.7 87.95 146.6 147.9 143.4 140.3 139.1 140.6 143.4 146.4 149.1 150.6 151.1 151.1 151.9 152.8 35.97 161.1 161.6 158.0 155.3 154.7 156.9 160.3 161.8 163.3 165.0 165.2 166.3 165.6 166.2 51.98 136.6 138.4 133.3 129.9 128.3 129.4 131.7 135.8 139.3 140.6 141.4 140.6 142.4 143.6 Mining 8 Metal ................................ 10 .51 109.1 123.5 120.8 120.0 83.1 71.2 73.1 90.8 107.2 122.2 126.3 128.0 127.5 9 Coal............................................ 11.12 .69 146.7 143.4 145.0 150.0 149.8 154.9 148.9 145.7 151.6 155.3 150.3 158.9 151.1 74.0 10 Oil and gas extraction............ 13 4.40 133.8 132.5 133.9 133.2 134.3 133.6 134.7 135.4 137.4 139.1 141.5 142.6 144.3 146.5 14 .75 131.7 133.1 128.1 123.9 123.7 123.5 128.2 129.0 133.0 137.8 140.0 138.8 137.9 Nondurable manufactures 20 8.75 149.2 147.8 149.5 149.0 148.9 148.3 148.6 149.4 150.5 150.7 150.0 151.2 151.8 21 .67 119.8 121.9 116.2 113.9 119.6 117.4 119.1 123.1 125.1 118.8 122.9 125.1 22 2.68 136.8 139.9 137.1 133.6 132.5 132.6 133.0 133.8 135.0 133.9 133.8 135.1 134.5 15 Apparel products.................... 23 3.31 128.6 131.3 128.6 127.2 121.5 123.8 126.7 127.5 128.0 125.1 125.9 125.9 16 Paper and products.................. 26 3.21 151.0 148.2 145.7 146.2 143.6 147.1 152.3 153.0 154.4 156.8 157.2 156.7 156.0 157.7 17 Printing and publishing.......... 27 4.72 139.6 136.5 135.5 135.4 138.6 140.3 140.3 141.5 142.7 144.9 145.5 146.7 147.1 147.8 18 Chemicals and products.......... 28 7.74 206.7 209.1 199.2 191.1 190.3 197.8 206.8 209.1 212.0 218.8 219.2 220.9 217.9 19 Petroleum products.................. 29 1.79 134.9 137.4 133.0 131.3 130.5 126.7 130.5 130.1 131.2 137.5 137.3 135.9 132.9 132.1 20 Rubber and plastic products.. 30 2.24 255.8 261.8 248.1 242.9 242.5 245.9 253.1 259.2 259.6 259.2 258.2 262.5 263.7 21 Leather and products.............. 31 .86 70.1 69.9 70.1 68.5 67.8 67.7 67.2 70.2 71.2 67.8 68.9 69.4 69.3 Durable manufactures 22 Ordnance, private and government...................... 19.91 3.64 77.9 77.5 77.9 77.5 77.1 77.2 77.1 79.1 79.6 79.5 78.9 78.6 78.9 79.9 23 Lumber and products... 24 1.64 119.3 105.2 104.5 109.7 112.8 121.7 122.6 122.2 124.9 122.0 126.3 126.3 124.8 24 Furniture ana fixtures 25 1.37 150.0 157.1 149.5 143.1 138.6 141.1 144.8 147.2 147.2 149.0 150.5 153.0 155.1 25 Clay, glass, stone products ... 32 2.74 146.5 148.8 140.8 134.5 134.2 135.7 141.4 145.2 147.8 151.4 154.9 154.0 151.9 26 Primary metals.......................... 33 6.57 101.6 106.4 96.1 90.4 81.7 86.0 90.1 100.6 113.4 112.1 113.9 114.3 114.8 115.3 27 Iron and steel ................ 331.2 4.21 91.7 97.4 84.4 75.4 68.1 75.3 79.8 93.3 107.4 103.5 108.0 107.8 107.4 28 Fabricated metal products.... 34 5.93 135.0 141.4 133.2 126.1 123.8 125.8 129.0 132.8 134.1 137.4 137.6 139.1 140.8 142.6 29 Nonelectrical machinery........ 35 9.15 162.8 163.2 162.1 158.3 158.5 158.8 159.1 161.1 163.4 167.5 168.9 169.0 170.5 171.7 30 Electrical machinery................ 36 8.05 172.7 177.0 171.4 166.6 165.0 166.7 167.5 170.0 173.0 174.9 177.9 174.6 177.3 178.6 31 Transportation equipment---- 37 9.27 116.8 115.1 109.8 110.0 110.7 108.3 112.9 118.8 121.7 120.6 117.3 115.0 119.9 121.8 32 Motor vehicles and parts... 371 4.50 118.8 114.7 105.9 106.7 107.9 104.4 113.4 124.2 129.0 126.3 119.2 117.5 127.6 130.4 33 Aerospace and miscella­ neous transportation equipment...................... 372-9 4.77 114.9 115.5 113.5 113.1 113.4 111.9 112.3 113.6 114.8 115.2 115.5 112.5 112.7 113.7 34 Instruments.............................. 38 2.11 171.0 173.8 171.0 169.2 167.5 167.6 167.4 169.6 169.9 172.1 174.0 171.3 170.4 170.4 35 Miscellaneous manufactures .. 39 1.51 147.8 151.2 147.3 43.7 144.7 144.2 142.8 145.0 147.5 149.5 151.8 152.6 153.1 155.0 Gross value (billions of 1972 dollars, annual rates) Major Market 36 Products, total.......................... 507.4 602.1 599.5 588.6 585.0 586.7 585.9 593.3 604.7 610.9 615.5 614.0 611.3 618.7 623.1 37 Final.......................................... 390.9 465.4 464.5 457.3 455.6 456.9 453.0 458.0 467.7 473.0 475.5 472.6 469.9 477.0 481.2 38 Consumer goods.................. 277.5 313.5 312.5 306.3 305.8 307.7 305.1 309.0 316.6 320.0 320.3 317.2 316.2 320.9 323.3 39 Equipment............................ 113.4 151.9 152.0 151.0 149.8 149.2 147.9 149.0 151.1 153.0 155.2 155.4 153.6 156.1 157.9 40 Intermediate.............................. 116.6 136.7 135.0 131.3 129.4 129.9 132.9 135.3 137.1 137.9 140.0 141.5 141.5 141.7 141.9 Note. Published groupings include some series and subtotals not shown sepa­ 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 □ May 1981 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1981 1978 1979 1980' Aug. Sept. Dec. Jan.' Feb.' Mar. Private residential real estate activity (thousands of units) New Units 1 Permits authorized................................ 1,801 1,552 1,171 1.361 1,564 1,333 1,355 1,235 1,228 1,165 1,128 2 1-family................................................ 1,183 981 704 857 914 819 812 743 715 665 653 3 2-or-more-family................................ 618 570 467 504 650 514 543 492 513 500 475 4 Started..................................................... 2,020 1,745 1,292 1.411 1,482 1,519 1,550 1,535 1,660 1,214 1,284 5 1-family............................................... 1,433 1,194 852 971 1,032 1,009 1,019 974 993 793 817 6 2-or-more-family................................ 587 551 440 440 450 510 531 561 667 421 467 7 Under construction, end of period1... 1,310 1,140 864 886 905 915' 941 944 8 1-family................................................ 765 639 515 474 495 514 529 535' 544 543 9 2-or-more-family................................ 546 501 383 370 369 372 376 380' 397 401 10 Completed.............................................. 1,868 1,855 1,501 1.429 1,254 1,287 1,274 1,373' 1,249 1,373 11 l-family................................................ 1,369 1,286 956 924 763 823 819 895' 901 959 12 2-or-more-family................................ 499 570 545 505 491 464 455 478' 348 414 13 Mobile homes shipped.......................... 276 277 222 208 233 256 Merchant builder activity in 1-family units 14 Number sold.......................................... 818 709 530 616 563 549 560 514' 525 508 511 15 Number for sale, end of period1........ 419 402 341 331 335 334 337 336 332 337 326 Price (thousands of dollars)2 Median 16 Units sold............................................ 55.8 62.7 64.9 63.2 68.5 66.1 67.1 67.2' 67.5 65.4 66.7 Average 17 Units sold............................................ 62.7 71.9 76.6 76.5 80.3 77.7 82.2 81.5' 79.9 79.6 80.2 Existing Units (1-family) 18 Number sold......................................... 3,863' 3,701' 2.970 3,280 3,120 2,960 2,580 2,560 2,520 Price of units sold (thous. of dollars)2 19 Median................................................... 48.7 55.5 62.1 64.9 64.2 62.7 64.3 63.0 64.5 64.1 64.5 20 Average................................................. 55.1 64.0 72.7 76.2 75.5 73.4 74.9 74.0 76.1 75.7 75.5 Value of new construction3 (millions of dollars) Construction 21 Total put in place.......................... 205,457 228.948 228,705 215,149 228,831 235,784 247,403 261,916 253,990 247,988 22 Private.............................................. 159,555 179.948 173,578 162.057 167,882 173,833 182,182 189,153 196,400 193,423 189,763 23 Residential.................................. 93,423 99,029 86,903 78.632 84,378 89,207 97,007 100,216 103,154 100,653 97,013 24 Nonresidential, total.................. 66,132 80,919 86,675 83.425 83,504 84,626 85,175 88,937 93,246 92,770 92,750 Buildings 25 Industrial............................ 10,993 14,953 14,021 13.046 13,102 12,996 13,392 15,079 15,127 15,239 15,746 26 Commercial........................ 18,568 24,924 29,344 27.993 27,425 28,417 28,888 30,392 33,605 33,071 32,754 27 Other.................................... 6,739 7,427 8,533 8.095 8,447 8,760 8,799 9,086 9,931 9,640 9,649 28 Public utilities and other---- 29,832 33,615 34,777 34.291 34,530 34,453 34,096 34,380 34,583 34,820 34,601 29 Public.............................................. 45,901 49,001 55,128 53.092 55,778 54,998 53,602 58,250 65,516 60,567 58,225 30 Military........................................ 1,501 1,641 1,853 2.315 1,717 2,069 1,765 1,705 2,063 1,980 1,974 31 Highway...................................... 10,713 11,915 13,473 11.334 13,804 13,550 12,427 13,742 19,882 17,812 15,121 32 Conservation and development 4,457 4,586 5,083 4.353 5,091 4,763 5,109 5,626 6,242 6,197 5,977 33 Other............................................ 29,230 30,859 34,719 35.090 35,166 34,616 34,301 37,177 37,329 34,578 35,153 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 ana estimating techniques. For a description of these changes see Construction Reports current figures are available from originating agency. Permit authorizations are (C-30-76^-5), issued by the Bureau in July 1976. those reported to the Census Bureau from 16,000 jurisdictions beginning with 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Prices A49 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted 12 months to 3 months (at annual rate) to 1 month to Index level Mar. 1980 1981 1980 1981 1981 1980 1981 (1967 Mar. Mar. =100)1 June Sept. Dec. Mar. Nov. Dec. Jan. Feb. Mar. 14.7 10.6 11.4 7.8 13.2 9.6 1.1 1.0 .7 1.0 .6 265.1 13.7 9.6 5.4 13.2 11.0 8.6 1.0 .7 .6 1.1 .5 249.8 7.3 10.1 5.8 19.7 13.1 2.1 1.2 1.0 -.1 .3 .4 272.2 16.6 9.4 5.2 10.6 9.9 12.3 .9 .6 1.0 1.4 .5 237.0 9.8 8.3 7.5 15.2 11.8 -.7 1.3 .4 .3 -.3 -.1 219.8 25.3 10.7 3.8 5.0 6.2 29.8 .5 .7 2.1 3.2 1.3 257.5 16.1 11.9 20.5 .7 16.8 10.3 1.3 1.4 .9 .8 .8 292.5 8.9 8.8 10.0 8.6 9.6 7.0 .6 .7 .7 .5 .5 203.0 17.2 12.4 22.1 -.3 17.8 10.9 1.4 1.5 .9 .9 .8 309.5 16.3 10.6 12.7 5.7 13.2 11.7 1.1 1.0 1.0 1.1 .7 262.3 12.6 9.9 14.0 5.8 14.4 5.8 1.1 1.1 .6 .4 .4 248.1 21.7 11.5 26.4 -3.5 23.1 3.1 1.7 1.5 .5 0 .3 336.8 13.9 10.5 8.4 13.5 8.3' 12.0 .7' .4' .7' .8 1.3 265.3 15.2 10.4 7.6 14.5 7.4' 12.1 .7' .3' .7' .8 1.4 267.3 3.3 7.8 -1.4 31.0 4.3' .3 .3' 0.0' -.1' -.6 .8 251.8 21.7 11.4 12.2' 7.5' 8.9' 17.4 .9' .4' 1.1' 1.3 1.6 271.8 9.8 11.0 10.9 9.9 11.8' 11.5 .6' .4' .9' 1.1 .7 257.8 19.2 10.0 6.2 7.8 12.9 13.2 .9' 1.6' 1.2' .6 1.3 304.7 24.7 23.1 .2 32.3 27.5' 35.7 2.4' 1.8' l 00 Consumer Prices2 1 All items........................................ 2 Commodities................................ 3 Food .......................................... 4 Commodities less food............ 5 Durable.................................. 6 Nondurable.......................... 7 Services.......................................... 8 Rent............................................ 9 Services less rent...................... Other groupings 10 All items less food...................... 11 All items less food and energy.. 12 Homeownership.......................... Producer Prices 13 Finished goods.............................. 14 Consumer.................................. 15 Foods...................................... 16 Excluding foods.................... 17 Capital equipment.................... 18 Intermediate materials3.............. Crude materials 19 Nonfood.................................... 11.5 -.4 484.8 20 Food .......................................... -1.2 6.3 -.3 73.9 -4.0' -23.1 .2 -2.6 -1.1 -3.3 -2.0 262.0 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 □ May 1981 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1980 1980 Ql Q2 03 04 Ql Gross National Product 1 Total......................................................................... 2,156.1 2,413.9 2,626.1 2,571.7 2,564.8 2,637.3 2,730.6 2,826.8 By source 2 Personal consumption expenditures...................... 1.348.7 1,510.9 1,672.8 1.631.0 1,626.8 1,682.2 1,751.0 1,805.4 3 Durable goods...................................................... 199.3 212.3 211.9 220.9 194.4 208.8 223.3 238.1 4 Nondurable goods................................................ 529.8 602.2 675.7 661.1 664.0 674.2 703.5 724.4 5 Services.................................................................. 619.6 696.3 785.2 749.0 768.4 799.2 824.2 842.8 6 Gross private domestic investment...................... 375.3 415.8 395.3 415.6 390.9 377.1 397.7 423.1 7 Fixed investment.................................................. 353.2 398.3 401.2 413.1 383.5 393.2 415.1 431.0 8 Nonresidential.................................................. 242.0 279.7 296.0 297.8 289.8 294.0 302.1 314.7 9 Structures ...................................................... 78.7 96.3 108.8 108.2 108.4 107.3 111.5 116.2 10 Producers’ durable equipment.................. 163.3 183.4 187.1 189.7 181.4 186.8 190.7 198.5 11 Residential structures...................................... 111.2 118.6 105.3 115.2 93.6 99.2 113.0 116.3 12 Nonfarm........................................................ 106.9 113.9 100.3 110.1 88.9 94.5 107.6 110.9 13 Change in business inventories.......................... 22.2 17.5 -5.9 2.5 7.4 -16.0 -17.4 -7.9 14 Nonfarm............................................................ 21.8 13.4 -4.7 1.5 6.1 -12.3 -14.0 -5.9 15 Net exports of goods and services........................ -0.6 13.4 23.3 8.2 17.1 44.5 23.3 24.3 16 Exports.................................................................. 219.8 281.3 339.8 337.3 333.3 342.4 346.1 371.5 17 Imports.................................................................. 220.4 267.9 316.5 329.1 316.2 297.9 322.7 347.2 18 Government purchases of goods and services ... 432.6 473.8 534.7 516.8 530.0 533.5 558.6 574.1 19 Federal.................................................................. 153.4 167.9 198.9 190.0 198.7 194.9 212.0 219.6 20 State and local...................................................... 279.2 305.9 335.8 326.8 331.3 338.6 346.6 354.5 By major type of product 21 Final sales, total...................................................... 2.133.9 2.396.4 2.632.0 2,569.1 2.557.4 2.653.4 2.748.0 2.834.7 22 Goods.................................................................... 946.6 1.055.9 1.130.4 1.116.9 1.106.4 1.129.4 1.169.0 1.225.2 23 Durable.............................................................. 409.8 451.2 458.6 456.4 444.6 456.5 476.7 489.7 24 Nondurable...................................................... 536.8 604.7 671.9 660.5 661.8 672.9 698.2 735.5 25 Services.................................................................. 976.3 1,097.2 1.229.6 1,178.6 1,205.6 1,249.0 1,285.3 1.314.7 26 Structures............................................................. 233.2 260.8 266.0 276.2 252.8 258.9 276.4 287.0 27 Change in business inventories.............................. 22.2 17.5 -5.9 2.5 7.4 -16.0 -17.4 -7.9 28 Durable goods...................................................... 17.8 11.5 -4.0 -11.8 3.3 -8.4 .7 -14.2 29 Nondurable goods................................................ 4.4 6.0 -1.8 14.3 4.1 -7.7 -18.1 6.3 30 Memo: Total GNP in 1972 dollars........................ 1,483.0 1.480.7 1.501.9 1,463.3 1,471.9 1,485.6 1.509.2 National Income 31 Total.......................................................................... 1.745.4 1,963.3 2.121.4 2.088.5 2.070.0 2.122.4 2.204.8 n.a. 32 Compensation of employees.................................. 1.299.7 1.460.9 1.596.5 1,558.0 1.569.0 1.597.4 1.661.8 1,721.8 33 Wages and salaries.............................................. 1.105.4 1.235.9 1.343.6' 1.314.5 1,320.4 1.342.3 1,387.3 1.442.3 34 Government and government enterprises... 219.6 235.9 253.6' 243.3 250.5 253.9 263.3 267.0 35 Other.................................................................. 885.7 1,000.0 1.090.0 1,067.9 1,069.9 1.088.4 1,134.0 1.175.3 36 Supplement to wages and salaries.................... 194.3 225.0 252.9 243.5 248.6 255.0 264.5 279.5 37 Employer contributions for social insurance 92.1 106.4 115.8 112.6 113.6 116.0 121.0 131.5 38 Other labor income........................................ 102.2 118.6 137.1 130.9 135.1 139.1 143.5 148.0 39 Proprietors’ income1................................................ 117.1 131.6 130.6 133.7 124.9 129.7 134.0 131.4 40 Business and professional1 ................................ 91.0 100.7 107.2 107.9 101.6 107.6 111.6 112.4 41 Farm1 .................................................................... 26.1 30.8 23.4 25.7 23.3 22.1 22.5 19.0 42 Rental income of persons2.................................... 27.4 30.5 31.8 31.2 31.5 32.0 32.4 32.7 43 Corporate profits1.................................................... 199.0 196.8 182.7' 200.2 169.3 177.9 183.3' n.a. 44 Profits before tax3................................................ 223.3 255.4 245.5 277.1 217.9 237.6 249.5' n.a. 45 Inventory valuation adjustment........................ -24.3 -42.6 -45.7 -61.4 -31.1 -41.7 -48.4 -38.4 46 Capital consumption adjustment...................... -13.5 -15.9 -17.2 -15.4 -17.6 -17.9 -17.8 -16.9 47 Net interest.............................................................. 115.8 143.4 179.8 165.4 175.3 185.3 193.3 200.9 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. 1980 1981 Account 1978 1979 1980 Ql Q2 Q3 Q4' Ql Personal Income and Saving 1,721.8 1,943.8 2,160.2 2,088.2 2,114.5 2,182.1 2,256.2 2,317.7 1,105.2 1,236.1 1,343.7 1,314.7 1,320.4 1,341.8 1,397.8 1,442.3 389.1 437.9 465.4 461.7 456.0 460.1 484.0 501.1 299.2 333.4 350.7 347.9 343.2 346.7 364.0 377.0 270.5 303.0 328.9 322.6 323.2 329.2 340.6 351.4 226.1 259.2 295.7 283.6 290.8 298.7 310.0 322.8 219.4 236.1 253.6 246.8 250.5 253.9 263.3 267.0 102.2 118.6 137.1 130.9 135.1 139.1 143.5 148.0 117.2 131.6 130.6 133.7 124.9 129.7 134.0 131.4 91.0 100.8 107.2 107.9 101.6 107.6 111.6 112.4 26.1 30.8 23.4 25.7 23.3 22.1 22.5 19.0 27.4 30.5 31.8 31.2 31.5 32.0 32.4 32.7 43.1 48.6 54.4 52.4 54.2 55.1 56.1 58.0 173.2 209.6 256.3 239.9 253.6 261.8 269.7 288.4 223.3 249.4 294.2 271.7 280.7 310.7 313.9 319.1 16 Old-age survivors, disability, and health insurance benefits......... 116.2 131.8 153.8 142.0 144.7 163.2 165.3 169.2 69.6 80.6 87.9 86.2 85.9 88.1 91.2 102.2 1,721.8 1,943.8 2.160.2 2,088.2 2,114.5 2,182.1 2,256.2 2,317.7 19 Less: Personal tax and nontax payments............................................ 258.8 302.0 338.5 323.1 330.3 341.5 359.2 372.2 20 Equals: Disposable personal income....................................................... 1,462.9 1,641.7 1,821.7 1.765.1 1,784.1 1,840.6 1,897.0 1,945.5 21 Less: Personal outlays................................................................................ 1,386.6 1,555.5 1,720.4 1,678.7 1,674.1 1,729.2 1,799.4 1,854.2 22 Equals: Personal saving................................................................................ 76.3 86.2 101.3 86.4 110.0 111.4 97.6 91.3 Memo: Per capita (1972 dollars) 23 Gross national product................................................................................ 6,568 6,721 6,646 6.768 6,580 6,597 6,641 6,731 24 Personal consumption expenditures....................................................... 4,136 4,219 4,196 4,251 4,134 4,172 4,232 4,272 25 Disposable personal income..................................................................... 4,487 4,584 4,571 4,600 4,532 4,565 4,585 4,604 26 Saving rate (percent)....................................................................................... 5.2 5.2 5.6 4.9 6.2 6.1 5.1 4.7 Gross Saving 27 Gross saving.............................................................................................. 355.2 412.0 401.9' 404.5 394.5 402.0 406.7 n.a. 28 Gross private saving......................................................................................... 355.4 398.9 432.9 413.0 435.9 446.5 436.4 n.a. 29 Personal saving.................................................................................................. 76.3 86.2 101.3 86.4 110.0 111.4 97.6 91.3 30 Undistributed corporate profits1 ................................................................ 57.9 59.1 44.3 52.1 42.1 42.8 40.4 n.a. 31 Corporate inventory valuation adjustment............................................... -24.3 -42.6 -45.7 -61.4 -31.1 -41.7 -48.4 -38.4 Capital consumption allowances 32 Corporate............................................................................................................. 136.4 155.4 175.4 167.1 173.0 178.4 183.2 187.5 33 Noncorporate...................................................................................................... 84.8 98.2 111.8 107.4 110.7 113.4 115.8 119.0 34 Wage accruals less disbursements.............................................................. .0 .0 .0 .0 .0 .5 -.5 .0 35 Government surplus, or deficit (-), national income and product accounts...................................................................................................... -0.2 11.9 -32.1' 1.7 -29.6 -45.6 -30.8 n.a. 36 Federal............................................................................................................. -29.2 -14.8 -61.2 -36.3 -66.5 -74.2 -67.9 n.a. 37 State and local................................................................................................ 29.0 26.7 29.1 26.6 23.9 28.6 37.1 n.a. 38 Capital grants received by the United States, net................................. .0 1.1 1.1 1.1 1.1 1.1 1.1 1.2 39 Gross investment...................................................................................... 361.6 414.1 401.2 407.3 392.5 405.0 400.1 426.6 40 Gross private domestic.................................................................................... 375.3 415.8 395.3 415.6 390.9 377.1 397.7 423.1 41 Net foreign.......................................................................................................... -13.8 -1.7 5.9 -8.3 1.7 27.8 2.3 3.5 42 Statistical discrepancy.............................................................................. 6.4 2.2 -.7' 2.8 -1.9 3.0 -6.6 n.a. 1. With inventory valuation and capital consumption adjustments. Source. Survey of Current Business (Department of Commerce). 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 International Statistics □ May 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 1980 p 04 01 02 03 Q4 p 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 -65,452 -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 Remittances, pensions, and other transfers........................ -1,884 -2.142 -2,452 -665 -565 -564 -578 -747 10 U.S. government grants (excluding military)...................... -3,171 -3,524 -4,506 -887 -1,247 -762 -949 -1,549 11 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 12 Change in U.S. official reserve assets (increase, - ) ............ 732 -1.132 -8,155 -649 -3.268 502 -1,109 -4,279 13 Gold............................................................................................ -65 -65 0 -65 0 0 0 0 14 Special drawing rights (SDRs).............................................. 1,269 -1,136 -16 0 -1,152 112 -261 1,285 15 Reserve position in International Monetary Fund.............. 4,231 -189 -1,667 27 -34 -99 -294 -1,240 16 Foreign currencies.................................................................... -4,683 257 -6,472 -611 -2.082 489 -554 -4,324 17 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 18 Bank-reportea claims.............................................................. -33,631 -25,868 -46,608 -7.213 -274 -21,051 -12,268 -13,015 19 Nonbank-reported claims........................................................ -3,853 -2.029 n.a. 410 -1,474 147 479 n.a. 20 U.S. purchase of foreign securities, net.............................. -3.450 -4,643 -3,188 -986 -765 -1.246 -805 -371 21 U.S. direct investments abroad, net3.................................... -16,345 -24.318 -20,592 -4.129 -5,458 -2,869 -4,058 - 8,207 22 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 23 U.S. Treasury securities.......................................................... 23,523 -22,356 9,640 -5,769 -5.357 4,314 3,769 6,914 24 Other U.S. government obligations...................................... 666 465 2,187 41 801 250 549 587 25 Other U.S. government liabilities4........................................ 2,220 -714 1,375 -924 181 737 242 215 26 Other U.S. liabilities reported by U.S. banks.................... 5,488 7.219 -84 4,881 -3,185 1,652 2,006 -557 27 Other foreign official assets5.................................................. 1,395 1.116 3,061 550 345 822 1,425 469 28 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 29 U.S. bank-reported liabilities................................................ 16,259 32,668 10,687 400 6,355 -4,208 194 8,346 30 U.S. nonbank-reported liabilities.......................................... 1,640 1,692 n.a. 1,050 683 1,331 405 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 2,197 4.830 2,693 920 3,278 -1,225 -254 894 32 Foreign purchases of other U.S. securities, net.................. 2,811 2,942 7,443 313 2,427 1,194 990 2,832 33 Foreign direct investments in the United States, net3 .... 7,896 9.713 8,204 2.563 1.666 3.082 2,437 1,020 34 Allocation of SDRs...................................................................... 0 1.139 1,152 0 1,152 0 0 0 35 Discrepancy.................................................................................. 11,354 23,765 35,605 11.202 6,981 20,200 2,879 5,544 36 Owing to seasonal adjustments.............................................. 2,400 -93 1,465 -4,032 2,658 37 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 38 U.S. official reserve assets (increase, -)............................ 732 -1,132 -8,155 -649 -3,268 502 -1,109 -4,279 39 Foreign official assets in the United States (increase, +).................................................................... 31,072 -13.556 14,804 -297 -7,396 7,038 7,749 7,415 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 above) .................................................................................... -1,137 5,558 12,985 5,005 2,955 4,749 4,391 890 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above).................................................... 236 305 635 139 144 155 125 211 1. Seasonal factors are no longer calculated for lines 12 through 41. 4. 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 5. 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. Note. Data are from Bureau of Economic Analysis, Survey of Current Business (U.S. Department of Commerce). 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 1980 Sept. Oct. Nov Jan. Feb. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments........................................ 143,682 181,860 220,684 18,828 19,214 18,715 19,251 18,825 19,764 21,434 2 GENERAL IMPORTS including mer­ chandise for immediate consump­ tion plus entries into bonded warehouses...................................... 174,759 209,458 245,010 19,940 20,347 19,860 21,436 23,194 21,922 20,949 3 Trade balance........................................ -31,075 -27,598 -24,326 - 1,112 -1,134 -1,145 -2,185 -4,369 -2,158 485 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr .P 1 Total1.......................................................... 18,650 18,956 26,756 23,967 25,673 26,756 28,316 29,682 30,414 29,698 2 Gold stock, including Exchange Stabili­ zation Fund1 ...................................... 11,671 11,172 11,160 11,163 11,162 11,160 11,159 11,156 11,154 11,154 3 Special drawing rights2 3.......................... 1,558 2,724 2,610 3,939 3,954 2,610 3,628 3,633 3,913 3,712 4 Reserve position in International Mone­ tary Fund2 .......................................... 1,047 1,253 2,852 1,671 1,822 2,852 2,867 3,114' 3,452 3,581 5 Foreign currencies4-5................................ 4,374 3,807 10,134 7,194 8,735 10,134 10,662 11,783 11,895 11,251 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 □ May 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 Aug. Sept. Oct. Nov. Dec. Jan. Feb.? All foreign countries 1 Total, all currencies.................................. 258,897 306,795 364,233 386,467 385,884 383,178 389,011 396,939 394,263 398,168 2 Claims on United States.......................... 11,623 17,340 32,302 36,864 29,341 30,476 30,617 28,442' 29,506 31,984 3 Parent bank............................................ 7,806 12,811 25,929 26,711 19,685 21,440 22,254 20,719 20,630 21,396 4 Other........................................................ 3,817 4,529 6,373 10,153 9,656 9,036 8,363 7,723' 8,876 10,588 5 Claims on foreigners.................................. 238,848 278,135 317,175 332,531 339,204 335,463 340,690 350,784' 347,153 348,103 6 Other branches of parent bank.......... 55,772 70,338 79,661 72,558 73,856 72,441' 74,026' 76,542' 75,300 75,238 7 Banks...................................................... 91,883 103,111 123,413 136,590 139,902 138,276' 139,952' 144,600' 143,950 145,282 8 Public borrowers2.................................. 14,634 23,737 26,072 26,113 26,740 26,548 26,935 27,594 27,428 27,757 9 Nonbank foreigners.............................. 76,560 80,949 88,029 97,270 98,706 98,198 99,777 102,048' 100,475 99,826 10 Other assets................................................ 8,425 11,320r 14,756' 17,072' 17,339' 17,239 ' 17,704' 17,713' 17,604 18,081 11 Total payable in U.S. dollars.................... 193,764 224,940 267,711 283,974 282,171 279,689 284,269 289,717 290,844 295,156 12 Claims on United States.......................... 11,049 16,382 31,171 35,551 28,138 29,059 29,173 27,173' 28,250 30,730 13 Parent bank............................................ 7,692 12,625 25,632 26,390 19,414 21,043 21,853 20,368 20,338 21,143 14 Other........................................................ 3,357 3,757 5,539 9,161 8,724 8,016 7,320 6,805' 7,912 9,587 15 Claims on foreigners.................................. 178,896 203,498 229,118 239,561 245,588 242,018 246,238 253,391' 253,098 254,583 16 Other branches of parent bank.......... 44,256 55,408 61,525 55,106 56,603 55,213r 57,202' 58,263' 58,544 57,691 17 Banks...................................................... 70,786 78,686 96,261 108,073 111,878 109,428' 110,779' 115,963' 116,163 117,637 18 Public borrowers2.................................. 12,632 19,567 21,629 21,786 22,305 22,578 22,846 23,391' 23,035 23,297 19 Nonbank foreigners.............................. 51,222 49,837 49,703 54,596 54,802 54,799 55,411 55,774' 55,356 55,958 20 Other assets................................................ 3,820 5,060' 7,422' 8,862 8,445 8,612 8,858 9,153' 9,496 9,843 United Kingdom 21 Total, all currencies.................................. 90,933 106,593 130,873 136,467 137,447 138,158 140,715 142,781 142,716 143,818 22 Claims on United States.......................... 4,341 5,370 11,117 8,465 8,022 8,216 8,771 7,491 7,716 9,200 23 Parent bank............................................ 3,518 4,448 9,338 6,023 5,788 5,969 6,552 5,792 5,278 6,471 24 Other........................................................ 823 922 1,779 2,442 2,234 2,247 2,219 1,699 2,438 2,729 25 Claims on foreigners.................................. 84,016 98,137 115,123 121,805 123,369 123,854 125,859 129,249 129,107 128,457 26 Other branches of parent bank.......... 22,017 27,830 34,291 31,607 30,858 31,431 32,267 34,538 35,127 35,376 27 Banks...................................................... 39,899 45,013 51,343 55,530 57,066 56,723 57,423 57,658 57,975 58,011 28 Public borrowers2.................................. 2,206 4,522 4,919 5,865 6,251 6,113 6,405 6,684 6,465 6,445 29 Nonbank foreigners.............................. 19,895 20,772 24,570 28,803 29,194 29,587 29,764 30,369 29,540 28,625 30 Other assets................................................ 2,576 3,086 4,633 6,197 6,056 6,088 6,085 6,041 5,893 6,161 31 Total payable in U.S. dollars.................... 66,635 75,860 94,287 93,720 94,784 95,287 97,246 98,9i3 99,930 101,865 32 Claims on United States.......................... 4,100 5,113 10,746 7,954 7,656 7,647 8,233 7,098 7,293 8,754 33 Parent bank............................................ 3,431 4,386 9,297 5,960 5,744 5,817 6,410 5,701 5,221 6,418 34 Other........................................................ 669 727 1,449 1,994 1,912 1,830 1,823 1,397 2,072 2,336 35 Claims on foreigners.................................. 61,408 69,416 81,294 82,705 84,355 84,849 86,246 88,967 89,615 90,083 36 Other branches of parent bank.......... 18,947 22,838 28,928 25,565 24,913 25,593 26,710 28,231 28,759 28,937 37 Banks...................................................... 28,530 31,482 36,760 39,070 40,917 40,312 40,542 41,373 42,373 42,207 38 Public borrowers2.................................. 1,669 3,317 3,319 4,327 4,663 4,551 4,706 4,909 4,661 4,748 39 Nonbank foreigners.............................. 12,263 11,779 12,287 13,743 13,862 14,393 14,288 14,454 13,822 14,191 40 Other assets................................................ 1,126 1,331' 2,247' 3,061 2,773 2,791 2,767 2,848 3,022 3,028 Bahamas and Caymans 41 Total, all currencies.................................. 79,052 91,735 108,977 128,515 123,179 119,524 119,367 123,754 123,460 124,809 42 Claims on United States.......................... 5,782 9,635 19,124 25,882 18,305 19,656 18,325 17,751 18,370 19,150 43 Parent bank............................................ 3,051 6,429 15,196 19,149 11,839 13,837 13,071 12,631 12,814 12,371 44 Other........................................................ 2,731 3,206 3,928 6,733 6,466 5,819 5,254 5,120 5,556 6,779 45 Claims on foreigners.................................. 71,671 79,774 86,718 98,496 100,905 95,959 96,800 101,903 100,792 101,199 46 Other branches of parent bank.......... 11,120 12,904 9,689 13,160 14,724 13,076' 13,118' 13,315' 12,956 11,998 47 Banks...................................................... 27,939 33,677 43,189 51,809 52,749 49,900' 50,626' 54,885' 54,252 55,280 48 Public borrowers2.................................. 9,109 11,514 12,905 12,055 12,078 12,441 12,213 12,574 12,558 12,605 49 Nonbank foreigners.............................. 23,503 21,679 20,935 21,472 21,354 20,542 20,843 21,129 21,026 21,316 50 Other assets................................................ 1,599 2,326 3,135 4,137 3,969 3,909 4,242 4,100 4,298 4,460 51 Total payable in U.S. dollars.................... 73,987 85,417 102,368 122,667 117,245 113,683 113,560 117,571 117,549 119,007 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 Aug. Sept. Oct. Nov. Dec. Jan. Feb.P All foreign countries 52 Total, all currencies.................................. 258,897 306,795 364,233 386,467 385,884 383,178 389,011 396,939 394,263 398,168 53 To United States........................................ 44,154 58,012 66,686 87,606 84,068 84,152 86,580 90,874 92,143 90,346 24,542 28,654 24,530 37,466 38,490 37,187 36,957 39,058 38,431 36,164 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 1 6 8 9 9 2 1 8 3 , , 1 9 8 68 8 3 1 5 4 , , 4 72 15 5 3 1 2 2 , , 9 63 4 5 3 3 1 4 2 , , 1 8 0 6 5 0 3 1 6 3 , , 2 4 1 1 3 0 3 1 7 4 , , 2 4 8 8 6 5 ' ' 4 1 0 3 , , 1 5 1 9 8 4 4 1 0 3 , , 2 9 3 5 1 1 57 To foreigners.............................................. 206,579 238,912 283,344 284,141 287,810 285,198 288,225 291,571 287,769 293,672 58 Other branches of parent bank.......... 53,244 67,496 77,601 69,178 70,689 69,691 71,498 73,913 72,594 72,946 59 Banks...................................................... 94,140 97,711 122,849 130,360 131,022 132,142 132,237 130,421 131,633 133,707 60 Official institutions................................ 28,110 31,936 35,664 33,080 33,086 30,713 31,115 32,438 28,870 28,529 61 Nonbank foreigners.............................. 31,085 41,769 47,230 51,523 53,013 52,652 53,375 54,799 54,672 58,490 62 Other liabilities.......................................... 8,163 9,871 14,203 14,720 14,006 13,828 14,206 14,539 14,351 14,150 63 Total payable in U.S. dollars.................... 198,572 230,810 273,819 291,873 289,163 287,177 292,425 300,850 301,335 305,649 64 To United States........................................ 42,881 55,811 64,530 84,698 81,125 81,255 83,764 88,054 89,597 88,016 65 Parent bank............................................ 24,213 27,519 23,403 35,906 36,825 35,431 35,243 37,418 36,856 34,746 66 Other banks in United States.............. 11,915 13,771 14,419 12,410 12,581 13,114 14,215' 13,420 13,749 67 Nonbanks................................................ 18,669 16,377 27,356 34,373 31,890 33,243 35,407 36,421' 39,321 39,521 68 To foreigners.............................................. 151,363 169,927 201,476 198,971 200,281 198,541 200,814 204,630 203,549 209,129 69 Other branches of parent bank.......... 43,268 53,396 60,513 53,355 55,146 53,695 55,543 56,941 56,494 56,372 70 Banks...................................................... 64,872 63,000 80,691 86,420 85,387 86,961 86,525 86,491 88,213 90,590 71 Official institutions................................ 23,972 26,404 29,048 26,165 25,659 23,364 23,840 24,689 21,842 21,894 72 Nonbank foreigners.............................. 19,251 27,127 31,224 33,031 34,089 34,521 34,906 36,509 37,000 40,273 73 Other liabilities.......................................... 4,328 5,072 7,813 8,204 7,757 7,381 7,847 8,166 8,189 8,504 United Kingdom 74 Total, all currencies.................................. 90,933 106,593 130,873 136,467 137,447 138,158 140,715 142,781 142,716 143,818 75 To United States........................................ 7,753 9,730 20,986 20,608 19,343 19,157 20,594 21,735 23,183 22,697 76 Parent bank............................................ 1,451 1,887 3,104 2,542 2,951 2,712 3,198 4,176 4,228 3,189 7 7 8 7 N O o th 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 , , 9 1 1 5 0 6 1 5 1 , , 3 0 6 3 1 1 1 5 0 , , 8 6 0 45 0 1 5 1 , , 7 6 3 6 2 4 1 5 1 , , 7 8 1 4 6 3 1 5 3 , , 3 5 9 6 3 2 1 5 3 , , 7 7 8 2 5 3 79 To foreigners.............................................. 80,736 93,202 104,032 109,604 112,412 113,539 114,813 115,582 114,208 115,696 80 Other branches of parent bank.......... 9,376 12,786 12,567 13,343 13,706 13,940 13,951 13,933 13,599 12,934 81 Banks...................................................... 37,893 39,917 47,620 51,452 53,776 56,772 58,127 55,848 56,487 56,681 82 Official institutions................................ 18,318 20,963 24,202 22,600 22,444 19,807 20,437 21,412 19,199 19,607 83 Nonbank foreigners.............................. 15,149 19,536 19,643 22,209 22,486 23,020 22,298 24,389 24,923 26,474 84 Other liabilities.......................................... 2,445 3,661 5,855 6,255 5,692 5,462 5,308 5,464 5,325 5,425 85 Total payable in U.S. dollars.................... 67,573 77,030 95,449 96,453 96,832 97,055 99,135 102,300 103,015 105,265 86 To United States........................................ 7,480 9,328 20,552 20,007 18,687 18,551 19,978 21,080 22,554 22,189 87 Parent bank............................................ 1,416 1,836 3,054 2,496 2,892 2,634 3,101 4,078 4,126 3,131 8 8 9 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 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,064 4 3 , , 1 3 0 9 1 1 9 7 , ,6 8 5 4 1 7 1 5 1 , , 8 7 0 0 9 2 1 5 0 , , 2 5 5 3 9 6 1 5 0 , , 7 20 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 1 5 3 , , 7 3 0 5 2 6 90 To foreigners.............................................. 58,977 66,216 72,397 73,431 75,422 76,114 76,696 78,512 77,742 80,007 91 Other branches of parent bank.......... 7,505 9,635 8,446 9,128 9,588 9,891 9,770 9,600 9,456 8,922 92 Banks...................................................... 25,608 25,287 29,424 31,726 32,891 35,495 35,998 35,097 35,581 36,192 93 Official institutions................................ 15,482 17,091 20,192 18,253 18,046 15,338 15,989 17,024 14,941 15,420 94 Nonbank foreigners.............................. 10,382 14,203 14,335 14,324 14,897 15,390 14,939 16,791 17,764 19,473 95 Other liabilities.......................................... 1,116 1,486 2,500 3,015 2,723 2,390 2,461 2,708 2,719 3,069 Bahamas and Caymans % Total, all currencies.................................. 79,052 91,735 108,977 128,515 123,179 119,524 119,367 123,754 123,460 124,809 97 To United States........................................ 32,176 39,431 37,719 58,925 56,317 56,123 56,860 59,599 58,928 58,515 98 Parent bank............................................ 20,956 20,482 15,267 29,189 29,355 27,678 26,871 28,105 26,516 26,175 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 2 7 2 , , 4 2 6 7 0 6 2 6 0 , , 0 8 7 8 5 7 2 5 2 , , 9 5 4 0 5 0 2 6 3 , , 5 4 1 71 8 2 7 4 , , 3 1 9 0 1 3 ' ' 2 7 5 , , 1 2 7 3 3 9 2 7 5 , , 2 1 1 2 2 8 101 To foreigners.............................................. 45,292 50,447 68,598 66,630 63,966 60,593 59,492 61,203 61,597 63,415 102 Other branches of parent bank.......... 12,816 16,094 20,875 18,081 17,079 16,720 15,878 17,040 17,819 18,781 103 Banks...................................................... 24,717 23,104 33,631 34,100 32,185 29,202 28,933 29,893 30,050 30,289 104 Official institutions................................ 3,000 4,208 4,866 4,119 4,250 4,610 4,368 4,361 4,204 3,663 105 Nonbank foreigners.............................. 4,759 7,041 9,226 10,330 10,452 10.061 10,313 9,909 9,524 10,682 106 Other liabilities.......................................... 1,584 1,857 2,660 2,960 2,896 2,808 3,015 2,952 2,935 2,879 107 Total payable in U.S. dollars.................... 74,463 87,014 103,460 124,103 118,576 115,166 115,121 119,574 119,214 120,714 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 □ May 1981 3.14 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1980 1981 Item 1978' 1979 r 1980 Sept.' Oct.' Nov.' Dec.' Jan. Feb.P Mar .p 1 Total1........................................................................... 162,625 149,546 164,402 156,894 157,376 163,212 164,402 162,778 162,298 169,687 By type 2 Liabilities reported by banks in the United States2 . 23,326 30,540 30,381 30,841 28,734 29,546 30,381 27,008 24,778 27,330 3 U.S. Treasury bills and certificates3.......................... 67,671 47,666 56,243 49,361 50,392 55,104 56,243 56,522 56,829 60,306 U.S. Treasury bonds and notes 4 Marketable.................................................................. 35,894 37,590 41,431 40,801 41,465 41,765 41,431 42,295 43,699 44,784 5 Nonmarketable4........................................................ 20,970 17,387 14,654 15,254 15,254 15,254 14,654 14,654 14,494 14,294 6 U.S. securities other than U.S. Treasury securities5 14,764 16,363 21,693 20,637 21,531 21,543 21,693 22,299 22,498 22,973 By area 1 Western Europe1............................................................ 93,089 85,633 81,592 76,967 75,989 80,884 81,592 80,434 78,334 79,974 8 Canada............................................................................ 2,486 1,898 1,562 1,901 1,670 1,393 1,562 1,174 1,089 1,437 9 Latin America and Caribbean.................................... 5,046 6,291 5,688 6,606 6,008 5,722 5,688 5,456 5,242 6,367 10 Asia.................................................................................. 58,854 52,827 70,608 67,671 69,114 70,097 70,608 70,557 72,582 76,669 11 Africa.............................................................................. 2,408 2,412 4,123 3,232 3,520 3,866 4,123 3,973 3,948 4,089 12 Other countries6............................................................ 742 485 829 517 1,077 1,250 829 1,184 1,103 1,151 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 2,406' 1,918' 2,403' 2,739 2,754 3,748 2 Banks’ own claims1........................................................................................ 2,356 3,671 2,419 2,772 2,874 3,203 4,206 3 Deposits...................................................................................................... 941 1,795 994 1,212 1,090 1,169 2,507 4 Other claims................................................................................................ 1,415 1,876 1,425 1,560 1,784 2,035 1,699 5 Claims of banks’ domestic customers2...................................................... 358 580 1,058 798 595 962 1. Includes claims of banks’ domestic customers through March 1978. Note. Data on claims exclude foreign currencies held by U.S. monetary au- 2. Assets owned by customers of the reporting bank located in the United States thorities. that represent claims on foreigners held by reporting banks for the accounts of their domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A57 3.16 LIABILITIES TO FOREIGNERS Reported by Banks in the United States Payable in U.S. dollars Millions of dollars, end of period 1980 1981 Holder and type of liability 1977 1978 1979 Sept. Oct. Nov. Dec. Jan. Feb. Mar.p 1 All foreigners........................................................ 126,168 166,842' 187,521' 191,149' 196,030' 204,792' 205,295 202,359' 201,174 203,557 2 Banks’ own liabilities.......................................... 78,661r 117,196' 119,117' 121,437' 125,048' 124,789 122,857' 121,504 120,293 3 Demand deposits.............................................. 18,996 19,218 23,303' 22,344' 22,460' 22,847 23,462 22,149 23,301 21,333 4 Time deposits1.................................................. 11,521 12,427r 13,623' 14,104' 14,113' 14,647' 15,076 15,898' 15,762 16,230 5 Other2................................................................ 9,705' 16,453' 18,112' 17,181' 17,097' 17,581 14,685' 13,493 16,128 6 Own foreign offices3........................................ 37,311' 63,817' 64,557' 67,683' 70,458' 68,670 70,125' 68,949 66,602 7 Banks’ custody liabilities4.................................. 88,181' 70,325 73,032' 74,594' 79,743 80,506 79,501' 79,669 83,263 8 U.S. Treasury bills and certificates5............ 48,906 68,202 48,573 50,731 51,990 56,484 57,595 57,673' 58,442 62,074 9 Other negotiable and readily transferable instruments6.............................................. 17,472' 19,396' 19,783' 20,002' 20,624 20,079 19,050' 18,269 18,259 10 Other.................................................................. 2,507' 2,356' 2,517' 2,601' 2,635 2,832 2,778' 2,959 2,930 11 Nonmonetary international and regional organizations7................................................ 3,274 2,607 2,356 2,549 2,734 2,476 2,342 1,961 2,003 1,859 12 Banks’ own liabilities.......................................... 906 714 476 352 383 442 419 317 293 13 Demand deposits.............................................. 231 330 260 141 115 187 146 212 186 126 14 Time deposits1.................................................. 139 84 151 100 95 92 85 71 76 67 15 Other2................................................................ 492 303 235 143 104 211 137 54 100 16 Banks’ custody liabilities4.................................. 1,701 1,643 2,073 2,382 2,093 1,900 1,542 1,687 1,566 17 U.S. Treasury bills and certificates.............. 706 201 102 316 581 337 254 88 368 333 18 Other negotiable and readily transferable instruments6.............................................. 1,499 1,538 1,757 1,800 1,756 1,646 1,453 1,319 1233 19 Other.................................................................. 1 2 0 0 0 0 0 0 0 20 Official institutions8............................................ 65,822 90,742' 78,206' 80,203' 79,127' 84,650' 86,624 83,530' 81,607 87,636 21 Banks’ own liabilities.......................................... 12,165' 18,292' 18,466' 16,101' 16,842' 17,826 15,222 13,932 16,196 22 Demand deposits.............................................. 3,528 3,390 4,671' 4,229' 3,406 3,553 3,771 3,869 3,579 3,339 23 Time deposits1.................................................. 1,797 2,560r 3,050' 3,576' 3,355' 3,588' 3,612 3,343 2,992 2,920 24 Other2................................................................ 6,215' 10,571' 10,661' 9,341' 9,700' 10,443 8,010 7,361 9,937 25 Banks’ custody liabilities4.................................. 78,577 59,914 61,736' 63,025 67,808 68,798 68,308' 67,674 71,440 26 U.S. Treasury bills and certificates5............ 47,820 67,415 47,666 49,361 50,392 55,104 56,243 56,522 56,829 60,306 27 Other negotiable and readily transferable instruments6.............................................. 10,992 12,196 12,312' 12,577' 12,648 12,501 11,756' 10,813 10,962 28 Other.................................................................. 170 52 63 55' 56 54 30 32 173 29 Banks9.................................................................... 42,335 57,423' 88,316' 90,341' 95,296' 97,812' 96,415 96,659' 96,694 92,956 30 Banks’ own liabilities.......................................... 52,626' 83,299' 85,093' 89,931' 91,932' 90,456 90,594' 90,302 86,564 31 Unaffiliated foreign banks.............................. 15,315' 19,482' 20,536' 22,248' 21,474' 21,786 20,469 21,354 19,961 32 Demand deposits.......................................... 10,933 11,257 13,285' 12,989' 13,843 13,714 14,188 12,889 14,289 12,606 33 Time deposits1.............................................. 2,040 1,429' 1,667' 1,408' 1,718' 1,782' 1,703 1,857 1,818 2,324 34 Other2............................................................ 2,629 4,530' 6,139' 6,686' 5,978 5,895 5,723 5,247 5,032 35 Own foreign offices3........................................ 37,311' 63,817' 64,557' 67,683' 70,458' 68,670 70,125' 68,949 66,602 36 Banks’ custody liabilities4.................................. 4,797' 5,017' 5,248' 5,365 5,880 5,959 6,065' 6,392 6,392 37 U.S. Treasury bills and certificates.............. 141 300 422 361 515 529 623 631' 795 826 38 Other negotiable and readily transferable instruments6.............................................. 2,425 2,415' 2,533 2,417 2,883 2,748 2,856 2,850 2,918 39 Other.................................................................. 2,072' 2,179' 2,354' 2,434 2,467 2,588 2,578 2,747 2,648 40 Other foreigners.................................................. 14,736 16,070 18,642 19,056' 18,874 19,854' 19,914 20,209' 20,869 21,106 41 Banks’ own liabilities.......................................... 12,964' 14,891' 15,081' 15,052 15,892' 16,065 16,623 16,952 17,240 42 Demand deposits.............................................. 4,304 4,242 5,087 4,986' 5,096 5,393 5,356 5,179 5,246 5,263 43 Time deposits.................................................... 7,546 8,353 8,755 9,020' 8,945 9,184' 9,676 10,628' 10,875 10,919 44 Other2................................................................ 368' 1,048' 1,076' 1,011 1,315 1,033 815' 831 1,058 45 Banks’ custody liabilities4.................................. 3,106' 3,751' 3,975 3,822 3,962 3,849 3,586 3,917 3,865 46 U.S. Treasury bills and certificates.............. 240 285 382 693 502 513 474 432 451 609 47 Other negotiable and readily transferable instruments6.............................................. 2,557' 3,247' 3,181 3,208 3,337 3,185 2,985 3,287 3,146 48 Other.................................................................. 264 123 100 112 112 190 170 180 110 49 Memo: Negotiable time certificates of deposit in custody for foreigners............................ 11,007 10,984' 10,729' 10,799 10,553 10,745 10,267 9,868 9,801 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 □ May 1981 3.16 Continued 1980 1981 Area and country 1977 1978 1979 Sept. Oct. Nov. Dec. Jan. Feb. Mar.P 1 Total................................................................................ 126,168 166,842' 187,521' 192,149' 196,030' 204,792' 205,295 202,359' 201,174 203,557 2 Foreign countries............................................................ 122,893 164,235 r 185,164' 189,600' 193,296' 202,315' 202,953 200,398' 199,170 201,697 3 Europe............................................................................ 60,295 85,172' 90,952' 83,513' 83,970' 90,682' 90,897 89,701' 89,216 91,399 4 Austria........................................................................ 318 513 413 432 460 511' 523 554 551 522 5 Belgium-Luxembourg................................................ 2,531 2,550 2,375 3,696 3,322 3,696 4,019 4,062 4,783 4,729 6 Denmark...................................................................... 770 1,946 1,092 528 493 586 497 420 432 463 7 Finland........................................................................ 323 346 398 311 307 363 455 264 355 332 8 France .......................................................................... 5,269 9,214 10,433 12,332 11,654 12,374' 12,125 12,168' 12,496 12,972 9 Germany...................................................................... 7,239 17,283' 12,935 7,854 7,557 9,168' 9,973 10,336 9,297 12,320 10 Greece.......................................................................... 603 826 635 591 643 711 670 524 562 593 11 Italy.............................................................................. 6,857 7,739 7,782 5,969 6,796 7,308 7,572 6,743 5,988 3,456 12 Netherlands................................................................ 2,869 2,402 2,337 2,540 2,555 2,783' 2,441 2,568 2,541 2,323 13 Norway........................................................................ 944 1,271 1,267 1,074 1,381 1,444 1,344 899 1,037 1,575 14 Portugal...................................................................... 273 330 557 571 491 437 374 370 358 356 15 Spain............................................................................ 619 870 1,259 1,321 1,520 1,379 1,500 1,416 1,388 1,631 16 Sweden ........................................................................ 2,712 3,121 2,005 1,826 1,813 1,807' 1,737 1,365 2,078 2,406 17 Switzerland.................................................................. 12,343 18,225 17,954 13,524 13,695 16,574 16,689 16,631' 16,636 16,940 18 Turkey.......................................................................... 130 157 120 237 171 257 242 203 231 235 19 United Kingdom........................................................ 14,125 14,272' 24,700' 22,830' 23,791' 24,439' 22,680 24,209' 24,382 24,666 20 Yugoslavia.................................................................. 232 254 266 169 203 225 681 296 269 202 21 Other Western Europe1............................................ 1,804 3,440 4,070 7,275' 6,865' 6,140' 6,939 6,225 5,385 5,280 22 U.S.S.R........................................................................ 98 82 52 39 33. 64 68 46 84 47 23 Other Eastern Europe2............................................ 236 330 302 392 220 416 370 401 364 352 24 Canada ............................................................................ 4,607 6,969 7,379 10,337' 10,039' 9,856' 10,031 9,802 9,131 8,624 25 Latin America and Caribbean.................................... 23,670 31,638' 49,686' 48,945' 52,501 53,308' 53,170 53,229' 52,215 50,853 26 Argentina.................................................................... 1,416 1,484 1,582 1,875 1,996 1,996 2,132 1,857 1,998 1,917 27 Bahamas...................................................................... 3,596 6,752 15,255 14,096' 17,567 16,803 16,381' 16,164 15,645 14,039 28 Bermuda...................................................................... 321 428 430 677 595 555 670 475 804 921 29 Brazil............................................................................ 1,396 1,125 1,005 1,222' 1,342 1,248 1,216 1,339 1,266 1,149 30 British West Indies.................................................... 3,998 5,974' 11,138' 11,392' 12,058' 12,637' 12,766 12,798' 12,144 11,576 31 Chile............................................................................ 360 398 468 431 448 456 460 501 431 549 32 Colombia.................................................................... 1,221 1,756 2,617 2,916 3,037 2,962 3,077 3,085' 3,087 2,973 33 Cuba............................................................................ 6 13 13 5 5 6 6 6 7 6 34 Ecuador ...................................................................... 330 322 425 381 387 437 371 389 449 516 35 Guatemala3......................................................... 416 414 373 365 359 367 428 461 446 36 Jamaica3...................................................................... 52 76 101 85 78' 97 112 101 94 37 Mexico........................................................................ 2,876 3,467 4,185 4,226 4,575 4,580' 4,547 4,595' 4,601 4,908 38 Netherlands Antilles.................................................. 196 308 499 360 393 568 413 599 523 436 39 Panama........................................................................ 2,331 2,967 4,483 3,894 3,595 4,575 4,718 4,460 4,194 4,295 40 Peru.............................................................................. 287 363 383 355 380 345 403 401 447 344 41 Uruguay ...................................................................... 243 231 202 199 220 244 254 290 266 306 42 Venezuela.................................................................... 2,929 3,821 4,192 4,405 3,659 3,662' 3,170 3,794 3,925 4,220 43 Other Latin America and Caribbean.................... 2,167 1,760 2,318 2,035' 1,793' 1,796' 2,123 1,936 1,869 2,159 44 Asia.................................................................................. 30,488 36,492 33,005' 42,009' 41,056' 41,999 42,420 41,649 42,724 44,742 China 45 Mainland.................................................................. 53 67 49 38 46 62 49 55 55 60 46 Taiwan.................................................................... 1,013 502 1,393 1,595 1,610 1,636 1,662 1,821 1,733 1,821 47 Hong Kong.................................................................. 1,094 1,256 1,672 2,347' 2,304' 2,410 2,548 2,764 3,054 2,421 48 India............................................................................ 961 790 527 529 485 438 416 437 604 576 49 Indonesia.................................................................... 410 449 504 827 811 715 730 1,170 678 1,063 50 Israel............................................................................ 559 688 707 534 530 548 883 523 557 584 51 Japan............................................................................ 14,616 21,927 8,907 15,434' 15,372' 15,720 16,281 17,701 17,992 19,367 52 Korea.......................................................................... 602 795 993 1,994 1,809 1,764 1,528 1,498 1,485 1,382 53 Philippines.................................................................. 687 644 795 817' 842' 803 919 849 1,057 1,110 54 Thailand...................................................................... 264 427 277 517 403 440 464 367 404 250 55 Middle-East oil-exporting countries4...................... 8,979 7,534 15,300' 15,409 14,611 15,214 14,453 12,216 12,695 13,963 56 Other Asia.................................................................. 1,250 1,414 1,879 1,968' 2,232 2,250 2,487 2,249 2,409 2,143 57Africa.............................................................................. 2,535 2,886 3,239 3,902 4,246 4,718' 5,187 4,358 4,371 4,553 58 Egypt............................................................................ 404 404 475 322 269 374 485 313 496 333 59 Morocco...................................................................... 66 32 33 32 57 38 33 42 30 33 60 South Africa................................................................ 174 168 184 354 288 326' 288 327 258 322 61 Zaire............................................................................ 39 43 110 42 36 34 57 48 58 28 62 Oil-exporting countries5............................................ 1,155 1,525 1,635 2,459 2,911 3,211 3,540 2,921 2,833 3,084 63 Other Africa.............................................................. 698 715 804 694 685 735 783 707 697 753 64 Other countries.............................................................. 1,297 1,076 904 894 1,484 1,752 1,247 1,658 1,513 1,526 65 Australia...................................................................... 1,140 838 684 613 1,190 1,419 950 1,304 1,205 1,287 66 All other...................................................................... 158 239 220 281 294 333 297 354 307 240 67 Nonmonetary international and regional organizations.......................................................... 3,274 2,607 2,356 2,549 2,734 2,476 2,342 1,961 2,003 1,859 68 International.............................................................. 2,752 1,485 1,238 1,389 1,586 1,366 1,156 913 995 754 69 Latin American regional.......................................... 278 808 806 837 841 801 890 769 745 768 70 Other regional6.......................................................... 245 314 313 323 307 309 296 279 263 338 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 Sept. Oct. Nov. Dec. Jan. Feb. Mar./1 1 Total............................................................ 90,206 115,545 r 133,943' 161,548' 163,189' 167,525' 172,702 167,338' 167,677 178,769 2 Foreign countries........................................ 90,163 115,488' 133,906' 161,510' 163,144' 167,487' 172,624 167,266' 167,597 178,695 3 Europe........................................................ 18,114 24,201' 28,388' 29,667' 29,306' 32,654' 32,155 30,657 30,843 34,010 4 Austria.................................................... 65 140 284 264 196 250 236 249 191 174 5 Belgium-Luxembourg............................ 561 1,200 1,339 1,954 1,680 1,946 1,621 1,739 2,140 2,568 6 Denmark.................................................. 173 254 147 180 132 165 127 129 172 119 7 Finland.................................................... 172 305 202 184 253 248 460 322 337 316 8 France...................................................... 2,082 3,735 3,322 3,232 2,551 3.506 2,958 2,716 3,115 3,834 9 Germany.................................................. 644 845 1,179 1,018 987 1.506 948 985 1,047 1,074 10 Greece...................................................... 206 164 154 221 278 265 256 264 248 217 11 Italy.......................................................... 1,334 1,523 1,631 2,560 2,842 3,063 3,364 3,168 3,107 2,982 12 Netherlands............................................ 338 677 514 546 557 749 575 642 523 548 13 Norway.................................................... 162 299 276 248 335 138 227 294 224 216 14 Portugal.................................................. 175 171 330 330 341 393 331 299 240 247 15 Spain........................................................ 722 1,120 1,051 1,106 1,113 1,111 993 1,131 1,160 1,377 16 Sweden.................................................... 218 537 542 716 763 633 783 688 733 868 17 Switzerland.............................................. 564 1,283 1,165 1,337 1,564 1.932 1,446 1,753 1,729 1,310 18 Turkey...................................................... 360 300 149 144 123 149 145 146 155 235 19 United Kingdom.................................... 8,964 10,147' 13,795' 13,015' 12,981' 13,995' 14,917 13,175 12,944 14,994 20 Yugoslavia.............................................. 311 363 611 682 684 689 853 863 859 871 21 Other Western Europe1........................ 86 122 175 245 226 234 179 347 177 176 22 U.S.S.R.................................................... 413 360' 268' 241 257 271 281 249 249 266 23 Other Eastern Europe2........................ 566 657 1,254 1,444' 1,443' 1,413' 1,457 1,490' 1,494 1,620 24 Canada........................................................ 3,355 5,152 4,143 5,072' 4,614 4,542 4,810 4.221 4,874 5,131 25 Latin America and Caribbean................ 45,850 57,565' 67,993' 85,935' 87,986' 89,259' 92,992 90,792' 89,523 95,433 26 Argentina................................................ 1,478 2,281 4,389 5,629 5,898 6,270 5,689 5,642' 5,637 5,674 27 Bahamas.................................................. 19,858 21,555 18,918 30,440' 30,275 29,679 29,419 28,358 28,642 33,370 28 Bermuda.................................................. 232 184 496 216 399 260 218 267 364 347 29 Brazil........................................................ 4,629 6,251 7,713' 9,635' 10,131' 9,996' 10,496 10,260 9,810 10,201 30 British West Indies................................ 6,481 9,694' 9,818' 12,019' 12,948' 13,674 15,663' 14,546 14,333 14,147 31 Chile........................................................ 675 970 1,441 1,627 1,721 1,730 1,951 1,862 1,850 1,878 32 Colombia................................................ 671 1,012 1,614 1,493 1,575 1,582 1,752 1,665 1,435 1,469 33 Cuba ........................................................ 10 0 4 6 3 3 3 4 3 3 34 Ecuador .................................................. 517 705 1,025 1,111 1,157 1,157 1,190 1.222 1,179 1,253 35 Guatemala3............................................ 94 134 105 112 114 137 114 113 208 36 Jamaica3.................................................. 40 47 33 35 40 36 33 41 77 37 Mexico.................................................... 4,909 5.479 9,099 11,120' 11,745 12,014 12,595 12,687 12,463 12,436 38 Netherlands Antilles.............................. 224 273 248 710 799 816 821 835 655 807 39 Panama.................................................... 1,410 3,098 6,041' 4,461 3,972 4,367 4,974 5,033 4,858 5,522 40 Peru........................................................... 962 918 652 671 719 749 890 912 877 784 41 Uruguay.................................................. 80 52 105 100 100 105 137 111 107 103 42 Venezuela................................................ 2,318 3,474 4,657' 4,879 4,710 5,113 5,438 5,515 5,514 5,400 43 Other Latin America and Caribbean . 1,394 1,485' 1,593' 1,681' 1,689' 1,591 1,583' 1,728 1,653 1,756 44 Asia.............................................................. 19,236 25,362' 30,730' 37,716' 37,964' 37,956' 39,140' 38,564' 39,127 40,590 China 45 Mainland.............................................. 10 4 35 117 126 187 195 225 186 201 46 Taiwan................................................ 1,719 1,499 1,821 2,492 2,332 2,382 2,469 2,415 2,282 2,402 47 Hong Kong.............................................. 543 1.479 1,804 2,243' 2,133' 2,094 2,247 2,250 2,212 2,320 48 India........................................................ 53 54 92 84 103 125 142 110 142 127 49 Indonesia................................................ 232 143 131 208 214 248 245 280 306 288 50 Israel........................................................ 584 888 990 916' 1,055 1,125 1,172 1,081 829 944 51 Japan........................................................ 9,839 12,646' 16,911' 20,666' 20,614' 20,323 21,361 21,187 22,314 23,715 52 Korea...................................................... 2,336 2,282 3,793' 5,565' 5,880' 5,839' 5,697 5,904' 5,936 5,830 53 Philippines.............................................. 594 680 737 1,171' 1,084' 1,122 989 840 745 605 54 Thailand.................................................. 633 758 933' 947 925 974 876 810 808 835 55 Middle East oil-exporting countries4.. 1,746 3,125 1,548 1,429' 1,258 1,538 1,494 1,435 1,443 1,486 56 Other Asia.............................................. 947 1,804 1,934' 1,876 2,240 1,999 2,252' 2,026 1,923 1,837 57 Africa.......................................................... 2,518 2,221 1,797 2,029 2,090 1.933 2,377 1,910 1,981 2,496 58 Egypt........................................................ 119 107 114 123 159 165 151 175 152 137 59 Morocco.................................................. 43 82 103 166 119 146 223 186 115 153 60 South Africa............................................ 1,066 860 445 535 440 375 370 337 421 534 61 Zaire........................................................ 98 164 144 101 123 98 94 96 94 336 62 Oil-exporting countries5........................ 510 452 391 374 469 402 805 410 425 589 63 Other........................................................ 682 556 600 729 780 747 734 707 773 746 64 Other countries.......................................... 1,090 855 1,091 1,185 1,143 1,150' 1,122 1,250 1.035 65 Australia.................................................. 905 877 673 879 942 915 859 827 868 870 66 All other.................................................. 186 111 182' 213 243 228 290' 295 381 164 67 Nonmonetary international and regional organizations6.................................... 43 56 36' 38' 78 72' 79 74 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 □ May 1981 3.18 BANKS’ OWN AND DOMESTIC CUSTOMERS’ CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period 1980 1981 Type of claim 1977 1978' Sept. Jan.' Feb.' 1 Total.......................................................................... 90,206 126,787 154,030 187,038' 198,807 2 Banks’ own claims on foreigners.......................... 115,545 133,943 161,548' 163,189 167,525 172,702 167,338 167,677 178,769 3 Foreign public borrowers........................................ 10,346 15,937 19,311' 19,478 21,158 20,944 20,969 20,130 20,785 4 Own foreign offices1................................................ 41,605 47,428 61,880' 62,087 62,507 65,084 64,002 64,785 73,716 5 Unaffiliated foreign banks...................................... 40,483 40,927 45,963' 46,576 49,066 50,215 46,350 46,025 46,650 6 Deposits................................................................ 5,428 6,274 7,211' 7,116 7,579 8,254 7,261 7,238 7,295 7 Other...................................................................... 35,054 34,654 38,752' 39,460 41,488 41,962 39,089 38,788 39,355 8 All other foreigners................................................ 23,111 29,650 34,395' 35,048 34,794 36,459' 36,017 36,737 37 9 Claims of banks’ domestic customers2................ 11,243 20,088 25,490 26,106 10 Deposits.................................................................... 480 955 1,081 885 11 Negotiable and readily transferable instruments3 5,396 13,100 15,260 15,574 12 Outstanding collections and other claims4.......... 6,176 5,366 6,032 9,148 9,648 13 Memo: Customer liability on acceptances.......... 15,030 18,021 23,433' 22,714' Dollar deposits in banks abroad, reported by non­ banking business enterprises in the United States5.................................................................... 13,162 21,578 22,075 22,696 24,516 21,396 25,407 30,585 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................................................................................................................ 73,635 ' 87,538' 86,181' 85,452 r 93,260' 99,022' 106,857' By borrower 2 Maturity of 1 year or less1............................................................................ 58,345' 68,362' 65,152' 64,109' 71,938' 76,231' 82,665' 3 Foreign public borrowers.......................................................................... 4,633 6,159' 7,233' 6,812' 7,227' 8,935' 10,036' 4 All other foreigners.................................................................................. 53,712' 62,203' 57,919' 57,297' 64,711' 67,296' 72,628' 5 Maturity of over 1 year1.............................................................................. 15,289 19,176' 21,030' 21,343' 21,322' 22,791' 24,193' 6 Foreign public borrowers.......................................................................... 5,395' 7,787' 8,371' 8,593' 8,673' 9,722' 10,152' 7 All other foreigners.................................................................................. 9,894' 11,388' 12,659' 12,750' 12,649' 13,069' 14,041' By area Maturity of 1 year or less1 8 Europe........................................................................................................ 15,169' 16,802' 15,235' 13,848' 17,215' 16,940' 18,762' 9 Canada ........................................................................................................ 2,670 2,471 1,777 1,812' 2,047' 2,166 2,723' 10 Latin America and Caribbean................................................................ 20,895' 25,686' 24,928' 23,042' 24,460' 28,097' 32,034' 11 Asia.............................................................................................................. 17,545' 21,478' 21,641' 23,737' 26,162' 26,876' 26,748' 12 Africa.......................................................................................................... 1,496 1,401 1,077' 1,043 1,330 1,401 1,757' 13 All other2.................................................................................................... 569 524 493 627 724 751 640' Maturity of over 1 year1 14 Europe........................................................................................................ 3,142 3,653 4,160' 4,236' 4,033 4,705' 5,118' 15 Canada ........................................................................................................ 1,426 1,364 1,317 1,214 1,199 1,188 1,448' 16 Latin America and Caribbean................................................................ 8,464 11,769' 12,814' 13,388' 13,887' 14,187' 15,075' 17 Asia.............................................................................................................. 1,407 1,578 1,911 1,728 1,477' 2,014' 1,865' 18 Africa.......................................................................................................... 637 625' 655' 620 576 567 507' 19 All other2.................................................................................................... 214 188 173' 157' 150' 130' 179' 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. D ec.P 1Total........................................................................................................ 206.8 240.0 266.2 263.9 275.6 293.9 303.8 308.0 328.2 338.6 352.1 2G-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 Italy...................................................................................................... 5.8 6.5 6.7 5.7 6.1 6.1 6.4 6.2 6.9 7.2 8.2 7 Netherlands........................................................................................ 2.8 3.5 4.4 3.9 4.0 4.7 4.8 4.3 4.5 4.4 4.4 8 Sweden ................................................................................................ 1.2 1.9 2.1 2.0 2.0 2.3 2.4 2.4 2.7 2.8 2.9 9 Switzerland.......................................................................................... 3.0 3.6 5.3 4.5 4.7 5.0 4.7 4.3 3.3 3.4 4.0 10 United Kingdom................................................................................ 41.7 46.5 47.3 46.4 50.3 53.7 56.4 57.6 64.4 66.7 68.5 11 Canada ................................................................................................ 5.1 6.4 6.0 5.9 5.5 6.0 6.3 6.8 7.2 7.9 8.4 12 Japan.................................................................................................... 15.9 18.8 20.6 19.0 19.5 22.3 22.4 25.1 25.5 26.1 26.8 13Other 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 Peru...................................................................................................... 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 3.5 3.4 3.6 3.8 4.1 4.2 41 India.................................................................................................... .2 .2 .2 .2 .2 .3 42 Israel.................................................................................................... 1.0 1.0 1.3 .9 1.2 LI 1.5 43 Korea (South).................................................................................... 3.1 3.9 5.5 6.5 7.1 7.3 7.1 44 Malaysia4............................................................................................ .5 .6 .9 .8 .9 ' 1.0 45 Philippines.......................................................................................... 2.2 2.5 2.8- 4.2 4.4 4.6 5.0 46 Thailand.............................................................................................. .7 1.1 1.2 L4 1.6 1.4 1.5 1.4 47 Other Asia.......................................................................................... .5 .4 .2 .4 .4 .5 .6 Africa 48 Egypt.................................................................................................... .4 .3 .4 .5 .7 .6 .6 .7 .7 .7 .8 49 Morocco.............................................................................................. .3 .5 .6 .6 .5 .5 .6 .5 .5 .6 .7 50 Zaire.................................................................................................... .2 .3 .2 .2 .2 .2 .2 .2 .2 .2 .2 51 Other Africa5.................................................................................... 1.2 .7 1.4 1.4 1.5 1.6 1.7 1.8 1.8 2.0 2.0 52 Eastern Europe...................................................................................... 5.2 6.3 6.9 6.7 6.7 7.2 7.3 7.3 7.2 7.3 7.5 53 U.S.S.R................................................................................................ 1.5 1.6 1.3 1.1 .9 .9 .7 .6 .5 .5 .4 54 Yugoslavia.......................................................................................... .8 1.1 1.5 1.6 1.7 1.8 1.8 1.9 2.1 2.1 2.3 55 Other.................................................................................................... 2.9 3.7 4.1 4.0 4.1 4.6 4.8 4.9 4.5 4.7 4.7 56 Offshore banking centers...................................................................... 24.7 26.1 30.9 33.7 37.0 38.6 40.4 42.6 43.9 44.1 47.1 57 Bahamas.............................................................................................. 10.1 9.9 10.4 12.3 14.4 13.0 13.7 14.0 13.6 12.9 13.3 58 Bermuda.............................................................................................. .5 .6 .7 .6 .7 .7 .8 .6 .6 .6 .6 59 Cayman Islands and other British West Indies............................ 3.8 3.7 7.4 7.1 7.4 9.5 9.4 11.3 9.5 10.0 10.3 60 Netherlands Antilles.......................................................................... .6 .7 .8 .8 1.0 1.1 1.2 .9 1.2 1.3 2.0 61 Panama6.............................................................................................. 3.0 3.1 3.0 3.4 3.8 3.4 4.3 4.9 5.6 5.6 6.3 62 Lebanon .............................................................................................. .1 .2 .1 .1 .1 .2 .2 .2 .2 .2 .2 63 Hong Kong.......................................................................................... 2.2 3.7 4.2 4.8 4.9 5.5 6.0 5.7 6.9 7.4 8.1 64 Singapore............................................................................................ 4.4 3.7 3.9 4.2 4.2 4.9 4.5 4.7 5.9 5.6 5.9 65 Others7................................................................................................ .0 .5 .5 .4 .4 .4 .4 .4 .4 .4 .3 66 Miscellaneous and unallocated8.......................................................... 5.0 5.3 9.1 9.5 9.9 10.6 11.7 13.1 14.3 13.7 15.1 1. The banking offices covered by these data are the U.S. offices and foreign the claims of the U.S. offices also include customer claims and foreign currency branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. claims (amounting in June 1978 to $10 billion). Offices not covered include (1) U.S. agencies and branches of foreign banks, and 3. In addition to the Organization of Petroleum Exporting Countries shown (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are ad­ individually, this group includes other members of OPEC (Algeria, Gabon, Iran, justed to exclude the claims on foreign branches held by a U.S. office or another Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) 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 □ May 1981 3.21 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars 1981 1980 1981 Country or area 1979 1980 Jan- Mar.P Sept. Holdings (end of period)! 1 Estimated total2........................................ 51,344 57,418' 55,874' 56,558' 57,222' 57,418 60,277 61,760 2 Foreign countries2...................................... 45,915 52,831' 51,178' 52,081' 52,872' 52,831 55,655 56,840 3 Europe2........................................................ 24,824 24,337' 25,019' 24,786' 24,711' 25.466 25,235 4 Belgium-Luxembourg............................ 60 77 91 78 74 88 106 5 Germany2................................................ 14,056 12,335 13,110 12,823 12,758 12,915 12,340 6 Netherlands............................................ 1,466 1,884 1,640 1,658 1,777 1,944 1,965 7 Sweden.................................................... 647 595 611 607 614 535 566 8 Switzerland2............................................ 1,868 1,485 1,566 1,517 1,489 1,524 1,527 9 United Kingdom.................................... 6,236 7,183' 7,459' 7,541' 7,414' 7,745 7,892 10 Other Western Europe........................ 491 111 542 562 584 714 839 11 Eastern Europe...................................... 0 0 0 0 0 0 0 12 Canada........................................................ 232 449 480 503 532 490 478 13 Latin America and Caribbean................ 466 999 768 768 942 1,074 1,151 14 Venezuela................................................ 103 292 302 292 292 292 292 15 Other Latin America and Caribbean . 200 285 241 255 278 341 339 16 Netherlands Antilles.............................. 163 421 225 221 372 441 519 17 Asia.............................................................. 19,805 26,112 24,294' 25,333' 25,968' 27.467 28,827 18 Japan........................................................ 11,175 9,479 9,444 9,503 9,547 9,543 9,543 19 Africa.......................................................... 591 920 617 685 715 1,139 1,140 20 All other...................................................... -3 14 0 5 4 18 9 21 Nonmonetary international and regional organizations...................................... 5,429 4,587 4,696 4,477 > 4,350 4,622 4,920 22 International.......................................... 5,388 4,548 4,632 4,430 4,302 4,548 4,586 4,878 23 Latin American regional...................... 37 36 65 44 44 36 36 36 Transactions (net purchases, or sales (-) during period) 24 Total2............................................................ 6,397 6,075' 4,341 1,752 1,035 25 Foreign countries2...................................... 6,099 6,916' 4,009 1,181 903 791' -41 1,088 1,736 1,185 26 Official institutions................................ 1,697 3,840' 3,354 998 664 301' -336 865 1,404 1,084 27 Other foreign2........................................ 4,403 3,076' 655 183 240 490 295 223 332 100 28 Nonmonetary international and regional organizations...................................... 301 -843' 333 571 -222 -126' 237 -53 295 Memo: Oil-exporting countries 29 Middle East3.............................................. -1,014 7,672 2,762 601 990 561 358 300 1,139 1,322 30 Africa4.......................................................... -100 328 220 25 68 29' 205 51 169 0 1. Estimated official and private holdings of marketable U.S. Treasury securities 2. Beginning December 1978, includes U.S. Treasury notes publicly issued to with an original maturity of more than 1 year. Data are based on a Benchmark private foreign residents denominated in foreign currencies. survey of holdings as of Jan. 31, 1971, and monthly transactions reports. Excludes 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign United Arab Emirates (Trucial States). countries. 4. Comprises Algeria, Gabon, Libya, and Nigeria. 3.22 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS Millions of dollars, end of period 1980 1981 Assets 1978 1979 1980 Oct. Nov. Dec. Jan. Feb. Mar. Apr.P 1 Deposits.......................................................................... 367 429 411 368 368 411 573 422 474 475 Assets held in custody 2 U.S. Treasury securitiesi.............................................. 117,126 95,075 102,417 98,121 102,786 102,417 104,490 106,389 111,859 113,746 3 Earmarked gold2............................................................ 15,463 15,169 14,965 14,986 14,968 14,965 14,893 14,892 14,883 14,886 1. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S. Note. Excludes deposits and U.S. Treasury securities held for international and Treasury securities payable in dollars and in foreign currencies. regional organizations. Earmarked gold is gold held for foreign and international 2. The value of earmarked gold increased because of the changes in par value accounts and is not included in the gold stock of the United States, of the U.S. dollar in May 1972 and in October 1973. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Investment Transactions A63 3.23 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1981 1980 1981 Transactions, and area or country 1979 1980' Jan- Sept. Oct. Nov. Dec. Jan. Feb. Mar.P Mar.P U.S. corporate securities Stocks 1 Foreign purchases.......................................................... 22,781 40,320 10,085 3,569 4,438 4,457 4,345 3,422 2,718 3,945 2 Foreign sales.................................................................. 21,123 34,962 8,420 3,329 3,920 3,588 3,701' 2,798 2,312 3,310 3 Net purchases, or sales (-).......................................... 1,658 5,358 1,665 241 519 869 644' 624 406 636 4 Foreign countries............................................................ 1,642 5,340 1,643 246 524 867 623' 612 403 628 5 Europe............................................................................ 217 3,069 1,302 -83 300 633 254' 438 257 607 6 France .......................................................................... 122 482 210 .33 53 109 60' 62 41 107 7 Germany...................................................................... -221 186 73 -18 35 121 8' 24 18 31 8 Netherlands................................................................ -71 -328 56 -38 -29 -58 -17 43 2 12 9 Switzerland.................................................................. -519 308 226 -122 83 265 -88 105 -24 146 10 United Kingdom........................................................ 964 2,503 707 153 172 251 300' 178 220 309 11 Canada ............................................................................ 552 865 220 -22 -66 263 247' 26 91 103 12 Latin America and Caribbean.................................... -19 148 92 -83 132 57 -8' 101 -22 14 13 Middle East*.................................................................. 688 1,206 42 410 126 -109 177 63 74 -95 14 Other Asia...................................................................... 211 16 -16 19 33 18 -49' -14 -2 0 15 Africa.............................................................................. -14 -1 2 2 2 0 -2 2 0 -1 16 Other countries.............................................................. 7 38 2 4 -3 5 2' -5 7 0 17 Nonmonetary international and regional organizations.......................................................... 17 18 22 -5 -6 2 22 12 2 8 Bonds2 18 Foreign purchases.......................................................... 8,835 15,425 4,992 645 1,591' 1,193' 946 1,549 1,402' 2,041 19 Foreign sales.................................................................. 7,602 9,976 2,918 481 739 902 826 817 863' 1,239 20 Net purchases, or sales (-).......................................... 1,233 5,449 2,074 165 852r 291' 121 733 539 802 21 Foreign countries............................................................ 1,330 5,514 2,061 214 897 ' 295 ' 107 706 552 803 22 Europe............................................................................ 626 1,576 657 -23 263' 163' -26 214 311 132 23 France.......................................................................... 11 129 -29 -2 2r 12 12 4 -42 9 24 Germany...................................................................... 58 213 258 4 30 13 22 49 112 97 25 Netherlands................................................................ -202 -65 32 7 8 -7 17 6 12 14 26 Switzerland.................................................................. -118 54 37 0 1 8 14 22 12 4 27 United Kingdom........................................................ 814 1,257 309 -5 228' 166' -113 124 207 -22 28 Canada............................................................................ 80 135 24 12 9 21 -7 7 -2 19 29 Latin America and Caribbean.................................... 109 185 52 18 7 11 -5 -3 26 28 30 Middle East*.................................................................. 424 3,486 1,415 194 594 105 113 492 201 723 31 Other Asia...................................................................... 88 117 -83 14 24 -3 32 -1 17 -99 32 Africa.............................................................................. 1 5 0 0 0 0 0 0 0 0 33 Other countries.............................................................. 1 10 -4 -2 0 -1 0 -4 0 0 34 Nonmonetary international and regional organizations.......................................................... -96 -65 13 -49 -45 -4 14 27 -13 -1 Foreign securities 35 Stocks, net purchases, or sales (-)............................ -786 -2,084 -140 -558 -341' 129 -68 35' 13' -187 36 Foreign purchases...................................................... 4,615 7,885 2,168 694 795' 927 721 696' 709' 763 37 Foreign sales.............................................................. 5,401 9,968 2,308 1,253 1,136' 798 788 661' 697' 950 38 Bonds, net purchases, or sales (-)............................ -3,855 -846 -337 -84 -206 92' 274 -237' 29' -130 39 Foreign purchases...................................................... 12,672 17,069 4,431 1,231 1,651 1,254' 1,786 1,142 1,296' 1,992 40 Foreign sales.............................................................. 16,527 17,915 4,768 1,316 1,857 1,161 1,512 1,379' 1,267' 2,122 41 Net purchases, or sales (-), of stocks and bonds ... -4,641 -2,929 -477 -643 -547' 221' 206 -202' 42' -317 42 Foreign countries............................................................ -3,891 -3,806 -582 -680 -563' 198' -177 -261' 24' -345 43 Europe............................................................................ -1,646 -957 -197 -110 126' -30 -86 -116 80' -161 44 Canada............................................................................ -2,601 -1,948 -29 -344 -651 329' 24 -4 76' -101 45 Latin America and Caribbean.................................... 347 126 35 7 -35 -24 -11 51 52' -68 46 Asia.................................................................................. 44 -1,131 -343 -223 -16 -73 -84 -177' -169' 3 47 Africa.............................................................................. -61 24 -35 -4 29 -1 -13 -10 -8 -17 48 Other countries.............................................................. 25 80 -13 -6 -16 -3 -7 49 Nonmonetary international and regional organizations.......................................................... -750 876 105 37 15 23 383 59 17 29 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 □ May 1981 3.24 LIABILITIES TO UN AFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1979 1980 Type, and area or country 1978 1979 June Sept. Dec. Mar. June Sept.' 1 Total.............................................................................................................. 14,869 16,940r 15,510 15,700 16,940r 17,352 r 18,446 r 18,454 2 Payable in dollars........................................................................................ 11,506 13,922' 12,623 12,692 13,922' 14,417' 15,080' 15,214 3 Payable in foreign currencies2.................................................................. 3,363 3,018 2,888 3,008 3,018 2,936' 3,366 3,239 By type 4 Financial liabilities...................................................................................... 6,295 7,302' 6,041 6,131 7,302' 7,781' 8,281' 8,125 5 Payable in dollars.................................................................................... 3,831 5,092' 3,867 3,877 5,092' 5,597' 5,725' 5,707 6 Payable in foreign currencies................................................................ 2,464 2,210 2,173 2,254 2,210 2,184 2,556 2,418 7 Commercial liabilities................................................................................ 8,574 9,639 9,470 9,568 9,639 9,571 10,165 10,328 8 Trade payables........................................................................................ 4,008 4,380 4,302 4,051 4,380 4,138 4,265 4,369 9 Advance receipts and other liabilities.................................................. 4,566 5,258 5,168 5,518 5,258 5,433 5,899 5,960 10 Payable in dollars.................................................................................... 7,675 8,830 8,755 8,815 8,830 8,819 9,355 9,507 11 Payable in foreign currencies................................................................ 899 808 715 754 808 752 810 821 By area or country Financial liabilities 12 Europe...................................................................................................... 3,903 4,574 3,582 3,713 4,574 4,808 5,392' 5,214 13 Belgium-Luxembourg........................................................................ 289 345 355 317 345 360 422 404 14 France.................................................................................................... 167 168 134 126 168 188 341 327 15 Germany.............................................................................................. 366 497 283 381 497 520 657 557 16 Netherlands.......................................................................................... 390 828 401 542 828 795 783 766 17 Switzerland.......................................................................................... 248 170 235 190 170 174 238' 224 18 United Kingdom.................................................................................. 2,110 2,372 1,955 1,957 2,372 2,568 2,783 2,761 19 Canada...................................................................................................... 244 445' 290 304 445' 383' 482 456 20 Latin America and Caribbean.............................................................. 1,357 1,483 1,395 1,347 1,483 1,764 1,633 1,718 21 Bahamas................................................................................................ 478 375 477 390 375 459 434 412 22 Bermuda.............................................................................................. 4 81 2 2 81 83 2 1 23 Brazil.................................................................................................... 10 18 19 14 18 22 25 20 24 British West Indies.............................................................................. 194 514 189 198 514 694 700 685 25 Mexico.................................................................................................. 102 121 131 122 121 101 101 108 26 Venezuela............................................................................................ 49 72 68 71 72 70 72 74 27 Asia............................................................................................................ 780 790 764 757 790 805 750 705 28 Japan .................................................................................................... 714 723 706 700 723 737 680 615 29 Middle East oil-exporting countries3.............................................. 32 31 25 19 31 26 31 37 30 Africa........................................................................................................ 5 4 6 5 4 11 10 11 31 Oil-exporting countries4.................................................................... 2 1 2 1 1 1 1 1 32 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 4,066 34 Belgium-Luxembourg........................................................................ 75 137 81 103 137 117 132 109 35 France.................................................................................................... 321 467 353 394 467 503 485 501 36 Germany.............................................................................................. 529 534 471 539 534 533 714 693 37 Netherlands.......................................................................................... 246 227 230 206 227 288 245 276 38 Switzerland.......................................................................................... 302 310 439 348 310 382 462 452 39 United Kingdom.................................................................................. 824 1,073 997 1,015 1,073 994 1,120 1,033 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 2,909 49 Japan .................................................................................................... 448 488 516 517 488 578 411 502 50 Middle East oil-exporting countries3.............................................. 1,523 1,017 1,225 1,070 1,017 901 1,019 944 51 Africa........................................................................................................ 743 728 891 775 728 742 875 1,006 52 Oil-exporting countries4.................................................................... 312 384 410 370 384 382 498 633 53 All other5.................................................................................................. 203 233 243 287 233 263 367 396 1. For a description of the changes in the International Statistics tables, see July 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and 1979 Bulletin, p. 550. United Arab Emirates (Trucial States). 2. Before December 1978, foreign currency data include only liabilities denom- 4. Comprises Algeria, Gabon, Libya, and Nigeria. inated in foreign currencies with an original maturity of less than one year. 5. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A65 3.25 CLAIMS ON UN AFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1979 1980 Type, and area or country 1978 1979 June Sept. Dec. Mar. June Sept.r 1 Total.............................................................................................................. 27,864 30,899 30,318 30,949 30,899 31,984 31,894 31,458 2 Payable in dollars........................................................................................ 24,881 27,734 27,418 28,280 27,734 28,984 28,852 28,280 3 Payable in foreign currencies2.................................................................. 2,984 3,165 2,900 2,668 3,165 3,000 3,042 3,178 By type 4 Financial claims.......................................................................................... 16,528 18,139 19,321 19,176 18,139 19,260 18,543 18,164 5 Deposits.................................................................................................... 11,069 12,493 13,661 13,730 12,493 13,586 12,702 12,099 6 Payable in dollars................................................................................ 10,000 11,584 12,706 12,830 11,584 12,612 11,822 11,018 7 Payable in foreign currencies............................................................ 1,068 909 956 901 909 974 879 1,081 8 Other financial claims............................................................................ 5,459 5,646 5,660 5,446 5,646 5,673 5,841 6,065 9 Payable in dollars................................................................................ 3,874 3,803 4,079 4,030 3,803 4,055 4,103 4,395 10 Payable in foreign currencies............................................................ 1,584 1,843 1,581 1,416 1,843 1,619 1,737 1,670 11 Commercial claims...................................................................................... 11,337 12,760 10,997 11,773 12,760 12,724 13,352 13,294 12 Trade receivables.................................................................................... 10,778 12,072 10,368 11,061 12,072 12,079 12,656 12,605 13 Advance payments and other claims.................................................. 559 688 628 712 688 645 695 688 14 Payable in dollars.................................................................................... 11,006 12,347 10,633 11,421 12,347 12,317 12,926 12,867 15 Payable in foreign currencies................................................................ 331 413 363 352 413 407 425 427 By area or country Financial claims 16 Europe...................................................................................................... 5,218 6,129 5,640 6,562 6,129 5,840 5,835 5,576 17 Belgium-Luxembourg........................................................................ 48 32 54 33 32 19 23 14 18 France.................................................................................................... 178 177 183 191 177 290 307 381 19 Germany.............................................................................................. 510 409 363 393 409 300 190 168 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 4,798 24 Latin America and Caribbean.............................................................. 5,672 6,204 7,448 6,682 6,204 7,516 6,851 6,671 25 Bahamas................................................................................................ 2,959 2,684 3,648 3,284 2,684 3,450 3,007 2,757 26 Bermuda.............................................................................................. 80 30 57 31 30 34 25 65 27 Brazil.................................................................................................... 151 163 141 133 163 128 120 116 28 British West Indies.............................................................................. 1,288 2,001 2,407 1,838 2,001 2,591 2,393 2,283 29 Mexico.................................................................................................. 163 158 159 156 158 169 178 192 30 Venezuela............................................................................................ 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 4,655 38 Belgium-Luxembourg........................................................................ 144 203 170 179 203 208 255 230 39 France.................................................................................................... 609 727 470 518 727 703 662 707 40 Germany.............................................................................................. 399 584 421 448 584 515 504 569 41 Netherlands.......................................................................................... 267 298 307 262 298 347 297 289 42 Switzerland.......................................................................................... 198 269 232 224 269 349 429 333 43 United Kingdom.................................................................................. 827 905 731 818 905 924 908 988 44 Canada...................................................................................................... 1,096 843 1,106 1,164 843 862 895 929 45 Latin America and Caribbean.............................................................. 2,547 2,855 2,410 2,595 2,855 2,992 3,281 3,375 46 Bahamas................................................................................................ 109 21 98 16 21 19 19 53 47 Bermuda.............................................................................................. 215 197 118 154 197 135 133 81 48 Brazil.................................................................................................... 629 647 503 568 647 656 697 710 49 British West Indies.............................................................................. 9 16 25 13 16 11 9 17 50 Mexico.................................................................................................. 506 700 588 648 700 835 921 981 51 Venezuela............................................................................................ 292 342 296 346 342 349 394 388 52 Asia............................................................................................................ 3,082 3,365 2,967 3,116 3,365 3,370 3,540 3,395 53 Japan .................................................................................................... 976 1,127 1,005 1,128 1,127 1,209 1,130 1,094 54 Middle East oil-exporting countries3.............................................. 717 766 685 701 766 718 829 837 55 Africa........................................................................................................ 447 556 487 549 556 518 567 669 56 Oil-exporting countries4.................................................................... 136 133 139 140 133 114 115 135 57 All other5.................................................................................................. 179 240 194 220 240 225 249 270 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 □ May 1981 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on Apr. 30, 1981 Rate on Apr. 30, 1981 Rate on Apr. 30, 1981 Country Country Country Per­ Month Per­ Month Per­ Month cent effective cent effective cent effective Argentina 182.47 Apr. 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.. 14.0 Apr. 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 .. 17.40 Apr. 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 to such discounts or advances, the rate Note. Rates shown are mainly those at which the central bank either shown is the one at which it is understood the central bank transacts the discounts or makes advances against eligible commercial paper and/or largest proportion of its credit operations. 3.27 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1980 Country, or type Dec. Jan. Feb. Mar. Apr. 1 Eurodollars........ 8.74 11.96 14.00 13.55 16.46 19.47 18.07 17.18 15.36 15.95 2 United Kingdom 9.18 13.60 16.59 15.87 15.84 14.64 14.20 13.12 12.58 12.26 3 Canada .............. 8.52 11.91 13.12 11.71 12.96 16.83 16.98 17.28 16.85 17.35 4 Germany............ 3.67 6.64 9.45 8.99 9.37 10.11 9.41 10.74 13.44 13.12 5 Switzerland........ 0.74 2.04 5.79 5.40 5.53 6.61 5.68 7.09 8.33 8.67 6 Netherlands .... 6.53 9.33 10.60 9.63 9.59 9.69 9.36 9.78 10.61 10.41 7 France ................ 8.10 9.44 12.18 11.69 11.26 11.52 11.38 11.87 12.56 13.00 8 Italy.................... 11.40 11.85 17.50 18.16 17.51 17.47 17.34 17.50 18.22 19.92 9 Belgium.............. 7.14 10.48 14.06 12.24 12.40 12.75 12.41 12.52 13.93 17.16 10 Japan.................. 4.75 6.10 11.45 10.98 9.74 9.60 9.00 8.52 7.87 6.83 Note. Rates are for 3-month interbank loans except for the following: Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate. 3.28 FOREIGN EXCHANGE RATES Cents per unit of foreign currency 1980 1981 Country/currency 1978 1979 1980 Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 Australia/dollar.......................... 114.41 111.77 114.00 117.43 116.75 116.86 118.19 116.26 116.29 115.32 2 Austria/schilling.......................... 6.8958 7.4799 7.7349 7.6714 7.3433 7.1549 7.0297 6.6033 6.6959 6.5355 3 Belgium/franc.............................. 3.1809 3.4098 3.4247 3.3875 3.2457 3.1543 3.0962 2.8972 2.8966 2.8220 4 Canada/dollar.............................. 87.729 85.386 85.530 85.538 84.286 83.560 83.974 83.442 83.936 83.966 5 Denmark/krone.......................... 18.156 19.010 17.766 17.639 16.962 16.573 16.181 15.152 15.109 14.683 6 Finland/markka.......................... 24.337 27.732 26.892 27.122 26.452 25.903 25.752 24.656 24.612 23.059 7 France/franc................................ 22.218 23.504 23.694 23.489 22.515 21.925 21.539 20.142 20.147 19.548 8 Germany/deutsche mark.......... 49.867 54.561 55.089 54.280 52.113 50.769 49.771 46.757 47.498 46.219 9 India/rupee.................................. 12.207 12.265 12.686 12.932 12.868 12.608 12.567 12.164 12.131 12.060 10 Ireland/pound............................ 191.84 204.65 205.77 203.88 194.59 189.01 185.54 173.31 173.25 168.46 11 Italy/lira...................................... .11782 .12035 .11694 .11441 .11000 .10704 .10478 .09807 .09699 .09280 12 Japan/yen.................................... .47981 .45834 .44311 .47777 .46928 .47747 .49419 .48615 .47897 .46520 13 Malaysia/ringgit.......................... 43.210 45.720 45.967 46.902 46.187 45.406 44.994 44.196 43.830 43.182 14 Mexico/peso................................ 4.3896 4.3826 4.3535 4.3324 4.3166 4.3071 4.2792 4.2544 4.2238 4.1880 15 Netherlands/guilder.................... 46.284 49.843 50.369 50.052 48.102 46.730 45.810 42.870 42.912 41.660 16 New Zealand/dollar.................. 103.64 102.23 97.337 98.069 96.770 95.404 96.137 93.414 91.999 90.273 17 Norway/krone............................ 19.079 19.747 20.261 20.421 19.938 19.370 19.087 18.485 18.540 18.271 18 Portugal/escudo.......................... 2.2782 2.0437 1.9980 1.9756 1.9178 1.8773 1.8591 1.7722 1.7621 1.7178 19 South Africa/rand...................... 115.01 118.72 128.54 133.13 133.20 132.83 133.69 129.27 126.50 123.32 20 Spain/peseta................................ 1.3073 1.4896 1.3958 1.3423 1.3085 1.2653 1.2409 1.1686 1.1672 1.1395 21 Sri Lanka/rupee.......................... 6.3834 6.4226 6.1947 5.9707 5.8139 5.7379 5.9525 5.5975 5.5527 5.4185 22 Sweden/krona............................ 22.139 23.323 23.647 23.845 23.240 22.722 22.490 21.734 21.704 21.309 23 Switzerland/franc........................ 56.283 60.121 59.697 60.185 57.942 56.022 54.907 51.502 52.043 50.664 24 United Kingdom/pound............ 191.84 212.24 232.58 241.64 239.41 234.59 240.29 229.41 223.19 217.53 Memo: 25 United States/dollar1................ 92.39 88.09 87.39 86.59 89.31 90.99 91.38 96.02 96.22 98.80 1. Index of weighted-average exchange value of U.S. dollar against cur­ the Weighted-Average Exchange Value of the U.S. Dollar: Revision” on page rencies of other G-10 countries plus Switzerland. March 1973 = 100. 700 of the August 1978 Bulletin. Weights are 1972-76 global trade of each of the 10 countries. Series revised as of August 1978. For description and back data, see “Index of Note. Averages of certified noon buying rates in New York for cable transfers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A67 Guide to Tabular Presentation, Statistical Releases, and Special Tables Guide to Tabular Presentation Symbols and Abbreviations c Corrected 0 Calculated to be zero e Estimated n.a. Not available P Preliminary n.e.c. Not elsewhere classified r Revised (Notation appears on column heading IPCs Individuals, partnerships, and corporations when more than half of figures in that column REITs Real estate investment trusts are changed.) RPs Repurchase agreements * Amounts insignificant in terms of the last decimal SMSAs Standard metropolitan statistical areas place shown in the table (for example, less than Cell not applicable 500,000 when the smallest unit given is millions) General Information Minus signs are used to indicate (1) a decrease, (2) a negative gations of the Treasury. “State and local government” also figure, or (3) an outflow. includes municipalities, special districts, and other political “U.S. government securities” may include guaranteed is­ subdivisions. sues of U.S. government agencies (the flow of funds figures In some of the tables details do not add to totals because of also include not fully guaranteed issues) as well as direct obli­ rounding. Statistical Releases List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases .................................................................... December 1980 A80 Special Tables Published Irregularly, with Latest Bulletin Reference Commercial bank assets and liabilities, call dates, December 31, 1978, to March 31, 1980 ....... October 1980 A71 Commercial bank assets and liabilities, June 30, 1980....................................................................... December 1980 A68 Commercial bank assets and liabilities, September 30, 1980............................................................ February 1981 A68 Commercial bank assets and liabilities, December 31, 1980 ............................................................. April 1981 All Assets and liabilities of U.S. branches and agencies of foreign banks, September 30, 1980....... April 1981 A78 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Federal Reserve Board of Governors Paul A. Volcker, Chairman Henry C. Wallich Frederick H. Schultz, Vice Chairman J. Charles Partee Office of Board Members Office of Staff Director for 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 W illiam R. M aloni, Special Assistant to the Board M urray Altmann, Assistant to the Board Frank O’Brien, Jr., Special Assistant to the Board Peter M. Keir, Assistant to the Board Joseph S. Sims, Special Assistant to the Board Stanley J. Sigel, Assistant to the Board James L. Stull, Manager, Operations Review Program Normand R. V. Bernard, Special Assistant to the Board Legal Division Division of Research and Statistics Neal L. Petersen, General Counsel James L. Kichline, Director Robert E. Mannion, Deputy General Counsel Joseph S. Zeisel, Deputy Director J. Virgil M attingly, Jr., Associate General Counsel M ichael J. Prell, Associate Director G ilbert T. Schwartz, Associate General Counsel Robert A. Eisenbeis, Senior Deputy Associate Director M ichael E. Bleier, Assistant General Counsel Jared J. Enzler, Senior Deputy Associate Director Cornelius K. Hurley, Jr., Assistant General Counsel Eleanor J. Stock w ell, Senior Deputy Associate Director M aryellen A- Brown, Assistant to the General Counsel Donald L. Kohn, Deputy Associate Director Charles R. M cNeill, Assistant to the General Counsel J. Cortland G. Peret, Deputy Associate Director Helmut F. W endel, Deputy Associate Director M artha 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. M ichael Manies, Assistant Secretary Frederick M. Struble, Assistant Director Stephen P. Taylor, Assistant Director Levon H. Garabedian, Assistant Director (Administration) Division of Consumer and Community Affairs Division of International Finance Janet O. H art, Director G riffith 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 Division of Banking Larry J. Promisel, Assistant Director Supervision and Regulation Ralph W. Smith, Jr., Assistant Director John E. Ryan, Director Frederick R. Dahl, Associate Director W illiam Taylor, Associate Director W illiam 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

A69 and Official Staff Nancy H. Teeters Lyle E. Gramley Emmett J. Rice Office of Office of Staff Director for Staff Director for Management Federal Reserve Bank Activities John M. Denkler, Staff Director Theodore E. Allison, Staff Director Edward T. M ulrenin, Assistant Staff Director Harry A. Guinter, Assistant Director for Contingency Joseph W. Daniels, Sr., Director of Equal Employment Op­ Planning portunity Division of Federal Reserve Division of Data Processing Bank Operations Charles L. Hampton, Director Clyde H. Farnsw orth, Jr., Director Bruce M. Beardsley, Deputy Director Lorin S. Meeder, Associate Director Uyless D. Black, Associate Director Raymond L. Teed, Associate Director Glenn L. Cummins, Assistant Director W alter Althausen, Assistant Director Neal H. Hillerm an, Assistant Director Charles W. Bennett, Assistant Director C. W illiam Schleicher, Jr., Assistant Director Richard B. Green, Assistant Director Robert J. Zemel, Assistant Director E lliott C. M cEntee, Assistant Director David L. Robinson, Assistant Director P. D. Ring, Adviser Division of Personnel David L. Shannon, Director John R. Weis, Assistant Director Charles W. Wood, Assistant Director Office of the Controller John Kakalec, Controller George E. Livingston, Assistant Controller Division of S upport Services Donald E. Anderson, Director W alter 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

A70 Federal Reserve Bulletin □ May 1981 FOMC and Advisory Councils Federal Open Market Committee Paul A. Volcker, Chairman Anthony M. Solomon, Vice Chairman Edward G. Boehne Lyle E. Gramley Frederick H. Schultz Robert H. Boykin J. Charles Partee Nancy H.Teeters E. Gerald Corrigan Emmett J. Rice Henry C. W allich 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. M ullineaux, 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 Advisory Council M erle E. Gilliand, Fourth District, President Chauncey E. Schmidt, Twelfth District, Vice President William S. Edgerly, First District Robert M. Surd am, Seventh District Donald C. Platten, Second District Ronald Terry, Eighth District John H. Walther, Third District Clarence G. Frame, Ninth District J. Owen Cole, Fifth District Gordon E. Wells, Tenth District Robert Strickland, Sixth District T. C. Frost, Jr., Eleventh District Herbert V. Prochnow, Secretary W illiam J. Korsvik, Associate Secretary Consumer Advisory Council Ralph J. Rohner, Washington D.C., Chairman Charlotte H. Scott, Charlottesville, Virginia, Vice Chairman Arthur F. Bouton, Little Rock, Arkansas F. Thomas Juster, Ann Arbor, Michigan Julia H. Boyd, Alexandria, Virginia Richard F. Kerr, Cincinnati, Ohio Ellen Broadman, Washington, D.C. Harvey M. Kuhnley, Minneapolis, Minnesota James L. Brown, Milwaukee, Wisconsin The Rev. Robert J. McEwen, S.J., Chestnut Hill, Mark E. Budnitz, Atlanta, Georgia Massachusetts Joseph N. Cugini, Westerly, Rhode Island Stan L. Mularz, Chicago, Illinois Richard S. D’Agostino, Philadelphia, Pennsylvania William J. O’Connor, Buffalo, New York Susan Pierson De W itt, 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

A71 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK, Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON*.................... 02106 Robert 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. Showalter 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 Herbert H. Dow William C. Conrad ST. LOUIS ....................63166 Armand C. Stalnaker Lawrence K. Roos William B. Walton Donald W. Moriarty, Jr. Little Rock.................72203 E. Ray Kemp, Jr. John F. Breen Louisville....................40232 Sister Eileen M. Egan Donald L. Henry Memphis .................. 38101 Patricia W. Shaw Robert E. Matthews MINNEAPOLIS......... ..55480 Stephen F. Keating E. Gerald Corrigan William G. Phillips Thomas E. Gainor Helena........................ 59601 Norris E. Hanford Betty J. Lindstrom KANSAS CITY ,.64198 Paul H. Henson Roger Guffey Doris M. Drury Henry R. Czerwinski Denver.........................80217 Caleb B. Hurtt Wayne W. Martin Oklahoma City...........,.73125 Christine H. Anthony William G. Evans Omaha.........................68102 Robert G. Lueder Robert D. Hamilton DALLAS ..................... .75222 Gerald D. Hines Robert H. Boykin John V. James William H. Wallace El Paso........................ 79999 Josefina A. Salas-Porras Joel L. Koonce, Jr. Houston..................... 77001 Jerome L. Howard J. Z. Rowe San Antonio ............. .78295 Lawrence L. Crum Carl H. Moore SAN FRANCISCO ... ,94120 Cornell C. Maier John J. Balles Caroline L. Ahmanson John B. Williams Los Angeles ............. ,90051 Harvey A. Proctor Richard C. Dunn Portland..................... 97208 John C. Hampton Angelo S. Carella Salt Lake City........... 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

A72 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 M onetary 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. 1. 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 1970-79. 1981. 587 pp. $20.00 per copy. dress, $3.60 each. Federal Reserve Chart Book. Issued four times a year in Federal Reserve Staff Study: Ways to Moderate February, May, August, and November. Subscription Fluctuations in Housing Construction. 1972. 487 includes one issue of Historical Chart Book. $7.00 per pp. $4.00 each; 10 or more to one address, $3.60 each. year or $2.00 each in the United States, its possessions, Lending Functions of the Federal Reserve Banks. Canada, and Mexico. Elsewhere, $10.00 per year or 1973. 271 pp. $3.50 each; 10 or more to one address, $3.00 each. $3.00 each. Historical Chart Book. Issued annually in Sept. Subscrip­ Improving the M onetary Aggregates: Report of the tion to Federal Reserve Chart Book includes one issue. Advisory Committee on M onetary Statistics. $1.25 each in the United States, its possessions, Canada, 1976. 43 pp. $1.00 each; 10 or more to one address, $.85 and Mexico; 10 or more to one address, $1.00 each. Else­ each. where, $1.50 each. Annual Percentage Rate Tables (Truth in Lending— Capital Market Developments. Weekly. $15.00 per year Regulation Z) Vol. I (Regular Transactions). 1969. 100 or $.40 each in the United States, its possessions, Cana­ pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each da, and Mexico; 10 or more of same issue to one address, volume $1.00; 10 or more of same volume to one ad­ $13.50 per year or $.35 each. Elsewhere, $20.00 per year dress, $.85 each. or $.50 each. Federal Reserve Measures of Capacity and Capacity Selected Interest and Exchange Rates—W eekly Se­ ries of Charts. Weekly . $15.00 per year or $.40 each in Utilization. 1978. 40 pp. $1.75 each; 10 or more to one address, $1.50 each. the United States, its possessions, Canada, and Mexico; 10 or more of same issue to one address, $13.50 per yearT he Bank Holding Company Movement to 1978: A or $.35 each. Elsewhere, $20.00 per year or $.50 each. Compendium. 1978. 289 pp. $2.50 each; 10 or more to one address, $2.25 each. The Federal Reserve Act, as amended through December 1976, with an appendix containing provisions of certain Improving the Monetary Aggregates: Staff Papers. other statutes affecting the Federal Reserve System. 307 1978. 170 pp. $4.00 each; 10 or more to one address, pp. $2.50. $3.75 each. Regulations of the Board of Governors of the Fed­ 1977 Consumer Credit Survey. 1978. 119 pp. $2.00 each. eral Reserve System Flow of Funds Accounts. 1949-1978. 1979. 171 pp. $1.75 Published Interpretations of the Board of Gover­ each; 10 or more to one address, $1.50 each. nors, as of June 30, 1980. $7.50. Introduction to Flow of Funds. 1980. 68 pp. $1.50 each; Bank Credit-Card and Check-Credit Plans. 196b. 102 10 or more to one address, $1.25 each. pp. $1.00 each; 10 or more to one address, $.85 each. Public Policy and Capital Formation. 1981. 326 pp. Survey of Changes in Family Finances. 1968. 321 pp. $13.50 each. $1.00 each; 10 or more to one address, $.85 each. 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A73 Consumer Education Pamphlets The GNMA-Guaranteed Passthrough Security: Mar­ Short pamphlets suitable for classroom use. Multiple cop­ ket Developm ent and Im plications for the ies available without charge. Growth and Stability of Home M ortgage Lend­ ing, by David F. Seiders. Dec. 1979. 65 pp. Alice in Debitland Foreign Ownership and the Perform ance 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 Perspectives on Personal Saving. 8/80. dence by Paul W. Boltz and Tim S. Campbell. May The Impact of Rising Oil Prices on the Major Foreign Indus­ 1979. 40 pp. trial Countries. 10/80. Measurement of Capacity Utilization: Problems and Federal Reserve and the Payments System: Upgrading Elec­ Tasks, by Frank de Leeuw, Lawrence R. Forest, Jr., tronic Capabilities for the 1980s. 2/81. Richard D. Raddock, and Zoltan E. Kenessey. July U.S. International Transactions in 1980. 4/81. 1979. 264 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Index to Statistical Tables References are to pages A-3 through A-66 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 Deposits (See also specific types) Domestic finance companies, 37 Banks, by classes, 3, 17, 18-21, 27 Federal Reserve Banks, 11 Federal Reserve Banks, 4,11 Nonfinancial corporations, current, 36 Turnover, 12 Automobiles Discount rates at Reserve Banks (See Interest rates) Consumer installment credit, 40, 41 Discounts and advances by Reserve Banks (See Loans) Production, 46, 47 Dividends, corporate, 35 BANKERS balances, 17, 18--20 (See also Foreigners) EMPLOYMENT, 44, 45 Banks for Cooperatives, 33 Eurodollars, 25 Bonds (See also U.S. government securities) New issues, 34 FARM mortgage loans, 39 Yields, 3 Farmers Home Administration, 39 Branch banks, 15, 21, 54 Federal agency obligations, 4,10,11,12,32 Business activity, nonfinancial, 44 Federal and federally sponsored credit agencies, 33 Business expenditures on new plant and equipment, 36 Federal finance Business loans (See Commercial and industrial loans) Debt subject to statutory limitation and types and CAPACITY utilization, 44 ownership of gross debt, 30 Capital accounts Receipts and outlays, 28, 29 Banks, by classes, 17 Treasury operating balance, 28 Federal Reserve Banks, 11 Federal Financing Bank, 28,33 Central banks, 66 Federal funds, 3, 6, 18, 19, 20, 25, 28 Certificates of deposit, 21,25 Federal Home Loan Banks, 33 Commercial and industrial loans Federal Home Loan Mortgage Corporation, 33, 38,39 Commercial banks, 15, 24 Federal Housing Administration, 33, 38,39 Weekly reporting banks, 18-21,22 Federal Intermediate Credit Banks, 33 Commercial banks Federal Land Banks, 33, 39 Assets and liabilities, 3, 15. 17, 18-21 Federal National Mortgage Association, 33, 38, 39 Business loans, 24 Federal Reserve Banks Commercial and industrial loans, 22, 24 Condition statement, 11 Consumer loans held, by type, 40,41 Discount rates (See Interest rates) Loans sold outright, 21 U.S. government securities held, 4,11,12, 30, 31 Nondeposit funds, 16 Federal Reserve credit, 4, 5,11, 12 Number, 17 Federal Reserve notes, 11 Real estate mortgages held, by holder and property, 39 Federally sponsored credit agencies, 33 Commercial paper, 3, 23, 25,37 Finance companies Condition statements (See Assets and liabilities) Assets and liabilities, 37 Construction, 44,48 Business credit, 37 Consumer installment credit, 40, 41 Loans, 18, 19,20, 40,41 Consumer prices, 44, 49 Paper, 23, 25 Consumption expenditures, 50,51 Financial institutions, loans to, 18,19,20 Corporations Float, 4 Profits and their distribution , 35 Flow of funds, 42,43 Security issues, 34,63 Foreign 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 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 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

A75 HOUSING, new and existing units, 48 REAL estate loans Banks, by classes, 18-20, 27, 29 INCOME, personal and national, 44, 50,51 Life insurance companies, 27 Industrial production, 44,46 Mortgage terms, yields, and activity, 3, 38 Installment loans, 40, 41 Type of holder and property mortgaged, 39 Insurance companies, 27, 30, 31, 39 Repurchase agreements and federal funds, 6, 18,19,20 Interbank loans and deposits, 17 Reserve requirements, member banks, 8 Interest rates Reserves Bonds, 3 Commercial banks, 17 Business loans of banks, 24 Federal Reserve Banks, 11 Federal Reserve Banks, 3,7 Member banks, 3, 4, 5, 14,17 Foreign countries, 66 U.S. reserve assets, 53 Money and capital markets, 3, 25 Residential mortgage loans, 38 Mortgages, 3, 38 Retail credit and retail sales, 40,41,44 Prime rate, commercial banks, 24 Time and savings deposits, 9 SAVING International capital transactions of the Flow of funds, 42, 43 United States, 54-65 National income accounts, 51 International organizations, 54-59,62-65 Savings and loan assns., 3,9,27, 31, 39,42 Inventories, 50 Savings deposits (See Time deposits) Investment companies, issues and assets, 35 Savings institutions, selected assets, 27 Investments (See also specific types) Securities (See also U.S. government securities) Banks, by classes, 17,27 Federal and federally sponsored agencies, 33 Commercial banks, 3, 15, 17, 18-20 Foreign transactions, 63 Federal Reserve Banks, 11,12 New issues, 34 Life insurance companies, 27 Prices, 26 Savings and loan associations, 27 Special drawing rights, 4, 11,52, 53 State and local governments LABOR force, 45 Deposits, 18,19, 20 Life insurance companies (See Insurance companies) Holdings of U.S. government securities, 30, 31 Loans (See also specific types) New security issues, 34 Banks, by classes, 17,18—21,27 Ownership of securities of, 18, 19, 20, 27 Commercial banks, 3, 15, 17, 18-21, 22, 24 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 . Capacity utilization, 44 TAX receipts, federal, 29 Production, 44, 47 Time deposits, 3, 9, 12, 14, 17, 18-21 Margin requirements, 26 Trade,foreign, 53 Member banks Treasury currency, Treasury cash, 4 Assets and liabilities, by classes, 17 Treasury deposits, 4,11, 28 Borrowings at Federal Reserve Banks, 5,11 Treasury operating balance, 28 Federal funds and repurchase agreements, 6 Number, 17 UNEMPLOYMENT, 45 Reserve requirements, 8 U.S. balance of payments, 52 Reserves and related items, 3, 4, 5, 14 U.S. government balances Mining production, 47 Commercial bank holdings, 18, 19, 20 Mobile home shipments, 48 Member bank holdings, 14 Monetary aggregates, 3, 14 Treasury deposits at Reserve Banks, 4, 11, 28 Money and capital market rates (See Interest rates) U.S. government securities Money stock measures and components, 3,13 Bank holdings, 17, 18-20, 27, 30, 31 Mortgages (See Real estate loans) Dealer transactions, positions, and financing, 32 Mutual funds (See Investment companies) Federal Reserve Bank holdings, 4, 11, 12, 30, 31 Mutual savings banks, 3, 9,18-20, 27, 30, 31, 39 Foreign and international holdings and transactions, 11, 30, 62 NATIONAL defense outlays, 29 Open market transactions, 10 National income, 50 Outstanding, by type and ownership, 30, 31 Rates, 3,25 OPEN market transactions, 10 Utilities, production, 47 PERSONAL income, 51 Prices VETERANS Administration, 38, 39 Consumer and producer, 44,49 Stock market, 26 WEEKLY reporting banks, 18-22 Prime rate, commercial banks, 24 Wholesale (producer) prices, 44,49 Production, 44,46 Profits, corporate, 35 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories LEGEND m~ 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