Federal Reserve Bulletin, 1982-03

VOLUME 68 • NUMBER 3 • MARCH 1982 FEDERAL RESERVE BULLETIN Board of Governors of the Federal Reserve System Washington, D.C. PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman • Stephen H. Axilrod • Michael Bradfield John M. Denkler • Janet O. Hart • James L. Kichline • 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 125 MONETAR Y POLIC Y REP OR T budget deficits, before the Senate TO CONGRESS Committee on the Budget, March 2, 1982, and before the Senate Committee on While economic activity was disappointing Appropriations, March 4, 1982. last year, signs of progress in reducing inflationary pressures emerged. 174 Lyle E. Gramley, Member, Board of Governors, gives his views regarding the effects 135 INDUSTRIAL DEVELOPMENT BONDS: of financial innovations on the conduct of SOME ASPECTS OF THE CURRENT monetary policy and recommends that the CONTROVERSY Congress impose reserve requirements on money market fund shares and other similar The growth of financing through industrial investments to the extent that they serve as development bonds has raised questions the functional equivalent of transaction balabout the appropriate use of implicit federal ances, regardless of the issuer, before the subsidies and the impact on borrowing Subcommittee on Domestic Monetary Policosts of state and local governments and on cy of the House Committee on Banking, federal revenues. Finance and Urban Affairs, March 3, 1982. 143 TREASURY AND FEDERAL RESERVE 178 Theodore E. Allison, Staff Director for FOREIGN EXCHANGE OPERATIONS Federal Reserve Bank Activities, presents In the exchange markets the dollar first the views of the Board on delayed funds declined and then firmed over the period availability, including what the Board has from August 1981 through January 1982. learned from studies of the problems and practices of delayed availability and what 165 INDUSTRIAL PRODUCTION would be the most productive approach to the problems, before the Subcommittee on Output increased about 1.6 percent in Feb- Consumer Affairs of the Senate Committee ruary. on Banking, Housing, and Urban Affairs, March 19, 1982. 167 STATEMENTS TO CONGRESS Paul A. Volcker, Chairman, Board of Governors, comments on the implications of 185 ANNOUNCEMENTS congressional decisions on spending and revenue measures for the overall fiscal posi- Resignation of Frederick H. Schultz as a tion of the government and for financial member of the Board of Governors. markets, before the House Committee on Amendment of Regulation Z with respect to Ways and Means, February 23, 1982, and the definition of an "arranger of credit" before the Senate Finance Committee on under the Truth in Lending Simplification February 24, 1982. Act. (See Legal Developments.) 171 Chairman Volcker reviews the recent and Publication of a supplement to the list of prospective course of monetary policy and over-the-counter stocks that are subject to its relationship to the problem of curtailing the Federal Reserve's margin regulations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Publication of revised money stock data. AI FINANCIAL AND BUSINESS STATISTICS Proposed policy statement to provide A3 Domestic Financial Statistics guidance on reviews of applications for A46 Domestic Nonfinancial Statistics approval of bank acquisitions, mergers, or A54 International Statistics consolidations; proposed regulatory framework that could be used to establish margin A69 GUIDE TO TABULAR PRESENTATION, requirements on futures contracts based on STATISTICAL RELEASES, AND SPECIAL stock indexes. TABLES Admission of six state banks to membership A70 BOARD OF GOVERNORS AND STAFF in the Federal Reserve System. A72 FEDERAL OPEN MARKET COMMITTEE 189 LEGAL DEVELOPMENTS AND STAFF; ADVISORY COUNCILS Amendment to Regulation Z; various rules and bank holding company and bank merg- A73 FEDERAL RESERVE BANKS, er orders; and pending cases. BRANCHES, AND OFFICES A74 FEDERAL RESERVE BOARD PUBLICATIONS A76 INDEX TO STATISTICAL TABLES A78 MAP OF FEDERAL RESERVE SYSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress Report submitted to the Congress on February continued high—if not accelerating—rates of in- 10, 1982, pursuant to the Full Employment and flation. Thus, it was recognized that reducing Balanced Growth Act of 1978.1 inflation would take time and that anti-inflation policies would have to be applied with persis- MONETARY POLICY AND THE tence if they were to be effective in altering PERFORMANCE OF THE ECONOMY IN 1981 expectations and slowing the rate of increases in prices. The economy was growing rapidly as 1981 be- While fiscal policy and decisions made in the gan, continuing the sharp cyclical rebound that private sector have much to do with the course of had started in mid-1980. Activity leveled out economic developments, economic theory and during the spring and summer, however, and it experience alike indicate that progress toward fell in the final quarter of the year. As a result, price stability cannot be obtained without adethe rate of production of goods and services— quate restraint on the growth of money and real gross national product—was only slightly credit. Monetary policy was conducted in 1981 higher at the end of 1981 than it had been a year with this crucial fact in mind. The Federal Reearlier. With the weakening of output late in the serve set objectives for the growth of the moneyear, the margin of unutilized plant capacity tary aggregates that it believed would help to widened and the unemployment rate rose sharply damp inflation and would lead to movement over to near postwar record levels. time toward trend rates of monetary expansion While economic activity was disappointing last consistent with the growth of potential output at year, signs of progress in reducing inflationary stable prices. pressures were emerging. The rate of price infla- Short-term market rates of interest began 1981 tion slowed from the extremely rapid pace of the at record levels, as rapid growth of economic preceding two years, and as 1981 progressed activity in the second half of 1980 had pushed up there also were indications of an easing in the the demand for money and credit faster than rate of wage increases, particularly in some key could be accommodated within the target ranges pattern-setting industries. for growth of the monetary aggregates and bank Confidence in the restoration of reasonable reserves. Early in 1981 these demands began to overall price stability is needed if economic subside, pressures on bank reserve positions growth is to be resumed on a sustained basis. were relieved, and money market rates declined The accelerating inflation of earlier years had for a time. A bulge in money demand early in the been eroding the foundations of the nation's second quarter was steadily resisted by restraineconomy: capital formation had slowed; produc- ing the supply of reserves, and in the process tivity was sagging; the functioning of basic mar- short-term interest rates moved back to their ket mechanisms was being impaired; and inequi- earlier highs. By midsummer, short-term interest table and capricious transfers of wealth were rates were declining, as demands for money and harming many of the weakest among us. The task credit slackened while the Federal Reserve exof reversing the inflationary trend of earlier years panded nonborrowed reserves in an effort to was made more difficult because a decade of maintain adequate monetary growth. Those deescalating prices and unsuccessful anti-inflation clines in interest rates accelerated in October and policies had led to firmly held expectations of November as the recession took hold. On balance, short-term interest rates—al- 1. The charts for the report are available on request from though volatile—moved down considerably over Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. the course of 1981. In contrast, long-term rates Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

126 Federal Reserve Bulletin • March 1982 rose substantially over the period, despite de- ties, and medical services—as a group—have clines in the last quarter of the year. The pres- been rising faster than the overall inflation rate, sure on long-term rates appeared to reflect a and the share of disposable income devoted to combination of factors. Of continuing strong these items has been increasing. The resulting investor concern were anticipations that contin- squeeze on family budgets led many households ued, large federal budget deficits would clash to overextend themselves during the second half with private credit demands particularly as the of the 1970s, taking on more and more debt to economy expanded and put strong pressures on finance their purchases. credit markets. Despite reductions in the growth With household balance sheets debt-laden and of many federal spending programs, federal bor- credit costs rising, a retrenchment in consumer rowing in calendar year 1981 siphoned off rough- borrowing began in 1980, and continued through ly a quarter of the total funds available to domes- 1981. As the year progressed, household balance tic nonfinancial borrowers. In the background sheets appeared to be improving. Consumer debt were continuing doubts and skepticism that anti- burdens (the ratio of monthly debt repayment inflation programs would be carried through. obligations to income) declined to their lowest Moreover, the volatility of the markets may have level in more than five years. Moreover, partly in inhibited aggressive buying of longer-term secu- response to the higher after-tax income after the rities. tax cut on October 1, the saving rate rose from The tensions in credit markets in 1981 had about 5 percent in the first three quarters of 1981 their greatest impact on capital formation by to 6 percent in the fourth quarter. businesses and households. Housing construc- In real terms, personal consumption expendition fell to its lowest level in the postwar period; tures rose VA percent over the four quarters of only 1.1 million new housing units were started 1981. The gain was concentrated in the early in 1981. The weakness in real estate markets last months of the year as real consumer spending year reflected a number of influences. Of para- fell, on balance, over the final three quarters of mount importance in the short run was the cost 1981. Purchases of new automobiles were hardof mortgage funds. The average rate on mort- est hit. Sales of domestically produced cars gages closed for new homes was 15.3 percent in totaled 6.2 million units in 1981, the poorest the fourth quarter of 1981, up from 12.6 percent a performance in 20 years. The depressed condiyear earlier. But it was not higher mortgage rates tions in the auto sector were related, in part, to alone that cut into housing demand: high prices the typical cyclical volatility in the demand for also adversely affected the ability of those seek- motor vehicles and to credit market conditions, ing new homes to afford the monthly payments. which affected the cost of financing new car and Although house prices changed little in 1981, truck purchases. However, the current problems over the preceding five years prices of new and in the industry appear to be related mainly to existing homes had risen half again as fast at the longer-term trends in the demand for automooverall rate of inflation. As a result, the share of biles. These include the rapid increase in the average family disposable income needed to ser- price of new cars, high gasoline and other operatvice the monthly payment on a typical new ing costs, sluggish growth of real income, intense mortgage rose from 21 percent in 1976 to nearly foreign competition, and government regulations 40 percent last year. that have necessitated large investments to com- Slow income growth and rising unemploy- ply with emission control standards and to imment, along with the increased cost of credit, prove fuel efficiency. As 1981 was ending, the combined to damp consumer spending in 1981— auto industry appeared to be taking aggressive particularly for more discretionary, large-ticket actions to reduce costs and to improve the comitems such as autos, furniture, and appliances. petitiveness of its products. Since the mid-1970s, household real after-tax Business firms, like households, restrained income has only been rising at an annual rate of their spending on investment goods in 1981. Vi percent, compared with a long-run trend of 2 Demand was damped by a substantial degree of percent. At the same time, the prices of essential excess capacity and by the rising trend in corpoitems such as food, gasoline, heating fuel, utili- rate bond rates throughout much of the year, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 127 which boosted the real cost of capital. In real fourth during the period from January to August. terms, expenditures for new plant and equipment The dollar eased somewhat in the last part of rose only IV2 percent over the four quarters of 1981, but at the end of the year still remained 1981. Although spending for new structures in- well above its year-earlier level. The improvecreased during the year, real equipment outlays ment in the inflation outlook in the United States fell for the second year in a row; the biggest was a factor in the appreciation of the dollar. declines were for electrical machinery and trans- Moreover, at various times during the year portation equipment, while spending for most changes in the differential between interest rates other capital goods remained weak. on dollar assets and rates of return on foreign In contrast to fixed investment outlays, sizable currency assets also had a noticeable impact on unintended inventory accumulation boosted busi- exchange rates. ness financing requirements. As the year went Real exports of goods and services increased on, unexpectedly weak demand led to a buildup in the first quarter of 1981, in part because of of excess stocks in several industries. The most strong growth of GNP in one of our major trading pronounced problem was in autos, but other partners, Canada. But for the next three quarmanufacturers and retailers also found their in- ters, real exports declined in response to a slowventory levels uncomfortably high relative to ing of economic growth abroad and the effect of sales. On balance, total nominal business capital the appreciation of the dollar in 1980 and 1981. spending—fixed investment and inventories— The volume of imports, other than oil, rose fairly rose about 20 percent above the 1980 average. steadily throughout the year. The current ac- Early in 1981, strong economic growth helped count, reflecting this weakened trade performboost corporate internal funds, greatly reducing ance, shifted from a surplus in the first quarter to corporate needs for external financing. But as a deficit by the fourth quarter. the economy slowed, corporate profits turned Employment grew at a moderate rate during sluggish and businesses were forced to rely more the first three quarters of 1981 and the unemployheavily on credit markets to satisfy their rising ment rate edged down. Job increases were stroncapital needs. The bulk of business borrowing gest in the service and trade sectors. As economlast year was in short-term markets, as most ic activity began to contract in the autumn, the firms felt it best to defer making long-run com- demand for labor fell sharply and the unemploymitments in the current financial environment. ment rate climbed to 8.8 percent in December— With the accumulation of additional short-term only fractionally below its postwar high. Layoffs debt, however, corporate balance sheet positions in the durable goods and construction industries deteriorated further, and the ratio of short-term accounted for much of the drop in employment. to total debt of the nonfinancial corporate sector As a result, the unemployment rate of adult rose to a record high. men—who tend to be more heavily employed in Real purchases of goods and services at all these industries—jumped to a postwar record of levels of government rose only moderately dur- 7.9 percent in December 1981. ing 1981 as a sharp increase in purchases by the Labor productivity (output per hour worked) federal government was partly offset by curtailed showed considerable fluctuation during 1981, spending at the state and local level. The rise in reflecting the course of economic activity. Profederal spending on goods and services reflected ductivity rose at an annual rate of 1 VA percent in another large increase in defense purchases, the first three quarters of 1981. However, as while federal payroll reductions helped to con- often happens at the beginning of a cyclical tain increases in nondefense outlays. At the state downturn, output fell more than employment in and local level, real purchases fell 2 percent the fourth quarter and productivity declined, owing to a combination of the withdrawal of offsetting the gains earlier in the year. Averaging federal support for many activities, the contin- across short-run cyclical movements, productiviued impact of tax limitation measures, and the ty has shown little improvement in recent years, effects of a sluggish economy on tax revenues. and thus has provided virtually no offset to the The weighted-average value of the dollar impact of rapidly rising compensation on unit against major foreign currencies rose nearly one- labor costs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

128 Federal Reserve Bulletin • March 1982 Compensation and wage increases did deceler- (FOMC) for the various monetary aggregates ate during 1981—with continuing progress ob- anticipated a deceleration in monetary growth served throughout the year. But the slowing was that would encourage further improvement in moderate, reflecting the basic inertia of the price performance. Measured from the fourth wage-determination process, in which many quarter of 1980 to the fourth quarter of 1981, and union contracts last three years or more and abstracting from the effects on deposit structure nonunion wage agreements usually are set annu- of the authorization of negotiable order of withally. By the second half of 1981, however, some drawal (NOW) accounts nationwide, the ranges changes in those traditional wage-setting prac- adopted were as follows: for Ml-A, 3 to 5VI tices were under way in several important indus- percent; for Ml-B, V/2 to 6 percent; for M2,6 to 9 tries: management and workers alike began to percent; and for M3, 6V2 to 9VI percent. The reconsider planned wage adjustments; some ex- associated range for commercial bank credit was piring contracts were renegotiated well in ad- 6 to 9 percent. vance of termination dates; and labor agreements In formulating its objectives for 1981, the at a number of firms were modified in an effort to FOMC knew that the growth rates of the narrow ease cost pressures and to enable firms to com- aggregates would be affected markedly by shifts pete more effectively. These adjustments, cou- into NOW accounts, which for the first time pled with the progress seen in reducing inflation became available on a nationwide basis in Januduring 1981, suggest that the nation's anti-infla- ary. Transfers into NOW accounts, which are tion policies have set the stage for a sustained included in Ml-B, from savings deposits and unwinding of wage and price increases. other asset holdings not included in Ml were The trend in inflation improved noticeably expected to be particularly large in the early during 1981, and by year-end virtually all aggre- months of the year. Thus, in order to avoid gate price indexes were advancing well below confusion about the intent of policy and to facilidouble-digit rates for the first time since 1978. tate comparisons with previous years, the objec- The consumer price index rose 8.9 percent over tives announced for Ml-B abstracted from such the course of 1981, down from the average rate of shifts.2 Even after accounting for such shifts, nearly 13 percent in 1979 and 1980. Important however, the FOMC anticipated that the growth factors in the slowing of inflation were excep- rates of the various aggregates were likely to tionally favorable agricultural supplies and de- diverge more than usual, reflecting the rapid clines, after the first quarter, in world oil prices. pace of institutional change in financial markets. Inflation in areas other than food and energy— The FOMC indicated that if Ml-B growth particularly consumer commodities and capital (adjusted for shifts into new NOW accounts and equipment—also began to abate, although price other checkable deposits) was about in the midpressures persisted in the consumer service sec- dle of its annual range, the growth of M2 was tor, notably for medical care. As the year pro- likely to be in the upper part of its range, given gressed, surveys of consumer expectations sug- the popularity of the nontransaction components gested that the inflationary psychology, which of M2 that pay market-related interest rates. It had increasingly permeated many aspects of eco- also was noted that the relationship of M3 and nomic behavior in earlier years, appeared to be bank credit to their respective ranges would be subsiding. influenced in an important way by the pattern of credit flows that would emerge, and particularly by whether financial conditions would be conducive for corporations to refinance short-term THE GROWTH OF borrowing in the bond and equity markets. MONEY AND CREDIT IN 1981 It soon became apparent as 1981 unfolded that The Board of Governors in its report to the the behavior of the aggregates was turning out to Congress last February indicated that the System intended to maintain restraint in the expansion of 2. The shift adjustments were estimated on the basis of money and credit in 1981. The specific ranges survey evidence and were published regularly over the past chosen by the Federal Open Market Committee year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 129 be even more divergent than had been anticipat- declines in the summer and fall and in part a shift ed. Growth rates of the shift-adjusted narrow to preferences for very liquid assets in an enviaggregates were low in the opening months of the ronment of heightened economic and financial year, a development that was welcome following uncertainty. Similarly, M2 growth in the second rapid growth in the latter part of 1980. A strong half was about in line with expansion in the first surge in April was offset by weakness over the half, although growth in this measure also picked remainder of the second quarter. On the whole, up at the end of the year. The expansion in M3, average growth in adjusted Ml-B over the first on the other hand, decelerated from the rapid half of 1981 was well below the growth that pace of the first half, as sales of large certificates would have been expected on the basis of histori- of deposit slowed in concert with a slackening in cal relationships among money, GNP, and inter- growth of bank credit and stronger growth in est rates. On the other hand, despite the weak- core deposits. ness in Ml-B, the broader aggregates expanded Measuring growth for the year from the fourth quite rapidly in early 1981. Growth in M2 over quarter of 1980 to the fourth quarter of 1981, the first half was near the upper end of its annual growth in Ml-B adjusted for shifts into NOW range, while the expansion of M3 placed this accounts was about 2!/4 percent—VA percentage aggregate above the upper bound of its range at points below the lower end of its targeted range.3 midyear. Growth rates, of course, are affected by the After reassessing its objectives for 1981 at particular pattern of variation that develops over midyear, the FOMC elected to leave unchanged the course of the year. Measuring expansion the previously established ranges for the aggre- from December to December, growth in adjusted gates over the remainder of the year. However, Ml-B in 1981 was at a rate of 3Vi percent. On a in light of the reduced growth in Ml-type bal- yearly average basis, which reflects movements ances over the first half of the year, indications through the year as a whole relative to the level that this weakness might reflect a lasting change of the previous year, the increase was at a rate of in cash management practices of individuals and 43/4 percent. At the same time, measured from businesses related to the growth of alternative the fourth quarter of 1980 to the fourth quarter of means of holding highly liquid funds, and given 1981, growth of M2 was 9.4 percent, 0.4 percentthe relatively strong growth of the broader aggre- age point above the upper limit of its range. Also, gates, the FOMC anticipated that growth of the growth of M3 exceeded the upper end of its range narrow aggregates might likely and desirably end by 1.9 percentage points, while bank credit the year near the lower bounds of their annual growth was just inside the upper end of its annual ranges. Even so, given the sluggishness early in range. the year, this decision implied that growth of Table 1 puts the performance of the aggregates Ml-A and Ml-B would accelerate over the bal- during 1981 into a somewhat longer-term perance of the year. At the same time, the FOMC spective, showing two measures of annual indicated that M2 and M3 might well end the year growth. No matter which of the measures of around the upper ends of their ranges. This annual growth is used, a marked deceleration in expectation also reflected in part the possibility Ml-B since 1978 is apparent. The table also that regulatory and legislative actions as well as clearly illustrates that growth rates for the broadthe popularity of money market mutual funds er aggregates have been maintained around a might intensify the public's preference to hold higher level, and larger divergences have develthe type of assets encompassed in the broader oped from growth of Ml-B. In considerable part, aggregates. these differences can be explained by structural Although growth of narrow money in the sec- changes in financial markets. ond half of the year was on average about the As noted earlier, it was already obvious last same as in the first half, Ml-B strengthened February when the FOMC was meeting to set its appreciably in the final two months of the year. This acceleration appeared to reflect in part a 3. Unadjusted for shifts into NOW accounts, Ml-B increased 5.0 percent from the fourth quarter of 1980 to the lagged response to large short-term interest rate fourth quarter of 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

130 Federal Reserve Bulletin • March 1982 interest rates provided a substantial incentive for 1. Growth of money and bank credit Percentage changes businesses to intensify efforts to pare narrow money balances and to make increasingly wide- Period Ml-B1 M2 M3 Bank credit2 spread use of sophisticated cash management Fourth quarter to techniques. At the same time, explosive growth fourth quarter 1978 8.3 8.3 11.3 13.3 of money market mutual funds (MMMFs), many 1979 7.5 8.4 9.8 12.6 of which offer check-writing or other third-party- 1980 6.6 9.1 9.9 8.0 1981 2.3 9.4 11.4 8.8 payment services comparable with conventional Annual average to checking accounts, appeared to induce some annual average 1978 8.2 8.8 11.8 12.4 households to minimize checking account bal- 1979 7.7 8.5 10.3 13.5 ances. Also, the broader availability of NOW 1980 5.9 8.3 9.3 8.5 1981 4.7 9.7 11.5 9.4 accounts may have stimulated households to reconsider in a more general way their habits of 1. Growth rates for 1980 and 1981 adjusted for shifts to other checkable deposit accounts since the end of the preceding year. cash management. 2. The December level used for calculating these 1981 growth rates Likewise, the strong growth of M2 over the incorporates an adjustment to abstract from the shifting of assets from domestic banking offices to international banking facilities. past few years reflected changing financial practices. Money market funds and instruments ofobjectives for 1981 that shifts into NOW ac- fered by depository institutions that pay marketcounts after their nationwide authorization at the related interest rates have been accounting for an beginning of 1981 would alter the behavior of the increasing proportion of M2, as such assets have narrow aggregates. Data for early January had become much more competitive with open marpointed to a very large movement of funds at the ket instruments. Indeed, the attractiveness of beginning of the year. However, the pattern and small time deposits was enhanced last year by magnitude of subsequent movements could not the liberalization of the interest rate ceilings on be predicted with any certainty. As events un- small savers certificates and to a limited extent folded, the shifts into NOW accounts were more by the introduction of all savers certificates. concentrated in the early part of 1981 than was Even so, three-fourths of the increase in the anticipated by the working assumptions of the nontransaction components of M2 was account- Board's staff. Through June, the adjustments ed for by MMMFs, which grew 140 percent last made to the aggregates to correct for such shifts year. had the effect of raising Ml-A by $28 billion and The distortions in the aggregates resulting lowering Ml-B by %9Vi billion. Over the second from the expansion in MMMFs are difficult to half of 1981, further adjustments for shifts into quantify. Surveys of household behavior and NOW accounts raised Ml-A by only another $6 data on account turnover suggest that most billion and lowered Ml-B by about %2Vi billion shareholders of money funds have made little or more. While these adjustments are imprecise and no use of their accounts for transaction purbased on evidence from a variety of sources, poses. Thus, the direct substitution effect of data on the number of NOW accounts coupled MMMFs on the growth of Ml has appeared with other available information confirm that the small, perhaps on the order of 1 percentage point shifting of funds from demand deposits to new on the rate of growth for the year. However, interest-bearing checking accounts tapered off indirect effects may have been larger as the considerably by the fall. A surge in NOW ac- potential availability of such a highly liquid asset count balances near the end of the year and early may facilitate holding less funds in demand and in 1982 appeared to reflect primarily the precau- NOW accounts. tionary savings behavior already noted rather The direct effect of MMMFs on M2 appears than shifting of funds into new accounts. more substantial in dollar terms. Presumably, the As already indicated, the growth of the narrow great bulk of the inflow of $20 billion in 1981 to aggregates adjusted for shifts into NOW ac- MMMFs catering only to institutional investors counts was low in 1981 compared with the other was funds that otherwise would have been inaggregates and also relative to past relationships vested in assets not included in M2. In addition, with income and interest rates. Continued high it seems likely that a small portion of the growth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 131 of $90 billion in other types of MMMFs also centage point less than shown by the adjusted reflected diversions from assets not in M2. data. In light of the sizable distortions created by the Broader measures of credit flows reflected the growth of institution-only MMMFs, such funds slowing pace of production and income in 1981 have been excluded from the revised M2, but and the effects of high interest rates. Households they will continue to be a component of M3. In and businesses continued to increase their boraddition, M2 has been revised to include retail rowing over the first three quarters, but their use repurchase agreements (RPs). Retail RPs, which of credit contracted in the fourth quarter in previously had been a component only of M3, response to the weakening of the economy. In were promoted on a substantial scale in 1981, view of the high level of long-term interest rates likely attracting funds mainly from household during most of 1981, virtually all of the increase small-denomination time deposits and MMMF in funds raised was in short-term debt instruholdings and thus resulting in a downward bias ments. Overall, net funds raised by nonfinancial on M2 growth. The net effect on M2 growth of sectors rose 7 percent in 1981 and continued to reclassifying institution-only MMMFs and retail fall relative to GNP for the third consecutive RPs, along with other minor revisions, was year. small. M3 increased more rapidly than M2 last year largely because of the substantial expansion in THE FEDERAL RESERVE S OBJECTIVES large CDs, particularly over the first half of the FOR THE GROWTH OF MONEY AND CREDIT year. With growth of core deposits weak on balance over the year, depository institutions The Federal Reserve remains committed to reincreased their managed liabilities to support straint on the growth of money and credit in expansion in loans and investments. order to exert continuing downward pressure on Growth in bank credit accelerated somewhat the rate of inflation. Such a policy is essential if in 1981 but stayed just within the upper end of its the groundwork is to be laid for sustained ecoannual target range. The pickup in bank credit nomic expansion. growth was concentrated in business loans. A distinct slowing of inflation occurred during Growth in this category was bolstered by the 1981, and the prospects for further progress are high level of corporate bond rates through most good. Failure to persist in the effort to maintain of the year, which tended to focus business the improvement would have long-lasting and credit demands on short-term borrowing such as damaging consequences. Once again, underlying bank loans and commercial paper. Although expectations would deteriorate, with potentially merger activity contributed significantly to the adverse effects on financial markets, particularly growth of loan commitments over the year, actu- long-term rates. The result would be to embed al takedowns for this purpose influenced loan inflation even more deeply into the nation's growth only slightly. Real estate loans at banks economic system—with the attendant debilitatin 1981 grew at about the same moderate pace as ing consequences for the performance of the in 1980, while consumer lending strengthened a economy. A failure to continue on the current little from 1980. Security holdings at banks grew path would mean that the next effort would be somewhat more slowly than loans in 1981. associated with still greater hardship. The bank credit data in December were affect- Progress toward price stability can be ed by the shifting of assets to accounts in the achieved most effectively and with the least newly authorized international banking facilities amount of economic disruption by the concerted (IBFs). About $22 billion of loans to foreign application of monetary, fiscal, regulatory, and customers are estimated to have shifted from other economic policies. But quite clearly infla- U.S. offices to IBFs in December. The data tion cannot persist over an extended period presented in this report are adjusted for this shift. unless financed by excessive growth of money. Without this adjustment, the increase in bank Thus, a policy of restraint on the growth of the credit from the fourth quarter of 1980 to the monetary aggregates is a key element in an antifourth quarter of 1981 was SlA percent, Vi per- inflation strategy. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

132 Federal Reserve Bulletin • March 1982 Targets for the monetary aggregates have been Federal Reserve's commitment to reduce inflaset with the aim of slowing the expansion of tionary forces. As has been typical in the past, money over time to rates consistent with the these changes are measured from actual fourthneeds of an economy growing in line with its quarter levels from the previous year.5 productive potential at reasonably stable prices. During 1981, Ml-B (shift-adjusted) rose slowly The speed with which the trend of monetary in relation to nominal GNP.6 On the assumption growth can be lowered without unduly disturbing that the relationship between growth of Ml and effects on short-run economic performance de- the rise of nominal GNP is likely to be more pends, in part, on the credibility of anti-inflation normal in 1982, and given the relatively low base policies and their effects on price expectations as for the range of Ml-B, the Committee contemwell as on other forces influencing interest rates plated that growth in Ml this year may well be in and credit market demands, including important- the upper part of its range. At the same time, the ly the fiscal position of the federal government. FOMC elected to retain the lower bound of 2Vi More technically, financial innovation or other percent for growth of Ml that was tentatively set factors affecting the demand for specific forms of last July in recognition of the possibility that money need to be monitored. financial innovations—especially techniques for In its deliberations concerning the target economizing on the use of checking account ranges for 1982, the Committee recognized that balances included in Ml—could accelerate, with the recent rapid increase in Ml placed the mea- restraining effects on growth of Ml. sure in January well above the average level The actual and potential effects on Ml of during the fourth quarter of 1981, the conven- ongoing changes in financial technology and the tional base for the new target. Experience has greater availability of a wide variety of moneyshown that, from time to time, Ml growth can like instruments and near-monies strongly sugfluctuate rather sharply over short periods, and gest the need for also giving careful attention to these movements may be at least partially re- developments with respect to broader money versed fairly quickly. The available analysis sug- measures in the implementation of monetary gested that the recent increase reflected in part policy. The range for growth of M2 is the same as some temporary factors of that kind, rather than in 1981 when actual growth slightly exceeded the signaling a basic change in the amount of money upper bound of the range. The Committee conneeded to finance growth in nominal GNP. templated that M2 growth in 1982 would be In light of all these considerations, the FOMC somewhat below the 1981 pace, although probareaffirmed the following ranges of monetary ex- bly in the upper part of the range. However, pansion—tentatively set out in mid-1981—for the should personal saving, responding to recent year ending in the fourth quarter of 1982: for Ml, changes in tax law or other influences, grow 2Vi to 51/2 percent; for M2, 6 to 9 percent, and for much more rapidly in relation to income than M3, VA\o 9V percent.4The FOMC also adopted now anticipated, or should depository institu- 2 a corresponding range of 6 to 9 percent for tions attract an exceptionally large inflow to commercial bank credit. These ranges are the individual retirement accounts from sources outsame as those agreed to in July and reaffirm the side measured M2, growth of M2 might appropriately reach—or even slightly exceed—the upper 4. The objective for growth of narrowly defined money over 1982 is set in terms of Ml only. Last February, when the FOMC set its targets for narrow money, it recognized that regulatory changes allowing for the establishment of nation- 5. Because of the introduction of IBFs, the bank credit data wide NOW accounts would distort the observed behavior of after December 1981 are not comparable with earlier data. Ml-A and Ml-B. Accordingly, the targets were set on a basis Thus, the targets for 1982 are in terms of growth from an that abstracted from the shifting of funds into interest-bearing average of December 1981 and January 1982 to the average checkable deposits. Based on a variety of evidence suggest- level in the fourth quarter of 1982. ing that the bulk of the shift to NOW accounts had occurred 6. Ml-B velocity, before shift adjustment, rose at a rate by late 1981, the Federal Reserve reaffirmed in December its closer to historical experience. However, the shift of funds previously announced intention that starting in January 1982 from savings accounts or other sources of funds not included shift adjustments would no longer be published and only a in measures of the narrow money supply temporarily desingle Ml figure would be released with the same coverage as pressed that velocity figure, particularly early in the year. Ml-B. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 133 end of the range. The ability of depository insti- levels. A continuation of high levels of long-term tutions to compete for the public's savings will, rates also would inhibit the recovery in residenof course, also be affected in part by deregula- tial housing, although demographic factors will tory decisions that may be made by the Deposi- continue to buttress demands in that sector. tory Institutions Deregulation Committee. The effort to deal with inflation is at a critical The 1982 ranges for M3 and bank credit were juncture. The upward trend in inflation clearly left unchanged from those for 1981. These aggre- has been halted and the process of reversal is gates again will be influenced importantly by the under way. There are signs that price setting, degree to which credit demands tend to be fo- wage bargaining, and personal spending decicused on short-term borrowing and are funded at sions are beginning to be made and that these home or abroad. decisions over time will serve to moderate, rather than to intensify, inflationary pressures. Nonetheless, the behavior of financial markets and THE OUTLOOK FOR THE ECONOMY IN 1982 other evidence strongly suggests the continued existence of considerable skepticism that prog- Economic activity still appears to be contracting; ress in reducing inflation will be maintained. industrial production and employment certainly Lasting improvement in financial markets—pardeclined further in January, with the extent of ticularly for longer-term instruments—is depenthe fall worsened by exceptionally bad winter dent on confidence that progress against inflation storms. Demand in the key sectors that had led will continue; looming federal deficits have the decline—housing and consumer spending— served to shake that confidence. Prospects for showed some signs of leveling off as the year lower interest rates and for sustaining recovery began, and the recent cuts in production likely over a long period—indeed for the timing of have helped to relieve some of the remaining recovery—are thus tied to prospects for a more inventory imbalances. Recent weather-related stable price level. disruptions may affect the incoming data for a How we emerge from the current recession time, but the economy appears to be in the will be crucial to further curtailing inflation. The process of bottoming out, and a perceptible recovery phases that have followed recent recesrecovery in business activity seems likely before sions have sometimes been associated with an midyear. acceleration of inflation. However, if monetary One element supporting final demands in the and fiscal policies are appropriately disciplined, economy is the federal government. Part of the this pattern need not recur; and recovery from recent expansion in the deficit reflects the cush- the current recession will be consistent with ioning effects of reduced taxes and increased further progress toward achieving sustainable government expenditures that result from declin- growth, price stability, and lower levels of intering income growth and rising unemployment. In est rates. addition, however, the buildup in defense spend- Given the current circumstances and in light of ing is a continuing source of stimulus. The sec- the objectives for the monetary aggregates for ond phase of the tax reductions that occurs in the coming year, the individual members of the July will provide another expansionary impetus to the economy. At the same time, the deficit— particularly if expected to continue at exception- 2. Economic projections for 1982 ally high levels in later years—adversely influ- Percent ences current financial market conditions. Projected for 1982 The Federal Reserve's objectives for money PPeerriioodd AAccttuuaall 11998811 FOMC Adminigrowth in 1982 are consistent with recovery in members stration economic activity. The expansion is likely to be Changes, fourth quarter to concentrated initially in consumer spending. fourth quarter Given the substantial margin of excess capacity, Nominal GNP 9.3 8 to 10'/2 10.4 Real GNP .7 Vt to 3 3.0 outlays for business fixed investment may re- GNP deflator 8.6 6l/z to 7% 7.2 Average level in the main weak, particularly if long-term interest fourth quarter rates continue to fluctuate near their current high Unemployment rate 8.3 8l/4 to 9Vi 8.4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

134 Federal Reserve Bulletin • March 1982 FOMC have formulated projections for econom- The FOMC members' projections generally ic performance in 1982 that generally fall within encompass those that underlie the administrathe ranges indicated in table 2. The members of tion's recent budget proposals. The consensus the FOMC expect inflation to continue to moder- view of the FOMC anticipates an improvement ate in 1982. At the same time, real activity is in inflation during 1982 comparable with the expected to accelerate with most of the growth administration's as well as a similar outlook for coming in the second half of the year. With the labor market. The administration's projecinflation continuing to be substantial and the tion for real growth falls at the high end of the prospect of the federal budget deficit remaining FOMC consensus. In the event prices and wages large even as the recovery gathers momentum, should respond more rapidly to anti-inflation demands for credit should intensify as the year policies than historical experience would suggest progresses. In these circumstances, the recovery or should more favorable productivity trends is likely to be somewhat restrained, with the develop, then the recovery could be faster withresult that unemployment probably still will be out adverse pressures developing on prices, substantial at year-end. wages, and interest rates. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

135 Industrial Development Bonds: Some Aspects of the Current Controversy Daniel E. Laufenberg of the Board's Division of turing corporations. Such uses seem to contra- Research and Statistics prepared this article. dict the intent of the Revenue and Expenditure Control Act of 1968, which imposed maximum Tax-exempt securities have been the traditional dollar limits on the size of the IDB issue or on the means by which state and local governmental total capital expenditures on any one project units have financed the construction of schools, financed in part or in whole by IDBs, except for roads, hospitals, and other public improvements. special purposes. In recent years, another category of these "mu- This paper reviews the legal definitions of nicipal" securities, generally referred to as in- small-issue and selected-purpose IDBs to produstrial development bonds (IDBs), has become vide a clearer distinction between IDBs and important. IDBs are issued by state and local traditional municipal issues; analyzes the costs units on behalf of private businesses to finance and benefits of using tax-exempt financing to industrial and commercial projects. The growth promote local development; and discusses the of IDB financing has stirred considerable contro- current concerns about IDB issuance. versy, centering on the appropriate use of implicit federal subsidies and the impact on the borrowing costs of state and local governments. BACKGROUND Moreover, concern has arisen about the impact on federal revenues of the tax exemption of The use of public tax-exempt credit for private interest earned on IDBs; partly for this reason, business purposes had its origin in the United the Reagan administration has proposed curtail- States in 1936, when Mississippi authorized citment of IDB issuance as part of its budget ies and counties to incur general-obligation inprogram. debtedness to construct industrial buildings for Hundreds of state agencies, local development lease to private enterprise. Other states in the agencies, counties, and cities have issued IDBs South and a few in other regions followed suit in the name of local economic development. But after World War II, but through the 1950s the many of the uses to which this financing vehicle volume of IDBs was relatively small. has been put has raised doubts about legitimate In the early 1960s, the total of IDB issuance public purpose. A recent study by the Congres- picked up substantially as more use was made of sional Budget Office noted that some less con- the revenue version of IDBs, which is secured by ventional uses of small-issue IDBs have become the property or receipts of the project financed common, such as commercial real estate devel- rather than the full faith and credit of the issuer, opment, retail stores, recreational facilities, tour- and as businesses of all sizes participated in ist facilities, and proprietary health facilities.1 locally sponsored development programs. By Moreover, small-issue IDB financing is being 1968, IDBs, most of which were revenue bonds, used extensively by large national retailers and represented 10 percent of all long-term tax-exsomewhat less extensively by large manufac- empt bond sales. The growing popularity of such bonds alarmed Treasury Department officials because IDBs threatened sizable losses of tax revenues. As a 1. Small Issue Industrial Revenue Bonds. Congress of the result, the Treasury ruled in 1967 that IDBs were United States, Budget Office, September 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

136 Federal Reserve Bulletin • March 1982 subject to taxation. This ruling was withdrawn, the issuance of the bonds also must be counted however, when the Congress enacted the Reve- against the limit.2 nue and Expenditure Control Act of 1968, the In general, capital expenditures must be taken statute that still governs IDB issuance. Under into account if those expenditures are properly this statute, tax-exempt status is denied IDBs chargeable to the capital account of the principal except those that are designated as "small is- user or a related person. There are, however, sues" or those that finance certain types of exceptions to the "related person" rule when facilities. such capital expenditures are made by exempt entities. For example, the IRS has ruled that capital expenditures by the local governmental LEGAL LIMITS ON IDB ISSUANCE unit do not count against the $10 million limit unless the expenditures are used to construct Securities issued by state and local governmental facilities that are clearly a part of the project units are defined as IDBs in the 1968 legislation if financed with IDBs. On the other hand, capital they satisfy two tests. The first is the "trade or expenditures by a charitable trust or a nonprofit business test," which is met if a major portion of corporation involved in an IDB financing do not bond proceeds are used in business by a nonex- count against the limit even if the expenditures empt entity—one other than a state or local are directly for the financed project. government or organization. The second is the "security interest test," which is met if a major portion of the debt service is secured by property Exempt Facilities used in or payments derived from a business, regardless of whether the bonds are also general In addition to the small-issue exemption, the obligations of the issuer. IDB issues in recent Revenue and Expenditure Control Act permits years have been exclusively revenue bonds, and the issuance of IDBs, without limits on the size increasingly have been called industrial revenue of the issue or the total capital expenditures on bonds (IRBs). For the remainder of this paper, the project being financed, if substantially all of IDB and IRB are used synonymously. the proceeds are used for selected purposes.3 Although a few of these purposes are considered to be traditional municipal functions when pro- Small Issues of vided by state and local governments, most of Industrial Development Bonds them are not generally viewed as appropriate uses of tax-exempt financing. The Revenue and Expenditure Control Act of The Public Securities Association, the primary 1968 provides a tax exemption for certain small source of data on the issuance of tax-exempt issues of industrial development bonds. Under securities, reports the volume of all municipal this exemption, the governmental unit issuing the bonds on the basis of the purpose for which they bonds may select a limit of either $1 million or are issued (table 1), but does not provide a $10 million. In either case, substantially all of the breakdown between IDBs and other tax-exempt proceeds from the issues must be used to ac- securities issued for each purpose. Thus the quire, construct, or improve depreciable proper- precise relative importance of IDBs in the taxty. An IDB issue is within the $1 million exemp- exempt market is impossible to quantify, but it is tion if the sum of the proposed issue and outstanding IDBs, whether or not by the same issuer but used to finance facilities for the princi- 2. For a project that also has financing under the Urban Development Action Grant program, the capital expenditure pal user in the same jurisdiction, is no greater limit is $20 million, but the tax-exempt issue cannot exceed than $1 million. If the issuer elects the $10 million $10 million. limit, all capital expenditures incurred by the 3. Substantially all of the proceeds, defined as 90 percent of an amount equal to the bond proceeds less the issuance principal user in the issuing jurisdiction during cost and a reasonable debt reserve fund, must be used to the six-year period beginning three years before purchase land or depreciable property. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Development Bonds 137 1. New security issues of state and local facilities. At least 90 percent of such fuel must be governments, 1978-81 produced at, or adjacent to, the steam- or alcohol-producing facilities. Item 1978 1979 1980 1981 Millions of dollars Electric Energy and Gas Facilities. The princi- All issues1 48,352 43,335 48,368 47,515 pal factor in determining whether tax-exempt Refunding and advance financing is available for privately owned electric refunding 10,767 1,925 1,768 1,201 New capital 37,585 41,410 46,600 46,314 energy and gas facilities is the size of the service areas. Only "local furnishing" facilities, which Percent are facilities that service an area no larger than Use of proceeds Education 13.0 12.5 10.0 10.0 two contiguous counties or a city and a contigu- Social welfare and public services 6.0 2.0 2.0 3.0 ous county, qualify for the exemption. More- Transportation 9.0 6.0 5.5 7.0 over, the Internal Revenue Service has ruled to Hospitals 6.0 8.0 8.0 12.0 Utilities 24.0 20.5 17.0 22.0 allow tax-exempt financing for a privately owned Housing 16.0 29.0 33.0 13.0 Recreation 2.0 1.0 1.0 1.0 electric generating facility that served a distribu- Industrial aid2 2.0 4.0 4.0 7.0 tion system located entirely within two counties Industrial pollution control 7.0 5.0 5.0 9.0 Other purposes 15.0 12.0 14.5 16.0 but was owned and operated by a wholly owned subsidiary corporation of a utility that furnished 1. Par amounts of long-term issues based on date of sale. 2. The percent of new capital used for industrial aid purposes is electric energy to the general public in many based on data from the Public Securities Association, which according areas of the state. to a recent Congressional Budget Office study, substantially understate the volume of small-issue industrial development bonds sold during the past four years. The reason for this discrepancy is that many small issues are privately placed with commercial banks or Airports, Docks, and Wharves. Privately other lenders and are seldom reported beyond the state level. owned airports, docks, and wharves are eligible SOURCE. Public Securities Association. for tax-exempt financing if they satisfy the public-use test. Airports satisfy this test if they are clearly greater than that inferred from simply available to the general public or are served by a adding the industrial-aid and pollution-control common or charter carrier that is publicly availcategories in table 1, given the following long list able. This exemption applies to facilities that are of purposes that are eligible for the special ex- directly related and essential to aircraft landing emption. and takeoff, as well as to those related to servicing aircraft and transferring passengers and car- Sewage or Sold-Waste-Disposal Facilities. go. Subordinate facilities that also qualify for the Privately owned sewage and solid-waste-dispos- exemption include in-flight meal facilities; comal facilities qualify for a special-purpose exemp- mercial space in terminals and hotels to be used tion if they are used for the collection, storage, by passengers, all of which must be located at the treatment, utilization, processing, or final dis- airport; and certain improved or unimproved posal of sewage and solid waste, and if they are land adjacent to the airport. Facilities at the available to the general public. In recent years airport used to customize new aircraft do not the separation from garbage of combustible ma- qualify. terial used as fuel has given this material market Docks and wharves satisfy the public-use test value in some areas. As such, it did not qualify as if they are available for use by the general public, solid waste within the meaning of the Revenue are served by a common or charter carrier that is and Expenditure Control Act of 1968. For exam- publicly available, or are part of a public port. ple, boilers that burned combustible waste no Functionally related and subordinate facilities longer qualified as solid waste disposal facilities. include cranes, conveyors, and training and stor- To clarify this point, the Windfall Profits Tax Act age facilities. The IRS has ruled that offshore oil of 1980 added a section to the Internal Revenue ports and onshore oil-storage facilities qualify as Code that expanded the definition of solid-waste- exempt facilities but that docks located in a disposal facilities to include qualified steam-gen- public port to be used for construction of vessels erating facilities and qualified alcohol-producing do not qualify. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

138 Federal Reserve Bulletin • March 1982 Pollution-Control Facilities. Facilities for air exemption does not apply if debt service is or water pollution control installed by privately guaranteed, either directly or indirectly, by the owned companies are considered exempt if they federal government pursuant to an energy-proremove, alter, dispose, or store pollutants. In duction or conservation program. this regard, smokestacks do not qualify because they merely disperse pollutants. Moreover, no Industrial Parks. IDBs are exempt if they are part of the cost of a new production facility that issued to finance the acquisition or development avoids the creation of pollutants, rather than of land used as building sites by industrial, treating the pollutants after they are created, distribution, or wholesale businesses. These are qualifies for the exemption. industrial parks and must be administered by an exempt entity or developed under an overall plan Facilities for the Furnishing of Water. An subject to special zoning restrictions to qualify exemption is provided in the tax code for private- for the exemption. For the purposes of this ly owned facilities that furnish water to the exemption, development of land includes providgeneral public, and that are operated by a gov- ing water, sewage, and drainage facilities; road, ernmental unit or charge rates established or railroad, docking, and similar transportation faapproved by a state or political subdivision, an cilities; and power or communication facilities. It agency or instrumentality of the United States, does not include the construction of buildings or or a public utility commission or a similar body other structures. of any state or political subdivision. Mass Commuting Facilities. Mass commuting Sports and Convention or Trade-Show Facili- facilities eligible for tax-exempt financing include ties. Privately owned sports facilities that are real property and improvements and personal eligible for tax-exempt financing without limits property including buses, train cars, subway on the size of the issue include baseball and cars, and similar vehicles leased to mass transit football stadiums, indoor sports arenas, swim- systems owned by state or local governments. ming pools, golf courses, ski slopes, and tennis courts. Facilities directly related to exempt Residential Mortgage Programs. Proceeds of sports facilities, including bathhouses, club- tax-exempt bonds also are used to finance resihouses, parking lots, and ski lifts (but not an dential mortgages. Single-family mortgage bonds overnight ski lodge), are also exempt. are issued under two general types of programs, For convention or trade-show facilities, only mortgage-purchase programs and loan-to-lender the special-purpose buildings and structures such programs. Under a mortgage-purchase program, as meeting halls and display areas qualify under the proceeds are used by the issuer to acquire this exemption. To meet the public-use test, the mortgages that are originated and serviced by facility must be available for rent by the general participating financial institutions. This type of public, which means it cannot be leased subject program has been viewed traditionally by bond to a long-term contract with one user or group of counsel as not being an IDB-financed project users. Tax exemption does not apply to bonds because the mortgages purchased are considered issued to finance a hotel, even though most of its assets of the issuer rather than of the participatclientele are expected to be delegates or partici- ing financial institutions. Under a loan-to-lender pants at conventions and trade shows. program, the bonds are issued on behalf of participating financial institutions, which in turn Qualified Hydroelectric Generating Facilities. use the proceeds to finance mortgages that are In 1980, the tax code was amended to permit the held as assets of the financial institutions rather issuance of IDBs for qualified hydroelectric gen- than the governmental authority. This type of erating facilities. Such a facility qualifies if the program has been viewed by bond counsel as an property is owned for tax purposes by a state or IDB-financed project. political subdivision, and if the facility generates The marked increase in the issuance of taxelectricity from the flow or fall of water. The exempt bonds during 1979-80 to finance residen- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Development Bonds 139 tial mortgages, mortgages that largely benefited important topic in the current debate on tax middle-income households, raised doubts about reform. The advantages of IDBs explain why the the propriety of this use of tax-exempt financing. volume of such bonds has become so great, and This concern and the potential loss of tax reve- the disadvantages of IDBs explain why their nue to the Treasury were the principal factors purposes have been questioned. behind the passage of the Mortgage Subsidy Bond Tax Act of 1980, which prohibits the issuance of any bonds to subsidize single-family Some Advantages mortgages after December 31, 1983, and places substantial restrictions on the issuance of such Industrial development bond financing is one of a bonds in the interim: variety of incentives a state or local government can offer business firms to locate or to remain 1. The residence securing the mortgage must within its jurisdiction.4 In principle, IDBs can be be the principal residence of the borrower. an effective way to target investment on indus- 2. A borrower may not have had an ownership tries and areas so as to contribute substantially to interest in a principal residence during the threemore balanced national economic growth. Howyear period before execution of the mortgage. ever, to the extent that local authorities every- 3. The purchase price of the residence fiwhere use IDB financing to compete against each nanced may not exceed 90 percent of the average other, any regional benefits to private businesses purchase price of single-family residences during are eliminated and such financing functions simthe most recent 12-month period for which such ply as a conduit to the tax-exempt market. information is available in the statistical area in Like that of any other tax-exempt security, the which the residence is located. cost of the IDB subsidy is borne by the federal 4. Each state is limited in the aggregate princigovernment but the subsidy is used at the discrepal amount of bonds that it and its political tion of the local authority. Moreover, in the case subdivisions can issue annually. of revenue bonds no liability is assigned to the 5. The arbitrage differential permitted beissuing authority for the debt service on the tween the effective rate of interest on the mortbonds, and few if any limits are placed on the gages financed by the bond proceeds and the total volume issued.5 Thus, constituents of the yield on the bonds cannot exceed 1 percent for issuing jurisdictions are seldom concerned about mortgage-purchase programs and IV2 percent for the volume or purposes of IDB issues. loan-to-lender programs. The less stringent arbi- Private businesses benefit from the issuance of trage restriction on loan-to-lender programs may IDBs because such bonds give them access to explain, in part, why many of the mortgagethe capital market at a rate of interest below subsidy programs in 1981 were of this type. market rates on taxable debt obligations. For The Mortgage Subsidy Bond Act also amend- firms that might otherwise be denied access to ed the tax code governing IDB issuance to allow capital markets, the relative benefit from IDB tax-exempt financing for multifamily housing financing may be the firm's existence. The oponly if at least 20 percent of the financed units portunity cost to society, in the form of misalloare occupied by low- or moderate-income ten- cated resources, of providing this subsidy may, ants, as defined by the Department of Housing however, more than offset any benefit. and Urban Development. This qualification reportedly deterred some tax-exempt issuers from offering multifamily housing bonds during 1981. 4. Other incentives frequently offered by state governments in competing for private business include exemption from state taxes, loan guarantees, and below-cost facilities THE EFFECTS OF INDUSTRIAL BONDS and services. 5. While the size of any one IDB issue is restricted (except for those whose proceeds finance the exempt facilities dis- IDB issuance, despite the legal restrictions imcussed above), there are no limits on the number of such posed on it in 1968, has once again surfaced as an issues by any one jurisdiction. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

140 Federal Reserve Bulletin • March 1982 2. Benefit to the firm of IDB financing the commercial loan department, they are often Percent of taxable yield reported as loans rather than tax-exempt securities. By classifying IDBs as loans, banks can Ratio of tax-exempt to taxable yields MMaarrggiinnaall ttaaxx rraattee ooff (percent) avoid the question of whether the obligations are tthhee ffiirrmm ((ppeerrcceenntt)) of "investment grade," which is required of 50 60 70 80 90 securities held by banks. 26 37 30 22 15 7 48 26 21 16 10 5 Some Disadvantages If the IDB issue acts solely as a means for a firm to borrow at lower costs in the tax-exempt Public programs that offer credit to private busimarket, the relative benefit to that firm depends ness under conditions more favorable than those on the ratio of tax-exempt to taxable yields and, conventionally offered by the market inevitably because interest expenses are tax deductible, on involve some element of subsidy. In the case of the marginal tax rate of the borrowing firm.6 IDBs, the subsidy is from the federal govern- As table 2 shows, an increase in the ratio of ment, but is triggered by a local authority. Oppotax-exempt to taxable yields results in a decline nents of IDB financing contend that local auin the relative benefit to the firm of IDB financing thorities might dispense a federal subsidy either regardless of the firm's marginal tax rate. More- less carefully than would federal officials or less over, the higher the tax rate of the firm, the lower carefully than a subsidy of local money. They the relative benefit of tax-exempt financing. also argue against the use of a federal subsidy to Because of the tax-exempt nature of municipal foster new private business that may place estabsecurities, investors generally are persons and lished businesses at a competitive disadvantage. institutions that are subject to high marginal tax Furthermore, they assert that the IDB loses any rates. Chief among these are individuals and justification for tax exemption if it is issued for individual trusts, property and casualty insur- corporations that do not need assistance in fiance companies, and commercial banks. At pres- nancing expansion and in areas where commerent, commercial banks are the primary holders of cial credit is readily available.7 municipal bonds, but, reportedly, they are rely- Tax-exempt financing entails the loss of tax reing more often on small-issue IDBs to satisfy venues rather than an increase in actual expenditheir demand for tax shelter. One attractive tures. This characteristic of IDBs makes them, in feature that small-issue IDBs offer banks is their the eyes of critics, an inequitable and inefficient resemblance to business loans. Thus the com- way for the federal government to provide finanmercial loan departments of banks often assume cial assistance to state and local governments. responsibility for evaluating the risks and negoti- From the viewpoint of tax equity, the exempating the terms of such IDB issues. Moreover, tion permits individuals and institutions in high because these transactions are handled within tax brackets to avoid the full burden of the progressive federal income tax. While the bond- 6. The benefit of IDB financing, in this case, is assumed to holders could be viewed as paying a "tax" to the be the spread between taxable and tax-exempt yields, both of state and local governments by accepting lower which are adjusted for the tax deductibility of interest costs; interest rates on tax-exempt bonds, they are in that is, fact net gainers, because they are willing to B = (R, - R le )( 1 - t), engage in the transaction only if the "tax" allows them to avoid a higher federal income tax. where B is the benefit, R, is the taxable interest rate, R is the te tax-exempt rate, and t is the marginal tax rate of the firm. With regard to the cost effectiveness of IDBs This expression can be transposed into the following form: as a subsidy, the exemption gives less financial B = (1 - r)(l - t) R„ assistance in the form of lower interest rates than where r is the ratio of tax-exempt to taxable yields. The 7. Advisory Commission on Intergovernmental Relations, percentages reported in table 1 represent the coefficient Industrial Development Bond Financing (ACIR, June 1963), (1 - r)(l - t) in the above expression. pp. 40-46. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Development Bonds 141 it costs the federal government in foregone reve- governs the issuance of such bonds. Once again, nue. Opponents of IDBs contend that, to make these concerns have surfaced in relation to the the tax exemption attractive to investors in lower reportedly growing volume of small-issue IDBs, tax brackets, the issuance of such bonds pushes but have yet to result in additional legislation. yields higher on municipal securities relative to Under current federal law anyone may use smalltaxable securities. While a relatively higher tax- issue IDBs, and only a few states limit the exempt yield is necessary to attract the marginal, projects benefiting from tax-exempt financing low-bracket investor into the municipal market, within their jurisdictions. Thus small-issue IDBs the higher yield is available to all who invest in finance a wide variety of business ventures, newly issued securities, including those in the including projects like private golf courses and higher tax brackets. Moreover, the value of tax- fast-food outlets as well as small industrial firms. exempt financing to state and local governments Another serious problem with the current use declines because they must pay higher relative of small-issue IDBs is that many of the bond interest rates on all bond issues regardless of the issues are for business firms that do not need purpose. The net effect is an increase in the financial assistance to undertake their projects. overall cost of tax-exempt financing to the feder- Critics object to this use of tax-exempt financing al government in the form of tax revenue fore- because it serves simply as a source of cheap gone and a smaller relative benefit to municipal credit at the expense of federal tax revenues. issuers. In other words, the efficiency of this Addressing these concerns, as well as the type of revenue sharing declines as the ratio of federal revenue loss arising from IDBs, the adtax-exempt to taxable yields rises. ministration has proposed legislation that would limit the use of IDBs to small businesses and bar firms that use IDB financing from also taking CURRENT PROBLEMS accelerated depreciation write-offs for the same projects. Moreover, tax exemption would be Questions about the public purpose and the limited to IDBs approved before their issuance inefficiency of IDBs sold during the mid-1960s by state or local elected officials. These restricresulted in the enactment of the Revenue and tions would apply to the issuance of both small- Expenditure Control Act of 1968, which still issue and exempt-facility IDBs. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

143 Treasury and Federal Reserve Foreign Exchange Operations This 40th joint report reflects the Treasury- the dollar were well below their peaks of late Federal Reserve policy of making available addi- 1980, they were widening again during the sumtional information on foreign exchange opera- mer, attracting interest-sensitive funds into doltions from time to time. The Federal Reserve lar-denominated assets once again. Bank of New York acts as agent for both the Most other industrial countries by contrast Treasury and the Federal Open Market Commit- continued to show disappointingly slow progress tee of the Federal Reserve System in the conduct in pulling out of the difficulties associated with of foreign exchange operations. the prolonged adjustment to the oil price in- This report was prepared by Sam Y. Cross, creases of 1979-80. Many countries had a public Manager of Foreign Operations for the System debate over the appropriate course of fiscal and Open Market Account and Senior Vice President monetary policy in the face of unacceptably high in charge of the Foreign Group of the Federal inflation and mounting unemployment. In this Reserve Bank of New York. It covers the period context, foreign governments expressed open August 1981 through January 1982. Previous concern over the high level of U.S. interest rates reports have been published in the March and and the inflationary consequences of the depreci- September BULLETINS of each year beginning ation of their currencies against the dollar. Furwith September 1962. thermore, political developments in Eastern Europe and the Middle East clouded the outlook for There were two key turning points for the dollar many countries abroad, leaving traders and inin the exchange market during the period under review. In early August, the year-long advance 1. Federal Reserve of the dollar against major foreign currencies reciprocal currency arrangements came to an end. Then, after a four-month de- Millions of dollars cline, dollar rates started to firm at the beginning Amount of facility of December, a trend that continued through the Institution Jan. 1, Jan. 31, remainder of the period. 1981 1982 Several factors supported the long advance of Austrian National Bank 250 250 the dollar through early August. Inflation in the National Bank of Belgium 1,000 1,000 Bank of Canada 2,000 2,000 United States had begun to moderate even as the National Bank of Denmark 250 250 U.S. economy withstood recessionary tenden- Bank of England 3,000 3,000 Bank of France 2,000 2,000 cies longer than most forecasters had expected. German Federal Bank 6,000 6,000 The Reagan Administration's leadership in trans- Bank of Italy 3,000 3,000 lating its economic policy into action was greeted Bank of Japan 5,000 5,000 Bank of Mexico 700 700 positively in the exchange markets, particularly Netherlands Bank 500 500 Bank of Norway 250 250 as the program gained support in the Congress. Bank of Sweden 500 300' At the same time, the U.S. current account Swiss National Bank 4,000 4,000 continued to post a surplus. Meanwhile, the Bank for International Settlements Swiss francs/dollars 600 600 demand for credit in the United States remained Other authorized European strong, and with the Federal Reserve continuing currencies/dollars 1,250 1,250 to restrain monetary expansion, interest rates Total 30,300 30,100 stayed high. Thus, although differentials favoring 1. Decreased by $200 million effective May 23, 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

144 Federal Reserve Bulletin • March 1982 2. Drawings and repayments under reciprocal currency arrangements, January 1, 1981-January 31, 19821 Millions of dollars equivalent; drawings, or repayments (-) Activity by the Federal Reserve System 1981 TTTrrraaannnsssaaaccctttiiiooonnnsss wwwiiittthhh CCoommmmiittmmeennttss,, JJaannuuaarryy CCoommmmiittmmeennttss,, JJaann.. 11,, 11998811 Q1 Q2 Q3 Q4 11998822 JJaann.. 3311,, 11998822 PPPPuuuubbbblllliiiicccc sssseeeerrrriiiieeeessss GGGGeeeerrrrmmmmaaaannnn FFFFeeeeddddeeeerrrraaaallll BBBBaaaannnnkkkk 5,233.6 0 0 - 680.3 -931.1 0 3,622.3 SSSSwwwwiiiissssssss NNNNaaaattttiiiioooonnnnaaaallll BBBBaaaannnnkkkk 1,203.0 0 0 744.5 0 0 458.5 TTTToooottttaaaallll 6,436.6 0 0 -1,424.8 -931.1 0 4,080.8 Activity by foreign central banks 1981 BBBBaaaannnnkkkk ddddrrrraaaawwwwiiiinnnngggg oooonnnn SSSSyyyysssstttteeeemmmm OOuuttssttaannddiinngg JJaannuuaarryy OOuuttssttaannddiinngg,, JJaann.. 11,, 11998811 Q1 Q2 Q3 Q4 11998822 JJaann.. 3311,, 11998822 Bank of Sweden 0 200.0 -200.0 0 0 0 0 1. Because of rounding, figures may not add to totals. Data are on a value-date basis. vestors with the view that the United States was ing monetary expansion. Reflecting the slow a relatively attractive outlet for investment. growth of the narrowly defined money supply, As the dollar continued its advance in early the federal funds rate dropped about 600 basis August, however, sentiment became more cau- points over the four months to the end of Notious. Market participants were aware that major vember. The Federal Reserve progressively European central banks had stepped up their eliminated its surcharge of 4 percent on large dollar sales and, in view of the rapid runup of the banks that frequently borrowed at the discount dollar in late July and early August, began to window, and by early December it had reduced expect a correction. Consequently, once the its basic discount rate 2 percentage points to 12 upward momentum broke, dollar rates fell back percent. By November evidence was already sharply in mid-August and then declined irregu- mounting that the U.S. economy was in a sharp larly through late November. recession, leading to expectations that private- The August turnaround in the exchange mar- sector credit demands would decline substantialkets coincided with a shift in focus in the U.S. ly. These expectations contributed to a rally in financial community from the immediate issues the bond market, which brought long-term rates surrounding the passage of the administration's down more than 200 basis points by the end of program to its implications for the fiscal deficit the month. and U.S. capital markets. As market attention The four-month decline of short-term interest turned to estimates of the fiscal gap, skepticism rates in the United States was reflected in a deepened that the administration's program narrowing of interest differentials favorable to could proceed without having the government's the dollar vis-a-vis most other currencies. At burgeoning financing needs exert renewed least initially, monetary authorities abroad felt strains on the credit markets. In this environ- they had little room to respond to the lower U.S. ment, a growing concern arose over the potential interest rates by easing their own money market for conflict between fiscal and monetary policy, rates. They were concerned about entrenched leading market participants to question whether inflationary pressures at home; and in some the Federal Reserve might back away from its countries, notably France, Switzerland, and the anti-inflation stance. United Kingdom, the central banks acted to raise At the same time, the economy began to show interest rates. In addition, some countries felt signs of weakening. U.S. short-term interest constrained by the pressures against their currates were therefore easing, even though the rencies within the European Monetary System Federal Reserve continued its policy of restrain- (EMS). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 145 Beginning in October, however, as U.S. inter- ered favorable rates for current payments or est rates continued to decline, monetary authori- investments. From time to time substantial purties in some countries began to allow an easing of chases of dollars were made by the monetary their own short-term interest rates. Their econo- authorities in the Organization of Petroleum Exmies were making little headway in recovering porting Countries (OPEC) and other countries from recession, and unemployment was rising outside the Group of Ten. In addition, a continurapidly. Government deficits were already large ing inflow of funds into dollars came from Japan, relative to historical standards and in many cases where residents were taking advantage of a rewere placing strains on the domestic financial cent relaxation of exchange controls or were for markets. Consequently, the authorities in several other reasons seeking to diversify their portfolios countries felt that only limited scope existed for internationally. Furthermore, the November ralfurther fiscal stimulus. The current account defi- ly in the U.S. bond market reportedly attracted cits of a number of countries were beginning to capital from abroad, as investors sought to lock decline so that the authorities felt they no longer in high yields and position themselves for capital needed such high interest rates to attract capital appreciation. Moreover, the increasingly fragile from abroad. There were widespread forecasts of situation in the Middle East and Poland dea U.S. move from current account surplus to pressed sentiment toward those countries seen deficit in 1982; Japan's current account had as more vulnerable than the United States to already swung from a deep deficit into surplus; heightened geopolitical tensions. The recession and a German export surge had led officials and in the U.S. economy led forecasters to expect private forecasters alike to predict an elimination less deterioration in this country's current acof that country's current account deficit in 1982. count than previously. Even so, by the end of Moreover, strains in the EMS were relieved by a November the dollar had dropped SlA percent multilateral realignment of parities on October 5. from levels at the end of July against sterling, As a result, foreign monetary authorities felt they about 11 percent against the Japanese yen and had greater scope for easing their domestic inter- the German mark, and as much as 18 percent est rates. Even so, with the drop in short-term against the Swiss franc. U.S. rates accelerating, particularly in Novem- Early in December the dollar turned around ber, interest differentials favoring the dollar con- once more and began an advance that carried tinued to narrow. through the end of January. This second turning Meanwhile, other factors lent support to the point was triggered by a reappraisal of the view dollar. Orders to buy dollars emerged repeatedly that a continuing drop in economic activity in the whenever the dollar moved substantially lower, United States would lead to further substantial as commercial interests in a number of centers declines in U.S. interest rates and, therefore, to sought to take advantage of what they consid- further movements adverse to the dollar in interest rate differentials. That reappraisal was based on a number of 3. U.S. Treasury and Federal Reserve developments. In the United States, the Federal foreign exchange operations1 Reserve was perceived as moving cautiously to Net profits or losses (—), in millions of dollars reduce its discount rate and to supply bank U.S. Treasury liquidity. Although output was falling and unem- FFeeddeerraall PPeerriioodd ployment was climbing, credit demands were not RReesseerrvvee Exchange General Stabilization account fading. In fact, commercial financing needs were Fund heavy, with corporate issues flooding the bond 1981—Q1 6.2 - .7 -144.3 market in December and commercial demand for Q2 - 1.4 - 3.8 0 Q3 .1 0 85.9 bank credit remaining strong. Also, estimates of Q4 0 0 - 39.2 January 1982 0 15.2 - 4.2 the federal deficit for current and future fiscal Valuation profits and losses on years had undergone repeated and large upward outstanding assets and liabilities as of January 31, 1982 -374.8 -1,102.1 826.4 revisions, and the prospective borrowing requirement for the first quarter of 1982 was seen 1. Data are on a value-date basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

146 Federal Reserve Bulletin • March 1982 as likely to be greater than previously had been of the U.S. authorities. The Trading Desk at the estimated. Moreover, the release of figures Federal Reserve Bank of New York continued showing no letup in a series of large weekly its longstanding practice of cooperating with increases in the monetary aggregates began to other central banks by intervening as their agent generate expectations of a substantial tightening from time to time in the New York market. of money market conditions. Under these cir- On September 1 and December 15 the U.S. cumstances, U.S. money market rates rose in Treasury paid off the first two maturing tranches December and faster in early January. equivalent to $1,611.4 million of its securities Abroad, by contrast, persistent weakness of denominated in German marks. After those redomestic economies had led to near-record lev- demptions, the Treasury had outstanding els of unemployment, and in some countries $4,080.8 million equivalent of the foreign currenofficial financial policies were coming under do- cy notes, public series, which had been issued mestic criticism. As pressures for measures to with the cooperation of the German and Swiss boost employment intensified, expectations authorities in connection with the dollar-support strengthened that some countries in Europe program of November 1978. Of the notes outmight ease their restrictive monetary postures standing as of January 31, 1982, a total of even if U.S. interest rates did not decline further. $3,622.3 million is denominated in German In fact, during January, the central banks of marks and $458.5 million is denominated in many major industrialized countries either re- Swiss francs. The maturity dates for the remainduced their official lending rates or facilitated ing securities range between May 12, 1982, and some easing of local money market rates. July 26, 1983. As interest rate differentials once more moved In the seven months through January 1982, the strongly in favor of the dollar, they began to Federal Reserve had gains of $0.1 million on its attract funds into dollar-denominated assets. The foreign currency transactions. The Exchange dollar was bid up across the board during the Stabilization Fund (ESF) gained $15.2 million in final two months of the period. By the end of connection with sales of foreign currencies to the January it had risen about 6 percent against the Treasury General Fund to finance interest and European currencies and 8 percent against the principal payments on securities denominated in yen from the levels at the end of November. As a foreign currencies. The Treasury's general acresult, the dollar closed the six-month period count gained $42.5 million net. This gain reflectdown on balance about 1 percent against sterling, ed $94.8 million of profits on the redemption at 4 percent against the yen, 5!/2 percent against the maturity of securities denominated in Swiss German mark, and 13 percent against the Swiss francs and German marks, partly offset by $52.3 franc. The trade-weighted value of the dollar in million of losses as a result of annual renewals at terms of ten major currencies declined 316 per- current market rates of the agreement to warecent during the period. house Swiss franc and German mark proceeds of During the six-month period, there were occa- Treasury securities with the Federal Reserve. As sions when the market experienced unusually of January 31, 1982, valuation losses on outsudden and sharp exchange rate movements dur- standing balances were $374.8 million for the ing a single day. Some of these episodes were Federal Reserve and $1,102.1 million for the associated with major political events, such as Exchange Stabilization Fund. The Treasury's the assassination of Egypt's President Anwar general account had valuation gains of $828.4 Sadat on October 6 and the imposition of martial million related to outstanding issues of securities law in Poland over the December 12-13 week- denominated in foreign currencies. end. Other episodes were less dramatic and were not associated with such identifiable events. The U.S. authorities were prepared to intervene on GERMAN MARK some occasions had the market disturbances persisted or cumulated during the U.S. trading In early August, the German mark was subject to session; as it turned out, the Federal Reserve divergent tendencies: weak against the dollar but undertook no intervention operations on behalf strong against European currencies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 147 With respect to the dollar, market sentiment changes, the German Federal Bank had frequenttoward the mark remained bearish. Domestical- ly bought French and Belgian francs to ease ly, the German economy was relatively weak: pressures within the EMS while selling dollars, unemployment was rising, and inflation was high at times heavily, to support the mark against the by historical standards. Moreover, the govern- dollar. Through the end of July, Germany's ment deficit remained large, capital markets con- foreign currency reserves had increased to stand tinued under strain, and fiscal policy was under at $43.4 billion. During August, however, as the heated discussion publicly and within Germany's German Federal Bank stepped up its dollar sales coalition government. to support the mark, German foreign currency Internationally, Germany had experienced reserves fell by $1.5 billion. substantial deterioration in its terms of trade Once the mark came close to its lows, market because of the increase in oil prices and the participants became wary of a shift in market depreciation of the mark. The current account direction and professionals moved quickly to was in heavy deficit, and wide interest rate cover their short positions. The mark bounced differentials favored investment in the United back sharply, and as the dollar fell lower in the States. On top of these economic considerations, exchanges, market sentiment toward the German the mark was seen in the exchanges as more currency became more favorable. In part, the exposed than the dollar to international political turnaround reflected developments in the United tensions. This vulnerability reflected Germany's States, where the initial euphoria surrounding strategic position, its ties to Eastern Europe, and the adoption of the administration's economic its greater reliance on the Middle East for energy program gave way to skepticism that the proresources and export markets. In consequence, gram would achieve all its goals. the mark was subject to capital outflows, all the At the same time in Germany, trade and curmore as market sentiment toward the dollar rent account figures for July were released, became increasingly bullish. On August 10 the pointing to a dramatic improvement in export rate plunged to a five-year low of DM 2.5773, a sales and providing the first concrete evidence decline of some 45 percent since mid-1980. that the earlier surge in export orders was finally Against other EMS currencies, however, the showing through. Official commentary about this mark remained strong. It benefited from the improvement gave rise to expectations that Germarket's view that the authorities in Germany many's current account deficit would continue to were still placing priority on correcting the exter- narrow in subsequent months—a time when nal imbalance and on financing the current ac- most forecasters were expecting the U.S. current count deficit in the interim by inflows of private account to deteriorate. Furthermore, the governand official capital. The federal government con- ment finalized a 1982 budget proposal according tinued the practice, unusual for Germany, of to which nominal expenditure growth would be placing German mark-denominated debt instru- slowed to 4 percent and the net financing requirements directly with foreign official institutions. ment of the federal government would be cut to Following the move in February 1981 to intro- DM 27 billion or 1.6 percent of gross national duce a special Lombard facility, German interest product, down from a revised estimate for 1981 rates increased so that adverse interest rate of DM 34.3 billion or 2.2 percent of GNP. As the differentials vis-a-vis other EMS currencies were dollar eased, therefore, the German mark moved either narrowed or eliminated. The German Fed- up to trade around DM 2.3195 by the end of eral Bank had announced that because of the September. inflation problem it would aim at the lower part Meanwhile, the strengthening of the mark addof the 4- to 7-percent target range for the growth ed to strains within the EMS. The markets of central bank money. Thus, with the market became vulnerable, especially before weekends, apprehensive about prospects for other EMS to repeated rumors of an imminent realignment currencies, the mark had moved toward the top of the participating currencies. Speculative bidof the EMS, at times hitting its upper interven- ding for marks against the French and Belgian tion limit. francs frequently stretched the EMS to its limits, As a result of these crosscurrents in the ex- generating sizable intervention in several centers Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

148 Federal Reserve Bulletin • March 1982 and pushing the mark up against the dollar as profits forced many firms to move aggressively well. The German Federal Bank responded to to economize on labor. As a result, market these pressures by purchasing both dollars and participants came to expect that the German EMS currencies in the exchanges so that, by the Federal Bank would take advantage of whatever end of September, German foreign exchange opportunity developed to allow German interest reserves increased by $1.1 billion. rates to follow U.S. rates down. In addition, the Over the weekend of October 3 and 4, the earlier optimism over a quick and sustained EMS finance ministers announced a realignment improvement in Germany's balance of payments of parities to take effect October 5. The mark, as faded, as first August and then September well as the Dutch guilder, was revalued by 5l/2 monthly trade figures disappointed market expercent against those currencies whose parities pectations. Late in October the government reremained unchanged and in effect by 8V2 percent vised its budget estimates for 1982 to take acagainst the French franc and the Italian lira. count of climbing unemployment and revenues Immediately thereafter, the mark traded in the that were lower than expected, thereby eliminatlower portion of the new band, reflecting reflows ing virtually all of the planned drop in the borof speculative investments as well as a reversal rowing requirement. Although this new budget of commercial leads and lags. Accordingly, other gap was later covered, largely by an expected central banks began purchasing marks in the increase in profits of the Federal Bank available exchanges so as to cover the liabilities within the to be transferred to the government, the episode EMS that had built up over preceding months. underscored the differences that still existed Against the dollar, however, the realignment was within the government coalition on major issues seen as freeing the mark to strengthen further, of economic policy. Also, political tensions abroad and in subsequent days the mark moved up to adversely affected sentiment toward the mark. DM 2.1815, 15V2 percent above its August low. The assassination of Egyptian President Anwar Following the realignment of the EMS, the Sadat pointed up the potential for instability in German Federal Bank confirmed the easing of the Middle East and Germany's reliance on that interest rates that had already begun in Ger- region for oil supplies. Repeated reports of milimany's money and capital markets by cutting tary maneuvers around Poland were also an unthe special Lombard facility rate from 12 percent settling reminder of Germany's vulnerability to to 11 percent effective October 9. The German potential Soviet interference in Eastern Europe. Federal Bank felt able to take action to support Under these circumstances, the mark did not the domestic economy because of the overall strengthen even though interest differentials adstrength of the mark, the improving outlook for verse to the mark were narrowing sharply. Also, the balance of payments, and the achievement of the German Federal Bank moved cautiously to a compromise on fiscal policy. Even so, the provide some short-term liquidity to the banking German Federal Bank was careful not to signal system through swaps and repurchase agreemore forceful action, because at home inflation ments and did not change official interest rates continued to accelerate to an annual rate of 7 again until December 4, when it cut its special percent year on year and in the United States Lombard rate V2 percentage point to 10.5 perinterest rates remained high so that interest rate cent. By contrast, in the two months to early differentials adverse to the mark remained large. December, the Federal Reserve had twice low- Later the same day the Federal Reserve lowered ered its discount rate by 1 percentage point to 12 its surcharge on discount window borrowing by percent and also eliminated the remaining surlarge banks from 3 percent to 2 percent, the charge of 2 percentage points on frequent borsecond cut of 1 percentage point in this rate in rowers. Short-term interest rates in the United three weeks. Thus, the German Federal Bank's States had fallen sufficiently to cut in half—from action did not contribute to any further widening about 5 percentage points to 2V2 percentage of interest rate differentials versus dollar assets. points—the short-term differentials vis-a-vis the mark. After mid-October a number of developments within Germany weighed on the mark. Unem- During the six weeks to the end of November, ployment was increasing as declining corporate the mark occasionally came into demand, espe- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 149 daily at times when U.S. interest rates were In the event, the government presented to declining. But the mark did not keep pace with Parliament a compromise program, approved currencies outside the EMS that were continuing shortly after the close of the period, that was to strengthen against the dollar. Instead, move- designed to stimulate jobs through investment ments of the rate above the DM 2.20 level subsidies, lending programs for small companies, regularly prompted commercial and investor sell- and modest direct government spending on enering of marks against dollars. On occasion, the gy-saving projects—financed mainly by an inmark came sharply on offer, especially in the crease of 1 percentage point in the value-added wake of political developments in Eastern Eu- tax in 1983. Meanwhile, new figures showed that rope or the Middle East. At these times, the an export surge late in the year had boosted German Federal Bank intervened promptly and Germany's trade account and helped pull its forcefully to sell dollars while EMS central banks current account deficit for 1981 as a whole down were also buying marks. These operations con- to DM 17.5 billion, significantly lower than had tributed to better market balance. been forecast. The improving external position In December and January the mark was ad- gave the German Federal Bank scope to lower its versely affected by developments abroad. On special Lombard rate a further ¥z percentage December 14, martial law was declared in Po- point to 10 percent on January 21 and ensure a land, triggering a brief scramble for dollars similarly modest easing in money market rates. against marks and sending the rate as low as At the end of January the mark was trading at DM 2.3650 for a few hours. Prompt intervention DM 2.3420, down about 6]A percent from the by the German Federal Bank and other central late-November levels while up about 9 percent banks, together with commercial activity and from its lows of early August. The German professional profit taking, quickly restored bal- Federal Bank was at times active in the markets ance to the market, and the rate almost fully during December and January, selling dollars in recovered in just a matter of hours. Yet the support of the mark, while other central banks Polish situation remained a matter of market within the EMS continued to acquire marks. concern. In the United States, interest rates Reflecting dollar sales by the Federal Bank durstopped declining, disappointing market expecta- ing the two months, German foreign currency tions that the deepening U.S. recession would reserves fell $3.0 billion to close the period at continue to ease credit demands. Indeed, U.S. $37.5 billion, down $5.9 billion for the period as a money market rates moved strongly higher, cast- whole. ing doubt that the strengthening of Germany's external position would show through in the mark exchange rate. Swiss FRANC This development focused attention anew on the dilemma facing the German authorities. With In mid-1981, Switzerland was faced with the the level of unemployment heading to a record 2 resurgence of inflationary pressures. Part of the million persons, political pressures mounted, not inflationary impulse stemmed from the buoyancy only from labor unions but also within parties in of the domestic economy—in contrast to the the governing coalition, for more action to deal stagnation in other European countries—led by with the deteriorating unemployment situation. strong consumption and construction activity. But the government was concerned about ac- Shortages developed in the housing market and tions that either would increase taxes and there- domestic house prices and rents exhibited sharp by hamper a recovery or would increase govern- increases, contributing to a strong rise in conment borrowing and thereby add to inflation. sumer prices. Also, the decline of the Swiss franc There were also pressures to ease monetary in the exchanges substantially boosted the cost conditions. But the German Federal Bank re- of imports, particularly by raising the domestic mained concerned that a renewed easing in inter- price of oil and other dollar-denominated raw est rates would exacerbate the decline in the materials. mark, which would exert a further upward push Though Swiss interest rates had risen progreson costs and prices. sively, they were still well below those in other Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

150 Federal Reserve Bulletin • March 1982 industrial countries. At midyear, interest differ- 6 percent from 5 percent and its Lombard rate to entials adverse to the franc were about 9 to 10 7.5 percent from 6.5 percent, the fourth rise in percentage points vis-a-vis the dollar and more 1981 in those official lending rates. The authorithan 3 percentage points vis-a-vis the German ties also made the refinancing of credit through mark. Consequently, foreign official and corpo- foreign exchange swaps with the central bank rate borrowers continued to place heavy de- more expensive. Following these actions, Swiss mands on the Swiss franc money and capital franc interest rates shot up temporarily before markets. The Swiss authorities did not seek to settling down around 11 percent. restrain these outflows. They hoped to avoid the The rise in Swiss interest rates during Septemdevelopment of sizable external markets in Swiss ber and October, which occurred at a time when franc-denominated assets, particularly for longer interest rates in other centers were easing, meant maturities, and in any event the current account that differentials adverse to the franc either narhad moved into surplus, estimated to be $2.0 rowed dramatically, as in the case of the dollar, billion to $2.5 billion for 1981. Nonetheless, the or were reversed, as in the case of the German pressure of outflows of capital pushed the Swiss mark. Nonresidents therefore found incentives franc down in the exchanges. At the end of July to begin repaying their Swiss franc-denominated the franc was trading at SF 2.15 against the dollar debt, while investors sought out higher-yielding and SF 0.87 against the German mark. Along franc investments, and these actions helped to with other major currencies, it declined further propel the franc sharply higher in the exchanges. against the rising dollar to a four-year low of As the franc strengthened, the view developed in SF 2.2095 on August 10, a decline of some 39 the market that the Swiss authorities might allow percent since its peak of 1980. On July 31, the franc to appreciate beyond SF 0.80 against Switzerland's foreign exchange reserves stood at the mark—a level considered an upper bound in $9.9 billion. the market since September 1978 when the Swiss The Swiss authorities continued to pursue a National Bank had intervened forcefully at that policy of monetary restraint to combat inflation- rate. In addition, many European countries were ary pressures. Increasingly, however, the au- regarded as more vulnerable than Switzerland to thorities had reason to question whether policy political tensions in Eastern Europe and the was as restrictive as developments in the mone- Middle East, and this concern over the prospects tary aggregates would suggest or, in view of the for other currencies continued to benefit the inflationary situation, whether policy was as Swiss franc. In these circumstances, the franc tight as circumstances warranted. For some time became exceptionally well bid. By mid-Novemthe monetary base was below the annual growth ber the rate advanced 18 percent from levels in target of 4 percent for 1981. However, as in many early September to a high of SF 1.7475 against other countries, continuing financial innovations the dollar and some 10 percent to SF 0.7935 in Switzerland, coupled with unusually high in- against the German mark. terest rates by historical standards, had altered The strong appreciation of the franc, while the behavior of banks and the public, making the welcome as a contribution in the fight against monetary base as well as the broader monetary inflation, was nevertheless a matter of concern to aggregates less reliable than in the past as a guide the authorities. Of special worry was the rapid to policy. Questions about the adequacy of mon- rise against the German mark, the currency of etary restraint were highlighted by the release of Switzerland's main foreign trade partner and consumer price numbers for August, showing major competitor in third markets, because it inflation rising 11.3 percent at an annual rate in threatened to put Swiss exporting and tourist the most recent quarter and 7.4 percent year on industries in a difficult position. Still, the authoriyear. ties made clear in public statements that large- Early in September the authorities began tak- scale intervention similar to that undertaken in ing aggressive action to tighten monetary policy 1978 would be inappropriate. Sizable sales of and thereby underscore the primacy of the anti- Swiss francs would lead to an expansion in inflation struggle. Effective September 2 the Switzerland's money supply, and large pur- Swiss National Bank boosted its discount rate to chases of dollars would push the dollar higher in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 151 the exchanges—both developments that would Federal Bank on January 21 of its special Lomexacerbate inflationary pressures. bard rate. In these circumstances the franc, In the event, by November the economy though fluctuating widely at times, remained firm showed clear signs of flattening out and some against the German mark. But vis-a-vis the dolprivate forecasters began to express fears that lar, the franc continued to ease as money and economic activity would weaken to the point at capital market rates in the United States firmed which unemployment might rise. In addition, the substantially and were generally expected to need to avoid liquidity strains from developing remain high despite the weakness of the U.S. with the approach of the year-end argued for economy. some relaxation in monetary restraint. Accord- By the end of January the franc was trading at ingly, the Swiss National Bank progressively SF 1.8680 against the dollar and at SF 0.7976 reduced the rate charged to domestic banks for against the German mark. At these levels the Swiss-franc swap credit against dollars and pro- franc was up 15^2 percent against the dollar since vided somewhat more liquidity than it absorbed its August low. Over the six months under revia maturing swaps. On December 4 the authori- view the franc gained WA percent against the ties reduced the Lombard rate from 7.5 percent dollar and 8 percent against the German mark. to 7.0 percent—an action taken in coordination Between the end of July and the end of January, with interest rate reductions in other industrial Switzerland's foreign exchange reserves rose countries and designed to bring the Lombard rate $600 million to 10.5 billion in response to foreign more closely in line with prevailing Swiss money currency swap operations, the net purchase of market rates. But at the same time the Swiss dollars in intervention operations, and interest National Bank was anxious to avoid the impres- earnings on outstanding reserves. sion of a fundamental shift in policy course and consequently left the discount rate unchanged at 6 percent. In the exchange market the franc lost JAPANESE YEN its upward momentum as domestic and Euro- Swiss money market rates eased downward. By mid-1981, the Japanese economy had made Against the dollar the franc slipped back to trade impressive adjustments to the second round of around SF 1.80 by the end of December. Against oil price increases of 1979-80. Changes in prothe mark, however, the franc remained well bid duction processes in many of Japan's largest around SF 0.7985, principally in response to enterprises had substantially reduced Japan's market concerns over the foreign and domestic dependence on oil imports. These developments, implications for Germany of the declaration of together with the continuing impact of the 1979martial law in Poland. 80 depreciation of the yen, had led to a sharp By January the need for such a tight monetary improvement in Japan's current account, which policy in Switzerland appeared to have passed, swung from deep deficit to moderate surplus in particularly with the release of inflation figures just one and a half years. The rate of inflation at showing a marked deceleration in consumer the wholesale level, which at one point in 1980 prices to around 6 percent. The monetary growth had reached 24 percent, had slowed to just about target of 3 percent announced by the authorities 1 percent. Meanwhile, restrictive monetary and for 1982 was generally viewed as consistent with fiscal policies had helped limit the extent to the policy of fighting inflation, while also provid- which rising prices of material were passed on in ing sufficient liquidity so as not to exacerbate the the economy so that inflation at the consumer developing weakness of the economy. Even so, level, which had never exceeded 9 percent, was the Swiss authorities were thought to be under around 5 percent per year. less pressure than others in Europe to ease credit The process of adjustment had been uneven, conditions, given Switzerland's low unemploy- however, and domestic demand remained weak. ment rate and the still relatively favorable per- Important sectors of the economy remained seformance of the economy. In fact, the Swiss verely depressed. Moreover, consumer expendi- National Bank did not lower its official lending tures were slow to recover from the deflationary rates following the reduction by the German impact of rising energy prices, despite the mod- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

152 Federal Reserve Bulletin • March 1982 eration of inflation. The sluggishness of domestic selling of yen gathered force, it pushed the spot demand cast doubt that a firm basis for sustained rate down to ¥ 246.10 by the first business day in recovery had been established, and domestic August—a level only about 6 percent above its pressures on the authorities intensified to adopt 1980 low. reflationary measures. Anxiety rose that the At this point, many market participants felt weakness of demand at home, in combination that the yen's decline had been overdone in view with the legacy of the yen's earlier depreciation, of Japan's steadily improving current account would provoke another surge of exports and position. With banks generally in an oversold exacerbate protectionist reactions in Japan's ma- position, the market was ripe for a reversal of jor markets overseas. sentiment toward the yen when the dollar began As a result, the authorities had already begun its general decline during August. Reports that to provide stimulus to the economy. The govern- some Middle Eastern investors had been attractment had announced measures to aid small com- ed in size by the rally in Japan's securities panies and speed up expenditures for public markets and purchases on the international monworks. But the scope for further expansionary etary market helped spur the turnaround in defiscal policies was limited by virtue of the fact mand for the currency in early August. The yen's that the levels of the government's overall deficit rise initially outpaced that of other currencies and borrowing requirement continued to be con- against the dollar, bringing the exchange rate to sidered excessive by many Japanese and were ¥ 228.20 against the dollar and to a high of already exerting pressures in the local capital ¥ 91.64 against the German mark on August 18. markets. Thus, the larger source of stimulus A sense of caution soon overcame the yen came from an easing of monetary policy. During market, however. Participants recalled the disapthe spring, the Bank of Japan lowered its dis- pointment earlier in the year when the yen's count rate, eased banks' reserve requirements, appreciation had not gone as far as expected. and substantially relaxed "window guidance" They worried about the possibility that new ceilings on the growth of bank lending. protectionist barriers might be erected in mar- In the exchange markets, the yen had benefit- kets where Japan's exports were penetrating ed from Japan's improving economic perform- rapidly. Moreover, pressures built up over the ance to recover from its 1980 lows against most summer and autumn for the government to intro- European currencies. Relative to the German duce further monetary and fiscal stimulus to the mark, it had risen nearly 40 percent to trade at 97 still flagging domestic economy. In this atmoyen to the mark by early August. Against the sphere, the yen's rise seemed to stall after middollar, however, a tentative recovery late in 1980 August at a level around ¥ 230 against the dollar had given way to a renewed and protracted even as the European currencies continued risdecline. With interest rates in Japan lower than ing. in any other industralized country, Japanese In September, the monetary authorities anresidents had taken advantage of newly liberal- nounced that window guidance ceilings on comized foreign exchange controls to make long- mercial banks' lending would be further interm investments abroad. Then during midsum- creased for the fourth quarter, even though mer, when a long-awaited decline in U.S. monetary growth, running close to 10 percent at interest rates failed to materialize, market partic- an annual rate, was just within the Bank of ipants lost hope that the large interest differen- Japan's projections. Further, the government tials adverse to the yen would soon narrow so as announced on October 2 a four-point program of to permit Japan's improving competitiveness to fiscal and other measures intended to stimulate show through in the yen-dollar exchange rate. domestic demand and imports while assisting Thus, as Japanese importers sought to limit their Japanese industries and regions that were experilosses during the August vacation period, they encing particularly severe structural difficulties. accelerated their yen sales to hedge remaining The Ministry of Finance also set wider limits on future dollar needs. In addition, foreign corpora- foreign lending by Japanese banks for the halftions continued short-term yen borrowings to year beginning in October, in keeping with the meet financing needs in other currencies. As the projected financing needs accompanying the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 153 growing surplus on the current account and even though the October figures on export letters reflecting the continuing policy of allowing the of credit already gave some warning that the country's banks to maintain their overall share of growth of exports might be slowing in subselending in the Euromarkets. quent months. Under these positive influences, Long-term capital outflows from Japan re- the yen rose some 8 percent against the dollar mained large even though interest differentials during November, reaching its high for the sixfavoring dollar investments narrowed during the month period of ¥ 213.40 on November 30 while late summer and autumn. Using their new free- recovering to ¥ 96.80 against the German mark. dom under the 1980 Foreign Exchange Law, Toward the end of the year there still was no Japanese institutional investors continued pro- clear evidence of recovery in the domestic econgrams begun earlier in the year to diversify omy and predictions of a very large current internationally. Also, some Japanese firms with account surplus in 1982 became widely accepted. large import requirements had experienced sig- Statistics on consumer and wholesale prices connificant losses earlier in the year on their uncov- tinued to show the lowest rate of inflation among ered future dollar commitments and were now industrial countries. Information released about adopting more conservative policies regarding the real economy indicated that growth of the the hedging of forward obligations in foreign third quarter had been heavily concentrated in currency. the foreign sector. Public-sector spending and In the case of firms in some structurally de- domestic consumption were virtually flat while pressed industries, such as oil refining, the need private investment actually declined slightly for to protect weak financial positions by hedging the third quarter in a row. Investment by small more of their future import requirements was and medium-sized firms showed an especially encouraged as part of the government's efforts to large drop, continuing the trend that had been of support long-term adjustment. Under these influ- concern to policymakers for some time. After the ences, the yen-dollar rate wavered around the third quarter, monthly trade statistics revealed ¥ 230 level through September and October. that even export growth had slowed at least Against the German mark, whose continuing rise temporarily in November under the influence of against the dollar was partly influenced by the government-imposed restraints as well as slugpressures building for realignment within the gish demand in major export markets. While EMS, the yen declined steadily to reach a low welcome from the point of view of mitigating point of nearly ¥ 105 per mark on October 30. trade frictions, this development lent further emphasis to the need for recovery in the domes- During November the yen became well bid tic economy. again, as U.S. interest rates declined further, and hopes became widespread that this trend would The new budget, announced in December for continue. Market participants felt that, despite the fiscal year beginning in April 1982, retained renewed arguments being heard in Japan for a the relatively restrictive stance that had been further easing of monetary policy, Japan's al- adopted for fiscal year 1981 in keeping with the ready low interest rates offered less scope for the long-range objective of containing and eventually monetary authorities in Japan compared with reducing the size of the government's deficit and those in Europe to match U.S. interest rate borrowing requirement. In these circumstances reductions. Therefore, further drops in U.S. and with the yen exhibiting more strength than it rates were expected to be reflected in a signifi- had in the earlier part of the year, the monetary cant narrowing of the differentials adverse to yen authorities took further action to help spur the investments. Foreign transactions in Japan's se- faltering recovery. On December 11, the Bank of curities markets, including purchases of bonds Japan reduced its discount rate for lending to under short-term repurchase arrangements, re- commercial banks 3/4of a percentage point to 5'A versed direction in November to become sizable percent following similar actions in the United net purchases. Market participants were also States and other industrial countries. This step impressed by trade figures released for Septem- was supplemented later in the month by the ber and October that showed a further strong announcement that overall credit ceilings limitimprovement in the current account surplus, ing loans extended by Japan's leading commer- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

154 Federal Reserve Bulletin • March 1982 cial banks, already progressively eased in previ- STERLING ous quarters, would be lifted entirely for the calendar quarter beginning in January 1982. In mid-1981, deep-seated concerns over the pros- In announcing the cut in the official lending pects for the economy of the United Kingdom rate, the authorities made it clear that they had continued to weigh on market sentiment toward confined the reduction to less than 1 percentage the pound. While the worst of the 2Vi-year-old point so as not to interfere with the recent rising recession appeared over, evidence of an ecotendency of the yen and that they were prepared nomic upturn had not yet materialized and, with to counter any short-term effect on the yen- interest rates lower than earlier in the year, there dollar rate by intervening in the exchange mar- was concern that the government might be easing kets. Nonetheless, when the U.S. and Eurodol- its stringent financial policies prematurely. It lar interest rates began to rise during December, appeared likely that the U.K. share in world the relative unattractiveness of yields on yen- export markets was falling—inasmuch as persisdenominated assets showed through in the ex- tently high rates of inflation and the earlier changes once again and the yen began moving appreciation of the exchange rate had severely down. eroded the competitiveness of British industry. When the upward movement of U.S. interest The trade and current accounts remained in rates continued into January, rather than revers- surplus. However, softening world oil prices ing with the new year as many had hoped, the prompted worries that the substantial benefits depreciation of the yen continued. Potential yen that Britain's oil self-sufficiency had provided to holders became interestingly impressed with the the balance of payments might diminish. Morediscrepancy between the pressures building for over, in other major industrial countries interest sustained high interest rates in the United States, rates had increased, particularly over the sumas new statistics were released showing higher- mer. But in the United Kingdom the pressures of than-expected growth of the U.S. monetary ag- high and rising unemployment were seen in the gregates, and the situation of Japan's monetary exchange market as limiting the rationale, as well authorities, who faced a continued need to ease as the scope, for the authorities to raise domestic credit policy to stimulate the flagging domestic interest rates, and interest differentials in fact economy. Hope that wide interest differentials moved adversely to sterling-denominated assets. might soon be reversed thus faded in the first By the end of July the pound had dropped 24 weeks of the new year. Pressure against the yen percent from the highs registered in January of intensified, bringing the exchange rate against last year to $1.84 against the dollar. It also the dollar to ¥ 230.00 by the close of January, declined IOV2 percent to DM 4.55 against the down 8 percent from the November 30 high but German mark and 10 percent in effective terms to up 6V2 percent above the low of August 1981. The 92.5 on a trade-weighted basis. The Bank of yen's cross rate in terms of the German mark had England, acting to smooth fluctuations in the changed even less on balance to ¥ 98.21 by the exchange rate, had maintained its policy of interend of January as compared with ¥ 97.00 six vening modestly on both sides of the market. months earlier. Nonetheless, mainly reflecting the repayment of The Bank of Japan continued its policy of outstanding loans, Britain's foreign exchange intervening in the exchange markets to smooth reserves had declined to $13.6 billion by the end erratic fluctuations in the exchange rate, inter- of July. vening to support the yen at various times when The pronounced drop of the dollar in August the rate moved down rapidly. Such dollar sales was reflected in only a temporary rebound of contributed to net declines recorded in Japan's sterling in the exchanges. Indeed, bearish sentiforeign exchange reserves for December and ment toward the pound deepened in September January. For the six months as a whole, howev- and October so that, while other European curer, Japan's foreign exchange reserves rose $600 rencies were advancing against the dollar, the million to $24.6 billion by the end of January, pound declined in the exchanges. In part, remainly reflecting interest earnings on Japan's newed downward pressure on sterling reflected outstanding holdings. fears that the monetary authorities had relaxed Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 155 the restrictive stance of monetary policy before margins and of investment activity. But, on the inflationary expectations had been firmly laid to other hand, the fall in the exchange rate followrest, thereby threatening the progress already ing the decline that had already taken place under way in bringing inflation under control. In earlier in 1981 threatened anti-inflationary goals the view of many, the growth of the targeted at a time when wage and price inflation were aggregate sterling M3 substantially above its 8 to showing improvement. Inflation had already fall- 10 percent annual range could not be fully ex- en to around 10 percent, close to rates prevailing plained by temporary distortions, such as the among Britain's major trading partners. Moredelay of tax payments caused by a civil servants' over, a sharp drop in average wage settlements strike, or by technical factors, such as a shift in had occurred, which, coupled with productivity housing finance from the building societies to the gains, had stabilized unit labor costs for the first banks. After allowing for these considerations, time in a decade. A failure by the authorities to the "underlying" rate of growth of sterling M3 respond forcefully to the rapid buildup of selling remained high. The banking data released for pressures might risk accelerating sterling's fall August were particularly discouraging in this given the development of a severely adverse respect, reflecting a rapid expansion of bank market psychology. Furthermore, domestic lending to finance personal consumption and to monetary developments, particularly the expansatisfy growing needs of the corporate sector. sion of bank lending, suggested that policy action The downward pressure on sterling also result- was appropriate to avoid a further buildup of ed from nervousness ahead of the publication of domestic liquidity. Thus, on balance, both extertrade figures for September and October—the nal and internal considerations pointed to the first full figures since February 1981 when the desirability of increasing U.K. money market civil service pay dispute interrupted the compila- rates. tion of data. In the interval, expectations for a Accordingly, in mid-September the authorities reduction of the trade surplus had developed. raised short-term interest rates sharply, under Weakened competitiveness was thought likely to new monetary control arrangements that came restrict the volume of exports, while import into effect the previous month, first through the volume was expected to rebound as the previous discount window and then by operations in the sharp rundown of domestic stocks abated and bill market. In addition, the authorities began was gradually reversed. The decline of sterling operating more actively in the exchange market during 1981 was also presumed to have weak- as a seller of dollars. Meanwhile, interest rates ened the terms of trade. In the event, the actual moved lower in the United States, and as a result trade figures confirmed a fall in the trade surplus British interest rates stood above comparable from the exceptional level of the winter of 1980- U.S. interest rates for the first time since No- 81, though gaps in the data posed greater-than- vember 1980. Then, immediately following the usual problems of interpretation. Looking ahead, realignment within the EMS, interest rates softreductions in crude oil prices, which had taken ened in a number of continental European counplace on a selective basis following the break- tries as well so that interest differentials moved down of OPEC price discussions in late summer, favorably for sterling more generally. These deadded to the unfavorable outlook for Britain's velopments prompted widespread demand for balance of payments trends. sterling, which gathered momentum in Novem- As broad-based selling pushed the pound pre- ber when the rally in the U.S. bond market cipitously lower, the rate dropped in September carried over to the gilt-edged market and attractto $1.7695 against the dollar and DM 4.10 against ed foreign investors seeking to benefit from the mark. In effective terms it traded as low as capital gains in addition to exchange rate returns. 86, representing a trade-weighted drop in sterling By late November the pound had recovered 11 to the lowest levels since March 1979. At this percent from its lows to trade around $1.98 point British policymakers faced a choice. On against the dollar and 91.9 on an effective basis. the one hand, the depreciation of the exchange During December, domestic debate over the rate improved competitiveness and brightened state of the economy intensified against the backthe outlook for a recovery of depressed profit ground of increased labor unrest. On December Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

156 Federal Reserve Bulletin • March 1982 2, Chancellor Howe announced a £5 billion in- dollar and advanced strongly against the conticrease in projected public spending for the 1982— nental currencies. By the end of January the 83 fiscal year (April-March), mainly for the local pound was trading at $1.8670 for a net rise of Wz authorities and for spending on employment and percent against the dollar since the end of July. training programs. But these measures were gen- On an effective basis, sterling stood at 91.8 for a erally seen as no more than a passive adjustment 3/4 percent decline over the six-month period by the government to rising unemployment and under review. continued low levels of economic activity be- Between the end of July 1981 and the end of cause they did not imply a significant shift in the January 1982 the foreign exchange reserves of already restrictive stance of fiscal policy. Most the United Kingdom declined $1.0 billion to private forecasters remained relatively pessimis- $12.6 billion. The authorities' intervention operatic concerning the strength of any recovery given tions in the exchange market had a small impact the lackluster prospects for government expendi- on reserves as compared with other influences, ture, consumer spending, and exports. The re- such as the repayments and accruals of external building of inventories was thought to compen- public-sector borrowings and the revaluation sate only partly for the weakness in other areas losses of gold and dollar swaps against European of economic activity. In these circumstances, currency units (ECUs) done with the European exchange market participants remained con- Monetary Cooperation Fund. cerned that the government would have to relax its restrictive policies after all and the pound again came under selling pressure, with the rate FRENCH FRANC slipping back 6 percent from its late-November highs to $1.8690 by mid-December before During late summer 1981, major elements of the steadying around the year-end. economic strategy adopted by France's new gov- Sentiment toward sterling turned more opti- ernment were under exchange market scrutiny. mistic during January. The labor situation im- The government had moved aggressively to reproved, particularly following the unexpected duce burgeoning unemployment through monedecision of the miners not to strike and instead to tary and fiscal measures to stimulate consumpaccept the management pay offer—a develop- tion and investment, and it was pledged to a ment that seemed to validate the perseverance of program to redistribute income and to nationalthe government in its overall strategy. The min- ize major banks and industrial groups. In other ers' decision brightened the outlook for inflation European countries the case for a shift toward to abate, and in the exchange market this boost- policy stimulus was under intense political deed sentiment for sterling. Domestically, this bate, but most governments opted for continued prospect gave a lift to the capital markets and monetary and fiscal restraint. Consequently, generated hopes that conditions in the money pessimism deepened in the exchange markets markets would ease. In fact, a softening in short- over the outlook for the French franc, since the term interest rates materialized and was not divergence in policies was expected to produce a resisted by the authorities. Even so, the decline deterioration in inflation and the current account in short-term U.K. interest rates was less than deficit in France while improvements were anticreductions on the Continent where the monetary ipated in some other European countries. The authorities were taking advantage of some im- franc fell in these circumstances more rapidly provement in their external positions to allow than other European currencies against the rising interest rates to decline and thus support their dollar. From FF 5.8775 at the end of July it economies. As a result, interest rate differentials plummeted to a record low of FF 6.1870 on favoring sterling investments over those denomi- August 10, while also dropping to the floor of the nated in continental currencies widened. At the EMS. Moreover, in subsequent weeks as the same time, trade figures released for December dollar declined in the exchanges, the franc had were better than expected and the pound also difficulty keeping pace with the advance of the benefited from oil company demand. As a result, German mark and other EMS currencies against sterling held generally firm against the rising the U.S. currency. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 157 The French government sought to contain the private banking sector, with the takeover shifting selling pressures on the franc during August and approximately 750,000 workers from private in- September so as not to jeopardize its domestic dustry to the government sector. program. The Bank of France intervened heavily In the exchange market, participants continin the exchange markets, selling mainly dollars ued to be concerned about the direction of ecoas well as European currencies, to keep the franc nomic policy. They feared an adverse impact on within the mandatory 2VA percent trading limit already depressed business spending plans of the against the German mark and occasionally also government's efforts to nationalize and restrucagainst other currencies that traded at the top of ture industry. They were troubled by the prosthe joint float. The government also tightened pect of a sharp rise in the fiscal deficit, which exchange controls to limit further the scope for seemed likely if an economic recovery did not leading and lagging of commercial payments by materialize. They worried that an expansion in temporarily suspending the facility for importers the deficit in a short period could compromise to purchase foreign currency forward. Previous- the government's growth target for the monetary ly, one-month forward cover had been permitted aggregates and, thereby, risk substantially inexcept for importers of raw materials, who were creasing inflationary pressures. These concerns allowed up to three months to purchase forward prompted large flows of funds to move out of exchange ahead of delivery. In addition, the France amid growing speculation that the franc Bank of France raised on September 21 its would be devalued within the EMS. The outmoney market intervention rates 1 percentage flows of funds were reflected in a decline of $3 point—to 191/2 percent for seven-day maturi- billion in French foreign exchange reserves from ties—thereby reversing the previously easier ten- $22.6 billion at the end of July to $19.8 billion by dency in domestic interest rates. However, the the end of September. authorities did not wish to undercut the basic On October 5 the central EMS parity of the policy aim of reducing the high interest rate French franc, along with the Italian lira, was burden on French industry, and thus the govern- adjusted downward 3 percent against the Danish ment requested that the increase in banks' costs krone, the Irish pound, and the Belgian franc— be financed out of profits and not by raising base whose central rates remained unchanged—and in lending rates. effect 8!/2 percent against the German mark and Otherwise, with respect to domestic policy, the Netherlands guilder, currencies whose centhe government continued to address the prob- tral rates were moved upward within the joint lems of an economy showing only limited signs float. Immediately after the EMS realignment, of recovery from more than sixteen to eighteen the franc traded at the top of the new band amid a months of recession. Late in September the reflow of funds that took the form of a reversal of government presented its 1982 budget proposals, commercial leads and lags and also represented a aimed foremost at increasing employment by reflux of speculative and investment capital. As a supporting economic activity. The budget pro- result, the franc rose in tandem with the mark vided for the creation of 70,000 new public- against the dollar to trade around FF 5.58 by sector jobs, increased spending on private and mid-October. public investment, raised aid and financial incen- In the weeks that followed, French governtives to industry, and hiked outlays on education ment officials stated that henceforth the governand various social welfare programs. On the ment would give the same priority to fighting revenue side, the imposition of new taxes, higher inflation as to unemployment to ensure maxitax rates, and steps to reduce tax evasion fell mum positive effects from the currency realignshort of the nearly 27 percent increase in expen- ment. The authorities acted on several fronts to ditures, leaving the government with a projected blunt the inflationary impact of the devaluation fiscal deficit of FF 95 billion, roughly equivalent of the franc. The government imposed temporary to 3 percent of GNP, compared with about FF 70 price controls or freezes on a wide range of billion in 1981 or about 2.4 percent of GNP. The services and food items, on which prices had government also approved a bill nationalizing shown marked acceleration, and introduced an 8 five industrial groups and a large segment of the percent guideline on annual increases for indus- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

158 Federal Reserve Bulletin • March 1982 trial products. Regarding wages, the government seen in the exchanges as less vulnerable than began discussions with the country's main other continental countries to political disrupunions to alter cost-of-living provisions in future tions in the Middle East and in Eastern Europe, a wage negotiations so as to stabilize real earnings. perception that helped to bolster the franc, par- In addition, the government froze FF 15 billion in ticularly following the declaration of martial law budgeted 1982 expenditures, while also raising in Poland in December. employer and worker contributions to the social For all these reasons, the franc remained firm security fund. These various measures helped at the top of the joint float even as EMS currenimprove the atmosphere in the domestic bond cies as a group weakened against the dollar market, and the government, unable to issue new during December and January. By the end of bonds for some time previously, began to borrow January, the franc was trading at FF 5.96 against successfully on a large scale. The government's the dollar, a net decline of about 1V4 percent over access to the bond market in financing its deficit the six-month period under review but a rise of made possible a deceleration in monetary growth more than 3Vi percent from its August lows. The and enhanced prospects for the monetary aggre- relative strength of the franc enabled the Bank of gates to stay within the 1982 range. France to acquire sufficient marks in the market With the realignment in place and with policies to reimburse in advance the main part of its very in France appearing to move toward greater short-term obligations to the European Fund for balance between the goals of combating unem- Monetary Cooperation (FECOM) stemming ployment and curbing inflation, the franc re- from earlier exchange market intervention in mained firm within the EMS. The impact of 1981. The outstanding amount was fully repaid stimulative policies on France's inflation and by early January in ECUs, foreign currency, and trade performance remained a source of concern. special drawing rights. By the end of January, However, these issues became somewhat less France's foreign exchange reserves stood at acute, as other countries moved cautiously to $18.3 billion. At this level, France's foreign provide stimulus to their flagging economies exchange reserves were $4.3 billion lower over through an easing in monetary conditions and as the six-month period under review, in part rethey came under growing pressure to adopt pro- flecting these repayments as well as the revaluagrams of fiscal stimulus. With the divergence in tion losses of gold and dollar swaps against policies somewhat less pronounced, some fore- ECUs done with FECOM. casters began to look for a smaller deterioration than previously expected in the 1982 French current account. ITALIAN LIRA Moreover, nominal French interest rates remained relatively high—commanding a premi- At the beginning of August the Italian lira had um of 6 to 7 percentage points over German fallen against the strongly rising dollar to stand at interest rates—even though the authorities had LIT 1,227.50. However, it was trading comfortrenewed their efforts to reduce French money ably near the top of the EMS, holding its position market rates in the aftermath of the EMS realign- firmly in relation to other European currencies ment. French firms sought foreign currency after its earlier downward adjustment within the loans to finance domestic expenditures, while joint float. The Bank of Italy had recently taken foreign official and private investors maintained advantage of the lira's position within the EMS and even increased their holdings of franc-de- to rebuild foreign currency reserves to a level of nominated assets. In these circumstances, the $16.5 billion. French authorities were able to ease the ban on The relatively firm performance of the lira at forward purchases of foreign currencies, allow- that time reflected sizable tourist inflows that ing importers of selected basic commodities to offset the adverse impact of Italy's deteriorating purchase foreign exchange up to three months terms of trade following the sharp increase in ahead of delivery. Otherwise, exchange controls dollar prices for energy and other products as remained intact, limiting the scope for resident well as a weakening of demand in Italy's princioutflows. Moreover, France continued to be pal export markets. In addition, a tight control on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 159 liquidity and credit at home helped shield the lira "norms" for prices, wages, and public utility from high interest rates abroad. The Bank of rates. At the same time, the government decided Italy, as part of its continuing struggle against to extend the four-month-old import deposit inflation, had tightened monetary policy progres- scheme until the end of February 1982. In an sively by widening the scope of its ceilings on agreement with the European Community, howbank lending, raising reserve requirements, and ever it announced a phased reduction of the hiking its discount rate to 19 percent. In addition, proportion of foreign exchange purchases held in the monetary authorities were changing their non-interest-bearing deposits and increased procedures for issuing Treasury bills so that the somewhat the products exempted from the de- Bank of Italy could vary its purchases of bills posit requirement. according to its assessment of domestic liquidity During August and September, the lira reneeds rather than buying all unsold Treasury bills mained firm within the joint float even as seasonat auction. Moreover, a deposit scheme had been al tourist inflows tapered off. Italy's trade balimposed in May for a four-month period on ance was beginning to improve, as export purchases of foreign exchange for imports. This volumes picked up in response to the earlier scheme, which required the placement with the devaluation and as softness in the domestic econ- Bank of Italy for ninety days of a non-interest- omy held import volumes down. Although the bearing lira deposit equal to 30 percent of the weakness of the EMS bloc had pushed the lira to exchange transaction, had the effect of increas- a new record low of LIT 1,268.50 against the ing the cost of payments in foreign currency as dollar on August 10, the Bank of Italy was able to well as cutting into credit available for domestic purchase sizable amounts of dollars to rebuild its purposes. reserve position through early September. These Nevertheless, problems were continuing. In- purchases were reflected in the $1.0 billion inflation was still running at a rate of 18 percent, crease in foreign currency reserves over the two considerably higher than most of Italy's trading months. partners. The public-sector debt had continued Late in September the lira dropped from the to exceed expectations despite persistent at- middle to the bottom of the joint float. Rumors tempts at expenditure control. A collapse in the began to circulate in the market that an EMS stock market had seriously threatened the au- realignment would be broad enough to include thorities' long-standing efforts to rebuild the fi- the lira, whereas previously only a limited adjustnancial structure of Italy's industrial sector. Evi- ment focusing on other currencies was thought dence then available indicated that the domestic likely. New estimates, putting the public-sector economy was weak, with industrial production borrowing requirement as large as 12.5 percent still declining. The terms of trade were falling, as of gross domestic product, also generated conthe U.S. dollar continued to climb in the ex- cern that the escalating deficit would undermine changes and the traditional surplus on service the efforts to curb inflation. As Italian importers income was contracting because of growing in- moved to accelerate foreign currency purchases, ternational debt service. sizable intervention by the Bank of Italy was To deal with these problems, a new coalition required to steady the rate. government led by Republican Giovanni Spado- On October 5, the lira was, in fact, devalued lini announced that it would not rely on any along with the French franc by 3 percent against further sharp contraction of economic activity to the currencies whose official parities remained curb inflation. Instead, it would seek to contain unchanged and, in effect, by 8V2 percent against inflationary pressures through a series of negoti- the German mark and the Dutch guilder. In ations with business, labor, and various political public statements after the realignment, the Italinterests aimed foremost at adjusting Italy's ian government stressed that it had not taken the wage indexation system, the scala mobile. For initiative for the change and that the effect of the the first time, two of the three major labor unions revaluation of the mark versus the lira, while indicated a willingness to negotiate limited ad- insufficient to reestablish the competitive posijustments to the system. Furthermore, proposals tion of Italian exports to West Germany, would were put forth for "receding targets" and make German exports to Italy more expensive Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

160 Federal Reserve Bulletin • March 1982 and thereby add to Italian inflation in the short dollar and 7lA percent against the mark, in part run. reflecting the results of the October EMS realign- After the EMS realignment and through the ment. Meanwhile, Italy's foreign exchange reend of November the lira, although generally serves advanced $1.3 billion over the period to trading around the middle of the EMS band, stand at $17.8 billion at the end of January. firmed against the dollar. Italian interest rates remained high while those in other centers were generally declining so that favorable interest rate differentials for the lira widened against most EUROPEAN MONETARY SYSTEM currencies. Concern remained, however, that the new government would not win quick agreement The persistence of serious recession and high from unions and business on approaches to re- inflation provoked major policy debates in most duce price and wage pressures. Similarly, in countries in the EMS over the summer of 1981. November a record rise in the scala mobile Complaints intensified that high U.S. interest underscored the risk that the gains in internation- rates were exacerbating the already difficult al competitiveness resulting from the two devalu- process of adjustment by forcing a choice beations would be quickly eroded by inflation. tween accepting the inflationary consequences of Thus, at times the lira came on offer and the depreciation of their currencies against the rising Bank of Italy promptly intervened to resist de- dollar or by raising interest rates in defense of clines in the rate, as reflected in the two-month home currencies and accepting a loss in economdrop of $469 million in foreign currency reserves. ic output. Domestically, pressures built up for a Beginning in late December and continuing relaxation in monetary policy, for fiscal expanthrough the end of January, the lira firmed to sion—through some combination of increased trade at or near the top of the EMS, even though expenditures and tax cuts—or otherwise for a it fell back in relation to the U.S. dollar along change in policy emphasis. In some countries, with other currencies in the joint float. The such as Germany, the commitment to restrictive Italian trade and current accounts had made policies already in place remained firm. In other considerable and sustained improvement. Ex- nations, including Belgium and the Netherlands, port and import volumes, as well as service the debate made it difficult for newly elected income, were responding favorably to the depre- legislatures to reach agreement on a ruling govciation of the lira, declining real incomes in Italy, ernment or on a common program. In France and inventory liquidation. Moreover, long-term there was an explicit shift in strategy, under new capital continued to flow into Italy, mainly in the leadership elected in the spring, in favor of form of Eurodollar borrowings, as credit avail- reducing unemployment through domestic stimuability at home remained tight. To reinforce the lus and specific job-creating measures. slowdown that was under way in inflation, the In the exchange markets, expectations intensi- Bank of Italy extended in late December the 1981 fied during the summer and early autumn that ceilings on growth of bank lending until the end divergent policies and economic trends among of 1982. These ceilings were extremely restric- participating EMS countries—particularly Gertive in that they required a reduction of lending in many and France—would force a realignment of real terms. Nevertheless, the lira came on offer the joint float. These expectations gained on occasion, for example, when a bunching of strength, particularly after the turnaround of the foreign currency purchases entered the market dollar in August, since market participants felt following reductions in the proportion of transac- that tensions within the joint float would more tions covered by the import deposit scheme. But readily show through once there was greater intervention by the Bank of Italy helped the lira scope for the mark to rise in the exchanges. In remain near the top of the EMS. By the end of the event, large speculative flows emerged, im- January the lira was trading at LIT 1,250.00 posing major strains on the joint float arrangeagainst the dollar, up 1 Vi percent from its August ment. To contain the selling pressures, the monelows. However, over the six-month period under tary authorities in many countries raised review, the lira declined PA percent against the domestic interest rates. Moreover, EMS central Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 161 banks intervened heavily during August and Sep- since the general elections in May. The governtember to keep their currencies within agreed ment was pledged to a program of reducing the limits. In contrast to the spring, the intervention fiscal deficit as a proportion of GNP, while also largely took the form of sales of dollars rather directing part of the country's substantial gas than EMS currencies. Then, on October 5 the revenues to specific employment-creating proj- EMS currencies were realigned with the German ects. mark and Dutch guilder each revalued 5V2 per- Even though Denmark in contrast to the Nethcent and the French franc and the Italian lira erlands was running a current account deficit, each devalued 3 percent in relation to the Belgian the Danish krone also traded firmly in the upper franc, the Danish krone, and the Irish pound portion of the joint float. Gains in export market whose bilateral central rates against each other shares and the depressed level of imports supremained unchanged. ported the krone by narrowing Denmark's cur- The new exchange rate structure and the less- rent account deficit over the course of 1981. The ening of strains within the EMS provided more central bank also made sizable foreign currency countries than previously with the scope to begin payments on behalf of the government from lowering interest rates and thereby provide some official reserves, thereby helping maintain balmonetary stimulus to their economies. France ance in the exchange market. and Denmark permitted money market rates to Trading around the middle of the EMS band ease, while Germany and the Netherlands low- was the Italian lira, bolstered by a contraction in ered official lending rates in the October-Decem- Italy's current account deficit and a tight moneber period. However, the reduction of European tary policy that induced long-term capital to flow interest rates lagged behind the decline of rates in in from abroad. Meanwhile, the Irish pound the United States and partly for this reason EMS tended to fluctuate somewhat below the middle currencies advanced against the dollar by as of the joint float even as Irish domestic interest much as 11 to 16 percent from their August lows. rates rose significantly. Although conversions of In December when U.S. interest rates moved private- and public-sector foreign borrowings higher, the currencies of the EMS started to helped underpin the pound, the inflows of capital decline against the rising dollar in the exchanges. had difficulty keeping pace with the widening of Although exchange rates fluctuated rather wide- the current account deficit, as a recovery in ly against the dollar, the configuration of curren- stock building and fixed investment from earlier cies within the EMS remained comparatively depressed levels began to draw in imports. stable. The German mark, after having initially moved The French franc, which moved to the top of to the floor of the EMS following the October the band immediately after the realignment, was realignment, remained near the bottom of the soon joined by the Dutch guilder in the upper joint float through the end of 1981. Accordingly, part of the EMS. The guilder was supported by a EMS central banks were able to purchase marks current account surplus and improving inflation in exchanges to cover liabilities incurred earlier prospects in the Netherlands. From a deficit in in the year to the FECOM. Together with the 1980, the current account moved to a surplus of mark at the bottom of the EMS was the Belgian about NG 7 billion last year, with further im- franc, pushed lower by concerns over Belgium's provement expected this year. The turnaround in large and protracted budget and current account the current account reflected delayed increases deficits. After elections in November, expectain the price of natural gas exports and the effect tions built up that a downward adjustment of the on imports of weak domestic investment and franc within the EMS would occur. As selling consumer demand. In addition, direct incomes pressures intensified in late November and early policies pursued by the authorities in 1980 and December, the Belgian National Bank supported 1981 improved competitiveness, with labor costs the franc at the floor of the 2V4 percent band per unit of output lagging behind those of most through increasingly heavy sales of foreign curother countries. Also contributing to the guil- rency. The authorities also raised the discount der's strength in the EMS was the formation of a rate and the Lombard rate each by 2 percentage government in autumn after many false starts points to 15 percent and 17 percent respectively, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

162 Federal Reserve Bulletin • March 1982 effective December 11, and enforced other mea- CANADIAN DOLLAR sures making it prohibitively expensive for nonresidents to speculate against the franc. Then, The Canadian dollar was heavily on offer in midover the December 13-14 weekend, a new gov- 1981, dropping on August 4 to a fifty-year low of ernment was formed, pledged to restrain wage Can. $1.2445 (U.S. $0.8035). The decline reflectincreases under the wage indexation system and ed market concerns over the balance of paycurtail the budget deficit. With the new govern- ments implications of Canadian energy policy, ment providing grounds for a more effective constitutional issues, and persistent inflation. approach than previously to reducing govern- The main focus of exchange market attention ment expenditures and lowering the costs of was Canadian energy policy announced in the industry, market sentiment toward the Belgian autumn of 1980, especially the establishment of franc improved. incentives for exploration and development of After the new year, as the currency bloc domestic energy that favor Canadian ownership, declined against the dollar, the configuration of and an ensuing dispute between the federal govcurrencies within the EMS shifted somewhat, ernment and Alberta over energy pricing and but without imposing new strains on the joint- taxation. By mid-1981, the "Canadianization" float mechanism itself. As before, the Dutch policy had stimulated sales of foreign-owned guilder and the French franc remained strong energy companies and outflows of capital. Morewithin the joint float, and the authorities in both over, the policy was seen as threatening the countries were able to lower interest rates in line inflows of investment capital needed to offset the with reductions in Germany. The Italian lira also traditional current account deficit and to provide traded at the top of the band as the authorities capital required to develop Canadian energy rekept interest rates high. The Danish krone serves and other economic resources. Also, to slipped lower in the middle of the band in re- press their position in the dispute with the federal sponse to projections of a widening in Denmark's government, the provincial authorities in Alberta current account deficit irl 1982 and the authori- had cut oil production temporarily within the ties, unable to take advantage of the tendency for province, increasing Canada's short-term depenmajor European interest rates to come down, dence on imported crude oil. tightened money market conditions instead. Other factors beyond the energy problems The German mark moved higher in the joint weighed on market sentiment in early August. float even as the German Federal Bank, acting to Strong upward pressure on Canadian prices and stimulate domestic demand, lowered on January wage costs had continued through the first half of 21 the special Lombard rate for the third time in 1981 in contrast to the United States where six months. As the mark moved higher and as improvement on the inflation front had begun to debate within Ireland over economic policy in- appear. The move to patriate the Canadian contensified, the Irish pound came under modest stitution by the federal government led to legal pressure and moved into the lower half of the challenges by provincial governments at a time EMS band. For its part, the Belgian franc traded when relations were already strained by the steadily at the bottom of the EMS and the energy issues. Earlier in the summer, the tradiauthorities cut the discount rate, effective Janutional interest rate differentials in favor of the ary 7, 1 percentage point to 14 percent and the Canadian currency nearly disappeared at times Lombard rate 2 percentage points to 15 percent. when short-term U.S. rates climbed sharply. The authorities did not, however, further reduce Against this background, the Canadian dollar lending rates when the German Federal Bank had become increasingly vulnerable, dropping acted on January 21 to cut its official lending sharply at the end of July and the first week of rate. By the end of January the EMS currencies August. The authorities took several actions in had relinquished much of the gains recorded response. The Bank of Canada intervened heaviagainst the dollar in the autumn months to end ly to support the rate and by the end of July, the six-month period about Wi percent to 10^4 Canadian foreign currency reserves had declined percent higher against the U.S. currency from to $748 million. It also drew $700 million in July their August lows. and $500 million in August under the $3.5 billion Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 163 standby facility with domestic chartered banks to market as to how much longer the authorities replenish reserves. At the end of August total could maintain their policies of restraint even borrowings under the facility stood at $1.5 bil- with no evidence of a slowing of inflation. Morelion. Beginning in late July, the Bank of Canada over, the Canadian trade surplus had weakened aggressively pushed up interest rates. In roughly through the summer, pushing the current acthree weeks, short-term rates jumped about 3 count more deeply into deficit. The Bank of percentage points, restoring substantial interest Canada was a net purchaser of U.S. dollars rate differentials in favor of Canadian assets by during these two months. It paid down $200 early August. In addition, the Canadian Ministry million in borrowings from domestic banks and of Finance asked commercial banks to reduce by the end of October foreign currency reserves their lending to corporations for purposes of stood at $1,270 million. financing buy-outs involving foreign currency During November, the Canadian dollar conversions. climbed about 2 percent as the U.S. dollar de- In the wake of these actions, the Canadian clined against most major currencies and as dollar rebounded in the exchanges. Also during several factors shifted in favor of the Canadian August, expectations developed that a compro- dollar. The Bank of Canada responded to the mise would soon be reached between the federal continued decline in U.S. interest rates by limitand provincial governments on the troublesome ing the fall in Canadian interest rates. As a result, issues of pricing, taxation, and revenue sharing interest rate differentials favorable to the Canadiin the energy field. On September 1, an agree- an dollar widened, spurring borrowings abroad, ment was in fact announced that provided for the especially by public authorities. As the exchange rapid move of domestic oil prices toward world rate rose, borrowers moved to accelerate conmarket levels, helping to alleviate exchange mar- versions of foreign currency. The government ket concern that the government's policy would also introduced a generally restrictive 1982 federlimit future energy development. With agree- al budget to Parliament. The exchange market ment now reached, chances increased that sever- was impressed that monetary and fiscal policy in al major oil exploration projects that had been Canada continued to be directed toward control suspended in earlier months would be resumed. of entrenched inflationary pressures. At about Also, Alberta moved to restore oil production the same time, new oil and gas finds in the cutbacks, easing Canadian needs for imported Beaufort Sea seemed to improve the chances of crude. A compromise on revenue sharing was achieving the Canadian goal of energy self-suffialso achieved, providing for increases in federal ciency by 1990. Also, Prime Minister Trudeau revenues. Under these circumstances, and with announced in early November a compromise the U.S. dollar generally in decline, the Canadian agreement with all provinces except Quebec dollar recovered substantially after mid-August approving patriation of the Canadian constituto Can. $1.1929 by September 3. The Bank of tion. Canada was a net purchaser of U.S. dollars By November 30, the Canadian dollar had during August and September and repaid $700 reached Can. $1.1761 (U.S. $0.8503), its highest million of the $1.5 billion in credits drawn during level in over a year. With the Canadian dollar the summer. strengthening sharply, the Bank of Canada The Canadian dollar then steadied to trade in a bought U.S. dollars in the exchange markets. fairly narrow range, easing back slightly on bal- During November, the government finalized a ance through the remainder of September and $300 million medium-term loan from the Saudi October. The Bank of Canada, stressing its view Arabian Monetary Agency. In total, Canadian that reduction of inflation was crucial to a return foreign currency reserves rose $1.75 billion durto healthy economic growth and external bal- ing the month and stood at $3.0 billion at the ance, resisted declines in Canadian interest rates month-end. In November and December the as large as those then developing in the United Bank of Canada repaid the final amounts bor- States. Nevertheless, a sudden increase in unem- rowed to finance intervention during the sumployment in September and other signs of devel- mer. oping economic slack led to questions in the In December and January, with U.S. interest Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

164 Federal Reserve Bulletin • March 1982 rates rising, concern developed that Canadian which at their peak had been more than 5 perinterest rates would not increase sufficiently to centage points, nearly evaporated by the end of maintain interest rate differentials. Successive January. Capital inflows tapered off and the monthly figures on unemployment confirmed the Canadian dollar dropped back to Can. $1.1988. weakness of the Canadian economy and trig- Thus, by the end of January, the Canadian gered a debate over fiscal and monetary policy. dollar was trading about 2 percent below its highs The restrictive tone of the 1982 budget had at the end of November but still nearly 3 percent generated substantial domestic criticism, and above its lows reached just after the opening of many analysts were predicting that the Canadian the period. The Bank of Canada was a net seller economy had by then entered its worst recession of U.S. dollars, so that Canadian foreign currenof the postwar period. Yet, inflation had not cy reserves declined in January to stand at $2.9 decelerated and wage settlements continued billion. Even so, over the six-month period, above 12 percent at a time when the United Canadian foreign currency reserves increased States was showing progress in both of these $2.2 billion and all drawings on the standby areas. In the event, Canadian interest rates drift- facility with domestic chartered banks had been ed slightly lower and favorable differentials, repaid. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

165 Industrial Production Released for publication March 16 apparently was weather related. Output of business equipment increased 0.5 percent after a Industrial production increased an estimated 1.6 decline of 3.4 percent in January; a further percent in February, reflecting a rebound in weakening occurred in the output of building and activity from the sharply curtailed output levels that resulted in part from severe January weather. Gains were generally widespread, with output Seasonally adjusted, ratio scale, 1967=100 of autos and trucks also rebounding in February from the very low level a month earlier. The index for February at 141.8 percent of the 1967 average was 1.0 percent below the December 1981 level and 6.6 percent below its level a year earlier. Industrial production in January is now estimated to have declined about 2.5 percent from December's level rather than the 3 percent originally estimated. In market groupings, production of consumer goods increased 1.7 percent in February, after a decline of 2 percent in January. Autos were assembled at an annual rate of 4.1 million units, up about 14 percent from the January assembly rate. Output of durable goods for the home increased 2.8 percent; revised estimates now indicate only a slight decline in January. In February, output of consumer nondurable goods regained almost three-fifths of the 1.5 percent Federal Reserve indexes, seasonally adjusted. Latest figures: Febdrop in the preceding month, a part of which ruary. Auto sales and stocks include imports. Major market groupings 1967 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, GGGrrrooouuupppiiinnnggg 1982 1981 1982 FFFeeebbb... 111999888111 tttooo FFFeeebbb... Jan." Feb.® Oct. Nov. Dec. Jan. Feb. 111999888222 Total industrial production 139.6 141.8 -1.7 -1.9 -2.1 -2.5 1.6 -6.6 Products, total 142.3 144.3 -1.1 -1.3 -1.2 -2.4 1.4 -3.9 Final products 142.3 144.2 -.7 -1.1 -1.0 -2.4 1.3 -2.7 Consumer goods 138.6 140.9 -.9 -1.7 -1.8 -2.0 1.7 -4.7 Durable 118.9 123.5 -2.9 -4.8 -5.0 -3.5 3.9 -12.5 Nondurable 146.5 147.8 -.2 -.5 -.7 -1.5 .9 -1.8 Business equipment 172.4 173.3 -1.2 -.8 -.3 -3.4 .5 -2.4 Defense and space 105.5 107.7 1.5 .8 1.6 -1.4 2.1 7.2 Intermediate products 141.9 144.4 -2.1 -1.8 -1.9 -2.7 1.8 -8.4 Construction supplies 122.3 124.9 -3.2 -3.8 -2.2 -3.9 2.1 -16.1 Materials 135.6 138.1 -2.6 -2.6 -3.8 -2.5 1.8 -10.5 p Preliminary. e Estimated. NOTE. Indexes are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

166 Federal Reserve Bulletin • March 1982 Major industry groupings 1967 = 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee,,, GGGrrrooouuupppiiinnnggg 1982 1981 1982 FFFeeebbb... 111999888111 tttooo FFFeeebbb... Jan." Feb.6 Oct. Nov. Dec. Jan. Feb. 111999888222 Manufacturing 137.6 140.1 -2.1 -2.0 -2.3 -2.9 1.8 -7.3 Durable 126.6 129.2 -2.2 -2.5 -2.4 -3.5 2.1 -8.2 Nondurable 153.5 155.8 -1.9 -1.5 -2.1 -2.2 1.5 -6.3 Mining 143.8 142.0 .2 -1.4 -.6 .9 -1.3 -.8 Utilities 168.8 167.4 .2 .5 -.9 .9 -.8 .6 p Preliminary. e Estimated. NOTE. Indexes are seasonally adjusted. mining equipment and of farm equipment, while rable materials rebounded 2.1 percent, and enersmall rebounds occurred in manufacturing, pow- gy materials increased 0.8 percent. er, commercial, and transit equipment. In industry groupings, manufacturing output Production of defense and space equipment increased an estimated 1.8 percent in February; increased 2.1 percent last month, more than the it had declined almost 3 percent the preceding drop in January, and was IVA percent above a month. Both durable and nondurable manufacyear earlier. Output of construction supplies tures regained about two-thirds of their January increased 2.1 percent in February, after a 3.9 declines. Mining output was reduced 1.3 percent percent decline the previous month. Output of in February, largely because of reduced oil and materials increased 1.8 percent, recovering most gas extraction activity. Production by utilities of the January decline; both durable and nondu- declined 0.8 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

167 Statements to Congress Statement by Paul A. Volcker, Chairman, Board cal downturns. But the current recession has of Governors of the Federal Reserve System, been superimposed on a pattern of stagnation before the Committee on Ways and Means, U.S. extending over a number of years—years charac- House of Representatives, February 23, 1982. terized by a rising trend of unemployment, lagging productivity, and particularly strong pres- I appreciate this opportunity to participate in sures on the older industrial sectors and regions. your hearings on the President's economic pro- And even now, after months of rising unemploygram. The responsibilities of the Federal Reserve ment, interest rates have remained painfully are, of course, limited to monetary policy, but high, delaying recovery in some important secwe must necessarily recognize the broad interre- tors of the economy. lationships among monetary and other policies In broad terms, I do not think there is any bearing upon national economic performance. great mystery as to why the economy and finan- Your committee has particular responsibility for cial markets have behaved in this way. During initiating specific revenue and spending mea- the 1970s, inflation increasingly became viewed sures; in reaching your decisions, you must also as a way of life, and in the process economic take into account the implications of these deci- incentives were distorted and our productive sions for the overall fiscal position of the govern- energies sapped. As we lost our most important ment and for financial markets. At that point our financial yardstick—a stable dollar—interest concerns intersect, and my comments this morn- rates rose and became highly volatile. As moneing will be largely directed to that area. tary policy moved to deal more forcefully with I have often expressed my concern about the the inflation—particularly in a context of fiscal critical need to break the inflationary momentum imbalance—the strain on financial markets bethat had come to grip the nation in the 1970s, and came more acute. But the alternative course of I have spoken of the indispensable role that trying to accommodate inflation by providing monetary policy has to play in that effort. At the excessive monetary growth would offer no lastsame time, I have emphasized the extra difficul- ing relief—and probably little respite even in the ties that result from placing too heavy a burden short run—for that approach would only feed on monetary policy alone in the fight on infla- inflationary expectations and reinforce the reluction—difficulties manifested in exceptionally tance of lenders to commit funds for any substanheavy pressures on financial markets and inter- tial period of time. est rates, and therefore on credit-dependent sec- Now we can see clear signs of progress on the tors of the economy. inflation front. A reversal of the pattern of the Current developments both reflect needed inflation rate ratcheting higher in each successive progress on the inflation front and reinforce my economic cycle would be an event of profound concern about the burdens placed on monetary importance, not least in encouraging a return to policy to bring about and sustain that progress. much lower and more stable interest rates. We In the best of circumstances, ending an inflation, cannot "prove" that we have yet turned that once it has become embedded in behavior and corner. Indeed, some of the progress against expectations, can be painful in the short run, inflation reflects the more immediate and tempohowever necessary that effort is to our future rary effects of recession-weakened markets, the strength and prosperity. The hard fact is that the pressures of extraordinarily high interest rates economy is now in the grip of a second reces- on commodity and other sensitive prices, and sion in as many years. Recent developments recent surpluses in petroleum and grain produchave some of the characteristics of earlier cycli- tion. But we are also seeing signs of potentially Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

168 Federal Reserve Bulletin • March 1982 more lasting changes in attitudes of business and affecting the preferences of the public for differlabor toward pricing, wage bargaining, and pro- ent types of financial assets. Specifically, growth ductivity. Not surprisingly, the effort is most of Ml-B (adjusted for the estimated shift of funds clearly apparent in industries in which costs and into NOW accounts) decelerated further last wages have been most out of line, in which year, averaging, over the year as a whole, a little international competitive pressures are particu- more than 1 percent below the previous year— larly intense, or in which regulatory change has the third consecutive year of lower growth. From encouraged greater price competition. But I be- the fourth quarter of 1980 to the fourth quarter of lieve the pattern is likely to spread, "building in" 1981, growth of Ml-B (adjusted) was 2.3 percent, lower rates of increase in nominal wages and a little more than 1 percentage point below the prices over time. And as the inflationary and cost lower end of the target that we had indicated was pressures ease, the economy can resume a desirable at midyear. The growth of the broader healthy pattern of growth, with greater job op- aggregate M2—about 9Vi percent over the fourportunities, increasing productivity, and higher quarter period—was a bit higher than in 1980, real wages. partly reflecting the extraordinary growth in But if that bright prospect is to be achieved, money market funds. we simply cannot afford now—just as the disin- As you know, the money supply had a particuflationary process is beginning to take hold and larly sharp increase in the early weeks of 1982, beginning to be believed—to abandon our mone- after fairly large increases in November and tary vigilance. Past failures to "carry through" December. Increases of that size are unusual have left a legacy of skepticism and uncertainty when production and incomes are weak, and the among workers and businessmen, among con- recent rise appears to be related in considerable sumers, and among participants in financial mar- part to the desire of individuals to place marginkets in which lenders demand "inflation" and ally more of their assets in highly liquid form. "uncertainty" premiums when committing their Interest rates, after falling sharply last fall, refunds. Credibility in dealing with inflation will traced part of that decline in January and early have to be earned by performance and persis- February, partly because the rising money suptence over time. Prudent fiscal and other policies ply was reflected in renewed pressure on bank must help in achieving that credibility. But I reserve positions. More recently, monetary believe it is broadly and rightly recognized that, growth appears to be moderating, and bond whatever those other policies, appropriate re- markets have rallied. straint on the expansion of money and credit will These recent movements, in my mind, emphacontinue to be fundamental to restoring price size again two relevant points in assessing our stability. monetary targets and their implications. First, in As you know, I testified two weeks ago before a large and complex economy, short-term fluctuthe House and Senate Banking Committees to ations in money supply data—for a month or report the Federal Reserve's specific intentions even a quarter, and much more so from week to with respect to money and credit growth for week—can be anticipated as consumers and bus- 1982. Without repeating the details, I would like inesses adjust their cash holdings. So long as the to highlight a few of the major points. trend is appropriate, those short-term fluctua- Developments during 1981 were broadly con- tions should have no important implication for sistent with the continuing effort to reduce economic activity or inflation. growth of money and credit to noninflationary Second and more fundamentally, our targets levels over time. There were, to be sure, some are, by design, limited to amounts necessary to divergent movements among the various mone- finance real growth in a framework of declining tary and credit aggregates that we target. Those inflation. The stronger the inflationary momenmovements are largely explicable in terms of tum, and the more pressure on credit markets technological and regulatory change—the intro- from other directions, the greater the risk that duction of negotiable order of withdrawal high interest rates will squeeze out housing, (NOW) accounts nationwide, the enormous investment, and other private activity supported growth of money market funds, and other factors by borrowing. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 169 We believe the targets for 1982 established this defense program) shows a sharply rising deficit, month (reaffirming tentative targets set last July) even if we assume revenues are lifted and spendwill be consistent with recovery in business ing restrained by a rather strong recovery. All activity over the second half of the year. Our the estimates before you, by the administration, target range for Ml of 2Vi to 5Vi percent is by the Congressional Budget Office, or by priconsistent with larger growth in money over the vate forecasters, point in the same direction. In year as a whole than during 1981, and the Federal the absence of action to close the potential gap, Open Market Committee has suggested that, as the deficit will rise to about $150 billion or more things now stand, growth in the upper part of the in fiscal 1983, and to still larger amounts in later range would be acceptable. The FOMC also years. Looking at the same situation in another suggested that growth of M2 toward the upper way, even if we assumed the unemployment rate end of its 6- to 9-percent range (the same as last would soon drop back to 6 percent or so—about year) would also be acceptable. But these ranges the level of the best recent years—we would be also imply a "tight fit," in the sense that they are faced with large and rising deficits unless strong predicated on the assumption and prospect of a new measures are taken to contain them. further decline in the rate of inflation. In recognition of this outlook, the administra- The fact is that consolidating and extending tion has, as you know, proposed substantial our progress on inflation will require continuing measures to reduce the potential deficit for fiscal restraint on monetary growth, and we intend to 1983, and the years beyond. The emphasis is on maintain the necessary degree of restraint. That spending reductions, but some revenue measures restraint, by providing assurance that inflation are also proposed. That program is estimated to will continue to decline, should over time be a reduce the projected fiscal gap $56 billion in 1983 powerful influence in bringing down interest and $84 billion in 1984. If enacted, as proposed, it rates as well, particularly in the long-term area. would go a considerable way toward dealing with Indeed, prospects for any lasting relaxation of the fiscal problem. interest rate pressures would be dim without the As you consider those and other proposals, I continuing monetary discipline that success must emphasize the threat that, unless substanagainst inflation requires. tial budgetary actions are undertaken, private For the more immediate future, interest rate borrowers would be squeezed out of the market, prospects depend crucially on other factors as with adverse consequences for homebuilding, for well, and I am fully aware that interest rates are business investment, and for other credit-depenvitally important to the timing, strength, and dent sectors. In other words, the budgetary sustainability of economic recovery. The most outlook as it stands does not seem to me consisimportant of those "other" factors is surely the tent with the expansion in private investment we outlook for the federal deficit, a factor that is seek and have sought to encourage through tax directly within your own purview. reduction and other measures. As you know, this year, fiscal 1982, we will The problem is not simply one for the future— have a very large federal deficit—on the order of for 1983 and 1984 and beyond. Financial markets $100 billion. To a considerable extent, that defi- constantly look ahead—any lender or borrower cit is a reflection of the recession, which reduces tries to anticipate and "discount" what lies revenues and raises outlays. In the particular ahead. Anticipations of a future "squeeze" are circumstances of today, the current deficit, to a translated into present high interest rates, into a large degree, acts as an "automatic stabilizer" desire to "stay short" in lending, into a relucfor the economy. The financing load should be tance to set into motion plans to build and to manageable in a context of reduced credit de- invest. Moreover, the deep-seated public instinct mands by other sectors. that sustained large deficits will lead, sooner or As we look ahead to 1983 and beyond, the later, to pressure to create more money to fisituation is quite different, and that is the source nance those deficits, or will otherwise stimulate of my concern about the budgetary situation. inflation, undercuts the effort to restore stability. What is so disturbing is that the current services I would also point out that, even with meabudget (taking account of the administration's sures as large as those proposed by the adminis- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

170 Federal Reserve Bulletin • March 1982 tration, we would be left with historically high In carrying the primary responsibility for origideficits in relation to gross national product or nating tax legislation and for certain large spendour probable savings potential, as the projected ing programs, your committee has the excruciatrecovery proceeded. And those projections have ing job of translating general budgetary little margin for misjudgment of the underlying objectives into concrete legislation. You must trend in spending or revenues, in interest rates, make choices involving social, national security, in the inflation rate and the like—areas in which and programmatic considerations far beyond the any projection has an element of uncertainty. I purview of the Federal Reserve or me. As a note, in that respect, that projections of the purely economic matter, I do believe that, in existing budget gap by the Congressional Budget general, lower taxes—particularly lower margin- Office run somewhat higher than those of the al income tax rates—will permit the private econadministration. omy to perform more effectively, tending to The potential for a continuing squeeze on increase incentives and to reduce distortions. financial markets could be alleviated by in- From that standpoint, control of spending clearly creases in business and personal saving. Such deserves priority. But to the extent that the saving has been abysmally low in recent years. needed job cannot be done by expenditure con- Greater price stability, positive real interest trol alone, I see no alternative to considering new rates, and the tax measures introduced last year, sources of revenue. all should work in the direction of greater sav- The difficult economic circumstances of today ings. But to count on a dramatically large in- should not blind us to the fact that we have much crease in savings to "bail" us out of the budget- upon which to build. We can see the tangible ary problem would be to miss the point, at best. progress against inflation. The administration We need larger saving to finance higher levels of and the Congress have taken action to spur business investment and housing construction; productivity, work, and savings through the tax we cannot afford to have it dissipated in financ- system. The inexorable upward trend in spending prolonged excessive budget deficits—deficits ing has been bent lower. Regulatory reform is that, as matters stand, would absorb, or more under way. From that perspective, what we need than absorb, a reasonable projection of increased is not any basic change in direction, but a sense savings. of urgency and persistence in "carrying Given the nature of the problem before us, and through." That sense has clear implications for the clear risks of underestimating the size of the continued discipline in monetary policy. And it budgetary problem, I can only conclude that the has direct implications for dealing with the bud- Congress should set its sights for still larger getary problem that looms so large before you. budgetary savings, keeping in mind the widening Seldom in my experience has the challenge gap now projected beyond fiscal 1983. been so clear for all to see. And seldom has there Credible steps to assure substantially declining been so strong a consensus on the need to meet it federal deficits as the economy expands, looking with bold measures. Those facts give me confitoward balance as we restore satisfactory levels dence that you and your colleagues, working of unemployment, would be enormously helpful with the administration, will find the way to in resolving some of the problems in our financial reconcile the competing priorities among the markets today. Indeed, such action could have a particulars of spending and revenue decisions in galvanizing effect in bringing about lower interest a way consistent with needed reduction in the rates because concern about the budgetary pros- deficit. The quicker that can be done, the pects preoccupies the thinking of many potential brighter, in my judgment, will be the outlook for investors in the market today. the economy. • Chairman Volcker gave similar testimony before the Finance Committee, U.S. Senate, February 24, 1982. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 171 Statement by Paul A. Volcker, Chairman, Board the years ahead. While it might be argued that of Governors of the Federal Reserve System, larger growth in the money supply, now or in the before the Committee on the Budget, U.S. Sen- future, could relieve the pressure, one result ate, March 2, 1982. would be to renew fears of inflation, just as marked progress toward greater price stability is I appreciate this opportunity to discuss with you apparent. An inflationary increase in the money important economic issues that are of concern to supply cannot substitute for real savings, and in all of us. Obviously, interrelationships among time would result in higher rather than lower monetary, fiscal, and other policies have impor- interest rates. tant bearing on our national economic perform- Clearly, the potential problem before us lies ance and, especially, on the performance of our squarely at the point where monetary and fiscal credit markets. The Federal Reserve has respon- policies intersect our respective responsibilities. sibilities only for monetary policy. This commit- For that reason, I should like, first, to review the tee has an important role in shaping the broad recent and prospective course of monetary polioutlines of congressional budget policy and, par- cy and then to discuss its relationship to the ticularly, in focusing on longer-term budget pros- fiscal problem. pects. This longer-term focus is especially impor- Monetary policy has, of course, been directed tant at the current juncture. toward restraining growth in money and credit Clearly, the economy is going through trou- with the important objective of reducing inflabled times. Unemployment is painfully high, tionary pressures and placing the economy on a particularly in older industrial regions. Interest course toward price stability. The hard fact is rates are imposing severe strains on housing, that uprooting a deeply embedded inflationary small business, and agriculture, and also on thrift process is difficult; it is made even more difficult institutions and certain other financial institu- to the extent that the effort is concentrated on tions. These problems are in major part a legacy one policy instrument. The fact that interest of high inflation and lagging growth in productivi- rates have remained painfully high in the midst of ty over a number of years. The recession has also recession, restraining activity in credit-depenplayed a major role in the current budgetary dent sectors of the economy, is one reflection of deficit, which is likely to be more than double the the difficulty. But the problem extends back over deficit you planned about a year ago. a number of years. As you know, the current I believe that there are strong reasons to recession has been superimposed on a pattern of expect a cyclical upturn later this year. Our stagnation extending over a considerable period. monetary policy targets will accommodate such In broad terms I do not think there is any great an upturn. And the deficit for the current year, mystery as to why the economy has behaved this with its large cyclical component, should be way. Beginning in the mid-1960s, inflation inmanageable; to a considerable extent, by sup- creasingly became a way of life and in the porting income flows and spending during the process distorted economic incentives, sapped recession, it can help stabilize the economy and our productive energies, and caused arbitrary induce recovery. and capricious transfers of income and wealth. For future years the situation is quite different. For a time, as inflation gained momentum, real We face the bleak prospect, as things now stand interest rates were low or negative. But after and without strong action to contain spending inflation took hold and became embedded in and to increase revenues, that budgetary deficits behavior and expectations, anticipations by borwill rise very substantially, even assuming satis- rowers and lenders alike tended to propel interfactory economic growth. That prospect threat- est rates higher. And as monetary policy moved ens the recovery we need in business investment to deal more forcefully with the inflation—particand housing by potentially preempting a sizable ularly in a context of fiscal imbalance—the strain fraction of our savings potential; moreover, the on financial markets became more acute. future implications for congested credit markets The alternative course of simply accommodatfeed back on present interest rates, as lenders ing inflation by providing it monetary sustenance and borrowers "discount" what might happen in would, however, offer no lasting relief. By feed- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

172 Federal Reserve Bulletin • March 1982 ing expectations of inflation and reinforcing the area of the market most heavily affected by reluctance of lenders to commit funds for any but expectations. the briefest periods of time, the high level of Those interest rates have remained high deinterest rates (particularly long-term rates) would spite visible progress—and potentially lasting only become further embedded in the economy. progress—on the inflation front. To be sure, The hard fact is that loss of our most important some of the progress against inflation reflects the financial yardstick—a stable dollar—bred high more immediate, and potentially reversible, efand volatile interest rates. Restoration and main- fects of recession-weakened markets, current tenance of lower interest rates are ultimately surpluses in petroleum and grain production, and dependent on greater confidence that stability reduced commodity speculation and pressures can and will be restored. generally for inventory liquidation due to ex- Developments during 1981 seem to me broadly traordinarily high interest rates. However, we consistent with that effort. While particular mea- can now also see encouraging signs of more sures of money and credit diverged, responding lasting progress. Attitudes of business and labor in large part to legislative, regulatory, and insti- toward pricing and wage bargaining, and toward tutional change affecting the way businesses and work rules that hamper productivity, seem to be individuals chose to hold their financial assets, changing. Not surprisingly, that change is most the general direction was consistent with the apparent in industries in which costs and wages effort to curb the monetary sources of inflation. have been most clearly out of line and in which Specifically, Ml-B growth (adjusted for the esti- international competitive pressures or those remated shift of funds into negotiable order of sulting from regulatory change are particularly withdrawal accounts) decelerated further last intense. But—so long as monetary and fiscal year, averaging a little more than 1 percent lower policies are appropriate—I believe these changes than the previous year—the third consecutive will be reflected in a spreading pattern of cost year of such deceleration. Growth of the broader and price restraint. Individually, workers and aggregate, M2, averaged a bit higher than in businessmen are naturally reluctant to maintain 1980, but that rise, at the margin, reflected such restraint, partly for fear their concessions extraordinary growth in money market funds and will not be matched by those of others. But regulatory and legislative changes affecting the collectively, such restraint, combined with highattractiveness of time deposits, which pulled into er productivity, will be amply repaid in the form M2 some funds that otherwise would have been of higher real wages and better prospects for job placed elsewhere. security. This is the foundation on which we can expect to build a sustainable recovery. Despite the slow growth of the narrowly defined money supply, short-term interest rates fell If these brighter prospects are to be achieved, substantially from midyear peaks, and had a however, we cannot afford—just as the disinflaparticularly sharp drop after the recession took tionary process is beginning to take hold—to hold. As you know, however, short-term rates abandon our monetary vigilance. Past failures to retraced part of that decline late in the year and "carry through" have left a legacy of skepticism early in 1982. The money supply rose sharply in and uncertainty among workers and businessthe early weeks of 1982, and as a result, bank men, among consumers, and, not least, among reserve positions came under renewed pressure. participants in financial markets in which lenders A spurt in money growth is unusual in a context demand "inflation" and "uncertainty" premiof weak production and income, and it appeared ums when committing their funds. That is one at least in part related to uncertainties on the part important factor holding up longer-term interest of individuals, leading them to shift a portion of rates. Credibility in dealing with inflation will their financial assets into the most liquid form. have to be earned by performance and persis- More recently, the excessive growth has ap- tence over time. And, I believe, it is broadly and peared to be subsiding, and interest rates have rightly recognized that appropriate restraint on turned somewhat lower. But a characteristic of the expansion of money and credit will continue the past year has been the persistently high level to be fundamental to restoring price stability. of intermediate- and long-term interest rates, an Our intentions with respect to money and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 173 credit growth in 1982 reported to the Congress national product. Moreover, a range of possible three weeks ago seem to me consistent with that outcomes exists with respect to our savings need. The monetary targets are, we believe, potential and sources of funds in the credit consistent with recovery in real business activity markets, even with the given assumptions reover the second half of the year; in fact, the garding GNP. Nevertheless, some general implitarget range for Ml is consistent with somewhat cations of the budgetary outlook as it stands are larger growth in that aggregate than actual clear enough. growth of the adjusted measure during 1981. At In the absence of action, the projected deficits the same time, the targets do assume and are would be outside the range of peacetime experidesigned to encourage further progress toward ence for good business years, whether measured price stability. In that sense, they are a "tight in absolute terms or in relation to the potential fit." GNP and savings. The performance of the credit markets in 1982 In recognition of those concerns, the adminisand beyond, in a framework of disciplined mone- tration has proposed large cuts in spending and tary policy, will be heavily influenced by supply some measures to increase revenues. Such acand demand forces other than the course of tion would go a long way toward bringing the inflation and inflationary expectations. Key deficits down, cutting them by one-half or so in among these is the size of the federal deficit. fiscal 1984 according to administration estimates. Government borrowing and private borrowing But even with such forceful action, the size of compete for a limited supply of available savings the projected deficits would remain large, relaand credit. That competition is usually ameliorat- tive to savings and GNP, for a relatively prospered in the midst of recession because private ous business year. While a few years in the 1970s credit demands are reduced. But a more prosper- appear roughly comparable, there would seem to ous economy also implies much stronger needs be little or no "safety margin" for meeting for mortgage and business credit; indeed, sus- expanded investment requirements. Should the tained recovery of the private economy and the deficit trends be more adverse, as the Congresinvestment we need to support productivity are sional Budget Office suggests, the potential for dependent on more favorable financial market "crowding out" private investment would be conditions. Precisely those more favorable mar- greater. ket conditions are threatened by prospects for A substantial increase in savings could help sharply rising deficits in fiscal 1983 and the years protect against the implied squeeze on financial beyond. Members of this committee are acutely markets. Indeed, business saving is likely to be aware that all of the familiar projections, by the enhanced substantially by the provisions of last administration, the Congressional Budget Office, year's tax bill,- and personal saving should also and private forecasters, point to historically huge be increased as inflation declines and in response deficits, assuming that the administration's de- to other incentives. But we also need to rememfense plans are broadly carried out and no new ber that the larger savings potential should not be steps are taken to curtail nondefense spending or dissipated in financing government purchases or raise revenues. We can debate whether the esti- transfer payments when our investment needs mates of the administration or the Congressional are so urgent. Budget Office are more accurate. But the point is The hard fact is we cannot escape a choice— that there is no disagreement that deficits would whether we want to encourage more favorable rise to $150 billion and beyond, in a context of a financing conditions for the private sector or steadily expanding economy, under either set of whether we are willing to risk seeing our savings assumptions, and deficits of those magnitudes and financial resources diverted in large measure cannot be acceptable—not if we, in fact, want to to financing a federal deficit. see the rise in investment and housing we want. While it is the deficits for fiscal 1983, 1984, and Projecting the federal budgetary position for beyond that loom so large, action is needed now several years ahead necessarily involves a range for several reasons. First, as you know, the of uncertainty about spending and tax programs, budgetary momentum cannot be curbed without the level of interest rates, and overall gross planning ahead. Steps to achieve large reduc- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

174 Federal Reserve Bulletin • March 1982 tions in spending or higher receipts in fiscal more effectively and that higher marginal tax 1983—only six months off—need to be put in rates distort incentives and impede economic place soon, and measures of spending restraint efficiency. But you must weigh many considershould be undertaken during the current congres- ations, and I recognize the choices before you sional session to be fully effective in fiscal 1984. are extremely difficult and involve detailed con- Second, deficits of the projected magnitude siderations of social objectives and program obare in some degree self-reinforcing. Prolongation jectives beyond the purview of the Federal Reof high deficits and high interest rates feeds back serve. To the extent that the job cannot be into future debt service and budget expenditures. accomplished by further steps to reduce growth Finally, and most important, uncertainties in spending, I see no alternative but action to about future credit market pressures cloud the bring the trend of revenues into better alignment planning of investors today. Strong actions taken with spending prospects. now to assure that deficits can and will be In concluding, I would emphasize that the reduced as the economy recovers can go far main directives of economic policy laid out last toward galvanizing investor attitudes in a favor- year seem to me broadly appropriate to the able direction. Paradoxical as it may seem in challenge before us. We are making progress light of some past economic analysis—analysis against inflation, and sustaining that progress is developed when inflation and high interest rates fundamental to a brighter future. Tax and other were not a preoccupation—prospects for recov- policies developed last year should contribute to ery can be speeded by decisive action by this a more productive, competitive economy. Some committee and your congressional colleagues to steps have been taken to slow the strong upward curb future deficits, for the result would be to momentum in government spending. relieve apprehension in the market that contrib- At the same time, the agenda for action is utes to today's high rates. clear. The Federal Reserve will maintain the As I noted earlier, if enacted, the proposals by needed degree of monetary discipline. We need the administration for deficit-reducing measures decisive action to curtail budget deficits. totaling more than $55 billion in fiscal 1983 and As we approach that agenda, I can only be approaching $85 billion in 1984 would go a long encouraged by the degree of understanding of the way toward ameliorating the potential problem. nature and the urgency of the problems before They represent a major challenge to the Con- us. I believe a sense exists that, difficult as it is, gress, but I would urge upon you the desirability the Congress and the administration have an of going even further to reduce demonstrably the opportunity in coming weeks to seize the initiapattern of deficits as the economy recovers. The tive with a strong budgetary program. We in the appropriate target, it seems to me, would be to Federal Reserve mean to do our part in fostering restore the prospect of budgetary balance as a confidence in financial markets. Together, the high level of economic activity is restored. Federal Reserve and the Congress can move On purely economic grounds, I believe that from challenge to conviction that the base has lower taxes will enable the economy to perform been laid for national recovery. • Chairman Volcker gave similar testimony before the Committee on Appropriations, U.S. Senate, March 4, 1982. Statement by Lyle E. Gramley, Member, Board I appreciate the opportunity to present my views of Governors of the Federal Reserve System, regarding the effects of financial innovations on before the Subcommittee on Domestic Monetary the conduct of monetary policy. Policy of the Committee on Banking, Finance Innovation in U.S. financial markets and pracand Urban Affairs, U.S. House of Representa- tices has been proceeding at a phenomenal pace tives, March 3, 1982. in the last decade. The innovational process is by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 175 no means completed. It is therefore appropriate More recently, other interest-bearing assets and timely to examine the implications of this have attracted considerable public interest as development for monetary policy. Let me begin, substitutes for money. A number of brokerage if I may, with a review of the principal forces firms now offer cash management accounts, responsible for the drastic changes we have seen which combine the features of money market in financial markets. funds and margin accounts. Most of these allow Our economy has suffered from a rising trend for withdrawal of funds by check in any denomiof inflation since the mid-1960s. As borrowers nation and by debit card. The money market and lenders came to expect inflation to continue, fund component of the Merrill Lynch Cash Manor even to accelerate, market interest rates agement Account has already grown to more moved progressively upward. than $13 billion. Very recently, new types of Higher market rates of interest increased the "sweep" arrangements have emerged, some depenalty for holding deposits whose yields were signed primarily for smaller businesses and othconstrained by law or regulation. The yields that ers for households. Sweep arrangements permit depository institutions could pay were limited by funds to move automatically into or out of conprohibitions or ceilings on the payment of explic- ventional transaction balances to investment acit interest and also by reserve requirements that counts paying market-related yields. reduced the rate of return on the investment of The financial innovations of recent years have deposit proceeds. Moreover, the thrift institu- affected principally the asset portfolios and the tions have been, and still are, severely limited in cash management practices of individuals and their capacity to pay market interest rates on other small investors. They parallel developdeposits because they hold a substantial volume ments that began many years earlier in the manof longer-term assets acquired earlier when infla- agement of cash by nonfinancial corporations tion and interest rates were lower. and other large investors. The problems for As the public has become increasingly sensi- monetary policy posed by these innovations tive to the earnings lost by holding non-interest- have thus been around for a while. bearing or low-yielding deposits, it has become Financial innovation has, however, raised more adept at economizing on cash balances and more questions in recent years about the appromore receptive to new kinds of financial invest- priate definition of money, about the precision of ments. The increased financial sophistication of the Federal Reserve's control over the money households and businesses, moreover, has been stock, and about the meaning of changes in coupled with technological advances in the com- money balances. I will touch on each of these puter and telecommunications industries that issues in turn. have reduced the transaction costs of transferring funds. New institutions and instruments have DEFINITIONS OF MONEY emerged to satisfy the public's demand for highyielding liquid assets. The most widely publi- The difficulties associated with defining money cized of these are the money market mutual are not new: the existence of money substitutes funds, which have grown explosively during the and "near-monies" has always made it hard to past several years. These investment companies decide which assets should be included in a offer small savers the opportunity to invest indi- particular measure of money. Traditionally, the rectly in diversified pools of very short-term, issue has boiled down to drawing the line somelarge-denomination, money market instruments where along a spectrum of assets ranked accordsuch as commercial paper and negotiable certifi- ing to degrees of "moneyness," starting with cates of deposit. While money market funds are a balances serving as a generally accepted means repository for savings, they also can serve as of payment—having few investment characteristransaction balances, or as a very close substi- tics—and moving successively to less liquid astute for them. Most money market funds allow sets offering higher returns. The difficulties of the immediate withdrawal of balances by check defining money have increased as new instruor other convenient means. ments have come into use that possess overlap- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

176 Federal Reserve Bulletin • March 1982 ping transaction and investment characteristics. average turnover rate of shares in money market The conventional measure of transaction bal- mutual funds is about two to three times per ances, Ml, now includes interest-bearing check- year, slightly lower than that for passbook savable deposits that have a significant savings ings deposits at banks and thrift institutions. component. At the same time, money market However, the prospect of rapid growth of transfunds and cash management accounts—which action balances not covered by reserves poses a are not included in Ml—are also used in part for potentially serious problem for monetary control transaction purposes. in the future. I will return to that subject shortly. Periodic redefinitions of money are needed when financial innovation proceeds rapidly. The 1980 redefinition of the monetary aggregates was STABILITY OF MONEY DEMAND designed to bring all transaction accounts into Ml. Available evidence at that time suggested In recent years, the principal monetary policy that money market mutual funds were not exten- problem stemming from financial innovations sively used for transaction purposes, and so they has been their effect on the relationship among were included in M2. Last month, M2 was re- the money stock, nominal gross national prodvised to exclude shares in money market mutual uct, and interest rates. Relative stability in this funds held by institutional investors; retail repur- relationship is an important ingredient in a cenchase agreements, which are close substitutions tral bank's use of monetary aggregates as interfor small-denomination time deposits, were mediate targets or as indicators of policy. Before brought into the definition of M2. 1974, it was possible to predict reasonably well Further revisions in definitions of the mone- the amount of Ml that the public would want to tary aggregates may be necessary in the near hold given the size of the economy and the level future. The staff of the Federal Reserve Board, of interest rates. Since then, however, growth of with the help of the Investment Company Insti- Ml has been considerably slower, relative to the tute, is undertaking a survey to determine the rise of nominal GNP, than indicated by historical extent to which money market mutual funds are relationships. More important, the period since used for transaction purposes. The staff will also 1974 has been characterized by a greater degree be gathering data this year on individual retire- of short-run instability in money demand. ment and Keogh accounts. These latter data may Estimates of the amount of shortfall in money provide the basis for removing these accounts— growth, relative to expectations based on historiwhich are of a long-term nature—from the defini- cal experience, differ from one money demand tion of M2 or for a better understanding of equation to another. But a large number of changes in M2. studies of the public's demand for transaction balances point to a similar conclusion: for reasons that we understand only imperfectly, mon- CONTROLLING THE ey demand has grown more slowly than expected MONETARY AGGREGATES over the past seven or eight years, and it has also been rather unstable in the short run. Turning next to the issue of controlling the The relationship between the broader monemonetary aggregates, my judgment is that finan- tary aggregates and GNP has also changed in cial innovations have not, as yet, created a recent years because of financial innovations and serious problem. The Monetary Control Act of regulatory changes. In past periods of rising 1980 extended reserve requirements to all depos- market interest rates, growth of M2 tended to itory institutions, a step that helped to strengthen slow abruptly because the flow of funds was the link between reserves and narrow money diverted from depository institutions to market balances. The extent to which balances used for securities. But the composition of M2 has transaction purposes escape reserve require- changed materially since 1978; now, more than ments because they are held outside depository 60 percent of its nontransaction component coninstitutions is not known with precision, but it sists of assets bearing market-related yields. This appears to be small at present. For example, the change helps to insulate the growth of M2 and its Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 177 relationship to GNP from the effects of changing base. I do not believe that such a step would market interest rates. Consequently, even in the improve monetary policy. The base is a rather face of substantial interest rate variations, the arbitrary combination of the various components velocity of M2 has changed relatively little over of the monetary aggregates. Its largest compoeach of the last three years, in contrast to the nent is currency, whose magnitude has always swings that used to occur. been—and, I believe, always should be—deter- I do not by any means conclude that the recent mined by the public's demands for currency. The instability of money demand requires a basic remaining portion of the base, reserves, is basichange in our procedures for implementing mon- cally a weighted sum of the reservable deposit etary policy. On the contrary, setting targets in components of the monetary aggregates, with the advance for growth of money provides an impor- weights determined by their respective reserve tant safeguard against the pitfalls that would be ratios. When the significance of movements in encountered in a policy focused largely on inter- the aggregates is uncertain, so also is the signifiest rates. As history before October 6, 1979, cance of changes in the monetary base. Furtheramply demonstrates, focusing too much atten- more, there is little reason to think that stability tion on interest rates in the conduct of monetary in the growth of the base will produce economic policy is apt to lead to a rate of monetary stability. Annual growth in the base actually was expansion that produces inflation. We have very stable over the 1970s, with yearly growth made substantial progress since the fourth quar- rates never deviating more than 1 VA percentage ter of 1979 in reducing the expansion of money points from their average for the decade. Neverand credit, and also in reducing the rate of theless, the 1970s was a period of considerable inflation. The methods of monetary control em- economic instability. ployed since then have contributed to those Finally, targeting on a broad credit aggredevelopments. gate—another suggestion sometimes offered— However, several implications for monetary has some intellectual appeal for me. Unfortutargeting can be drawn from the experience of nately, the suggestion seems impractical. The recent years. First, short-run movements of the data on credit flows become available with very money stock have even less meaning than they substantial lags and are subject to large revionce did as indicators of monetary policy. What sions. happens to money growth over longer periods is what counts. Second, monetary targets should be expressed in rather wide ranges: the present LEGISLATIVE REMEDIES ranges of 3 percentage points are certainly not too wide. Third, we need to continue to use Let me turn now to legislative actions that would multiple targets, rather than to focus on any enhance the effectiveness of monetary policy. single measure of money. Indeed, somewhat The greatest concern at this moment is the greater weight may need to be given to the possibility that an increasing proportion of the broader monetary aggregates in the future as a financial assets used for transaction purposes consequence of the relative instability of the will, over time, be held in forms other than demand for Ml. Finally, we need to stand ready deposits, thus escaping Federal Reserve reserve to accept growth of money outside of our target requirements. Such a development, besides its ranges—or even to modify the ranges—if implications for monetary control, would mean changes in the public's asset preferences warrant that a growing fraction of the nation's money it. stock would lack the protection of deposit insur- What we cannot do, and what the Federal ance and be held at institutions beyond the scope Reserve will not do, is to abandon the basic ob- of supervision and regulation of the traditional jective of gradually slowing the growth of mon- federal financial regulatory authorities. If such ey and credit in the interests of reducing infla- shifts in asset preferences occurred suddenly, tion. and on a wide scale, they might be accompanied It is sometimes argued that our present mone- by rather marked reductions in the supply of tary targets should be replaced by the monetary credit to borrowers heavily dependent on deposi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

178 Federal Reserve Bulletin • March 1982 tory institutions as a source of funds—borrowers money market funds, fund managements amply such as farmers, other small businesses, consum- demonstrated the feasibility and relative ease of ers, and homebuyers. "cloning" their funds to accommodate changes I would therefore recommend that the Con- in the regulatory environment. Such an approach gress authorize the Federal Reserve to impose would not affect the returns available to individreserve requirements on money market fund uals holding shares in money market funds pureshares and all other instruments to the extent ly as a savings vehicle. that they serve as the functional equivalent of This step alone would not address fully the transaction balances, regardless of the issuer. existing disparities of regulatory treatment Such legislation would keep intact the basic among financial intermediaries. Given the prohiphilosophy of the Monetary Control Act, which bition of explicit interest payments on demand extended reserve requirements to transaction deposits and the ceiling rates on time and savings balances of all depository institutions. It would deposits, deposit-taking institutions are unable to also provide a framework for fairer competition compete on an equal footing with intermediaries among financial intermediaries. offering new instruments. The depository institu- In implementing the Monetary Control Act, tions have long been the core of our financial the Federal Reserve designated as a transaction system, and many of their customers have no account one that is accessible by check or debit ready alternatives for the particular types of card, or one that can be used with some frequen- credit such institutions extend. I do not think we cy for third-party transfers by other means, such can take lightly the erosion of their competitive as by telephone. The distinction between a trans- position. action account and other accounts payable on Ceilings on rates paid on time and savings demand inevitably is vague at the margin, and I deposits will be phased out under existing legislabelieve the Federal Reserve should retain suffi- tion over the next four years. I wish the process ciently flexible authority to put forward defini- could take place faster, and that we could also tions to include the many new types of plans with remove the prohibition of interest on demand transaction capabilities that are likely to be de- deposits. Great caution must be exercised, howveloped. ever, to ensure that the process of deregulation My expectation would be that money market does not add unnecessarily to the burdens of funds would react to the imposition of such thrift institutions, whose earnings are already reserve requirements by segregating shares that under severe strain. can be used for transaction purposes from other Financial innovation will no doubt continue at accounts. Their customers would be offered a a rapid pace in the foreseeable future. We as choice among types of funds, with the "transac- regulators and legislators must ensure that the tion balance" account offering a somewhat lower process of innovation is consistent with an effecyield. During the short period in 1980 when tive monetary policy and equitable treatment of marginal reserve requirements were imposed on financial institutions. • Statement by Theodore E. Allison, Staff Director credit unions, other depository institutions, and for Federal Reserve Bank Activities, before the nondepository institutions such as money market Subcommittee on Consumer Affairs of the Com- mutual funds whereby the depositor of a check mittee on Banking, Housing, and Urban Affairs, may not withdraw the funds represented by the U.S. Senate, March 10, 1982. check for some period of time to assure that funds are available in the depositor's account if I am pleased to have the opportunity to present the check is returned unpaid. When confronted the views of the Board of Governors on policies with problems involving these policies, many and practices regarding delayed funds availabil- depositors are understandably irritated; often ity. Delayed funds availability is a practice used they must delay other transactions, and some by some banks, savings and loan associations, may even realize costs as a result. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 179 I would like to explain briefly how the check able, and if no stop-payment order is made. But collection system works and how it relates to if the check is not properly drawn or endorsed, if delayed funds availability; to share with you funds are not available, or if a stop-payment what the Board has learned from its studies of order exists, then the paying institution will send delayed availability problems and practices; and the check back to the endorsing institution (table to explain what, in the Board's view, would be 1). When a paying institution returns a check, it the most productive approach in seeking solu- must do so by midnight of the day after it tions to the problems that exist. receives the check. Article 4 of the Uniform Commercial Code, which has been adopted in all states, governs THE CHECK COLLECTION SYSTEM check clearing and requires the paying institution to return the check to the institution from which The check collection system in the United States it received the check. Thus, if several institutions frequently involves many handlings of a check were involved sequentially in the clearing procbetween its deposit in one depository institution ess, each institution must also handle the check and its payment by the paying depository institu- as it is returned to the depositor. Although the tion. Checks deposited to accounts in the same processing of return items is the reverse of the institution at which they are to be paid account original processing for collection, this process is for about 51 percent of all checks written. The much more labor intensive. The machine-readremaining 49 percent of the checks must be able coding at the bottom of the check allows for collected by sending them to any of the follow- collection routing through the use of computering: controlled high-speed check sorters. A check being returned, however, must be processed • A correspondent bank1 manually because each endorsement stamp on • A Federal Reserve office2 the back of the check must be read to determine • A check clearinghouse3 the institution to which the check should be • The paying depository institution directly returned. As a result, return routing might typi- • Some combination of the above (the most cally require twice as much time as collection likely alternative). routing. For example, a check requiring two days As little as one day or as many as six or more to be delivered to the paying institution might days may be required for a check to move from require four additional days to be returned to the the institution at which it is first deposited (the institution of first deposit. Unfortunately, at the endorsing institution) to the paying institution. time a check is first deposited, there is no way of The actual time required depends on the number knowing whether it will be paid or returned of intermediary institutions involved, the weath- unpaid. er, distance, whether there are holidays or week- Slightly more than 1 percent of all checks the ends involved, the exposure to mechanical Federal Reserve collects—about half a million breakdowns in transportation or sorting equip- checks per day— are returned unpaid (table 1). ment, and potential human error. Upon receipt We believe that the rate of return is similar for of the check, the paying institution deducts funds the checks not collected through the Federal equal to the amount of the check from the Reserve. balance in the maker's account if the check is Correspondent institutions and the Federal properly drawn and endorsed, if funds are avail- Reserve grant credit for checks that they collect for depository institutions that use an availability schedule, which reflects the normal processing 1. A correspondent bank is any depository institution that provides services and holds balances for other depository and transportation time involved. For example, institutions. if a Federal Reserve office normally is able to 2. Federal Reserve Banks process approximately 40 percollect a check in one day, it gives one-day cent of all checks written. 3. A check clearinghouse is usually an association of availability. Most commonly, the Federal Redepository institutions, which may serve many needs of its serve provides credit within two days. However, member institutions including the exchange or clearing of reflecting the uncertainty regarding the payment checks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

180 Federal Reserve Bulletin • March 1982 1. Reasons for returned checks Percent Insufficient Account Endorsement Payment Post- Uncollected Maker Other Total funds closed errors stopped dated funds Individual 60 9 2 2 2 1 2 78 Business 12 2 2 3 0 1 1 21 Other 0 0 1 0 0 0 0 1 Total 72 11 5 5 2 2 3 100 SOURCE. Federal Reserve Bank of Philadelphia, sample of 1,119 returned items, September 1981. Findings correspond to similar study by Bank Administration Institute. or return of a check, the credit granted is provi- vidual risk—how well known the depositor is to sional, and the institution receiving the credit the bank, the amount of the check, the average must be prepared to give it up immediately time required for collection and return of unpaid should the check be returned unpaid. Depository checks between this institution and the paying institutions' depositors must also be prepared to institution, and so forth. In other cases, institumake restitution of any funds credited to their tions apparently delay funds on all checks or all account should a deposited check be returned out-of-town checks. unpaid, even though a delay in availability may Whether the delay is imposed selectively or have been imposed. not, delayed funds availability is often character- Several alternatives exist to the use of checks ized as "unfair" to depositors. Institutions, howthat can ensure against the problems and risks ever, defend the practice as a means of protectassociated with checks being returned unpaid. ing themselves from losses associated with Many payments—especially those that recur reg- returned checks. As the previous description of ularly such as salary, dividends, and social se- the check collection system shows, no mechacurity—can be received through automated nism exists for informing an endorsing institution clearinghouses, and others can be handled as affirmatively that a check has been paid. One wire transfers. Both of these electronic means of way for an institution to avoid loss in the event a payment are secure against loss or theft, and check is returned unpaid is to delay the deposientail immediate and (usually) irrevocable credit tor's use of the funds. The longer the delay, the to the receiver's account. I will discuss these less risk that the check might be returned and alternatives in more detail later. loss incurred by the institution. Thus, in view of the check collection system in this country, selective policies and practices on delayed avail- DELAYED FUNDS AVAILABILITY ability have a legitimate business basis and may contribute to the safety and soundness of deposi- Delayed funds availability is one way that institu- tory institutions. tions may protect themselves from the risks It is frequently charged that delayed funds involved in the event a check is returned unpaid availability practices are intended to generate by the paying institution to the institution in increased revenues for depository institutions at which it was first deposited. the expense of depositors. Certain institutions Delayed funds availability is practiced by all may be able to enhance their revenue through the types of depository institutions but varies widely practice of imposing blanket, rather than selecamong individual institutions. A study by federal tive, delay policies because blanket delay probanking agencies in 1978 found that 38 percent of grams are relatively easy to implement and affect the commercial banks surveyed had adopted all or most checks that are deposited. However, some formal policy on delayed funds availability, a selective policy of delayed availability may often specifying widely different procedures and entail considerable expense for the institution criteria. Some institutions rarely or never delay because training employees to identify the need availability. Frequently, institutions tailor the for and length of delay is costly, and selectively delay by considering their own exposure to indi- imposed delays are handled as exceptions to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 181 routine procedures. Moreover, delayed availabil- slight increase in consumer problems has ocity policies are just one of a number of terms and curred during the intervening period. One possiconditions—including service levels, check fees, ble explanation for this increase may be the required balances, hours of operation, location higher level of interest rates recently, which may of branches, and interest rates—that must be have provided incentives for banks to be more considered as a whole in determining the costs cautious in making funds available and for deposand benefits of the account relationship for the itors to maintain lower checking and savings customer. Thus, a less selective policy, such as account balances. imposing a delay on all out-of-area checks depos- Of the 4 percent of all respondents who reportited, which would seemingly be more profitable ed problems, the consequence of delayed funds for the institution, might be used in conjunction availability for about one-fifth was having checks with lower fees or lower minimum balance re- they had written on their accounts returned, quirements than would otherwise be the case. In which probably led to personal distress and effect, a less costly, less selective policy could be possibly to the levy of a service charge as well. part of a product preferred by customers who are By contrast, four-fifths of the consumers experimore interested in low fees and low minimum encing problems said their problem involved balances than a short delay in using their funds. inconvenient delays in purchasing goods, or in The Federal Reserve has made an effort to getting cash, or some other inconvenience. More keep informed of delayed availability practices often than not, consumers indicated that the and problems, both because of its role in the inconvenience had not been serious. monitoring of consumer complaints about bank- The cause of the delayed availability problem ing practices and because of its responsibility for mentioned most frequently by consumers was the effectiveness of the payments system. For lack of awareness of the bank's policy—either example, we have a formal procedure for receiv- they never were informed of the policy or they ing, tabulating, and investigating consumer com- had forgotten it. Of those depositors who experiplaints involving banks. In the past five years the enced problems, substantially more than half number of complaints involving delays in the use appear to have contacted their depository instituof funds has consistently been only about 1 or 2 tion and believed that the institution was helpful. percent of the total number of consumer com- The 1978 bank survey found that 97 percent of plaints (table 2). the banks that had a policy of delayed funds In addition, the Board has sponsored three availability also had an officer authorized to surveys of consumer problems with delays in use make exceptions to the policy. of funds deposited by check in their accounts— In addition, the consumer surveys indicated one in 1977 and two in 1981—all conducted by that depositors know a variety of ways to avoid the University of Michigan's Survey Research problems once they become aware of the prac- Center. Of the 1,200 account holders queried in tice and that those who have had the most the two most recent surveys, 90 percent had problems are most likely to have changed their rarely or never experienced delays over the past habits or practices to avoid further problems. few years. Less than 4 percent had experienced For example, many said they would plan ahead, frequent problems. The same question was asked keep enough money in their account, carry more in the 1977 survey, and indications are that a cash, or cash their checks elsewhere and then deposit the balance not needed right away. When consumers are asked what they would do if they 2. Complaints of funds availability received by the thought they would have to wait at least four Federal Reserve System, 1977-81 days to use their money, the most frequent response was that they would change depository Total Funds Year complaints availability Percent institutions. Consequently, depositors who are better informed apparently can and do take steps 1977 3,474 45 1 1978 3,301 46 1 to avoid future problems and are better equipped 1979 4,065 75 2 to bring competitive forces to bear when policies 1980 4,568 95 2 1981 3,913 75 2 are judged unreasonable. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

182 Federal Reserve Bulletin • March 1982 WHAT SHOULD BE DONE? would be advisable. To attempt to define, through legislation or regulation, an "appropri- The Board is sympathetic to the problems that ate" maximum period of delay would be difficult depositors face as a result of policies of delayed or impossible, given the complexity of our naavailability, especially when delays appear long tion's check collection process. Any such legislarelative to normal check-collection time require- tive or regulatory maximum could well become ments and when problems result from consumers the industry standard, thus worsening the situanot being aware of the policies. The Board tion for the majority of customers and reducing believes that two approaches warrant further the efficiency of the payments system. Moreattention. First, the Federal Reserve System will over, under any legislative or regulatory apexpand its efforts to investigate possible ways to proach, if the risk of loss could not be avoided by speed up the handling of returned checks. If selectively delaying funds availability beyond substantial progress can be made in this area, some maximum, fees or required balances would depository institutions that impose delayed avail- probably be increased by depository institutions ability could reduce the length of the delays. In to fund anticipated or actual losses. this connection, the Board has also directed that Meanwhile, the Board will continue to monitor a study be conducted to determine whether exist- carefully the complaints it receives on this issue, ing Federal Reserve services can be enhanced or and it will periodically conduct further surveys new Federal Reserve services developed to through the University of Michigan. achieve prompt final settlement of certain types Finally, the Board wishes to note some alterof checks that seem to cause delayed availability natives to receiving payments by check that problems more frequently. These might include depository institutions and their customers can large payments for deposit in another part of the use to avoid the need for or the effects of delayed country—such as for the purchase of a house— funds availability. Recurring check payments, or periodic payments by parents to students such as salary, dividends, social security, and so attending school away from home. forth, can most efficiently be accomplished Second, the Board believes that financial insti- through the automated clearinghouse (ACH). tutions should, on their own initiative, better The ACH is a form of electronic fund transfer inform their depositors of the extent and nature that does not have the delays associated with of the policies and practices of delayed availabil- check collection. ity that they employ. Improved consumer aware- Less frequent, large dollar-value transactions, ness is needed on this subject. Our surveys show such as the transfer of the proceeds from the sale that depositors who ask often get some accom- of a former residence to a depository institution modation in particular cases from an official of in a new location, are suitable for wire transfer, a their institution, generally avoid problems there- service designed to accomplish large payments in after, and are prepared to change institutions if a secure, rapid, and irrevocable manner. necessary when confronted by what they consid- A depositor having a large check and wishing er an unreasonable policy on funds availability. to use a check collection method that includes an In this connection, the Federal Reserve and the affirmative notice of payment or nonpayment American Bankers Association have agreed to may use the "noncash collection" service, reinstate a joint task force on delayed availability which functions in the following manner. Upon practices to address, among other things, the instructions from its depositor, a depository inissue of disclosure by banks of their funds avail- stitution may send a collection letter to the ability policies. The recommendations developed paying institution, enclosing the check and specithrough this joint effort will be made available to fying that funds in payment of the check are to be other interested parties, including other supervi- wired to the originating institution for deposit to sory agencies and other depository institution its depositor's account. Funds will not be credittrade associations. ed to the depositor's account until received. Moreover, the preparation of the letter at the The Board does not believe that adoption of a sending institution and processing at the paying legislative or regulatory approach to this practice Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 183 institution are manual processes, the cost is depository institutions, and the Board and the substantially higher than the regular check col- Reserve Banks are moving on two fronts to help lection costs, and five to ten business days may find ways of improving the situation. They are be required for completion of the transaction. undertaking a study of possible improvements in Nonetheless, this may be a desirable alternative check collection procedures that would achieve to assure that the check will not be returned faster handling of return items or faster confirmabecause the transaction is final once the paying tion of payment or nonpayment of checks; and institution has sent the funds. In this manner, the they will be working with the American Bankers depositor can invest or spend the funds when Association on ways that depository institutions received without concern that the check may be might improve customer awareness of their polireturned later. cies on funds availability. The Board does not believe that delayed availability problems are sufficiently widespread that federal legislation or CONCLUSION regulation would be desirable at this time. The Consumers have experienced difficulties with the Board will, of course, continue to monitor confunds availability policies and practices of some sumer problems and attitudes in this area. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

185 Announcements FREDERICK H. SCHULTZ: estate brokers as arrangers of credit in seller- RESIGNATION AS A MEMBER financed home sales. OF THE BOARD OF GOVERNORS The Board said that ideally the matter should be resolved by action of the Congress, and that it Frederick H. Schultz has resigned as a member of was excluding real estate brokers at this time to the Board of Governors, effective February 11, give the Congress time to act. Depending upon 1982. Mr. Schultz's letter of resignation follows. action by the Congress, the Board will review the question early in 1983. February 11, 1982 Dear Mr. President: SUPPLEMENT TO OTC STOCK LIST Although my term of office officially expired on the last day of January, the law provides that I continue to The Federal Reserve Board has published a serve until my successor is sworn in. However, the high ethical standards of the Federal Reserve require supplement to its list of over-the-counter (OTC) that I not take part in Board meetings within 30 days of stocks that are subject to its margin regulations, the time that I am involved in activities in the private effective March 1, 1982. The supplement to the sector. Therefore, in an abundance of caution, I am list issued October 5, 1981, makes the following herewith submitting my resignation as a Governor and changes: 173 stocks have been included for the Vice Chairman of the Federal Reserve Board. It has been a great honor to serve in this capacity. first time; 17 stocks previously on the list have This organization creates justifiable pride in its mem- been removed for substantially failing to meet bers. You can continue to be confident of the quality the requirements for continued listing; and 54 of the Federal Reserve and its commitment. stocks have been removed for reasons such as being listed on a national securities exchange or Sincerely, Frederick H. Schultz the companies being acquired by another firm. The supplement is available on request from Publications Services, Board of Governors of the Federal Reserve System, Washington, D.C. REGULATION Z. AMENDMENT 20551. The Federal Reserve Board has amended Regulation Z (Truth in Lending) with respect to the MONEY STOCK REVISION definition, under the Truth in Lending Simplification Act, of an "arranger" of credit, effective On February 5, 1982, the Board published re- February 19, 1982. vised money stock data incorporating annual The definition includes those who regularly seasonal adjustment and benchmark changes, as arrange for consumer loans by another person well as minor compositional changes. who is not a creditor. The amendment specified Seasonal adjustment factors were updated usthat this definition excludes those (such as real ing data for 1981, and in accordance with a estate brokers) who arrange for the financing of recommendation of the Committee of Experts on the sale of a residence or real property by the Seasonal Adjustment Techniques, an X-llseller. ARIMA method was used to compute seasonal The Board's action was taken after consider- factors for 1982. Updated monthly seasonal facation of some 3,000 letters of comment on a tors for 1981 and 1982 and weekly factors for late proposal that would have included certain real 1981 and 1982 are shown in tables 1 and 2. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

186 Federal Reserve Bulletin • March 1982 1. Seasonal factors for currency, traveler's checks, and deposit components of the money stock, monthly Commercial banks Thrift institutions MMoonntthh CCuurrrreennccyy tt NN rr cc aa oo hh vv nn ee ee bb cc ll aa ee kk nn rr ss '' kk ss D d D dee OO ee pp pp mm CC ll oo uu DD aa ss ss nn ii 11 tt dd ss DD ddee ee pp mm oo aa ss nn iitt dd ss 11 d S e a p v o in si g t s s de S t p i m m o a s e l i l t s de L t p i a m o rg s e e i t s d S e a p v o in s g it s s de S t p m im o a s e l i l t s de L t p i a m o rg s e i e t s 1981 January .9941 .9467 1.0179 1.0182 .9981 1.0030 1.0191 .9906 1.0079 1.0005 February .9874 .9515 .9736 .9742 .9905 1.0104 1.0212 .9869 1.0099 1.0078 March .9908 .9528 .9782 .9792 .9865 1.0109 1.0194 .9888 1.0102 .9951 April .9935 .9494 1.0129 1,0136 .9938 1.0038 1.0053 .9934 11..00000981 .9852 May 1..09098040 .9624 .9810 .9810 .9914 1.0031 .9954 .9899 .9997 June 1.0351 .9970 .9971 .9939 1.0032 .9842 .9961 .9998 .9960 1.1111 July..: 1.0070 1.0044 1.0039 1.0092 .9962 .9732 1.0137 .9932 1.0005 August 1.0048 1.1137 .9930 .9920 1.0120 .9917 .9788 1.0112 .9878 1.0036 September .9975 1.0599 1.0005 .9995 1.0094 .9914 .9857 1.0179 .9906 1.0068 October .9990 1.0078 1.0052 1.0042 1.0128 .9970 .9889 1.0127 .9978 1.0067 November 1.0092 .9609 1.0078 1.0077 1.0031 .9931 1.0052 1.0041 .9952 .9993 December 1.0183 .9442 1.0284 1.0292 1.0015 .9958 1.0214 .9955 .9969 .9968 1982 January .9952 .9477 1.0177 1.0180 .9982 1.0031 1.0194 .9906 1.0081 1.0027 February .9873 .9529 .9738 .9744 .9902 1.0108 1.0223 .9868 1.0103 1.0100 March .9898 .9537 .9787 .9794 .9851 1.0115 1.0200 .9882 1.0108 .9964 April .9945 .9497 1.0126 1.0134 .9931 1.0038 1.0063 .9931 1.0101 .9851 May .9983 .9630 .9812 .9812 .9908 1.0029 .9951 .9895 1.0002 .9993 June .9990 1.0377 .9970 .9972 .9931 1.0030 .9847 .9956 1.0003 .9946 July 1.0072 1.1118 1.0042 1.0037 1.0098 .9959 .9731 1.0144 .9924 .9988 August 1.0039 1.1118 .9931 .9923 1.0126 .9913 .9784 1.0115 .9870 1.0020 September .9974 1.0643 1.0002 .9993 1.0098 .9911 .9856 1.0183 .9904 1.0056 October .9999 1.0121 1.0052 1.0041 1.0126 .9971 .9890 1.0124 .9980 1.0070 November 1.0081 .9595 1.0079 1.0078 1.0032 .9934 1.0043 1.0043 .9952 1.0003 December 1.0192 .9451 1.0282 1.0290 1.0020 .9959 1.0211 .9953 .9970 .9987 1. In constructing Ml the seasonal factors for "demand deposits plus other ally adjusted is constructed using the demand deposit seasonal factors. Other checkable deposits" are used to derive the sum of demand deposits and other checkable deposits (OCD) seasonally adjusted, is derived as the difference checkable deposits, seasonally adjusted. The demand deposit component season- between these two series. Several benchmark revisions were made. quency of data and definition (daily deposits data • Commercial bank deposits data were bench- include balances in escrow accounts and certain marked to the March, June, and September 1981 primary obligations). Historical data on savings call reports. and small time deposits at thrift institutions be- • A consolidation adjustment has been made to fore November 1980 have been revised to be remove at the Ml level the portion of thrift consistent with the broader daily deposits report institutions' holdings of vault cash that is esti- definition. mated to be used for servicing their other check- In the revised measures, retail repurchase able deposit liabilities; this adjustment lowers the agreements (RPs) at all depository institutions— currency component of the money stock that issued in denominations of less than $100,000— previously included all vault cash at thrift institu- appear in the small-denomination time deposit tions. The remainder of thrift institution vault component of M2; in the old measures, retail RPs cash has been removed at the M2 level. entered at the M3 level as a component of term • Cash items in the process of collection RPs. Institution-only money market mutual (CIPC) of thrift institutions have been netted funds—which do not offer accounts to individagainst transaction deposits at the Ml level. uals—are removed from the money market mu- Owing to unavailability of data, CIPC of thrift tual fund component of M2 and enter the money institutions previously had not been deducted stock at the M3 level, along with large-denominafrom measures of the money stock. tion time deposits and large-denomination term • Daily deposits data for savings and time RPs. deposits at thrift institutions—reported since No- A more detailed description of these revisions vember 1980 as a consequence of the Monetary and revised historical data are available on re- Control Act of 1980—have been incorporated, quest from the Banking Section, Board of Govermaking these components for thrifts comparable nors of the Federal Reserve System, Washingto those of commercial banks in terms of fre- ton, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 187 2. Seasonal factors for currency and deposit components of Ml and commercial bank deposit components of broader aggregates, weekly Commercial banks DDeemmaanndd WWeeeekk CCuurrrreennccyy ppll dd uu ee ss pp oo OO ss CC iitt DD ss 11 d D e e p m os a i n t d s' Savings S ti m m a e l l L ti a m rg e e deposits deposits deposits 1981 October 7 1.0050 1.0200 1.0180 1.0177 .9951 .9958 14 1.0060 1.0170 1.0150 1.0159 .9984 .9925 21 .9970 1.0040 1.0010 1.0128 .9983 .9873 28 .9890 .9790 .9770 1.0082 .9965 .9890 November 4 .9990 1.0110 1.0110 1.0050 .9954 .9917 11 1.0150 1.0140 1.0120 1.0042 .9933 .9980 18 1.0090 1.0140 1.0140 1.0024 .9923 1.0032 25 1.0070 .9890 .9870 1.0025 .9928 1.0135 December 2 1.0080 1.0150 1.0170 1.0031 .9930 1.0159 9 1.0210 1.0250 1.0230 1.0069 .9946 1.0118 16 1.0170 1.0280 1.0300 1.0043 .9951 1.0158 23 1.0240 1.0280 1.0290 .9988 .9961 1.0256 30 1.0170 1.0270 1.0310 .9972 .9982 1.0333 1982 JJaannuuaarryy 6 1.0110 1.0760 1.0720 1.0021 .9999 1.0186 13 1.0030 1.0370 1.0370 1.0024 1.0015 1.0180 20 .9930 1.0150 1.0180 .9987 1.0033 1.0163 27 .9810 .9740 .9730 .9936 1.0049 1.0206 FFeebbrruuaarryy 3 .9820 .9820 .9860 .9905 1.0073 1.0225 10 .9950 .9820 .9830 .9910 1.0100 1.0214 17 .9910 .9790 .9810 .9916 1.0102 1.0183 24 .9820 .9570 .9570 .9894 1.0104 1.0214 March 3 .9840 .9740 .9740 .9857 1.0105 1.0227 10 1.0000 .9850 .9840 .9846 1.0121 1.0197 17 .9940 .9840 .9880 .9841 1.0126 1.0192 24 .9880 .9710 .9710 .9856 1.0109 1.0189 31 .9820 .9750 .9780 .9908 1.0084 1.0168 AApprriill 7 1.0000 1.0170 1.0160 1.0011 1.0047 1.0107 14 1.0050 1.0260 1.0280 .9991 1.0041 1.0069 21 .9930 1.0210 1.0230 .9902 1.0040 1.0015 28 .9820 .9940 .9930 .9870 1.0035 1.0032 MMaayy 5 .9970 .9930 .9990 .9892 1.0025 .9924 12 1.0060 .9840 .9840 .9914 1.0025 .9946 19 .9980 .9820 .9820 .9921 1.0028 .9960 26 .9910 .9640 .9630 .9909 1.0032 .9980 June 2 .9960 .9860 .9860 .9907 1.0045 .9953 9 1.0090 1.0000 .9990 .9934 1.0056 .9889 16 1.0020 1.0090 1.0090 .9934 1.0043 .9832 23 .9970 .9920 .9920 .9932 1.0022 .9780 30 .9910 .9890 .9900 .9971 .9993 .9821 JJuullyy 7 1.0190 1.0250 1.0190 1.0067 .9984 .9758 14 1.0130 1.0150 1.0180 1.0098 .9972 .9703 21 1.0050 1.0030 1.0010 1.0100 .9958 .9716 28 .9960 .9780 .9780 1.0089 .9943 .9738 AAuugguusstt 4 1.0030 1.0000 1.0010 1.0112 .9918 .9738 ' 11 1.0150 1.0060 1.0060 1.0136 .9921 .9767 18 1.0080 .9960 .9940 1.0129 .9915 .9786 25 .9980 .9770 .9760 1.0115 .9909 .9803 SSeepptteemmbbeerr 8 1 1 . . 9 0 9 1 0 3 0 0 1 . . 9 0 9 0 0 4 0 0 1 . .0 9 0 87 0 0 0 1 1. . 0 0 0 1 9 0 6 3 . . 9 9 9 91 3 2 5 . . 9 9 8 86 4 2 5 15 1.0010 1.0200 1.0190 1.0098 .9911 .9809 22 .9940 .9970 .9960 1.0069 .9912 .9846 29 .9840 .9770 .9770 1.0083 .9905 .9922 October 6 1.0050 1.0220 1.0160 1.0165 .9945 .9869 13 1.0070 1.0150 1.0140 1.0166 .9980 .9913 20 .9990 1.0060 1.0020 1.0135 .9985 .9879 27 .9900 .9810 .9800 1.0091 .9969 .9884 November 3 .9970 1.0060 1.0120 1.0057 .9956 .9913 10 1.0150 1.0150 1.0130 1.0041 .9936 .9969 17 1.0090 1.0160 1.0150 1.0027 .9924 1.0025 24 1.0070 .9940 .9900 1.0024 .9927 1.0121 December 1 1.0050 1.0050 1.0110 1.0028 .9928 1.0158 8 1.0210 1.0240 1.0220 1.0067 .9946 1.0117 15 1.0180 1.0270 1.0290 1.0049 .9951 1.0147 22 1.0220 1.0300 1.0310 .9998 .9960 1.0236 29 1.0200 1.0200 1.0250 .9975 .9980 1.0319 1. In constructing Ml the seasonal factors for demand deposits plus other ally adjusted is constructed using the demand deposit seasonal factors. Other checkable deposits are used to derive the sum of demand deposits and other checkable deposits (OCD), seasonally adjusted, is derived as the difference checkable deposits seasonally adjusted. The demand deposit component season- between these two series. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

188 Federal Reserve Bulletin • March 1982 PROPOSED ACTIONS SYSTEM MEMBERSHIP: ADMISSION OF STATE BANKS The Federal Reserve Board has proposed a policy statement to provide guidance on certain The following banks were admitted to membertypes of competitive situations in which the ship in the Federal Reserve System during the Board, or a Federal Reserve Bank, would sub- period February 11 through March 10, 1982: ject applications for approval of bank acquisi- Florida tions, mergers, or consolidations to intensive Miami Bayshore Bank of Florida scrutiny. The Board requested comment by April Tampa Great American Bank of Tampa 9, 1982. Oregon The Federal Reserve Board has also issued for Lincoln City Pacific State Bank comment a regulatory framework that could be Texas used to establish margin requirements on futures Dallas Texas Independent Bank contracts based on stock indexes. Comments Virginia should be received by April 30, 1982. Louisa Bank of Louisa Vienna Commercial Bank of Tysons Corner Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

189 Legal Developments AMENDMENT TO REGULATION Z report, agreements, and examination forms, guidelines, instructions or other similar materials, in consul- The Board of Governors of the Federal Reserve Sys- tation with the Board's Legal Division where appropritem has amended its Regulation Z-Truth in Lending ate, for use in connection with several laws and (12 CFR Part 226 to change the definition of "arranger regulations that are part of the Board's Consumer of credit" to state that it does not include anyone who Affairs and Civil Rights Compliance Program. arranges for seller financing of a dwelling. However, in Effective January 28, 1982, the Board amends 12 light of the possibility of Congress' addressing the CFR 265.2 by amending paragraph (h)(1) by revising question of whether arrangers of credit should have (h)(1) introductory text, (h)(l)(i) and (h)(l)(ii) and the responsibility for providing Truth in Lending dis- adding (h)(l)(v) through (h)(l)(vii), effective immediclosures, the Board has decided not to adopt the ately to read as follows: amendment as proposed previously. Effective February 19, 1982, the Board revises Section 265.2—Specific Functions Delegated to § 226.2(a)(3) of revised Regulation Z (46 FR 20848), by Board Employees and to Federal Reserve adding a sentence at the end, so that it will read as Banks follows: Section 226.2—Definitions and Rules of (h) * * * Construction (1) Pursuant to the provisions of section 11(a) of the Federal Reserve Act (12 U.S.C. 248(a)), sections (a) Definitions. * * * 108(b), 621(c), 704(b), 814(c) and 917(b) of the (3) "Arranger of credit" means a person who regu- Consumer Credit Protection Act (15 U.S.C. 1607(b), larly arranges for the extension of consumer credit2 1681s(c), 1691c(b), 16921(c), and 1693o(b), section by another person if: 305(c) of the Home Mortgage Disclosure Act (12 (i) A finance charge may be imposed for that U.S.C. 2804(c)), section 18(f)(3) of the Federal credit, or the credit is payable by written agree- Trade Commission Act (15 U.S.C. 57a(f)(3), section ment in more than four installments (not including 808(c) of the Civil Rights Act of 1968 (42 U.S.C. a downpayment); and 3608(c)), and section 5(c) of the Bank Holding (ii) The person extending the credit is not a Company Act of 1956 (12 U.S.C. 1844(c)), to issue creditor. examination or inspection manuals, report, agree- The term does not include a person (such as a ment, and examination forms, guidelines, instrucreal estate broker) when arranging seller financing tions or other similar materials, in consultation with of a dwelling or real property. the Board's Legal Division where appropriate, for use in connection with: (i) Sections 1 through 921 (excluding sections 201 through 500) of the Consumer Credit Protection Act (15 U.S.C. 1601—1693r). AMENDMENT TO RULES REGARDING (ii) Sections 301 through 312 of the Home Mort- DELEGATION OF AUTHORITY gage Disclosure Act (12 U.S.C. 2801-2811). (iii) * * * The Board of Governors of the Federal Reserve Sys- (iv) * * * tem has amended its "Rules Regarding Delegation of (v) Section 1364 of the National Flood Insurance Authority" in order to delegate to the Director of its Act of 1968 (42 U.S.C. 4101 (a)) and Sections Division of Consumer and Community Affairs, the 105(b) and 202(b) of the Flood Disaster Protection authority to issue examination or inspection manuals, Act of 1973 (42 U.S.C. 4012a(b) and 4106(b)). (vi) Section 19(j) of the Federal Reserve Act (12 2. [Footnote unchanged] U.S.C. 371b). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

190 Federal Reserve Bulletin • March 1982 (vii) Sections 801-806 of the Community Rein- market. Bank is the largest of 24 banking organizations vestment Act (12 U.S.C. 2901-2905). competing in the Eastern Palm Beach banking market, controlling 15.6 percent of the deposits in the market. Applicant is the 4th largest banking organization in the relevant market, controlling $179.1 million in deposits, representing 7.4 percent of the total deposits in com- BANK HOLDING COMPANY AND BANK MERGER mercial banks in the market. Acquisition of First ORDERS ISSUED BY THE BOARD OF GOVERNORS Marine by Applicant would significantly increase Applicant's share of market deposits, to 23.0 percent, Orders Under Section 3 of Bank Holding causing Applicant to become the largest banking orga- Company Act nization in the market. As a means of reducing the anticompetitive effects Barnett Banks of Florida, Inc., of its proposed acquisition upon existing competition Jacksonville, Florida in the Eastern Palm Beach market, Applicant has committed to divest 9 of Bank's 17 offices located in Order Approving Acquisition of Bank Holding the banking markets as soon as possible within nine Company months of the Board's approval of the application. To document its commmitment, Applicant has submitted Barnett Banks of Florida, Inc., Jacksonville, Florida, a detailed outline of the manner in which it intends to a bank holding company within the meaning of the acquire First Marine and subsequently divest 9 of its Bank Holding Company Act, has applied for the offices (40 percent of First Marine's assets).3 Upon Board's approval under section 3 of the Act (12 U.S.C. completion of the proposed divestiture, Applicant's § 1842) to directly acquire 100 percent of the voting market share would drop to 17.0 percent of the deposshares of First Marine Banks, Inc. ("First Marine"), its in the banking market. The resulting four-firm and to indirectly acquire at least 98 percent of the concentration ratio would be 46 percent and the marvoting shares of its subsidiary bank, First Marine Bank ket would remain relatively unconcentrated with 23 and Trust of the Palm Beaches ("Bank"), both of banking organizations represented. In addition, the Riviera Beach, Florida, and subsequently to merge competitive effects of consummation of this proposal with First Marine. would be further mitigated by the substantial presence Notice of the application, affording opportunity for of thrift institutions within the relevant banking marinterested persons to submit comments and views, has ket. been given in accordance with section 3(b) of the act. The Board wishes to emphasize that a divestiture, The time for filing comments and views has expired, such as the one proposed by Applicant, should be and the Board has considered the applications and all completed prior to or concurrent with consummation comments received in light of the factors set forth in of the proposal so as to avoid the existence of signifisection 3(c) of the act (12 U.S.C. § 1842(c)). cant anticompetitive effects for even a short period of Applicant, the 2nd largest banking organization in time. The Board expects that future bank holding Florida, controls 24 subsidiary banks with aggregate company applicants will make every effort to arrange deposits of about $3.7 billion, representing 9.5 percent their proposals to comply with this policy. However, of the total deposits in commercial banks in the state.1 the Board recognizes that special circumstances exist Acquisition of First Marine, the 17th largest banking in this case that justify an exception to this policy. In organization in Florida, controlling one bank with particular, the Board notes that Applicant has submitdeposits of $376.2 million, would increase Applicant's ted a detailed outline of its divestiture plan and has share of commercial bank deposits in Florida by 1.0 signed an agreement with a potential purchaser of the percent but would not alter its statewide ranking. banking offices to be divested. In addition, and of The banking subsidiaries of Applicant and First greater importance, is that the facts of record indicate Marine, with the exception of the banking subsidiaries that, in this case, Board approval is a prerequisite to in the Eastern Palm Beach banking market,2 do not further regulatory approvals. Thus, additional time is compete directly with each other in any banking necessary to accomplish the divestiture and additional time is required to obtain these approvals. Therefore, 1. All deposit data are as of June 30, 1980. 3. On November 3, 1981, Applicant and Pan American Banks Inc., 2. The Eastern Palm Beach banking market includes the developed Miami, Florida ("Pan American"), signed a stock purchase and sale coastal area of Palm Beach County between Broward and Martin agreement concerning Pan American's proposed purchase of the 9 Counties, but excludes the Belle Glade-Pahokee area in the western offices of Bank. Pan American is the 14th largest banking organization part of Palm Beach County, Florida. in the relevant market and controls 2.0 percent of deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 191 in light of these considerations, as well as the fact that Federal Reserve Bank of Atlanta, under delegated Applicant has committed to divest the nine banking authority. offices as soon as possible within nine months of the By order of the Board of Governors, effective Board's approval, the Board concludes that the appli- February 17, 1982. cation should be approved on the condition that Applicant divest the nine branches of Bank within nine Voting for this action: Chairman Volcker and Governors months of the Board's approval of the acquisition of Wallich, Partee, Teeters, and Rice. Absent and not voting: First Marine. Based upon this condition, the Board's Governor Gramley judgment is that consummation of the acquisition and divestiture plan would not have any significantly ad- (Signed) JAMES MCAFEE, verse effects upon existing or potential competition, or [SEAL] Associate Secretary of the Board. on the concentration of resources in any relevant market. Concurring Statement of Governor Teeters The financial and managerial resources and future prospects of Applicant, First Marine, and their subsid- The Board's action approving this application based iary banks are regarded as generally satisfactory and upon Applicant's divestiture commitment implicitly their future prospects appear favorable. Accordingly, permits an anticompetitive situation to persist for at banking factors are consistent with, but lend no weight least nine months following the Board's approval of toward, approval of the proposal. the proposal. This result concerns me, and in order to Applicant intends to make the following services avoid this consequence, I believe that such divestiavailable to-Bank's customers: a centralized securities tures should be timed to occur prior to or concurrent portfolio management that permits Applicant's bank- with consummation of an applicant's proposal. ing subsidiaries to maintain well-balanced bond portfo- In this instance, I concur in the judgment of the lios suitable to their individual needs; the fiduciary Board that this application be conditionally approved. management and portfolio expertise of Barnett Bank However, I believe this action represents an exception Trust Company, N.A.; access by Bank's existing to the policy stated by the Board today, prohibiting customers to Applicant's statewide system of auto- horizontal acquisitions that result, even for a short mated teller machines; Applicant's "umbrella" adver- period, in significant anticompetitive effects in a banktising program and its expertise in the marketing of ing market. banking products for business and customers; Bank's access to Applicant's experienced banking officers; February 17, 1982 the substantial efficiencies resulting from the standarization of forms and procedures relating to compliance Statement by the Board of Governors of the Federal with the federal and state laws and regulations govern- Reserve System Regarding the Application of ing banking; regular auditing by Applicant's staflf of Mercantile Texas Corporation internal auditors; Applicant's loan review team; availability of the expertise of Applicant's international By Order dated December 21, 1981, the Board apbanking department and its corporate cash manage- proved the application of Mercantile Texas Corporament services designed to assist businesses in making tion, Dallas, Texas ("Mercantile"), a bank holding the most advantageous use of their liquid assets. While company within the meaning of the Bank Holding it appears that these banking services are already Company Act to acquire by merger under section available in the market through Applicant's subsidiar- 3(a)(5) of the act (12 U.S.C. § 1842(a)(5)), PanNational ies, making these services more widely available Group Inc., El Paso, Texas ("PanNational"),1 a registhroughout the market would lend slight weight toward tered bank holding company. approval of this application and outweigh any anticom- Mercantile, the fifth largest banking organization in petitive effects associated with this proposal. Texas, controls nine banks with aggregate deposits of Accordingly, on the basis of the record, the applica- about $3.8 billion, representing 4.2 percent of total tion is approved subject to the condition that the commercial bank deposits in the state.2 PanNational is proposed divestiture plan be completed as soon as 1. PanNational has two nonbanking subsidiaries engaged in activipossible within nine months of the Board's approval of ties permissible under sections 225.4(a)(6) and (8) of the Board's the proposal. The transaction shall not be made before Regulation Y. Because Mercantile plans to convert these subsidiaries into an operating subsidiary of a national bank and a bank service the thirtieth calendar day following the effective date corporation, respectively, applications pursuant to section 4(c)(8) of of this Order, or later than three months after the the act are not necessary in this case. effective data of this Order, unless such period is 2. All banking data are as of December 31, 1980, and reflect bank holding company formations and acquisitions approved as of Novemextended for good cause by the Board, or by the ber 30, 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

192 Federal Reserve Bulletin • March 1982 the fourteenth largest banking organization in Texas, make findings of fact with respect to each of four and controls six banks with aggregate deposits of issues7 if the Board is to deny a particular application about $711.7 million, representing 0.8 percent of com- on the basis of the probable future competition docmercial bank deposits in the state. trine. PanNational is the second largest banking organiza- The Board has made a thorough investigation of the tion in the El Paso banking market,3 and controls five Mercantile application. On the basis of the record a banks in that market with deposits representing 29.8 majority of the Board has concluded that there is percent of market commercial bank deposits. PanNa- insufficient ground for making the factual findings that tional also controls the second largest banking organi- would justify denial under the evidentiary standards zation in the Waco banking market,4 through its con- established in the Court's Mercantile decision. Theretrol of deposits representing 26.7 percent of the fore, the majority cannot conclude that there would be deposits in the market. None of Mercantile's subsid- a substantially adverse competitive effect were Meriary banks has an office in either of these banking cantile to enter the El Paso or Waco markets by the markets. Both the El Paso and Waco banking markets means proposed in its application. However, the are concentrated, with the four largest banking organi- Board wishes to note that in arriving at its final zations in each market controlling, respectively, 82.7 determination in this case it reserves judgment as to and 70.8 percent of total market commercial bank the appropriateness of applying the Court's analysis in deposits. all circumstances. The Board originally denied Mercantile's applica- The financial and managerial resources and future tion by Order dated April 15, 1980,5 on the ground that prospects of Mercantile and PanNational and their consummation of Mercantile's proposal would have respective subsidiaries are considered satisfactory and substantially adverse effects on probable future com- consistent with approval. While some new or expandpetition in the relevant banking markets that were not ed services may result from approval of this acquisiclearly outweighed by considerations relating to the tion, including the offering of automated teller machine convenience and needs of the communities to be services to PanNational's customers, there is no eviserved. The Board also expressed its concern over the dence in the record indicating that the banking needs possibility that continued approval of acquisition or of the communities to be served are not being met. merger proposals involving large statewide holding Considerations relating to the convenience and needs companies and relatively sizable banking organiza- of the communities to be served are consistent with tions might perpetuate the size disparity between approval. statewide and regional banking organizations, and On the basis of the above, the Board concludes that result in an increase in concentration ratios. the facts of record pertaining to this proposal do not Mercantile petitioned the United States Circuit provide a sufficient basis for making findings such as Court of Appeals for the Fifth Circuit for review of the those listed by the Circuit Court of Appeals for the Board's Order. On February 25, 1981, the Court Fifth Circuit.8 On reconsideration of all the facts of vacated6 the Board's Order and on July 10, 1981, record, the Board's judgment is that approval of this formally remanded Mercantile's petition to the Board application would not be contrary to the public interest for reconsideration and additional findings of fact with and that the application should be approved. regard to the applicability of probable future competi- Board of Governors of the Federal Reserve System, tion analysis to the circumstances involved. Specifi- February 1, 1982. cally, the Court directed the Board to address questions of fact related to the number of other potential (Signed) WILLIAM W. WILES, entrants into the El Paso and Waco markets, the [SEAL] Secretary of the Board. likelihood that Mercantile would enter either market independently if this and comparable applications 7. In addition to the three areas of inquiry described above, the were denied, and the deconcentrating or other pro- Court also required the Board to consider the degree of concentration competitive effects associated with such independent in the relevant banking markets if the Board is to deny a proposal on the basis of the probable future competition doctrine. The Court did entry. The Court's analysis requires the Board to not require the Board to make a finding on this issue on remand in this case because the opinion indicates the Board has made an adequate finding with respect to the degree of concentration in El Paso and Waco. 3. The El Paso banking market is approximated by the El Paso 8. The Court held that the Board may not deny a proposed merger of SMSA, which is represented by El Paso County, Texas. bank holding companies without finding a violation of "the antitrust 4. The Waco banking market is approximated by the Waco SMSA, standards explicitly incorporated into" the act. 638 F.2d at 1263. which is represented by McClennan County, Texas. However, the Board continues to be of the view that the last sentence 5. Mercantile Texas Corporation, 66 FEDERAL RESERVE BULLETIN of section 3(c) of the act, which requires that "[i]n every case the 423 (1980). Board shall take into consideration ... the convenience and needs of 6. Mercantile Texas Corp. v. Board of Governors, 638 F.2d 1255 the community to be served," authorizes the Board to consider all (5th Cir. 1981). competitive aspects of an acquisition or merger proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 193 Dissenting Statement of Governor Teeters cumbersome. It is evident to me that the facts of record in this case, when viewed realistically, support The majority of the Board has determined that the a finding that the acquisition will substantially lessen facts in this case, under the standards enunciated by competition on the basis of the probable future compethe United States Circuit Court of Appeals for the tition doctrine, and warrant denial of this application. Fifth Circuit, are insufficient to support a denial of the Indeed, as mentioned above, if the majority cannot application. If the facts in this case are insufficient to find material in the evidence of record for this applicasupport denial, then the possibility of developing a tion adequate to make the findings required by the sufficient case for denial of future applicants is severe- Court, I doubt that such material could be found for ly limited. The standards set by the Court require many future applications. evidence that is so subjective that the Board will have Furthermore, I believe that the precedential impact great difficulty in enforcing them. of this action may serve to greatly reduce the role of Probable future competition analysis has been bur- probable future competition analysis as a tool in dened with standards that are unrealistic and not monitoring the development of banking markets. Such susceptible to objective determination. Four standards analysis can be an important tool in shaping the are established: Board's regulatory policy. For many years market- (1) The target market is concentrated and noncom- extension acquisitions and mergers have been the petitive; predominant force in consolidating the banking indus- (2) There are a limited number of potential entrants try. Probable future competition analysis is the priinto the market; mary regulatory tool that is suitable for dealing with (3) There is a reasonable probability that the appli- this phenomenon. The majority's interpretation of the cant would enter the market on a de novo or standards expressed in the Court's opinion blunts this foothold basis if the proposed merger or acquisition tool. is denied; and I recognize that the banking industry in the United (4) Such de novo or foothold entry would result in States is undergoing significant change. These deconcentration of the market or in other significant changes, however, do not render competitive analysis procompetitive effects. meaningless in terms of distinct banking markets. A bank charter continues to convey a degree of monopo- Whether the first standard is met can be determined ly power with respect to particular banking product objectively with relative ease. But the other three markets. Moreover, state boundaries cannot be igpresent difficulties. In the case of the second, for nored as long as the McFadden Act and the Douglas example, the number of potential entrants into a Amendment to the Bank Holding Company Act conparticular market depends most prominently on the tinue to restrict interstate competition. I believe that intent of those entrants. Adequately and reliably mea- many local banking markets deserve the protection suring the intent of a business organization is extreme- afforded them by the competitive standards enunciatly difficult. Moreover, changes in policy or goals can ed in the Bank Holding Company Act. In my opinion, alter such "intent" in a very short period. with respect to market-extension mergers and acquisi- In the case of the third standard, applicants can tions, the majority demonstrates insufficient concern readily argue that they would never enter a market on for these standards. an independent basis, whether or not they intend to do so; and they can ensure that their records give no February 1, 1982 indication to the contrary. Thus attempts by the Board to meet this standard could often result in a mere Dissenting Statement of Governor Rice contest of credibility between the Board and the applicant. I share some of the concerns expressed in the Dissent- Finally, in applying the Court's fourth standard, ing Statement of Governor Teeters with respect to the regarding market deconcentration or other procompet- application of Mercantile Texas Corporation, although itive effects, I believe insufficient account has been I am not prepared at this time to conclude with taken of the significant differences in competitive Governor Teeters, that the evidence required by the effects in a banking market between a large outside Court's standards would always be so subjective that holding company opening a small branch and that the Board will have great difficulty in enforcing those same company acquiring a large bank, or the largest standards. Indeed, I believe the evidence of record in bank, in the market. this case is adequate to support a denial of this I do not believe that the Board has given sufficient application, even taking into account the Court's criteattention to ways of administering these standards that ria. In my view, the Court has deliberately left a would make their application more realistic and less considerable margin of discretion for the application of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

194 Federal Reserve Bulletin • March 1982 the Board's expertise and judgment. In light of the Act (12 U.S.C. § 1842(d)) prohibits the Board from substantial degree of latitude afforded by the Court's approving any application by a bank holding company opinion, I believe a denial of this application would be to acquire any bank located outside the state in which supportable under the Court's standards. the operations of the bank holding company's banking I consider it necessary, in view of my position on subsidiaries are principally conducted unless such this case, to indicate the reasons underlying my partic- acquisition is "specifically authorized by the statute ipation in the majority Statement regarding the appli- laws of the state in which such bank is located, by cation of Republic of Texas Corporation to acquire language to that effect and not merely by implication." The Citizens National Bank of Waco, which is also On February 18, 1981, Delaware amended its banking being issued today. In my opinion, there are significant laws to permit an out-of-state bank holding company distinctions between the factual situations surrounding to acquire a single de novo bank that, among other the two applications. The Waco banking market is less things, will be "operated in a manner and at a location concentrated than the El Paso banking market. The that is not likely to attract customers from the general most recent available statistics indicate that the four- public in [Delaware] to the substantial detriment of firm concentration ratio in El Paso is 82.7 percent existing banking institutions located in this state."2 while the corresponding figure for Waco is 70.8 per- The State Bank Commissioner of Delaware, after a cent. The number of additional potential entrants into hearing on the matter, approved the application of the Waco market is also likely to be somewhat greater Applicant to acquire Bank and found that the acquisithan that for the El Paso market, in view of the tion meets the statutory requirements for approval relatively attractive geographic location of the Waco under Delaware law. In reviewing the application, the market and the number of major banking organizations Secretary of the Board has determined that the proalready represented in El Paso. Thus, although the posed acquisition conforms to Delaware law and has facts of record warrant denial of Mercantile Texas determined that, as provided in section 3(d) of the act, Corporation's application, I believe such a conclusion the statute laws of Delaware specifically authorize the is less warranted with respect to Republic of Texas acquisition of a bank chartered in Delaware by an out- Corporation's application. I accordingly dissent from of-state bank holding company. In connection with the the majority view in the one case and join it in the application, the Secretary of the Board has taken into other. consideration the competitive effects of the proposed February 1, 1982 transaction, the financial and managerial resources and future prospects of the company and the banks concerned, and the convenience and needs of the Provident National Corporation, community to be served. After consideration of the Philadelphia, Pennsylvania record of this application in light of the factors contained in the act, the Secretary has determined that Order Approving Acquisition of Bank consummation of the transaction would be in the public interest. On the basis of these considerations, Provident National Corporation, Philadelphia, Penn- the application is approved. sylvania, a bank holding company within the meaning The transaction shall not be consummated before of the Bank Holding Company Act, has applied for the thirtieth calendar day following the effective date approval under section 3(a)(3) of the Act (12 U.S.C. of this Order, or later than three months after the § 1842(a)(3)) to acquire Provident of Delaware Bank, effective date of this Order, and Provident of Delaware Wilmington, Delaware, a proposed new bank. Bank, Wilmington, Delaware, shall be opened for Notice of the application, affording opportunity for business not later than six months after the effective interested persons to submit comments and views, has date of this Order, unless such periods are extended been given in accordance with section 3(b) of the act. for good cause by the Board or by the Federal Reserve The time for filing comments and views has expired, Bank of Philadelphia acting pursuant to delegated and the Secretary of the Board has considered the authority. application and all comments received in light of the By order of the Secretary of the Board acting factors set forth in section 3(c) of the act (12 U.S.C. pursuant to delegated authority for the Board of Gov- § 1842(c)). ernors, effective February 8, 1982. Applicant, controlling one banking subsidiary with aggregate deposits of approximately $2.14 billion, has (Signed) JAMES MCAFEE, applied to acquire Bank, which will be located in [SEAL] Associate Secretary of the Board. Delaware.1 Section 3(d) of the Bank Holding Company 1. Deposit data are as of September 30, 1981. 2. 5 Del. Code § 801, et. seq. (1974). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 195 Statement by the Board of Governors of the Federal review of the Board's Order. On June 24, 1981, the Reserve System Regarding the Application of Court vacated6 the Board's Order and on July 16, Republic of Texas Corporation 1981, formally remanded Republic's petition to the Board for reconsideration and additional findings of By Order dated December 21, 1981, the Board ap- fact with regard to the applicability of probable future proved the application of Republic of Texas Corpora- competition analysis to the circumstances involved. tion, Dallas, Texas ("Republic"), a bank holding The Court directed the Board to address the same company within the meaning of the Bank Holding questions of fact that the Court had directed the Board Company Act, to acquire The Citizens National Bank to address regarding the application of Mercantile of Waco, Waco, Texas ("Bank"), under section Texas Corporation, Dallas, Texas ("Mercantile"), to 3(a)(3) of the act. acquire by merger PanNational Corporation, El Paso, Republic, the fourth largest banking organization in Texas.7 These questions, as they apply to Republic's Texas, controls 31 banks with aggregate deposits of proposal, relate to the number of other potential approximately $6.8 billion, representing 7.6 percent of entrants into the Waco banking market, the likelihood total commercial bank deposits in the state.1 Bank is that Republic would enter the market independently if the thirtieth largest banking organization in Texas, this and comparable applications were denied, and the with deposits of approximately $238.6 million, repre- deconcentrating or other procompetitive effects assosenting 0.27 percent of commercial bank deposits in ciated with such independent entry. The Court's analthe state. ysis requires the Board to make findings of fact with respect to each of four issues8 if the Board is to deny a Bank is the largest bank in the Waco banking market;2 its deposits represent 29.4 percent of com- particular application on the basis of the probable future competition doctrine. mercial bank deposits in the market. None of Republic's subsidiary banks has an office in the Waco The Board has made a thorough investigation of banking market. The Waco banking market is concen- Republic's application. On the basis of the record, a trated; its four largest banking organizations control majority of the Board has concluded that there is 70.8 percent of total market commercial bank insufficient ground for making the factual findings that deposits. would justify denial under the evidentiary standards The Board originally denied Republic's application established in the Court's Republic decision.9 Thereby Order dated August 20, 1980.3 The Board's Order fore, the majority cannot conclude that there would be indicated that consummation of Republic's proposal a substantially adverse competitive effect were Repubmight substantially lessen probable future competition lic to enter the Waco market by the means proposed in in the relevant banking market, and that such an its application. However, the Board wishes to note anticompetitive effect4 was not clearly outweighed by that in arriving at its final determination in this case it considerations relating to the convenience and needs reserves judgment as to the appropriateness of applyof the community to be served. The Board also ing the Court's analysis in all circumstances. expressed its concern over the possibility that contin- The financial and managerial resources and future ued approval of acquisition or merger proposals in- prospects of Republic, Bank and Republic's subsidiarvolving large statewide holding companies and rela- ies are considered satisfactory and consistent with tively sizable banking organizations might perpetuate approval. Although some new or expanded services the size disparity between statewide and regional may result from approval of this acquisition, there is banking organizations, and result in an increase in no evidence in the record indicating that the banking concentration ratios.5 needs of the community to be served are not being Republic petitioned the United States Circuit Court met. Considerations relating to the convenience and of Appeals for the Fifth Circuit (the "Court") for needs of the community to be served are consistent with approval. 1. All banking data are as of December 31, 1980, and reflect bank 6. Republic of Texas Corp. v. Board of Governors, 649 F.2d 1026 holding company formations and acquisitions approved through (5th Cir. 1981). April 30, 1980. 7. See Mercantile Texas Corp. v. Board of Governors, 638 F.2d 2. The Waco banking market is approximated by the Waco SMSA, 1255 (5th Cir. 1981). which is represented by McClennan County, Texas. 8. In addition to the three areas of inquiry described above, the 3. Republic of Texas Corporation, 66 FEDERAL RESERVE BULLE- Court also required consideration of the degree of concentration in the TIN 787 (1980). relevant banking market. The Court did not require the Board to make 4. The Board's August, 1980 Order stated that even if the anticom- a finding on this issue on remand since the Court states in its opinion petitive effects of Republic's proposal were viewed as less than that Republic had not rebutted the Board's prima facie showing that substantial, the Board considered such effects to be so seriously the Waco banking market was behaving oligopolistically. adverse as to warrant denial. 9. Although the Board has analyzed the present application chiefly 5. In addition, the Board stated that consummation of Republic's with regard to the probable future competition doctrine, the Board proposal would eliminate the procompetitive effect Republic exerts as continues to take into consideration procompetitive effects exerted by a result of its position as a perceived potential entrant into the market. banks outside a particular market as perceived potential entrants. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

196 Federal Reserve Bulletin • March 1982 On the basis of the above, the Board concludes that area of safeguarding banking competition. I believe the facts of record pertaining to this proposal do not that the majority's action regarding the application by provide a sufficient basis for making findings such as Republic of Texas Corporation could have the same those listed by the Circuit Court of Appeals for the type of destructive precedential impact. Accordingly, Fifth Circuit.10 On reconsideration of all the facts of I dissent from the majority's Statement with respect to record, it is the Board's judgment that approval of this this application as well. application would not be contrary to the public interest and that the application should be approved. February 1, 1982 Board of Governors of the Federal Reserve System, February 1, 1982. Tulsa Commerce Bancshares, Inc., (Signed) WILLIAM W. WILES, Tulsa, Oklahoma [SEAL] Secretary of the Board. Order Approving the Formation of a Bank Holding Company Dissenting Statement of Governor Teeters Tulsa Commerce Bancshares, Inc., Tulsa, Oklahoma, I dissented from the Statement of the majority of the has applied for the Board's approval under section Board issued on today's date with respect to the 3(a)(1) of the Bank Holding Company Act (12 U.S.C. application of Mercantile Texas Corporation because I § 1842(a)(1)) of formation of a bank holding company believe that the facts of record in that case, when by acquiring 99.4 percent or more of the voting shares realistically viewed, are adequate to support a denial of Bank of Commerce and Trust Company, Tulsa, of that application on the basis of the probable future Oklahoma ("Bank"). competition doctrine. I stated my opinion that if the Notice of the application, affording opportunity for facts in that case were insufficient to support denial, interested persons to submit comments and views, has the possibility of developing a sufficient case for denial been given in accordance with section 2(b) of the act. of future applicants would be severely limited. The The time for filing comments and views has expired, standards set by the United States Circuit Court of and the Board has considered the application and all Appeals for the Fifth Circuit require evidence that is comments received in light of the factors set forth in so subjective that the Board will have great difficulty section 3(c) of the act (12 U.S.C. § 1842(c)). in enforcing them. Applicant is a nonoperating company with no sub- In my Dissenting Statement, I described in some sidiaries organized for the purpose of becoming a bank detail the reasons for my dissatisfaction with these holding company by acquiring Bank. Upon the acquistandards. I find these standards no less unrealistic sition of Bank (which holds $172.1 million in deposits), and subjective when applied to the facts of this case, Applicant would control the twelfth largest of 497 and I do not believe that the majority has given commercial banking organizations in Oklahoma and sufficient attention to ways of administering these approximately 0.9 percent of the total deposits in standards that would make their application more commercial banks in the state.1 effective and less cumbersome. I believe that the facts Bank is the sixth largest of 48 commercial banks of record in this case, viewed realistically, also war- located in the relevant banking market,2 and holds 4.19 rant denial of the application of Republic of Texas percent of total deposits in commercial banks in the Corporation. market. Principals of Applicant and Bank have owner- I also expressed my concern that the majority's ship interests in Gilcrease Hills Bank ("Gilcrease"), action regarding the application of Mercantile Texas Tulsa, Oklahoma, which is located in Bank's market. Corporation would greatly reduce the role of the Gilcrease is the smallest bank in the market and none probable future competition doctrine as a tool in of Applicant's or Bank's principals is in a policy fulfilling the Board's statutory responsibilities in the making position with Gilcrease. In light of these facts and the existence of numerous intervening banking alternatives between Gilcrease and Bank, the Board 10. The Court held that the Board may not deny a section 3(a) application to acquire a bank unless the Board finds that the acquisi- has concluded that the relationship between Applition would constitute a violation of' 'the antitrust standards explicitly cant, Bank, and Gilcrease has no significant effect on incorporated into" the act. 649 F.2d at 1043. However, the Board competition. Other principals of Applicant and Bank continues to be of the view that the last sentence of section 3(c) of the act, which requires that "fi]n every case the Board shall take into consideration . . . the convenience and needs of the community to be served," authorizes the Board to consider all competitive aspects of 1. All Banking data are as of March 31, 1981. an acquisition or merger proposal. 2. The relevant banking market is the Tulsa, Oklahoma RMA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 197 who are associated with various banking organizations banks with assets of $150 million or less. In applying in the market own less than 1.0 percent of the stock such a standard, the Board's opinion is that banking and hold no management positions in these organiza- factors are consistent with approval of this applications. Two of Bank's directors hold management posi- tion. tions in other banking organizations in Bank's market. While no immediate changes in Bank's services are These directors will hold no policy-making positions anticipated as a result of approval of this application, with Applicant and will own less than 1.0 percent of considerations relating to the convenience and needs Applicant's voting stock. In light of these facts, the of the community to be served are consistent with Board concludes that these affiliations have no signifi- approval. Accordingly, the Board has determined that cant effect on competition in the relevant market. It consummation of the transaction would be in the appears from these facts, and other facts of record, public interest and that the application should be that consummation of the proposal would not result in approved. any adverse effects upon competition or increase the On the basis of all the facts of record, the application concentration of banking resources in any relevant is approved for the reasons summarized above. The area. Accordingly, the Board concludes that competi- transaction shall not be made before the thirtieth tive considerations are consistent with approval of this calendar day following the effective date of this Order, application. or later than three months after the effective date of The financial and managerial resources of Applicant this Order, unless such period is extended for good and Bank are satisfactory and the future prospects for cause by the Board or by the Federal Reserve Bank of each appear favorable. In its consideration of this Kansas City, pursuant to delegated authority. application, the Board applied the less restrictive debt By Order of the Board of Governors, effective service standards for one-bank holding company for- February 5, 1982. mations announced by the Board in March of 1980.3 Although the Board stated at that time that these Voting for this action: Chairman Volcker and Governors standards would be applicable to one-bank holding Schultz, Partee, Rice, and Gramley. Absent and not voting: Governors Wallich and Teeters. companies whose subsidiary bank would have total assets of approximately $150 million or less, the Board intended to permit larger one-bank holding companies (Signed) JAMES MCAFEE, to come under the policy if the Board found that [SEAL] Associate Secretary of the Board. circumstances warranted such an exception.4 After reviewing all the facts of record, the Board finds such circumstances exist in this case. Yip Financial Investment, Ltd., Approval of this application would solidify local Hong Kong ownership of Bank and perpetuate Bank's current management, both of which the Board finds to be Yip Bancorporation, N.V., substantial public benefits. Principals of Applicant Netherlands Antilles acquired control of Bank in 1979 at a time when Bank's earnings were low and it was experiencing Yip Bancorp, large loan losses. Since that time, Applicant's princi- San Francisco, California pals have effected significant improvements in Bank's overall financial condition, including improvements in Chung Hwa Bancorp, Bank's asset quality and capital position. Moreover, San Francisco, California Applicant's principals appear willing to provide continuing support to Bank's capital position. Thus, under Order Approving Formation of Bank Holding the direction of Applicant's principals, Bank's condi- Companies tion has become satisfactory and its future prospects are favorable. Accordingly the Board finds that under Yip Financial Investment, Ltd., Hong Kong ("YFI, these circumstances, and in light of the general public Ltd."); Yip Bancorporation, N.V., Netherlands Antilinterest in facilitating local ownership, it is appropriate les ("YB-N.V."); Yip Bancorp, San Francisco, Calito apply the standards that would be applicable for fornia ("YB-U.S."); and Chung Hwa Bancorp, San one-bank holding company formations involving Francisco, California ("CHB"), have applied for the Board's approval under section 3(a)(1) of the Bank Holding Company Act (12 U.S.C. § 1842(a)(1)) to 3. 45 Federal Register 24,233 (1980). become bank holding companies through the acquisi- 4. See e.g., The Union of Arkansas Corporation, 66 FEDERAL tion by CHB of 100 percent of the voting shares of RESERVE BULLETIN 659 (1980). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

198 Federal Reserve Bulletin • March 1982 Commercial Bank of San Francisco, San Francisco, On the basis of the record, the applications are California ("Bank"). approved for the reasons summarized above. The Notice of the applications, affording opportunity for transaction shall not be made before the thirtieth day interested persons to submit comments and views, has following the effective date of this Order, or later than been given in accordance with section 3(b) of the act. three months after the effective date of this Order, The time for filing comments and views has expired unless such period is extended for good cause by the and the Board has considered the applications and all Board or by the Federal Reserve Bank of San Franciscomments received in light of the factors set forth in co, pursuant to delegated authority. section 3(c) of the act. By order of the Board of Governors, effective Applicants are nonoperating corporations organized February 5, 1982. for the purpose of becoming bank holding companies by acquiring Bank. YFI, Ltd., a corporation organized Voting for this action: Chairman Volcker and Governors under the laws of Hong Kong, owns all of the out- Schultz, Partee, Rice, and Gramley. Absent and not voting: standing shares of YB-N.V. which is organized under Governors Wallich and Teeters. the laws of the Netherlands Antilles. YB-N.V. owns 100 percent of the shares of YB-U.S. which in turn (Signed) JAMES MCAFEE, owns all of the shares of CHB. Both CHB and YB- [SEAL] Associate Secretary of the Board. U.S. are organized under the laws of California. Upon acquisition of Bank (deposits of $36.3 million as of September 30, 1981), Applicants will control the 108th Orders Under Section 4 of Bank Holding largest commercial bank in California with 0.04 per- Company Act cent of the total deposits in commercial banks in that state.1 Orbanco Financial Services Corporation, Bank is the 35th largest of 62 commercial banks in Portland, Oregon the relevant market and holds 0.1 percent of total deposits in commercial banks in the market.2 Inas- Order Denying Investment Note Activity much as Applicants and their principal control no other banks and conduct no nonbanking business in Orbanco Financial Services Corporation, Portland, the United States, consummation of the proposed Oregon, a bank holding company within the meaning transaction would have no adverse effects on existing of the Bank Holding Company Act, has applied for the or potential competition in any relevant market, and Board's approval under section 4(c)(8) of the act, 12 would not increase the concentration of resources in U.S.C. § 1843(c)(8), to engage in offering an investany relevant area. Therefore, competitive consider- ment note ("Note") with transactional characteristics. ations are consistent with approval of the applications. The proposed activity is not included in the list of The financial and managerial resources of Appli- permissible activities for bank holding companies concants are considered satisfactory and their future tained in the Board's Regulation Y, 12 C.F.R. prospects favorable. The financial and managerial § 225.4(a). resources of Bank will be enhanced by consummation Notice of the application, affording opportunity for of the transaction and Bank's future prospects appear interested persons to submit comments and views, has favorable, especially in light of the additional capital been duly published. (46 Federal Register 52426). The Applicants have committed to furnish Bank. Thus, time for filing comments and views has expired and the considerations relating to banking factors lend weight Board has considered the application and all comtoward approval of the applications. Applicants also ments received in light of the public interest factors set propose to improve the international financing serv- forth in section 4(c)(8) of the act. ices offered by Bank. Therefore, considerations relat- Applicant, the fourth largest commercial banking ing to the convenience and needs of the community to organization in Oregon with consolidated assets of be served are consistent with approval of the applica- $1.4 billion,1 controls three banks with aggregate detions. Accordingly, the Board has determined that posits of $726.7 million, representing about 6.1 percent consummation of the transaction would be in the of the total deposits in commercial banks in that state. public interest and that the applications should be Applicant also controls several nonbanking subsidiarapproved. ies engaged in commercial finance and mortgage lending activities. 1. Statewide banking data are as of December 31, 1980. 2. Market data are as of June 30, 1980. The relevant market is approximated by the San Francisco-Oakland-San Jose Ranally Metropolitan Area ("RMA"). 1. Banking data are as of June 30, 1980. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 199 The Note that Applicant proposes to offer would be permitted in the past due to the demand feature3 and available in minimum denominations of $5,000 and transactional capability of the Note Plan. Accordingly, would bear an interest rate computed daily on the the Board has determined that the activity is not basis of current market rates, and paid monthly. Note permissible as a funding method under section 4(a)(2) purchasers would be required to hold each Note for a of the act and consequently, prior Board approval to minimum of eight days, after which the Note would engage in the activity is required under section 4(c)(8) have a one day maturity and would be automatically of the act. renewed daily. Note purchasers would be required to The Board is authorized under section 4(c)(8) of the maintain a checking account at The Oregon Bank Bank Holding Company Act to approve nonbanking ("Bank"), Applicant's lead subsidiary bank, through activities for bank holding companies if the Board which additional purchases and redemptions could be determines that the proposed activity is so closely effected by means of telephone transfer.2 Although the related to banking or managing or controlling banks as initial purchase of Notes would be made directly with to be a proper incident thereto. Banks in fact provide, Orbanco at its offices, all subsequent transactions or are particularly well equipped to provide, services would occur through the Bank. Withdrawals and pur- similar to those involved in Orbanco's proposal. Acchases could be made in denominations of $500 or cordingly, the Board has determined that the proposed more, provided a minimum balance of $2500 were activity is closely related to banking. See National maintained. Checks could be drawn on the checking Courier Association v. Board of Governors, 516 F.2d account in any amount. Investors would not be issued 1229 (D.C. Cir. 1975). In determining whether a particindividual Notes but would receive monthly state- ular activity is a proper incident to banking, however, ments of all transactions involving the Notes. Orbanco the Board is required to determine whether the proproposes to register a $50 million Note issue with the posal can reasonably be expected to produce benefits Oregon Corporation Commissioner. Applicant indi- to the public, such as greater convenience, increased cates that the issue would be offered to Oregon resi- competition, or gains in efficiency, that outweigh dents only and, as an intrastate offering, would be possible adverse effects. exempt from registration under the Securities Act of The Note involves the taking of a deposit through 1933. Proceeds of the Note would be used to fund Bank and the use of this deposit to establish a debt Orbanco's nonbanking activities and no proceeds obligation of the parent holding company that can be would be channeled to Applicant's banking sub- redeemed virtually on demand through a checking sidiaries. account at Bank. In view of the extensive contact with As noted above, the proposed activity is not includ- Bank required to purchase and redeem the Note, and ed in the list of permissible bank holding company because of the fact that the Note is an obligation of the activities contained in Regulation Y. Applicant main- parent holding company, the Board believes that the tains that the activity is nevertheless permissible with- Note has a high degree of potential for public confuout prior Board approval as a method of funding its sion inasmuch as the Note is targeted at retail bank nonbanking operations. The Board has permitted bank customers and is sold to these customers in small holding companies to engage in funding activities denominations. Customers may not appreciate fully under section 4(a)(2) of the act, which authorizes bank the fact that their funds would be shifted from insured holding companies to engage in "banking or . . . to non-insured status and that when so shifted the managing or controlling banks and other subsidiaries Note would lack the prudential safeguards associated authorized under [the] Act or . . . furnishing services with bank deposits. Although Bank itself is subject to to or performing services for its subsidiaries." (12 bank regulation, the organization that ultimately re- U.S.C. § 1843 (a)(2)). The funding activities that the ceives and places the public's funds at risk is not Board has permitted in the past, however, have in- regulated to the same degree. volved either investment certificates or thrift notes In light of this potential for customer confusion, the with fixed maturities of at least 14 days, or commercial fact that customers' funds would be invested only in paper. Orbanco's proposed activity differs significant- nonbank subsidiaries of Orbanco causes particular ly from traditional funding activities that the Board has concern. This special concern derives, in major part, from the fact that the security underlying the Note would not provide diversification of risk or liquidity 2. The Board does not regard the tie-in of the Note with the usually required with respect to short term financial checking account at The Oregon Bank as unlawful under the anti-tie-in instruments available to small savers and investors. provisions of section 106 of the Bank Holding Company Act Amendments of 1970. The use of the Bank's services is intended to facilitate sale of the Notes rather than to benefit the Bank. The Board regards the Note as a single product not involving any tie-in of additional 3. The Board regards any instrument with a maturity of less than 14 services for purposes of section 106. days as a demand obligation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

200 Federal Reserve Bulletin • March 1982 The Board does not believe that these problems can requirements because the Note constitutes a liability be fully eliminated through disclosures or disclaimers of the holding company. In view of the likelihood that in a situation where the holding company's obligations a number of bank holding companies may wish to offer and the originating deposit are linked in a parent- similar debt obligations, this adverse effect also apsubsidiary relationship. The Board thus concludes that pears significant and weighs against approval of the such factors represent adverse effects that weigh application. against approval of the proposal. Applicant asserts that the proposal could result in The Board also considered the fact that the money public benefits by providing a higher rate of return on market rate payable on the Note has the potential to customers' funds and greater efficiencies in funding interfere with the orderly transition to market rates Orbanco's nonbank operations. While some public that Congress mandated in the Depository Institutions benefits may be associated with the proposal, the Deregulation and Monetary Control Act of 1980 Board does not believe that such benefits are sufficient ("DIDMCA"). Until that transition is completed, the to outweigh the adverse effects of the proposal. In- Congress has indicated a policy that all transaction deed, each of the adverse effects that the Board has accounts at depository institutions should be subject determined weigh against approval of the application to the same rate ceiling. Approval of the proposed are sufficient, in the Board's view, to outweigh any Note, issued by a bank holding company, in effect public benefits associated with the proposal. would permit the offering of a transaction account by Based upon the foregoing and other considerations Bank, an affiliate of the issuer, at an interest rate far in reflected in the record, the Board has determined that, excess of the rate that banks and thrift institutions are in the particular factual situation presented in this permitted to pay on NOW accounts. The Board con- case, the balance of the public interest factors that the cludes that this arrangement is inconsistent with con- Board is required to consider under section 4(c)(8) is gressionally mandated policy for an orderly phaseout not consistent with approval of the application. Acof Regulation Q, and thus is an adverse effect that cordingly, the application is hereby denied. weighs against approval. By order of the Board of Governors, effective Similarly, the Board regards the Note's transaction February 16, 1982. account feature as undermining the objective of the DIDMCA to impose reserve requirements on transac- Voting for this action: Chairman Volcker and Governors tion accounts at all depository institutions. Funds in Wallich, Partee, Teeters, Rice, and Gramley. the Note flow through a transaction account at Bank to the parent holding company and, thus, balances main- (Signed) WILLIAM W. WILES, tained in the Note are not now subject to reserve [SEAL] Secretary of the Board. ORDERS APPROVING APPLICATIONS UNDER THE BANK HOLDING COMPANY ACT AND BANK MERGER ACT 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 Effective Applicant Bank(s) date Exchange Bancorporation, Inc., First National Bank of Englewood, February 9, 1982 Tampa, Florida Englewood, Florida First City Bancorporation of First City National Bank of Floresville, February 22, 1982 Texas, Inc., Floresville, Texas Houston, Texas Pioneer American Bancorporation, Pendleton Banking Company, February 12, 1982 Pendleton, Oregon Pendleton, Oregon Southwest Bancshares, Inc., First Pasadena State Bank, February 17, 1982 Houston, Texas Pasadena, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 201 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Texas American Bancshares Inc., Charter National Bank, February 5, 1982 Fort Worth, Texas Piano, Texas Texas Commerce Bancshares, Inc. Texas Commerce Bank-Cypress Station, N.A. February 10, 1982 Houston, Texas Houston, Texas By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective AApppplliiccaanntt BBaannkk((ss)) Bank date Allied Bancshares, Inc., Lakewood Bank and Trust Com- Dallas February 5, 1982 Houston, Texas pany, Dallas, Texas Amarillo National Bancorp, Inc., Amarillo National Bank, Dallas February 11, 1982 Amarillo, Texas Amarillo, Texas Argyle Financial Services, Inc., Argyle State Bank, Minneapolis February 1, 1982 Argyle, Minnesota Argyle, Minnesota Azle Bancorp, Azle State Bank Dallas February 10, 1982 Azle, Texas Azle, Texas BSD Bancorp, Inc., American Valley Bank, San Francisco February 16, 1982 San Diego, California El Cajon, California Banks of Iowa, Inc., The Avoca State Bank, Chicago January 22, 1982 Des Moines, Iowa Avoca, Iowa Buffalo Bancorporation, Inc., First State Bank of Buffalo, Minneapolis February 22, 1982 Buffalo, South Dakota Buffalo, South Dakota Carolina Bancorp, Inc., Bank of Alamance, Richmond February 24, 1982 Sanford, North Carolina Graham, North Carolina Chebelle Corporation, Chelsea Savings Bank, Chicago January 27, 1982 Solon, Iowa Belle Plaine, Iowa Commerce Bancshares, Inc., Wentzville State Bank, Kansas City February 16, 1982 Kansas City, Missouri Wentzville, Missouri Commercial National Corporation, Prospect National Bank of Peoria, Chicago January 21, 1982 Peoria, Illinois Peoria, Illinois University National Bank of Peoria, Peoria, Illinois The Conifer Group, Inc., Commonwealth National Boston February 8, 1982 Worcester, Massachusetts Corporation, Boston, Massachusetts Corporate Bankshares, Inc., Corporate Woods State Bank, Kansas City February 12, 1982 Overland Park, Kansas Overland Park, Kansas Crookston Financial Services, Crookston National Bank, Minneapolis February 19, 1982 Inc., Crookston, Minnesota Crookston, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

202 Federal Reserve Bulletin • March 1982 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date El Campo Bancshares, Inc., Commercial State Bank of El Dallas January 28, 1982 El Campo, Texas Campo, El Campo, Texas Far-Mer Bankshares, Inc., Farmers & Merchants Bank, St. Louis January 29, 1982 Reyno, Arkansas Reyno, Arkansas Fifth Third Bancorp, The Bank of Russellville, Cleveland February 17, 1982 Cincinnati, Ohio Russellville, Ohio First Alsip Bancorp, Inc., First State Bank of Alsip, Chicago February 12, 1982 Alsip, Illinois Alsip, Illinois First Bancorp of Belleville, Inc., First United Bancshares, Inc., St. Louis February 16, 1982 Belleville, Illinois Belleville, Illinois Bank of Belleville, Belleville, Illinois First Bancshares, Inc., First Bank, Atlanta February 12, 1982 Slidell, Louisiana Slidell, Louisiana First Bancshares of Texas, Inc., Cushing Bancshares, Inc., Dallas February 2, 1982 Longview, Texas Cushing, Texas Van Bancshares, Inc., Van, Texas White Oak Bancshares, Inc., White Oak, Texas First Colonial Bancshares All American Bank of Chicago, Chicago February 1, 1982 Corporation, Chicago, Illinois Chicago, Illinois (additional shares) First Delhi Corporation, Capital Bank of Delhi, Dallas February 1, 1982 Delhi, Louisiana Delhi, Louisiana First State Holding Company, First State Bank, Kansas City February 11, 1982 Inc., Mullinville, Kansas Mullinville, Kansas First Texas Financial Corporation, First Texas Bank, Dallas February 16, 1982 Dallas, Texas Dallas, Texas Fourth Financial Corporation, M-L Bancshares, Inc., Kansas City January 28, 1982 Wichita, Kansas Wichita, Kansas Newton Bancshares, Inc., Newton, Kansas The Kansas State Bank, Newton, Kansas Fulton Bancshares, Inc., Fulton County Bank, Atlanta February 12, 1982 Alpharetta, Georgia Alpharetta, Georgia Gaylord Bancorporation Ltd., Citizens State Bank of Gaylord, Minneapolis February 1, 1982 Gaylord, Minnesota Gaylord, Minnesota Great Guaranty Bancshares, Inc., Guaranty Bank and Trust Atlanta February 18, 1982 New Roads, Louisiana Company, New Roads, Louisiana HNB Corporation, The Homer National Bank, Dallas February 23, 1982 Homer, Louisiana Homer, Louisiana Highland Park Bancorporation, The Highland Bank, Minneapolis February 2, 1982 Inc., St. Paul, Minnesota St. Paul, Minnesota Island American Bancshares, Inc., American Bank, Dallas February 12, 1982 Galveston, Texas Galveston, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 203 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Kansas Unlimited Investments, Bank of Pleasanton, Kansas City January 21, 1982 Inc., Pleasanton, Kansas Pleasanton, Kansas Keene Bancorp, Inc., First State Bank, Dallas February 16, 1982 Keene, Texas Keene, Texas Keyesport Bancshares, Inc., State Bank of Keyesport, St. Louis February 5, 1982 Keyesport, Illinois Keyesport, Illinois Liberty Holding Company, Liberty Bank of Cantonment, Atlanta February 12, 1982 Cantonment, Florida Cantonment, Florida Liberty National Bancshares, Inc., Liberty National Bank, Dallas February 19, 1982 Lovington, New Mexico Lovington, New Mexico M-L Bancshares, Inc., Newton Bancshares, Inc., Kansas City January 28, 1982 Wichita, Kansas Newton, Kansas The Kansas State Bank, Newton, Kansas Mark Twain Bancshares, Inc., Hub State Bank, St. Louis February 12, 1982 St. Louis, Missouri Independence, Missouri Maryland National Corporation, Central Atlantic Bank, N.A., Richmond February 12, 1982 Baltimore, Maryland Newark, Delaware Mason State Company, Mason State Bank, Kansas City January 22, 1982 Mason City, Nebraska Mason City, Nebraska Merchants Bancorp, Inc., The Merchants National Bank of Chicago February 18, 1982 Aurora, Illinois Aurora, Aurora, Illinois Midwest National Bancshares, Midwest National Bank, Kansas City January 28, 1982 Inc., Midwest City, Oklahoma Midwest City, Oklahoma Minnehaha Bancshares, Inc., Farmers State Bank of Flandreau, Minneapolis February 12, 1982 Sioux Falls, South Dakota Flandreau, South Dakota Minto Bancorporation, Inc. Bank of Minto, Minneapolis February 17, 1982 Minto, North Dakota Minto, North Dakota NCB Corp., Newton County Bank, Atlanta February 1, 1982 Mansfield, Georgia Mansfield, Georgia Northern Trust Corporation, Security Trust Company of Sara- Chicago February 5, 1982 Chicago, Illinois sota, N.A., Sarasota, Florida North Plaza Bancshares, Inc., North Plaza State Bank, Kansas City February 5, 1982 Topeka, Kansas Topeka, Kansas Ogden-Saratoga Corporation, First Security Bank of Downers Chicago January 26, 1982 Downers Grove, Illinois Grove, Downers Grove, Illinois Paraclete Bancorp., Commercial State Bank, Chicago January 25, 1982 Afton, Iowa Afton, Iowa Prairie Bancorp, Inc., Prairie State Bank, Chicago February 5, 1982 Bloomington, Illinois Bloomington, Illinois Ramsey Bancshares, Inc., Ramsey National Bank & Trust of Minneapolis February 3, 1982 Devils Lake, North Dakota Devils Lake, Devils Lake, North Dakota Sesser Bancorporation, Inc., Bank of Sesser, St. Louis February 8, 1982 Sesser, Illinois Sesser, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

204 Federal Reserve Bulletin • March 1982 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Tuscola Bancorp, Inc., The First National Bank of Doug- Chicago February 6, 1982 Springfield, Illinois las County, Tuscola, Illinois United Missouri Bancshares, Inc., Paris Savings Bank, Kansas City January 25, 1982 Kansas City, Missouri Paris, Missouri Union Colony Bancorp., Union Colony Bank, Kansas City February 12, 1982 Greeley, Colorado Greeley, Colorado United Madison Bancshares, Inc., United Madison Bank, N.A., Dallas February 18, 1982 Houston, Texas Houston, Texas Uptown Bancorporation, Inc., Uptown National Bank of Moline, Chicago February 1, 1982 Moline, Illinois Moline, Illinois Wabash Valley Bancorporation, Wabash Valley Bank and Trust Chicago February 19, 1982 Inc., Company, Peru, Indiana Peru, Indiana Wells-Foster Bankshares, Inc., Farmers State Bank, Minneapolis February 19, 1982 Carrington, North Dakota Carrington, North Dakota Westlake Bancshares, Inc., Westlake National Bank, Dallas February 5, 1982 Austin, Texas Austin, Texas Woodriver Banco, Inc., The Farmers Bank, Kansas City February 19, 1982 Oconto, Nebraska Oconto, Nebraska Youell Sales Department, Inc., Manson State Bank, Chicago February 12, 1982 Manson, Iowa Manson, Iowa Sections 3 and 4 Nonbanking Reserve Effective Applicant Bank(s) company Bank date (or activity) Hoi-Ark, Inc., The First National Bank to retain and service St. Louis February 4, 1982 Blytheville, Arkansas in Blytheville, certain notes receiv- Blytheville, Arkansas able directly connected with previous business activities. Pioneer Bancshares Zachary Taylor Life In- Dallas February 2, 1982 Corporation, surance Company, Shreveport, Louisiana Shreveport, Louisiana Pioneer Bank and Trust Company Shreveport, Louisiana Section 4 Nonbanking Reserve Effective AAp pilCantA company Bank date (or activity) First Glen Bancorp Inc., Van Dyke Associates Inc., New York February 17, 1982 Glens Falls, New York Glens Falls, New York Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 205 ORDERS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Reserve Effective Applicant Bank(s) Bank date The FTB Fifth Bank, The Bank of Russellville, Cleveland February 17, 1982 Russellville, Ohio Russellville, Ohio The Interim Dime Bank of Marietta, The Dime Bank of Ross County, N.A., Cleveland February 12, 1982 Marietta, Ohio Adelphi, Ohio Michigan Bank-Port Huron, Marine Bank & Trust, Chicago February 5, 1982 Port Huron, Michigan Marine City, Michigan United Jersey Bank/Southwest, Pine Hill office of The Bank of New Philadelphia February 4, 1982 Camden, New Jersey Jersey Pine Hill, New Jersey PENDING CASES INVOLVING THE BOARD OF GOVERNORS* *This list of pending cases does not include suits Public Interest Bounty Hunters v. Board of Goveragainst the Federal Reserve Banks in which the Board nors, et al., filed June 1981, U.S.D.C. for the of Governors is not named a party. Northern District of Georgia. Edwin F. Gordon v. John Heimann, et al., filed May Darnell Hilliard v. Esmond Langley, filed February 1981, U.S.C.A. for the Fifth Circuit. 1982, Superior Court of the District of Columbia. Louis J. Rous sell v. Board of Governors, filed May C. A. Cavendes, Sociedad Financiers v. Board of 1981, U.S.C.A. for the District of Columbia. Governors, filed January 1982, U.S.C.A. for the Wilshire Oil Company of Texas v. Board of Gover- District of Columbia. nors, et al., filed April 1981, U.S.C.A. for the Third First Lakefield BanCorporation v. Board of Gover- Circuit. nors, et al, filed January 1982, U.S.D.C. for the People of the State of Arkansas v. Board of Gover- District of Minnesota. nors, et al., filed March 1981, U.S.C.A. for the C. A. Cavendes, Sociedad Financiers v. Board of Western District of Arkansas. Governors, filed December 1981, U.S.C.A. for the First Bank & Trust Company v. Board of Governors, District of Columbia. filed February 1981, U.S.D.C. for the Eastern Dis- Option Advisory Service, Inc. v. Board of Governors, trict of Kentucky. filed December 1981, U.S.C.A. for the Second 9 to 5 Organization for Women Office Workers v. Circuit. Board of Governors, filed December 1980, Edwin F. Gordon v. Board of Governors, et al., filed U.S.D.C. for the District of Massachusetts. October 1981, U.S.C.A. for the Eleventh Circuit Securities Industry Association v. Board of Gover- (Two Consolidated Cases). nors, et al., filed October 1980, U.S.D.C. for the Wendall Hall v. Board of Governors, et al., filed District of Columbia. September 1981, U.S.D.C. for the Northern District Securities Industry Association v. Board of Goverof Georgia. nors, et al., filed October 1980, U.S.C.A. for the Allen Wolf son v. Board of Governors, filed September District of Columbia. 1981, U.S.D.C. for the Middle District of Florida. A. G. Becker, Inc. v. Board of Governors, et al., filed Option Advisory Service, Inc. v. Board of Governors, October 1980, U.S.D.C. for the District of Columfiled September 1981, U.S.C.A. for the Second bia. Circuit (two cases). A. G. Becker, Inc. v. Board of Governors, et al., filed American Bankers Association v. Federal Home Loan October 1980, U.S.C.A. for the District of Colum- Bank Board, et al., filed August 1981, U.S.D.C. for bia. the District of Columbia. A. G. Becker, Inc. v. Board of Governors, et al., filed Bank Stationers Association, Inc., et al. v. Board of August 1980, U.S.D.C. for the District of Columbia. Governors, filed July 1981, U.S.D.C. for the North- Otero Savings and Loan Association v. Board of ern District of Georgia. Governors, filed August 1980, U.S.D.C. for the District of Colorado. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

206 Federal Reserve Bulletin • March 1982 Berkovitz, et al. v. Government of Iran, et al., filed mittee, filed July 1979, U.S.D.C. for the District of June 1980, U.S.D.C. for the Northern District of Columbia. California. Security Bancorp and Security National Bank v. Louis J. Roussel v. Comptroller of the Currency and Board of Governors, filed March 1978, U.S.C. A. for Federal Reserve Board, filed April 1980, U.S.D.C. the Ninth Circuit. for the District of Columbia. Darnell Hilliard v. G. William Miller, et al., filed Donald W. Riegle, Jr. v. Federal Open Market Com- September 1976, U.S.C.A. for the District of Columbia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1 Financial and Business Statistics CONTENTS WEEKLY REPORTING COMMERCIAL BANKS Assets and liabilities Domestic Financial Statistics A18 All reporting banks A19 Banks with assets of $1 billion or more A3 Monetary aggregates and interest rates A20 Banks in New York City A4 Reserves of depository institutions, reserve, A21 Balance sheet memoranda bank credit A22 Branches and agencies of foreign banks A5 Reserves and borrowings of depository A23 Commercial and industrial loans institutions A24 Gross demand deposits of individuals, A6 Federal funds and repurchase agreements of partnerships, and corporations large member banks FINANCIAL MARKETS POLICY INSTRUMENTS A25 Commercial paper and bankers dollar A7 Federal Reserve Bank interest rates acceptances outstanding A8 Depository institutions reserve requirements A26 Prime rate charged by banks on short-term A9 Maximum interest rates payable on time and business loans savings deposits at federally insured institutions A26 Terms of lending at commercial banks A10 Federal Reserve open market transactions A27 Interest rates in money and capital markets A28 Stock market—Selected statistics A29 Selected financial institutions—Selected assets FEDERAL RESERVE BANKS and liabilities All Condition and Federal Reserve note statements A12 Maturity distribution of loan and security FEDERAL FINANCE holdings A30 Federal fiscal and financing operations A31 U.S. budget receipts and outlay MONETARY AND CREDIT AGGREGATES A32 Federal debt subject to statutory limitation A32 Gross public debt of U.S. Treasury—Types and A12 Bank debits and deposit turnover ownership A13 Money stock measures and components A33 U.S. government marketable securities— A14 Aggregate reserves of depository institutions Ownership, by maturity and monetary base A34 U.S. government securities dealers— A15 Loans and securities of all commercial banks Transactions, positions, and financing A35 Federal and federally sponsored credit agencies—Debt outstanding COMMERCIAL BANKS A16 Major nondeposit funds A17 Assets and liabilities, last Wednesday-of-month series Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

85 Federal Reserve Bulletin • March 1982 SECURITIES MARKETS AND International Statistics CORPORATE FINANCE A54 U.S. international transactions—Summary A36 New security issues—State and local A55 U.S. foreign trade governments and corporations A55 U.S. reserve assets A37 Open-end investment companies—Net sales and A55 Foreign official assets held at Federal Reserve asset position Banks A37 Corporate profits and their distribution A56 Foreign branches of U.S. banks—Balance sheet A38 Nonfinancial corporations—Assets and data liabilities A58 Selected U.S. liabilities to foreign official A38 Total nonfarm business expenditures on new institutions plant and equipment A39 Domestic finance companies—Assets and liabilities; business credit REPORTED BY BANKS IN THE UNITED STATES A58 Liabilities to and claims on foreigners REAL ESTATE A59 Liabilities to foreigners A61 Banks' own claims on foreigners A40 Mortgage markets A62 Banks' own and domestic customers' claims on A41 Mortgage debt outstanding foreigners A62 Banks' own claims on unaffiliated foreigners A63 Claims on foreign countries—Combined CONSUMER INSTALLMENT CREDIT domestic offices and foreign branches A42 Total outstanding and net change A43 Extension and liquidations REPORTED BY NONBANKING BUSINESS ENTERPRISES IN THE UNITED STATES FLOW OF FUNDS A64 Liabilities to unaffiliated foreigners A65 Claims on unaffiliated foreigners A44 Funds raised in U.S. credit markets A45 Direct and indirect sources of funds to credit markets SECURITIES HOLDINGS AND TRANSACTIONS A66 Foreign transactions in securities Domestic Nonfinancial Statistics A67 Marketable U.S. Treasury bonds and notes— Foreign holdings and transactions A46 Nonfinancial business activity—Selected measures A46 Output, capacity, and capacity utilization INTEREST AND EXCHANGE RATES A47 Labor force, employment, and unemployment A48 Industrial production—Indexes and gross value A67 Discount rates of foreign central banks A50 Housing and construction A68 Foreign short-term interest rates A51 Consumer and producer prices A68 Foreign exchange rates A52 Gross national product and income A53 Personal income and saving A69 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 1981 1981 1982 Item Q1 02 Q3 Q4 Sept. Oct. Nov. Dec. Jan. Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)1 Reserves of depository institutions 1 Total 5.5 4.2 4.0 3.2 15.1 -5.8 1.0 11.3' 22.2 2 Required 6.4 5.0 3.1 3.5 18.6 -1.7 -1.1 12.1 19.4 3 Nonborrowed 10.7 -2.4 7.9 10.5 14.5 2.5 17.0 12.3 -4.0 4 Monetary base2 5.2 5.8 4.3 3.9 6.0 0.7 3.3 11.3 11.6 Concepts of money and liquid assets3 5 Ml 4.6' 9.2 .3 5.7 .3 4.7 9.7 12.4' 21.0 6 M2 7.5 12.0 8.3 8.8 4.0 7.6 13.7' 8.4 11.7 7 M3 11.2 12.2 11.2 9.2 6.9 7.3 13.1 7.3' 8.8 8 L 11.6 10.6 11.9 n.a. 8.2r 10.3r 12.0 n.a. n.a. Time and savings deposits Commercial banks 9 Total 16.0 11.9 18.4 8.3 9.8 6.2 6.9' 1.6r 4.2 10 Savings4 -28.3 -8.9 -22.7 -11.9 -22.4 -16.8 8.5 4.6 14.5 11 Small-denomination time5 28.5 16.2 24.3 20.8' 23.7 22.2 17.4' -.3 2.0 12 Large-denomination time6 34.3 19.9 36.0 5.4r 11.2 .4 -5.2 2.2' 1.1 13 Thrift institutions7 4.0 3.2 2.6 2.7 -2.5 5.1 4.2 1.3 1.1 14 Total loans and securities at commercial banks8 11.3 8.4 8.7 3.7 5.2 5.6 3.3 -8.8 4.2 1981 1981 1982 Q1 Q2 Q3 Q4 Oct. Nov. Dec. Jan. Feb. Interest rates (levels, percent per annum) Short-term rates 15 Federal funds9 16.57 17.78 17.58 13.59 15.08 13.31 12.37 13.22 14.78 16 Discount window borrowing10 13.00 13.62 14.00 13.04 14.00 13.03 12.10 12.00 12.00 17 Treasury bills (3-month market yield)11 14.39 14.91 15.05 11.75 13.54 10.86 10.85 12.28 13.48 18 Commercial paper (3-month)11,14 15.34 16.15 16.78 13.04 14.85 12.16 12.12 13.09 14.53 Long-term rates Bonds 19 U.S. government13 12.74 13.49 14.51 14.14 15.13 13.56 13.73 14.57 14.48 20 State and local government14 9.97 10.69 12.11 12.54 12.83 11.89 12.91 13.28 12.97 21 Aaa utility (new issue)15 14.45 15.41 16.82 15.67 16.94 15.56 15.20 15.68 15.93 22 Conventional mortgages'6 15.10 16.15 17.50 17.33 18.05 16.95 17.00 17.30 17.20 1. Unless otherwise noted, rates of change are calculated from average amounts L: M3 plus other liquid assets such as term Eurodollars held by U.S. residents outstanding in preceding month or quarter. other than banks, bankers acceptances, commercial paper, Treasury bills and other 2. Includes reserve balances at Federal Reserve Banks in the current week plus liquid Treasury securities, and U.S. savings bonds. vault cash held two weeks earlier used to satisfy reserve requirements at all deposi- 4. Savings deposits exclude NOW and ATS accounts at commercial banks and tory institutions plus currency outside the U.S. Treasury, Federal Reserve Banks, thrifts and CUSD accounts at credit unions. the vaults of depository institutions, and surplus vault cash at depository institu- 5. Small-denomination time deposits—including retail RPs—are those issued in tions. amounts of less than $100,000. 3. Ml: Averages of daily figures for (1) currency outside the Treasury, Federal 6. Large-denomination time deposits are those issued in amounts of $100,000 or Reserve Banks, and the vaults of commercial banks; (2) traveler's checks of non- more. bank issuers; (3) demand deposits at all commercial banks other than those due 7. Savings and loan associations, mutual savings banks, and credit to domestic banks, the U.S. government, and foreign banks and official institutions 8. Changes calculated from figures shown in table 1.23. December 1981 and 1981 less cash items in the process of collection and Federal Reserve float; and (4) Q4 rates reflect shifts of foreign loans and securities from U.S. banking offices to negotiable order of withdrawal (NOW) and automatic transfer service (ATS) ac- international banking facilities. counts at banks and thrift institutions, credit union share draft (CUSD) accounts, 9. Averages of daily effective rates (average of the rates on a given date weighted and demand deposits at mutual savings banks. by the volume of transactions at those rates). M2: Ml plus savings and small-denomination time deposits at all depository 10. Rate for the Federal Reserve Bank of New York. institutions, overnight repurchase agreements at commercial banks, overnight Eu- 11. Quoted on a bank-discount basis. rodollars held by U.S. residents other than banks at Caribbean branches of member 12. Unweighted average of offering rates quoted by at least five dealers. banks, and balances of money market mutual funds (general purpose and broker/ 13. Market yields adjusted to a 20-year maturity by the U.S. Treasury. dealer). 14. Bond Buyer series for 20 issues of mixed quality. M3: M2 plus large-denomination time deposits at all depository institutions and 15. Weighted averages of new publicly offered bonds rated Aaa, Aa, and A by term RPs at commercial banks and savings and loan associations and balances of Moody's Investors Service and adjusted to an Aaa basis. Federal Reserve cominstitution-only money market mutual funds. pilations. 16. Average rates on new commitments for conventional first mortgages on new homes in primary markets, unweighted and rounded to nearest 5 basis points, from Dept. of Housing and Urban Development. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Nonfinancial Statistics • March 1982 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 1982 1982 Dec. Jan. Feb.? Jan. 13 Jan. 20 Jan. 27 Feb. 3 Feb. 10 Feb. 17 P Feb. 24P SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 151,920 152,297 150,554 150,931 152,276 151,086 152,857 148,574 151,072 151,391 2 U.S. government securities' 128.505 127,473 126,948 127,323 125,853 126,143 129,016 125,075 127,542 127,471 3 Bought outright 127,483 126,112 125,599 127,323 125,437 124,791 125,340 125,075 125,197 126,697 4 Held under repurchase agreements 1,022 1,361 1,349 0 416 1,352 3,676 0 2,345 774 5 Federal agency securities 9,291 9,184 9,102 9,100 9,105 9,103 9,206 9,053 9,141 9,083 6 Bought outright 9,126 9,084 9,044 9,100 9,082 9,058 9,056 9,053 9,046 9,040 7 Held under repurchase agreements 165 100 58 0 23 45 150 0 95 43 8 Acceptances 315 156 165 0 60 186 466 0 396 55 9 Loans 642 1,526 1,713 998 951 2,469 1,851 1,662 1,908 1,900 10 Float 3,456 4,485 3,292 4,159 6,798 3,569 2,721 3,116 2,465 4,060 11 Other Federal Reserve assets 9,711 9,473 9,334 9,351 9,508 9,615 9,597 9,668 9,622 8,822 12 Gold stock 11,152 11,151 11,151 11,151 11,151 11,151 11,151 11,151 11,151 11,150 13 Special drawing rights certificate account... 3,318 3,318 3,559 3,318 3,318 3,318 3,389 3,568 3,568 3,568 14 Treasury currency outstanding 13,707 13,777 13,708 13,693 13,700 13,705 14,056 13,705 13,710 13,710 ABSORBING RESERVE FUNDS 15 Currency in circulation 143,700 142,207 140,529 143,263 141,878 140,446 140,293 140,520 141,189 140,464 16 Treasury cash holdings 443 448 466 447 448 449 457 462 465 470 Deposits, other than reserves, with Federal Reserve Banks 17 Treasury 2,965 4,713 5,506 3,069 3,712 6,147 7,863 5,319 4,568 6,693 18 Foreign 343 389 304 530 334 292 314 279 321 276 19 Other 605 538 472 480 470 448 475 490 489 431 20 Required clearing balances NO 127 139 125 128 131 135 137 139 141 21 Other Federal Reserve liabilities and capital 5,768 5,401 5,396 5,379 5,391 5,269 5,474 5,097 5,467 5,206 22 Reserve accounts2 26,163 26,721 26,161 25,799 28,085 26,078 26,443 24,694 26,863 26,137 End-of-month figures Wednesday figures 1981 1982 1982 Dec. Jan. Feb. Jan. 13 Jan. 20 Jan. 27 Feb. 3 Feb. 10 Feb.17 Feb. 24 SUPPLYING RESERVE FUNDS 23 Reserve Bank credit outstanding 153,136 151,560 147,618 152,714 157,766 155,060 158,376 150,288 155,143 148,050 24 U.S. government securities1 130,954 128,230 125,410 125,446 127,787 129,047 132,942 125,183 130,353 126,250 25 Bought outright 127,738 124,967 125,410 125,446 124,872 126,541 125,588 125,183 126,025 126,250 26 Held under repurchase agreements .... 3,216 3,263 0 0 2,915 2,506 7,354 0 4,328 0 27 Federal agency securities 9,394 9,192 9,026 9,089 9,217 9,159 9,460 9,046 9,218 9,031 28 Bought outright 9,125 9,058 9,026 9,089 9,057 9,057 9,054 9,046 9,046 9,031 29 Held under repurchase agreements ... 269 134 0 0 160 102 406 0 172 0 30 Acceptances 195 597 0 0 417 368 596 0 453 0 31 Loans 1,601 2,217 1,180 2,906 3,682 5,109 1,800 2,283 1,505 1,414 32 Float 1,762 1,635 2,959 5,346 6,579 1,732 3,869 3,952 4,789 2,400 33 Other Federal Reserve assets 9,230 9,689 9,043 9,927 10,084 9,645 9,709 9,824 8,825 8,955 34 Gold stock 11,151 11,151 11,150 11,151 11,151 11,151 11,151 11,151 11,151 11,150 35 Special drawing rights certificate account 3,318 3,318 3,568 3,318 3,318 3,318 3,568 3,568 3,568 3,568 36 Treasury currency outstanding 14,480 14,523 13,713 13,698 13,705 13,705 13,705 13,705 13,710 13,710 ABSORBING RESERVE FUNDS 37 Currency in circulation 145,566 140,475 139,655 142,921 141,450 140,356 140,359 141,231 141,492 140,407 38 Treasury cash holdings 444 462 475 449 446 448 457 464 464 471 Deposits, other than reserves, with Federal Reserve Banks 39 Treasury 4,301 8,285 3,835 3,235 3,661 7,169 5,576 4,417 5,541 5,143 40 Foreign 505 333 416 275 264 346 274 340 271 264 41 Other 781 393 414 448 543 437 516 529 509 350 42 Required clearing balances 117 135 139 125 128 131 135 137 139 141 43 Other Federal Reserve liabilities and capital . 5,261 5,539 6,291 5,306 5,272 5,044 5,440 4,967 5,488 4,938 44 Reserve accounts2 25,111 24,931 24,825 28,122 34,176 29,303 34,043 26,627 29,668 24,764 1. Includes securities loaned—fully guaranteed by U.S. government securities 2. Excludes required clearing balances, pledged with Federal Reserve Banks—and excludes (if any) securities sold and scheduled to be bought back under matched sale-purchase transactions. NOTE. For amounts of currency and coin held as reserves, see table 1.12. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Depository Institutions A5 1.12 RESERVES AND BORROWINGS Depository Institutions Millions of dollars Monthly averages of daily figures Reserve classification 1980 1981 1982 Dec. June July Aug. Sept. Oct. Nov. Dec. Jan. Feb.P 1 Reserve balances with Reserve Banks' 26,664 26,623 27,111 27,000 25,499 25,690 25,892 26,163 26,721 26,161 2 Total vault cash (estimated) 18,149 18,187 18,273 18,435 18,925 18,810 18,844 19,538 20,284 19,254 3 Vault cash at institutions with required reserve balances2 12,602 12,358 12,443 12,549 13,041 12,924 12,986 13,577 14,199 13,117 4 Vault cash equal to required reserves at other institutions 704 1,462 1,457 1,477 2,053 2,097 2,073 2,178 2,290 2,187 5 Surplus vault cash at other institutions3 .. 4,843 4,367 4,373 4,409 3,831 3,789 3,785 3,783 3,795 3,950 6 Reserve balances + total vault cash4 44,940 44,810 45,384 45,435 4444,,442244 44,500 44,736 45,701 4477,,000055 4455,,442255 7 Reserve balances + total vault cash used to satisfy reserve requirements4-5 40,097 40,443 41,011 41,026 40,593 40,711 40,951 41,918 43,210 41,475 8 Required reserves (estimated) 40,067 40,104 40,667 40,731 40,177 40,433 40,604 41,606 42,785 40,992 9 Excess reserve balances at Reserve Banks4 6 . 30 339 344 295 416 278 347 312 425 483 10 Total borrowings at Reserve Banks 1,617 2,039 1,751 1,408 1,473 1,149 695 642 1,526 1,713 11 Seasonal borrowings at Reserve Banks 116 291 248 220 222 152 79 53 75 132 12 Extended credit at Reserve Banks n.a. n.a. n.a. 79 301 442 178 149 197 232 Weekly averages of daily figures for week ending: 1981 1982 Dec. 23 Dec. 30 Jan. 6 Jan. 13 Jan. 20 Jan. 27 Feb. 3 Feb. 10 Feb. IIP Feb. 24p 13 Reserve balances with Reserve Banks1 26,940 26,317 27,140 25,799 28,085 26,078 26,443 24,694 26,863 26,137 14 Total vault cash (estimated) 18,613 19,749 19,172 19,723 20,980 21,009 20,449 20,062 19,218 18,158 15 Vault cash at institutions with required reserve balances2 13,105 13,891 13,498 14,318 14,459 14,505 14,055 1133,,660099 1122,,997744 1122,,550077 16 Vault cash equal to required reserves at other institutions 2,076 2,152 2,137 2,399 2,288 2,318 2,286 2,346 2,215 2,062 17 Surplus vault cash at other institutions3 .. 3,432 3,706 3,537 3,006 4,233 4,186 4,108 4,107 4,029 3,589 18 Reserve balances + total vault cash4 45,553 46,066 46,312 45,522 49,065 47,087 4466,,889922 4444,,775566 4466,,008899 4444,,330022 19 Reserve balances + total vault cash used to satisfy reserve requirements4-5 42,121 42,360 42,775 42,516 44,832 42,901 42,784 40,649 42,060 40,713 20 Required reserves (estimated) 41,746 42,026 42,148 42,173 44,299 42,704 42,300 40,532 41,457 40,658 21 Excess reserve balances at Reserve Banks4-6 . 375 334 627 343 533 197 484 117 603 55 22 Total borrowings at Reserve Banks 620 882 1,452 998 951 2,469 1,851 1,662 1,908 1,900 23 Seasonal borrowings at Reserve Banks 70 75 59 53 70 96 110 114 134 146 24 Extended credit at Reserve Banks 161 173 193 194 195 199 212 225 227 222 1. As of Aug. 13, 1981 excludes required clearing balances of all depository existing member bank, or when a nonmember bank joins the Federal Reserve institutions. System. For weeks for which figures are preliminary, figures by class of bank do 2. Before Nov. 13, 1980, the figures shown reflect only the vault cash held by not add to total because adjusted data by class are not available. member banks. 5. Reserve balances with Federal Reserve Banks which exclude required clearing 3. Total vault cash at institutions without required reserve balances less vault balances plus vault cash at institutions with required reserve balances plus vault cash equal to their required reserves. cash equal to required reserves at other institutions. 4. Adjusted to include waivers of penalties for reserve deficiencies in accordance 6. Reserve balances with Federal Reserve Banks which exclude required clearing with Board policy, effective Nov. 19, 1975, of permitting transitional relief on a balances plus vault cash used to satisfy reserve requirements less required reserves. graduated basis over a 24-month period when a nonmember bank merged into an (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 Nonfinancial Statistics • March 1982 1.13 FEDERAL FUNDS AND REPURCHASE AGREEMENTS Large Member Banks' Averages of daily figures, in millions of dollars 1981 and 1982, week ending Wednesday BByy mmaattuurriittyy aanndd ssoouurrccee Jan. 6r Jan. 13 Jan. 20 Jan. 27 Feb. 3 Feb. 10 Feb. 17 Feb. 24 One day and continuing contract 1 Commercial banks in United States 57,560 58,089 55,172 50,762 53,711 57,156 56,219 52,871 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 18,375 18,181 17,889 17,452r 16,495 17,300 19,302 19,211 3 Nonbank securities dealers 3,744 3,638 4,019 4,368' 4,202 4,099 4,102 4,011 4 All other 20,501 21,715 21,558 21,999r 21,766 21,135 20,338 21,992 All other maturities 5 Commercial banks in United States 3,622 3,388 3.891 3,824 3,744 3,873 4,908 4,063 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 7,897 7,140 7,339 7,434 7,389 7,536 7,510 7,543 7 Nonbank securities dealers 3,459 3,603 3,718 4,151 4,183 4,027 4,572 3,814 8 All other 10,834 9,778 9,310 9,173 8,982 8,817 10,575 9,278 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 22,231 18,534 18,896 17,811r 18,477 19,070 19,764 18,974 10 Nonbank securities dealers 4,349 4,227 4,177 3,462 3,438 3,318 2,959 3,861 1. Banks with assets of $1 billion or more as of Dec. 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 Extended credit' SShhoorrtt--tteerrmm aaddjjuussttmmeenntt ccrreeddiitt aanndd sseeaassoonnaall ccrreeddiitt First 60 days Next 90 days FFFeeedddeeerrraaalll RRReeessseeerrrvvveee of borrowing of borrowing After 150 days BBBaaannnkkk EEffffeeccttiivvee ddaattee ffoorr ccuurrrreenntt rraatteess Rate on Effective Previous Rate on Previous Rate on Previous Rate on Previous 2/28/82 date rate 2/28/82 rate 2/28/82 rate 2/28/82 rate Boston 12 12/4/81 13 12 13 13 14 14 15 12/4/81 New York 12 12/4/81 13 12 13 13 14 14 15 12/4/81 Philadelphia 12 12/4/81 13 12 13 13 14 14 15 12/4/81 Cleveland 12 12/4/81 13 12 13 13 14 14 15 12/4/81 Richmond 12 12/4/81 13 12 13 13 14 14 15 12/4/81 Atlanta 12 12/4/81 13 12 13 13 14 14 15 12/4/81 Chicago 12 12/4/81 13 12 13 13 14 14 15 12/4/81 St. Louis 12 12/4/81 13 12 13 13 14 14 15 12/4/81 Minneapolis 12 12/4/81 13 12 13 13 14 14 15 12/4/81 Kansas City 12 12/4/81 13 12 13 13 14 14 15 12/4/81 Dallas 12 12/4/81 13 12 13 13 14 14 15 12/4/81 San Francisco.... 12 12/4/81 13 12 13 13 14 14 15 12/4/81 Range of rates in recent years2 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le l v l e F l) . — R. B o a f n 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. 41/2 5Vz In effect Dec. 31. 1972 4 Vi 1976— Jan. 19. 5V55-V6 i 11997799—— SSeepptt.. 19 101/5-11 11 1973— Jan. 15 5 5 23. 51/2 21 11 11 Feb. 26 5-5>/i 5'/5 Nov. 22. 514-5V5 51/4 Oct. 8 11-12 12 Mar. 2 5>/i 51/2 26. 51/4 51/4 10 12 12 Apr. 23 5'/55-5%3/4 55V3/54 May 4 1977— Aug. 30. 514-53/4 51/4 1980— Feb. 15 12-13 13 11 5-V4-6 6 31. 51/4-53/4 53/4 19 13 13 18 6 6 Sept. 2. 53/4 653 /4 MMaayy 29 12-13 13 June 11 6-6 Vi 6 >/l Oct. 26. 6 30 12 12 1 5 16V 5 6'/5 June 13 11-12 11 July 2 l-V/2 77 1/2 1978— Jan. 9. 6-6 Vi 66V Vi i 16 11 11 Aug. 2 1 4 3 7'/I 71/5 May 2 1 0 1 . . 61/ 6 5 1 - / 7 5 7 JJuullyy 2 2 9 8 10 1 - 0 1 1 1 1 0 0 12. 7 7 Sept. 26 11 11 1974— Apr. 25 7'/5-8 8 July 3. 7-71/4 7'/4 Nov. 17 12 12 30 8 87 3/4 July 10. 71/4 71/4 Dec. 5 12-13 13 Dec. 9 7^/4-8 Aug. 21. 73/4 73/4 8 13 13 1 6 73A 73/4 Sept. 22. 73/4 Oct. 16. 8-81/5 8Vi 1981— May 5 13-14 14 1975— Jan. 6 71/4-73/4 20. 81/5 98'/1i /2 May 8 14 14 10 71/741-7/34/4 71/4 Nov. 1. 81/5-9'/2 9V2 Nov. 2 13-14 13 2 4 71/4 3. 91/5 Nov 6 13 13 Feb. 5 63/4-71/4 63/4 Dec. 4 12 12 7 63/4 63/4 1979— July 20. 10 10 Mar. 10 61/4-63/4 6'/4 Aug. 17. LO-L VO'/Ii 1W0V/42 14 61/4 6'/4 20. 10 May 16 6-61/4 6 23 6 6 In effect Feb. 28, 1982 12 12 1. Applicable to advances when exceptional circumstances or practices involve In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adonly a particular depository institution and to advances when an institution is under justment credit borrowings by institutions with deposits of $500 million or more sustained liquidity pressures. See section 201.3(b)(2) of Regulation A. that had borrowed in successive weeks or in more than 4 weeks in a calendar 2. Rates for short-term adjustment credit. For description and earlier data see quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, the following publications of the Board of Governors: Banking and Monetary 1980. There was no surcharge until Nov. 17, 1980, when a 2 percent surcharge was Statistics, 1914-1941 and 1941-1970; Annual Statistical Digest. 1971-1975, 1972- adopted; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980 and 1976, 1973-1977. and 1974-1978. to 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981 and to 2 percent effective Oct. 12. As of Oct. 1, the formula for applying the surcharge was changed from a calendar quarter to a moving 13-week period. The surcharge was eliminated on Nov. 17, 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic NonfinancialS tatistics • March 1982 1.15 DEPOSITORY INSTITUTIONS RESERVE REQUIREMENTS1 Percent of deposits Member bank requirements Depository institution requirements before implementation of the after implementation of the TTyyppee ooff ddeeppoossiitt,, aanndd ddeeppoossiitt iinntteerrvvaall Monetary Control Act TTyyppee ooff ddeeppoossiitt,, aanndd Monetary Control Act5 iinn mmiilllliioonnss ooff ddoollllaarrss ddeeppoossiitt iinntteerrvvaall Percent Effective date Percent Effective date Net demand2 Net transaction accounts61 0-2 7 12/30/76 $0-$26 million 3 11/13/80 2-10 9!/i 12/30/76 1122 1111//1133//8800 10-100 113/4 12/30/76 100-400 12 % 12/30/76 Nonpersonal time deposits8 Over 400 161/4 12/30/76 By original maturity Less than 4 years 3 11/13/80 TTiimmee aanndd ssaavviinnggss22^^ 4 years or more 0 11/13/80 Savings 3 3/16/67 Eurocurrency liabilities TTiimmee44 All types 3 11/13/80 0-5, by maturity 30-179 days 3 3/16/67 180 days to 4 years 2Vi 1/8/76 4 years or more 1 10/30/75 Over 5, by maturity 30-179 days 6 12/12/74 180 days to 4 years 21/2 1/8/76 4 years or more 1 10/30/75 1. For changes in reserve requirements beginning 1963, see Board's Annual was reduced to zero beginning July 24, 1980. Managed liabilities are defined as Statistical Digest, 1971-1975 and for prior changes, see Board's Annual Report for large time deposits. Eurodollar borrowings, repurchase agreements against U.S. 1976, table 13. Under provisions of the Monetary Control Act, depository insti- government and federal agency securities, federal funds borrowings from nontutions include commercial banks, mutual savings banks, savings and loan asso- member institutions, and certain other obligations. In general, the base for the ciations, credit unions, agencies and branches of foreign banks, and Edge Act marginal reserve requirement was originally the greater of (a) $100 million or (b) corporations. the average amount of the managed liabilities held by a member bank, Edge 2. (a) Requirement schedules are graduated, and each deposit interval applies corporation, or family of U.S. branches and agencies of a foreign bank for the two to that part of the deposits of each bank. Demand deposits subject to reserve statement weeks ending Sept. 26,1979. For the computation period beginning Mar. requirements were gross demand deposits minus cash items in process of collection 20,1980, the base was lowered by (a) 7 percent or (b) the decrease in an institution's and demand balances due from domestic banks. U.S. office gross loans to foreigners and gross balances due from foreign offices (b) The Federal Reserve Act as amended through 1978 specified different ranges of other institutions between the base period (Sept. 13-26, 1979) and the week of requirements for reserve city banks and for other banks. Reserve cities were ending Mar. 12,1980, whichever was greater. For the computation period beginning designated under a criterion adopted effective Nov. 9,1972, by which a bank having May 29,1980, the base was increased by V/i percent above the base used to calculate net demand deposits of more than $400 million was considered to have the character the marginal reserve in the statement week of May 14-21, 1980. In addition, of business of a reserve city bank. The presence of the head office of such a bank beginning Mar. 19, 1980, the base was reduced to the extent that foreign loans and constituted designation of that place as a reserve city. Cities in which there were balances declined. Federal Reserve Banks or branches were also reserve cities. Any banks having net 5. For existing nonmember banks and thrift institutions at the time of impledemand deposits of $400 million or less were considered to have the character of mentation of the Monetary Control Act, the phase-in period ends Sept. 3, 1987. business of banks outside of reserve cities and were permitted to maintain reserves For existing member banks the phase-in period is about three years, depending on at ratios set for banks not in reserve cities. whether their new reserve requirements are greater or less than the old require- (c) Effective Aug. 24, 1978, the Regulation M reserve requirements on net ments. For existing agencies and branches of foreign banks, the phase-in ends Aug. balances due from domestic banks to their foreign branches and on deposits that 12, 1982. All new institutions will have a two-year phase-in beginning with the date foreign branches lend to U.S. residents were reduced to zero from 4 percent and that they open for business. 1 percent respectively. The Regulation D reserve requirement on borrowings from 6. Transaction accounts include all deposits on which the account holder is unrelated banks abroad was also reduced to zero from 4 percent. permitted to make withdrawals by negotiable or transferable instruments, payment (d) Effective with the reserve computation period beginning Nov. 16. 1978, orders of withdrawal, and telephone and preauthorized transfers (in excess of three domestic deposits of Edge corporations were subject to the same reserve require- per month) for the purpose of making payments to third persons or others. ments as deposits of member banks. 7. The Monetary Control Act of 1980 requires that the amount of transaction 3. (a) Negotiable order of withdrawal (NOW) accounts and time deposits such accounts against which the 3 percent reserve requirement will apply be modified as Christmas and vacation club accounts were subject to the same requirements as annually to 80 percent of the percentage increase in transaction accounts held by savings deposits. all depository institutions on the previous June 30. At the beginning of 1982 the (b) The average reserve requirement on savings and other time deposits before amount was accordingly increased from $25 million to $26 million. implementation of the Monetary Control Act had to be at least 3 percent, the 8. In general, nonpersonal time deposits are time deposits, including savings minimum specified by law. deposits, that are not transaction accounts and in which the beneficial interest is 4. (a) Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percent held by a depositor that is not a natural person. Also included are certain transwas imposed on large time deposits of $100,000 or more, obligations of affiliates, ferable time deposits held by natural persons, and certain obligations issued to and ineligible acceptances. This supplementary requirement was eliminated with depository institution offices located outside the United States. For details, see the maintenance period beginning July 24, 1980. section 204.2 of Regulation D. (b) Effective with the reserve maintenance period beginning Oct. 25, 1979, a marginal reserve requirement of 8 percent was added to managed liabilities in NOTE. Required reserves must be held in the form of deposits with Federal excess of a base amount. This marginal requirement was increased to 10 percent Reserve Banks or vault cash. After implementation of the Monetary Control Act, beginning Apr. 3, 1980, was decreased to 5 percent beginning June 12, 1980, and nonmembers may maintain reserves on a pass-through basis with certain approved institutions. NOTE TO TABLE 1.16 NOTE. Before Mar. 31,1980, the maximum rates that could be paid by federally insured commercial banks, mutual savings banks, and savings and loan associations were established by the Board of Governors of the Federal Reserve System, the Board of Directors of the Federal Deposit Insurance Corporation, and the Federal Home Loan Bank Board under the provisions of 12 CFR 217, 329, and 526 respectively. Title II of the Depository Institutions Deregulation and Monetary Control Act of 1980 (P.L. 96-221) transferred the authority of the agencies to establish maximum rates of interest payable on deposits to the Depository Institutions Deregulation Committee. The maximum rates on time deposits in denominations of $100,000 or more with maturities of 30-89 days were suspended in June 1970; such deposits maturing in 90 days or more were suspended in May 1973. For information regarding previous interest rate ceilings on all types of accounts, see earlier issues of the FEDERAL RESERVE BULLETIN, the Federal Home Loan Bank Board Journal, and the Annual Report of the Federal Deposit Insurance Corporation. 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 Type and maturity of deposit mutual savings banks (thrift institutions) In effect Feb. 28, 1982 Previous maximum In effect Feb. 28, 1982 Previous maximum Percent Eff d e a c te ti ve Percent Eff d e a c te ti ve Ef d fe a c te ti ve Percent 5'/5 51/4 1 Savings 5LA 7/1/79 7/1/73 7/1/79 2 Negotiable order of withdrawal accounts 2 5 !/4 12/31/80 1/1/74 51/4 12/31/80 5 Time accounts 3 Fixed ceiling rates by maturity 4 3 4 9 1 0 4 d 8 a 9 y d s a y to s ? 1 year 5 5 ' 3 / / 4 4 8 1 / / 1 1 / /8 7 0 9 5 5 >/2 7 7 / / 1 1 / / 7 7 3 3 6 ( 6) 1/1/80 (6) 53/4 5 6 2 1 t t o o 2 2 1 y 4 e y a e rs a r 7 s 7 7/1/73 5 5 > 3/ / 4 5 1 1/ / 2 2 1 1 / / 7 7 0 0 61/2 (') 6 5 3/4 7 2V5 to 4 years 7 6</2 7/1/73 53/4 1/21/70 63/4 0) 6 9 8 6 4 t t o o 8 6 y y e e a a r r s s 8 8 m71/4 12 1 / 1 2 / 3 1 / / 7 7 4 3 ' . ) 7 , </4 11/1/73 771/%5 12 1 / 1 2 / 3 1 / / 7 7 4 3 7>/2 1 1 0 1 8 Is s y u e e a d r s to o r g o m v o e r r e n m 8 ental units (all maturities) 10 73/4 6 6 / / 1 1 / / 7 7 8 8 V3/4 '12/23/74' 6 6 / / 1 1 / / 7 7 8 8 V/4 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 Special variable ceiling rates by maturity 13 6-month money market time deposits 12 13' 14 12-month all savers certificates 15 2'/5 years to 4 years Accounts with no ceiling rates 16 Indiv p i l d a u n a s l ( r 1 e 8 t ir m e o m n e t n h t s a o c r c o m u o n r t e s ) and Keogh (H.R. 10) (>7) (17) C7) (17) 1. July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loan Bill rate or 4-week Thrift ceiling associations. average bill rate 2. For authorized states only. Federally insured commercial banks, savings and loan associations, cooperative banks, and mutual savings banks in Massachusetts 7.25 percent or below 7.75 percent and New Hampshire were first permitted to offer negotiable order of withdrawal Above 7.25 percent, but below V5 of 1 percentage point plus the higher of (NOW) accounts on Jan. 1, 1974. Authorization to issue NOW accounts was ex- 8.50 percent the bill rate or 4-week average bill rate tended to similar institutions throughout New England on Feb. 27, 1976, in New 8.50 percent or above, but below 9 percent York State on Nov. 10, 1978, and in New Jersey on Dec. 28, 1979. Authorization 8.75 percent to issue NOW accounts was extended to similar institutions nationwide effective 8.75 percent or above VA of 1 percentage point plus the higher of Dec. 31. 1980. the bill rate or 4-week average bill rate 3. For exceptions with respect to certain foreign time deposits see the BULLETIN for October 1962 (p. 1279), August 1965 (p. 1084). and February 1968 (p. 167). The maximum allowable rates in February for commercial banks and thrifts based 4. Effective Nov. 10, 1980, the minimum notice period for public unit accounts on the bill rate were as follows: Jan. 26, 13.78; Feb. 2, 14.096; Feb. 9, 14.183; at savings and loan associations was decreased to 14 days and the minimum maturity Feb. 17, 14.61; Feb. 23. 12.945. The maximum allowable rates in February for period for time deposits at savings and loan associations in excess of $100,000 was commercial banks and thrifts based on the 4-week average bill rate were as follows: decreased to 14 days. Effective Oct. 30, 1980, the minimum maturity or notice Jan. 26, 13.18; Feb. 2, 13.571; Feb. 9, 13.853; Feb. 17, 14.167; Feb. 23, 13.958. period for time deposits was decreased from 30 to 14 days at mutual savings banks. 14. Effective Oct. 1, 1981, depository institutions are authorized to issue all 5. Effective Oct. 30, 1980, the minimum maturity or notice period for time savers certificates (ASCs) with a 1-year maturity and an annual investment yield deposits was decreased from 30 to 14 days at commercial banks. equal to 70 percent of the average investment yield for 52-week U.S. Treasury bills 6. No separate account category. as determined by the auction of 52-week Treasury bills held immediately before 7. No minimum denomination. Until July 1, 1979, a minimum of $1,000 was the calendar week in which the certificate is issued. A maximum lifetime exclusion required for savings and loan associations, except in areas where mutual savings of $1,000 ($2,000 on a joint return) from gross income is generally authorized for banks permitted lower minimum denominations. This restriction was removed for interest income from ASCs. The annual investment yields for ASCs issued in deposits maturing in less than 1 year, effective Nov. 1, 1973. February (in percent) were as follows: Feb. 21, 10.79. 8. No minimum denomination. Until July 1, 1979, the minimum denomination 15. Effective Aug. 1, 1981, commercial banks may pay interest on any variable was $1,000 except for deposits representing funds contributed to an individual ceiling nonnegotiable time deposit with an original maturity of 2V5 years to less retirement account (IRA) or a Keogh (H.R. 10) plan established pursuant to the than 4 years at a rate not to exceed LA of 1 percent below the average 2'/i-year Internal Revenue Code. The $1,000 minimum requirement was removed for such yield for U.S. Treasury securities as determined and announced by the Treasury accounts in December 1975 and November 1976 respectively. Department immediately before the date of deposit. Thrift institutions may pay 9. Between July 1, 1973, and Oct. 31, 1973, certificates maturing in 4 years or interest on these certificates at a rate not to exceed the average 2 V2 -year yield for more with minimum denominations of $1,000 had no ceiling; however, the amount Treasury securities as determined and announced by the Treasury Department of such certificates that an institution could issue was limited to 5 percent of its immediately before the date of deposit. If the announced average 2'/5-year yield total time and savings deposits. Sales in excess of that amount, as well as certificates for Treasury securities is less than 9.50 percent, commercial banks may pay 9.25 of less than $1,000, were limited to the 6'/5 percent ceiling on time deposits maturing percent and thrift institutions 9.50 percent for these deposits. These deposits have in 2years or more. Effective Nov. 1, 1973, ceilings were reimposed on certif- no required minimum denomination, and interest may be compounded on them. icates maturing in 4 years or more with minimum denomination of $1,000. There The ceiling rates of interest at which they may be offered vary biweekly. The is no limitation on the amount of these certificates that banks can issue. maximum allowable rates in February (in percent) for commercial banks were as 10. Accounts subject to fixed-rate ceilings. See footnote 8 for minimum denom- follows: Feb. 2, 14.3; Feb. 17, 14.80; and for thrift institutions: Feb. 2, 14.55; Feb. ination requirements. 17, 15.05. 11. Effective Jan. 1, 1980, commercial banks are permitted to pay the same rate 16. Between Jan. 1, 1980, and Aug. 1, 1981, commercial banks, and thrift inas thrifts on IRA and Keogh accounts and accounts of governmental units when stitutions were authorized to offer variable ceiling nonnegotiable time deposits with such deposits are placed in the new 2'/5-year or more variable-ceiling certificates no required minimum denomination and with maturities of 2V5 years or more. or in 26-week money market certificates regardless of the level of the Treasury bill Effective Jan. 1, 1980, the maximum rate for commercial banks was 3/4 percentage rate. point below the average yield on 215-year U.S. Treasury securities; the ceiling rate 12. Must have a maturity of exactly 26 weeks and a minimum denomination of for thrift institutions was V4 percentage point higher than that for commercial banks. $10,000, and must be nonnegotiable. Effective Mar. 1, 1980, a temporary ceiling of 11% percent was placed on these 13. Commercial banks and thrift institutions were authorized to offer money accounts at commercial banks and 12 percent on these accounts at savings and loan market time deposits effective June 1, 1978. These deposits have a minimum de- associations. Effective June 2, 1980, the ceiling rates for these deposits at comnomination requirement of $10,000 and a maturity of 26 weeks. The ceiling rate mercial banks and savings and loans was increased V5 percentage point. The temof interest on these deposits is indexed to the discount rate (auction average) on porary ceiling was retained, and a minimum ceiling of 9.25 percent for commercial most recently issued 26-week U.S. Treasury bills. Interest on these certificates may banks and 9.50 percent for thrift institutions was established. not be compounded. Effective for all 6-month money market certificates issued 17. Effective Dec. 1, 1981, depository institutions were authorized to offer time beginning Nov. 1, 1981, depository institutions may pay rates of interest on these deposits not subject to interest rate ceilings when the funds are deposited to the deposits indexed to the higher of (1) the rate for 26-week Treasury bills established credit of, or in which the entire beneficial interest is held by, an individual pursuant immediately before the date of deposit (bill rate) or (2) the average of the four to an IRA agreement or Keogh (H.R. 10) plan. Such time deposits must have a rates for 26-week Treasury bills established for the 4 weeks immediately prior to minimum maturity of 18 months, and additions may be made to the time deposit the date of deposit (4-week average bill rate). Rate ceilings are determined as at any time before its maturity without extending the maturity of all or a portion follows: of the balance of the account. Bill rate or 4-week Commercial bank ceiling For NOTE see opposite page. average bill rate 7.50 percent or below 7.75 percent Above 7.50 percent XA of 1 percentage point plus the higher of the bill rate or 4-week average bill rate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Financial Statistics • March 1982 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1981 1982 TTyyppee ooff ttrraannssaaccttiioonn 11997799 11998800 11998811 July Aug. Sept. Oct. Nov. Dec. Jan. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 15,998 7,668 13,899 1,325 1,713 1,753 241 1,765 2,170 0 2 Gross sales 6,855 7,331 6,746 0 333 945 1,157 0 0 2,756 3 Exchange 0 0 0 0 0 0 0 0 0 0 4 Redemptions 2,900 3,389 1,816 100 0 500 200 16 0 600 Others within 1 year1 5 Gross purchases 3,203 912 317 122 0 0 0 0 80 0 6 Gross sales 0 0 23 0 0 0 0 0 0 0 / Maturity shift 17,339 12,427 13,794 1,073 2,807 628 425 1,389 887 542 8 Exchange -11,308 -18,251 -12,869 -351 -2,430 -599 0 -3,047 -754 0 9 Redemptions 2,600 0 0 0 0 0 0 0 0 0 1 to 5 years 10 Gross purchases 2,148 2,138 1,702 607 0 0 0 100 526 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -12,693 -8,909 -10,299 -1,073 -820 -628 -425 -1,057 -887 -542 13 Exchange 7,508 13,412 10,117 351 1,724 599 0 2,325 754 0 5 to 10 wars 14 Gross purchases 523 703 393 64 0 0 0 0 165 0 15 Gross sales 0 0 0 0 0 0 0 0 0 0 16 Maturity shift -4,646 -3,092 -3,495 0 -1,987 0 0 -332 0 0 1/ Exchange 2,181 2,970 1,500 0 400 0 0 400 0 0 Over 10 years 18 Gross purchases 454 811 379 182 0 0 0 0 108 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 20 Maturity shift 0 -426 0 0 0 0 0 0 0 0 21 Exchange 1,619 1,869 1,253 0 305 0 0 322 0 0 All maturities1 22 Gross purchases 22,325 12,232 16,690 2,301 1,713 1,753 241 1,865 3,049 0 23 Gross sales 6,855 7,331 6,769 0 333 945 1,157 0 0 2,756 24 Redemptions 5,500 3,389 1.816 100 0 500 200 16 0 600 Matched transactions 25 Gross sales 627,350 674,000 589,312 69,972 54,329 52,055 58,581 42,012 54,098 51,132 2b Gross purchases 624,192 675,496 589,647 69,309 55,917 51,555 58,372 41,900 54,044 51,717 Repurchase agreements 2277 Gross purchases 107,051 113,902 79,920 23,217 7,199 0 3,902 9.505 14,180 12,962 28 Gross sales 106.968 113,040 78,733 21,599 8,817 0 3,902 7,709 12,760 12,914 29 Net change in U.S. government securities 6,896 3,869 9,626 3,155 1,350 -192 -1,325 3,534 4,415 -2,724 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 853 668 494 0 0 0 0 494 0 0 31 Gross sales 399 0 0 0 0 0 0 0 0 0 32 Redemptions 134 145 108 * * 33 15 10 4 68 Repurchase agreements 3333 Gross purchases 37,321 28,895 13,320 5,182 864 0 787 1,607 1,647 800 34 Gross sales 36,960 28,863 13.576 4,822 1,225 0 787 1,288 1,697 935 35 Net change in federal agency obligations 681 555 130 360 -360 -33 -15 802 -54 -203 BANKERS ACCEPTANCES 36 Outright transactions, net 0 0 0 0 0 0 0 0 0 0 SI Repurchase agreements, net 116 73 -582 453 -453 0 0 744 -549 402 38 Net change in bankers acceptances 116 73 -582 453 -453 0 0 744 -549 402 39 Total net change in System Open Market Account 7,693 4,497 9,175 3,968 536 -225 -1,340 5,080 3,812 -2,524 1. Both gross purchases and redemptions include special certificates created NOTE.Sales, redemptions, and negative figures reduce holdings of the System when the Treasury borrows directly from the Federal Reserve, as follows (millions Open Market Account; all other figures increase such holdings. Details may not of dollars): March 1979, 2,600. add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Reserve Banks All 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month Account 1982 1981 1982 Jan. 27 Feb. 3 Feb. 10 Feb. 17 Feb. 24 Dec. Jan. Feb. Consolidated condition statement ASSETS 1 Gold certificate account 11,151 11,151 11,151 11,151 11,150 11,151 11,151 11,150 2 Special drawing rights certificate account 3,318 3,568 3,568 3,568 3,568 3,318 3,318 3,568 3 Coin 410 416 428 431 439 377 422 453 Loans 4 To depository institutions 5,109 1,800 2,283 1,505 1,414 1,601 2,217 1,180 5 Other 0 0 0 0 0 0 0 0 Acceptances 6 Held under repurchase agreements 368 596 0 453 0 195 597 0 Federal agency obligations 7 Bought outright 9,057 9,054 9,046 9,046 9,031 9,125 9,058 9,026 8 Held under repurchase agreements 102 406 0 172 0 269 134 0 U.S. government securities Bought outright 9 Bills 48,162 47,209 46,804 47,646 47,801 49,359 46,588 46,961 10 Notes 59,978 59,978 59,978 60,289 60,359 59,978 59,978 60,359 11 Bonds 18,401 18,401 18,401 18,090 18,090 18,401 18,401 18,090 12 Total1 126,541 125,588 125,183 126,025 126,250 127,738 124,967 125,410 13 Held under repurchase agreements 2,506 7,354 0 4,328 0 3,216 3,263 0 14 Total U.S. government securities 129,047 132,942 125,183 130,353 126,250 130,954 128,230 125,410 15 Total loans and securities 143,683 144,798 136,512 141,529 136,695 142,144 140,236 135,616 16 Cash items in process of collection 6,983 10,233 9,392 13,669 8,047 8,557 8,119 8,672 17 Bank premises 502 502 503 505 505 503 502 505 Other assets 18 Denominated in foreign currencies2 5,200 5,112 5,132 5,131 5,137 5,129 5,112 5,137 19 All other3 3,943 4,095 4,189 3,189 3,313 3,598 4,075 3,401 20 Total assets 175,190 179,875 170,875 179,173 168,854 174,777 172,935 168,502 LIABILITIES 21 Federal Reserve notes 127,509 127,527 128,418 128,677 127,607 131,906 126,835 126,869 Deposits 22 Depository institutions 29,434 34,178 26,764 29,807 24,905 25,228 25,066 24,964 23 U.S. Treasury—General account 7,169 5,576 4,417 5,541 5,143 4,301 8,285 3,835 24 Foreign—Official accounts 346 274 340 271 264 505 333 416 25 Other 437 516 529 509 350 781 393 414 26 Total deposits 37,386 40,544 32,050 36,128 30,662 30,815 34,077 29,629 27 Deferred availability cash items 5,251 6,364 5,440 8,880 5,647 6,795 6,484 5,713 28 Other liabilities and accrued dividends4 2,196 2,627 2,096 2,610 2,061 2,705 2,611 3,341 29 Total liabilities 172,342 177,062 168,004 176,295 165,977 172,221 170,007 165,552 CAPITAL ACCOUNTS 30 Capital paid in 1,286 1,287 1,289 1,291 1,290 1,278 1,287 1,291 31 Surplus 1,278 1,278 1,278 1,278 1,278 1,278 1,278 1,278 32 Other capital accounts 284 248 304 309 309 0 363 381 33 Total liabilities and capital accounts 175,190 179,875 170,875 179,173 168,854 174,777 172,935 168,502 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 95,533 92,265 96,024 93,641 94,410 95,220 94,794 94,816 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to bank) .... 150,632 150,650 150,557 150,655 150,682 151,033 150,605 150,636 36 LESS: Held by bank5 23,123 23,123 22,139 21,978 23,075 19,127 23,770 23,767 37 Federal Reserve notes, net 127,509 127,527 128,418 128,677 127,607 131,906 126,835 126,869 Collateral for Federal Reserve notes 38 Gold certificate account 11,151 11,151 11,151 11,151 11,150 11,151 11,151 11,150 39 Special drawing rights certificate account 3,318 3,568 3,568 3,568 3,568 3,318 3,318 3,568 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. government and agency securities 113,040 112,808 113,699 113,958 112,889 117,437 112,366 112,151 42 Total collateral 127,509 127,527 128,418 128,677 126,607 131,906 126,835 126,869 1. Includes securities loaned—fully guaranteed by U.S. government securities 3. Includes special investment account at Chicago of Treasury bills maturing pledged with Federal Reserve Banks—and excludes (if any) securities sold and within 90 days. scheduled to be bought back under matched sale-purchase transactions. 4. Includes exchange-translation account reflecting the monthly revaluation at 2. Includes U.S. government securities held under repurchase agreement against market exchange rates of foreign-exchange commitments. receipt of foreign currencies and foreign currencies warehoused for the U.S. Treas- 5. Beginning September 1980, Federal Reserve notes held by the Reserve Bank ury. Assets shown in this line are revalued monthly at market exchange rates. are exempt from the collateral requirement. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Nonfinancial Statistics • March 1982 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month TTTyyypppeee aaannnddd mmmaaatttuuurrriiitttyyy gggrrrooouuupppiiinnngggsss 1982 1981 1982 Jan. 27 Feb. 3 Feb. 10 Feb. 17 Feb. 24 Dec. 31 Jan. 29 Feb. 26 1 Loans—Total 5,109 1,800 2,283 1,505 1,414 1,601 2,217 1,180 2 Within 15 days 5,079 1,728 2,207 1,479 1,319 1,576 2,180 1,069 3 16 days to 90 days 30 72 76 26 95 25 37 111 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Acceptances—Total 368 596 0 453 0 195 597 0 6 Within 15 days 368 596 0 453 0 195 597 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 129,047 132,942 125,183 130,353 126,250 130,954 128,230 125,410 10 Within 15 days1 7,801 11,031 5,249 10,609 6,419 3,936 4,618 2,617 11 16 days to 90 days 23,428 23.314 21,587 23,596 24,820 25,190 24,980 26,558 12 91 days to 1 year 33,407 34,237 33,987 33,482 32,295 37,417 34,221 33,520 13 Over 1 year to 5 years 36,025 35,974 35,974 35,764 35,814 36,025 36,025 35,814 14 Over 5 years to 10 years 11,752 11,752 11,752 10,193 10,193 11,752 11,752 10,193 15 Over 10 years 16,634 16,634 16,634 16,709 16,709 16,634 16,634 16,708 16 Federal agency obligations—Total 9,159 9,460 9,046 9,218 9,031 9,394 9,192 9,026 17 Within 15 days1 243 484 135 367 292 529 276 173 18 16 days to 90 days 622 708 572 512 540 631 622 540 19 91 days to 1 year 1,357 1,331 1,378 1,378 1,238 1,443 1,357 1,369 20 Over 1 year to 5 years 5,404 5,404 5,428 5,428 5,428 5,256 5,404 5,396 21 Over 5 years to 10 years 960 960 960 960 960 962 960 976 22 Over 10 years 573 573 573 573 573 573 573 572 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. 1981 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr 11997788 11997799 11998800 Aug. Sept. Oct. Nov. Dec. Debits to demand deposits1 (seasonally adjusted) 1111 AAAAllllllll ccccoooommmmmmmmeeeerrrrcccciiiiaaaallll bbbbaaaannnnkkkkssss 40,297.8 49,775.0 63.013.4 89,723.4 87,303.2' 83,671.3'' 82,000.3' 86,430.0' 2222 MMMMaaaajjjjoooorrrr NNNNeeeewwww YYYYoooorrrrkkkk CCCCiiiittttyyyy bbbbaaaannnnkkkkssss 15,008.7 18,512.7 25.192.5 41.877.2 39,209.4' 35,109.8' 34,237.6' 34,937.3' 3333 OOOOtttthhhheeeerrrr bbbbaaaannnnkkkkssss 25,289.1 31,262.3 37,820.9 47.846.3 48,093.8 48,561.5 47,762.6 51,492.7 Debits to savings deposits2 (not seasonally adjusted) 4444 AAAATTTTSSSS////NNNNOOOOWWWW3333 17.1 83.3 158.4 745.0 820.2 833.4 753.3 903.5 5555 BBBBuuuussssiiiinnnneeeessssssss4444 56.7 77.3 93.4 118.1 122.0 117.2 96.3 117.9 6666 OOOOtttthhhheeeerrrrssss5555 359.7 515.2 605.3 595.5 577.0 581.6 539.7 597.0 7777 AAAAllllllll aaaaccccccccoooouuuunnnnttttssss 432.9 675.8 857.2 1,458.6 1,519.2 1,532.2 1,389.2 1,618.4 Demand deposit turnover1 (seasonally adjusted) 8 All commercial banks 139.4 163.5 201.6 316.8 309.5' 296.2' 292.0' 309.2' 9 Major New York City banks 541.9 646.2 813.7 1,338.1 1,260.1' 1,109.8' 1,128.3' 1,156.8' 10 Other banks 96.8 113.3 134.3 189.9 191.6 193.6 190.7 206.6 Savings deposit turnover2 (not seasonally adjusted) 11 ATS/NOW3 7.0 7.8 9.7 13.5 14.5 14.6 12.8 14.6 12 Business4 5.1 7.2 9.3 13.5 14.3 14.1 11.7 13.9 13 Others5 1.7 2.7 3.4 3.9 3.9 3.9 3.6 4.0 14 All accounts 1.9 3.1 4.2 6.7 7.1 7.2 6.4 7.4 1. Represents accounts of individuals, partnerships, and corporations, and of NOTE. Historical data for the period 1970 through June 1977 have been estimated; states and political subdivisions. these estimates are based in part on the debits series for 233 SMS As, which were 2. Excludes special club accounts, such as Christmas and vacation clubs. available through June 1977. Back data are available from Publications Services, 3. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts Board of Governors of the Federal Reserve System, Washington, D.C. 20551. authorized for automatic transfer to demand deposits (ATS). ATS data availability Debits and turnover data for savings deposits are not available before July 1977. starts with December 1978. 4. Represents corporations and other profit-seeking organizations (excluding commercial banks but including savings and loan associations, mutual savings banks, credit unions, the Export-Import Bank, and federally sponsored lending agencies). 5. Savings accounts other than NOW; business; and, from December 1978, ATS. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Aggregates A13 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures 1981 1982 IItteemm D 19 e 7 c 8 . D 19 e 7 c 9 . D 19 e 8 c 0 . D 19 e 8 c 1 . Sept. Oct. Nov. Dec. Jan. Seasonally adjusted MEASURES1 1 Ml 363.2 389.0 414.5 440.9r 431.2 432.9 436.4 440.9r 448.6 2 M2 1,403.9 1,518.9 1,656.1 l,822.4r 1,778.1 1,789.3 l,809.7r l,822.4r 1,840.2 3 M3 1,629.0 1,779.3 1.963.1 2,187.8r 2,138.0 2,151.0 2,174.5r 2,187.8r 2,203.9 4 L2 1,938.9 2,153.9 2,370.4 n.a. 2,577.2r 2,599.4r 2,625.3 n.a. n.a SELECTED COMPONENTS 5 Currency 97.4 106.1 116.2 123.1 121.1 121.3 121.8 123.1 123.8 6 Traveler's checks3 3.5 3.7 4.2 4.3 4.3 4.3 4.3 4.3 4.3 7 Demand deposits 253.9 262.2 267.2 236.4 234.7 235.7 235.7 236.4 239.3 8 Other checkable deposits7 8.4 16.9 26.9 77.0 71.2 71.6 74.7 77.0 81.! 9 Savings deposits4 479.9 421.7 398.9 343.6r 343.1 339.6 340.9 343.6r 348.9 10 Small-denomination time deposits5 533.9 652.6 751.7 854.7r 839.7 849.8 856.8r 854.7r 851.6 11 Large-denomination time deposits6 194.6 221.8 257.9 300.4 302.3 302.2 300.6 300.4 303.1 Not seasonally adjusted MEASURES1 12 Ml 372.5 398.8 424.6 451.2'' 431.5 434.5 439.7 451. V 453.4 13 M2 1,408.5 1,524.6 1.662.4 1.829.lr 1,775.6 1,793.1 1,809.3 l,829.1r 1,848.1 14 M3 1,637.5 1,789.2 1,973.8 2.199.6r 2,132.2 2,152.4 2,175.4r 2,199.6r 2,216.7 15 L2 1,946.6 2,162.8 2.380.2 n.a. 2,568.3r 2,597.8r 2,624.5 n.a. n.a. SELECTED COMPONENTS 16 Currency 99.4 108.2 118.3 125.4 120.8 121.2 122.9 125.4 123.2 17 Traveler's checks3 3.3 3.5 3.9 4.1 4.5 4.3 4.1 4.1 4.1 18 Demand deposits 261.5 270.1 275.1 243.3 234.6 236.6 237.5 243.3 243.6 19 Other checkable deposits7 8.4 17.0 27.2 78.4 71.7 72.4 75.2 78.4 82.5 20 Overnight RPs and Eurodollars8 24.1 26.3 35.0 38.1 39.6 36. V 36.9 38.1 43.3 21 Savings deposits4 478.0 420.5 398.0 343.0' 347.9 343.9 342.2 343.0r 346.8 22 Small-denomination time deposits5 531.1 649.7 748.9 851.7r 832.1 847.6 851.9 851.7r 856.8 Money Market Mutual Funds 23 General purpose and broker/dealer 7.1 34.3 61.8 150.8 130.4 137.1 144.6 150.8 154.4 24 Institution only 3.1 9.3 13.9 33.7 26.6 29.4 32.0 33.7 32.5 25 Large-denomination time deposits6 198.6 226.0 262.3 305.5r 299.1 299.8 301.8 305.5r 308.1 1. Composition of the money stock measures is as follows: 4. Savings deposits exclude NOW and ATS accounts at commercial banks and Ml: Averages of daily,figures for (1) currency outside the Treasury, Federal thrift institutions and CUSDs at credit unions. Reserve Banks, and the vaults of commercial banks; (2) traveler's checks of non- 5. Small-denomination time deposits—including retail RPs—are those issued in bank issuers; (3) demand deposits at all commercial banks other than those due amounts of less than $100,000. to domestic banks, the U.S. government, and foreign banks and official institutions 6. Large-denomination time deposits are those issued in amounts of $100,000 less cash items in the process of collection and Federal Reserve float; and (4) or more and are net of the holdings of domestic banks, thrift institutions, the U.S. negotiable order of withdrawal (NOW) and automatic transfer service (ATS) ac- government, money market mutual funds, and foreign banks and official institucounts at banks and thrift institutions, credit union share draft (CUSD) accounts, tions. and demand deposits at mutual savings banks. 7. Includes ATS and NOW balances at all institutions, credit union share draft M2: Ml plus savings and small-denomination time deposits at all depository balances, and demand deposits at mutual savings banks. institutions, overnight repurchase agreements at commercial banks, overnight Eu- 8. Overnight (and continuing contract) RPs are those issued by commercial rodollars held by U.S. residents other than banks at Caribbean branches of member banks to other than depository institutions and money market mutual funds (general banks, and balances of money market mutual funds (general purpose and broker/ purpose and broker/dealer), and overnight Eurodollars are those issued oy Cadealer). ribbean branches of member banks to U.S. residents other than depository insti- M3: M2 plus large-denomination time deposits at all depository institutions, term tutions and money market mutual funds (general purpose and broker/dealer). RPs at commercial banks and savings and loan associations, and balances of institution-only money market mutual funds. NOTE. Latest monthly and weekly figures are available from the Board's H.6 2. L: M3 plus other liquid assets such as term Eurodollars held by U.S. residents (508) release. Back data are available from the Banking Section, Division of Reother than banks, bankers acceptances, commercial paper. Treasury bills and other search and Statistics, Board of Governors of the Federal Reserve System, Washliquid Treasury securities, and U.S. savings bonds. ington, D.C. 20551. 3. Outstanding amount of U.S. dollar-denominated traveler's checks of nonbank issuers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic NonfinancialS tatistics • March 1982 1.22 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 1981 1982 1978 1979 1980 IItteemm Dec. Dec. Dec. May June July Aug. Sept. Oct. Nov. Dec. Jan. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 35.08 36.37 39.01 39.63 39.62 39.73 39.81 40.31 40.12 40.15 40.53 41.28 2 Nonborrowed reserves 34.22 34.90 37.32 37.40 37.58 38.05 38.39 38.86 38.94 39.49 39.89 39.76 3 Required reserves 34.85 36.04 38.49 39.37 39.28 39.39 39.52 39.90 39.84 39.81 40.21 40.86 4 Monetary base4 134.7 145.0 158.0 161.4 161.7 162.5 162.9 163.7 163.8 164.3 165.8 167.4 Not seasonally adjusted 5 Total reserves3 35.66 36.97 39.70 39.31 39.05 39.64 39.48 40.09 40.22 40.33 41.26 42.70 6 Nonborrowed reserves 34.80 35.50 38.01 37.08 37.02 37.96 38.06 38.63 39.04 39.67 40.63 41.18 7 Required reserves 35.43 36.65 39.19 39.05 38.72 39.30 39.19 39.67 39.94 39.99 40.94 42.28 8 Monetary base4 137.4 147.9 161.0 160.8 161.2 163.3 163.2 163.3 163.8 165.6 168.9 168.5 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS5 9 Total reserves3 41.68 43.91 40.66 40.52 40.44 41.01 41.02 40.59 40.71 40.95 41.92 43.20 10 Nonborrowed reserves 40.81 42.43 38.97 38.29 38.41 39.33 39.60 39.13 39.53 40.29 41.29 41.69 11 Required reserves 41.45 43.58 40.15 40.26 40.10 40.67 40.73 40.18 40.43 40.60 41.60 42.78 12 Monetary base4 144.6 156.2 162.4 162.6 163.3 165.4 165.4 163.9 164.3 166.3 169.7 169.1 1. Reserves measures from November 1980 to date reflect a one-time increase— 5. Reserves of depository institutions series reflect actual reserve requirement estimated at $550 million to $600 million—in required reserves associated with the percentages with no adjustments to eliminate the effect of changes in Regulation reduction of week-end avoidance activities of a few large banks. D. including changes associated with the implementation of the Monetary Control 2. Reserve aggregates include required reserves of member banks and Edge Act Act. Includes required reserves of member banks and Edge Act corporations and, corporations and other depository institutions. Discontinuities associated with the beginning Nov. 13, 1980, other depository institutions. Under the transitional phaseimplementation of the Monetary Control Act, the inclusion of Edge Act corporation in program of the Monetary Control Act of 1980, the net changes in required reserves, and other changes in Regulation D have been removed. reserves of depository institutions have been as follows: effective Nov. 13, 1980, 3. Reserve balances with Federal Reserve Banks (which exclude required clear- a reduction of $2.8 billion; Feb. 12, 1981, an increase of $245 million; Mar. 12, ing balances) plus vault cash at institutions with required reserve balances plus 1981. an increase of $75 million; May 14, 1981, an increase of $245 million; Aug. vault cash equal to required reserves at other institutions. 13, 1981, an increase of $245 million; Sept. 3, 1981, a reduction of $1.3 billion; 4. Includes reserve balances and required clearing balances at Federal Reserve and Nov. 19, 1981, an increase of $220 million. Banks in the current week plus vault cash held two weeks earlier used to satisfy reserve requirements at all depository institutions plus currency outside the U.S. NOTE. Latest monthly and weekly figures are available from the Board's H.3(502) Treasury, Federal Reserve Banks, the vaults of depository institutions, and surplus statistical release. Back data and estimates of the impact on required reserves and vault cash at depository institutions. changes in reserve requirements are available from the Banking Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Aggregates A15 1.23 LOANS AND SECURITIES All Commercial Banks1 Billions of dollars; averages of Wednesday figures 1981 1982 1981 1982 n 1980 1980 Dec. Dec. Oct. Nov. Dec.2 Jan.2 Oct. Nov. Dec.2 Jan.2 Seasonally adjusted Not seasonally adjusted 1 Total loans and securities3 1,239.6 1324.0 1327.5 1317.7" 1322.2 1,249.5 1329.9 1333.4 1327.5" 1324.7 2 U.S. Treasury securities 110.0 112.5 110.3 110.9 114.3 110.5 111.5 109.5 111.4 113.8 3 Other securities 214.4 228.7 231.2 231.7 232.1 215.7 229.0 231.9 233.1 232.3 4 Total loans and leases3 915.1 982.8 986.0 975.04 975.9 923.3 989.4 992.0 983.04 978.7 5 Commercial and industrial loans 326.8 363.7 363.4 358.64'5 360.9 328.8 364.2 364.8 360.84-5 360.7 6 Real estate loans 262.6 281.8 283.1 285.54 287.3 263.3 283.0 284.4 286.34 287.9 7 Loans to individuals 179.6 183.4 183.7 185.2 185.9 180.9 185.0 184.9 186.5 186.4 8 Security loans 18.5 19.6 21.0 21.9 20.6 19.1 19.4 21.3 22.7 20.8 9 Loans to nonbank financial institutions .. 29.0 30.5 30.4 30.24 31.1 29.9 30.8 30.9 31.24 31.2 10 Agricultural loans 31.5 32.9 32.9 33.0 33.2 31.4 33.4 33.1 33.0 32.9 11 Lease financing receivables 10.9 12.5 12.6 12.7 13.0 10.9 12.5 12.6 12.7 13.0 12 All other loans 56.2 58.3 58.9 47.8 43.9 59.0 61.1 60.0 49.9 45.7 MEMO: 13 Total loans and securities plus loans sold3-6 . 1,242.3 1326.7 1330.3 1320.5" 1325.1 1,252.2 1332.6 1336.2 1330.3" 1327.6 14 Total loans plus loans sold3-6 917.8 985.5 988.8 977.94 978.8 926.0 992.0 994,7 985.84 981.6 15 Total loans sold to affiliates6 2.7 2.7 2.7 2.8 2.9 2.7 2.7 2.7 2.8 2.9 16 Commercial and industrial loans plus loans sold6 328.6 365.8 365.5 336600..8844--55 363.2 330.6 366.3 366.9 362.94-5 363.0 17 Commercial and industrial loans sold6 ... 1.8 2.0 2.1 2.2 2.2 1.8 2.0 2.1 2.2 2.2 18 Acceptances held 7.8 9.2 8.8 8.9 8.7 8.5 9.2 9.2 9.8 9.1 19 Other commercial and industrial loans .. 319.0 354.6 354.5 349.7 352.2 320.3 355.1 355.6 351.0 351.7 20 To U.S. addressees7 297.6 327.8 328.3 335.0 339.6 297.1 328.4 329.2 334.4 338.4 21 To non-U. S. addressees 21.4 26.7 26.3 14.7 12.6 23.2 26.7 26.5 16.6 13.3 22 Loans to foreign banks 23.4 23.6 23.4 19.0 15.4 25.1 24.0 23.2 20.0 16.1 1. Includes domestically chartered banks; U.S. branches and agencies of foreign 5. An accounting procedure change by one bank reduced commercial and inbanks, New York investment companies majority owned by foreign banks, and dustrial loans by $0.1 billion as of Apr. 1, 1981. Edge Act corporations owned by domestically chartered and foreign banks. 6. Loans sold are those sold outright to a bank's own foreign branches, non- 2. Beginning December 1981, shifts of foreign loans and securities from U.S. consolidated nonbank affiliates of the bank, the bank's holding company (if not a banking offices to international banking facilities reduced the levels of several items bank), and nonconsolidated nonbank subsidiaries of the holding company. as follows: line 1, $23.2 billion; line 4, $22.8 billion; line 21, $10.9 billion; line 22, 7. United States includes the 50 states and the District of Columbia. $5.9 billion; line 12, $11.8 billion; and line 3, $0.5 billion. After December 1981, levels were reduced as follows: line 1, $30.2 billion; line 4, $29.6 billion; line 21, NOTE. Data are prorated averages of Wednesday estimates for domestically $13.9 billion; line 22, $7.5 billion; line 12, $15.7 billion; and line 3, $0.6 billion. chartered banks, based on weekly reports of a sample of domestically chartered 3. Excludes loans to commercial banks in the United States. banks and quarterly reports of all domestically chartered banks. For foreign-related 4. Absorption of a nonbank affiliate by a large commercial bank added the institutions, data are averages of month-end estimates based on weekly reports following to February figures: total loans and securities, $1.0 billion; total loans from large agencies and branches and quarterly reports from all agencies, branches, and leases, $1.0 billion; commercial and industrial loans, $.5 billion; real estate investment companies, and Edge Act corporations engaged in banking. loans, $.1 billion; nonbank financial, $.1 billion. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Nonfinancial Statistics • March 1982 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars 1980 1981 1982 SSoouurrccee Dec. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Total nondeposit funds 1 Seasonally adjusted2 121.9 119.3 113.2 120.1 124.1 122.7 123.3 119.8 116.3 116.2 98.7 89.6 2 Not seasonally adjusted 122.5 120.0 113.4 125.7 126.0 124.6 127.4 125.0 118.3 120.8 99.1 88.0 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted 111.0 112.9 110.6 108.7 115.3 113.8 110.5 108.2 109.1 110.1 114.4 116.3 4 Not seasonally adjusted 111.6 113.8 111.4 114.2 117.2 115.7 114.6 113.3 111.1 114.7 114.8 114.7 5 Net balances due to foreign-related institutions, not seasonally adjusted 8.2 3.5 -.7 8.7 5.9 6.2 10.1 8.9 4.5 3.3 -18.5 -29.6 6 Loans sold to affiliates, not seasonally adjusted4 2.7 2.8 2.7 2.8 2.9 2.7 2.6 2.7 2.7 2.7 2.8 2.9 MEMO 7 Domestically chartered banks net positions with own foreign branches, not seasonally adjusted6 -14.7 -17.0 -21.3 -13.6 -14.6 -14.6 -10.2 -12.3 -15.4 -15.0 -22.4 -27.1 8 Gross due from balances 37.5 38.8 43.0 43.4 42.5 45.0 43.7 44.5 45.5 47.9 54.9 57.1 9 Gross due to balances 22.8 21.8 21.7 29.8 27.8 30.4 33.5 32.2 30.1 32.9 32.5 30.0 10 Foreign-related institutions net positions with directly related institutions, not seasonally adjusted7 22.9 20.5 20.6 22.3 20.6 20.8 20.4 21.2 19.9 18.4 3.9 -2.5 11 Gross due from balances 32.5 31.9 34.0 35.7 36.9 37.4 38.0 40.1 38.3 39.1 48.1 50.0 12 Gross due to balances 55.4 52.4 54.6 57.9 57.4 58.2 58.4 61.3 58.2 57.4 52.0 47.5 Security RP borrowings 13 Seasonally adjusted® 64.0 66.9 67.0 64.3 70.8 69.2 65.7 63.0 64.9 65.0 70.0 73.0 14 Not seasonally adjusted 62.3 65.6 65.5 67.6 70.5 68.9 67.6 65.9 64.7 67.3 68.2 69.2 U.S. Treasury demand balances9 15 Seasonally adjusted 9.5 12.0 12.1 12.5 11.4 10.9 8.3 9.3 11.1 12.1 11.8 13.5 16 Not seasonally adjusted 9.0 10.4 12.2 12.5 12.5 10.8 7.5 10.9 13.3 9.7 11.3 14.6 Time deposits, $100,000 or more10 17 Seasonally adjusted 267.0 281.4 283.0 294.9 302.4 313.1 321.7 324.7 324.8 323.4 324.0 324.3 18 Not seasonally adjusted 272.4 285.9 283.9 293.9 298.2 304.7 314.8 320.2 322.6 324.6 330.3 330.6 1. Commercial banks are those in the 50 states and the District of Columbia 5. Averages of daily figures for member and nonmember banks. with national or state charters plus agencies and branches of foreign banks. New 6. Averages of daily data. York investment companies majority owned by foreign banks, and Edge Act cor- 7. Based on daily average data reported by 122 large banks. porations owned by domestically chartered and foreign banks. 8. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from commercial banks. Averages of daily data. nonbanks and not seasonally adjusted net Eurodollars and loans to affiliates. In- 9. Averages of Wednesday figures. cludes averages of Wednesday data for domestically chartered banks and averages of current and previous month-end data for foreign-related institutions. NOTE. Beginning December 1981, shifts of foreign assets and liabilities from U.S. 3. Other borrowings are borrowings on any instrument, such as a promissory banking offices to international banking facilities (IBFs) reduced levels for several note or due bill, given for the purpose of borrowing money for the banking business. items as follows: lines 1 and 2, $22.4 billion; lines 3 and 4, $1.7 billion; line 5, This includes borrowings from Federal Reserve Banks and from foreign banks, $20.7 billion; line 7, $3.1 billion; and line 10, $17.6 billion. After December 1981, term federal funds, overdrawn due from bank balances, loan RPs, and participa- levels were reduced as follows: lines 1 and 2, $29.6 billion; lines 3 and 4, $2.4 tions in pooled loans. Includes averages of daily figures for member banks and billion; line 5, $27.2 billion; line 7. $4.7 billion; and line 10 $22.4 billion. averages of current and previous month-end data for foreign-related institutions. Total nondeposit funds and federal funds, RPs, and other borrowings from 4. Loans initially booked by the bank and later sold to affiliates that are still nonbanks have been revised because of new seasonal factors and benchmarking to held by affiliates. Averages of Wednesday data. the June and September 1980 call reports. 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 1981 Account Apr. May July Aug. Sept/ Oct. Nov. Dec.1 DOMESTICALLY CHARTERED COMMERCIAL BANKS1 1 Loans and securities, excluding interbank 1.170.4 1.188.7 1,195.5 1,206.1 1,214.1 1,221.3 1,242.5 1,239.9 1,249.4 1,268.1 1,262.5 2 Loans, excluding interbank 842.6 857.5 864.5 874.2 881.2 888.7 906.2 902.9 912.8 926.6 920.6 3 Commercial and industrial 279.8 287.8 290.3 295.4 298.3 301.2 308.5 308.5 312.6 320.9 320.9 4 Other 562.8 569.7 574.3 578.8 582.9 587.5 597.8 594.3 600.2 605.7 599.7 5 U.S. Treasury securities 110.3 113.1 112.1 113.4 113.1 111.3 109.4 110.0 106.7 109.6 111.7 6 Other securities 217.5 218.1 218.8 218.4 219.8 221.4 226.9 227.1 229.9 231.8 230.2 7 Cash assets, total 163.9 178.1 175.9 165.7 156.8 168.4 190.2 149.8 162.8 173.1 155.1 8 Currency and coin 17.7 18.7 19.3 19.0 19.5 20.0 19.2 19.7 18.3 22.0 19.8 9 Reserves with Federal Reserve Banks 31.8 38.3 25.2 25.4 27.0 25.4 26.8 25.3 26.1 28.0 30.2 10 Balances with depository institutions . 51.3 53.7 57.7 56.8 52.7 61.4 68.9 49.3 52.0 54.5 50.1 11 Cash items in process of collection ... 63.1 73.5 64.5 57.6 61.6 75.4 55.5 66.4 68.7 55.0 67.4 12 Other assets2 167.2 163.1 172.2 162.8 168.3 184.5 175.5 194.4 212.5 197.8 171.1 13 Total assets/total liabilities and capital... 1.501.5 1,534.4 1,544.0 1,533.7 1,558.0 1,617.2 1,565.2 1,606.7 1,653.7 1,615.5 1.537.8 14 Deposits 1,135.7 1,151.2 1,169.3 1,164.6 1,160.0 1,181.3 1,224.4 1,177.1 1,206.0 1,241.2 1,206.3 15 Demand 345.3 356.8 360.7 350.8 333.7 342.5 378.0 324.0 339.2 364.6 322.6 16 Savings 220.1 222.4 220.4 220.0 219.2 217.2 216.7 214.0 217.9 222.4 223.0 17 Time 570.3 572.0 588.3 593.8 607.2 621.6 629.7 639.1 648.9 654.2 660.7 18 Borrowings 164.8 180.4 156.8 170.3 160.4 164.4 176.9 174.5 179.3 190.1 191.7 19 Other liabilities 80.6 81.8 82.5 81.8 86.3 89.8 91.4 89.3 95.2 91.7 89.9 20 Residual (assets less liabilities) 120.4 124.4 125.8 127.3 127.0 122.5 124.4 124.3 126.2 130.7 127.6 MEMO: 21 U.S. Treasury note balances included in borrowing 10.2 16.8 5.5 17.4 7.2 6.4 15.3 13.9 5.6 13.6 16.6 22 Number of banks 14,701 14,713 14,719 14,719 14,719 14,720 14,720 14,740 14,743 14,744 14,690 ALL COMMERCIAL BANKING INSTITUTIONS3 23 Loans and securities, excluding interbank 1,254.6 1,291.2 1,297.9 1,306.7 1,334.3 1,324.7 1,335.5 1.330.6 1,322.9 24 Loans, excluding interbank 922.8 955.1 960.8 969.8 993.8 983.6 994.7 984.7 976.3 25 Commercial and industrial 331.6 345.5 350.3' 354.2r 366.3 361. T 365.5r 361.4 360.3 26 Other 591.3 609.8 610.4r 615.6' 627.5 621.9r 629.2' 623.4 616.1 27 U.S. Treasury securities 112.6 115.8 115.3 113.5 111.6 111.9 108.8 112.3 114.6 28 Other securities 219.3 220.4 221.8 223.4 228.9 229.2 232.0 233.6 232.0 29 Cash assets, total 193.2 207.5 187.8 205.2 234.5 165.4' 179.3 188.0 169.8 30 Currency and coin 17.7 19.0 19.5 20.1 19.2 19.7 18.3 22.0 19.8 31 Reserves with Federal Reserve Banks 32.7 26.5 28.0 26.6 28.1 26.5 27.5 29.3 31.3 32 Balances with depository institutions . 77.8 94.4 81.4 95. T 110.7 62.5r 66.0 67.0 62.5 33 Cash items in process of collection ... 65.1 67.5 58.9 62.9 76.5 56.6 67.4 69.7 56.1 34 Other assets2 229.0 238.0 228.4 233.7 251.0 244.0 267.0 290.1 275.0 35 Total assets/total liabilities and capital. . . 1,677.0 1,736.9 1,714.1 1,745.6 1,819.8 1,734.0 1,781.7 1.808.7 1,767.8 36 Deposits 1,193.3 1,235.5 l,221.5r 1,250.3 1,293.7 1,224.6 1,254.1 1,289.7 1,252.0 37 Demand 371.0 389.3 362.4r 378.3 412.2 337.1 352.6 378.4 335.4 38 Savings 220.4 220.3 219.5 217.5 216.9 214.3 218.1 222.7 223.2 39 Time 602.0 625.9 639.7 654.5 664.7 673.1 683.4 688.6 693.3 40 Borrowings 224.4 231.6 218.7r 223.5 242.7 236.8 246.2 250.8 253.3 41 Other liabilities 137.1 140.6 145.0' 147.4 157.0 146.4 153.3 135.6 133.0 42 Residual (assets less liabilities) 122.4 129.4 128.9 124.4 126.3 126.3 128.1 132.6 129.5 MEMO: 43 U.S. Treasury note balances included in borrowing 10.2 7.2 6.4 15.3 13.9 5.6 13.6 16.6 44 Number of banks 15,147 15,1 15,188 15,189 15,189 15,209 15,212 15,213 15,185 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 the last day of the quarter until June 1981; 3. Commercial banking institutions include domestically chartered commercial beginning July 1981, these data are estimates made on the last Wednesday of the banks, branches and agencies of foreign banks, Edge Act and Agreement corpo- month based on a weekly reporting sample of foreign-related institutions and quarterrations, and New York State foreign investment corporations. end condition report data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • March 1982 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 1882 Adjustment Dec. 30 Jan. 6 Jan. 13 Jan. 20 Jan. 27p Feb. 3p Feb. 10p Feb. IIP Feb. 24p b 1 a 9 n 8 k 1 , 1 Cash items in process of collection 54,879 53,600 48,082 49,251 44,111 48,220 43,519 60,614 44,956 118 2 Demand deposits due from banks in the United States 8,226 7,230 6,853 7,065 6,773 6,868 6,468 9,121 6,696 190 3 All other cash and due from depository institutions .. 36,114 35,566 35,090 40,636 37,002 40,816 34,043 37,459 31,168 354 4 Total loans and securities 608,325 612,198 606,700 604,314 600,360 610,409 603,759 607,023 607,539 1,711 Securities 5 U.S. Treasury securities 36,819 37,325 37,376 37,577 37,977 38,090 37,606 38,417 37,645 353 6 Trading account 5.947 6,604 6,664 6,599 6,854 7,304 6,789 7,606 6,802 7 Investment account, by maturity 30,872 30,721 30,712 30,978 31,122 30,785 30,817 30,811 30,844 353 8 One year or less 9,861 9,702 9,655 9,970 10,145 10,223 10,304 10,184 10,342 110 9 Over one through five years 17,904 17,991 18,043 17,994 17,958 17,573 17,513 17,709 17,647 219 10 Over five years 3,107 3,028 3,014 3,014 3,019 2,989 3,001 2,918 2,855 24 11 Other securities 80,086 81,293 79,968 79,267 79,290 80,413 79,328 79,090 79,146 688 12 Trading account 3,868 4,677 3,589 3,090 3,088 4,568 3,265 3,101 3,128 6 13 Investment account 76,218 76,616 76,378 76,177 76,202 75,845 76,063 75,989 76,018 682 14 U.S. government agencies 16,300 16,515 16,539 16,383 16,302 16,247 16,287 16,305 16,188 237 15 States and political subdivisions, by maturity 57,021 57,194 56,966 56,942 57,081 56,776 56,967 56,882 57,026 432 16 One year or less 88,,112222 8,172 7,891 7,915 8,016 7,853 7,912 7,750 7,860 108 17 Over one year 4488,,889999 49,022 49,075 49,027 49,064 48,923 49,055 49,132 49,167 324 18 Other bonds, corporate stocks and securities 2,896 2,907 2,873 2,852 2,818 2,821 2,809 2,801 2,803 13 Loans 19 Federal funds sold1 35,527 38,127 37,153 36,718 32,601 37,362 34,637 33,708 35,641 179 20 To commercial banks 25,740 26,958 25,740 26,247 22,285 26,818 24,357 23,975 24,508 179 21 To nonbank brokers and dealers in securities 7,504 8,274 8,503 7,705 7,434 7,705 7,585 6,955 8,043 22 To others 2,283 2,894 2,910 2,766 2,882 2,839 2,695 2,777 3,090 23 Other loans, gross 468,270 467,900 464,724 463,231 463,040 467,180 464,869 468,494 467,813 529 24 Commercial and industrial 195,499 195,962 194,657 194,887 195,719 198,011 198,040 199,099 198,950 515 25 Bankers acceptances and commercial paper 4,295 3,989 4,130 3,628 3,984 3,959 3,944 4,103 4,352 4 26 All other 191,205 191,973 190,528 191,259 191,735 194,052 194,096 194,996 194,599 510 27 U.S. addressees 184,435 185,166 184,018 184,868 185,400 187,699 187,663 188,630 188,137 506 28 Non-U.S. addressees 6,769 6,807 6,510 6,391 6,334 6,353 6,433 6,366 6,462 4 29 Real estate 124,444 125,644 125,744 125,920 126,041 126,157 126,278 126,502 126,703 1,059 30 To individuals for personal expenditures 75,164 73,781 73,640 73,412 73,289 73,059 72,748 72,708 72,509 -1,175 To financial institutions 31 Commercial banks in the United States 7,069 7,420 7,218 7,280 7,124 7,301 6,910 7,011 6,444 40 32 Banks in foreign countries 8,257 8,146 7,627 7,511 7,516 7,517 7,200 8,181 8,130 33 Sales finance, personal finance companies, etc... 10,695 10,439 10,206 10,303 10,461 11,158 10,654 10,448 10,218 6 34 Other financial institutions 16,034 15,938 16,064 15,853 15,511 15,598 15,908 16,255 15,974 2 35 To nonbank brokers and dealers in securities 7,946 7,195 6,905 5,655 5,241 6,017 5,462 4,882 6,780 2 36 To others for purchasing and carrying securities2... 2,810 2,741 2,700 2,651 2,664 2,658 2,677 2,667 2,682 4 37 To finance agricultural production 5,702 5,728 5,870 5,817 5,716 5,768 5,771 5,763 5,778 28 38 All other 14,648 14,907 14,090 13,942 13,758 13,935 13,220 14,977 13,642 47 39 LESS: Unearned income 5,827 5,874 5,904 5,865 5,936 5,899 5,924 5,920 5,933 49 40 Loan loss reserve 6,551 6,574 6,616 6,614 6,611 6,736 6,758 6,766 6,774 -10 41 Otherloans.net 455,893 455,453 452,203 450,752 450,492 454,544 452,187 455,808 455,106 490 42 Lease financing receivables 10,781 10,943 10,993 10,955 11,014 11,022 11,100 11,090 11,067 2 43 All other assets 108,184 108,521 108,301 104,916 103,712 106,468 108,133 103,549 104,699 342 44 Total assets 826,509 828,058 816,019 817,138 802,972 823,804 807,023 828,856 806,124 2,717 Deposits 45 Demand deposits 187,518 188,424 173,827 171,859 162,015 170,630 159,427 181,923 161,074 1,145 46 Mutual savings banks 556 762 619 579 570 692 573 683 520 47 Individuals, partnerships, and corporations 140,376 142,202 134,585 129,634 123,277 127,407 120,039 133,870 121,147 973 48 States and political subdivisions 5,235 5,120 4,924 4,523 4,740 5,270 4,535 5,631 4,590 60 49 U.S. government 2,148 2,974 1,199 3,585 2,203 3,538 2,174 1,912 2,456 6 50 Commercial banks in the United States 21,896 21,226 18,068 18,278 17,084 19,263 17,641 24,857 17,220 50 51 Banks in foreign countries 8,206 7,676 7,255 7,701 7,232 6,731 6,602 7,338 7,297 10 52 Foreign governments and official institutions 1,211 1,154 1,128 1,334 1,052 1,464 1,194 1,110 1,152 3 53 Certified and officers' checks 7,889 7,309 6,048 6,223 5,856 6,264 6,670 6,522 6,692 44 54 Time and savings deposits 362,502 363,114 364,230 363,890 365,612 367,193 366,814 363,746 369,200 1,632 55 Savings 76,971 80,813 80,299 79,706 78,156 79,293 78,658 78,728 77,758 1,137 56 Individuals and nonprofit organizations 73,446 77,162 76,663 76,125 74,612 75,771 75,145 75,165 74,269 1,090 57 Partnerships and corporations operated for profit 2,977 3,041 3,000 2,939 2,923 2,893 2,887 2,858 2,854 35 58 Domestic governmental units 524 582 614 610 593 606 603 683 615 11 59 All other 24 28 21 31 28 23 22 22 20 60 Time 285,531 282,301 283,931 284,184 287,457 287,900 288,156 285,017 291,442 495 61 Individuals, partnerships, and corporations 250,511 247,821 249,319 249,676 252,442 252,226 252,093 249,149 254,161 259 62 States and political subdivisions 19,849 19,671 19,957 19,950 20,364 20,480 20,841 20,582 21,370 229 63 U.S. government 239 235 246 266 281 290 299 295 310 7 64 Commercial banks in the United States 9,852 9,693 9,578 9,602 9,757 10,357 10,436 10,555 11,187 65 Foreign governments, official institutions, and banks 5,079 4,880 4,831 4,690 4,612 4,547 4,486 4,435 4,414 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 436 1,671 2,553 3,112 4,038 889 1,283 518 321 67 Treasury tax-and-loan notes 10,013 3,913 7,085 10,757 11,962 11,955 11,957 n.a. n.a. -2 68 AH other liabilities for borrowed money3 139,215 146,354 142,208 141,836 133,101 146,283 141,161 n.a. n.a. -435 69 Other liabilities and subordinated notes and debentures 73,384 69,798 71,352 71,147 71,403 71,514 71,090 70,476 73,882 58 70 Total liabilities 773,069 773,273 761,254 762,600 748,131 768,466 751,732 773,928 751,252 2,398 71 Residual (total assets minus total liabilities)4 53,440 54,784 54,765 54,538 54,841 55,338 55,291 54,928 54,872 320 1. Includes securities purchased under agreements to resell. NOTE. Beginning in the week ending Dec. 9, 1981, shifts of assets and liabilities 2. Other than financial institutions and brokers and dealers. to international banking facilities (IBFs) reduced the amounts reported in some 3. Includes federal funds purchased and securities sold under agreements to items, especially in loans to foreigners and to a lesser extent in time deposits. Based repurchase; for information on these liabilities at banks with assets of $1 billion or on preliminary reports, the large weekly reporting banks shifted $4.7 billion of more on Dec. 31, 1977, see table 1.13. assets to their IBFs in the five weeks ending Jan. 13, 1982. Domestic offices net 4. Not a measure of equity capital for use in capital adequacy analysis or for positions with IBFs are now included in net due from or net due to related insti- Digitized for oFthRerA aSnaElyRtic uses. tutions. More detail will be available later. 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 1981 1982 Adjustment bank. Dec. 30 Jan. 6 Jan. 13 Jan. 20 Jan. 27p Feb. 3P Feb. 10p Feb. 17p Feb. 24p 1981 1 Cash items in process of collection 51,553 50,176 45,225 45,972 41,436 45,270 40,953 56,776 42,377 115 2 Demand deposits due from banks in the United States 7,587 6,551 6,206 6,412 6,150 6,158 5,848 8,195 6,081 159 33,606 33,384 32,583 37,899 34,495 38.144 31,761 34,907 28,611 340 3 All other cash and due from depository institutions .. 567,776 572,294 567,142 565,050 561,695 571,090 564,562 567,982 568,937 3,347 4 Total loans and securities Securities 33,535 33,974 33,999 34,165 34,681 34,812 34,391 35,185 34,464 335 5 U.S. Treasury securities 5,887 6,522 6,580 6,513 6,796 7,197 6,713 7,462 6,702 6 Trading account 27,648 27,452 27,419 27,652 27,885 27.615 27,678 27,723 27,762 335 7 Investment account, by maturity 8.816 8,605 8.535 8,813 9,039 9,157 9.231 9.121 9,284 107 8 One year or less 16,040 16.137 16,181 16,136 16,145 15,785 15,761 15,998 15,936 204 9 Over one through five years 2,792 2,710 2,703 2,703 2,701 2,674 2,686 2,603 2,542 24 10 Over five years 73,650 74,812 73,493 72,825 72,834 73,941 72,824 72,650 72,682 625 11 Other securities 3,751 4,562 3.496 3,024 3,005 4,478 3,172 3,037 3,035 6 12 Trading account 69,899 70,250 69,997 69,801 69,829 69,463 69,651 69,613 69,647 619 13 Investment account 15.092 15,295 15,320 15,164 15.080 15,032 15,051 15,073 14,976 223 14 U.S. government agencies 52,090 52,230 51,987 51,968 52,114 51.793 51,974 51,922 52,051 384 15 States and political subdivision, by maturity 7,284 7,325 7,040 7.063 7,165 6,992 7,036 6,891 6,993 100 16 One year or less 44,806 44,905 44,947 44,904 44,949 44.801 44,938 45,030 45,058 284 17 Over one year 2,717 2,724 2,690 2,669 2,634 2,637 2,626 2,618 2.620 12 18 Other bonds, corporate stocks and securities .... Loans 19 Federal funds sold1 31,671 33,300 32,587 32,444 28,878 33.013 30,351 29,578 31.850 148 20 To commercial banks 22,403 22,806 21,876 22,717 19,196 23,332 20,831 20,570 21,444 148 21 To nonbank brokers and dealers in securities 7.028 7,656 7,866 7,034 6,892 6,919 6.910 6,309 7.370 22 To others 2,239 2,839 2,845 2,693 2,790 2.763 2,610 2,699 3,035 23 Other loans, gross 440,274 441,664 438,589 437,106 436,855 440,970 438,684 442,260 441,652 2,312 24 Commercial and industrial 185,752 186,129 184,893 185,071 185,864 188,106 188,110 189,099 189,027 486 25 Bankers acceptances and commercial paper 4,144 3,846 3,998 3,487 3,843 3,814 3,796 3,968 4,223 5 26 All other 181,608 182,282 180,895 181.584 182,020 184,292 184,314 185,131 184,804 480 27 U.S. addressees 174,916 175,563 174.468 175,274 175,769 178.024 177,967 178,850 178,428 476 28 Non-U.S. addressees 6,692 6,719 6,428 6,311 6,252 6,268 6,348 6,281 6,376 4 29 Real estate 117,629 118,670 118,736 118,893 118,999 119,121 119,240 119,467 119,657 929 30 To individuals for personal expenditures 65,765 66,417 66,294 66,060 65,948 65,773 65,479 65,456 65,259 775 To financial institutions 31 Commercial banks in the United States 6,861 7,227 7,038 7,120 6,967 7,110 6,742 6,844 6,258 41 32 Banks in foreign countries 8,178 8,056 7,561 7,442 7,444 7,450 7,130 8,110 8,032 33 Sales finance, personal finance companies, etc ... 10.549 10,292 10,060 10,154 10,303 10,996 10,493 10,282 10,067 6 34 Other financial institutions 15,658 15,518 15,643 15,431 15.115 15.208 15,502 15,866 15,593 1 35 To nonbank brokers and dealers in securities 7,886 7,112 6,852 5,606 5,196 5,966 5.412 4,835 6,731 2 36 To others for purchasing and carrying securities2 .. 2,559 2,497 2.453 2,408 2,419 2,418 2,440 2,442 2,464 4 37 To finance agricultural production 5,569 5,591 5,732 5,679 5,572 5,623 5,627 5,619 5,634 26 38 All other 13,867 14,154 13.326 13,242 13.028 13,199 12.509 14,240 12,928 41 39 LESS: Unearned income 5,189 5,234 5.266 5,227 5.293 5,266 5.289 5,283 5,293 46 40 Loan loss reserve 6,166 6,221 6,260 6.262 6,260 6,380 6,400 6,408 6,417 28 41 Other loans, net 428,920 430,208 427,064 425.617 425,302 429,324 426.996 430,568 429,942 2,238 42 Lease financing receivables 10,442 10,602 10,657 10,620 10,680 10,689 10,768 10,757 10,733 3 43 All other assets 104,943 105,431 105,180 101,820 100.591 103,213 104,739 100,120 101,372 361 44 Total assets 775,907 778,440 766,994 767,774 755,047 774,563 758,631 778,738 758,112 4,325 Deposits 45 Demand deposits 174,411 175,009 161,431 159.248 150,266 158,398 148,006 169,205 150.023 1,106 46 Mutual savings banks 543 734 598 560 555 666 554 657 500 47 Individuals, partnerships, and corporations 130,196 131,871 124,741 119,998 114,232 118,178 111,299 124,220 112.613 950 48 States and political subdivisions 4,594 4,578 4.350 3,942 4,128 4,658 3,891 4,998 4,050 47 49 U.S. government 1,946 2,691 978 3.008 1,891 3,199 1,846 1,691 2,231 6 50 Commercial banks in the United States 20,308 19,494 16,718 16,875 15,730 17,664 16,304 23,034 15,828 50 51 Banks in foreign countries 8,074 7.602 7,188 7,622 7,155 6,666 6,544 7,282 7,233 10 52 Foreign governments and official institutions 1,209 1,153 1,126 1,331 1,034 1.437 1,188 1,092 1,145 3 53 Certified and officers' checks 7.541 6,886 5,732 5,912 5,541 5,932 6,380 6,231 6,423 40 54 Time and savings deposits 339,283 341,049 342,206 341,908 343,635 345,104 344,631 341,580 346,870 2,826 55 Savings 71,105 74,586 74,126 73.578 72,168 73.212 72.628 72.674 71,785 1,021 56 Individuals and nonprofit organizations 67,844 71,197 70,749 70,249 68,875 69,946 69,363 69,360 68,538 975 57 Partnerships and corporations operated for profit 2,752 2,813 2,772 2,719 2,702 2,673 2,674 2,641 2,643 35 58 Domestic governmental units 484 548 585 580 564 570 570 651 584 11 59 All other 24 28 21 31 28 23 22 22 20 60 Time 268,178 266,463 268,079 268,329 271,466 271.892 272,003 268,906 275,085 1,805 61 Individuals, partnerships, and corporations 235,290 234.070 235,527 235,814 238,453 238.261 238,022 235,086 239,918 1,576 62 States and political subdivisions 18,136 18,005 18,288 18,310 18,697 18,774 19,089 18,854 19.585 222 63 U.S. government 229 225 235 256 271 280 288 285 300 7 64 Commercial banks in the United States 9,443 9,284 9.198 9,261 9,433 10,030 10.116 10,246 10,868 65 Foreign governments, official institutions, and banks 5,079 4,880 4,831 4,690 4,612 4.547 4,486 4,435 4,414 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 436 1,584 2,520 3.061 3,853 741 1.217 436 275 67 Treasury tax-and-Ioan notes 9,207 3,608 6,607 9.918 10,999 10,965 10,970 n.a. n.a. 68 All other liabilities for borrowed money3 131,178 137,927 133.593 133.295 125,328 137.863 132,827 n.a. n.a. 18 69 Other liabilities and subordinated notes and debentures 71,475 67.963 69,413 69,256 69,578 69,600 69.130 68,492 71,850 52 70 Total liabilities 725,990 727,140 715,770 716,686 703,658 722,673 706,780 727,344 706,778 4,001 71 Residual (total assets minus total liabilities)4 49,917 51,300 51.224 51.088 51,389 51,890 51.851 51,393 51,334 324 1. Includes securities purchased under agreements to resell. 4. Not a measure of equity capital for use in capital adequacy analysis or for 2. Other than financial institutions and brokers and dealers. other analvtic uses. 3. Includes federal funds purchased and securities sold under agreement to repurchase; for information on these liabilities at banks with assets of $1 billion or more on Dec. 31, 1977, see table 1.13. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic NonfinancialS tatistics • March 1982 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1981 1982 Dec. 30 Jan.6 Jan. 13 Jan. 20 Jan. 27^ Feb. 3P Feb. 10? Feb. 17^ 1 Cash items in process of collection 17,269 13,816 12,932 13,040 13,497 16,298 2 Demand deposits due from banks in the United States 1,361 1,237 977 1,310 1,038 964 1,034 1,611 3 All other cash and due from depository institutions 9,812 10,882 8,137 9,008 7,507 11,408 6,602 11,064 4 Total loans and securities1 135,997 133,843 133,127 133,572 132,793 136,861 133,774 132,509 Securities 5 U.S. Treasury securities2 6 Trading account2 7 Investment account, by maturity 6,907 6,864 6,850 6,831 6,815 6,655 6,617 6,797 8 One year or less 1,213 1,198 1,198 1,231 1,215 1,238 1,220 1,181 9 Over one through five years 5,093 5,055 5,046 4,997 4,998 4,835 4,816 5,030 10 Over five years 601 611 607 603 602 582 582 585 11 Other securities2 12 Trading account2 13 Investment account 14,750 14,752 14,637 14,618 14,710 14,598 14,620 14,612 14 U.S. government agencies 2,353 2,348 2,352 2,303 2,274 2,281 2,254 2,254 15 States and political subdivision, by maturity .. 11,552 11,563 11,445 11,480 11,598 11,486 11,530 11,530 16 One year or less 1,964 1,998 1,956 1,990 2,130 2,038 2,059 2,030 17 Over one year 9,589 9,565 9,488 9,490 9,468 9,448 9,471 9,500 18 Other bonds, corporate stocks and securities . 844 841 840 834 830 836 Loans 19 Federal funds sold3 8,215 6,887 7,670 9,441 8,528 10,620 9,568 6,776 20 To commercial banks 3,825 2.252 2,777 4,845 4,047 6,035 5,264 2,862 21 To nonbank brokers and dealers in securities ... 3,289 3,306 3,457 2,967 2,844 2,899 2,936 2,420 22 To others 1,101 1,330 1,435 1,628 1,638 1,685 1,368 1,495 23 Other loans, gross 109,585 108,829 107,474 106,187 106,311 108,562 106,561 107,917 24 Commercial and industrial 56,225 55,777 55,254 55,468 55,358 56,348 55,913 55,736 25 Bankers acceptances and commercial paper .. 1,265 1,194 1,284 1,042 1,163 1,010 912 874 26 All other 54,960 54,582 53,969 54,426 54,195 55,338 55,001 54,862 27 U.S. addressees 53,446 53,115 52,550 53,024 52,773 53,925 53.519 53,465 28 Non-U. S. addressees 1,514 1,467 1,419 1,402 1,422 1,414 1,482 1,396 29 Real estate 17,648 17,667 17,620 17,662 17,697 17,677 17,680 17,700 30 To individuals for personal expenditures 11,150 11,160 11,122 11,084 11,030 11,071 11,053 11,096 To financial institutions 31 Commercial banks in the United States 2,001 2,362 2,033 1,964 2,147 2,179 1,883 1,979 32 Banks in foreign countries 3,467 3,845 3,365 3,216 3,272 3,221 2,915 3,747 33 Sales finance, personal finance companies, etc. 4,323 4.253 4,249 4,349 4,509 5,154 4,648 4,536 34 Other financial institutions 4,595 4.365 4,485 4,436 4,340 4,332 4,328 4,434 35 To nonbank brokers and dealers in securities 5,090 4,271 4,272 3,138 3,113 3,676 3,330 2,687 36 To others for purchasing and carrying securities4 724 685 683 670 666 649 617 641 37 To finance agricultural production 277 276 464 459 401 414 429 439 38 All other 4,087 4,168 3,927 3,741 3,778 3,840 3,764 4,923 39 LESS: Unearned income 1,374 1.366 1,367 1,367 1,428 1,403 1,406 1,407 40 Loan loss reserve 2,086 2,124 2,137 2,137 2,143 2,171 2,187 2,186 41 Other loans, net 106,126 105,340 103,970 102,683 102,740 104,989 102,968 104,324 42 Lease financing receivables 2,258 2,302 2,308 2,314 2,318 2,285 2,339 2,338 43 All other asset? 43,264 44,179 43,052 41,073 41,070 43,014 43,348 40,705 44 Total assets 209,961 206,106 201,980 201,094 197,658 207,573 200,593 204,526 Deposits 45 Demand deposits 52,326 49,434 45,931 45,491 43,191 45,316 42,606 48,696 46 Mutual savings banks 268 368 313 282 284 302 276 326 47 Individuals, partnerships, and corporations 34,733 34,184 32,191 30,306 29,724 30,858 27,574 32,552 48 States and political subdivisions 424 610 552 522 437 654 486 619 49 U.S. government 500 808 365 942 532 866 582 367 50 Commercial banks in the United States 5,434 4,122 3,883 3,883 3,800 3,945 4,633 5,746 51 Banks in foreign countries 6,387 5,934 5,602 6,046 5,412 5,051 5,010 5,379 52 Foreign governments and official institutions ... 919 823 861 1,103 795 1,195 970 848 53 Certified and officers' checks 3,661 2,584 2,164 2,406 2,207 2,443 3,075 2,860 54 Time and savings deposits 66,460 65,224 65,927 65,693 66,930 68,349 67,764 65,976 55 Savings 9,318 9,707 9,648 9,540 9,357 9,468 9,411 9,448 56 Individuals and nonprofit organizations 8,966 9,341 9,277 9,185 9,005 9,111 9,026 9,027 57 Partnerships and corporations operated for profit 256 255 252 237 237 234 236 237 58 Domestic governmental units 94 109 116 114 112 120 145 180 59 All other 2 2 3 4 3 2 3 4 60 Time 57,142 55,517 56,279 56,153 57,573 58,881 58,353 56,527 61 Individuals, partnerships, and corporations ... 49,056 47,727 48,506 48,458 49,596 50,277 49,624 47,868 62 States and political subdivisions 2,073 1,916 1,923 1,961 2,121 2,263 2,326 2,341 63 U.S. government 25 25 40 54 56 57 59 60 64 Commercial banks in the United States 3,504 3,462 3,420 3,408 3,508 3,997 4,058 3,971 65 Foreign governments, official institutions, and banks 2,484 2,387 2,390 2,272 2,291 2,286 2,286 2,287 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 1,280 2,317 600 1,512 875 67 Treasury tax-and-loan notes 2,856 954 1,832 2,902 3,021 2,967 2,989 n.a. 68 All other liabilities for borrowed money6 42,003 45,330 41,905 42,685 39,284 46,189 41,973 n.a. 69 Other liabilities and subordinated notes and debentures 29,678 26,827 26,956 26,648 26,741 27,363 27,076 27,336 70 Total liabilities 193,323 189,049 184,869 184,018 180,680 190,184 183,284 187,216 71 Residual (total assets minus total liabilities)7 16,638 17,057 17,111 17,077 16,978 17,389 17,310 17,310 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. Not a measure of equity capital for use in capital adequacy analysis or for other analytic uses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A21 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions of dollars, Wednesday figures 1981 1982 Adjustment bank, Dec. 30 Jan. 6 Jan. 13 Jan. 20 Jan. 27P Feb. 3p Feb. 10p Feb. IIP Feb. 24P 1981 BANKS WITH ASSETS OF $750 MILLION OR MORE 1 Total loans (gross) and securities adjusted1 587,893 590,267 586,262 583,266 583,499 588,926 585,174 588,723 589,292 1,529 2 Total loans (gross) adjusted1 470,988 471,649 468,918 466,422 466,232 470,423 468,239 471,216 472,501 488 3 Demand deposits adjusted2 108,595 110,624 106,477 100,744 98,616 99,608 96,093 94,540 96,442 972 4 Time deposits in accounts of $100,000 or more 187,938 182,990 184,113 183,947 186,944 186,812 186,452 182,731 188,502 -965 5 Negotiable CDs 137,490 132,238 133,022 132,653 135,481 135,380 134,235 130,889 135,142 -1,382 6 Other time deposits 50,448 50,752 51,090 51,293 51,462 51,432 52,217 51,842 53,360 417 7 Loans sold outright to affiliates3 2,848 2,888 2,906 2,893 2,863 2,838 2,850 2,826 2,799 8 Commercial and industrial 2,210 2,245 2,265 2,251 2,246 2,232 2,242 2,215 2,185 9 Other 638 643 641 642 616 607 608 611 614 BANKS WITH ASSETS OF $1 BILLION OR MORE 10 Total loans (gross) and securities adjusted1 549,866 553,717 549,754 546,703 547,085 552,295 548,677 552,259 552,945 3,231 11 Total loans (gross) adjusted1 442,681 444,931 442,262 439,714 439,570 443,542 441,462 444,424 445,799 2,271 12 Demand deposits adjusted2 100,605 102,647 98,510 93,393 91,209 92,266 88,903 87,703 89,586 935 13 Time deposits in accounts of $100,000 or more 178,259 174,953 176,103 175,965 178,871 178,724 178,260 174,602 180,186 432 14 Negotiable CDs 130,940 127,240 128,045 127,732 130,510 130,416 129,236 125,932 130,069 25 15 Other time deposits 47,319 47,713 48,059 48,232 48,361 48,308 49,024 48,670 50,117 407 16 Loans sold outright to affiliates3 2,771 2,816 2,834 2,819 2,789 2,766 2,776 2,757 2,718 17 Commercial and industrial 2,150 2,189 2,207 2,191 2,185 2,171 2,180 2,160 2,119 18 Other 621 627 627 628 604 595 596 597 599 BANKS IN NEW YORK CITY 19 Total loans (gross) and securities adjusted1-4 133,630 132,719 131,821 130,267 130,170 132,220 130,219 131,262 131,747 20 Total loans (gross) adjusted1 111,973 111,102 110,334 108,818 108,645 110,967 108,982 109,853 110,378 21 Demand deposits adjusted2 29,122 30,841 27,307 26,849 25,928 27,464 23,894 26,285 26,792 22 Time deposits in accounts of $100,000 or more 44,768 43,005 43,708 43,527 45,028 46,178 45,612 43,718 44,440 23 Negotiable CDs 34,028 32,050 32,765 32,670 34,246 35,205 34,559 32,835 33,324 24 Other time deposits 10,740 10,955 10,943 10,857 10,782 10,974 11,052 10,883 11,116 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, nonbanks. 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 NonfinancialS tatistics • March 1982 1.291 LARGE WEEKLY REPORTING BRANCHES AND AGENCIES OF FOREIGN BANKS Assets and Liabilities Millions of dollars, Wednesday figures 1981 1982 AAccccoouunntt Dec. 30 Jan. 6 Jan. 13 Jan. 20 Jan. 27P Feb. 3P Feb. lC Feb. IIP Feb. 24P 1 Cash and due from depository institutions 6,545 6,421 6,591 6,402 6,327 6,042 5,996 6,510 6,033 2 Total loans and securities 51,178 50,150 50,055 48,682 49,443 47,651 48,509 48,273 48,835 3 U.S. Treasury securities 2,196 2,209 2,445 2,435 2,387 2,545 2,680 2,613 2,618 4 Other securities 801 800 826 811 816 817 826 838 827 5 Federal funds sold1 5,070 5,282 4,791 4,205 5,044 3,865 4,212 4,816 4,399 6 To commercial banks in U.S 4,442 4,926 4,554 4,014 4,758 3,664 4,041 4,622 4,232 7 Toothers 628 355 236 191 286 201 171 194 167 8 Other loans, gross 43,111 41,860 41,993 41,231 41,196 40,424 40,791 40,006 40,990 9 Commercial and industrial 20,463 20,291 20,108 19,488 19,716 19,362 19,607 19,690 1199,,668855 10 Bankers acceptances and commercial paper 3,791 3,835 3,644 3,591 3,453 3,582 3,569 3,614 3,538 11 All other 16,672 16,456 16,464 15,898 16,263 15,780 16,038 16,076 16,147 12 U.S. addressees 13,971 13,902 13,886 13,395 13,645 13,591 13,939 13,957 13,919 13 Non-U.S. addressees 2,701 2,554 2,578 2,503 2,617 2,189 2,099 2,119 2,227 14 To financial institutions 17,504 16,740 16,949 16,939 16,832 16,499 16,625 16,027 16,686 15 Commercial banks in U.S 13,683 12,991 13,230 13,089 13,114 12,746 12,621 12,194 12,880 16 Banks in foreign countries 3,452 3,356 3,314 3,443 3,322 3,377 3,623 3,461 3,437 17 Nonbank financial institutions 370 394 404 406 396 376 382 371 369 18 For purchasing and carrying securities .. 687 456 492 371 332 438 449 366 571 19 All other 4,456 4,372 4,444 4,432 4,316 44,,112255 44,,110099 33,,992233 44,,004477 20 Other assets (claims on nonrelated parties) 12,202 11,858 12,266 12,064 12,074 11,959 11,733 11,840 12,077 21 Net due from related institutions 12,639 12,903 12,660 13,183 12,917 12,768 12,946 11,837 12,322 22 Total assets 82,564 81,332 81,572 80,331 80,760 78,421 79,184 78,461 79,267 23 Deposits or credit balances2 25,292 24,061 23,821 23,234 23,135 22,611 22,722 22,664 23,204 24 Credit balances 320 356 317 326 292 268 266 357 314 25 Demand deposits 2,379 2,459 2,096 1,939 1,972 1,872 1,953 22,,113399 11,,993366 26 Individuals, partnerships, and corporations 895 938 774 767 804 776 766 806 724 27 Other 1,484 1,521 1,322 1,172 1,168 1,096 1,186 1,333 1,212 28 Total time and savings 22,593 21,246 21,408 20,969 20,871 20,472 20,503 2200,,116677 2200,,995555 29 Individuals, partnerships, and corporations 18,866 17,936 17,926 17,452 17,744 17,425 17,335 17,075 17,915 30 Other 3,727 3,310 3,482 3,516 3,127 3,047 3,167 3,092 3,040 31 Borrowings3 31,573 33,068 32,779 33,041 32,231 32,238 33,017 32,326 33,824 32 Federal funds purchased4 5,666 8,169 7,659 8,176 7,167 7,351 7,979 7,874 8,748 33 From commercial banks in U.S 4,568 7,410 6,777 7,250 6,265 6,234 7,068 6,714 7,531 34 From others 1,097 759 882 926 902 1,118 911 1,160 1,217 35 Other liabilities for borrowed money ... 25,907 24,899 25,119 24,865 25,064 24,886 25,038 24,452 25,076 36 To commercial banks in U.S 23,242 22,428 22,596 22,395 22,553 22,435 22,447 21,902 22,537 37 Toothers 2,665 2,470 2,524 2,470 2,511 2,451 2,590 2,550 2,539 38 Other liabilities to nonrelated parties 12,306 11,921 12,472 12,216 12,237 12,069 11,851 11,849 12,196 39 Net due to related institutions 13,393 12,282 12,500 11,840 13,158 11,503 11,595 11,622 10,043 40 Total liabilities 82,564 81,332 81,572 80,331 80,760 78,421 79,184 78,461 79,267 MEMO 41 Total loans (gross) and securities adjusted' 33,054 32,233 32,270 31,579 31,570 31,240 31,848 31,457 31,722 42 Total loans (gross) adjusted5 30,056 29,224 28,999 28,333 28,368 27,879 28,341 28,006 28,277 1. Includes securities purchased under agreements to resell. NOTE. Beginning in the week ending Dec. 9, 1981, shifts of assets and liabilities 2. Balances due to other than directly related institutions. to international banking facilities (IBFs) reduced the amounts reported in some 3. Borrowings from other than directly related institutions. items, especially in loans to foreigners and to a lesser extent in time deposits. Based 4. Includes securities sold under agreements to repurchase. on preliminary reports, the large weekly reporting branches and agencies shifted 5. Excludes loans and federal funds transactions with commercial banks in U.S. $22.2 billion of assets to their IBFs in the six weeks ending Jan. 13,1982. Domestic offices net positions with IBFs are now included in net due from or net due to related institutions. More detail will be available later. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A23 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Domestic Classified Commercial and Industrial Loans Millions of dollars Outstanding Net change during Adjust- Industry classification ment 1981 1982 1981 1981 1982 bank1 Oct. 28 Nov. 25 Dec. 30 Jan. 27 Feb. 24p Q3 Q4 Dec. Jan. Feb.P 1 Durable goods manufacturing.... 25,907 25,568 26,864 27,126 28.281 834 756 1,297 245 1.155 17 2 Nondurable goods manufacturing 22,060 22,189 21,753 21,588 21.904 2,782 -1,647 -437 -176 316 11 3 Food, liquor, and tobacco 4,310 4,282 4,190 4,148 4,407 26 -241 -92 -43 258 2 4 Textiles, apparel, and leather.. 4,859 4,652 4,166 4,162 4.411 156 -910 -485 -6 249 2 5 Petroleum refining 3,722 4,769 4,861 4,574 4,133 543 906 92 -287 -441 6 Chemicals and rubber 5,056 4,624 4,341 4,483 4,743 1,700 -1,408 -283 140 260 2 7 Other nondurable goods 4,113 3,863 4,195 4,220 4,210 356 6 332 20 -10 4 8 Mining (including crude petroleum and natural gas) 21,728 22,940 24,364 24,552 25.804 3,088 3,082 1,424 187 1,253 9 Trade 27,481 28,175 28,005 28,103 27,758 892 1,006 -170 32 -344 65 10 Commodity dealers 1,666 1,901 2,292 2,297 1,802 158 634 390 5 -495 11 Other wholesale 12,636 12,791 12,919 13,224 13,142 546 285 128 286 -82 20 12 Retail 13,180 13,483 12,795 12,581 12,814 188 86 -688 -259 233 45 13 Transportation, communication, and other public utilities 21,716 22,019 23.184 23,416 23,380 1,035 1,324 1,165 208 -36 24 14 Transportation 8,410 8,281 8,619 8,740 8,891 262 160 338 100 151 22 15 Communication 3,573 3,701 3,954 4,027 4,076 -7 419 253 72 49 16 Other public utilities 9,734 10,037 10,611 10,648 10,412 780 745 574 36 -236 1 17 Construction 7,163 7,137 7,193 7,062 7,204 262 -53 56 -176 142 45 18 Services 25,424 25,591 26,482 26,648 27,112 792 1,145 891 62 464 104 19 All other2 15,920 16,057 17,070 17,273 16,983 642 1,251 1,014 -6 -290 209 20 Total domestic loans 167,400 169,675 174,916 175,769 178,428 10,328 6,864 5,242 376 2,659 476 21 MEMO: Term loans (original maturity more than 1 year) included in domestic loans 84,629 83,833 85,086 85,201 87,853 2,733 -1,049 1.254 -54 2,652 169 1. Adjustment bank amounts represent accumulated adjustments originally made NOTE. New series. The 134 large weekly reporting commercial banks with doto offset the cumulative effects of mergers. These adjustment amounts should be mestic assets of $1 billion or more as of Dec. 31, 1977, are included in this series. added to outstanding data for any date in the year to establish comparability with The revised series is on a last-Wednesday-of-the-month basis. Partly estimated any date in the subsequent year. Changes shown have been adjusted for these historical data are available from the Banking Section, Division of Research and amounts. Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. 2. Includes commercial and industrial loans at a few banks with assets of $1 20551. billion or more that do not classify their loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic NonfinancialS tatistics • March 1982 1.31 GROSS DEMAND DEPOSITS of Individuals, Partnerships, and Corporations1 Billions of dollars, estimated daily-average balances Commercial banks TTyyppee ooff hhoollddeerr 1980 1981 11997777 11997788 1199779922 DDeecc.. DDeecc.. DDeecc.. June Sept. Dec. Mar.3 June4 Sept. Dec. 1 All holders—Individuals, partnerships, and corporations 274.4 294.6 302.2 288.6 302.0 315.5 280.8 277.5 288.9 2 Financial business 25.0 27.8 27.1 27.7 29.6 29.8 30.8 28.2 28.0 3 Nonfinancial business 142.9 152.7 157.7 145.3 151.9 162.3 144.3 148.6 154.8 4 Consumer 91.0 97.4 99.2 97.9 101.8 102.4 86.7 n.a. 82.1 86.6 5 Foreign 2.5 2.7 3.1 3.3 3.2 3.3 3.4 3.1 2.9 6 Other 12.9 14.1 15.1 14.4 15.5 17.2 15.6 15.5 16.7 Weekly reporting banks 1980 1981 11997777 11997788 1199779955 DDeecc.. DDeecc.. DDeecc.. June Sept. Dec. Mar.3 June4 Sept. Dec. 7 All holders—Individuals, partnerships, and corporations 139.1 147.0 139.3 133.9 140.6 147.4 133.2 131.3 137.5 8 Financial business 18.5 19.8 20.1 20.2 21.2 21.8 21.9 20.7 21.0 9 Nonfinancial business 76.3 79.0 74.1 69.2 72.4 78.3 69.8 71.2 75.2 10 Consumer 34.6 38.2 34.3 33.9 36.0 35.6 30.6 n.a. 28.7 30.4 11 Foreign 2.4 2.5 3.0 3.1 3.1 3.1 3.2 2.9 2.8 12 Other 7.4 7.5 7.8 7.5 7.9 8.6 7.7 7.9 8.0 1. Figures include cash items in process of collection. Estimates of gross deposits 4. Demand deposit ownership survey estimates for June 1981 are not yet available are based on reports supplied by a sample of commercial banks. Types of depositors due to unresolved reporting errors. in each category are described in the June 1971 BULLETIN, p. 466. 5. After the end of 1978 the large weekly reporting bank panel was changed to 2. Beginning with the March 1979 survey, the demand deposit ownership survey 170 large commercial banks, each of which had total assets in domestic offices sample was reduced to 232 banks from 349 banks, and the estimation procedure exceeding $750 million as of Dec. 31, 1977. See "Announcements," p. 408 in the was modified slightly. To aid in comparing estimates based on the old and new May 1978 BULLETIN. Beginning in March 1979, demand deposit ownership estireporting sample, the following estimates in billions of dollars for December 1978 mates for these large banks are constructed quarterly on the basis of 97 sample have been constructed using the new smaller sample; financial business, 27.0; banks and are not comparable with earlier data. The following estimates in billions nonfinancial business, 146.9; consumer, 98.3; foreign, 2.8; and other, 15.1. of dollars for December 1978 have been constructed for the new large-bank panel; 3. Demand deposit ownership data for March 1981 are subject to greater than financial business, 18.2; nonfinancial business, 67.2; consumer, 32.8; foreign, 2.5; normal errors reflecting unusual reporting difficulties associated with funds shifted other, 6.8. to NOW accounts authorized at year-end 1980. For the household category, the $15.7 billion decline in demand deposits at all commercial banks between December 1980 and March 1981 has an estimated standard error of $4.8 billion. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Deposits and Commercial Paper A25 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1981 1982 IInnssttrruummeenntt 11997777 11997788 1199779911 11998800 DDeecc.. DDeecc.. DDeecc.. DDeecc.. July Aug. Sept. Oct. Nov. Dec. Jan. Commercial paper (seasonally adjusted) 11 AAllll iissssuueerrss 65,051 83,438 112,087 123,597 151,013 157,121 165,379 164,026 164,349 164,036 165,118 FFiinnaanncciiaall ccoommppaanniieess22 DDeeaalleerr--ppllaacceedd ppaappeerr33 22 TToottaall 8,796 12,181 17,161 19,236 26,006 27,813 30,213 28,909 28,745 28,613 29,233 33 BBaannkk--rreellaatteedd 2,132 3,521 2,874 3.561 5,267 6,037 6.161 5,626 5,725 6,036 6,495 DDiirreeccttllyy ppllaacceedd ppaappeerr44 44 TToottaall 40,574 51,647 64.748 67.888 79,571 80,769 83,311 83,053 82.290 81,702 80,504 55 BBaannkk--rreellaatteedd 7,102 12,314 17,598 22,382 26,104 25,153 26,426 25,397 26,224 26,901 28,587 66 NNoonnffiinnaanncciiaall ccoommppaanniieess55 15,681 19,610 30,178 36.473 45,436 48,539 51,855 52,064 53,314 53,721 55,381 Bankers dollar acceptances (not seasonally adjusted) 7 Total 25,450 33,700 45,321 54,744 63,721 64,577 65,048 66,072 68,749 69,226 Holder 8 Accepting banks 10,434 8,579 9,865 10,564 10,505 9,959 10,022 10,511 11,253 10,857 9 Own bills 8,915 7,653 8,327 8,963 9,437 9,214 9,040 9,522 10,268 9,743 10 Bills bought 1,519 927 1,538 1,601 1,068 745 982 989 985 1,115 Federal Reserve Banks 11 Own account 954 1 704 776 453 0 0 0 0 0 n a. 12 Foreign correspondents 362 664 1,382 1,791 1,459 1,451 1,243 1,428 1,408 1,442 13 Others 13,700 24.456 33,370 41,614 51,303 53,167 53,783 54,133 56,089 56,926 Basis 14 Imports into United States 6,378 8,574 10,270 11,776 13,059 13,313 13,992 14,699 14,851 14,765 15 Exports from United States 5,863 7,586 9,640 12.712 13,296 13,774 13,514 13,981 14,936 15,400 16 All other 13,209 17,540 25,411 30.257 37,365 37,490 37,542 37,391 38,962 39,061 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 comfactoring, 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

A26 Domestic Nonfinancial Statistics • March 1982 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per annum Effective date Rate Effective Date Rate Month Average Month rate 11998811——MMaayy 19 20.00 1981—Nov. 3 17.50 1980—Oct 13.79 1981—July 22 20.50 9 17.00 Nov 16.06 Aug June 3 20.00 16.50- Dec 20.35 Sept July 8 20.50 17 17.00 Oct SSeepptt.. 15 20.00 20 16.50 1981—Jan 20.16 Nov 22 19.50 24 16.00 Feb 19.43 Dec Oct. 5 19.00 Dec. 1 15.75 Mar 18.05 13 18.00 Apr 17.15 1982—Jan 1982—Feb. ? 16.50 May 19.61 Feb Feb. 18 17.00 June 20.03 Feb. 23 16.50 1.34 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 2-7, 1981 Size of loan (in thousands of dollars) All IItteemm 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) $25,466,901 $853,739 $639,132 $579,473 $2,158,438 $814,291 $20,421,829 2 Number of loans 161,627 115,558 20,039 8,992 12,122 1,275 3,641 3 Weighted-average maturity (months) 1.6 3.0 2.8 3.9 3.4 3.0 1.2 4 Weighted-average interest rate (percent per annum) . 17.23 19.95 19.19 19.65 19.13 18.64 16.73 5 Interquartile range1 16.14-18.06 18.25-21.55 18.25-20.85 18.27-21.15 18.25-20.22 17.50-19.65 15.99-17.30 Percentage of amount of loans 6 With floating rate 35.5 27.9 48.2 56.5 5577..00 72.1 3311..11 7 Made under commitment 48.1 31.3 35.9 35.8 45.9 71.9 48.8 8 With no stated maturity 15.9 10.1 15.3 17.1 19.9 35.2 15.0 LONG-TERM COMMERCIAL AND INDUSTRIAL LOANS 9 Amount of loans (thousands of dollars) $2,438,209 $317,491 $688,950 $205,534 $1,226,234 10 Number of loans 27,160 23,639 2.811 319 391 11 Weighted-average maturity (months) 37.6 29.4 34.0 37.1 41.8 12 Weighted-average interest rate (percent per annum) . 18.94 19.60 21.22 18.52 17.55 13 Interquartile range1 17.50-19.56 18.00-20.50 18.00-20.50 17.50-19.75 16.72-18.90 Percentage of amount of loans 14 With floating rate 56.3 48.0 3333..11 85.6 66.6 15 Made under commitment 54.1 36.3 27.2 69.5 71.2 CONSTRUCTION AND LAND DEVELOPMENT LOANS 16 Amount of loans (thousands of dollars) $1,420,394 $155,847 $192,683 $187,702 $425,106 $459,056 17 Number of loans 23,437 12,668 5.497 2,616 2,406 250 18 Weighted-average maturity (months) 9.9 7.6 9.9 5.7 11.5 11.1 19 Weighted-average interest rate (percent per annum) . 19.46 19.86 19.60 20.43 20.03 18.34 20 Interquartile range1 18.54-20.75 19.00-21.00 18.77-19.90 18.50-21.74 19.56-20.82 17.12-19.90 Percentage of amount of loans 21 With floating rate 55.3 17.6 2211..22 4455..22 48.5 92.8 22 Secured by real estate 82.4 95.9 98.5 98.9 78.9 67.5 23 Made under commitment 38.5 16.4 11.6 16.8 28.2 75.6 24 With no stated maturity 10.2 3.6 2.3 4.3 4.3 23.7 Type of construction 25 l-to4-family 45.8 79.6 55.2 63.4 57.3 12.6 26 Multifamily 5.0 1.2 1.6 2.8 3.7 9.8 27 Nonresidential 49.2 19.1 43.2 33.8 39.0 77.7 All 250 sizes 1-9 10-24 25^(9 50-99 100-249 and over 28 Amount of loans (thousands of dollars) $1,260,648 $156,504 $179,965 $197,569 $162,025 $301,038 $263,546 29 Number of loans 64,345 41,247 12,442 5,909 2,448 1.919 380 30 Weighted-average maturity (months) 5.8 5.8 7.3 5.5 5.7 5.6 4.9 31 Weighted-average interest rate (percent per annum) . 18.76 18.52 18.79 18.59 18.40 19.04 18.93 32 Interquartile range1 17.72-19.56 17.72-19.44 17.72-19.54 17.72-19.36 17.72-19.06 18.10-20.12 18.00-20.15 By purpose of loan 3 3 4 3 O Fe th ed er e r l i l v iv es e t s o to ck ck 1 1 8 8 . . 6 5 6 0 1 1 8 8 . . 2 5 3 6 1 1 9 8 . . 5 1 0 9 1 18 8 . . 3 7 5 7 1 11 8 88 . .. 0 44 5 11 18.1 ( 4 2) 1199..11 ( 00 2) 3 3 6 5 F O a t r h m er m cu ac rr h e i n n t e r o y p e a r n a d t i e n q g u e ip x m pe e n n s t e s 1 1 8 8 . . 1 8 1 8 1 1 8 8 . . 0 6 0 7 1 1 7 9 . . 9 0 4 4 1 1 7 8 . . 9 7 8 4 18. ( 472) 19.2 ( 0 2) 19.1 ( 1 2) 37 Other 18.87 18.68 19.13 19.31 18.28 19.03 18.63 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 All 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 1982 1982, week ending IInnssttrruummeenntt 11997799 11998800 11998811 Nov. Dec. Jan. Feb. Jan 29 Feb. 5 Feb. 12 Feb. 19 Feb. 26 MONEY MARKET RATES 1 Federal funds1,2 11.19 13.36 16.38 13.31 12.37 13.22 14.78 13.98 14.77 15.19 15.61 13.86 Commercial paper3,4 2 1-month 10.86 12.76 15.69 12.35 12.16 12.90 14.62 13.64 14.85 15.04 15.28 13.54 3 3-month 10.97 12.66 15.32 12.16 12.12 13.09 14.53 13.83 14.70 14.92 15.15 13.55 4 6-month 10.91 12.29 14.76 11.96 12.14 13.35 14.27 13.87 14.49 14.60 14.72 13.43 Finance paper, directly placed3,4 5 1-month 10.78 12.44 15.30 12.13 11.89 12.67 14.41 13.43 14.54 14.90 15.02 13.41 6 3-month 10.47 11.49 14.08 11.80 11.31 12.56 13.59 13.11 13.60 13.84 13.97 13.08 7 6-month 10.25 11.28 13.73 11.72 11.24 12.56 13.58 13.11 13.56 13.80 13.97 13.12 Bankers acceptances4,5 8 3-month 11.04 12.78 15.32 12.00 12.13 13.06 14.47 13.68 14.63 14.88 14.96 13.59 9 6-month n.a. n.a. 14.66 11.84 12.27 13.31 14.09 13.57 14.22 14.48 14.48 13.35 Certificates of deposit, secondary market6 10 1-month 11.03 12.91 15.91 12.45 12.27 13.03 14.78 13.80 14.88 15.14 15.52 13.81 11 3-month 11.22 13.07 15.91 12.48 12.49 13.51 15.00 14.24 15.11 15.40 15.66 14.03 12 6-month 11.44 12.99 15.77 12.65 13.07 14.25 15.12 14.58 15.19 15.50 15.69 14.29 13 Eurodollar deposits, 3-month2 11.96 14.00 16.79 13.33 13.24 14.29 15.75 15.10 15.24 15.86 16.53 15.30 U.S. Treasury bills4 Secondary market7 14 3-month 10.07 11.43 14.03 10.86 10.85 12.28 13.48 12.79 13.68 14.12 14.06 12.31 15 6-month 10.06 11.37 13.80 11.30 11.52 12.83 13.61 12.96 13.72 14.01 14.04 12.84 16 1-year 9.75 10.89 13.14 11.20 11.57 12.77 13.11 12.78 13.19 13.43 13.37 12.56 Auction average8 17 3-month 10.041 11.506 14.077 11.269 10.926 12.412 13.780 13.364 13.850 14.099 14.740 12.430 18 6-month 10.017 11.374 13.811 11.530 11.471 12.930 13.709 13.530 13.846 13.933 14.360 12.695 1199 99..881177 1100..774488 1133..115599 1144..007777 1111..550044 1133..114433 1133..118800 1133..114433 1133..118800 CAPITAL MARKET RATES U.S. Treasury notes and bonds9 Constant maturities10 20 1-year 10.67 12.05 14.78 12.41 12.85 14.32 14.73 14.37 14.85 15.11 15.03 14.08 21 2-year 10.12 11.77 14.56 12.88 13.29 14.57 14.82 14.55 14.93 15.10 15.04 14.32 ?? 2-'/2-year11 14.55 15 05 14 30 23 3-year 9.71 11.55 14.44 13.11 13.66 14.64 14.73 14.57 14.84 15.05 14.88 14.26 24 5-year 9.52 11.48 14.24 13.38 13.60 14.65 14.54 14.52 14.73 14.91 14.58 14.02 25 7-year 9.48 11.43 14.06 13.42 13.62 14.67 14.46 14.48 14.66 14.87 14.42 13.97 26 10-year 9.44 11.46 13.91 13.39 13.72 14.59 14.43 14.42 14.63 14.84 14.39 13.92 27 20-year 9.33 11.39 13.72 13.56 13.73 14.57 14.48 14.37 14.67 14.95 14.44 13.96 28 30-year 9.29 11.30 13.44 13.35 13.45 14.22 14.22 14.09 14.39 14.68 14.18 13.71 Composite12 29 Over 10 years (long-term) 8.74 10.81 12.87 12.68 12.88 13.73 13.63 13.57 13.83 14.05 13.58 13.13 State and local notes and bonds Moody's series13 30 Aaa 5.92 7.85 10.43 10.98 11.70 12.30 12.20 12.20 12.20 12.20 12.20 12.20 31 BBaaaa 6.73 9.01 11.76 12.69 13.30 13.95 13.83 13.80 13.90 13.80 13.80 13.80 32 BBoonndd BBuuyyeerr sseerriieess1144 6.52 8.59 11.33 11.89 12.91r 13.28 12.97 13.15 13.13 13.09 12.96 12.70 Corporate bonds Seasoned issues15 33 All industries 10.12 12.75 15.06 15.35 15.38 16.05 16.13 16.14 16.15 16.24 16.23 15.92 34 Aaa 9.63 11.94 14.17 14.22 14.23 15.18 15.27 15.27 15.34 15.49 15.34 14.92 35 Aa 9.94 12.50 14.75 14.97 15.00 15.75 15.72 15.84 15.83 15.80 15.77 15.49 36 A 10.20 12.89 15.29 15.82 15.75 16.19 16.35 16.27 16.27 16.40 16.51 16.26 37 Baa 10.69 13.67 16.04 16.39 16.55 17.10 17.18 17.17 17.18 17.28 17.29 1166..9988 Aaa utility bonds16 38 10.03 12.74 15.56 15.56 15.20 15.68 15.93 15.68 16.56 15 30 39 Recently offered issues 10.02 12.70 15.56 15.49 15.18 15.88 15.97 15.59 15.97 16.34 16.00 15.57 MEMO: Dividend/price ratio17 40 Preferred stocks 9.07 10.57 n.a. 12.76 12.83 13.19 13.20 13.13 13.12 13.32 13.23 13.14 41 Common stocks 5.46 5.25 n.a. 5.54 5.57 5.95 6.06 5.98 5.95 6.05 6.10 6.12 1. Weekly and monthly figures are averages of all calendar days, where the 11. Each weekly figure is calculated on a biweekly basis and is the average of rate for a weekend or holiday is taken to be the rate prevailing on the preceding five business days ending on the Monday following the calendar week. The biweekly business day. The daily rate is the average of the rates on a given day weighted rate is used to determine the maximum interest rate payable in the following twoby the volume 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 of yields (to maturity or call) for all outstanding notes ending Wednesday. and bonds neither due nor callable in less than 10 years, including several very low 3. Unweighted average of offering rates quoted by at least five dealers (in the yielding "flower" bonds. case of commercial paper), or finance companies (in the case of finance paper). 13. General obligations only, based on figures for Thursday, from Moody's Before November 1979, maturities for data shown are 30-59 days, 90-119 days, Investors Service. and 120-179 days for commercial paper; and 30-59 days, 90-119 days, and 150- 14. General obligations only, with 20 years to maturity, issued by 20 state and 179 days for finance paper. local governmental units of mixed quality. Based on figures for Thursday. 4. Yields are quoted on a bank-discount basis, rather than an investment yield 15. Daily figures from Moody's Investors Service. Based on yields to maturity basis (which would give a higher figure). on selected long-term bonds. 5. Dealer closing offered rates for top-rated banks. Most representative rate 16. Compilation of the Federal Reserve. Issues included are long-term (20 years (which may be, but need not be, the average of the rates quoted by the dealers). or more). New-issue yields are based on quotations on date of offering; those on 6. Unweighted average of offered rates quoted by at least five dealers early in recently offered issues (included only for first 4 weeks after termination of underthe day. writer price restrictions), on Friday close-of-business quotations. 7. Unweighted average of closing bid rates quoted by at least five dealers. 17. Standard and Poor's corporate series. Preferred stock ratio based on a sample 8. Rates are recorded in the week in which bills are issued. of ten issues: four public utilities, four industrials, one financial, and one trans- 9. Yields are based on closing bid prices quoted by at least five dealers. portation. Common stock ratios on the 500 stocks in the price index. 10. Yields adjusted to constant maturities by the U.S. Treasury. That is, yields are read from a yield curve at fixed maturities. Based on only recently issued, actively traded securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • March 1982 1.36 STOCK MARKET Selected Statistics 1981 1982 IInnddiiccaattoorr 11997799 11998800 11998811 July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 55.67 68.06 74.02 74.98 75.24 68.37 69.40 71.49 71.81 67.91 66.16 2 Industrial 61.82 78.64 85.44 86.64 86.72 78.07 78.94 80.86 81.70 76.85 74.78 3 Transportation 45.20 60.52 72.61 74.42 73.27 63.67 65.65 67.68 68.27 62.04 59.09 4 Utility 36.46 37.35 38.90 38.90 40.22 38.17 38.87 40.73 40.22 39.30 38.32 5 Finance 58.65 64.28 73.52 74.97 73.76 69.38 72.58 76.47 74.74 70.99 70.50 6 Standard & Poor's Corporation (1941-43 = 10)1 107.94 118.71 128.05 129.13 129.63 118.27 119.84 122.92 123.79 117.41 114.50 7 American Stock Exchange (Aug. 31, 1973 = 100) 186.56 300.94 343.50 364.33 364.60 313.60 308.81 321.0 321.84 296.49 275.10 Volume of trading (thousands of shares) 8 New York Stock Exchange 32,233 44,867 47,237 43,930 44,489 46,042 46,233 50,791 43,596 48,723 51,169 9 American Stock Exchange 4,182 6,377 5,346 4,374 5,137 5,556 4,233 5,257 4,992 4,497 4,400 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers-dealers2 11,619 14,721 14,321 15,134 14,545 13,973 13,866 14,044 14,321 13,441r 11 Margin stock3 11,450 14,500 14,060 14,870 14,270 13,710 13,600 13,780 14,060 13,190r 12 Convertible bonds 167 219 259 263 274 263 263 261 259 259 2 2 2 11 11 3 3 2 2 nn aa.. Free credit balances at brokers4 14 Margin-account 1,105 2,105 3,515 2,670 2,645 2,940 2,990 3,290 3,515 3,455 15 Cash-account 4,060 6,070 7,150 6,470 6,640 6,555 6,100 6,865 7,150 6,580 Margin-account debt at brokers (percentage distribution, end of period) 16 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 By equity class (in percent)5 17 Under 40 16.0 14.0 37.0 25.0 38.5 47.0 32.0 30.0 37.0 37.0 18 40-49 29.0 30.0 21.0 29.0 24.0 22.0 28.0 25.0 24.0r 24.0 n.a. 19 50-59 27.0 25.0 20.0 22.0 15.0 13.0 18.0 21.0 17.0r 16.0 20 60-69 14.0 14.0 10.0 11.0 10.0 8.0 10.0 11.0 10.0 10.0 21 70-79 8.0 9.0 6.0 7.0 6.0 5.0 6.0 6.0 6.0 7.0 22 80 or more 7.0 8.0 6.0 6.0 6.0 5.0 6.0 7.0 6.0 6.0 Special miscellaneous-account balances at brokers (end of period) t 23 Total balances (millions of dollars)* 16,150 21,690 25,870 24,460 24,760 25,234 24,962 25,409 25,870 26,080 Distribution by equity status (percent) 24 Net credit status 44.2 47.8 58.0 53.8 53.5 55.0 55.0 57.0 58.0 58.0 n.a. Debt status, equity of 1 25 60 percent or more 47.0 44.4 3111..00 37.9 37.0 33.0 35.0 33.0 3111..00 3111..00 \ 26 Less than 60 percent 8.8 7.7 8.3 9.5 12.0 10.0 10.0 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 proeguity instruments and secured at least in part by stock. Credit extended is end- ceeds) occur. ot-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

Financial Institutions A29 1.37 SELECTED FINANCIAL INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1981 1982 Account 1979 1980 Apr.T Mayr Juner Julyr Aug.r Sept.' Oct.T Nov.' Dec. Jan.? Savings and loan associations 1 Assets 578,962 629,829 639,770 645,586 647,704 649,807 653,022 655,658 659,073 660,326 663,844 667,118 2 Mortgages 475,688 502,812 509,942 512,183 515,256 511,990 518,172 518,778 519,248 519,146 518,350 517,457 3 Cash and investment securities1 46,341 57,572 57,242 59,418 57,980 57,817 58,932 59,530 61,517 61,369 62,756 63,812 4 Other 56,933 69,445 72,586 73,985 74,468 75,000 75,918 77,350 78,308 79,811 82,738 85,849 5 Liabilities and net worth 578,962 629,829 639,770 645,586 647,704 649,807 653,022 655,658 659,073 660,326 663,844 667,118 6 Savings capital 470,004 510,959 516,782 518,351 518,359 514,805 513,438 515,649 519,288 519,777 524,374 526,173 7 Borrowed money 55,232 64,491 67,818 70,153 74,875 79,704 83,456 87,477 86,108 86,255 89,097 89 140 8 FHLBB 40,441 47,045 49,607 51,064 53,836 57,188 60,025 61,857 62,000 61,922 62,794 62,899 9 Other 14,791 16,309 18,211 19,089 21,039 22,516 23,431 25,620 24,108 24,333 26,303 26,241 10 Loans in process 9,582 8,120 7,816 7.973 7,985 7,741 7,354 7,040 6,757 6,451 6,369 6,219 11 Other 11,506 12,227 15,085 17,243 14,933 16,556 18,275 15,307 17,506 19,101 15,612 18,069 12 Net worth2 32,638 33,319 32,269 31,866 31,552 31,001 30,499 30,185 29,414 28,742 28,392 27,517 13 MEMO: Mortgage loan commitments outstanding3 16,007 16,102 18,573 18,761 18,037 17,235 16,689 16,012 15,733 15,758 15,225 15,615 Mutual savings banks4 14 Assets 163,405 171,564 172,837 173,776 174,387 174,578 174,761 175,234 175,693 175,258 175,612 Loans 15 Mortgage 98,908 99,865 99,798 99,790 99,993 100,095 99,987 99,944 99,903 99,879 100,015 16 Other 9,253 11,733 12,756 13,375 14,403 14,359 14,560 14,868 14,725 15,073 14,740 Securities 17 U.S. government5 7,658 8,949 9,262 9,296 9,230 9,361 9,369 9,594 9,765 9,508 9,861 18 State and local government 2,930 2,390 2,314 2,328 2,337 2,291 2,326 2,323 2,394 2,271 2,274 19 Corporate and other6 37,086 39,282 39,247 39,111 38,418 38,374 38,180 38,118 38,108 37,874 37,674 20 Cash 3,156 4,334 4,172 4,513 4,473 4,629 4,791 4,810 5,118 5,039 5,415 21 Other assets 4,412 5,011 5,288 5,364 5,534 5,469 5,547 5,577 5,681 5,615 5,632 22 Liabilities 163,405 171,564 172,837 173,776 174,387 174,578 174,761 175,234 175,693 175,258 175,612 n. a. 23 Deposits 146,006 154,805 153,692 153,891 154,926 153,757 153,120 153,412 154,066 153,809 154,913 24 Regular7 144,070 151,416 151,429 151,658 152,603 151,394 150,753 151,072 151,975 151,787 152,834 25 Ordinary savings 61,123 53,971 52,331 51,212 51,594 50,593 49,003 49,254 48,238 48,456 49,409 26 Time and other 82,947 97,445 99,098 100,447 101,009 100,800 101,750 101,818 103,737 126,889 126,334 27 Other 1,936 2,086 2,264 2,232 2,323 28,494 27,073 25,769 24,806 2,023 2,079 28 Other liabilities 5,873 6,695 8,103 8,922 8,634 10,156 11,125 11,458 11,513 11,434 10,731 29 General reserve accounts 11,525 11,368 11,042 10,923 10,827 10,665 10,516 10,364 10,114 10,015 9,969 30 MEMO: Mortgage loan commitments outstanding8 3,182 1,476 1,614 1,709 1,577 1,401 1,333 1,218 1,140 1,207 1,293 Life insurance companies 31 Assets 432,282 479,210 493,185 497,276 500,316 503,994 506,585 509,478 515,079 519,281 521,354 Securities 32 Government 0,338 21,378 22,603 22,948 23,415 23,691 23,949 24,280 24,621 25,200 25,310 33 United States9 4,888 5,345 6,502 6,787 7,119 7,359 7,544 7,670 7,846 8,321 8,578 34 State and local 6,428 6,701 6,809 6,815 6,876 6,865 6,904 7,033 7,129 7,148 6,968 35 Foreign10 9,022 9,332 9,292 9,346 9,420 9,467 9,501 9,577 9,646 9,731 9,764 36 Business 222,332 238,113 245,841 247,437 248,737 250,186 250,371 250,315 253,976 255,632 254,978 n. a. 37 Bonds 178,371 190,747 198,397 199,818 201,402 203,016 204,501 205,908 208,004 209,194 208,587 38 Stocks 39,757 47,366 47,444 47,619 47,335 41,170 45,870 44,407 45,972 46,438 46,391 39 Mortgages 118,421 131,080 133,896 134,492 135,318 135,928 136,516 136,982 137,736 138,433 139,046 40 Real estate 13,007 15,033 16,464 16,738 16,966 17,429 17,626 17,801 18,382 18,629 19,157 41 Policy loans 34,825 41,411 43,772 44,292 44,970 45,591 46,252 47,042 47,731 48,275 48,741 42 Other assets 27,563 31,702 30,609 31,369 30,910 31,169 31,971 33,058 32,633 33,112 34,122 Credit unions 43 Total assets/liabilities and capital 65,854 71,709 74,442 75,278 75,781 76,043 75,656 76,145 76,123 76,830 77,682 78,012 44 Federal 35,934 39,801 40,626 41,105 41,443 41,678 41,394 41,682 41,727 42,025 42,382 42,512 45 State 29,920 31,908 33,816 34,173 34,338 34,365 34,262 34,463 34,396 34,805 35,300 35,500 46 Loans outstanding 53,125 47,774 49.186 49,697 50,271 50,724 51,207 51,407 51,029 50,631 50,448 49,949 47 Federal 28,698 25,627 26.410 26,744 27,133 27,378 27,701 27,871 27,686 27,508 27,458 27,204 48 State 24,426 22,147 22,776 22,953 23,138 23,346 23,506 23,536 23,343 23,123 22,990 22,745 49 Savings 56,232 64,399 67,160 67,740 68,317 67,690 66,943 67,512 67,625 67,981 68,871 69,432 50 Federal (shares) 35,530 36,348 36,882 37,241 37,618 37,176 36,713 36,928 37,015 37,261 37,574 37,875 51 State (shares and deposits) 25,702 28,051 30,278 30,499 30,699 30,514 30,230 30,584 30,610 30,720 31,297 31,557 For notes see bottom of page A30. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • March 1982 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFiissccaall FFiissccaall FFiissccaall Type of account or operation yyeeaarr yyeeaarr yyeeaarr 11997799 11998800 11998811 1980 1981 1981 1982 H2 HI H2 Nov. Dec. Jan. U.S. budget 1 Receipts' 463,302 517,112 599,272 260,569' 317,304' 301,777' 44,018' 56,825' 55,269 2 Outlays1-2 490,997 576,675 657,204 309,389' 333,115r 358,558' 54,660' 76,293' 45,930 3 Surplus, or deficit (-) -27,694 -59,563 -57,932 -48,821 -15,811 -56,780 -10,642 -19,468 9,339 4 Trust funds 18,335 8,791 7,168 -2,551 5,797 -8,085 -2,352 -7,675 10,799 5 Federal funds3 -46,069 -67,752 -65,099 -46,306 -21,608 -48,697 -8,290 -11,793 -1,460 OOffff--bbuuddggeett eennttiittiieess ((ssuurrpplluuss,, oorr ddeeffiicciitt ((--)))) 66 FFeeddeerraall FFiinnaanncciinngg BBaannkk oouuttllaayyss -13,261 -14,549 -20,769 -7,552 -11,046 -8,728 -1,189 -727 -1,241 77 OOtthheerr44--55 793 303 -236 376 -900 -1,752 -691 -320 11 U.S. budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (-) -40,162 -73,808 -78,936 -55,998 -27,757 -67,260 -12,522 -20,516 8,109 Source or financing 9 Borrowing from the public 33,641 70,515 79,329 54,764 33,213 54,081 10,972 14,274 9,783 10 Cash and monetary assets (decrease, or increase (—)) -408 -355 -1,878 -6,730 2,873 -1,111 8,129 -3,889 -13,371 11 Other7 6,929 3,648 1,485 7,964 -8,328 14,290 -6,579 10,131 -4,521 MEMO: 12 Treasury operating balance (level, end of period) 24,176 20,990 18,670 12,305 16,389 12,046 7,796 12,046 24,710 13 Federal Reserve Banks 6,489 4,102 3,520 3,062 2,923 4,301 3,475 4,301 8,285 14 Tax and loan accounts 17,687 16,888 15,150 9,243 13,466 7,745 4,321 7,745 16,425 1. The Budget of the U.S. Government, Fiscal Year 1983, has reclassified sup- 6. Includes U.S. Treasury operating cash accounts; special drawing rights; gold plemental medical insurance premiums and voluntary hospital insurance premiums, tranche drawing rights; loans to International Monetary Fund; and other cash and previously included in other social insurance receipts, as offsetting receipts in the monetary assets. health function. 7. Includes accrued interest payable to the public; allocations of special drawing 2. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was re- rights; deposit funds; miscellaneous liability (including checks outstanding) and classified from an off-budget agency to an on-budget agency in the Department of asset accounts; seigniorage; increment on gold; net gain/loss for U.S. currency Labor. valuation adjustment; net gain/loss for IMF valuation adjustment; and profit on 3. Half-year figures are calculated as a residual (total surplus/deficit less trust the sale of gold. fund surplus/deficit). 4. Includes Postal Service Fund; Rural Electrification and Telephone Revolving SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. Fund; and Rural Telephone Bank. Government," Treasury Bulletin, and the Budget of the United States Government, 5. Other off-budget includes petroleum acquisition and transportation, strategic Fiscal Year 1983. petroleum reserve effective November 1981. 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 Inassets." 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. Before 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. Be- Life insurance companies: Estimates of the American Council of Life Insurance fore 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, before 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 A31 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year FFFiiissscccaaalll FFFiiissscccaaalll FFFiiissscccaaalll SSSooouuurrrccceee ooorrr tttyyypppeee yyyeeeaaarrr yyyeeeaaarrr yyyeeeaaarrr 111999777999 111999888000 111999888111 1980 1981 1981 H2 HI H2 Nov. Dec. Jan. RECEIPTS 1 All sources' 463,302 517,112 599,272 260,569' 317,304 301,777' 44,018' 56,825 55,269 7 Individual income taxes, net 217,841 244,069 285,917 131,962 142,889 147,035 21,775 25,770 32,646 3 Withheld 195,295 223,763 256,332 120,924 126,101 134,199 21,387 24,590 20,810 4 Presidential Election Campaign Fund... 36 39 41 4 36 5 0 0 0 Non withheld 56,215 63,746 76,844 14,592 59,907 17,391 846 1,602 12,000 6 Refunds 33,705 43,479 47,299 3,559 43,155 4,559 458 423 163 Corporation income taxes 7 Gross receipts 71,448 72,380 73,733 28,579 44,048 31,056 1,877 1111,,008877 33,,221122 8 Refunds 5,771 7,780 12,596 4,518 6,565 6,847 1,133 867 738 9 Social insurance taxes and contributions. net 138,939 157.803 182,720 75,679' 101,316r 91,592' 15,496' 14,059 14,575 10 Payroll employment taxes and contributions2 115,041 133,042 156,953 66,831 83,851 82,984 13,610 13,504 13,085 11 Self-employment taxes and contributions3 5,034 5,723 6,041 188 6,240 244 0 0 530 12 Unemployment insurance 15,387 15,336 16,129 6,742 9,205 6,355 1,563 221 604 13 Other net receipts1-4 3,477 3,702 3,598 l,919r 2,02c 2,009' 323' 335 357 14 Excise taxes 18,745 24,329 40,839 15,332 21,945 22,097 3,334 3,633 3,087 IS Customs deposits 7,439 7,174 8,083 3,717 3,926 4,661 729 823 696 16 Estate and gift taxes 5,411 6,389 6,787 3,499 3,259 3,742 598 642 615 17 Miscellaneous receipts5 9,252 12,748 13,790 6,318 6,487 8,441 1,341 1,679 1,176 OUTLAYS 18 All types1,6 490,997 576,675 657,204 309,389' 333,115' 358,558' 54,660 76,293 45,930 19 National defense 117,681 135,856 159,765 72,457 80,005 87,421 14,205 16,258 14,131 70 International affairs 6,091 10,733 11,130 5,430 5,999 4,655 745 830 759 21 General science, space, and technology ... 5,041 5,722 6,359 3,205 3,314 3,388 592 613 496 77 Energy 6,856 6,313 10,277 3,997 5,677 4,394 173 399 383 73 Natural resources and environment 12,091 13,812 13,525 7,722 6,476 7,296 955 1,289 933 24 Agriculture 6,238 4,762 5,572 1,892 3,101 5,181 1,637 2,681 2,701 7,5 Commerce and housing credit 2,579 7,788 3,946 3,163 2,047' 1,825 -243 1,051 849 76 Transportation 17,459 21,120 23,381 11,547 11,991 10,753 1,559 1,871 1,465 27 Community and regional development 9,542 10,068 9,394 5,370 4,621 4,269 707 688 591 28 Education, training, employment, social services 29,685 30,767 31,402 15,221 1155,,992288 1133,,887788 22,,227744 22,,224455 22,,116600 79 Health1 46,962 55,220 65,982 29,680 33,113 35,322 5,874 5,839 5,711 30 Income security6 160,159 193,100 225,099 107,912 113,490 129,269 18,462 33,175 7,370 31 Veterans benefits and services 19,928 21,183 22,988 11,731 10,531 12,880 854 3,217 763 37 Administration of justice 4,153 4,570 4,698 2,299 2,344 2,290 371 352 340 33 General government 4,093 4,505 4,614 2,432 2,692 2,311 339 384 210 34 General-purpose fiscal assistance 8,372 8,584 6,856 4,191 3,015 3,043 259 28 1,451 35 52,566 64,504 82,537 35,909 41,178 47,667 7,869 13,081 6,634 36 Undistributed offsetting receipts7 -18,488 -21,933 -30,320 -14,769 -12,432 -17,281 -1,973 -7,710 -1,017 1. The Budget of the U.S. Government, Fiscal Year 1983 has reclassified sup- classified from an off-budget agency to an on-budget agency in the Department of plemental medical insurance premiums and voluntary hospital insurance premiums, Labor. previously included in other social insurance receipts, as offsetting receipts in the 7. Consists of interest received by trust funds, rents and royalties on the Outer health function. Continental Shelf, and U.S. government contributions for employee retirement. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. 3. Old-age, disability, and hospital insurance. SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. 4. Supplementary medical insurance premiums, federal employee retirement Government" and the Budget of the U.S. Government, Fiscal Year 1983. contributions, and Civil Service retirement and disability fund. 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. 6. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was re- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic NonfinancialS tatistics • March 1982 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1979 1980 1981 IItteemm Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstanding 852.2 870.4 884.4 914.3 936.7 970.9 977.4 1,003.9 1,034.7 2 Public debt securities 845.1 863.5 877.6 907.7 930.2 964.5 971.2 997.9 1,028.7 3 Held by public 658.0 677.1 682.7 710.0 737.7 773.7 771.3 789.8 825.5 4 Held by agencies 187.1 186.3 194.9 197.7 192.5 190.9 199.9 208.1 203.2 5 Agency securities 7.1 7.0 6.8 6.6 6.5 6.4 6.2 6.1 6.0 6 Held by public 5.6 5.5 5.3 5.1 5.0 4.9 4.7 4.6 4.6 7 Held by agencies 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.4 8 Debt subject to statutory limit 846.2 864.5 878.7 908.7 931.2 965.5 972.2 998.8 1,039.3 9 Public debt securities 844.5 862.8 877.0 907.1 929.6 963.9 970.6 997.2 1,037.7 10 Other debt1 1.7 1.7 1.7 1.6 1.6 1.6 1.6 1.6 1.6 11 MEMO: Statutory debt limit 879.0 879.0 925.0 925.0 935.1 985.0 985.0 999.8 1,079.8 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 1981 1982 TTyyppee aanndd hhoollddeerr 11997777 11997788 11997799 11998800 Oct. Nov. Dec. Jan. Feb. 1 Total gross public debt 718.9 789.2 845.1 930.2 1,005.0 1,013.3 1,028.7 1,038.4 1,048.2 By type 7 Interest-bearing debt 715.2 782.4 844.0 928.9 999.5 1,011.9 1,027.3 1,032.7 1,042.2 3 Marketable 459.9 487.5 530.7 623.2 689.6 704.8 720.3 726.5 737.5 4 Bills 161.1 161.7 172.6 216.1 229.1 233.9 245.0 250.6 254.0 5 Notes 251.8 265.8 283.4 321.6 362.6 370.8 375.3 374.4 382.1 6 Bonds 47.0 60.0 74.7 85.4 97.9 100.1 99.9 101.6 101.4 7 Nonmarketable1 255.3 294.8 313.2 305.7 309.9 307.1 307.0 306.1 304.7 8 2.2 2.2 2.2 9 State and local government series 13.9 24.3 24.6 23.8 23.1 23.0 23.0 22.7 22.7 10 Foreign issues3 22.2 29.6 28.8 24.0 20.5 20.3 19.0 18.9 18.4 11 Government 21.0 28.0 23.6 17.6 15.5 15.3 14.9 14.8 14.3 17. Public 1.2 1.6 5.3 6.4 5.0 5.0 4.1 4.1 4.1 13 Savings bonds and notes 77.0 80.9 79.9 72.5 68.0 68.0 68.1 67.8 67.6 14 Government account series4 139.8 157.5 177.5 185.1 198.1 195.5 196.7 196.4 195.7 15 Non-interest-bearing debt 3.7 6.8 1.2 1.3 5.6 1.4 1.4 5.7 6.0 By holder5 16 U.S. government agencies and trust funds 154.8 170.0 187.1 192.5 204.9 202.1 203.3 17 Federal Reserve Banks 102.8 109.6 117.5 121.3 122.4 126.5 131.0 18 Private investors 461.3 508.6 540.5 616.4 677.2 684.6 694.5 19 Commercial banks 101.4 93.2 96.4 116.0 111.3 110.0 109.4 20 Mutual savings banks 5.9 5.0 4.7 5.4 5.5 5.2 5.2 21 Insurance companies 15.1 15.7 16.7 20.1 19.2 19.4 19.1 n a. n a. 22 Other companies 20.5 19.6 22.9 25.7 38.6 38.3 37.8 23 State and local governments 55.2 64.4 69.9 78.8 88.3 87.5 85.6 Individuals 24 Savings bonds 76.7 80.7 79.9 72.5 68.0 68.1 68.0' 75 Other securities 28.6 30.3 36.2 56.7 73.0 73.6 75.6 26 Foreign and international6 109.6 137.8 124.4 127.7 135.3 138.3 141.4 27 Other miscellaneous investors7 49.7 58.9 90.1 106.9 138.0 144.3 152.3 1. Includes (not shown separately): Securities issued to the Rural Electrification 5. Data for Federal Reserve Banks and U.S. government agencies and trust Administration, depository bonds, retirement plan bonds, and individual retire- funds are actual holdings; data for other groups are Treasury estimates. ment bonds. 6. Consists of investments of foreign balances and international accounts in the 2. These nonmarketable bonds, also known as Investment Series B Bonds, may United States. be exchanged (or converted) at the owner's option for IV2 percent, 5-year mar- 7. Includes savings and loan associations, nonprofit institutions, corporate penketable Treasury notes. Convertible bonds that have been so exchanged are re- sion trust funds, dealers and brokers, certain government deposit accounts, and moved from this category and recorded in the notes category (line 5). government sponsored agencies. 3. Nonmarketable dollar-denominated and foreign currency-denominated series held by foreigners. NOTE. Gross public debt excludes guaranteed agency securities. 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 States (U.S. Treasury Department); data by holder from Treasury Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A33 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 11997799 11998800 Nov. Dec. Nov. Dec. All maturities 1 to 5 years 1 AH holders 530,731 623,186 704,819 720,293 89,578 197,409 227,886 228,550 2 U.S. government agencies and trust funds 11,047 9,564 8,745 8,669 2,555 1,990 1,906 1,906 3 Federal Reserve Banks 117,458 121,328 126,539 130,954 8,469 35,835 36,410 38,223 4 Private investors 402,226 492,294 569,534 580,671 133,173 159,585 189,570 188,422 5 Commercial banks 69,076 77,868 76,348 74,618 38,346 44,482 39,741 39,021 6 Mutual savings banks 3,204 3,917 3,847 3,971 1,668 1,925 1,814 1,870 7 Insurance companies 11,496 11,930 12,538 12,090 4,518 4,504 5,527 5,596 8 Nonfinancial corporations 8,433 7,758 5,497 4,214 2,844 2,203 1,212 1,146 9 Savings and loan associations 3,209 4,225 3,913 4,122 1.763 2,289 2,302 2,260 10 State and local governments 15,735 21.058 24,263 18,991 3,487 4,595 4,518 4,278 11 All others 291,072 365,539 444,001 462,663 80,546 99,577 134,455 134,251 Total, within 1 year 5 to 10 years 12 AH holders 255,252 297,385 328,572 340,082 50,440 56,037 60,112 63,483 13 U.S. government agencies and trust funds 1,629 830 648 647 871 1,404 824 779 14 Federal Reserve Banks 63,219 56,858 61.761 64,113 12,977 13,458 11,673 11,854 15 Private investors 190,403 239.697 266.163 275,322 36,592 41,175 47,615 50,851 16 Commercial banks 20,171 25,197 27,708 29,480 8,086 5,793 4,505 4,496 17 Mutual savings banks 836 1,246 1,439 1,569 459 455 229 238 18 Insurance companies 2,016 1,940 2,132 2,201 2,815 3,037 2,464 2,507 19 Nonfinancial corporations 4,933 4,281 2,436 2,421 308 357 298 344 20 Savings and loan associations 1,301 1,646 1,509 1,731 69 216 32 98 21 State and local governments 5,607 7,750 8.789 7,536 1,540 2,030 2,724 2,365 22 All others 155,539 197,636 222.150 230,383 24,314 29,287 37,365 40,804 Bills, within 1 year 10 to 20 years 23 All holders 172,644 216,104 233,905 245,015 27,588 36,854 43,062 44,744 24 U.S. government agencies and trust funds 0 1 1 » 4,520 3,686 4,027 3,996 25 Federal Reserve Banks 45,337 43,971 47,661 49,679 3,272 5,919 6,580 6,692 26 Private investors 127,306 172,132 186,243 195,335 19,796 27,250 32,455 34,055 27 Commercial banks 5,938 9,856 8,083 9,667 993 1,071 1,324 873 28 Mutual savings banks 262 394 340 423 127 181 197 151 29 Insurance companies 473 672 673 760 1,305 1,718 1,548 1,119 30 Nonfinancial corporations 2,793 2,363 1,059 1,173 218 431 801 131 31 Savings and loan associations 219 818 203 363 58 52 37 16 32 State and local governments 3,100 5,413 6,124 5,126 1,762 3,597 4,724 2,824 33 All others 114,522 152,616 169,760 177,824 15,332 20,200 23,824 28,940 Other, within 1 year Over 20 years 34 All holders 82,608 81,281 94,667 95,068 33,254 35,500 45,187 43,434 35 U.S. government agencies and trust funds. 1,629 829 647 647 1,472 1,656 1,340 1,340 36 Federal Reserve Banks 17,882 12,888 14,101 14,433 9,520 9,258 10,115 10,073 37 Private investors 63,097 67,565 79,920 79,987 22,262 24,587 33,731 32,020 38 Commercial banks 14,233 15,341 19.624 19,814 1,470 1,325 2,198 749 39 Mutual savings banks 574 852 1.099 1,146 113 110 168 144 40 Insurance companies 1,543 1,268 1.459 1,442 842 730 866 666 41 Nonfinancial corporations 2,140 1,918 1,377 1,248 130 476 750 172 42 Savings and loan associations 1,081 828 1,306 1,368 19 21 34 17 43 State and local governments 2,508 2,337 2,665 2,410 3,339 3,086 3,509 1,988 44 All others 41,017 45,020 52,389 52,560 16,340 18,838 26,208 28,285 NOTE. Direct public issues only. Based on Treasury Survey of Ownership from and 723 insurance companies, each about 80 percent; (2) 407 nonfinancial cor- Treasury Bulletin (U.S. Treasury Department). porations and 469 savings and loan associations, each about 50 percent; and (3) Data complete for U.S. government agencies and trust funds and Federal Reserve 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 Dec. 31,1981: (1) 5,317 commercialbanks, 452 mutual savings banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Nonfinancial Statistics • March 1982 1.43 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1981 1982 1981 and 1982, week ending Wednesday Item 1978 1979 1980 Nov. Dec. Jan. Jan. 13 Jan. 20 Jan. 27 Feb. 3 Feb. 10 Immediate delivery1 1 U.S. government securities .. 10,285 13,183 18,331 35,034 27,425 28,274 29,817 24,662 28,935 28,320 25,220 By maturity 2 Bills 6,173 7,915 11,413 18,862 16,599 13,998 18,028 15,806 18,671 16,602 13,135 3 Other within 1 year 392 454 421 1,137 986 680 722 505 523 613 514 4 1-5 years 1,889 2,417 3,330 7,713 5,354 4,749 4,177 4,099 5,742 6,403 4,777 5 5-10 years 965 1,121 1,464 3,534 2,265 2,578 4,373 2,208 1,858 2,200 2,712 6 Over 10 years 867 1,276 1,704 3,789 2,222 2,080 2,517 2,045 91 2,502 4,082 By type of customer 1 U.S. government securities dealers 1,135 1,448 1,484 2,040 1,908 1,371 1,619 1,545 1,587 1,450 1,257 8 U.S. government securities brokers 3,838 5,170 7,610 16,519 12,316 13,650 15,417 11,534 13,903 14,347 12,472 9 All others2 5,312 6,564 9,237 16,475 13,201 13,066 12,781 11,583 13,445 12,523 11,491 10 Federal agency securities ... 1,894 2,723 3,258 4,383 2,803 2,768 2,602 2,500 3,272 2,754 2,947 11 Certificates of deposit 1.292 1,764 2,472 6,380 4,781 4,249 4,759 3,609 4,458 4,361 3,209 12 Bankers acceptances 2.643 2,042 1.911 2,210 1,697 1,688 2,212 1,480 13 Commercial paper 7.512 6,782 7,573 6,834 7,852 7,329 8,131 6,627 Futures transactions3 14 Treasury bills 4,905 5.024 5,153 5,107 5,255 5,884 5,391 3,555 15 Treasury coupons 2,629 1,525 1,193 1,115 1,037 1,161 1,112 1,311 16 Federal agency securities ... n a. n a. n a. 260 218 194 163 172 226 271 161 17 Fo U rw .S a . r d g o tr v a e n r s n a m ct e i n o t n s s 4 e curities . I I 569 602 591 205 503 988 1,027 731 18 Federal agency securities ... 1,921 1,269 1,273 1,354 1,368 1,286 1,362 1,504 1. Before 1981, data for immediate transactions include forward transactions. date of the transaction for government securities (Treasury bills, notes, and bonds) 2. Includes, among others, all other dealers and brokers in commodities and or after 30 days for mortgage-backed agency issues. securities, nondealer departments of commercial banks, foreign banking agencies, NOTE. Averages for transactions are based on number of trading days in the and the Federal Reserve System. period. 3. Futures contracts are standardized agreements arranged on an organized ex- Transactions are market purchases and sales of U.S. government securities dealchange in which parties commit to purchase or sell securities for delivery at a future ers reporting to the Federal Reserve Bank of New York. The figures exclude date. allotments of, and exchanges for, new U.S. government securities, redemptions of 4. Forward transactions are agreements arranged in the over-the-counter market called or matured securities, purchases or sales of securities under repurchase in which securities are purchased (sold) for delivery after 5 business days from the agreement, reverse repurchase (resale), or similar contracts. 1.44 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing Averages of daily figures, in millions of dollars 1981 1982 1981 and 1982. week ending Wednesday IItteemm 11997788 11997799 11998800 Nov. Dec? Jan.P Dec. 30 Jan. 6 Jan. 13 Jan. 20 Jan. 27 Positions Net immediate1 1 U.S. government securities 2,656 3,223 4,306 8,592 4,111 5,457 5,423 9,523 5.934 3,142 4,852 2 Bills 2.452 3.813 4,103 4,920 2,308 3,507 3,536 7,242 3.732 1.728 2,895 3 Other within 1 year 260 -325 -1,062 -3,611 -3,915 -2,620 -3,048 -2,999 -2,703 -2,528 -2,466 4 1-5 years -92 -455 434 3,779 3,148 2,867 3,105 3,456 2,708 2,254 3,058 5 5-10 years 40 160 166 241 -80 -349 -380 -496 261 -174 -815 6 Over 10 years -4 30 665 3,264 2,650 1,993 2,210 2,320 1,937 1,863 1,916 7 Federal agency securities . 606 1,471 797 2,809 3,721 3,016 3,762 3,638 3,282 3,113 2,514 9 8 B C a e n rt k if e i r c s a t a e c s c e o p f ta d n e c p e o s s it 1 2,7 75 2 A ,79 4 3 i , 115 4 2, , 2 3 1 9 1 6 2 5 , , 5 0 8 8 7 6 3 2 , , 8 2 7 3 6 3 5 2 , , 8 3 3 6 7 8 5 2, , 3 1 9 5 8 4 4 2 , , 3 3 3 2 4 4 3 2, , 3 3 6 6 5 2 3 1 , , 1 9 3 8 9 7 10 Commercial paper t 3,273 3,254 2,577 3,293 2,823 2,612 2,624 2,289 11 Fu T tu r r e e a s p u o ry s it b i i o l n ls s 1 1 1 -7,318 -5,209 -6,565 -5,506 -6,152 -6,068 -6,871 -6,966 12 Treasury coupons n.a. n.a. n.a. -3,872 -3,626 -2,726 -3,134 -2,966 -2,592 -2,643 -2,642 13 Federal agency securities . 1 1 1 -197 -379 -64 -469 -437 -143 -46 63 14 Fo U rw .S a . r d g s o v p e o r s n it m io e n n s t securities t 1 1 t t 1 -443 -642 -461 -513 -397 -117 -546 -626 15 Federal agency securities . -1,045 -1,241 -1,226 -1.131 -1,156 -1,305 -1,404 -1,091 Financing2 Reverse repurchase agreements3 16 Overnight and continuing ... 20.711 25,185 25,006 26,474 27,118 23,946 26,195 17 Term agreements 44,981 51,003 47,632 53,624 46,898 47,494 47,583 Repurchase agreements4 18 Overnight and continuing ... 43,324 50,681 49,809 51,740 54,309 50,296 50,245 19 Term agreements 41,525 43,358 38,804 49,607 38,990 38,753 37,806 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A35 1.45 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period Agency 1979 1980 July Aug. Sept. 1 Federal and federally sponsored agencies' 137,063 163,290 193,229 213,690 218,362 223,393 226,010 226,269 2 Federal agencies 23,488 24,715 28,606 29,978 30,088 30,870 31,069 31,156 3 Defense Department2 968 738 610 536 526 516 514 490 4 Export-Import Bank3,4 8,711 9,191 11,250 12,401 12,385 12,855 12,845 12,829 5 Federal Housing Administration5 588 537 477 443 449 432 427 419 6 Government National Mortgage Association participation certificates" 3,141 2.979 2,817 2,715 2,715 2,715 2,715 2,715 7 Postal Service7 2,364 1,837 1,770 1,538 1,538 1,538 1,538 1,538 8 Tennessee Valley Authority 7,460 8,997 11,190 12,130 12,260 12,599 12,830 12,965 9 United States Railway Association7 356 436 492 215 215 215 200 200 10 Federally sponsored agencies1 113,575 138,575 164,623 183,712 188,274 192,523 194,941 195,113 11 Federal Home Loan Banks 27,563 33,330 41,258 52,431 55,161 58,276 57,990 57,854 12 Federal Home Loan Mortgage Corporation . 2,262 2,771 2,536 2,408 2,408 2,308 2,308 2,6 13 Federal National Mortgage Association .... 41,080 48,486 55,185 55,362 56,372 56,688 57,805 58,533 14 Federal Land Banks 20,360 16,006 12,365 10,317 10,317 10,317 9,717 9,717 15 Federal Intermediate Credit Banks 11,469 2,676 1,821 1,388 1,388 1,388 1,388 1,388 16 Banks for Cooperatives 4,843 584 584 220 220 220 220 220 17 Farm Credit Banks1 5,081 33,216 48,153 57,784 58,306 59,024 60,911 60,191 18 Student Loan Marketing Association8 915 1,5051 2,7201 3,800 4,100 4,300 4,600 4,600 19 Other 2 2 2 2 2 2 MEMO: 20 Federal Financing Bank debt1,9 51,298 67,383 87,460 102,853 103,597 107,309 108,171 109,495 Lending to federal and federally sponsored agencies 21 Export-Import Bank4 6,898 8,353 10,654 11,933 11,933 12,409 12,409 12,409 22 Postal Service7 2,114 1,587 1,520 1,288 1,288 1,288 1,288 1,288 23 Student Loan Marketing Association8 915 1,505 2,720 3,800 4,100 4,300 4,600 4,600 24 Tennessee Valley Authority 5,635 7,272 9,465 10,405 10,535 10,874 11,105 11,240 25 United States Railway Association7 356 436 492 215 215 215 200 200 Other Lending10 26 Farmers Home Administration 23,825 32,050 39,431 47,396 47,171 48,821 48,571 49,029 27 Rural Electrification Administration 4,604 6,484 9,196 11,604 11,861 12,343 12,674 12,924 28 Other 6,951 9,696 13,982 16,212 16,494 17,059 17,324 17,805 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 thev 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 Asbonds 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 particcurities 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 NOTES TO TABLE 1.44 1. Immediate positions are net amounts (in terms of par values) of securities 3. Includes all reverse repurchase agreements, including those that have been owned by nonbank dealer firms and dealer departments of commercial banks on arranged to make delivery on short sales and those for which the securities obtained a commitment, that is, trade-date basis, including any such securities that have have been used as collateral on borrowings, i.e., matched agreements. been sold under agreements to repurchase (RPs). The maturities of some repur- 4. Includes both repurchase agreements undertaken to Finance positions and chase agreements are sufficiently long, however, to suggest that the securities "matched book" repurchase agreements. involved are not available for trading purposes. Securities owned, and hence dealer positions, do not include securities to resell (reverse RPs). Before 1981, data for NOTE. Data for positions are averages of daily figures, in terms of par value, immediate positions include forward positions. based on the number of trading days in the period. Positions are shown net and 2. Figures cover financing involving U.S. government and federal agency secu- are on a commitment basis. Data for financing are based on Wednesday figures, rities, negotiable CDs, bankers acceptances, and commercial paper. in terms of actual money borrowed or lent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • March 1982 1.46 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1981 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11997788 11997799 11998800 June July Aug. Sept. Oct. Nov. 1 All issues, new and refunding1 48,512 43,365 48,367 4,886 3,184 3,078 3,874 3,977 5,137 Type of issue 2 General obligation 17,854 12,109 14,100 1,389 1,066 961 567 730 1,273 3 U.S. government loans2 n.a. 53 38 1 5 8 2 2 3 4 Revenue 30,658 31,256 34,267 3,497 2,118 2,117 3,307 3,247 3,864 5 U.S. government loans2 n.a. 67 57 4 1 4 10 5 2 Type of issuer 6 State 6,632 4,314 5,304 585 353 446 92 439 518 7 Special district and statutory authority 24,156 23,434 26,972 2,711 1,728 1,688 2,722 2,404 3,326 8 Municipalities, counties, townships, school districts 17,718 15.617 16,090 1,591 1,103 943 1,060 1,133 1,291 9 Issues for new capital, total 37,629 41,505 46,736 4,812 3,174 2,426 3,868 3,890 5,109 Use of proceeds 10 Education 5,003 5.130 4,572 641 255 272 162 195 568 11 Transportation 3,460 2,441 2,621 161 537 113 214 496 284 12 Utilities and conservation 9,026 8,594 8,149 767 881 543 1,626 695 742 13 Social welfare 10,494 15,968 19,958 1,380 712 807 498 951 1,850 14 Industrial aid 3,526 3,836 3,974 757 364 292 849 921 539 15 Other purposes 6,120 6,120 5,536 1,106 425 399 519 632 1,126 1. Par amounts of long-term issues based on date of sale. SOURCE. Public Securities Association. 2. Consists of tax-exempt issues guaranteed by the Farmers Home Administration. 1.47 NEW SECURITY ISSUES of Corporations Millions of dollars 1981 Type of issue or issuer, or use 11997799 11998800rr 11998811 June' Julyr Aug/ Sept.r Oct/ Nov/ Dec. 1 All issues1 51,533 73,694 69,093 9,452 3,842 3,097 4,696 4,368 8,518 5,717 2 Bonds 40,208 53,206 44,593 5,518 2,186 1,616 2,797 2,845 6,724 3,844 Type of offering 3 Public 25,814 41,587 37,604 4,604 1,926 905 2,198 2,582 6,560 3,526 4 Private placement 14,394 11,619 6.989 914 260 711 599 263 164 317 Industry group 5 Manufacturing 9,678 15,409 12.325 1,312 507 308 452 21 2,054 954 6 Commercial and miscellaneous 3.948 6,693 5.229 566 189 390 201 617 949 850 7 Transportation 3,119 3,329 2,054 584 120 95 63 51 130 82 8 Public utility 8,153 9,557 8.963 847 322 360 1,012 1,008 802 582 9 Communication 4,219 6,683 4.280 470 767 115 471 83 326 106 10 Real estate and financial 11,094 11,534 11.743 1,738 281 348 598 1,065 2,463 1,269 11 Stocks 11,325 20,489 24,500 3,934 1,656 1,481 1,899 1,523 1,794 1,873 Type 12 Preferred 3,574 3,631 1,796 187 67 14 186 141 59 80 13 Common 7,751 16,858 22.704 3.747 1,589 1,467 1,713 1,382 1,735 1,793 Industry group 14 Manufacturing 1,679 4,839 4,786 382 335 160 117 193 407 206 15 Commercial and miscellaneous 2,623 5,245 7,424 1,024 340 661 487 449 564 444 16 Transportation 255 549 735 18 29 91 87 23 15 23 17 Public utility 5,171 6,230 5.416 843 308 248 514 438 405 534 18 Communication 303 567 1.772 1,036 73 12 369 7 85 89 19 Real estate and financial 12,931 3,059 4.368 632 571 310 325 412 318 577 1. Figures, which represent gross proceeds of issues maturing in more than one 1933, employee stock plans, investment companies other than closed-end, intrayear, sold for cash in the United States, are principal amount or number of units corporate transactions, and sales to foreigners. multiplied by offering price. Excludes offerings of less than $100,000, secondary offerings, undefined or exempted issues as defined in the Securities Act of SOURCE. Securities and Exchange Commission. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Corporate Finance A37 1.48 OPEN-END INVESTMENT COMPANIES Net Sales and Asset Position Millions of dollars 1981 1982 IItteemm 11998800 11998811rr June July Aug. Sept. Oct. Nov. Dec.' Jan. INVESTMENT COMPANIES1 1 Sales of own shares2 15,266 20,596 1,910 1,639 1,457 1,449 1,768 1,729 2,140 3,032 2 Redemptions of own shares3 12,012 15,866 1,512 1,297 1,422 1,457 593 1,125 1,769 1,475 3 Net sales 3,254 4,730 398 342 35 -8 1,175 604 371 1,557 4 Assets4 58,400 55,207 58,887 57,494 54,221 51,659 54,335 57,408 55,207 54,347 5 Cash position5 5,321 5,277 5,199 5,109 5,058 5,409 5,799 6,269 5,277 5,424 6 Other 53,079 49,930 53,688 52,385 49,163 46,250 48,536 51,139 49,930 48,923 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 Seother 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. 1980 1981 AAccccoouunntt 11997788 11997799 11998800 Q1 Q2 03 Q4 Q1 Q2 Q3 1 Corporate profits with inventory valuation and capital consumption adjustment 185.5 196.8 182.7 200.2 169.3 177.9 183.3 203.0 190.3 195.7 2 Profits before tax 223.3 255.3 245.5 277.1 217.9 237.6 249.5 257.0 229.0 234.4 3 Profits tax liability 82.9 87.6 82.3 94.2 71.5 78.5 85.2 87.7 76.4 78.1 4 Profits after tax 140.3 167.7 163.2 182.9 146.4 159.1 164.3 169.3 152.6 156.3 5 Dividends 44.6 50.1 56.0 53.9 55.7 56.7 57.7 59.6 62.0 64.8 6 Undistributed profits 95.7 117.6 107.2 129.0 90.7 102.4 106.6 109.7 90.6 91.5 7 Inventory valuation -24.3 -42.6 -45.6 -61.4 -31.1 -41.7 -48.4 -39.2 -24.0 -25.3 8 Capital consumption adjustment -13.5 -15.9 -17.2 -15.4 -17.6 -17.9 -17.8 -14.7 -14.7 -13.4 SOURCE. Survey of Current Business (U.S. Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic NonfinancialS tatistics • March 1982 1.50 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1980 1981 AAccccoouunntt 11997755 11997766 11997777 11997788 11997799 Q3 Q4 Q1 Q2 Q3 1 Current assets 759.0 826.8 902.1 1,030.0 1,200.9 1,254.9 1,281.6 1,321.2 1,317.4 1,349.2 2 Cash 82.1 88.2 95.8 104.5 116.1 113.4 121.0 120.5 118.5 118.3 3 U.S. government securities 19.0 23.4 17.6 16.3 15.6 16.4 17.3 17.0 17.7 16.0 4 Notes and accounts receivable 272.1 292.8 324.7 383.8 456.8 478.7 491.2 507.3 507.4 519.7 5 Inventories 315.9 342.4 374.8 426.9 501.7 524.5 525.4 542.8 540.0 557.2 6 Other 69.9 80.1 89.2 98.5 110.8 121.9 126.7 133.6 133.7 138.1 7 Current liabilities 451.6 494.7 549.4 665.5 809.1 850.5 877.2 910.9 908.1 951.1 8 Notes and accounts payable 264.2 281.9 313.2 373.7 456.3 477.2 498.3 504.0 500.8 529.1 9 Other 187.4 212.8 236.2 291.7 352.8 373.4 378.9 406.9 407.2 422.0 10 Net working capital 307.4 332.2 352.7 364.6 391.8 404.3 404.4 410.3 409.3 398.1 11 MEMO: Current ratio 1 1.681 1.672 1.642 1.548 1.484 1.475 1.461 1.450 1.451 1.419 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. 1980 1981 1982 IInndduussttrryy 11998800 11998811RR 1199882211 Q4 Q1 Q2 Q3 Q4 Q11 Q21 1 Total nonfarm business 295.63 321.49 345.11 299.58 312.24 316.73 328.25 327.83 330.34 336.77 Manufacturing 2 Durable goods industries 58.91 61.84 67.24 59.77 61.24 63.10 62.58 60.78 62.95 64.79 3 Nondurable goods industries 56.90 64.95 69.58 58.86 63.27 62.40 67.53 66.14 66.28 68.72 Nonmanufacturing 4 Mining 13.51 16.86 18.33 15.28 16.20 16.80 17.55 16.81 17.26 17.20 Transportation Railroad 4.25 4.24 4.55 4.54 4.23 4.38 4.18 4.18 4.39 4.37 6 Air 4.01 3.81 4.15 3.77 3.85 3.29 3.34 4.82 3.23 2.97 7 Other 3.82 4.00 4.83 3.39 3.66 4.04 4.09 4.12 4.52 4.71 Public utilities 8 Electric 28.12 29.74 31.77 27.54 27.69 29.32 30.54 31.14 30.86 31.59 9 Gas and other 7.32 8.65 8.43 7.41 8.36 8.53 9.01 8.60 8.46 8.04 10 Trade and services 81.79 86.33 90.48 82.91 83.43 85.88 87.55 88.33 89.46 89.92 11 Communication and other2 36.99 41.06 45.75 36.11 40.32 39.02 41.89 42.92 42.93 44.45 1. Anticipated by business. SOURCE. Survey of Current Business (U.S. Dept. of Commerce). 2. "Other" consists of construction; social services and membership organizations; and forestry, fisheries, and agricultural services. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Corporate Finance A39 1.52 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1981 AAccccoouunntt 11997755 11997766 11997777 11997788 11997799 11998800 Q1 Q2 Q3 Q4 ASSETS Accounts receivable, gross 1 Consumer 36.0 38.6 44.0 52.6 65.7 73.6 76.1 79.0 84.5 85.5 2 Business 39.3 44.7 55.2 63.3 70.3 72.3 72.7 78.2 76.9 81.0 3 Total 75.3 83.4 99.2 116.0 136.0 145.9 148.7 157.2 161.3 166.5 4 LESS: Reserves for unearned income and losses.... 9.4 10.5 12.7 15.6 20.0 23.3 24.3 25.7 27.7 28.9 5 Accounts receivable, net 65.9 72.9 86.5 100.4 116.0 122.6 124.5 131.4 133.6 138.1 6 Cash and bank deposits 2.9 2.6 2.6 3.5 7 Securities 1.0 1.1 .9 1.3 2244..99'' 27.5 30.8 31.6 34.5 34.2 8 All other 11.8 12.6 14.3 17.3 9 Total assets 81.6 89.2 104.3 122.4 140.9 150.1 155.3 163.0 168.1 172.3 LIABILITIES 10 Bank loans 8.0 6.3 5.9 6.5 8.5 13.2 13.1 14.4 14.7 15.4 11 Commercial paper 22.2 23.7 29.6 34.5 43.3 43.4 44.2 49.0 51.2 51.2 12 Short-term, n.e.c 4.5 5.4 6.2 8.1 8.2 7.5 8.2 8.5 11.9 9.6 13 Long-term, n.e.c 27.6 32.3 36.0 43.6 46.7 52.4 51.6 52.6 50.7 54.8 14 Other 6.8 8.1 11.5 12.6 14.2 14.3 17.3 17.0 17.1 17.8 15 Capital, surplus, and undivided profits 12.5 13.4 15.1 17.2 19.9 19.4 20.9 21.5 22.4 23.6 16 Total liabilities and capital 81.6 89.2 104.3 122.4 140.9 150.1 155.3 163.0 168.1 172.3 1. Beginning Q1 1979, asset items on lines 6, 7, and 8 are combined. NOTE. Components may not add to totals due to rounding. 1.53 DOMESTIC FINANCE COMPANIES Business Credit Millions of dollars, seasonally adjusted except as noted Changes in accounts Extensions Repayments AAAccccccooouuunnntttsss receivable rrreeeccceeeiiivvvaaabbbllleee TTTyyypppeee ooouuutttssstttaaannndddiiinnnggg DDDeeeccc... 333111,,, 1981 1981 1981 111999888111''' Oct. Nov. Dec. Oct. Nov. Dec. Oct. Nov. Dec. 1 Total 81,022 418 1,395 552 17,393 20,029 16,192 16,975 18,634 15,640 2 Retail automotive (commercial vehicles) 11,401 -41 188 -5 877 1,081 898 918 893 903 3 Wholesale automotive 13,103 184 534 -48 4.804 5,275 3,408 4,620 4,741 3,456 4 Retail paper on business, industrial, and farm equipment.... 27.959 76 510 387 1,352 2,091 1,701 1,276 1.581 1,314 5 Loans on commercial accounts receivable and factored commercial accounts receivable 8,695 -21 83 -91 8,061 9,120 7,378 8,082 9,037 7,469 6 All other business credit 19.864 220 80 309 2,299 2.462 2.807 2,079 2.382 2,498 1. Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • March 1982 1.54 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1981 1982 Item 11997799 11998800 11998811 July Aug. Sept. Oct. Nov. Dec. Jan. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms1 1 Purchase price (thousands of dollars) 74.4 83.4 90.4 95.2 98.1 89.1 89.2 84.5 88.7 102.6 2 Amount of loan (thousands of dollars) 53.3 59.2 65.2 67.7 70.3 64.8 63.5 62.7 64.4 73.3 3 Loan/price ratio (percent) 73.9 73.2 74.8 73.9 74.7 74.1 73.0 77.3 75.3 75.5 4 Maturity (years) 28.5 28.2 27.7 28.3 27.2 26.6 27.4 23.4 27.7 27.4 5 Fees and charges (percent of loan amount)2 1.66 2.09 2.67 2.73 2.98 2.75 2.86 2.52 2.87 2.55 6 Contract rate (percent per annum) 10.48 12.25 14.16 14.13 14.60 14.69 15.04 15.68 15.23 14.66 Yield (percent per annum) 1 FHLBB series5 10.77 12.65 14.74 14.72 15.27 15.29 15.65 16.38 15.87 15.25 8 HUD series4 11.15 13.95 16.52 16.70 17.50 18.30 18.05 16.95 17.00 17.30 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5 10.87 13.42 16.29 16.76 17.96 18.55 17.43 15.98 16.43 17.38 10 GNMA securities" 10.22 12.55 15.29 15.76 16.67 17.06 16.54 15.10 15.51 16.19 FNMA auctions7 11 Government-underwritten loans 11.17 14.11 16.70 16.65 17.63 18.99 18.13 16.64 16.92 17.80 12 Conventional loans 11.77 14.43 16.64 16.44 17.59 19.14 18.61 17.20 16.95 17.33 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 13 Total 46,050 55,104 58.675 57,979 58,722 59.682 60,489 60,949 61,412 61,721 14 FHA/VA-insured 33.673 37,364 39,342 39.108 39,368 39.792 40,043 40,056 39,997 39,937 15 Conventional 14.377 17.724 19.334 18.870 19,354 19,890 20,445 20,885 21,435 21,435 Mortgage transactions (during period) 16 Purchases 10,812 8.099 6,112 627 944 1,125 1,000 594 655 430 17 Sales 0 0 2 0 0 0 0 0 0 0 Mortgage commitmentss 18 Contracted (during period) 10,179 8,083 9,331 1,662 1,394 811 533 560 1,272 703 19 Outstanding (end of period) 6,409 3,278 3,577 4,039 4,399 3,997 3,447 3.354 3,577 3,285 Auction of 4-month commitments to buy Government-underwritten loans 20 Offered 8,860.4 8.605.4 2,487.2 331.9 689.5 145.9 66.3 79.0 59.2 41.5 21 Accepted 3,920.9 4.002.0 1.478.0 290.4 336.6 64.1 37.3 34.4 27.0 30.8 Conventional loans 22 Offered 4.495.3 3,639.2 2,524.7 306.6 862.2 120.7 43.2 147.7 84.4 31.7 23 Accepted 2,343.6 1,748.5 1.392.3 238.2 304.3 67.9 27.5 63.1 48.0 11.5 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 24 Total 3,543 4,362 5,245 5.250 5,294 5.431 5,469 5,283 5,255 5,240 25 FHA/VA 1,995 2,116 2.236 2.233 2,238 2.264 2,267 2,232 2,227 2,209 26 Conventional 1,549 2,246 3.010 3,017 3,056 3,167 3,202 3,051 3,028 3,032 Mortgage transactions (during period) 27 Purchases 5.717 3,723 33..778899 242 101 337 290 416 1,140 1,628 28 Sales 4.544 2,527 3.531 238 44 249 244 596 1,158 162 Mortgage commitments10 29 Contracted (during period) 5,542 3,859 6.974 866 386 365 1,834 2,011 203 328 30 Outstanding (end of period) 797 447 3.518 824 1,028 982 2,863 4,451 3,518 5,033 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 seror the seller) to obtain a loan. vicing) on accepted bids in Federal National Mortgage Association's auctions of 3. Average effective interest rates on loans closed, assuming prepayment at the 4-month commitments to purchase home mortgages, assuming prepayment in 12 end of 10 years. years for 30-year mortgages. No adjustments are made for FNMA commitment 4. Average contract rates on new commitments for conventional first mortgages, fees or stock related requirements. Monthly figures are unweighted averages for rounded to the nearest 5 basis points; from Department of Housing and Urban auctions conducted within the month. Development. 8. Includes some multifamily and nonprofit hospital loan commitments in ad- 5. Average gross yields on 30-year, minimum-downpayment. Federal Housing dition to 1- to 4-family loan commitments accepted in FNMA's free market auction Administration-insured first mortgages for immediate delivery in the private sec- system, and through the FNMA-GNMA tandem plans. ondary market. Any gaps in data are due to periods of adjustment to changes in 9. Includes participation as well as whole loans. maximum permissible contract rates. 10. Includes conventional and government-underwritten loans. 6. Average net yields to investors on Government National Mortgage Association guaranteed, mortgage-backed, fully modified pass-through securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate Debt A41 1.55 MORTGAGE DEBT OUTSTANDING Millions of dollars, end of period 1980 1981 TTyyppee ooff hhoollddeerr,, aanndd ttyyppee ooff pprrooppeerrttyy 11997799 11998800 11998811 Q4 Q1 Q2 Q3 Q4' 1 All holders 1,326,916 1,446,074r 1,543,771r 1,446,074' 1,467,370' 1,497,061' 1,523,522' 1,543,771 2 1- to 4-family 878,938 960,344R 1,018,472' 960,344' 972,556' 990,862' 1,007,529' 1,018,472 3 Multifamily 128,850 137,163' 144,267' 137,163' 138,544' 140,100' 141,675' 144,267 4 Commercial 236,451 256,549' 279,096' 256,549' 261,809' 268,587' 274,250' 279,096 5 82,677 92,018' 101,936' 92,018' 94,461' 97,512' 100,068' 101,936 6 Major financial institutions 938,567 996,789 1,044,496' 996,789 1,006,836 1,023,340 1,036,687 1,044,496 7 Commercial.banks1 245,187 263,030 286,626 263,030 266,734 273,225 281,126 286,626 R 1- to 4-family 149,460 160,326 172,549 160,326 161,758 164,873 169,378 172,549 9 Multifamily 11,180 12,924 14,905 12,924 13,282 13,800 14,478 14,905 10 Commercial 75,957 81,081 90,717 81,081 83,133 86,091 88,836 90,717 11 Farm 8,590 8,699 8,455 8,699 8,561 8,461 8,434 8,455 12 Mutual savings banks 98,908 99,866 100,000 99,866 99,719 99,993 100,200 100,000 13 1- to 4-family 64,706 65,332 65,420 65,332 65,236 65,415 65,551 65,420 14 Multifamily 17,180 17,347 17,370 17,347 17,321 17,369 17,405 17,370 15 Commercial 16,963 17,127 17,150 17,127 17,102 17,149 17,184 17,150 16 Farm 59 60 60 60 60 60 60 60 17 Savings and loan associations 475,688 502,812 517,637 502,812 507,152 514,803 518,379 517,637 18 1- to 4-family 394,345 419,446 432,693 419,446 423,269 430,324 433,313 432,693 19 Multifamily 37,579 38,113 38,253 38,113 38,189 38,044 38,308 38,253 20 Commercial 43,764 45,253 46,691 45,253 45,694 46,435 46,758 46,691 21 Life insurance companies 118,784 131,081 140,233' 131,081 133,231 135,319 136,982 140,233 22 1- to 4-family 16,193 17,943 17,966' 17,943 17,847 17,646 17,512 17,966 23 Multifamily 19,274 19,514 20,101' 19,514 19,579 19,603 19,592 20,101 24 Commercial 71,137 80,666 88,991' 80,666 82,839 85,038 86,742 88,991 25 Farm 12,180 12,958 13,175' 12,958 12,966 13,032 13,136 13,175 26 Federal and related agencies 97,084 114,300 126,186 114,300 116,243 119,124' 121,772' 126,186 27 Government National Mortgage Association 3,852 4,642 4,765 4,642 4,826 4,972 4,382 4,765 28 1- to 4-family 763 704 765 704 696 698 696 765 29 Multifamily 3,089 3,938 4,000 3,938 4,130 4,274 3,686 4,000 30 Farmers Home Administration 1,274 3,492 2,235' 3,492 2,837 2,662' 1,562' 2,235 31 1- to 4-family 417 916 914' 916 1,321 1,151' 500' 914 32 Multifamily 71 610 473' 610 528 464' 242' 473 33 Commercial 174 411 506R 411 479 357' 325' 506 34 Farm 612 1,555 342' 1,555 509 690' 495' 342 35 Federal Housing and Veterans Administration 5,555 5,640 6,073 5,640 5,799 5,895 6,005 6,073 36 1- to 4-family 1,955 2,051 2,293 2,051 2,135 2,172 2,240 2,293 37 Multifamily 3,600 3,589 3,780 3,589 3,664 3,723 3,765 3,780 38 Federal National Mortgage Association 51,091 57,327 61,412 57,327 57,362 57,657 59,682 61,412 39 1- to 4-family 45,488 51,775 55,986 51,775 51,842 52,181 54,227 55,986 40 Multifamily 5,603 5,552 5,426 5,552 5,520 5,476 5,455 5,426 41 Federal Land Banks 31,277 38,131 46,446 38,131 40,258 42,681 44,708 46,446 42 1- to 4-family 1,552 2,099 2,788 2,099 2,228 2,401 2,605 2,788 43 Farm 29,725 36,032 43,658 36,032 38,030 40,280 42,103 43,658 44 Federal Home Loan Mortgage Corporation 4,035 5,068 5,255' 5,068 5,161 5,257 5,433 5,255 45 1- to 4-family 3,059 3,873 4,018' 3,873 3,953 4,025 4,166 4,018 46 Multifamily 976 1,195 1,237' 1,195 1,208 1,232 1,267 1,237 47 Mortgage pools or trusts2 119,278 142,258 162,273' 142,258 147,246 152,308' 158,140' 162,273 48 Government National Mortgage Association 76,401 93,874 105,790 93,874 97,184 100,558 103,750 105,790 49 1- to 4-family 74,546 91,602 102,750 91,602 94,810 98,057 101,068 102,750 50 Multifamily 1,855 2,272 3,040 2,272 2,374 2,501 2,682 3,040 51 Federal Home Loan Mortgage Corporation 15,180 16,854 19,843' 16,854 17,067 17,565 17,936 19,843 52 1- to 4-family 12,149 13,471 15,888' 13,471 13,641 14,115 14,401 15,888 53 Multifamily 3,031 3,383 3,955 3,383 3,426 3,450 3,535 3,955 54 Farmers Home Administration 27,697 31,530 36,640' 31,530 32,995 34,185' 36,454' 36,640 55 1- to 4-family 14,884 16,683 18,378' 16,683 16,640 17,165' 18,407' 18,378 56 Multifamily 2,163 2,612 3,426' 2,612 2,853 3,097' 3,488' 3,426 57 Commercial 4,328 5,271 6,161' 5,271 5,382 5,750' 6,040' 6,161 58 Farm 6,322 6,964 8,675' 6,964 8,120 8,173' 8,519' 8,675 59 Individual and others3 171,987 192,727' 210,816' 192,727' 197,045' 202,289' 206,923' 210,816 60 1- to 4-family 99,421 114,123R 126,064' 114,123' 117,180' 120,639' 123,465' 126,064 61 Multifamily 23,249 26,114R 28,301' 26,114' 26,470' 27,067' 27,772' 28,301 62 Commercial 24,128 26,740R 28,880' 26,740' 27,180' 27,767' 28,365' 28,880 63 Farm 25,189 25,750' 27,571' 25,750' 26,215' 26,816' 27,321' 27,571 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

A42 Domestic NonfinancialS tatistics • March 1982 1.56 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net ChangeA Millions of dollars 1981 1982 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 11997788 11997799 11998800 July Aug. Sept. Oct. Nov. Dec. Jan. Amounts outstanding (end of period) 1 Total 273,645 312,024 313,472 320,656 324,161 328,187 328,652 329,053 333,375 330,135 By major holder 2 Commercial banks 136,016 154,177 147,013 145,382 146,006 147,060 146,889 146,687 149,300 148,162 3 Finance companies 54,298 68,318 76,756 83,924 86,152 88,698 89,583 89,956 89,818 88,925 4 5 C R r e e ta d i i l t e u rs n 2 i ons 2 4 5 4 , , 9 3 8 3 7 4 4 2 6 8 , , 5 1 1 1 7 9 2 4 8 4 , , 4 0 4 4 8 1 2 4 6 6 , , 3 0 9 9 6 6 4 2 6 6 , , 6 4 0 7 5 7 4 26 6 , , 5 7 9 9 4 1 4 26 6 , , 9 4 2 1 2 6 2 4 7 6 , , 5 0 1 9 0 2 2 4 9 5 , , 5 9 5 5 1 4 4 28 5 , , 1 9 7 0 9 7 6 Savings and loans 7,097 8,424 9,911 10,959 11,125 11,236 11,348 11,529 11,598 11,668 7 Gasoline companies ... 3,220 3,729 4,468 5,078 5,004 5,007 4,713 4,487 4,403 4,541 8 Mutual savings banks .. 2.693 2,740 2,835 2,821 2,792 2,801 2,781 2,792 2,751 2,753 By major type of credit 9 Automobile 101,647 116,362 116,838 121,476 123,481 125,703 126,344 126,385 126,431 125,525 10 Commercial banks... 60,510 67,367 61,536 59,908 59,747 59,451 59,242 59,125 59,181 58,849 11 Indirect paper 33.850 38,338 35,233 34,505 34,599 34,616 34,651 34,781 35,097 35,029 12 Direct loans 26,660 29,029 26,303 25,403 25,148 24,835 24,591 24,344 24,084 23,820 13 Credit unions 21,200 22,244 21,060 22,044 22,286 22,375 22,196 22,041 21,975 21,953 14 Finance companies .. 19.937 26,751 34,242 39,525 41,448 43,877 44,906 45,219 45,275 44,723 15 Revolving 48,309 56,937 58,352 56,764 57,280 58,318 58,451 58,923 63,049 61,433 16 Commercial banks... 24,341 29,862 29,765 29,290 29,778 30,686 30,763 30,876 33,110 32,643 17 Retailers 20,748 23,346 24,119 22,396 22,498 22.625 22,975 23,560 25,536 24,249 18 Gasoline companies . 3,220 3,729 4,468 5,078 5,004 5,007 4,713 4,487 4,403 4,541 19 Mobile home 15,235 16,838 17,322 17,760 17,959 18,124 18,300 18,380 18,486 18,397 20 Commercial banks... 9,545 10,647 10,371 10,168 10,213 10,241 10,288 10,267 10,300 10,206 21 Finance companies .. 3,152 3,390 3,745 4,076 4,178 4,282 4,384 4,439 4,494 4,481 22 Savings and loans ... 2,067 2,307 2,737 3,026 3,072 3,103 3,134 3,184 3,203 3,222 23 Credit unions 471 494 469 490 496 498 494 490 489 48 8 24 Other 108,454 121,887 120,960 124,656 125,441 126,042 125,557 125,365 125,409 124,780 25 Commercial banks... 41,620 46,301 45,341 46,016 46,268 46,682 46,596 46,419 46,709 46,464 26 Finance companies .. 31,209 38,177 38,769 40,323 40,526 40,539 40,293 40,298 40,049 39,721 27 Credit unions 22,663 23,779 22,512 23,563 23,823 23,918 23,726 23,561 23,490 23,466 28 Retailers 5,239 4,773 4,329 4,000 3,979 3,969 3,947 3,950 4,015 3,930 29 Savings and loans ... 5,030 6,117 7,174 7,933 8,053 8,133 8,214 8,345 8,395 8,446 30 Mutual savings banks 2,693 2,740 2,835 2,821 2,792 2,801 2,781 2,792 2,751 2,753 Net change (during period)3 31 Total 43,079 38,381 1,448 1,551 2,428 2,975 1,002 600 -33 443 By major holder 32 Commercial banks 23,641 18,161 -7,163 29 -246 427 -76 433 1,160 10 33 Finance companies .... 9,430 14,020 8,438 948 2,383 2,682 1,204 462 -414 -597 3 3 4 5 C R r e e ta d i i l t e u rs n 2 ions 6 2 , , 7 4 2 9 9 7 2 2, , 1 1 8 3 5 2 -2,4 3 7 2 5 9 2 53 6 2 5 - 2 1 4 3 5 -13 1 4 1 -2 1 0 0 9 4 - - 1 2 2 2 6 4 - -3 3 3 6 8 9 68 2 9 7 36 Savings and loans 7 1,327 1,485 -175 42 71 32 121 57 172 37 Gasoline companies ... 257 509 739 4 33 -62 -42 -81 -98 39 38 Mutual savings banks .. 518 47 95 -52 -16 -20 -11 15 -31 103 By major type of credit 39 Automobile 18,736 14,715 477 1,056 1,859 2,079 1,024 564 68 -121 40 Commercial banks... 10,933 6,857 -5,830 47 -347 -404 -226 220 236 103 41 Indirect paper 6,471 4,488 -3,104 196 -42 -79 16 371 413 232 42 Direct loans 4,462 2,369 -2,726 -149 -305 -325 -242 -151 -177 -129 43 Credit unions 3,101 1,044 -1,184 263 106 -82 -98 -77 -200 345 44 Finance companies .. 4,702 6,814 7,491 746 2,100 2,565 1,348 421 32 -569 4 4 4 5 6 7 Re R C v o e o t l m a v i m i l n e e g r r s c ial banks... 2 9 5 , , , 0 8 9 3 1 6 5 1 7 2 5 8 , , , 5 6 5 9 2 2 8 8 1 1 - ,4 7 9 1 7 7 5 3 -2 3 1 0 1 1 5 7 6 1 1 2 7 1 6 7 8 5 5 4 7 9 0 1 3 3 1 1 2 8 8 4 4 2 - 1 9 2 9 6 1 8 -3 4 1 6 5 0 7 9 - - 1 2 9 7 4 6 6 1 48 Gasoline companies . 257 509 739 4 33 -62 -42 -81 -98 39 4 5 9 0 Mo C b o i m le m h e o r m ci e a l banks... 4 2 1 8 9 6 1 1 , , 6 1 0 0 3 2 -2 4 7 8 6 3 5 1 9 2 1 2 5 4 6 1 3 5 0 7 1 2 2 8 2 -9 7 5 1 8 4 1 3 - - 7 2 4 6 51 Finance companies .. 74 238 355 81 93 102 74 42 49 6 52 Savings and loans ... -276 240 430 -44 37 26 23 45 15 30 53 Credit unions 69 23 -25 10 2 -1 -3 -3 -2 12 54 Other 15,022 13,435 -927 320 236 168 -468 -60 -303 786 55 Commercial banks... 6,322 4,681 -960 175 -49 208 -60 24 376 257 56 Finance companies .. 4,654 6,968 592 121 190 15 -218 -1 -495 -34 57 Credit unions 3,559 1,118 -1,266 259 137 -51 -108 -144 -167 332 58 Retailers -314 -466 -444 -52 -31 -29 -80 -30 -28 -14 59 Savings and loans ... 283 1,087 1,056 -131 5 45 9 76 42 142 60 Mutual savings banks 518 47 95 -52 -16 -20 -11 15 -31 103 1. The Board's series cover most short- and intermediate-term credit extended 3. Net change equals extensions minus liquidations (repayments, charge-offs and to individuals through regular business channels, usually to finance the purchase other credit); figures for all months are seasonally adjusted. of consumer goods and services or to refinance debts incurred for such purposes, NOTE: Total consumer noninstallment credit outstanding—credit scheduled to and scheduled to be repaid (or with the option of repayment) in two or more be repaid in a lump sum, including single-payment loans, charge accounts, and installments. service credit—amounted to $71.3 billion at the end of 1979, $72.2 billion at the 2. Includes auto dealers and excludes 30-day charge credit held by travel and end of 1980, and $78.4 billion at the end of 1981. entertainment companies. A These data have been revised from January 1980 through December 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Debt A43 1.57 CONSUMER INSTALLMENT CREDIT Extensions and Liquidations A Millions of dollars; monthly data are seasonally adjusted. 1981 1982 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 107R 11998800 July Aug. Sept. Oct. Nov. Dec. Jan. Extensions 1 Total 297,668 324,777 306,076 28,290 28,323 29,406 26,836 27,370 26,656 26,888 By major holder 7 Commercial banks 142,433 154,733 134,960 11,973 11,458 12,384 11,610 1122,,443300 1133,,226644 1111,,777755 3 Finance companies 50,505 61,518 60,801 5,439 6,385 7,158 5,327 5,287 4,089 4,433 4 Credit unions 38,111 34,926 29,594 3,299 2,913 2,558 2,621 2,571 2,517 3,326 Retailers1 44,571 47,676 49,942 4,826 4,616 4,568 4,559 4,279 4,142 4,385 6 Savings and loans 3,724 5,901 6,621 383 537 573 553 668 588 716 7 Gasoline companies 16,017 18,005 22,253 2,252 2,284 2,035 2,021 1,963 1,931 2,000 8 Mutual savings banks 2,307 2,018 1,905 118 130 130 145 172 125 253 By major type of credit 9 Automobile 87,981 93.901 83,454 8,059 8,396 99,,000000 77,,449900 88,,007733 77,,335522 77,,447744 10 Commercial banks 52,969 53,554 41,109 3,755 3,280 3,218 3,263 3,979 3,978 3,696 11 Indirect paper 29,342 29,623 22,558 2,268 1,951 1,932 1,966 2,516 2,489 2,293 1? Direct loans 23,627 23,931 18,551 1,487 1,329 1,286 1,297 1,463 1,489 1,403 13 Credit unions 18,539 17,397 15,294 1,663 1,537 1,337 1,308 1,342 1,345 1,702 14 Finance companies 16,473 22,950 27,051 2,641 3,579 4,445 2,919 2,752 2,029 2,076 15 Revolving 105,125 120,174 128,068 11,706 11,663 12,263 11,753 11,379 11,592 11,070 16 Commercial banks 51,333 61,048 61,593 5,073 5,227 6,124 5,578 5,584 5,961 5,135 17 Retailers 37,775 41,121 44,222 4,381 4,152 4,104 4,154 3,832 3,700 3,935 18 Gasoline companies 16,017 18,005 22,253 2,252 2,284 2,035 2,021 1,963 1,931 2,000 19 Mobile home 5,412 6,471 5,093 445 520 532 475 479 508 434 70 Commercial banks 3,697 4,542 2,937 276 281 291 254 235 308 188 71 Finance companies 886 797 898 116 120 134 123 108 106 99 22 Savings and loans 609 948 1,146 30 105 95 89 127 86 122 23 Credit unions 220 184 113 23 14 12 9 9 8 25 74 Other 99,150 104,231 89,461 8,080 7,744 7,611 7,118 7,439 7,204 7,910 75 Commercial banks 34,434 35,589 29,321 2,869 2,670 2,751 2,515 2,632 3,017 2,756 76 Finance companies 33,146 37,771 32,852 2,682 2,686 2,579 2,285 2,427 1,954 2,258 71 Credit unions 19,352 17,345 14,187 1,613 1,362 1,209 1,304 1,220 1,164 1,599 78 Retailers 6,796 6,555 5,720 445 464 464 405 447 442 450 7.9 Savings and loans 3,115 4,953 5,476 353 432 478 464 541 502 594 30 Mutual savings banks 2,307 2,018 1,905 118 130 130 145 172 125 253 Liquidations 31 Total 254,589 286,396 304,628 26,739 25,895 26,431 25,834 26,770 26,689 26,445 By major holder 37 Commercial banks 118,792 136,572 142,123 11,944 11,704 11,957 11,686 11,997 1122,,110044 1111,,776655 33 Finance companies 41,075 47,498 52,363 4,491 4,002 4,476 4,123 4,825 4,503 5,030 34 Credit unions 31,382 32,741 32,069 2,767 2,668 2,692 2,830 2,795 2,886 2,637 35 Retailers1 42,074 45,544 49,613 4,561 4,629 4,557 4,455 4,405 4,480 4,358 36 Savings and loans 3,717 4,574 5,136 558 495 502 521 547 531 544 37 Gasoline companies 15,760 17,496 21,514 2,248 2,251 2,097 2,063 2,044 2,029 1,961 38 Mutual savings banks 1,789 1,971 1,810 170 146 150 156 157 156 150 By major type of credit 39 69,245 79,186 8822,,997777 7,003 66,,553377 66,,992211 66,,446666 77,,550099 77,,228844 77,,559955 40 Commercial banks 42,036 46,697 46,939 3,708 3,627 3,622 3,489 3,759 3,742 3,593 41 Indirect paper 22,871 25,135 25,662 2,072 1,993 2,011 1,950 2,145 2.076 2,061 47 Direct loans 19,165 21,562 21,277 1,636 1,634 1,611 1,539 1,614 1,666 1,532 43 Credit unions 15,438 16,353 16,478 1,400 1,431 1,419 1,406 1,419 1,545 1,357 44 Finance companies 11,771 16,136 19,560 1,895 1,479 1,880 1,571 2,331 1,997 2,645 45 Revolving 96,090 111,546 126,653 11,590 11,486 11,692 11,429 11,358 11,533 11,266 46 Commercial banks 45,366 55,527 61,690 5,278 5,101 5,531 5,396 5,386 5,494 5,411 47 Retailers 34,964 38,523 43,449 4,064 4,134 4,064 3,970 3,928 4,010 3,894 48 Gasoline companies 15,760 17,496 21,514 2,248 2,251 2,097 2,063 2,044 2,029 1,961 49 Mobile home 5,126 4,868 4,610 386 364 375 353 404 365 460 50 Commercial banks 3,278 3,440 3,213 264 257 261 226 244 227 262 51 Finance companies 812 559 543 35 27 32 49 66 57 93 57 Savings and loans 885 708 716 74 68 69 66 82 71 92 53 Credit unions 151 161 138 13 12 13 12 12 10 13 54 84,128 90,796 90,388 7,760 7,508 7,443 7,586 7,499 7,507 7,124 55 Commercial banks 28,112 30,908 30,281 2,694 2,719 2,543 2,575 2,608 2,641 2,499 56 Finance companies 28,492 30,803 32,260 2,561 2,496 2,564 2,503 2,428 2,449 2,292 57 Credit unions 15,793 16,227 15,453 1,354 1,225 1,260 1,412 1,364 1,331 1,267 58 Retailers 7,110 7,021 6,164 497 495 493 485 477 470 464 59 Savings and loans 2,832 3,866 4,420 484 427 433 455 465 460 452 60 Mutual savings banks 1,789 1,971 1,810 170 146 150 156 157 156 150 1. Includes auto dealers and excludes 30-day charge credit held by travel and A These data have been revised from January 1980 through December 1981. entertainment companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic NonfinancialS tatistics • March 1982 1.58 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-yearly data are at seasonally adjusted annual rates. 1979 1980 1981 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 11997766 11997777 11997788 11997799 11998800 11998811 HI H2 HI H2 HI H2 Nonfinancial sectors 1 Total funds raised 273.6 336.6 395.6 387.0 371.9 393.0 385.0 389.0 339.0 404.9 423.5 362.5 2 Excluding equities 262.8 333.5 396.3 394.0 357.0 399.9 394.7 393.3 330.1 383.8 422.0 377.9 By sector and instrument 3 U.S. government 69.0 56.8 53.7 37.4 79.2 87.3 30.0 44.7 66.5 91.9 85.7 88.9 4 Treasury securities 69.1 57.6 55.1 38.8 79.8 87.7 32.3 45.2 67.2 92.4 86.3 89.2 5 Agency issues and mortgages -.1 -.9 -1.4 -1.4 -.6 -.4 -2.3 -.5 -.6 -.6 -.5 -.4 6 All other nonfinancial sectors 204.6 -279.9 342.0 349.6 292.7 305.7 355.0 344.3 272.5 313.0 337.8 273.6 7 Corporate equities 10.8 3.1 -.6 -7.1 15.0 -6.9 -9.8 -4.3 8.9 21.0 1.5 -15.4 8 Debt instruments 193.8 276.7 342.6 356.7 277.8 312.6 364.7 348.6 263.6 292.0 336.3 289.0 y Private domestic nonfinancial sectors 185.0 266.0 308.7 328.6 263.4 274.9 341.0 316.1 241.3 285.6 301.9 248.0 10 Corporate equities 10.5 2.7 -.1 -7.8 12.9 -6.9 -9.6 -6.1 6.9 18.8 .9 -14.7 li Debt instruments 174.5 263.2 308.8 336.4 250.6 281.8 350.6 322.2 234.4 266.8 301.0 262.7 12 Debt capital instruments 123.7 172.2 193.7 200.1 179.4 150.0 203.0 197.2 177.0 181.9 171.7 128.3 13 State and local obligations 15.7 21.9 26.1 21.8 26.9 25.3 20.9 22.7 21.6 32.1 28.7 21.9 14 Corporate bonds 22.8 21.0 20.1 21.2 30.4 25.1 21.7 20.7 35.3 25.6 27.7 22.4 15 Home mortgages 64.0 96.3 108.5 113.7 81.7 60.0 117.6 109.8 76.5 87.0 73.4 46.7 16 Multifamily residential 3.9 7.4 9.4 7.8 8.5 7.2 8.0 7.6 8.2 8.8 6.4 8.0 17 Commercial 11.6 18.5 22.1 24.4 22.4 22.6 23.4 25.4 24.8 19.9 26.7 18.6 18 Farm 5.7 7.1 7.5 11.3 9.5 9.8 11.6 11.0 10.6 8.4 8.9 10.8 19 Other debt instruments 50.7 91.0 115.1 136.3 71.1 131.8 147.6 125.0 57.4 84.9 129.3 134.4 20 Consumer credit 25.4 40.2 47.6 46.3 2.3 26.4 50.9 41.6 -5.1 9.7 29.1 23.8 21 Bank loans n.e.c 4.4 26.7 37.1 49.2 37.3 53.0 55.5 42.8 13.5 61.2 45.0 61.0 22 Open market paper 4.0 2.9 5.2 11.1 6.6 19.0 8.0 14.2 24.8 -11.6 17.6 20.5 23 Other 16.9 21.3 25.1 29.7 24.9 33.4 33.1 26.4 24.1 25.6 37.6 29.1 24 By borrowing sector 185.0 266.0 308.7 328.6 263.4 274.9 341.0 316.1 241.3 285.6 301.9 248.0 25 State and local governments 15.2 17.3 20.9 18.4 25.3 22.5 17.9 18.9 19.7 30.9 26.1 18.9 26 Households 89.6 139.1 164.3 170.6 101.7 106.7 179.1 162.1 94.2 109.1 123.4 90.1 27 Farm 10.2 12.3 15.0 20.8 14.5 17.2 21.2 20.4 17.9 11.1 22.7 11.6 28 Nonfarm noncorporate 5.7 12.7 15.3 14.0 15.8 15.1 13.5 14.5 11.0 20.6 17.0 13.2 29 Corporate 64.3 84.6 93.2 104.8 106.1 113.5 109.3 100.2 98.4 113.8 112.7 114.2 30 Foreign 19.6 13.9 33.2 21.0 29.3 30.8 14.0 28.1 31.2 27.4 35.9 25.7 31 Corporate equities .3 .4 -.5 .8 2.1 * -.2 1.7 1.9 2.2 .6 -.7 32 Debt instruments 19.3 13.5 33.8 20.3 27.2 30.8 14.1 26.4 29.2 25.2 35.3 26.3 33 Bonds 8.6 5.1 4.2 3.9 .8 5.3 2.8 4.9 2.0 -.4 3.3 7.2 34 Bank loans n.e.c 5.6 3.1 19.1 2.3 11.5 6.5 2.1 2.4 6.1 17.0 6.1 6.8 35 Open market paper 1.9 2.4 6.6 11.2 10.1 13.9 6.1 16.3 15.7 4.5 20.6 7.1 36 U.S. government loans 3.3 3.0 3.9 3.0 4.7 5.2 3.1 2.8 5.4 4.0 5.3 5.1 Financial sectors 37 Total funds raised 23.4 51.4 76.8 84.3 66.7 86.9 87.8 80.8 59.8 73.5 90.8 83.0 By instrument 38 U.S. government related 15.1 21.9 36.7 48.2 43.0 43.1 43.7 52.8 44.7 41.3 38.7 47.6 39 Sponsored credit agency securities 3.3 7.0 23.1 24.3 24.4 29.6 21.2 27.3 25.1 23.7 24.0 35.2 40 Mortgage pool securities 12.2 16.1 13.6 24.0 18.6 13.5 22.5 25.5 19.6 17.6 14.7 12.4 41 Loans from U.S. government -.4 -1.2 0 0 0 0 0 0 0 0 0 0 42 Private financial sectors 8.2 29.5 40.1 36.0 23.7 43.8 44.1 28.0 15.2 32.2 52.1 35.4 43 Corporate equities -.2 2.6 1.8 2.5 6.2 8.9 3.6 1.4 7.1 5.2 10.4 7.4 44 Debt instruments 8.4 26.9 38.3 33.6 17.5 34.9 40.6 26.6 8.1 27.0 41.8 28.0 45 Corporate bonds 9.8 10.1 7.5 7.8 7.1 -.9 8.2 7.5 10.1 4.2 -1.7 -.1 46 Mortgages 2.1 3.1 .9 -1.2 -.9 -3.1 .3 -2.6 -5.8 4.0 -2.9 -3.3 4/ Bank loans n.e.c -3.7 -.3 2.8 -.4 -.5 2.7 -1.4 .6 * -.9 4.6 .7 48 Open market paper and RPs 2.2 9.6 14.6 18.2 4.6 20.0 25.4 10.9 -.8 10.1 23.7 16.3 49 Loans from Federal Home Loan Banks -2.0 4.3 12.5 9.2 7.1 16.2 8.2 10.1 4.6 9.6 18.0 14.5 Bv sector 50 Sponsored credit agencies 2.9 5.8 23.1 24.3 24.4 29.6 21.2 27.3 25.1 23.7 24.0 35.4 51 Mortgage pools 12.2 16.1 13.6 24.0 18.6 13.5 22.5 25.5 19.6 17.6 14.7 12.4 52 Private financial sectors 8.2 29.5 40.1 36.0 23.7 43.8 44.1 28.0 15.2 32.2 52.1 35.4 53 Commercial banks 2.3 1.1 1.3 1.6 .5 .4 1.3 1.8 .8 .3 .2 .5 54 Bank affiliates 5.4 2.0 7.2 6.5 6.9 8.3 8.0 4.9 5.8 8.0 6.9 9.6 55 Savings and loan associations .1 9.9 14.3 11.4 6.9 13.6 11.1 11.7 -1.4 15.2 17.0 10.3 56 Other insurance companies .9 1.4 .8 .9 .9 .9 .9 .9 .9 .9 .9 .9 57 Finance companies 4.3 16.9 18.1 16.8 5.8 13.7 22.7 10.9 5.2 6.3 18.6 8.7 58 REITs -2.2 -2.3 -1.1 -.4 -1.7 -.7 -.6 -.2 -1.4 -2.0 -.8 -.5 59 Open-end investment companies -2.4 .4 -.5 -.6 4.4 -7.6 .7 -1.9 5.3 3.4 9.3 5.9 All sectors 60 Total funds raised, by instrument 297.0 388.0 472.5 471.3 438.6 479.9 472.8 469.7 398.8 478.4 514.4 445.5 61 Investment company shares -2.4 .4 -.5 -.6 4.4 7.6 .7 -1.9 5.3 3.4 9.3 5.9 62 Other corporate equities 13.1 5.3 1.7 -4.0 16.8 -5.6 -6.9 -1.0 10.7 22.8 2.6 -13.9 63 Debt instruments 286.4 382.3 471.3 475.8 417.5 478.0 479.0 472.6 382.9 452.1 502.5 453.5 64 U.S. government securities 84.6 79.9 90.5 85.7 122.3 130.6 73.8 97.6 111.3 133.2 124.5 136.6 65 State and local obligations 15.7 21.9 26.1 21.8 26.9 25.3 20.9 22.7 21.6 32.1 28.7 21.9 66 Corporate and foreign bonds 41.2 36.1 31.8 32.8 38.4 29.4 32.6 33.0 47.4 29.5 29.3 29.5 67 Mortgages 87.2 132.3 148.3 155.9 121.1 96.5 160.6 151.1 114.2 128.0 112.4 80.6 68 Consumer credit 25.4 40.2 47.6 46.3 2.3 26.4 50.9 41.6 -5.1 9.7 29.1 23.8 69 Bank loans n.e.c 6.2 29.5 59.0 51.0 48.4 62.1 56.2 45.8 19.6 77.2 55.8 68.5 /U Open market paper and RPs 8.1 15.0 26.4 40.5 21.4 52.9 39.5 41.5 39.7 3.1 61.9 43.9 n Other loans 17.8 27.4 41.5 41.9 36.7 54.8 44.4 39.3 34.1 39.3 60.8 48.7 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A45 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 1979 1980 1981 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11997766 11997777 11997788 11997799 11998800 11998811 HI H2 HI H2 HI H2 1 Total funds advanced in credit markets to nonfinancial sectors 262.8 333.5 396.3 394.0 357.0 399.9 394.7 393.3 330.1 383.8 422.0 377.9 By public agencies and foreign 2 Total net advances 49.8 79.2 101.9 74.0 92.1 90.0 49.6 98.5 102.9 81.3 101.2 78.8 3 U.S. government securities 23.1 34.9 36.1 -6.2 15.6 16.1 -27.1 14.7 23.2 8.0 21.6 10.6 4 Residential mortgages 12.3 20.0 25.7 36.7 31.1 22.1 35.7 37.8 33.3 28.9 20.8 23.3 5 FHLB advances to savings and loans -2.0 4.3 12.5 9.2 7.1 16.2 8.2 10.1 4.6 9.6 18.0 14.5 6 Other loans and securities 16.4 20.1 27.6 34.3 38.2 35.6 32.8 35.8 41.7 34.8 40.8 30.3 Total advanced, by sector 7 U.S. government 7.9 10.0 17.1 19.0 23.7 24.9 19.8 18.3 25.4 22.1 29.9 19.9 8 Sponsored credit agencies 16.8 22.4 39.9 53.4 43.8 44.4 47.8 58.9 42.4 45.2 40.4 48.4 9 Monetary authorities 9.8 7.1 7.0 7.7 4.5 9.2 -.9 16.2 12.1 -3.1 -7.1 25.4 10 Foreign 15.2 39.6 38.0 -6.1 20.0 11.5 -17.2 5.1 23.0 17.0 38.0 -14.9 11 Agency borrowing not included in line 1 15.1 21.9 36.7 48.2 43.0 43.1 43.7 52.8 44.7 41.3 38.7 47.6 Private domestic funds advanced 12 Total net advances 228.1 276.2 331.0 368.2 307.9 353.1 388.9 347.6 271.9 343.8 359.5 346.7 13 U.S. government securities 61.5 45.1 54.3 91.9 106.7 114.4 101.0 82.9 88.1 125.3 102.9 126.0 14 State and local obligations 15.7 21.9 26.1 21.8 26.9 25.3 20.9 22.7 21.6 32.1 28.7 21.9 15 Corporate and foreign bonds 30.5 22.2 22.4 24.0 26.2 25.7 24.0 24.0 32.5 19.9 24.5 26.8 16 Residential mortgages 55.5 83.7 92.1 84.6 59.1 45.0 89.8 79.5 51.2 66.9 58.9 31.2 17 Other mortgages and loans 62.9 107.7 148.6 155.1 96.2 158.9 161.4 148.7 83.1 109.3 162.5 155.3 18 LESS: Federal Home Loan Bank advances -2.0 4.3 12.5 9.2 7.1 16.2 8.2 10.1 4.6 9.6 18.0 14.5 Private financial intermediation 19 Credit market funds advanced by private financial institutions 191.4 260.9 302.4 292.5 270.3 309.6 316.9 268.0 246.1 294.4 321.0 298.2 20 Commercial banking 59.6 87.6 128.7 121.1 99.7 103.3 130.3 112.0 58.5 140.9 101.9 104.8 21 Savings institutions 70.5 82.0 73.5 55.9 58.4 27.9 59.6 52.2 35.5 81.3 42.0 13.9 22 Insurance and pension funds 49.7 67.8 75.0 66.4 79.8 83.8 72.3 60.5 89.2 70.3 79.3 88.3 23 Other finance 11.6 23.4 25.2 49.0 32.4 94.5 54.8 43.3 62.8 1.9 97.7 91.2 24 Sources of funds 191.4 260.9 302.4 292.5 270.3 309.6 316.9 268.0 246.1 294.4 321.0 298.2 25 Private domestic deposits 124.4 138.9 140.8 143.2 171.1 188.6 135.1 151.2 158.7 183.6 203.4 173.8 26 Credit market borrowing 8.4 26.9 38.3 33.6 17.5 34.9 40.6 26.6 8.1 27.0 41.8 28.0 27 Other sources 58.5 95.1 123.2 115.7 81.6 86.1 141.2 90.3 79.4 83.8 75.8 96.3 28 Foreign funds -4.7 1.2 6.3 25.6 -22.3 6.6 45.6 5.6 -22.8 -21.9 -6.6 19.7 29 Treasury balances -.1 4.3 6.8 .4 -2.6 .6 5.0 -4.2 -2.3 -2.8 10.3 -9.1 30 Insurance and pension reserves 34.3 50.1 62.2 47.8 64.1 72.2 52.3 43.4 70.0 58.1 62.7 81.7 31 Other, net 29.0 39.5 48.0 41.9 42.4 6.7 38.4 45.4 34.5 50.4 9.3 4.0 Private domestic nonfinancial investors 32 Direct lending in credit markets 45.1 42.2 67.0 109.3 55.1 78.4 112.5 106.1 33.9 76.4 80.3 76.5 33 U.S. government securities 16.4 24.1 35.6 62.8 32.6 48.2 71.0 54.5 19.3 45.8 37.2 59.3 34 State and local obligations 3.3 -.8 1.4 1.4 3.1 14.1 2.6 .2 -1.8 7.9 20.5 7.7 35 Corporate and foreign bonds 11.8 -3.8 -2.9 10.3 3.6 -9.1 4.6 16.0 4.8 2.3 -5.0 -13.2 36 Commercial paper 1.9 9.6 16.5 11.4 -3.8 5.0 11.4 11.4 -4.5 -3.1 5.8 4.3 37 Other 11.7 13.2 16.4 23.5 19.7 20.1 22.9 24.0 16.0 23.3 21.8 18.5 38 Deposits and currency 133.4 148.5 152.1 152.6 182.3 195.7 149.3 155.9 167.6 197.1 209.4 181.9 39 Currency 7.3 8.3 9.3 7.9 10.3 8.7 9.0 6.9 8.5 12.1 4.8 12.6 40 Checkable deposits 10.4 17.2 16.3 19.2 4.2 15.5 16.6 21.9 -1.5 9.9 29.6 1.3 41 Small time and savings accounts 123.7 93.5 63.5 61.7 80.9 37.4 66.5 56.9 66.7 95.2 13.7 61.2 42 Money market fund shares * .2 6.9 34.4 29.2 107.5 30.2 38.6 61.9 -3.4 104.1 110.8 43 Large time deposits -12.0 25.8 46.6 21.2 50.3 27.6 3.3 39.1 26.3 74.2 48.3 6.8 44 Security RPs 2.3 2.2 7.5 6.6 6.5 .7 18.5 -5.3 5.3 7.8 7.7 -6.3 45 Foreign deposits 1.7 1.3 2.0 1.5 .9 -1.6 5.2 -2.3 .4 1.3 1.2 -4.5 46 Total of credit market instruments, deposits and currency 178.5 190.7 219.1 261.9 237.5 274.1 261.8 262.0 201.5 273.4 289.7 258.5 47 Public support rate (in percent) 19.0 23.7 25.7 18.8 25.8 22.5 12.6 25.0 31.2 21.2 24.0 20.8 48 Private financial intermediation (in percent) 83.9 94.4 91.3 79.4 87.8 87.7 81.5 77.1 90.5 85.6 89.3 86.0 49 Total foreign funds 10.5 40.8 44.3 19.5 -2.3 18.1 28.4 10.7 .2 -4.8 31.4 4.8 MEMO: Corporate equities not included above 50 Total net issues 10.6 5.7 1.2 -4.6 21.1 2.0 -6.2 -2.9 16.0 26.3 11.9 -8.0 51 Mutual fund shares -2.4 .4 -.5 -.6 4.4 7.6 .7 -1.9 5.3 3.4 9.3 5.9 52 Other equities 13.1 5.3 1.7 -4.0 16.8 -5.6 -6.9 -1.0 10.7 22.8 2.6 -13.9 53 Acquisitions by financial institutions 12.5 7.4 4.5 10.6 17.7 21.7 7.1 14.0 10.5 24.9 26.4 17.0 54 Other net purchases -1.9 -1.6 -3.4 -15.1 3.4 -19.8 -13.4 -16.9 5.5 1.4 -14.5 -25.0 NOTES BY LINE NUMBER. 30. Excludes net investment of these reserves in corporate equities. 1. Line 2 of table 1.58. 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. 39. Mainly an offset to line 9. 12. Line 1 less line 2 plus line 11. Also line 19 less line 26 plus line 32. Also sum 46. Lines 32 plus 38, or line 12 less line 27 plus 39 and 45. of lines 27, 32, and 38 less lines 40 and 46. 47. Line 2/line 1. 17. Includes farm and commercial mortgages. 48. Line 19/line 12. 25. Line 38 less lines 40 and 46. 49. Sum of lines 10 and 28. 26. Excludes equity issues and investment company shares. Includes line 18. 50. 52. Includes issues by financial institutions. 28. Foreign deposits at commercial banks, bank borrowings from foreign branches, NOTE. Full statements for sectors and transaction types quarterly, and annually and liabilities of foreign banking agencies to foreign affiliates. for flows and for amounts outstanding, may be obtained from Flow of Funds 29. Demand deposits at commercial banks. Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • March 1982 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1981 1982 MMeeaassuurree 11997799 11998800 11998811'' May June July Aug. Sept. Oct. Nov.' Dec. Jan. Feb. 1 Industrial production1 152.5 147.0 151.0 152.7 152.9 153.9 153.6 151.6 149.1 146.3 143.2 139.6 141.8 Market groupings 2 Products, total 150.0 146.7 150.6 152.3 152.7 153.0 152.6 151.0 149.4 147.5 145.8 142.3 144.3 3 Final, total 147.2 145.3 149.5 151.3 151.4 152.1 151.5 150.0 148.9 147.2 145.8 142.3 144.2 4 Consumer goods 150.8 145.4 147.8 150.7 150.3 150.7 149.6 147.8 146.5 144.0 141.4 138.6 140.9 5 Equipment 142.2 145.2 151.8 152.1 153.0 154.1 154.0 152.9 152.1 151.5 151.8 147.5 148.8 6 Intermediate 160.5 151.9 154.4 156.1 154.9 156.2 156.8 154.6 151.4 148.7 145.9 141.9 144.4 7 Materials 156.4 147.6 151.6 153.4 154.0 155.3 155.2 152.5 148.5 144.6 139.1 135.6 138.1 Industry groupings 8 Manufacturing 153.6 146.7 150.4 152.8 152.4 153.2 115533..22 151.1 148.2 145.0 141.7 137.6 140.1 Capacity utilization (percent)1-2 9 Manufacturing 85.7 79.1 78.5 80.0 79.6 79.8 79.6 78.3 76.6 74.8 72.9 70.6 71.8 10 Industrial materials industries .... 87.4 80.0 79.9 81.2 81.3 81.9 81.7 80.0 77.7 75.5 72.5 70.5 71.7 11 Construction contracts (1972 = 100)3 185.6 161.8 n.a. 160.0 170.0 153.0 156.0 159.0 157.0 142.0 172.0 n.a. n.a. 12 Nonagricultural employment, total4 . 136.5 137.6 139.1 139.1 139.2 139.6 139.7 139.9 139.6 139.1 138.5' 138.0' 138.2 13 Goods-producing, total 113.5 110.3 110.2 110.3 110.8 111.3 111.3 111.2 110.1 109.1 107.7' 106.2' 106.4 14 Manufacturing, total 108.2 104.4 104.2 105.0 105.0 105.6 105.4 105.4 104.1 102.9 101.5' 100.4' 100.2 15 Manufacturing, productionworker 105.3 99.4 98.5 99.6 99.6 100.1 9999..99 99.8 98.1 96.4 94.5' 93.2' 93.2 16 Service-producing 149.1 152.6 155.0 155.0 154.8 155.2 155.2 155.6 155.7 155.6 155.3' 155.5' 155.7 17 Personal income, total 308.5 342.9 381.5 375.8 378.5 384.0 387.8 390.9 392.8' 395.6 395.4' 396.0' n.a. 18 Wages and salary disbursements .. 289.5 314.7 347.3 343.6 345.2 347.8 351.4 353.7' 355.4 357.8 356.2' 357.1' n.a. 19 Manufacturing 248.6 261.5 288.9 289.2 289.9 292.1 294.3 294.9 293.7 292.0 288.8' 287.1' n.a. 20 Disposable personal income5 299.6 332.5 379.6 362.3 364.4 369.7 372.9 375.5r 379.6 381.9 381.7 383.5 n.a. 21 Retail sales6 281.6 303.8 332.5 326.7 333.9 333.8 338.5 338.9 331.1 333.3 334.1 329.2 334.5 Prices7 22 Consumer 217.4 246.8 272.4 269.0 271.3 274.4 276.5 279.3 279.9 280.7 281.5 282.5 n.a. 23 Producer finished goods 247.0' 269.8 269.6 270.5 271.8 271.5' 272.6 274.2 275.3' 276.1 277.3 276.9 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. 1. 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). 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1981 1981 1981 SSeerriieess Q1 Q2 Q3 Q4' Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4' Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Manufacturing 151.3 152.4 152.5 144.9 189.4 190.9 192.4 193.9 79.9 79.8 79.3 74.7 2 Primary processing 157.5 156.5 155.8 143.5 193.8 195.0 196.3 197.5 81.3 80.3 79.4 72.7 3 Advanced processing 148.1 150.2 150.7 145.6 187.1 188.7 190.4 192.0 79.1 79.6 79.2 75.9 4 Materials 154.2 153.4 154.3 144.1 187.6 189.0 190.3' 191.5' 82.2 81.2 81.1 75.2 5 Durable goods 150.9 152.3 152.8 140.2 191.8 192.9 194.2 195.3 78.7 78.9 78.7 71.8 6 Metal materials 117.5 112.8 114.2 99.5 141.5 141.7 141.9 142.1 83.0 79.6 80.5 70.0 7 Nondurable goods 179.2 178.4 175.8 164.4 207.3 209.2 211.2 213.1 86.5 85.3 83.3 77.3 8 Textile, paper, and chemical 186.7 185.9 182.8 169.7 217.1 219.4 221.7 223.9 86.0 84.8 82.5 75.8 9 Textile 114.8 114.5 115.5 106.8 140.1 140.6 141.0 141.6 81.9 81.4 81.8 75.4 10 Paper 151.4 151.0 152.2 148.1 159.7 160.7 161.9 162.8 94.8 93.9 94.1 91.0 11 Chemical 232.7 231.6 224.9 206.2 274.1 277.5 281.0 284.4 84.9 83.5 80.0 72.5 12 Energy materials 130.9 125.1 131.6 127.8 153.5 154.3' 155.0 155.8' 85.3 81.1 84.9 82.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Labor Market A47 2.11 Continued Previous cycle1 Latest cycle2 1981 1982 . c High Low High Low Feb. July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Capacity utilization rate (percent) 13 Manufacturing 88.0 69.0 87.2 74.9 79.8 79.8 79.6 78.3 76.6 74.8 72.9 70.6 71.8 14 Primary processing 93.8 68.2 90.1 71.0 81.5 80.1 79.9 78.2 75.7 72.7 69.6 67.0 67.9 15 Advanced processing 85.5 69.4 86.2 77.2 79.0 79.8 79.4 78.3 77.0 75.8 74.7 72.7 73.9 16 Materials 92.6 69.4 88.8 73.8 82.3 81.9 81.6 80.0 77.7 75.5 72.5 70.5 71.7 17 Durable goods 91.5 63.6 88.4 68.2 78.5 79.3 79.4 77.3 74.7 72.2 68.5 65.9 67.2 18 Metal materials 98.3 68.6 96.0 59.6 83.2 79.5 83.0 79.1 73.9 70.8 65.3 63.9 63.8 19 Nondurable goods 94.5 67.2 91.6 77.5 86.8 83.9 83.0 82.9 80.3 77.3 74.3 72.0 73.4 20 Textile, paper, and chemical.... 95.1 65.3 92.2 75.3 86.3 83.2 82.3 82.1 79.1 75.9 72.5 69.7 71.1 21 Textile 92.6 57.9 90.6 80.9 82.2 82.0 82.3 81.3 78.8 75.5 72.0 68.8 71.0 22 Paper 99.4 72.4 97.7 89.3 94.5 92.9 93.6 95.7 92.1 92.3 88.6 88.5 89.7 23 Chemical 95.5 64.2 91.3 70.7 85.3 81.2 79.7 79.2 76.2 72.4 69.0 65.8 66.9 24 Energy materials 94.6 84.8 88.3 82.7 85.8 86.2 85.6 83.0 82.5 82.2 81.3 82.0 82.5 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. 1981 1982 CCaatteeggoorryy 11997799 11998800 11998811 Aug. Sept. Oct. Nov. Dec. Jan.' Feb. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 166,952 169,848 172,272 172,559 172,758 172,967 173,154 173,330 173,494 173,657 2 Labor force (including Armed Forces)1 ... 107,050 109,042 111,812 110,978 110,659 111,170 111,430 111,348 111,038 111,333 3 Civilian labor force 104,962 106,940 108,670 110088,,881188 108,494 109,012 109,272 110099,,118844 110088,,887799 110099,,116655 Employment 4 Nonagricultural industries2 95,477 95,938 97,030 97,436 96,900 96,965 96,800 94,404 96,170' 96,217 5 Agriculture 3,347 3,364 3,368 3,404 3,358 3,378 3,372 3,209 3,411 3,373 Unemployment 6 Number 6,137 7,637 8,273 7,978 8,236 8,669 9,100 9,571 9,298 99,,557755 7 Rate (percent of civilian labor force) . 5.8 7.1 7.6 7.3 7.6 8.0 8.3 8.8 8.5 88..88 8 Not in labor force 59,902 60,806 60,460 61,581 62,099 61,797 61,724 61,982 62,456 62,324 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 89,823 90,564 91,548 91,901 92,033 91,832 91,522 91,113' 90,839' 90,936 10 Manufacturing 21,040 20,300 20,264 20,505 20,496 20,241 20,017 19,736' 19,528' 19,482 11 Mining 958 1,020 1,104 1,151 1,162 1,162 1,172 1,175' 1,168' 1,161 12 Contract construction 4,463 4,399 4,307 4,275 4,272 4,259 4,229 4,193' 4,068' 4,146 13 Transportation and public utilities 5,136 5,143 5,152 5,170 5,186 5,168 5,147 5,122' 5,120' 5,114 14 Trade 20,192 20,386 20,736 20,862 20,872 20,916 20,838 20,735' 20,843' 20,905 15 Finance 4,975 5,168 5,330 5,354 5,366 5,360 5,355 5,366' 5,361' 5,362 16 Service 17,112 17,901 18,598 18,667 18,774 18,788 18,838 18,856' 18,849' 18,902 17 Government 15,947 16,249 16,056 15,917 15,905 15,938 15,926 15,930' 15,902' 15,864 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 workfigures. 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

A48 Domestic Nonfinancial Statistics • March 1982 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value Monthly data are seasonally adjusted. Grouping 1 p 9 ro 6 - 7 1981 1981 1982 portion age' Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan.? Index (1967 = 100) MAJOR MARKET 1 Total index 100.00 151.0 151.4 151.8 152.1 151.9 152.7 152.9 153.9 153.6 151.6 149.1 146.3 143.2 139.6 2 Products 60.71 150.6 149.9 150.2 150.7 151.3 152.3 152.2 153.0 152.6 151.0 149.4 147.5 145.8 142.3 3 Final products 47.82 149.5 147.8 148.2 149.0 149.9 151.3 151.4 152.1 151.5 150.0 148.9 147.2 145.8 142.3 4 Consumer goods 27.68 147.8 146.9 147.8 148.3 148.9 150.7 150.3 150.7 149.6 147.8 146.5 144.0 141.4 138.6 5 Equipment 20.14 151.8 149.1 148.7 150.0 151.4 152.1 153.0 154.1 154.0 152.9 152.1 151.5 151.8 147.5 6 Intermediate products 12.89 154.4 157.5 157.7 157.1 156.3 156.1 154.9 156.2 156.8 154.6 151.4 148.7 145.9 141.9 7 Materials 39.29 151.6 153.8 154.3 154.4 152.9 153.4 154.0 155.3 155.2 152.5 148.5 144.6 139.1 135.6 Consumer goods 8 Durable consumer goods 7.89 140.5 140.1 141.2 143.6 144.3 147.3 147.9 146.5 142.5 140.4 136.3 129.7 123.2 118.9 9 Automotive products 2.83 137.9 130.4 133.9 139.2 142.9 151.8 153.1 147.6 137.6 139.1 132.8 121.7 119.2 107.5 10 Autos and utility vehicles .. 2.03 111.2 102.7 108.5 116.1 120.2 129.1 131.4 123.0 107.8 110.0 101.7 88.9 87.5 71.6 11 Autos 1.90 103.4 93.3 101.1 107.8 113.2 120.0 122.2 118.1 104.0 103.3 92.5 81.1 78.1 61.3 12 Auto parts and allied goods 80 205.6 200.8 198.4 197.5 200.8 209.5 208.0 210.0 213.1 212.9 211.8 205.0 199.7 198.5 13 Home goods 5.06 142.0 145.6 145.2 146.1 145.0 144.8 145.0 145.8 145.3 141.1 138.2 134.1 125.4 125.3 14 Appliances, A/C, and TV.. 1.40 119.6 132.2 125.8 129.1 121.2 121.4 120.0 123.6 126.8 119.0 116.7 107.7 85.7 99.2 15 Appliances and TV 1.33 121.2 134.1 128.2 131.2 122.6 122.3 121.4 124.8 128.9 121.4 118.7 108.7 86.6 100.1 16 Carpeting and furniture.... 1.07 158.0 156.2 160.4 160.2 165.2 163.1 166.3 163.2 160.1 158.6 152.6 146.9 144.4 135.8 17 Miscellaneous home goods. 2.59 147.4 148.4 149.5 149.4 149.7 149.9 149.8 150.7 149.2 145.8 143.9 143.2 139.1 135.1 18 Nondurable consumer goods ... 19.79 150.8 149.6 150.5 150.1 150.7 152.1 151.2 152.3 152.5 150.8 150.5 149.7 148.7 146.5 19 Clothing 4.29 119.7 121.2 120.9 118.9 120.6 122.1 120.9 122.8 121.9 119 3 117 8 116 1 112 6 20 Consumer staples 15.50 159.4 157.5 158.6 158.8 159.0 160.3 159.6 160.5 161.0 159.5 159.6 159.0 158.7 157.7 21 Consumer foods and tobacco 8.33 150.3 149.3 150.5 150.5 150.2 151.3 149.6 150.5 150.6 149.5 150.7 150.4 151.1 148.9 22 Nonfood staples 7.17 169.9 167.0 168.1 168.4 169.3 170.8 171.3 172.2 173.0 171.1 169.9 169.1 167.4 167.8 23 Consumer chemical products 2.63 222.8 213.0 219.3 220.0 224.1 225.1 224.4 226.8 227.7 227.5 223.0 220.3 216.1 217.4 24 Consumer paper products 1.92 127.9 127.9 129.0 128.7 127.4 127.7 129.2 127.6 128.9 127.7 126.9 125.7 126.6 127.0 25 Consumer energy products 2.62 147.7 149.4 145.4 143.7 144.9 147.9 148.9 150.0 150.4 146.4 148.2 149.4 148.5 147.9 26 Residential utilities.... 1.45 166.3 167.5 161.3 161.1 162.9 168.9 170.4 172.6 169.7 162.8 166.2 167.4 166.4 Equipment 2/ Business 12.63 181.1 177.7 177.5 179.3 181.0 182.0 183.6 184.8 184.8 182.7 180.5 179.0 178.4 172.4 28 Industrial 6.77 166.4 161.5 163.4 164.6 165.9 167.0 169.0 169.4 170.2 168.9 166.9 165.1 163.7 158.6 29 Building and mining 1.44 286.1 264.0 270.4 276.6 281.7 286.4 289.7 290.3 293.0 293.6 295.6 293.8 294.1 289.1 30 Manufacturing 3.85 127.9 127.7 128.4 128.6 128.5 128.4 130.6 130.8 130.8 129.3 125.7 123.6 121.7 117.1 31 Power 1.47 149.7 149.1 149.9 149.3 149.9 150.8 151.2 151.6 152.7 150.4 148.4 147.1 145.4 139.2 32 Commercial transit, farm .... 5.86 198.0 196.6 193.7 196.2 198.6 199.4 200.4 202.5 200.9 198.5 196.2 195.0 195.5 188.4 33 Commercial 3.26 258.6 249.3 250.4 252.7 254.5 258.0 259.9 263.7 264.3 264.2 259.8 260.6 261.3 255.0 34 Transit 1.93 125.4 133.1 124.8 127.8 131.5 130.0 129.7 128.4 124.6 121.0 120.6 116.6 117.5 109.0 35 Farm 67 112.1 122.9 116.4 118.5 119.7 113.9 114.9 118.0 111.8 102.1 104.6 101.7 99.8 92.9 36 Defense and space 7.51 102.7 100.9 100.5 100.7 101.5 102.0 101.7 102.6 102.8 103.0 104.5 105.3 107.0 105.5 Intermediate products 37 Construction supplies 6.42 141.9 148.4 148.9 149.0 147.9 146.5 143.4 144.3 144.0 139.7 135.2 130.1 127.2 122.3 38 Business supplies 6.47 166.8 166.6 166.4 165.1 164.7 165.6 166.2 168.0 169.5 169.4 167.5 167.1 164.5 161.4 39 Commercial energy products . 1.14 176.4 175.5 174.0 174.7 175.2 179.0 177.7 180.0 176.6 174.2 174.3 177.0 177.4 177.1 Materials 40 Durable goods materials 20.35 149.1 150.0 150.6 152.2 151.8 152.8 152.4 153.6 154.3 150.4 145.6 141.0 134.1 129.2 41 Durable consumer parts 4.58 114.5 114.7 114.3 118.4 119.7 121.1 123.1 123.2 121.8 114.5 107.6 102.8 92.9 84.9 42 Equipment parts 5.44 191.2 189.7 188.9 191.1 192.8 194.0 193.2 193.8 194.7 192.7 190.3 188.7 183.3 178.7 43 Durable materials n.e.c 10.34 142.4 144.7 146.6 146.7 144.3 145.1 143.9 145.9 147.4 144.1 138.9 132.9 126.5 122.7 44 Basic metal materials 5.57 112.0 116.6 118.6 118.3 113.8 114.3 112.8 114.5 117.4 113.1 106.5 101.6 94.7 93.2 45 Nondurable goods materials.... 10.47 174.6 180.2 179.9 177.5 179.3 179.0 176.9 176.5 175.4 175.5 170.6 164.7 115588..77 115544..22 46 Textile, paper, and chemical materials 7.62 181.4 187.6 187.3 185.1 186.8 187.3 183.7 183.5 182.4 182.5 176.4 169.9 162.7 157.0 47 Textile materials 1.85 113.0 114.8 115.1 114.4 115.1 114.9 113.4 115.5 116.0 114.9 111.6 106.9 102.0 97.6 48 Paper materials 1.62 150.8 150.5 151.0 152.6 152.2 150.9 149.8 150.0 151.5 155.1 149.6 150.2 144.6 144.7 49 Chemical materials 4.15 224.0 234.7 233.8 229.5 232.4 233.9 228.4 227.1 224.1 223.4 215.9 205.8 196.9 188.4 50 Containers, nondurable 1.70 169.2 173.0 172.3 168.7 172.0 167.8 171.4 171.7 169.4 170.9 166.7 163.5 160.9 158.4 51 Nondurable materials n.e.c... 1.14 137.4 141.0 141.8 139.6 139.7 140.5 139.6 136.6 137.8 136.2 137.1 131.9 128.7 129.0 52 Energy materials 8.48 129.0 130.2 131.6 130.9 123.1 123.0 129.3 133.3 132.6 128.9 128.3 128.1 127.0 128.1 53 Primary energy 4.65 115.0 115.8 118.2 116.9 104.2 104.4 113.7 120.3 120.9 117.4 116.4 115.6 115.9 116.1 54 Converted fuel materials .... 3.82 145.9 147.8 148.0 148.1 146.1 145.5 148.2 149.2 146.9 142.9 142.8 143.4 140.5 142.7 Supplementary groups 55 Home goods and clothing 9.35 131.7 134.4 134.1 133.6 133.8 134.4 133.9 135.2 134.5 131.1 128.8 125.9 119.5 116.5 56 Energy, total 12.23 137.4 138.5 138.5 137.7 132.6 133.5 138.0 141.2 140.5 136.8 136.9 137.2 136.3 136.9 57 Products 3.76 156.4 157.3 154.0 153.1 154.1 157.3 157.6 159.1 158.4 154.8 156.1 157.8 157.3 156.7 58 Materials 8.48 129.0 130.2 131.6 130.9 123.1 123.0 129.3 133.3 132.6 128.9 128.3 128.1 127.0 128.1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Output A49 2.13 Continued 1967 Grouping c S o I d C e p p r o o r - - a 1 v 9 g 8 . 1 r tion Feb. Apr. May June July Aug. Sept. Oct. Nov. Dec Jan.? Feb. Index (1967 = 100) MAJOR INDUSTRY 1 Mining and utilities. 12.05 154.9 153.3 154.1 154.8 150.5 152.1 156.3 159.1 158.2 155.8 156.1 155.4 154.2 155.6 154.0 2 Mining 6.36 142.2 140.4 143.1 143.2 135.2 135.4 141.7 146.5 146.0 145.0 145.3 143.3 142.5 143.8 142.0 3 Utilities 5.69 169.1 167.6 166.4 167.8 167.6 170.7 172.7 173.1 171.9 167.8 168.1 168.9 167.3 168.8 167.4 4 Electric 3.88 190.9 189.3 187.1 188.9 188.6 192.9 195.6 196.2 194.2 188.3 189.4 190.9 188.8 190.4 188.7 5 Manufacturing 87.95 150.4 151.1 151.2 151.6 152.0 152.8 152.4 153.2 153.2 151.1 148.0 145.0 141.7 137.6 140.1 6 Nondurable 35.97 164.7 165.6 166.2 165.3 165.9 166.4 165.8 167.1 167.3 165.9 162.8 160.3 156.9 153.5 155.8 7 Durable 51.98 140.5 141.0 140.8 142.1 142.5 143.5 143.2 143.6 143.4 140.9 137.8 134.4 131.2 126.6 129.2 Mining 8 Metal 10 .51 123.1 125.5 134.1 131.1 123.1 125.0 123.5 123.6 124.1 121.5 119.8 115.4 109.4 118.0 9 Coal 11.12 .69 141.3 147.5 159.0 151.2 75.9 77.0 122.9 170.0 167.4 161.9 166.9 160.8 145.5 147.9 154.3 10 Oil and gas extraction ... 13 4.40 146.8 141.4 142.2 144.1 146.1 146.2 148.2 147.7 148.2 148.8 148.9 148.4 150.5 151.5 147.1 11 Stone and earth minerals. 14 .75 129.4 138.4 140.0 138.8 133.7 132.2 132.7 133.3 128.2 123.4 122.0 116.7 115.7 112.5 Nondurable manufactures 12 Foods 20 8.75 152.1 151.9 152.5 152.4 151.9 152.2 151.3 151.6 151.9 150.7 151.4 153.0 152.4 150.2 13 Tobacco products 21 .67 122.9 123.5 125.4 125.7 122.2 122.3 120.9 121.3 123.8 122.4 124.3 119.6 121.7 14 Textile mill products 22 2.68 135.7 138.4 139.3 136.2 138.9 138.8 138.3 139.4 140.7 136.3 132.5 126.1 122.8 117.0 15 Apparel products 23 3.31 120.3 123.8 121.6 120.2 121.6 122.6 121.1 122.6 122.6 122.5 117.8 113.8 112.5 16 Paper and products 26 3.21 155.1 156.5 156.0 157.6 157.0 155.9 153.4 154.9 156.7 158.6 153.3 152.6 146.8 146.9 148.5 17 Printing and publishing 27 4.72 144.2 143.9 144.8 142.7 141.6 141.3 143.1 144.4 146.1 145.9 145.6 143.4 144.9 146.0 147.1 18 Chemicals and products 28 7.74 215.4 218.9 219.8 218.5 219.8 220.6 218.4 221.5 219.2 216.3 208.8 204.6 197.9 192.7 19 Petroleum products 29 1.79 129.7 133.1 131.5 130.3 130.0 129.8 129.3 128.7 130.4 129.1 128.3 128.0 128.4 123.0 120.1 20 Rubber and plastic products . 30 2.24 274.0 264.0 270.2 269.5 275.2 280.3 285.1 285.3 286.7 282.2 276.0 264.1 246.9 237.3 21 Leather and products 31 .86 69.3 68.9 68.3 68.8 68.9 69.8 68.4 70.1 69.6 69.7 71.2 70.8 65.6 63.7 Durable manufactures 22 Ordnance, private and government 19.91 3.64 81.1 78.6 78.4 78.5 79.8 80.9 80.9 80.6 81.8 82.3 82.5 84.3 85.5 84.7 86.3 23 Lumber and products 24 1.64 119.0 127.4 126.2 125.6 126.3 126.2 122.5 122.9 119.1 113.2 109.6 104.7 103.8 95.5 24 Furniture and fixtures 25 1.37 157.2 150.0 154.3 155.6 158.7 158.9 162.4 164.9 163.3 159.9 157.2 153.7 149.4 142.5 25 Clay, glass, stone products 32 2.74 147.9 156.8 156.4 154.6 154.3 151.7 148.1 148.7 148.2 147.3 143.4 135.9 132.0 128.2 26 Primary metals 33 6.57 107.9 114.1 114.5 114.9 110.6 111.9 107.4 109.4 113.1 108.6 102.3 96.6 89.5 87.2 86.8 27 Iron and steel 331.2 4.21 99.8 108.7 108.4 108.0 103.4 105.6 98.5 99.7 105.1 99.2 92.2 87.2 79.2 78.3 28 Fabricated metal products. 34 5.93 136.4 135.8 137.6 139.2 139.5 138.4 139.3 140.1 140.0 136.8 133.8 130.2 126.1 119.7 122.1 29 Nonelectrical machinery... 35 9.15 171.2 167.3 168.3 169.2 169.7 172.1 174.1 176.7 176.4 173.9 169.7 167.9 166.7 161.2 163.5 30 Electrical machinery 36 8.05 178.4 177.6 174.9 177.4 178.8 179.9 180.1 180.9 182.6 180.0 179.6 175.7 170.7 168.5 171.3 31 Transportation equipment 37 9.27 116.1 117.4 116.1 119.5 121.3 123.7 123.4 119.8 115.4 114.2 110.6 106.1 103.7 96.5 101.2 32 Motor vehicles and parts 371 4.50 122.3 120.0 119.9 127.1 130.7 136.4 137.5 130.5 123.1 120.4 113.8 105.5 100.4 90.2 97.3 33 Aerospace and miscellaneous transportation equipment 372-9 4.77 110.2 114.9 112.6 112.3 112.4 111.8 110.2 109.7 108.2 108.5 107.5 106.8 106.7 102.5 104.9 34 Instruments 38 2.11 170.3 173.9 171.1 170.0 170.0 170.6 171.3 172.1 172.3 169.7 168.6 167.1 166.4 162.1 164.6 35 Miscellaneous manufactures .... 39 1.51 154.7 152.9 154.9 155.4 157.3 157.0 158.8 159.4 158.6 154.2 151.5 151.7 147.9 142.9 144.6 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 Products, total 507.41 612.3 612.9 614.5 618.0 616.2 622.2 619.2 621.4 616.5 611.5 605.0 597.6 592.2 574.0 585.7 37 Final 390.91 474.0 471.6 472.8 476.4 476.3 482.4 480.5 481.9 476.4 473.0 470.1 465.2 461.6 446.7 455.9 38 Consumer goods 277.51 317.9 316.8 318.8 320.5 320.0 32.4.3 322.1 324.0 319.3 317.7 314.3 310.5 306.7 296.6 303.0 39 Equipment 113.41 156.1 154.8 154.0 155.9 156.3 158.1 158.5 157.9 157.1 155.3 155.8 154.7 154.9 150.1 152.8 40 Intermediate 116.61 138.2 141.2 141.7 141.7 139.9 139.8 138.7 139.5 140.1 138.4 134.9 132.4 130.6 127.3 129.8 1. 1972 dollar value. NOTE. Published groupings include some series and subtotals not shown separately. For description and historical data, see Industrial Production—1976 Revision (Board of Governors of the Federal Reserve System: Washington, D.C.), December 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics • March 1982 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1981 1982 IItteemm 11997799 11998800 11998811 June July Aug. Sept. Oct.' Nov.' Dec.' Jan. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,552 1,191 969' 963 913 865 850 722 723 789 836 2 1-family 981 710 558 567 528 494 453 398 401 454 456 3 2-or-more-family 571 481 412' 396 385 371 397 324 322 335 380 4 Started 1,745 1,292 1,085' 1,046' 1,040' 946' 899' 854' 860 899 894 5 1-family 1,194 852 706' 705' 696' 614' 623' 507 554 559 588 6 2-or-more-family 551 440 379' 341' 344' 332' 276' 347 306 340 306 7 Under construction, end of period1 1,140 896 691' 853' 822 788 762 726 709 705 8 1-family 639 515 385 482 462 438 423 407 399 401 9 2-or-more-family 501 382 305 371 361 349 340 318 311 303 n a. 10 Completed 1,855 1,502 1,264 1,377 1,324 1,226 1,197 1,251 1,016 1,132 11 1-family 1,286 957 818 877 864 804 776 713 650 672 12 2-or-more-family 569 545 446 500 460 422 421 538 366 460 13 Mobile homes shipped 277 222 241 256' 267' 238' 232' 208 207 206 Merchant builder activity in 1-family units 14 Number sold 709 545r 436' 417' 408 364 335' 359 390 457 353 15 Number for sale, end of period1 402 342' 278 318 312 308 304' 291 282 272 277 Price (thousands of dollars)2 Median 16 Units sold 62.8r 64.7r 68.9' 68.8' 69.5' 72.6' 65.8 69.6 71.3 68.6 68.0 17 Units sold 71.9 76.4' 83.1' 84.7 82.6' 87.0' 81.3' 82.5 85.3 83.3 81.3 EXISTING UNITS (1-family) 18 Number sold 3,701 2,881 2,350' 2.680' 2,450' 2.240' 2,070' 1,930 1,900 1,940 1,820 Price of units sold (thous. of dollars)2 19 Median 55.5 62.1 66.1' 66.7' 67.5 68.1 67.1 66.0 65.9 66.6 66.8 20 Average 64.0 72.7 78.0 79.9 79.6 80.5 79.1 76.6 77.5 78.6 80 .3 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 230,781 230,273 236,312 233,998 233,862 229,844 230,892 229,857 231,587 234,395 230,956 22 Private 181,690 174,896 182,816 181,811 182,288 180,576 178,649 178,245 179,179 181,323 180,055 23 Residential 99,032 87,260 85,720 85,971 82,916 80,535 78,503 78,202 78,056 79,643 77,864 24 Nonresidential, total 82,658 87,636 97,096 95,840 99,372 100,041 100,146 100,043 101,123 101,680 102,191 Buildings 25 Industrial 14,953 13,839 16.839 16,243 17,182 18,295 18,344 18,558 18,373 17,736 17,213 26 Commercial 24,919 29,940 33,308 32,442 34,028 33,721 33,412 33,046 34,506 35,921 36,8 89 27 Other 7,427 8,654 9.358 9,735 9,241 9,367 9,402 9,553 9,193 9,019 9,779 28 Public utilities and other 35,359 35,203 37.591 37,420 38.921 38,658 38,988 38,886 39,051 39,004 38,310 29 Public 49,088 55,371 53,496 52,186 51,574 49,268 52,243 51,611 52,408 53,072 50,901 30 Military 1,648 1,880 1,956 2,254 2,091 2,105 2,065 2,116 1,960 1,919 2,1 08 31 Highway 11,998 13,784 13,143 13,338 13,203 12,227 12,537 11,515 12,478 11,642 12,167 32 Conservation and development 4,586 5,089 5,268 4,912 5,233' 4,717 4,910' 6,978 4,868 4,908 5,273 33 Other 30,856 34,618 33,129 31,682 31.047' 30,219 32,731 31,002 33,102 34,603 31,353 1. Not at annual rates. NOTE. Census Bureau estimates for all series except (a) mobile homes, which 2. Not seasonally adjusted. are private, domestic shipments as reported by the Manufactured Housing Institute 3. Value of new construction data in recent periods may not be strictly comparable and seasonally adjusted by the Census Bureau, and (b) sales and prices of existing with data in prior periods due to changes by the Bureau of the Census in its units, which are published by the National Association of Realtors. All back and estimating techniques. For a description of these changes see Construction Reports current figures are available from originating agency. Permit authorizations are (C-30-76-5), issued by the Bureau in July 1976. those reported to the Census Bureau from 16,000 jurisdictions beginning with 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Prices A51 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data, except as noted 12 months to 3 months (at annual rate) to 1 month to IIInnndddeeexxx llleeevvveeelll IIIttteeemmm 1981 1981 1982 JJJaaannn... 11998811 11998822 111999888222 JJaann.. JJaann.. Mar. June Sept. Dec. Sept. Oct. Nov. Dec. Jan. === ((( 111 111 999 000 666 000 777 ))) ]]] CONSUMER PRICES2 1 All items 11.7 8.4 9.6 8.1 12.8 5.4 1.1 .4 .5 .4 .3 282.5 2 Commodities 10.3 5.5 8.8 3.2 8.5 3.6 .7 .4 .2 .3 .1 258.8 3 Food 10.2 4.6 5.3 2.2 7.7 1.7 .7 .3 .1 .1 .7 281.0 4 Commodities less food 10.5 5.8 10.2 3.8 9.0 4.3 .8 .4 .2 .4 -.1 245.9 5 Durable 9.8 5.6 1.3 9.7 10.8 1.2 .7 -.1 .1 .3 .2 233.4 6 Nondurable 11.2 6.1 26.7 -1.4 4.6 3.8 .6 .8 .5 -.3 .2 260.2 7 Services 13.7 12.6 10.9 14.8 19.2 7.8 1.5 .5 .9 .5 .5 323.9 8 Rent 9.1 8.4 7.0 7.7 10.2 9.0 .8 .8 .7 .7 .6 217.8 9 Services less rent 14.3 13.1 11.5 15.8 20.4 7.6 1.6 .4 1.0 .4 .5 344.2 Other groupings 10 All items less food 12.0 9.2 10.5 9.3 13.9 6.2 1.2 .5 .6 .4 .2 281.4 11 All items less food and energy 11.4 9.3 6.4 11.6 15.0 5.6 1.1 .5 .4 .5 .3 268.5 12 Homeownership 14.8 9.4 2.9 16.9 21.5 .3 1.7 -.3 .2 .2 -.1 367.5 PRODUCER PRICES 13 Finished goods 11.3 6.3 12.8 7.1 3.4 5.2 .2 .5 .5 .3 .4 277.4 14 Consumer 11.3 5.8 13.2 6.4 2.8 4.0 .2 .4 .4 .2 .5 277.7 IS Foods 8.3 2.2 5.1 3.5 1.6 -3.7 -.5 -.3 -.6 .0 1.1 256.4 16 Excluding foods 12.7 7.3 16.5 7.6 3.2 7.2 .5 .6 .9 .3 .2 284.4 17 Capital equipment 11.1 8.4 11.6 10.0 5.7 9.7 .2 1.0 .8 .6 .4 276.1 18 Intermediate materials3 10.8 6.2 13.8 8.0 5.2 2.8 .2 .0 .4 .3 .3 316.6 Crude materials 19 Nonfood 18.0 6.9 34.3 16.1 1.1 -5.6 .5 -.8 -.8 .1 -1.1 481.1 20 Food 11.1 -10.4 -15.6 6.4 -18.2 -25.5 -3.8 -2.3 -2.2 -2.8 4.4 242.5 1. Not seasonally adjusted. 3. Excludes intermediate materials for food manufacturing and manufactured 2. Figures for consumer prices are those for all urban consumers. animal feeds. SOURCE. Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics • March 1982 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1980 1981 AAccccoouunntt 11997799 11998800 11998811 Q4 Q1 Q2 Q3 Q4 GROSS NATIONAL PRODUCT 1 Total 2,413.9 2,626.1 2,924.8 2,730.6 2,853.0 2,885.8 2,965.0 2,995.3 By source 2 Personal consumption expenditures 1,510.9 1,672.8 1,857.8 1,751.0 1,810.1 1.829.1 1.883.9 1,908.4 3 Durable goods 212.3 211.9 232.1 223.3 238.3 227.3 236.2 226.8 4 Nondurable goods 602.2 675.7 743.0 703.5 726.0 735.3 751.3 759.3 5 Services 696.3 785.2 882.7 824.2 845.8 866.5 896.4 922.2 6 Gross private domestic investment 415.8 395.3 450.7 397.7 437.1 458.6 463.0 443.9 7 Fixed investment 398.3 401.2 433.7 415.1 432.7 435.3 435.6 431.3 8 Nonresidential 279.7 296.0 328.3 302.1 315.9 324.6 335.1 337.5 9 Structures 96.3 108.8 125.4 111.5 117.2 123.1 128.3 133.0 10 Producers' durable equipment 183.4 187.1 202.9 190.7 198.7 201.5 206.8 204.5 11 Residential structures 118.6 105.3 105.4 113.0 116.7 110.7 100.5 93.8 12 Nonfarm 113.9 100.3 99.9 107.6 111.4 105.4 94.9 88.1 13 Change in business inventories 17.5 -5.9 17.0 -17.4 4.5 23.3 27.5 12.6 14 Nonfarm 13.4 -4.7 14.6 -14.0 6.8 21.5 23.1 7.1 15 Net exports of goods and services 13.4 23.3 25.0 23.3 29.2 20.8 29.3 20.8 16 Exports 281.3 339.8 365.6 346.1 367.4 368.2 368.0 358.9 17 Imports 267.9 316.5 340.6 322.7 338.2 347.5 338.7 338.2 18 Government purchases of goods and services 473.8 534.7 591.3 558.6 576.5 577.4 588.9 622.2 19 Federal 167.9 198.9 203.3 212.0 221.6 219.5 226.4 253.6 20 State and local 305.9 335.8 361.0 346.6 354.9 357.9 362.5 368.6 By major type of product 21 Final sales, total 2,396.4 2,632.0 2,907.8 2,748.0 2,848.5 2,862.5 2,937.6 2,982.6 22 Goods 1,055.9 1,130.4 1,272.5 1,169.0 1,247.5 1,257.0 1,298.3 1,287.4 23 Durable 451.2 458.6 507.4 476.7 501.4 516.9 525.2 486.2 24 Nondurable 604.7 671.9 765.1 692.2 746.1 740.1 773.0 801.2 25 Services 1,097.2 1,229.6 1,371.1 1,285.3 1,317.1 1,344.7 1.390.5 1,432.2 26 Structures 260.8 266.0 281.1 276.4 288.4 284.1 276.3 275.7 27 Change in business inventories 17.5 -5.9 17.0 -17.4 4.5 23.3 27.5 12.6 28 Durable goods 11.5 -4.0 7.9 .7 -4.2 18.5 18.6 -1.3 29 Nondurable goods 6.0 -1.8 9.1 -18.1 8.6 4.8 8.9 14.0 30 MEMO: Total GNP in 1972 dollars 1,483.0 1,480.7 1,510.1 1,485.6 1,516.4 1,510.4 1,515.8 1,497.6 NATIONAL INCOME 31 Total 1,963.3 2,121.4 2,346.3 2,204.8 2,291.1 2,320.9 2,377.6 2,395.5 32 Compensation of employees 1,460.9 1,596.5 1,771.5 1,661.8 1,722.4 1,752.0 1,790.7 1,820.9 33 Wages and salaries 1.235.9 1,343.6 1,482.6 1,397.3 1,442.9 1,467.0 1.498.7 1,522.0 34 Government and government enterprises 235.9 253.6 273.9 263.3 267.1 270.5 274.7 283.2 35 Other 1,000.0 1,090.0 1,208.7 1,134.0 1,175.7 1,196.4 1,224.0 1,238.8 36 Supplement to wages and salaries 225.0 252.9 288.8 264.5 279.5 285.1 292.0 298.9 37 Employer contributions for social insurance 106.4 115.8 134.7 121.0 131.5 133.2 135.6 138.4 38 Other labor income 118.6 137.1 154.2 143.5 148.0 151.8 156.3 160.5 39 Proprietors' income1 131.6 130.6 134.6 134.0 132.1 134.1 137.1 135.2 40 Business and professional1 100.7 107.2 112.4 111.6 113.2 112.5 112.4 111.5 41 Farm1 30.8 23.4 22.3 22.5 18.9 21.7 24.7 23.8 42 Rental income of persons2 30.5 31.8 33.6 32.4 32.7 33.3 33.9 34.5 43 Corporate profits' 196.8 182.7 191.5 183.3 203.0 190.3 195.7 n.a. 44 Profits before tax3 255.4 245.5 232.9 249.5 257.0 229.0 234.4 n.a. 45 Inventory valuation adjustment -42.6 -45.7 -27.5 -48.4 -39.2 -24.0 -25.3 -21.5 46 Capital consumption adjustment -15.9 -17.2 -13.9 -17.8 -14.7 -14.7 -13.4 -12.8 47 Net interest 143.4 179.8 215.0 193.3 200.8 211.0 220.2 228.0 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 A53 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1980 1981 AAccccoouunntt 11997799 11998800 11998811 Q4 Q1 Q2 Q3 Q4 PERSONAL INCOME AND SAVING 1 Total personal income 1,943.8 2,160.2 2,404.0 2,256.2 2,319.8 2,368.5 2,441.7 2,485.9 2 Wage and salary disbursements 1,236.1 1,343.7 1,482.6 1,397.8 1,442.9 1,467.0 1,498.5 1,522.1 3 Commodity-producing industries 437.9 465.4 512.7 484.0 501.3 508.1 520.2 521.0 4 Manufacturing 333.4 350.7 387.3 364.0 377.4 386.7 393.9 391.0 5 Distributive industries 303.0 328.9 361.0 340.6 351.9 357.8 365.3 369.1 6 Service industries 259.2 295.7 335.0 310.0 322.5 330.5 338.5 348.7 7 Government and government enterprises 236.1 253.6 273.9 263.3 267.1 270.5 274.5 283.3 8 Other labor income 118.6 137.1 154.2 143.5 148.0 151.8 156.3 160.5 9 Proprietors'income1 131.6 130.6 134.6 134.0 132.1 134.1 137.1 135.2 10 Business and professional1 100.8 107.2 112.4 111.6 113.2 112.5 112.4 111.5 11 Farm1 30.8 23.4 22.3 22.5 18.9 21.7 24.7 23.8 12 Rental income of persons2 30.5 31.8 33.6 32.4 32.7 33.3 33.9 34.5 13 Dividends 48.6 54.4 61.3 56.1 58.0 60.2 63.0 64.1 14 Personal interest income 209.6 256.3 308.6 269.7 288.7 300.9 315.7 329.0 15 Transfer payments 249.4 294.2 333.2 313.9 319.6 324.2 342.2 347.0 16 Old-age survivors, disability, and health insurance benefits 131.8 153.8 180.4 165.3 169.8 172.0 188.5 191.4 17 LESS: Personal contributions for social insurance 80.6 87.9 104.2 91.2 102.3 103.1 105.0 106.5 18 EQUALS: Personal income 1,943.8 2,160.2 2,404.0 2,256.2 2,319.8 2,368.5 2.441.7 2,485.9 19 LESS: Personal tax and nontax payments 302.0 338.5 388.1 359.2 372.0 382.9 399.8 398.0 20 EQUALS: Disposable personal income 1,641.7 1,821.7 2,015.8 1,897.0 1.947.8 1,985.6 2,042.0 2,087.9 21 LESS: Personal outlays 1,555.5 1,720.4 1,908.5 1,799.4 1,858.9 1,879.0 1,935.1 1,961.2 22 EQUALS: Personal saving 86.2 101.3 107.3 97.6 88.9 106.6 106.9 126.7 MEMO: Per capita (1972 dollars) 23 Gross national product 6,588 6,503 6,568 6,499 66,,661199 66,,558811 66,,558855 66,,449922 24 Personal consumption expenditures 4,135 4,108 4,170 4,142 4,191 4,162 4,184 4,149 25 Disposable personal income 4,493 4,473 4,525 4,488 4,511 4,517 4,535 4,539 26 Saving rate (percent) 5.2 5.6 5.3 5.1 4.6 5.4 5.2 6.1 GROSS SAVING 27 Gross saving 412.0 401.9 454.9 406.7 442.6 465.3 469.4 n.a. 28 Gross private saving 398.9 432.9 479.7 436.4 451.1 475.3 486.2 n.a. 29 Personal saving 86.2 101.3 107.3 97.6 88.9 106.6 106.9 126.7 30 Undistributed corporate profits1 59.1 44.3 50.7 40.4 55.7 52.0 52.8 n.a. 31 Corporate inventory valuation adjustment -42.6 -45.7 -27.5 -48.4 -39.2 -24.0 -25.3 -21.5 Capital consumption allowances 32 Corporate 155.4 175.4 119977..77 118833..22 118877..55 119944..66 220011..11 220077..77 33 Noncorporate 98.2 111.8 123.9 115.8 119.0 122.1 125.4 129.1 34 Wage accruals less disbursements .0 .0 .0 .5 .0 0 .0 .0 35 Government surplus, or deficit (-), national income and product accounts 11.9 -32.1 -25.9 -30.8 -9.7 -11.2 -17.9 n.a. 36 Federal -14.8 -61.2 -62.5 -67.9 -46.6 -47.2 -55.7 n.a. 37 State and local 26.7 29.1 36.6 37.1 36.9 36.1 37.8 n.a. 38 Capital grants received by the United States, net 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 39 Gross investment 414.1 401.2 454.1 400.1 446.0 458.3 469.6 442.7 40 Gross private domestic 415.8 395.3 450.7 397.7 437.1 458.6 463.0 443.9 41 Net foreign -1.7 5.9 3.5 2.3 8.8 -.2 6.5 -1.3 42 Statistical discrepancy 2.2 -.7 -.8 -6.6 3.4 -6.9 .2 n.a. 1. With inventory valuation and capital consumption adjustments. SOURCE. Survey of Current Business (Department of Commerce). 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • March 1982 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1980 1981 IItteemm ccrreeddiittss oorr ddeebbiittss 11997788 11997799 11998800 Q3 Q4 Q1 Q2 Q3P f1 Balance on current account -14,075 1,414 3,723 4,975 1,390 3,263 1,142 2,100 11,,114499 33,,224444 33,,554466 22,,443388 886 3 Merchandise trade balance2 -33,759 -27,346 -25,342 -2,902 -5,570 -4,677 -6,910 -7,042 4 Merchandise exports 142,054 184,473 223,966 56,252 57,149 61,098 60,477 58,037 5 Merchandise imports -175,813 -211,819 -249,308 -59,154 -62,719 -65,775 -67,387 -65,079 6 Military transactions, net 738 -1,947 -2,515 -455 -715 -568 -698 -72 7 Investment income, net3 21,400 33,462 32,762 8,154 8,257 9,053 8,733 9,490 8 Other service transactions, net 2,613 2,839 5,874 1,681 1,762 982 1,535 1,618 9 Remittances, pensions, and other transfers -1,884 -2,057 -2,397 -591 -720 -550 -553 -602 10 U.S. government grants (excluding military) -3,183 -3,536 -4,659 -912 -1,624 -977 -965 -1,292 11 Change in U.S. government assets, other than official reserve assets, net (increase, -) -4,644 -3,767 -5,165 -1,427 -1,094 -1,395 -1,485 -1,242 12 Change in U.S. official reserve assets (increase, -) 732 -1,132 -8,155 -1,109 -4,279 -4,529 -905 -4 13 Gold -65 -65 0 0 0 0 0 0 14 Special drawing rights (SDRs) 1,249 -1,136 -16 -261 1,285 -1,441 -23 -225 15 Reserve position in International Monetary Fund 4,231 -189 -1,667 -294 -1,240 -707 -780 -647 16 Foreign currencies -4,683 257 -6,472 -554 -4,324 -2,381 -102 868 17 Change in U.S. private assets abroad (increase, -)3 -57,158 -57,739 -71,456 -16,766 -22,622 -16,473 -19,581 -16,758 18 Bank-reported claims -33,667 -26,213 -46,947 -12,440 -13,139 -11,241 -15,627 -14,808 19 Nonbank-reported claims -3,853 -3,026 -2,653 343 -2,005 -3,192 2,470 n.a. 20 U.S. purchase of foreign securities, net -3,582 -4,552 -3,310 -818 -356 -488 1,479 -517 21 U.S. direct investments abroad, net3 -16,056 -23,948 -18,546 -3,851 -7,122 -1,552 -4,945 -1,433 22 Change in foreign official assets in the United States (increase, +) 33,561 -13,757 15,492 7,686 7,712 5,503 -2,779 -5,847 23 U.S. Treasury securities 23,555 -22,435 9,683 3,769 6,911 7,242 -2,069 -4,632 24 Other U.S. government obligations 666 463 2,187 549 587 454 536 545 2b Other U.S. government liabilities4 2,359 -133 636 80 205 -112 177 -162 26 Other U.S. liabilities reported by U.S. banks 5,551 7,213 -159 1,823 -460 -2,910 -2,070 -2,572 27 Other foreign official assets5 1,4530 1,135 3,145 1,465 469 829 647 974 28 Change in foreign private assets in the United States (increase, + )3 30,187 52,703 34,769 3,965 16,157 1,637 15,667 20,903 29 U.S. bank-reported liabilities 16,141 32,607 10,743 916 7,737 -3,889 7,916 16,720 30 U.S. nonbank-reported liabilities 1,717 2,065 5,109 373 3,228 -820 -293 n.a. 31 Foreign private purchases of U.S. Treasury securities, net 2,178 4,820 2,679 -254 893 1,405 733 -523 32 Foreign purchases of other U.S. securities, net 2,254 1,334 5,384 241 2,240 1,454 3,472 758 33 Foreign direct investments in the United States, net3 .... 7,896 11,877 10,853 2,689 2,059 2,487 3,839 3,948 34 Allocation of SDRs 0 1,139 1,152 0 0 1,093 0 0 35 Discrepancy 11,398 21,140 29,640 2,676 2,736 10,901 7,941 848 36 --33,,229911 22,,113399 --334400 11,,222222 --22,,559922 37 Statistical discrepancy in recorded data before seasonal adjustment 11,398 21,140 29,640 5,967 597 11,241 6,719 3,440 MEMO: Changes in official assets 38 U.S. official reserve assets (increase, 732 -1,132 -8,155 -1,109 -4,279 --44,,552299 -905 -4 39 Foreign official assets in the United States (increase, +) 31,202 -13,624 14,856 7,606 7,507 5,615 --22,,995566 --55,,668855 40 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 22 above) -1,137 5,543 12,744 4,115 1,024 5,446 22,,667766 33,,002288 41 Transfers under military grant programs (excluded from lines 4, 6, and 10 above) 236 305 635 125 211 192 214 120 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 and Official Assets A55 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1981' 1982 IItteemm 11997799 11998800 11998811rr July Aug. Sept. Oct. Nov. Dec. Jan. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 181,860 220,626 233,677 19,289 19,031 19,551 19,163 19,153 18,885 18,737 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 209,458 244,871 260,982 20,114 23,242 21,274 23,077 22,508 19,746 22,829 3 Trade balance -27,598 -24,245 -27,305 -825 -4,212 -1,723 -3,914 -3,355 -861 -4,092 NOTE. The data through 1981 in this table are reported by the Bureau of Census not covered in Census statistics, and (b) the exclusion of military sales (which are data on a free-alongside-ship (f.a.s.) value basis—that is, value at the port of export. combined with other military transactions and reported separately in the "service Beginning in 1981, foreign trade of the U.S. Virgin Islands is included in the Census account" in table 3.10, line 6). On the import side, additions are made for gold, basis trade data; this adjustment has been made for all data shown in the table. ship purchases, imports of electricity from Canada and other transactions; military Beginning with 1982 data, the value of imports are on a customs valuation basis. payments are excluded and shown separately as indicated above. The Census basis data differ from merchandise trade data shown in table 3.10, U.S. International Transactions Summary, for reasons of coverage and timing. On SOURCE. FT900 "Summary of U.S. Export and Import Merchandise Trade" the export side, the largest adjustments are: (a) the addition of exports to Canada (U.S. Department of Commerce, Bureau of the Census). 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1981 1982 TTyyppee 11997788 11997799 11998800 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 Total1 18,650 18,956 26,756 29,265 29,716 30,248 31,002 30,075 30,098 30,060 2 Gold stock, including Exchange Stabilization Fund1 11,671 11,172 11,160 11,154 11,152 11,152 11,152 11,151 11,151 11,150 3 Special drawing rights2'3 1,558 2,724 2,610 3,739 3,896 3,949 4,109 4,095 4,176 4,359 4 Reserve position in International Monetary Fund2 1,047 1,253 2,852 4,341 4,618 4,736 5,009 5,055 5,237 5,275 5 Foreign currencies4'5 4,374 3,807 10,134 10,031 10,050 10,411 10,732 9,774 9.534 9,276 1. Gold held under earmark at Federal Reserve Banks for foreign and inter- 3. Includes allocations by the International Monetary Fund of SDRs as follows: national accounts is not included in the gold stock of the United States; see table $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 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. 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS Millions of dollars, end of period 1981 1982 AAsssseettss 11997788 11997799 11998800 Aug. Sept. Oct. Nov. Dec. Jan. Feb/ 1 Deposits 367 429 411 255 419 547 534 505 333 416 Assets held in custody 2 U.S. Treasury securities1 117,126 95,075 102,417 102,197 101,068 101,068 103,894 104,680 104,631 103,557 3 Earmarked gold2 15,463 15,169 14,965 14,833 14,813 14,811 14,802 14,804 14.802 14,791 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

A56 International Statistics • March 1982 3.14 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1981 June July Aug. Sept. Oct. Nov. Dec.P All foreign countries 1 Total, all currencies 306,795 364,409 401,135 422,946 433,238 433,242 450,234 444,654 462,811 462,633 2 Claims on United States 17,340 32.302 28,460 35,217 43,074 41,533 46,369 41,554 44,561 62,135 3 Parent bank 12,811 25.929 20,202 24,311 30,994 29,782 32,249 26,833 26,540 41,647 4 Other 4,529 6,373 8,258 10,906 12,080 11,751 14,120 14,721 18,021 20,488 5 Claims on foreigners 278,135 317,330 354,960 368,644 370.938 372,378 384,407 383,463 397,728 380,481 6 Other branches of parent bank 70,338 79,662 77,019 79,814 82.128 83,171 84,627 83,597 89,280 88,591 7 Banks 103,111 123,420 146,448 154,682 154,760 152.286 159,637 156,833 161,412 151,457 8 Public borrowers2 23,737 26.097 28,033 27,872 28,728 29,270 29,927 30,211 30,170 28,192 9 Nonbank foreigners 80,949 88,151 103,460 106,276 105.322 107,651 110,216 112,822 116,866 112,241 10 Other assets 11,320 14.777 17,715 19,085 19,226 19,331 19,458 19,637 20,522 20,017 11 Total payable in U.S. dollars 224,940 267,713 291,798 320,308 330,758 328,784 343,067 336,817 348,946 350,564 12 Claims on United States 16,382 31.171 27,191 37,403 41.873 40,250 45,116 40,370 43,271 60,538 13 Parent bank 12,625 25.632 19,896 24,041 30,742 29,490 31,991 26,639 26,347 41,104 14 Other 3,757 5,539 7,295 9,922 11.131 10,760 13,125 13,731 16,924 19,434 15 Claims on foreigners 203,498 229,120 255,391 275,185 277.354 276,935 286,367 284,590 293,592 278,367 16 Other branches of parent bank 55,408 61,525 58,541 62,696 64,725 65,477 66,279 65,859 69,949 70,286 17 Banks 78,686 96,261 117,342 128,048 127.469 124,504 131,524 127,944 131,478 122,695 18 Public borrowers2 19,567 21.629 23,491 23,554 24.333 24,410 24,709 25,199 25,110 22,848 19 Nonbank foreigners 49,837 49,705 56,017 60,887 60.827 62,544 63,855 65,588 67,055 62,538 20 Other assets 5,060 7,422 9,216 11,160 11.531 11,599 11.584 11,857 12,083 11,659 United Kingdom 21 Total, all currencies 106,593 130,873 144,717 149,704 148,774 150,161 154,096 153,615 161,531 157,229 22 Claims on United States 5,370 11,117 7,509 9,650 9.130 9,995 11,167 9,668 9,315 10,534 23 Parent bank 4,448 9,338 5,275 7,098 6.167 7,189 7,842 6,351 5,162 6,596 24 Other 922 1,779 2,234 2,552 2.963 2,806 3,325 3,317 4,153 3,938 25 Claims on foreigners 98,137 115.123 131,142 134.092 133,626 134,034 137,056 137,879 145,899 140,166 26 Other branches of parent bank 27,830 34.291 34,760 35,914 37,035 38,035 39,117 38.799 41,467 42,123 27 Banks 45,013 51.343 58,741 60,261 59,639 58,362 58,986 59,307 63,044 56,848 28 Public borrowers2 4,522 4,919 6,688 6,811 6.822 6,665 7,112 7,305 7,463 7,490 29 Nonbank foreigners 20,772 24,570 30,953 31,106 30.130 30,972 31,841 32,468 33,906 33,705 30 Other assets 3,086 4.633 6,066 5,962 6.018 6,132 5,873 6,068 6,327 6,529 31 Total payable in U.S. dollars 75,860 94,287 99,699 104,959 107,961 109,008 113,014 112,064 117,454 115,188 32 Claims on United States 5,113 10.746 7,116 9,160 8.628 9,552 10,703 9,201 8,811 9,960 33 Parent bank 4,386 9,297 5,229 7,059 6.110 7,128 7,779 6,299 5,110 6,435 34 Other 727 1,449 1,887 2,101 2.518 2,424 2,924 2,902 3,701 3,525 35 Claims on foreigners 69,416 81.294 89,723 96,230 95,832 95,887 98,611 98,934 104,741 101,136 36 Other branches of parent bank 22,838 28.928 28,268 29,725 30,789 31,710 32,845 32.698 34,905 36,322 31,482 36.760 42,073 45,631 44,488 42,957 43,605 43,345 46,463 41,106 38 Public borrowers2 3,317 3,319 4,911 5,123 5,176 5,006 5,281 5,485 5,500 5,595 39 Nonbank foreigners 11,779 12.287 14,471 15,751 15.379 16,214 16,880 17,406 17,873 18,113 40 Other assets 1,331 2,247 2,860 3,464 3,501 3,569 3,700 3,929 3,902 4,092 Bahamas and Caymans 41 Total, all currencies 91,735 108,977 123,837 135,081 145,290 142,087 147,904 142,687 148,557 149,050 42 Claims on United States 9,635 19,124 17,751 21,812 29.808 27,131 29,896 26,741 29,908 46,246 43 Parent bank 6,429 15,196 12,631 14,477 21,654 19,303 20,372 16.717 17,665 31,330 44 Other 3,206 3,928 5,120 7,335 8.154 7,828 9,524 10,024 12,243 14,916 45 Claims on foreigners 79,774 86,718 101,926 108,477 110,584 109,888 113,048 110,781 113,487 98,313 46 Other branches of parent bank 12,904 9,689 13,342 13,569 13,788 13,909 13,174 13,066 13,983 12,962 47 Banks 33,677 43.189 54,861 59,705 60,748 59,316 62,946 60,220 61,337 55,338 48 Public borrowers2 11,514 12.905 12,577 12,038 12,471 12,610 12,431 12,637 12,730 9,995 49 Nonbank foreigners 21,679 20.935 21,146 23,165 23,577 24,053 24,497 24,858 25,437 20,018 50 Other assets 2,326 3,135 4,160 4,792 4.898 5,068 4,960 5,165 5,162 4,491 51 Total payable in U.S. dollars 85,417 102,368 117,654 129,438 139,514 136,054 142,053 136,854 142,632 143,686 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

Overseas Branches A57 3.14 Continued 1981 T '.L'l',,. 11997788'' 11997799 11998800 June July Aug. Sept. Oct. Nov. Dec.P All foreign countries 52 Total, all currencies 306,795 364,409 401,135 422,946 433,238 433,242 450,234 444,654 462,811 462,633 53 To United States 58,012 66,689 91,079 109,322 118,093 116,190 124,096 120,039 128,081 137,618 54 Parent bank 28,654 24,533 39,286 44,327 43,069 44,010 48,592 45,909 49,385 56,160 55 Other banks in United States 12,169 13,968 14,473 16,136 17,578 15,686 17,657 16,464r 17,110 19,315 56 Nonbanks 17,189 28,188 37,275 48,859 57,446 56,494 57,847 57,666' 61,586 62,143 57 To foreigners 238,912 283,510 295,411 298,169 299,240 300,081 306,785 305,040 315,969 305,426 58 Other branches of parent bank 67,496 77,640 75,773 79,033 81,387 80,991 83,336 82,038 87,821 86,368 59 Banks 97,711 122,922 132,116 131,854 129,290 125,563 127,794 128,536 132,013 124,900 60 Official institutions 31,936 35,668 32,473 26,316 25,682 28,209 28,715 27,685 24,541 25,840 61 Nonbank foreigners 41,769 47,280 55,049 60,966 62,881 65,318 66,940 66,781 71,594 68,318 62 Other liabilities 9,871 14,210 14,690 15,455 15,905 16,971 19,353 19,575 18,761 19,589 63 Total payable in U.S. dollars 230,810 273,857 303,281 332,284 343,947 341,596 355,030 349,602 360,972 364,093 64 To United States 55,811 64,530 88,157 106,740 115,481 113,526 121,130 117,362 125,118 134,601 65 Parent bank 27,519 23,403 37,528 42,822 41,620 42,481 46,766 44,170 47,456 54,275 66 Other banks in United States 11,915 13,771 14,203 15,945 17,391 15,529 17,479 16,313' 17,011 19,001 67 Nonbanks 16,377 27,356 36,426 47,973 56,470 55,516 56,885 56,879' 60,651 61,325 68 To foreigners 169,927 201,514 206,883 215,931 218,178 217,239 221,090 219,818 224,505 217,463 69 Other branches of parent bank 53,396 60,551 58,172 62,292 64,884 64,338 66,256 65,160 69,554 69,164 70 Banks 63,000 80,691 87,497 89,909 88,554 83,842 84,670 84,552 84,691 79,596 71 Official institutions 26,404 29,048 24,697 20,853 20,108 22,056 22,836 21,948 18,911 20,288 72 Nonbank foreigners 27,127 31,224 36,517 42,877 44,632 47,003 47,328 48,158 51,349 48,415 73 Other liabilities 5,072 7,813 8,241 9,613 10,288 10,831 12,810 12,422 11,349 12,029 United Kingdom 74 Total, all currencies 106,593 130,873 144,717 149,704 148,774 150,161 154,096 153,615 161,531 157,229 75 To United States 9,730 20,986 21,785 29,598 30,383 31,408 34,143 32,960 36,316 38,033 76 Parent bank 1,887 3,104 4,225 4,371 4,138 4,189 5,370 3,542 4,045 5,455 77 Other banks in United States 4,189 7,693 5,716 6,172 5,864 5,646 6,396 6,054 7,102 7,502 78 Nonbanks 3,654 10,189 11,844 19,055 20,381 21,573 22,377 23,364 25,169 25,076 79 To foreigners 93,202 104,032 117,438 115,099 113,560 113,191 113,862 114,415 118,401 112,244 80 Other branches of parent bank 12,786 12,567 15,384 14,996 15,103 15,255 15,121 15,544 16,090 16,534 81 Banks 39,917 47,620 56,262 55,923 54,351 51,532 51,830 53,634 56,239 51,336 82 Official institutions 20,963 24,202 21,412 17,197 16,352 17,866 18,687 17,442 15,089 16,517 83 Nonbank foreigners 19,536 19,643 24,380 26,983 27,754 28,538 28,224 27,795 30,983 27,857 84 Other liabilities 3,661 5,855 5,494 5,007 4,831 5,562 6,091 6,240 6,814 6,952 85 Total payable in U.S. dollars 77,030 95,449 103,440 113,427 113,247 114,191 117,920 117,346 122,362 120,277 86 To United States 9,328 20,552 21,080 28,858 29,606 30,661 33,464 32,408 35,706 37,343 87 Parent bank 1,836 3,054 4,078 4,277 4,054 4,132 5,309 3,484 3,956 5,361 88 Other banks in United States 4,101 7,651 5,626 6,094 5,768 5,594 6,317 5,976 7,061 7,249 89 Nonbanks 3,391 9,847 11,376 18,487 19,784 20,935 21,838 22,948 24,689 24,733 90 To foreigners 66,216 72,397 79,636 81,544 80,400 79,988 80,638 81,260 82,766 79,023 91 Other branches of parent bank 9,635 8,446 10,474 10,289 10,566 10,943 10,747 11,121 11,457 12,037 92 Banks 25,287 29,424 35,388 36,701 35,789 32,914 33,010 34,312 35,141 32,298 93 Official institutions 17,091 20,192 17,024 14,000 13,133 14,244 15,514 14,415 12,133 13,612 94 Nonbank foreigners 14,203 14,335 16,750 20,554 20,912 21,887 21,367 21,412 24,035 21,076 95 Other liabilities 1,486 2,500 2,724 3,025 3,241 3,542 3,818 3,678 3,890 3,911 Bahamas and Caymans % Total, all currencies 91,735 108,977 123,837 135,081 145,290 142,087 147,904 142,687 148,557 149,050 97 To United States 39,431 37,719 59,666 69,407 77,197 73,924 77,533 75,991 80,161 85,703 98 Parent bank 20,482 15,267 28,181 32,160 31,034 31,265 33,282 33,387 36,066 39,260 99 Other banks in United States 6,073 5,204 7,379 8,822 10,517 8,938 9,964 9,349' 8,971 10,609 100 Nonbanks 12,876 17,248 24,106 28,425 35,646 33,721 34,287 33,255' 35,124 35,834 101 To foreigners 50,447 68,598 61,218 62,470 64,491 64,565 66,627 672,795 64,462 60,023 102 Other branches of parent bank 16,094 20,875 17,040 19,484 20,989 20,315 22,393 20,521 23,307 20,641 103 Banks 23,104 33,631 29,895 28,326 28,056 27,538 27,983 25,396 24,712 23,218 104 Official institutions 4,208 4,866 4,361 3,685 3,934 4,605 4,028 4,078 3,381 3,498 105 Nonbank foreigners 7,041 9,226 9,922 10,975 11,512 12,107 12,223 12,800 13,062 12,666 106 Other liabilities 1,857 2,660 2,953 3,204 3,602 3,598 3,744 3,901 3,934 3,324 107 Total payable in U.S. dollars 87,014 103,460 119,657 131,120 141,241 137,754 143,507 138,094 144,034 145,226 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • March 1982 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1981 1982 IItteemm 11997799 11998800 Juner July' Aug/ Sept/ Oct/ Nov.? Dec.'' JanP 1 Total1 149,697 164,578r 167,088 167,007 162,396 161,587 159,798 164,672 169,585 167,860 By type 2 Liabilities reported by banks in the United States2 . 30,540 30,381 25,251 25,956 22,940 22,865 20,928 23,424 26,316 23,861 3 U.S. Treasury bills and certificates3 47,666 56,243 57,719 55,659 52,921 5500,,117799 4488,,886677 49,644 52,389 52,306 U.S. Treasury bonds and notes 4 Marketable 37,590 41,455 46,605 47,402 48,934 50,311 51,943 54,076 53,289 54,130 5 Nonmarketable4 17,387 14,654 13,202 12,802 12,402 12,402 12,191 11,791 11,791 11,791 6 U.S. securities other than U.S. Treasury securities5 16,514 21,845' 24,311 25,188 25,199 25,830 25,869 25,737 25,800 25,772 By area 7 Western Europe1 85,633 81,592 71,130 70,576 65,960 64,409 61,086 63,097 65,241 62,757 8 Canada 1,898 1,562 1,248 664 1,603 1,366 1,073 2,247 2,403 2,377 9 Latin America and Caribbean 6,291 5,688 6,103 5,584 5,968 5,429 5,088 5,049 6,927 5,977 10 Asia 52,978 70,784r 83,142 85,847 84,643 87,332 89,190 91,300 91,924 94,268 11 Africa 2,412 4,123 3,190 2,645 2,839 2,090 2,149 1,792 1,849 1,649 12 Other countries6 485 829 2,275 1,691 1,383 961 1,212 1,187 1,241 832 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. 3.16 LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in Foreign Currencies Millions of dollars, end of period 1981 IItteemm 11997788 11997799 11998800 Mar. June Sept.' Dec.P 1 Banks' own liabilities 2,406 1,918 3,748 3,298 3,031 2,878 3,667 2 Banks' own claims1 3,671 2,419 4,206 4,257 3,699r 4,078 5,331 3 Deposits 1,795 994 2,507 1,779 2,050r 2,409 3,592 4 Other claims 1,876 1,425 1,699 2,478 1,649' 1,669 1,738 5 Claims of banks' domestic customers2 358 580 962 444 347 248 972 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

Nonbank-Reported Data A59 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States Payable in U.S. dollars Millions of dollars, end of period 1981 1982 HHoollddeerr aanndd ttyyppee ooff lliiaabbiilliittyy 11997788 11997799 11998800 June July Aug. Sept. Oct. Nov. Dec. Jan.P 1 All foreigners 166,842 187,521 205,297' 208,928' 213,796' 208,046' 216,113 198,717' 208,263' 242,228 247,363 2 Banks' own liabilities 78,661 117,196 124,791' 128,003' 132,022' 130,981' 142,213 124,261' 132,556' 162,133 167,962 3 Demand deposits 19,218 23,303 23,462 23,177' 21,413' 22,073' 23,592 19,061 21,127' 19,698 18,030 4 Time deposits' 12,427 13,623 15,076 16,641 16,457 17,250 17,313 17,465 18,068' 29,311 30,371 5 Other2 9,705 16,453 17,583' 14,088' 13,435' 11,242 13,608 11,225 14,129' 17,406 15,264 6 Own foreign offices3 37,311 63,817 68,670 74,097' 80,717 80,416 87,699 76,511' 79,232' 95,718 104,297 7 Banks' custody liabilities4 88,181 70,325 80,506 80,925' 81,774 77,065 73,900 74,456 75,707' 80,095 79,402 8 U.S. Treasury bills and certificates5 .. 68,202 48,573 57,595 59,745 57,550 54,846 52,368 51,281 52,005' 55,312 55,131 9 Other negotiable and readily transferable instruments6 17,472 19,396 20,079 17,096' 17,865 17,999 17,295 18,257 18,259' 18,814 18,787 10 Other 2,507 2,356 2,832 4,084 6,359 4,220 4,238 4,919 5,442 5,970 5,484 11 Nonmonetary international and regional organizations7 2,607 2,356 2,344' 1,777 1,798 1,650 1,826 1,981 2,317 2,721 2,141 12 Banks' own liabilities 906 714 444 r 357 363 436 398 303 555 638 365 13 Demand deposits 330 260 146 224 222 233 249 185 388 262 130 14 Time deposits' 84 151 85 75 75 59 60 58 74 58 86 15 Other2 492 303 212' 58 65 145 89 60 93 318 148 16 Banks' custody liabilities4 1,701 1,643 1,900 1,420 1,435 1,214 1,428 1,678 1,762 2,083 1,775 17 U.S. Treasury bills and certificates ... 201 102 254 289 247 84 96 184 142 541 217 18 Other negotiable and readily transferable Instruments6 1,499 1,538 1,646 1,132 1,188 1,130 1,332 1,494 1,621 1,542 1,558 19 Other 1 2 0 0 0 0 0 0 0 0 0 20 Official institutions* 90,742 78,206 86,624 82,970' 81,616' 75,860' 73,044 69,796 73,068' 78,706 76,167 21 Banks' own liabilities 12,165 18,292 17,826 15,815 14,479' 13,482 13,951 11,869 14,212' 16,687 14,474 22 Demand deposits 3,390 4,671 3,771 3,975 3,134 3,714 2,697 2,668 2,459 2,612 2,400 23 Time deposits' 2,560 3,050 3,612 2,563 2,090 2,021 1,981 1,692 1,908' 4,180 3,668 24 Other2 6,215 10,571 10,443 9,277 9,255' 7,747 9,273 7,509 9,846' 9,895 8,405 25 Banks' custody liabilities4 78,577 59,914 68,798 67,155' 67,136 62,378' 59,093 57,927 58,856 62,019 61,693 26 U.S. Treasury bills and certificates5 .. 67,415 47,666 56,243 57,719 55,659 52,921 50,179 48,867 49,644 52,389 52,306 27 Other negotiable and readily transferable instruments6 10,992 12,196 12,501 9,356' 9,396 9,402' 8,659 9,013 9,161 9,582 9,360 28 Other 170 52 54 80' 2,081 55 255 46 51 47 27 29 Banks9 57,423 88,316 96,415 101,512' 107,895' 107,446' 117,630 102,986' 108,486' 134,860 144,730 30 Banks' own liabilities 52,626 83,299 90,456 93,305' 98,974' 98,350 108,618 92,786' 97,651' 123,145 132,817 31 Unaffiliated foreign banks 15,315 19,482 21,786 19,208 18,257' 17,933 20,919 16,275 18,418' 27,427 28,521 32 Demand deposits 11,257 13,285 14,188 13,630' 12,929 13,255 15,199 11,346 12,908' 11,613 10,766 33 Time deposits' 1,429 1,667 1,703 1,728 1,573 1,686 1,880 1,631 1,837' 9,156 11,402 34 Other2 2,629 4,530 5,895 3,850' 3,755' 2,993 3,840 3,298 3,673' 6,658 6,353 35 Own foreign offices3 37,311 63,817 68,670 74,097' 80,717 80,416 87,699 76,511' 79,232' 95,718 104,297 36 Banks' custody liabilities4 4,797 5,017 5,959 8,207' 8,921 9,097' 9,012 10,200 10,835' 11,715 11,913 37 U.S. Treasury bills and certificates ... 300 422 623 1,170 1,069 1,217 1,439 1,574 1,584 1,683 1,853 38 Other negotiable and readily transferable instruments6 2,425 2,415 2,748 3,178 3,732 4,017' 3,889 4,091 4,169 4,421 4,888 39 Other 2,072 2,179 2,588 3,859' 4,119 3,862 3,684 4,535 5,082' 5,611 5,172 40 Other foreigners 16,070 18,642 19,914 22,669' 22,489' 23,089' 23,613 23,955 24,392' 25,941 24,326 41 Banks' own liabilities 12,964 14,891 16,065 18,526' 18,206' 18,714' 19,246 19,303 20,139' 21,663 20,305 42 Demand deposits 4,242 5,087 5,356 5,347' 5,127' 4,872' 5,447 4,862 5,373' 5,212 4,734 43 Time deposits 8,353 8,755 9,676 12,275 12,719 13,483 13,393 14,084 14,249' 15,916 15,214 44 Other2 368 1,048 1,033 903 360 358 406 358 517' 535 358 45 Banks' custody liabilities4 3,106 3,751 3,849 4,143' 4,283 4,376 4,367 4,652 4,253 4,278 4,020 46 U.S. Treasury bills and certificates ... 285 382 474 568 575 624 654 656 635' 698 755 47 Other negotiable and readily transferable instruments6 2,557 3,247 3,185 3,430' 3,548 3,450 3,414 3,659 3,309' 3,268 2,981 48 Other 264 123 190 144 159 302 300 337 309' 312 284 49 MEMO: Negotiable time certificates of deposit in custody for foreigners ... 11,007 10,984 10,745 10,250' 10,091 9,939' 9,459 9,424 9,975 10,542 10,435 1. Excludes negotiable time certificates of deposit, which are included in "Other 5. Includes nonmarketable certificates of indebtedness and Treasury bills issued negotiable and readily transferable instruments." Data for time deposits before to official institutions of foreign countries. April 1978 represent short-term only. 6. Principally bankers acceptances, commercial paper, and negotiable time cer- 2. Includes borrowing under repurchase agreements. tificates of deposit. 3. U.S. banks: includes amounts due to own foreign branches and foreign sub- 7. Principally the International Bank for Reconstruction and Development, and sidiaries consolidated in "Consolidated Report of Condition" filed with bank reg- the Inter-American and Asian Development Banks. ulatory agencies. Agencies, branches, and majority-owned subsidiaries of foreign 8. Foreign central banks and foreign central governments and the Bank for banks: principally amounts due to head office or parent foreign bank, and foreign International Settlements. branches, agencies or wholly owned subsidiaries of head office or parent foreign 9. Excludes central banks, which are included in "Official institutions." bank. 4. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • March 1982 3.17 Continued 1981 1982 AArreeaa aanndd ccoouunnttrryy 11997788 11997799 11998800 June July Aug. Sept. Oct. Nov. Dec. Jan.P 1 Total 166,842 187,521 205,297r 208,928' 213,796' 208,046' 216,113 198,717' 208,263' 242,228 247,363 2 Foreign countries 164,235 185,164 202,953 207,151' 211,999' 206,396' 214,287 196,736' 205,946' 239,507 245,223 3 Europe 85,172 90,952 90,897 86,788' 85,447' 81,547 85,087 77,662' 82,292' 90,667 89,695 4 Austria 513 413 523 540 610 612 590 583 595' 587 718 Belgium-Luxembourg 2,550 2,375 4,019 5,056 4,759 4,240 4,852 3,644 3,989 4,122 3,969 6 Denmark 1,946 1,092 497 415 431' 239 163 232 306 333 512 7 Finland 346 398 455 305 296' 220 198 187 196 296 157 8 France 9,214 10,433 12,125 11,515 11,058 9,235 7,637 7,125 7,385 8,487 8,075 9 Germany 17,283 12,935 9,973 9,631 9,072 7,301 8,410 6,555 7,211 7,665 6,908 10 Greece 826 635 670 507 533 492 578 496 428 463 467 11 Italy 7,739 7,782 7,572 4,620 6,140' 6,374 6,264 5,687 5,656 7,290 7,101 12 Netherlands 2,402 2,337 2,441 2,133 1,792 1,751 2,240 2,173 2,351 2,779 2,773 13 Norway 1,271 1,267 1,344 1,743 1,289 1,228 1,008 1,449 1,642 1,457 1,244 14 Portugal 330 557 374 454 448 460 486 424 358 354 300 15 Spain 870 1,259 1,500 1,199 1,340' 1,409 1,189 975 954 916 1,008 16 Sweden 3,121 2,005 1,737 2,180 1,864 1,667 2,102 1,609 1,508 1,545 1,272 17 Switzerland 18,225 17,954 16,689 15,842' 16,325' 16,426 16,983 17,114' 18,937' 18,878 18,939 18 Turkey 157 120 242 194 356 208 234 252 197 518 336 19 United Kingdom 14,272 24,700 22,680 24,428 23,236' 24,194 26,335 23,985 24,258 28,280 30,900 20 Yugoslavia 254 266 681 312 408 343 366 265 380 375 215 21 Other Western Europe1 3,440 4,070 6,939 5,323 5,177 4,804 5,010 4,472 5,384 5,781 4,427 22 U.S.S.R 82 52 68 41 33' 34 28 42 72 49 106 23 Other Eastern Europe2 330 302 370 351 280 310 414 396 486 493 268 24 Canada 6,969 7,379 10,031 10,267' 9,260' 9,873' 10,119 8,934 10,091 10,261 11,621 25 Latin America and Caribbean 31,638 49,686 53,170 56,155' 64,014' 63,791 66,363 59,338' 61,266' 84,176 89,068 26 Argentina 1,484 1,582 2,132 1,991 1,980 2,043 1,979 1,929 2,012 2,445 2,754 27 Bahamas 6,752 15,255 16,381 17,760 24,484' 24,209 25,168 20,962' 22,900' 34,380 42,479 28 Bermuda 428 430 670 698 646 700 806 721 624 770 668 29 Brazil 1,125 1,005 1,216 1,412 1,172' 1,282 1,301 1,265 1,283' 1,541 1,594 30 British West Indies 5,974 11,138 12,766 12,836' 14,024 13,239 14,456 10,472 9,516' 17,460 17,814 31 Chile 398 468 460 508 566 538 491 538 505' 664 765 32 Colombia 1,756 2,617 3,077 2,827 2,784 2,708 22,,552277 2,759 2,776' 2,993 2,838 33 Cuba 13 13 6 7 7 7 88 6 7 9 7 34 Ecuador 322 425 371 463 392 355 394 403 516 434 357 35 Guatemala3 416 414 367 399 412 399 476 419 444 479 487 36 Jamaica3 52 76 97 80 122 290 92 147 96 87 120 37 Mexico 3,467 4,185 4,547 5,351 5,532 6,352 6,021 5,717 6,029' 7,065 4,755 38 Netherlands Antilles 308 499 413 497 487 692 697 2,771 2,896' 3,073 3,042 39 Panama 2,967 4,483 4,718 4,615 5,004 4,619 4,964 4,599 4,904 4,852 3,482 40 Peru 363 383 403 450 363 398 380 369 473 691 589 41 Uruguay 231 202 254 322 243 266 259 249 266 367 480 42 Venezuela 3,821 4,192 3,170 3,548 3,671 3,621 3,982 4,044 3,971' 4,246 4,515 43 Other Latin America and Caribbean . 1,760 2,318 2,123 2,393' 2,125 2,073 2,362 1,969 2,049 2,620 2,324 44 Asia 36,492 3333,,000055 4422,,442200 47,352' 48,113' 46,192 4488,,772222 4466,,884444 4488,,662255 4499,,778899 5500,,667777 China 45 Mainland 67 49 49 102 84 74 76 85 200 153 183 46 Taiwan 502 1,393 1,662 1,936 2,006' 2,177 2,188 2,182 2,140 2,082 2,221 47 Hong Kong 1,256 1,672 2,548 3,151 3,451' 3,956 4,062 4,158 4,090 3,951 3,957 48 India 790 527 416 408 398' 455 491 433 514 385 511 49 Indonesia 449 504 730 582 1,309 732 809 1,269 985 640 1,230 50 Israel 688 707 883 478 387 482 412 418 475 587 543 51 Japan 21,927 8,907 16,281 19,563 19,475 19,757 20,747 20,204 19,988' 20,557 20,076 52 795 993 1,528 1,329' 1,252 1,319 1,434 1,291 1,322 2,013 2,156 53 Philippines 644 795 919 1,049 992 868 832 691 736 876 757 54 Thailand 427 277 464 422 436 371 392 274 409 534 371 55 Middle-East oil-exporting countries4 . 7,534 15,300 14,453 15,203' 14,921' 12,396 13,293 12,196 13,603 13,160 13,610 56 Other Asia 1,414 1,879 2,487 3,129 3.402' 3,607 3,985 3,643 4,163' 4,852 5,063 57 Africa 2,886 3,239 5,187 3,907 3,177' 3,201 2,561 2,535 2,381 3,195 3,060 58 Egypt 404 475 485 289 293 355 433 343 328 354 569 59 Morocco 32 33 33 41 77 59 43 28 37 32 36 60 South Africa 168 184 288 253 257 296 244 282 202 420 251 61 Zaire 43 110 57 181 84 41 76 44 56 134 33 62 Oil-exporting countries5 1,525 1,635 3,540 2,388 1,715 1,703 1,040 1,165 830 1,395 1,206 63 Other Africa 715 804 783 755 752' 746 725 672 929 860 965 64 Other countries 1,076 904 1,247 2,683 1,987 1,792 1,434 1,423 1,291 1,419 1,102 65 Australia 838 684 950 2,398 1,770 1,568 1,174 1,212 1,065 1,223 852 66 All other 239 220 297 285 217 224 260 211 226 196 250 67 Nonmonetary international and regional organizations 2,607 2,356 2,344r 1,777 1,798 1,650 1,826 1,981 2,317 2,721 2,141 68 International 1,485 1,238 l,157r 747 699 524 631 945 1,128 1,661 1,065 69 Latin American regional 808 806 890 722 765 747 750 724 797 710 17 70 Other regional6 314 313 296 307 333 379 445 312 391 350 1,059 1. Includes the Bank for International Settlements. Beginning April 1978, also 6. Asian, African, Middle Eastern, and European regional organizations, except includes Eastern European countries not listed in line 23. the Bank for International Settlements, which is included in "Other Western 2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German Dem- Europe." ocratic Republic, Hungary, Poland, and Romania. 3. Included in "Other Latin America and Caribbean" through March 1978. 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). 5. Comprises Algeria, Gabon, Libya, and Nigeria. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A61 3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period 1981 1982 AArreeaa aanndd ccoouunnttrryy 11997788 11997799 11998800 June July Aug. Sept. Oct. Nov. Dec. Jan.P 1 Total 115,545 133,943 172,592 196,947r 196,885 r 198,903' 210,104' 196,637' 208,059 248,850 253,315 2 Foreign countries 115,488 133,906 172,514 196,900' 196,825' 198,852' 210,049' 196,593' 208,019 248,794 253,263 3 Europe 24,201 28,388 32,108 36,978' 35,198 35,065 40,876 34,373' 39,304 48,470 51,312 4 Austria 140 284 236 166 157 185 436 138 179 151 214 5 Belgium-Luxembourg 1,200 1,339 1,621 2,395 ' 2,087 2,373 2,625 1,758' 2,023 2,780 2,822 6 Denmark 254 147 127 125 132 166 158 186 207 186 226 7 Finland 305 202 460 365 343 352 346 397 527 549 555 8 France 3,735 3,322 2,958 3,209 2,861 3,074 3,351 2,563 3,252 4,089 4,661 9 Germany 845 1,179 948 1,099 1,259 1,144 1,267 841 979 937 1,080 10 Greece 164 154 256 249 292 214 287 235 255 333 373 11 Italy 1,523 1,631 3,364 3,879 3,923 3,997 4,016 4,322 4,559 5,208 5,451 12 Netherlands 677 514 575 667 497 581 569 564 567 685 729 13 Norway 299 276 227 172 167 249 300 230 281 384 384 14 Portugal 171 330 331 353 389 350 328 353 390 530 584 15 Spain 1,120 1,051 993 1,769 1,726 1,801 1,711 1,627 1,693 2,091 2,166 16 Sweden 537 542 783 794 730 672 930 871 1,333 1,202 1,291 17 Switzerland 1,283 1,165 1,446 1,690 1,871 1,708 1,948 1,471 1,961 2,209 1,842 18 Turkey 300 149 145 147 137 159 144 153 144 421 462 19 United Kingdom 10,147 13,795 14,917 16,675 15,454 14,832 19,380 15,755' 17,895 23,184 24,761 20 Yugoslavia 363 611 853 988 992 948 932 954 1,016 1,224 1,206 21 Other Western Europe1 122 175 179 182 160 200 185 148 197 209 231 22 U.S.S.R 360 268 281 302 245 252 232 203 248 367 455 23 Other Eastern Europe2 657 1,254 1,410 1,752 1.776 1,809 1.733 1,605' 1,596 1,730 1,816 24 Canada 5,152 4,143 4,810 7,022' 7,661 6,353 7,962 7,343' 6,922 8,595 9,505 25 Latin America and Caribbean 57,565 67,993 92,992 103,374' 105,327' 108,731' 111,607' 107,833' 112,913 137,013 141,439 26 Argentina 2,281 4,389 5,689 5,822 5.742 5.702 5,771 5,887' 6,044 7,541 8,613 27 Bahamas 21,555 18,918 29,419 34,755 35,577' 36,709' 38,057' 36,631' 39,432 42,802 43,782 28 Bermuda 184 496 218 404 411 340 490 335 255 326 375 29 Brazil 6,251 7,713 10,496 10,014 9.781 10,214 9,861 10,374 10,823 16,882 17,314 30 British West Indies 9,694 9,818 15,663 18,317' 18.001 17,846 19,016' 17,108' 17,745 21,350 21,064 31 Chile 970 1,441 1,951 2,070' 2,203 2,321 2,514 2,567 2,649 3,673 4,150 32 Colombia 1,012 1,614 1,752 1,533 1.480 1,429 1,487 1,529 1,598 2,027 2,113 33 Cuba 0 4 3 3 7 14 3 4 3 3 7 34 Ecuador 705 1,025 1,190 1,285 1,307 1,318 1,298 1.282 1,328 1,531 1,696 35 Guatemala3 94 134 137 105' 95 115 119 127' 123 124 118 36 Jamaica3 40 47 36 38 39 40 68 40' 45 62 177 37 Mexico 5,479 9,099 12,595 14,066 15,560 17.391 17,245 17,148 18,500 22,367 22,952 38 Netherlands Antilles 273 248 821 874 933 894 869 928 951 1,056 941 39 Panama 3,098 6,041 4,974 6,210 6,029 6.167 6,669' 5,791 5,645 6.743 6,741 40 Peru 918 652 890 818 803 796 788 796' 705 1,213 1,435 41 Uruguay 52 105 137 94 102 107 142 166 148 157 256 42 Venezuela 3,474 4,657 5,438 5,295 5,436 5,529 5,325 5,273' 5,129 7,082 7,223 43 Other Latin America and Caribbean . 1,485 1,593 1,583 1,671' 1,821 1,800 1,885 1,848' 1,790 2,075 2,481 44 Asia 25,362 30,730 39,078 46,027 44,999 44,934 45,537' 43.190' 44,963 49,793 45,728 China 45 Mainland 4 35 195 205 188 186 153 148 199 107 85 46 Taiwan 1,499 1,821 2,469 2,471 2,380 2,543 2,476 2,349' 2,262 2,461 2,630 47 Hong Kong 1,479 1,804 2,247 3,328 3,208 3,347 3,716 3,784' 3,921 4,113 4,096 48 India 54 92 142 132 106 135 144 176 179 132 148 49 Indonesia 143 131 245 257 271 254 363 267 329 346 315 50 Israel 888 990 1,172 1,309 1.178 1,108 1,086 1,200 1,325 1,586 1,318 51 Japan 12,646 16,911 21,361 25,995 25.954 25,352 25,273' 22,790' 23,785 26,771 24,051 52 Korea 2,282 3,793 5,697 6,678 6.426 6,479 6,486 6,567' 6,733 7,291 6,520 53 Philippines 680 737 989 1,192 1,194 1,402 1,530 1,448 1,621 1,818 1,764 54 Thailand 758 933 876 663' 546 527 549 559 546 564 526 55 Middle East oil-exporting countries4 . 3,125 1,548 1,432 1,615' 1,288 1,473 1,394 1,381 1,569 1,597 1,611 56 Other Asia 1,804 1,934 2,252 2,181 2,261 2,129 2,367 2,520 2,495 3,008 2,663 57 Africa 2,221 1,797 2,377 2,420' 2,518 2,715 2,957 2,796' 2,803 3,546 3,817 58 Egypt 107 114 151 155 128 148 145 147 137 238 259 59 Morocco 82 103 223 71 88 204 273 269 243 284 273 60 South Africa 860 445 370 658 688 787 917 848' 904 1,011 948 61 Zaire 164 144 94 98 100 87 102 102' 100 112 98 62 Oil-exporting countries5 452 391 805 672 726 713 689 534 531 657 773 63 Other 556 600 734 767' 789 777 831 896 888 1,244 1,467 64 Other countries 988 855 1,150 1,078 1,121 1,054 1,110 1,059 1,114 1,379 1,462 65 Australia 877 673 859 939 988 952 959 962 989 1,197 1,279 66 All other 111 182 290 139 133 102 152 97 125 182 183 67 Nonmonetary international and regional organizations6 56 36 78 48 60 51 55 43 40 56 52 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. NOTE. Data for period prior to April 1978 include claims of banks' domestic 3. Included in "Other Latin America and Caribbean" through March 1978. customers on foreigners. 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • March 1982 3.19 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 1981 1982 TTyyppee ooff ccllaaiimm 11997788 11997799 11998800 June July Aug. Sept. Oct. Nov. Dec. Jan.P 1 Total 111111122222226666666,,,,,,,777777788888887777777 111111155555554444444,,,,,,,000000033333330000000 111111199999998888888,,,,,,,666666699999998888888 222222233333330000000,,,,,,,777777777777776666666''''''' 222222244444445555555,,,,,,,777777700000005555555''''''' 222222288888886666666,,,,,,,111111111111114444444 22 BBaannkkss'' oowwnn ccllaaiimmss oonn ffoorreeiiggnneerrss 111111111111115555555,,,,,,,555555544444445555555 111111133333333333333,,,,,,,999999944444443333333 111111177777772222222,,,,,,,555555599999992222222 111111199999996666666,,,,,,,999999944444447777777''''''' 196,885' 198,903' 222222211111110000000,,,,,,,111111100000004444444''''''' 196,637' 208,059 222222244444448888888,,,,,,,888888855555550000000 225533,,331155 33 FFoorreeiiggnn ppuubblliicc bboorrrroowweerrss 11111110000000,,,,,,,333333344444446666666 11111115555555,,,,,,,999999933333337777777 22222220000000,,,,,,,888888888888882222222 22222222222222,,,,,,,999999900000009999999''''''' 24,026' 24,414 22222225555555,,,,,,,000000022222221111111 25,436' 26,391 33333330000000,,,,,,,999999911111112222222 3322,,334466 44 OOwwnn ffoorreeiiggnn ooffffiicceess11 44444441111111,,,,,,,666666600000005555555 44444447777777,,,,,,,444444422222228888888 66666665555555,,,,,,,000000088888884444444 77777779999999,,,,,,,888888822222227777777''''''' 80,698' 80,398' 88888888888888,,,,,,,222222211111114444444 78,855 84,881 99999996666666,,,,,,,444444411111115555555 9955,,009966 55 UUnnaaffffiilliiaatteedd ffoorreeiiggnn bbaannkkss 44444440000000,,,,,,,444444488888883333333 44444440000000,,,,,,,999999922222227777777 55555550000000,,,,,,,111111166666668888888 55555555555555,,,,,,,111111166666665555555''''''' 54,200' 55,364 55555558888888,,,,,,,444444488888887777777''''''' 54,957' 57,648 77777772222222,,,,,,,555555577777776666666 7755,,550055 66 DDeeppoossiittss 5555555,,,,,,,444444422222228888888 6666666,,,,,,,222222277777774444444 8888888,,,,,,,222222255555554444444 11111111111111,,,,,,,111111166666663333333''''''' 11,278 11,678 11111112222222,,,,,,,666666688888885555555 12,407' 12,828 22222221111111,,,,,,,000000044444441111111 2233,,000022 77 OOtthheerr 33333335555555,,,,,,,000000055555554444444 33333334444444,,,,,,,666666655555554444444 44444441111111,,,,,,,999999911111114444444 44444444444444,,,,,,,000000000000002222222''''''' 42,922' 43,686 44444445555555,,,,,,,888888800000003333333''''''' 42,550' 44,820 55555551111111,,,,,,,555555533333335555555 5522,,550033 88 AAllll ootthheerr ffoorreeiiggnneerrss 22222223333333,,,,,,,111111111111111111111 22222229999999,,,,,,,666666655555550000000 33333336666666,,,,,,,444444455555559999999 33333339999999,,,,,,,000000044444446666666''''''' 37,961' 38,727 33333338888888,,,,,,,333333388888882222222 37,389' 39,139 44444448888888,,,,,,,999999944444448888888 5500,,336688 99 CCllaaiimmss ooff bbaannkkss'' ddoommeessttiicc ccuussttoommeerrss22 .... 11111111111111,,,,,,,222222244444443333333 22222220000000,,,,,,,000000088888888888888 22222226666666,,,,,,,111111100000006666666 33333333333333,,,,,,,888888822222229999999''''''' 33333335555555,,,,,,,666666600000000000000''''''' 33333337777777,,,,,,,222222266666664444444 444444488888880000000 999999955555555555555 888888888888885555555 777777766666663333333''''''' 999999999999992222222 1111111,,,,,,,333333355555555555555 11 Negotiable and readily transferable 5555555,,,,,,,333333399999996666666 11111113333333,,,,,,,111111100000000000000 11111115555555,,,,,,,555555577777774444444 22222223333333,,,,,,,555555555555559999999''''''' 22222225555555,,,,,,,111111199999993333333''''''' 22222225555555,,,,,,,777777788888886666666 12 Outstanding collections and other 5555555,,,,,,,333333366666666666666 6666666,,,,,,,000000033333332222222 9999999,,,,,,,666666644444448888888 9999999,,,,,,,555555500000007777777 9999999,,,,,,,444444411111115555555''''''' 11111110000000,,,,,,,111111122222223333333 13 MEMO: Customer liability on 11111115555555,,,,,,,000000033333330000000 11111118888888,,,,,,,000000022222221111111 22222222222222,,,,,,,777777711111114444444 22222227777777,,,,,,,444444455555557777777 22222227777777,,,,,,,666666644444440000000''''''' 22222229999999,,,,,,,666666633333336666666 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 , 13,648' 22,241' 24,141 33,102 37,410' 34,240' 36,093' 39,758' 41,367 38,699 n.a. 1. U.S. banks: includes amounts due from own foreign branches and foreign 4. Data for March 1978 and for period before 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 certifbanks: 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 descripbranches, 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 that represent claims on foreigners held by reporting banks for the account of their NOTE. Beginning April 1978, data for banks' own claims are given on a monthly domestic customers. basis, but the data for claims of banks' own domestic customers are available on 3. Principally negotiable time certificates of deposit and bankers acceptances. a quarterly basis only. 3.20 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 1981 MMaattuurriittyy ;; bbyy bboorrrroowweerr aanndd aarreeaa Dec. Dec. Dec. Mar. June Sept Dec.P 1 73,635 86,181 106,748' 107,276 116,886' 121,561' 151,955 By borrower 2 Maturity of 1 year or less1 58,345 65,152 82,555' 83,471 91,447' 94,053' 114,059 3 Foreign public borrowers 4,633 7,233 9,974' 10,734 11,713' 12,950' 15,071 4 All other foreigners 53,712 57,919 72,581' 72,737 79,734' 81,104' 98,988 5 Maturity of over 1 year1 15,289 21,030 24,193 23,805 25,439' 27,508' 37,897 6 Foreign public borrowers 5,395 8,371 10,152 10,250 11,022' 12,367' 15,607 7 All other foreigners 9,894 12,659 14,041 13,555 14,416' 15,141' 22,290 By area Maturity of 1 year or less1 8 Europe 15,169 15,235 18,715' 18,681 20,815' 22,727' 27,145 9 Canada 2,670 1,777 2,723 2,743 3,291' 3,799 4,273 10 Latin America and Caribbean 20,895 24,928 32,034 31,329 33,292' 35,207' 47,576 11 17,545 21,641 26,686' 28,363 31,485' 29,222' 31,653 V. Africa 1,4% 1,077 1,757 1,624 1,768' 2,324 2,474 13 All other2 569 493 640 730 797' 774 938 Maturity of over 1 year1 14 Europe 3,142 4,160 5,118 5,585 6,283' 6,405' 8,080 15 Canada 1,426 1,317 1,448 1,180 1,317' 1,347 1,729 16 Latin America and Caribbean 8,464 12,814 15,075 14,841 15,448 17,471' 25,187 17 1,407 1,911 1,865 1,530 1,680 1,565' 1,749 18 Africa 637 655 507 531 551 548 893 19 All other2 214 173 179 138 159 172 260 1. Remaining time to maturity. 2. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported, Data A63 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks' Billions of dollars, end of period 1979 1980 1981 AArreeaa oorr ccoouunnttrryy 11997777 1199778822 Sept. Dec. Mar. June Sept. Dec. Mar. June Sept.P 1 Total 240.0 266.2 294.0 303.8 308.5 328.7 339.1 351.9 370.9 382.2 398.2 2 G-10 countries and Switzerland 116.4 124.7 135.7 138.4 141.2 154.2 158.8 162.1 168.4 168.3 171.8 3 Belgium-Luxembourg 8.4 9.0 10.7 11.1 10.8 13.1 13.6 13.0 13.5 14.2 14.0 4 France 11.0 12.2 12.0 11.7 12.0 14.1 13.9 14.1 14.5 14.7 16.0 5 Germany 9.6 11.3 12.8 12.2 11.4 12.7 12.9 12.1 13.2 12.1 12.7 6 Italy 6.5 6.7 6.1 6.4 6.2 6.9 7.2 8.2 7.7 8.4 8.6 7 Netherlands 3.5 4.4 4.7 4.8 4.3 4.5 4.4 4.4 4.6 4.1 3.7 8 Sweden 1.9 2.1 2.3 2.4 2.4 2.7 2.8 2.9 3.2 3.1 3.4 9 Switzerland 3.6 5.3 5.0 4.7 4.3 3.3 3.4 5.0 5.1 5.2 5.1 10 United Kingdom 46.5 47.3 53.7 56.4 57.6 64.4 66.7 67.4 68.2 66.7 68.6 11 Canada 6.4 6.0 6.0 6.3 6.9 7.2 7.7 8.4 8.8 10.8 11.5 12 Japan 18.8 20.6 22.3 22.4 25.4 25.5 26.1 26.5 29.6 28.9 28.2 13 Other developed countries 18.6 19.4 19.7 19.9 18.8 20.3 20.6 21.7 23.5 24.8 26.3 14 Austria 1.3 1.7 2.0 2.0 1.7 1.8 1.8 1.9 1.8 2.1 2.1 15 Denmark 1.6 2.0 2.0 2.2 2.1 2.2 2.2 2.3 2.4 2.3 2.5 16 Finland 1.2 1.2 1.2 1.2 1.1 1.3 1.2 1.4 1.4 1.3 1.4 17 Greece 2.2 2.3 2.3 2.4 2.4 2.5 2.6 2.8 2.7 3.0 2.9 18 Norway 1.9 2.1 2.3 2.3 2.4 2.4 2.4 2.6 2.8 2.8 3.0 19 Portugal .6 .6 .7 .7 .6 .6 .7 .6 .6 .8 1.0 20 Spain 3.6 3.5 3.3 3.5 3.5 3.9 4.2 4.4 5.6 5.7 5.8 21 Turkey 1.5 1.5 1.4 1.4 1.4 1.4 1.3 1.5 1.5 1.4 1.5 22 Other Western Europe .9 1.3 1.5 1.4 1.4 1.6 1.7 1.7 1.8 1.8 1.9 23 South Africa 2.4 2.0 1.7 1.3 1.1 1.5 1.2 1.1 1.5 1.9 2.5 24 Australia 1.4 1.4 1.3 1.3 1.2 1.2 1.2 1.3 1.4 1.7 1.9 25 OPEC countries3 17.6 22.7 23.4 22.9 21.8 20.9 21.4 22.7 21.7 22.2 23.4 26 Ecuador 1.1 1.6 1.6 1.7 1.8 1.8 1.9 2.1 2.0 2.0 2.1 27 Venezuela 5.5 7.2 7.9 8.7 7.9 7.9 8.5 9.1 8.3 8.7 9.2 28 Indonesia 2.2 2.0 1.9 1.9 1.9 1.9 1.9 1.8 2.1 2.1 2.5 29 Middle East countries 6.9 9.5 9.2 8.0 7.8 6.9 6.7 6.9 6.7 6.8 7.1 30 African countries 1.9 2.5 2.8 2.6 2.5 2.5 2.4 2.8 2.6 2.6 2.6 31 Non-OPEC developing countries 48.7 52.6 58.9 62.9 63.7 67.6 72.8 77.2 81.8 84.6 89.8 Latin America 32 Argentina 2.9 3.0 4.1 5.0 5.5 5.6 7.6 7.9 9.4 8.5 9.2 33 Brazil 12.7 14.9 15.1 15.2 15.0 15.3 15.8 16.2 16.8 17.3 17.6 34 Chile .9 1.6 2.2 2.5 2.5 2.7 3.2 3.7 4.0 4.7 5.5 35 Colombia 1.3 1.4 1.7 2.2 2.1 2.2 2.4 2.6 2.4 2.5 2.5 36 Mexico 11.9 10.8 11.4 12.0 12.1 13.6 14.4 15.9 17.0 18.2 20.0 37 Peru 1.9 1.7 1.4 1.5 1.3 1.4 1.5 1.8 1.8 1.7 1.8 38 Other Latin America 2.6 3.6 3.6 3.7 3.6 3.6 3.9 3.9 4.7 3.8 4.2 Asia China 39 Mainland .0 .0 .1 .1 .1 .1 .1 .2 .2 .2 .2 40 Taiwan 3.1 2.9 3.5 3.4 3.6 3.8 4.1 4.2 4.4 4.6 5.1 41 India .3 .2 .2 .2 .2 .2 .2 .3 .3 .3 .3 42 Israel .9 1.0 1.0 1.3 .9 1.2 1.1 1.5 1.3 1.8 1.5 43 Korea (South) 3.9 3.9 5.3 5.4 6.4 7.1 7.3 7.1 7.7 8.7 8.5 44 Malaysia .7 .6 .7 .9 .8 .9 .9 1.0 1.0 1.4 1.4 45 Philippines 2.5 2.8 3.7 4.2 4.4 4.6 4.8 5.1 4.8 5.1 5.6 46 Thailand 1.1 1.2 1.6 1.5 1.4 1.5 1.5 1.6 1.6 1.5 1.4 47 Other Asia .4 .2 .4 .5 .5 .5 .5 .6 .5 .7 .8 Africa 48 Egypt .3 .4 .6 .6 .7 .8 .6 .8 .8 .7 1.0 49 Morocco .5 .6 .5 .6 .5 .5 .6 .7 .6 .5 .7 50 Zaire .3 .2 .2 .2 .2 .2 .2 .2 .2 .2 .2 51 Other Africa4 .7 1.4 1.6 1.7 1.7 1.9 2.1 2.1 2.2 2.1 2.2 52 Eastern Europe 6.3 6.9 7.2 7.3 7.3 7.2 7.3 7.4 7.7 7.7 7.7 53 U.S.S.R 1.6 1.3 .9 .7 .6 .5 .5 .4 .4 .5 .4 54 Yugoslavia 1.1 1.5 1.8 1.8 1.9 2.1 2.1 2.3 2.4 2.5 2.5 55 Other 3.7 4.1 4.6 4.8 4.9 4.5 4.7 4.6 4.8 4.8 4.8 56 Offshore banking centers 26.1 31.0 38.6 40.4 42.6 44.3 44.6 47.0 53.1 59.0 60.9 57 Bahamas 9.9 10.4 13.0 13.7 13.9 13.7 13.2 13.7 15.2 17.7 20.8 58 Bermuda .6 .7 .7 .8 .6 .6 .6 .6 .7 .7 .9 59 Cayman Islands and other British West Indies 3.7 7.4 9.5 9.4 11.3 9.8 10.1 10.6 11.7 12.4 11.7 60 Netherlands Antilles .7 .8 1.1 1.2 .9 1.2 1.3 2.1 2.3 2.4 2.2 61 Panama5 3.1 3.0 3.4 4.3 4.9 5.6 5.6 5.4 6.5 6.9 6.7 62 Lebanon .2 .1 .2 .2 .2 .2 .2 .2 .2 .2 .2 63 Hong Kong 3.7 4.2 5.5 6.0 5.7 6.9 7.5 8.1 8.4 10.3 10.3 64 Singapore 3.7 3.9 4.9 4.5 4.7 5.9 5.6 5.9 7.3 8.1 8.0 65 Others6 .5 .5 .4 .4 .4 .4 .4 .3 .9 .3 .1 66 Miscellaneous and unallocated7 5.3 9.1 10.6 11.7 13.1 14.3 13.7 14.0 14.9 15.7 18.2 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 Iraa. 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. Excludes Liberia. of U.S. offices in table 3.17 (excluding those held by agencies and branches of 5. Includes Canal Zone beginning December 1979. foreign banks and those constituting claims on own foreign branches). However, 6. Foreign branch claims only. see also footnote 2. 7. Includes New Zealand, Liberia, and international and regional organizations. 2. Beginning with data for June 1978, the claims of the U.S. offices in this tame include only banks' own claims payable in dollars. For earlier dates Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics • March 1982 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States' Millions of dollars, end of period 1980 1981 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11997788 11997799 11998800 Sept. Dec. Mar. June Sept.? 1 Total 14,956 17,170 21,644 18,778 21,644 21,681 21,163' 21,178 2 Payable in dollars 11,527 14,095 17,935 15,441 17,935 18,156 17,915' 18,186 3 Payable in foreign currencies2 3,429 3.075 3,709 3,337 3,709 3,525 3,247' 2,992 By type 4 Financial liabilities 6,368 7,477 11,122 8,441 11.122 11,492 11,386 10,921 5 Payable in dollars 3,853 5,207 8,350 5,954 8,350 8,860 9,053 8,739 b Payable in foreign currencies 2,515 2,270 2,772 2,487 2,772 2,633 2,333 2,182 7 Commercial liabilities 8,588 9,693 10.521 10,337 10,521 10,188 9,777' 10,257 8 Trade payables 4,001 4,421 4,708 4,377 4,708 4,781 4,377' 4,268 9 Advance receipts and other liabilities 4,587 5,272 5,814 5,960 5,814 5,407 5,401' 5,989 10 Payable in dollars 7,674 8,888 9,585 9,487 9,585 9,296 8,862' 9,447 11 Payable in foreign currencies 914 805 936 850 936 892 915' 810 By area or country Financial liabilities 12 Europe 3,971 4,655 6,314 5,321 6,314 6,011 5,926 6,073 13 Belgium-Luxembourg 293 345 484 432 484 553 527 440 14 France 173 175 327 360 327 324 362 607 15 Germany 366 497 582 557 582 498 477 430 lb Netherlands 391 829 663 781 663 544 700 583 17 Switzerland 248 170 354 224 354 315 321 335 18 United Kingdom 2,167 2,460 3,769 2,836 3,769 3,665 3,419 3,526 19 Canada 247 532 958 642 958 1,090 978 977 20 Latin America and Caribbean 1.357 1.483 3,103 1.734 3,103 3,483 3,592 3,032 21 Bahamas 478 375 964 407 964 1,217 11,,227722 1,019 22 Bermuda 4 81 1 1 1 1 11 0 23 Brazil 10 18 23 20 23 19 20 20 24 British West Indies 194 514 1,452 708 1,452 1,458 1,534 1,296 25 Mexico 102 121 99 108 99 97 98 107 2b Venezuela 49 72 81 74 81 85 91 90 27 Asia 784 799 723 712 723 880 861 805 28 Japan 717 726 644 618 644 766 741 687 29 Middle East oil-exporting countries3 32 31 38 37 38 51 29 30 30 Africa 5 4 11 11 11 6 5 3 31 Oil-exporting countries4 2 1 1 1 1 1 0 1 32 All other5 5 4 15 21 15 23 24 29 Commercial liabilities 33 Europe 3,047 3.636 4,197 4,074 4,197 3,814 3,892' 3,912 34 Belgium-Luxembourg 97 137 90 109 90 83 72 78 35 France 321 467 582 501 582 563 558' 575 36 Germany 523 545 679 686 679 639 617' 579 37 Netherlands 246 227 219 276 219 246 225 235 38 Switzerland 302 310 493 452 493 385 375 556633 39 United Kingdom 824 1,077 1,017 1,047 1,017 880 950' 888888 40 Canada 667 868 806 591 806 749 652' 742 41 Latin America 997 1.323 1,244 1,361 1,244 1,287 1,149' 1,064 42 Bahamas 25 69 8 8 8 1 4 3 43 Bermuda 97 32 73 114 73 111 72 113 44 Brazil 74 203 111 156 111 84 54 61 45 British West Indies 53 21 35 12 35 16 34 11 46 Mexico 106 257 326 324 326 421 319' 345 47 Venezuela 303 301 307 293 307 253 290 249 48 Asia 2,931 2,905 3,005 2,909 3,005 3,071 2,787' 3,197 49 Japan 448 494 802 502 802 810 867 111 50 Middle East oil-exporting countries3 1,523 1,017 894 944 894 955 837' 880 51 Africa 743 728 814 1,006 814 828 676' 751 52 Oil-exporting countries4 312 384 514 633 514 519 392 351 53 All other5 203 233 456 396 456 440 622 593 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 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1980 1981 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11997788 11997799 11998800 Sept. Dec. Mar. June Sept./" 1 Total 28,004 31,286 34,489 32,048 34,489 37,661 35,258' 33,809 2 Payable in dollars 25,001 28,094 31,563 28,712 31,563 34,663 32,334r 30,828 3 Payable in foreign currencies2 3,003 3,193 2,926 3,336 2,926 2,999 2,924r 2,981 By type 4 Financial claims 16,644 18,431 19,812 18,633 19,812 22,203 20,133 18,949 5 Deposits 11,201 12,797 13,978 12,574 13,978 16,474 14,487 13,239 6 Payable in dollars 10,133 11,881 13,203 11,361 13,203 15,679 13,761 12,508 7 Payable in foreign currencies 1,068 916 775 1,213 775 795 725 732 8 Other financial claims 5,443 5,634 5,834 6,059 5,834 5,729 5,646 5,710 9 Payable in dollars 3,874 3,808 4,152 4,404 4,152 4,082 3,992 4,009 10 Payable in foreign currencies 1,569 1,826 1,683 1,655 1,683 1,646 1,655 1,701 11 Commercial claims 11,360 12,855 14,677 13,415 14,677 15,458 15,125' 14,860 12 Trade receivables 10,802 12,161 13,957 12,714 13,957 14,657 14,295' 14,001 13 Advance payments and other claims 559 694 720 702 720 801 830 859 14 Payable in dollars 10,994 12,405 14,208 12,947 14,208 14,901 14,581' 14,311 15 Payable in foreign currencies 366 450 468 469 468 557 544' 549 By area or country Financial claims 16 Europe 5,225 6,163 6,094 5,692 6,094 6,098 5,212 4,628 17 Belgium-Luxembourg 48 32 195 17 195 170 174 26 18 France 178 177 334 409 334 411 377 348 19 Germany 510 409 230 168 230 213 139 320 20 Netherlands 103 53 32 30 32 42 34 48 21 Switzerland 98 73 59 41 59 90 96 67 22 United Kingdom 4,031 5,107 4,967 4,646 4,967 4,900 4,046 3,476 23 Canada 4,549 4,984 5,057 4,948 5,057 6,611 6,168 6,018 24 Latin America and Caribbean 5,714 6,282 7,682 6,812 7,682 8,552 7,882 7,313 25 Bahamas 3,001 2,757 3,424 2,845 3,424 3,947 3,231 3,128 26 Bermuda 80 30 135 65 135 13 33 15 27 Brazil 151 163 96 116 96 22 20 66 28 British West Indies 1,291 2,007 2,681 2,342 2,681 3,398 3,396 3,010 29 Mexico 162 157 208 192 208 168 162 273 30 Venezuela 157 143 137 128 137 131 143 143 31 Asia 920 706 710 853 710 691 618 653 32 Japan 305 199 177 331 177 191 107 120 33 Middle East oil-exporting countries3 18 16 20 20 20 17 19 29 34 Africa 181 253 238 260 238 214 216 222 35 Oil-exporting countries4 10 49 26 29 26 27 39 41 36 All other5 55 44 32 68 32 36 37 116 Commercial claims 37 Europe 3,983 4,909 5,511 4,709 5,511 5,822 5,467' 5,403 38 Belgium-Luxembourg 144 202 233 230 233 277 235 219 39 France 609 727 1,129 710 1,129 918 783' 762 40 Germany 399 589 591 571 591 597 572' 579 41 Netherlands 267 298 318 289 318 347 308 307 42 Switzerland 198 272 351 339 351 461 474 402 43 United Kingdom 824 901 932 994 932 1,187 1,067 1,025 44 Canada 1,094 849 899 934 899 1,037 991' 993 45 Latin America and Caribbean 2,546 2,853 3,791 3,389 3,791 3,832 3,793' 3,684 46 Bahamas 109 21 21 53 21 15 29 18 47 Bermuda 215 197 148 81 148 170 192 241 48 Brazil 628 645 861 712 861 799 823 708 49 British West Indies 9 16 34 17 34 15 34 13 50 Mexico 505 698 1,090 992 1,090 1,051 1,113' 969 51 Venezuela 291 343 407 388 407 436 420' 438 52 3,112 3,450 3,507 3,443 3,507 3,763 3,767' 3,628 53 Japan 1,006 1,175 1.045 1,135 1,045 1,294 1,218' 1,097 54 Middle East oil-exporting countries3 716 766 821 837 821 925 934' 823 55 Africa 447 554 651 669 651 678 703' 703 56 Oil-exporting countries4 136 133 151 135 151 143 137 149 57 All other5 178 240 318 272 318 327 404' 449 1. For a description of the changes in the International Statistics tables, see July 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and 1979 BULLETIN, p. 550. United Arab Emirates (Trucial States). 2. Prior to December 1978, foreign currency data include only liabilities denom- 4. Comprises Algeria, Gabon, Libya, and Nigeria. inated in foreign currencies with an original maturity of less than one year. 5. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 International Statistics • March 1982 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1982 1981 1982 Transactions, and area or country 11997799 11998800 11998811 Jan.- Jan.P June July Aug. Sept. Oct. Nov. Dec. Jan.? U.S corporate securities STOCKS 1 Foreign purchases 22,783 40,290' 40,558 2,016 4,419' 3,458' 3,152 2,847 2,839 2,689 2,940 2,016 2 Foreign sales 21,104 34,870' 34,842 1,748 3,424' 3,258' 3,206 2,322 2,792 2,494 2,740 1,748 3 Net purchases, or sales ( — ).... 1,679 5,419r 5,717 268 995' 200' -54 525 47 195 200 268 4 Foreign countries 1,662 5,401' 5,692 263 990' 192' -49 531 53 207 199 263 5 Europe 2 1 3 3 7 7 3, 4 1 9 0 0 8 ' 3,5 8 9 8 2 9 2~312 5 4 3 8 7 ' ' 1 4 2 9 1 r ' 7 2 4 9 3 1 8 0 4 2 6 1 1 -7 0 9 176 5 2 - 3 2 1 1 1 1 1 1 1 1 6 9 7 8 6 0 1 2 3 4 5 O M O C A La a t t f i U S F N G h h t r n d i i w r e e n a d n e e c a r r d l a i t i r n e t h t A a m c A z e c e o d m e e E a s r u r n i l a e l a a K n y a s r n t t n i i r 1 d c n d i a s e g s d a o n m d Caribbean . - - 5 2 - - - 9 2 5 6 1 1 7 1 1 6 5 1 8 4 9 1 9 5 7 4 2 1 8 2 - 1 , 3 , 5 2 3 8 1 1 - 2 2 0 1 8 3 0 4 1 6 8 3 6 7 8 8 8 6 9 ' 2 1 - , - - , 2 1 2 7 2 4 3 2 1 4 5 7 3 6 6 0 8 0 0 0 9 7 9 7 - - 1 - 4 1 1 4 5 4 6 1 5 3 0 1 0 0 8 3 1 3 1 1 1 -1 3 0 5 2 8 7 1 4 0 3 4 6 7 3 4 2 ' ' - - 1 - - - 1 1 2 - 1 4 2 2 7 3 1 0 1 4 9 1 8 6 7 7 5 8 ' - - - - - - 1 3 3 2 5 2 2 8 7 6 9 8 1 8 0 5 0 1 - - - 4 1 6 8 - 4 9 4 2 3 3 8 1 8 4 7 4 9 0 2 - - - 1 1 9 4 - 1 8 2 6 1 7 7 7 7 6 0 4 6 3 - - - 3 4 7 2 9 5 4 7 6 8 6 4 0 1 - - - 11 2 3 - 7 7 7 6 77 4 6 3 0 4 5 1 11 88 - - 1 - 1 4 1 4 4 5 6 1 3 5 1 3 0 0 0 1 8 17 Nonmonetary international and regional organizations 17 18 24 5 5 8 -5 -5 -6 -12 0 5 BONDS2 18 Foreign purchases 8 7 8 7,, ,, 66 88 44 88 88 88 '' '' 1 9 5 , , 9 4 6 2 4 5 1 17 2 , , 2 1 0 8 8 0 7 94 7 6 8 1 1, , 9 4 3 5 9 0 ' ' 1,8 8 9 2 4 0 1,1 8 7 9 1 4 1 1 , , 3 0 0 5 6 1 1 1 , , 1 2 6 0 6 3 1 1, , 0 3 9 0 9 3 1 1 , , 1 0 9 3 2 8 9 7 4 7 6 8 19 Foreign sales 1,240' 5,461 5,028 168 489' 1,074 277 255 -36 -204 153 168 20 Net purchases, or sales (-) 1,376 5,526 4,961 154 473 1,067 278 243 -27 -212 157 154 21 Foreign countries 671 1,576 1,335 144 179 122 176 5 -106 -112 139 144 22 Europe 5 5 9 6 2 12 1 9 2 ' 85 1 0 1 8 1 3 5 15 1 1 0 - 6 5 8 1 -9 0 5 6 4 4 43 5 67 4 52 7 8 1 3 5 23 France -202 -65 60 2 0 0 -2 -2 3 9 3 2 24 Germany -118 54 98 19 20 22 22 -23 7 10 -3 19 25 Netherlands 814 1,257 178 3 4 11 45 -53 -164 -174 55 3 26 Switzerland 80 135 -6 29 -6 23 2 -12 -35 -29 -2 29 2 3 3 2 2 3 9 0 1 7 8 2 L O M C A a a t f i U t h r n d i i e n d a n c r d l a i e A t a A e m d E s i a e a K s r t i i 1 c n a g d a o n m d Caribbean . 4 1 2 8 0 4 8 9 1 1 3,4 1 1 9 1 8 1 9 7 5 5 0 3,4 1 - - 6 4 7 1 3 5 4 2 -8 5 1 9 3 0 0 7 - 3 7 5 1 1 9 0 2 1 8 2 4 5 1 9 3 0 0 - 2 8 5 4 1 0 0 2 - - 1 5 9 7 2 0 -1 4 8 2 3 4 0 0 -7 - - - 1 2 1 2 4 -6 -2 6 2 2 0 2 0 -8 5 1 9 3 0 0 7 3343 NOothnemr ocnoeutanrtryi eisn ternational and regional organizations -136' -65 66 14 16' 7 -1 12 -10 9 -4 14 Foreign securities 35 Stocks, net purchases, or sales (-).. -817 -2,142' 2 159 -128' 106' 51 191 -30 -70 3 3 6 7 F F o o r r e e i i g g n n p sa u l r e c s h ases 4 5 , , 6 4 1 3 7 4 1 7 0 , , 8 0 8 2 8 9 ' ' 9 9 , , 1 1 9 9 8 6 5 3 2 6 1 2 1, 8 0 9 1 1 9 ' 8 7 9 8 1 5 ' 8 7 3 8 5 4 7 6 9 0 4 3 5 6 8 1 8 7 6 6 2 9 5 5 38 Bonds, net purchases, or sales (-).. -3,999' -1,013 -5,218 -21 -483' -418' -32 -260' -154 -1,946 39 Foreign purchases 12,662 17,073 17,823 1,222 1,510' 1,768 1,078 1,023 1,553 2,296 40 Foreign sales 16,660' 18,086 23,041 1,243 1,993' 2,186' 1,110 1,282' 1,706 4,242 41 Net purchases, or sales (-), of stocks and bonds -4,816' -3,155' -5,215 -611' -68' -183 -2,015 42 Foreign countries -4,066' --41,,013018' ' -4,459 110 -611' -622' 62 -82' -356 -1,427 43 Europe -1,785' 637 -18403 -50' 145' -55 74' -45 -453 4 4 4 4 4 7 8 4 5 6 O A C A La f a t s h r t i n i a i e n a c r a d A a c o m u e n r t i r c i a e s and Caribbean -2, - 6 3 6 0 2 4 1 3 1 5 3 5 - - 1 1 , , 9 1 5 4 2 7 8 9 7 4 8 0 -3,7 2 1 4 5 9 8 7 5 3 2 7 0 - - 1 -2 6 4 5 7 - - 5 1 - - 1 0 0 6 7 7 3 9 4 ' ' ' -8 - - 1 2 2 - 5 2 4 3 4 8 0 ' - 1 7 - 6 3 3 4 2 1 1 -3 1 - - 2 6 3 7 6 7 1 - - 2 1 5 1 5 0 3 0 0 1 - - 8 1 - 7 4 6 5 9 8 7 1 49 Nonmonetary international and regional organizations — 750 876 756 28 311 14 173 -588 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

Investment Transactions and Discount Rates A67 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars 1982 1981 Country or area 1979 1980 1981 Jan.- Jan. June July Aug. Sept. Oct. Nov. Dec. Jan.? Holdings (end of period)1 1 Estimated total2 51,484 57,549 70,343 64,232' 64,638' 66,437' 67,008' 68,489' 70,512' 70,343 71,629 2 Foreign countries2 46,055 52,961 64,672 59,289 59,658 61,579 62,369 64,067 66,035 64,672 65,992 3 Europe2 24,964 24,468 23,976 25,000 24,573 25,090 24,334 24,531 24,952 23,976 24,373 4 Belgium-Luxembourg 60 77 543 173 163 370 372 384 329 543 614 5 Germany2 14,056 12,327 11,861 12,585 13,226 13,524 12,830 13,029 13,226 11,861 11,901 6 Netherlands 1,466 1,884 1,955 1,781 1,756 1,760 1,756 1,784 1,889 1,955 1,998 7 Sweden 647 595 643 582 606 623 646 661 645 643 644 8 Switzerland2 1,868 1,485 846 1,600 763 848 876 861 833 846 904 9 United Kingdom 6,376 7,323 6,709 6,976 6,709 6,630 6,469 6,446 6,693 6,709 6,800 10 Other Western Europe 491 777 1,419 1,304 1,350 1,334 1,385 1,367 1,337 1,419 1,514 11 Eastern Europe 0 0 0 0 0 0 0 0 0 0 -2 12 Canada 232 449 520 484 501 514 528 547 508 520 540 13 Latin America and Caribbean 466 999 736 666 724 818 854 788 761 736 721 14 Venezuela 103 292 286 287 287 313 294 289 306 286 286 15 Other Latin America and Caribbean 200 285 319 217 260 321 313 317 289 319 321 16 Netherlands Antilles 163 421 131 162 177 184 246 182 165 131 113 17 Asia 19,805 26,112 38,806 31,997 32,716 34,008 35,506 37,052 38,774 38,806 39,836 18 Japan 11,175 9,479 10,780 9,778 9,786 9,890 10,102 10,094 10,732 10,780 10,844 19 Africa 591 919 631 1,139 1,139 1,140 1,140 1,141 1,037 631 519 20 All other -3 14 2 3 6 8 8 8 3 2 3 21 Nonmonetary international and regional organizations 5,429 4,588 5,671 4,943 4,980' 4,858' 4,639' 4,422' 4,477 5,671 5,637 22 International 5,388 4,548 5,637 4,942 4,977' 44,,885566'' 4,636' 4,419' 4,476 5,670 5,636 23 Latin American regional 37 36 1 1 1 11 1 1 1 1 1 Transactions (net purchases, or sales (-) during period) 24 Total2 6,537 6,066 12,794 1,286 1,266 405 1,799 571 1,480 2,024 -169 1,286 25 Foreign countries2 6,238 6,906 11,710 1,320 1,121 369 1,920 791 1,698 1,968 -1,363 1,320 26 Official institutions 1,697 3,865 11,833 841 980 798 1,532 1,376 1,633 2,123 -787 841 27 Other foreign2 4,543 3,040 -124 478 141 -429 388 -585 65 -165 -576 478 28 Nonmonetary international and regional organizations 300 -843 1,085 -33 145 36 -120 -220 -217 56 1,194 -33 MEMO: Oil-exporting countries 29 Middle East3 -1,014 7,672 11,156 1,019 565 659 1,204 1,354 1,442 1,250 17 1,019 30 Africa4 -100 327 -289 -112 0 0 0 0 0 -102 -407 -112 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. 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on Feb. 28, 1982 Rate on Feb. 28, 1982 Rate on Feb. 28, 1982 Country Country Country Per- Month Per- Month Percent effective cent effective cent Argentina 187.55 Jan. 1982 France1 17.5 Oct. 1981 Sweden 11.0 Austria .. 6.75 Mar. 1980 Germany, Fed. Rep. of 7.5 May 1980 Switzerland 6.0 Belgium.. 14.0 Jan. 1982 Italy 19.0 Mar. 1981 United Kingdom' Brazil 49.0 Mar. 1981 Japan 5.5 Dec. 1981 Venezuela 14.0 Canada .. 1141..0830 Feb. 1982 Netherlands 8.5 Jan. 1982 Denmark. Oct. 1980 Norway 9.0 Nov. 1979 1. As from February 1981, the rate at which the Bank of France discounts discounts or makes advances against eligible commercial paper and/or Treasury bills for 7 to 10 days. government commercial banks or brokers. For countries with 2. Minimum lending rate suspended as of Aug. 20, 1981. more than one rate applicable to such discounts or advances, the rate shown is the one at which it is understood the central bank transacts the NOTE. Rates shown are mainly those at which the central bank either largest proportion of its credit operations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics • March 1982 3.27 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1981 1982 CCoouunnttrryy,, oorr ttyyppee 11997799 11998800 11998811 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 Eurodollars 11.96 14.00 16.79 18.79 17.80 16.34 13.33 13.24 14.29 15.75 2 United Kingdom 13.60 16.59 13.86 14.02 14.60 16.27 15.03 15.31 15.14 14.47 3 Canada 11.91 13.12 18.34 21.84 20.42 18.84 16.53 15.97 15.01 15.25 4 Germany 6.64 9.45 12.05 12.87 12.48 11.72 11.05 10.72 10.43 10.22 5 Switzerland 2.04 5.79 9.15 9.05 10.56 10.85 9.88 9.76 8.53 8.29 6 Netherlands 9.33 10.60 11.52 13.54 12.% 12.57 11.70 11.03 10.49 10.06 7 France 9.44 12.18 15.28 17.40 17.65 16.47 15.35 15.30 15.07 14.58 8 Italy 11.85 17.50 19.98 20.94 21.07 21.00 21.12 21.24 21.38 21.34 9 Belgium 10.48 14.06 15.28 16.00 16.00 15.83 15.28 15.48 15.09 14.89 10 Japan 6.10 11.45 7.58 7.22 7.26 7.13 7.15 6.75 6.41 6.38 NOTE. Rates are for 3-month interbank loans except for Canada, finance company paper; Belgium, 3-month Treasury bills; and Japan, Gensaki rate. 3.28 FOREIGN EXCHANGE RATES Currency units per dollar 1981 1982 CCoouunnttrryy//ccuurrrreennccyy 11997799 11998800 11998811 Sept. Oct. Nov. Dec. Jan. Feb. 1 Argentina/peso n.a. n.a. n.a. 5457.50 5967.00 6425.20 7417.10 9910.00 10256.00 2 Australia/dollar1 111.77 111.57 114.57 114.86 114.32 114.55 113.39 111.41 108.50 3 Austria/schilling 13.387 12.945 15.948 16.527 15.788 15.621 15.852 16.066 16.587 4 Belgium/franc 29.342 29.237 37.194 38.526 37.660 37.420 38.296 39.027 41.144 5 Brazil/cruzeiro n.a. n.a. 92.374 105.07 110.96 117.71 121.98 130.14 137.97 6 Canada/dollar 1.1603 1.1693 1.1990 1.2008 1.2029 1.1872 1.1851 1.1926 1.2140 7 Chile/peso n.a. n.a. n.a. 39.100 39.100 39.100 39.100 39.100 39.100 8 China, P.R./yuan n.a. n.a. 1.7031 1.7542 1.7576 1.7409 1.7405 1.7713 1.8200 9 Colombia/peso n.a. n.a. n.a. 55.877 56.444 57.175 57.129 59.409 60.129 10 Denmark/krone 5.2622 5.6345 7.1350 7.3835 7.2348 7.1720 7.3210 7.4977 7.7950 11 Finland/markka 3.8886 3.7206 4.3128 4.5000 4.4250 4.3442 4.3666 4.4033 4.5058 12 France/franc 4.2566 4.2250 5.4396 5.6326 5.6314 5.6240 5.7141 5.8298 6.0176 13 Germany/deutsche mark 1.8342 1.8175 2.2631 2.3522 2.2543 2.2292 2.2579 2.2938 2.3660 14 Greece/drachma n.a. n.a. n.a. 57.721 56.706 56.297 57.231 58.811 60.973 15 Hong Kong/dollar n.a. n.a. 5.5678 6.0259 5.9869 5.6681 5.6329 5.7959 5.8857 16 India/rupee 8.1555 7.8866 8.6807 9.1152 9.1348 9.1350 9.1304 9.1525 9.2144 17 Indonesia/rupiah n.a. n.a. n.a. 632.00 632.00 632.00 632.36 645.7 645.89 18 Iran/rial n.a. n.a. 79.324 80.955 80.95 80.606 79.000 n.a. n.a. 19 Ireland/pound1 204.65 213.53 161.32 155.04 157.5 158.95 157.30 153.97 148.86 20 Israel/shekel n.a. n.a. n.a. 13.174 13.738 14.537 15.363 16.163 17.488 21 Italy/lira 831.10 856.20 1138.60 1187.60 1194.30 1191.60 1206.40 1228.20 1263.20 22 Japan/yen 219.02 226.63 220.63 229.48 231.52 223.13 218.95 224.80 235.31 23 Malaysia/ringgit 2.1721 2.1767 2.3048 2.3516 2.2989 2.2562 2.2477 2.2575 2.3662 24 Mexico/peso 22.816 22.968 24.547 25.089 25.400 25.722 26.071 26.469 31.736 25 Netherlands/guilder 2.0072 1.9875 2.4998 2.6109 2.4913 2.4442 2.4734 2.5145 2.5947 26 New Zealand/dollar1 102.23 98.65 86.848 82.644 82.355 83.104 82.784 81.399 79.325 27 Norway/krone 5.0650 4.9381 5.7430 5.9610 5.9195 5.8164 5.7801 5.8623 5.9697 28 Peru/sol n.a. n.a. n.a. 441.43 455.10 469.83 487.73 515.21 534.47 29 Philippines/peso n.a. n.a. 7.8113 7.9699 8.0298 8.0868 8.1446 8.2132 8.2530 30 Portugal/escudo 48.953 50.082 61.739 65.502 64.700 64.375 65.348 66.492 69.067 31 Singapore/dollar n.a. n.a. 2.1053 2.1442 2.0977 2.0610 2.0530 2.0607 2.1095 32 South Africa/rand/1 118.72 122.72 114.77 105.56 104.61 103.82 103.10 103.46 101.95 33 South Korea/won n.a. n.a. n.a. 686.70 683.81 688.56 694.68 705.17 710.05 34 Spain/peseta 67.158 71.758 92.396 %.129 %.023 95.398 96.97 98.357 100.70 35 Sri Lanka/rupee 15.570 16.167 18.967 19.986 20.674 20.826 20.259 20.228 20.611 36 Sweden/krona 4.2892 4.2309 5.0659 5.4303 5.5492 5.4894 5.5411 5.6206 5.7579 37 Switzerland/franc 1.6643 1.6772 1.9674 2.0223 1.8844 1.7859 1.8152 1.8442 1.8909 38 Thailand/baht n.a. n.a. 21.731 23.050 23.050 23.050 23.050 23.050 23.050 39 United Kingdom/pound1 212.24 227.74 202.43 181.46 184.07 190.25 190.33 188.60 184.70 40 Venzuela/bolivar n.a. n.a. 4.2781 4.2990 4.2944 4.2961 4.2958 4.2960 4.2960 MEMO: United States/dollar2 88.09 87.39 102.94 107.98 106.34 104.53 105.21 106.96 110.36 1. Value in U.S. cents. revised as of August 1978. For description and back data, see "Index of 2. 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 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

69 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 when more IPCs Individuals, partnerships, and corporations than half of figures in that column are changed.) REITs Real estate investment trusts * Amounts insignificant in terms of the last decimal place RPs Repurchase agreements shown in the table (for example, less than 500,000 when SMSAs Standard metropolitan statistical areas the smallest unit given is millions) Cell not applicable General Information Minus signs are used to indicate (1) a decrease, (2) a negative obligations of the Treasury. "State and local government" figure, or (3) an outflow. also includes municipalities, special districts, and other politi- "U.S. government securities" may include guaranteed cal subdivisions. issues 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 rounding. STATISTICAL RELEASES List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases June 1981 A78 SPECIAL TABLES Published Irregularly, with Latest Bulletin Reference Commercial bank assets and liabilities, September 30, 1980 February 1981 A68 Commercial bank assets and liabilities, December 31, 1980 April 1981 A72 Assets and liabilities of U.S. branches and agencies of foreign banks, September 30, 1981 January 1982 A76 Commercial bank assets and liabilities, March 31, 1981 July 1981 A72 Commercial bank assets and liabilities, June 30, 1981 October 1981 A74 Commercial bank assets and liabilities, September 30, 1981 January 1982 A70 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

70 Federal Reserve Board of Governors PAUL A. VOLCKER, Chairman HENRY C. WALLICH J. CHARLES PARTEE OFFICE OF BOARD MEMBERS OFFICE OF STAFF DIRECTOR FOR MONETARY AND FINANCIAL POLICY JOSEPH R. COYNE, Assistant to the Board DONALD J. WINN, Assistant to the Board STEPHEN H. AXILROD, Staff Director ANTHONY F. COLE, Special Assistant to the Board EDWARD C. ETTIN, Deputy Staff Director WILLIAM R. MALONI, Special Assistant to the Board MURRAY ALTMANN, Assistant to the Board FRANK O'BRIEN, JR., Special Assistant to the Board 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 MICHAEL BRADFIELD, General Counsel JAMES L. KICHLINE, Director ROBERT E. MANNION, Deputy General Counsel JOSEPH S. ZEISEL, Deputy Director J. VIRGIL MATTINGLY, JR., Associate General Counsel MICHAEL J. PRELL, Associate Director GILBERT T. SCHWARTZ, Associate General Counsel JARED J. ENZLER, Senior Deputy Associate Director MARYELLEN A. BROWN, Assistant to the General Counsel DONALD L. KOHN, Senior Deputy Associate Director ELEANOR J. STOCKWELL, Senior Deputy Associate Director J. CORTLAND G. PERET, Deputy Associate Director OFFICE OF THE SECRETARY HELMUT F. WENDEL, Deputy Associate Director MARTHA BETHEA, Assistant Director WILLIAM W. WILES, Secretary JOE M. CLEAVER, Assistant Director BARBARA R. LOWREY, Associate Secretary ROBERT M. FISHER, Assistant Director JAMES MCAFEE, Associate Secretary DAVID E. LINDSEY, Assistant Director *THEODORE E. DOWNING, JR., Assistant Secretary LAWRENCE SLIFMAN, Assistant Director FREDERICK M. STRUBLE, Assistant Director STEPHEN P. TAYLOR, Assistant Director DIVISION OF CONSUMER PETER A. TINSLEY, Assistant Director AND COMMUNITY AFFAIRS LEVON H. GARABEDIAN, Assistant Director (Administration) JANET O. HART, Director GRIFFITH L. GARWOOD, Deputy Director DIVISION OF INTERNATIONAL FINANCE JERAULD C. KLUCKMAN, Associate Director GLENN E. LONEY, Assistant Director EDWIN M. TRUMAN, Director DOLORES S. SMITH, Assistant Director ROBERT F. GEMMILL, Associate Director CHARLES J. SIEGMAN, Associate Director LARRY J. PROMISEL, Senior Deputy Associate Director DIVISION OF BANKING DALE W. HENDERSON, Deputy Associate Director SUPERVISION AND REGULATION SAMUEL PIZER, staff ADVISER RALPH W. SMITH, JR., Assistant Director JOHN E. RYAN, Director FREDERICK R. DAHL, Associate Director DON E. KLINE, Associate Director WILLIAM TAYLOR, Associate Director JACK M. EGERTSON, Assistant Director ROBERT A. JACOBSEN, 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

71 and Official Staff NANCY H. TEETERS LYLE E. GRAMLEY EMMETT J. RICE OFFICE OF OFFICE OF STAFF DIRECTOR FOR STAFF DIRECTOR FOR MANAGEMENT FEDERAL RESERVE BANK ACTIVITIES JOHN M. DENKLER, Staff Director THEODORE E. ALLISON, Staff Director EDWARD T. MULRENIN, Assistant Staff Director JOSEPH W. DANIELS, SR., Director of Equal Employment Opportunity DIVISION OF FEDERAL RESERVE BANK OPERATIONS DIVISION OF DATA PROCESSING CLYDE H. FARNSWORTH, JR., Director LORIN S. MEEDER, Associate Director CHARLES L. HAMPTON, Director WALTER ALTHAUSEN, Assistant Director BRUCE M. BEARDSLEY, Deputy Director CHARLES W. BENNETT, Assistant Director ULYESS D. BLACK, Associate Director RICHARD B. GREEN, Assistant Director GLENN L. CUMMINS, Assistant Director EARL G. HAMILTON, Assistant Director NEAL H. HILLERMAN, Assistant Director ELLIOTT C. MCENTEE, Assistant Director C. WILLIAM SCHLEICHER, JR., Assistant Director DAVID L. ROBINSON, Assistant Director ROBERT J. ZEMEL, Assistant Director P.D. RING, Adviser IHOWARD F. CRUMB, Acting 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 SUPPORT SERVICES DONALD E. ANDERSON, Director ROBERT E. FRAZIER, Associate Director WALTER W. KREIMANN, Associate Director *On loan from the Federal Reserve Bank of Chicago. tOn loan from the Federal Reserve Bank of New York. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

155 Federal Reserve Bulletin • March 1982 FOMC and Advisory Councils FEDERAL OPEN MARKET COMMITTEE PAUL A. VOLCKER, Chairman ANTHONY M. SOLOMON, Vice Chairman EDWARD G. BOEHNE LYLE E. GRAMLEY EMMETT J. RICE ROBERT H. BOYKIN SILAS KEEHN NANCY H. TEETERS E. GERALD CORRIGAN J. CHARLES PARTEE HENRY C. WALLICH STEPHEN H. AXILROD, Staff Director JOSEPH E. BURNS, 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 DONALD J. MULLINEAUX, Associate Economist MICHAEL BRADFIELD, General Counsel MICHAEL J. PRELL, Associate Economist JAMES H. OLTMAN, Deputy General Counsel KARL L. SCHELD, Associate Economist ROBERT E. MANNION, Assistant General Counsel EDWIN M. TRUMAN, Associate Economist JAMES L. KICHLINE, Economist JOSEPH S. ZEISEL, Associate Economist PETER D. STERNLIGHT, Manager for Domestic Operations, System Open Market Account SAM Y. CROSS, Manager for Foreign Operations, System Open Market Account FEDERAL ADVISORY COUNCIL DONALD C. PLATTEN, Second District, President ROBERT M. SURDAM, Seventh District, Vice President WILLIAM S. EDGERLY, First District RONALD TERRY, Eighth District JOHN H. WALTHER, Third District CLARENCE G. FRAME, Ninth District JOHN G. MCCOY, Fourth District GORDON E. WELLS, Tenth District VINCENT C. BURKE, JR., Fifth District T. C. FROST, JR., Eleventh District ROBERT STRICKLAND, Sixth District JOSEPH J. PINOLA, Twelfth District HERBERT V. PROCHNOW, Secretary WILLIAM J. KORSVIK, Associate Secretary CONSUMER ADVISORY COUNCIL CHARLOTTE H. SCOTT, Charlottesville, Virginia, Chairman MARGARET REILLY-PETRONE, Upper Montclair, New Jersey, Vice Chairman ARTHUR F. BOUTON, Little Rock, Arkansas SHIRLEY T. HOSOI, LOS Angeles, California JULIA H. BOYD, Alexandria, Virginia GEORGE S. IRVIN, Denver, Colorado ELLEN BROADMAN, Washington, D.C. HARRY N. JACKSON, Minneapolis, Minnesota GERALD R. CHRISTENSEN, Salt Lake City, Utah F. THOMAS JUSTER, Ann Arbor, Michigan JOSEPH N. CUGINI, Westerly, Rhode Island ROBERT J. MCEWEN, S. J., Chestnut Hill, Massachusetts RICHARD S. D'AGOSTINO, Philadelphia, Pennsylvania STAN L. MULARZ, Chicago, Illinois SUSAN PIERSON DE WITT, Springfield, Illinois WILLIAM J. O'CONNOR, Buffalo, New York JOANNE S. FAULKNER, New Haven, Connecticut WILLARD P. OGBURN, Boston, Massachusetts MEREDITH FERNSTROM, New York, New York JANET J. RATHE, Portland, Oregon ALLEN J. FISHBEIN, Washington, D.C. RENE REIXACH, Rochester, New York E. C. A. FORSBERG, SR., Atlanta, Georgia PETER D. SCHELLIE, Washington, D.C. LUTHER R. GATLING, New York, New York NANCY Z. SPILLMAN, LOS Angeles, California VERNARD W. HENLEY, Richmond, Virginia CLINTON WARNE, Cleveland, Ohio JUAN J. HINOJOSA, McAllen, Texas FREDERICK T. WEIMER, Chicago, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

73 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK, Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* 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 Jean A. Crockett Edward G. Boehne Robert M. Landis, Esq. Richard L. Smoot CLEVELAND* 44101 J. L. Jackson Willis J. Winn William H. Knoell Walter H. MacDonald Cincinnati 45201 Clifford R. Meyer Robert E. Showalter Pittsburgh 15230 Milton G. Hulme, Jr. Harold J. Swart RICHMOND* 23219 Steven Muller Robert P. Black Paul E. Reichardt Jimmie R. Monhollon Baltimore 21203 Edward H. Covell Robert D. McTeer, Jr. Charlotte 28230 Naomi G. Albanese Stuart P. Fishburne Culpeper Communications and Records Center 22701 Albert D. Tinkelenberg ATLANTA 30301 William A. Fickling, Jr. William F. Ford John H. Weitnauer, Jr. Robert P. Forrestal Birmingham 35202 William H. Martin, III Hiram J. Honea Jacksonville 32231 Copeland D. Newbern Charles D. East Miami 33152 David H. Rush F. J. Craven, Jr. Nashville 37203 Cecelia Adkins Jeffrey J. Wells New Orleans 70161 Leslie B. Lampton James D. Hawkins CHICAGO* 60690 John Sagan Silas Keehn Stanton R. Cook Daniel M. Doyle Detroit 48231 Russell G. Mawby William C. Conrad ST. LOUIS 63166 Armand C. Stalnaker Lawrence K. Roos W. L. Hadley Griffin Donald W. Moriarty, Jr. Little Rock 72203 Richard V. Warner John F. Breen Louisville 40232 James F. Thompson Donald L. Henry Memphis 38101 Donald B. Weis Robert E. Matthews MINNEAPOLIS 55480 William G. Phillips E. Gerald Corrigan John B. Davis, Jr. Thomas E. Gainor Helena 59601 Ernest B. Corrick 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. Boy kin John V. James William H. Wallace El Paso 79999 A. J. Losee Joel L. Koonce, Jr. Houston 77001 Jerome L. Howard J. Z. Rowe San Antonio 78295 Pat Legan Thomas H. Robertson SAN FRANCISCO 94120 Caroline L. Ahmanson John J. Balles Alan C. Furth John B. Williams Los Angeles 90051 Bruce M. Schwaegler Richard C. Dunn Portland 97208 John C. Hampton Angelo S. Carella Salt Lake City 84130 Wendell J. Ashton A. Grant Holman Seattle 98124 John W. Ellis 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

74 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- Each volume $1.00; 10 or more to one address, $.85 TIONS. 1974. 125 pp. each. ANNUAL REPORT. OPEN MARKET POLICIES AND OPERATING PROCEDURES— FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or STAFF STUDIES. 1971. 218 pp. $2.00 each; 10 or more to $2.00 each in the United States, its possessions, Canada, one address, $1.75 each. and Mexico; 10 or more of same issue to one address, REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT MECHA- $18.00 per year or $1.75 each. Elsewhere, $24.00 per NISM. Vol. 1. 1971. 276 pp. Vol. 2. 1971. 173 pp. Vol. 3. year or $2.50 each. 1972. 220 pp. Each volume $3.00; 10 or more to one BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint address, $2.50 each. of Part I only) 1976. 682 pp. $5.00. THE ECONOMETRICS OF PRICE DETERMINATION CONFER- BANKING AND MONETARY STATISTICS, 1941-1970. 1976. ENCE, October 30-31, 1970, Washington, D.C. 1972. 397 1,168 pp. $15.00. pp. Cloth ed. $5.00 each; 10 or more to one address, ANNUAL STATISTICAL DIGEST $4.50 each. Paper ed. $4.00 each; 10 or more to one 1971-75. 1976. 339 pp. $5.00 per copy. address, $3.60 each. 1972-76. 1977. 377 pp. $10.00 per copy. FEDERAL RESERVE STAFF STUDY: WAYS TO MODERATE 1973-77. 1978. 361 pp. $12.00 per copy. FLUCTUATIONS IN HOUSING CONSTRUCTION. 1972. 487 1974-78. 1980. 305 pp. $10.00 per copy. pp. $4.00 each; 10 or more to one address, $3.60 each. 1970-79. 1981. 587 pp. $20.00 per copy. LENDING FUNCTIONS OF THE FEDERAL RESERVE BANKS. 1980. 1981. 241 pp. $10.00 per copy. 1973. 271 pp. $3.50 each; 10 or more to one address, FEDERAL RESERVE CHART BOOK. Issued four times a year in $3.00 each. February, May, August, and November. Subscription IMPROVING THE MONETARY AGGREGATES: REPORT OF THE includes one issue of Historical Chart Book. $7.00 per ADVISORY COMMITTEE ON MONETARY STATISTICS. year or $2.00 each in the United States, its possessions, 1976. 43 pp. $1.00 each; 10 or more to one address, $.85 Canada, and Mexico. Elsewhere, $10.00 per year or each. $3.00 each. ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— HISTORICAL CHART BOOK. Issued annually in Sept. Subscrip- Regulation Z) Vol. I (Regular Transactions). 1969. 100 tion to Federal Reserve Chart Book includes one issue. pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each $1.25 each in the United States, its possessions, Canada, volume $1.00; 10 or more of same volume to one and Mexico; 10 or more to one address, $1.00 each. address, $.85 each. Elsewhere, $1.50 each. FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one RIES OF CHARTS. Weekly. $15.00 per year or $.40 each in address, $1.50 each. the United States, its possessions, Canada, and Mexico; THE BANK HOLDING COMPANY MOVEMENT TO 1978: A 10 or more of same issue to one address, $13.50 per year COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to or $.35 each. Elsewhere, $20.00 per year or $.50 each. one address, $2.25 each. THE FEDERAL RESERVE ACT, as amended through December IMPROVING THE MONETARY AGGREGATES: STAFF PAPERS. 1976, with an appendix containing provisions of certain 1978. 170 pp. $4.00 each; 10 or more to one address, other statutes affecting the Federal Reserve System. 307 $3.75 each. pp. $2.50. 1977 CONSUMER CREDIT SURVEY. 1978. 119 pp. $2.00 each. REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- FLOW OF FUNDS ACCOUNTS. 1949-1978. 1979. 171 pp. $1.75 ERAL RESERVE SYSTEM. each; 10 or more to one address, $1.50 each. BANK CREDIT-CARD AND CHECK-CREDIT PLANS. 1968. 102 INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; pp. $1.00 each; 10 or more to one address, $.85 each. 10 or more to one address, $1.25 each. REPORT OF THE JOINT TREASURY-FEDERAL RESERVE STUDY PUBLIC POLICY AND CAPITAL FORMATION. 1981. 326 pp. OF THE U.S. GOVERNMENT SECURITIES MARKET. 1969. $13.50 each. 48 pp. $.25 each; 10 or more to one address, $.20 each. NEW MONETARY CONTROL PROCEDURES: FEDERAL RE- JOINT TREASURY-FEDERAL RESERVE STUDY OF THE GOV- SERVE STAFF STUDY, 1981. ERNMENT SECURITIES MARKET; STAFF STUDIES—PART SEASONAL ADJUSTMENT OF THE MONETARY AGGREGATES: 1. 1970. 86 pp. $.50 each; 10 or more to one address, $.40 REPORT OF THE COMMITTEE OF EXPERTS ON SEASONAL each. PART 2, 1971. 153 pp. and PART 3, 1973. 131 pp. ADJUSTMENT TECHNIQUES. 1981. 55 pp. $2.75 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

75 FEDERAL RESERVE REGULATORY SERVICE. Looseleaf; updat- STAFF STUDIES.- Summaries Only Printed in the ed at least monthly. (Requests must be prepaid.) Bulletin Consumer and Community Affairs Handbook. $60.00 per Studies and papers on economic and financial subjects year. that are of general interest. Requests to obtain single copies Monetary Policy and Reserve Requirements Handbook. of the full text or to be added to the mailing list for the series $60.00 per year. may be sent to Publications Services. Securities Credit Transactions Handbook. $60.00 per year. Federal Reserve Regulatory Service. 2 vols. (Contains all PERFORMANCE AND CHARACTERISTICS OF EDGE CORPORAthree Handbooks plus substantial additional material.) TIONS, by James V. Houpt. Feb. 1981. 56 pp. $175.00 per year. BANKING STRUCTURE AND PERFORMANCE AT THE STATE Rates for subscribers outside the United States are as LEVEL DURING THE 1970s, by Stephen A. Rhoades. Mar. follows and include additional air mail costs: 1981. 26 pp. Federal Reserve Regulatory Service, $225.00 per year. FEDERAL RESERVE DECISIONS ON BANK MERGERS AND AC- Each Handbook, $75.00 per year. QUISITIONS DURING THE 1970S, by Stephen A. Rhoades. WELCOME TO THE FEDERAL RESERVE, December 1980. Aug. 1981. 16 pp. THE USE OF CONTINGENCIES AND COMMITMENTS BY COM- MERCIAL BANKS, by Benjamin Wolkowitz et al. Jan. 1982. 186 pp. CONSUMER EDUCATION PAMPHLETS MULTIBANK HOLDING COMPANIES: RECENT EVIDENCE ON Short pamphlets suitable for classroom use. Multiple COMPETITION AND PERFORMANCE IN BANKING MARcopies available without charge. KETS, by Timothy J. Curry and John T. Rose. Jan. 1982. 9 pp. Alice in Debitland Consumer Handbook to Credit Protection Laws Dealing with Inflation: Obstacles and Opportunities REPRINTS The Equal Credit Opportunity Act and . . . Age Most of the articles reprinted do not exceed 12 pages. The Equal Credit Opportunity Act and . . . Credit Rights in Housing Revision of Bank Credit Series. 12/71. The Equal Credit Opportunity Act and . . . Doctors, Law- Rates on Consumer Installment Loans. 9/73. yers, Small Retailers, and Others Who May Provide Industrial Electric Power Use. 1/76. Incidental Credit Revised Series for Member Bank Deposits and Aggregate The Equal Credit Opportunity Act and . . . Women Reserves. 4/76. Fair Credit Billing Federal Reserve Operations in Payment Mechanisms: A Federal Reserve Glossary Summary. 6/76. Guide to Federal Reserve Regulations Perspectives on Personal Saving. 8/80. How to File A Consumer Credit Complaint The Impact of Rising Oil Prices on the Major Foreign If You Borrow To Buy Stock Industrial Countries. 10/80. If You Use A Credit Card Federal Reserve and the Payments System: Upgrading Elec- Series on the Structure of the Federal Reserve System tronic Capabilities for the 1980s. 2/81. The Board of Governors of the Federal Reserve System U.S. International Transactions in 1980. 4/81. The Federal Open Market Committee Bank Lending in Developing Countries. 9/81. Federal Reserve Bank Board of Directors Federal Reserve Banks Monetary Control Act of 1980 Truth in Leasing U.S. Currency What Truth in Lending Means to You Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 Index to Statistical Tables References are to pages A3 through A68 although the prefix "A" is omitted in this index ACCEPTANCES, bankers, 10, 25, 27 Demand deposits—Continued Agricultural loans, commercial banks, 18, 19, 20, 26 Ownership by individuals, partnerships, and Assets and liabilities (See also Foreigners) corporations, 24 Banks, by classes, 17, 18-21 Subject to reserve requirements, 14 Domestic finance companies, 39 Turnover, 12 Federal Reserve Banks, 11 Depository institutions Foreign banks, U.S. branches and agencies, 22 Reserve requirements, 8 Nonfinancial corporations, 38 Reserves, 3, 4, 5, 14 Savings institutions, 29 Deposits (See also specific types) Automobiles Banks, by classes, 3, 17, 18-21, 29 Consumer installment credit, 42, 43 Federal Reserve Banks, 4, 11 Production, 48, 49 Subject to reserve requirements, 14 Turnover, 12 Discount rates at Reserve Banks and at foreign central BANKERS balances, 17, 18-20 banks (See Interest rates) (See also Foreigners) Discounts and advances by Reserve Banks (See Loans) Banks for Cooperatives, 35 Dividends, corporate, 37 Bonds (See also U.S. government securities) New issues, 36 Yields, 3 EMPLOYMENT, 46, 47 Branch banks, 15, 21, 22, 56 Eurodollars, 27 Business activity, nonfinancial, 46 Business expenditures on new plant and equipment, 38 FARM mortgage loans, 41 Business loans (See Commercial and industrial loans) Federal agency obligations, 4, 10, 11, 12, 34 Federal credit agencies, 35 CAPACITY utilization, 46 Federal finance Capital accounts Debt subject to statutory limitation and types and Banks, by classes, 17 ownership of gross debt, 32 Federal Reserve Banks, 11 Receipts and outlays, 31 Central banks, 67 Treasury operating balance, 30 Certificates of deposit, 21, 27 Federal Financing Bank, 30, 35 Commercial and industrial loans Federal funds, 3, 6, 18, 19, 20, 27, 30 Commercial banks, 15, 17, 22, 26 Federal Home Loan Banks, 35 Weekly reporting banks, 18-22, 23 Federal Home Loan Mortgage Corporation, 35, 40, 41 Commercial banks Federal Housing Administration, 35, 40, 41 Assets and liabilities, 3, 15, 17, 18-21 Federal Intermediate Credit Banks, 35 Business loans, 26 Federal Land Banks, 35, 41 Commercial and industrial loans, 15, 17, 22, 23, 26 Federal National Mortgage Association, 35, 40, 41 Consumer loans held, by type, 42, 43 Federal Reserve Banks Loans sold outright, 21 Condition statement, 11 Nondeposit funds, 16 Discount rates (See Interest rates) Number, 17 U.S. government securities held, 4, 11, 12, 32, 33 Real estate mortgages held, by holder and property, 41 Federal Reserve credit, 4, 5, 11, 12 Commercial paper, 3, 25, 27, 39 Federal Reserve notes, 11 Condition statements (See Assets and liabilities) Federally sponsored credit agencies, 35 Construction, 46, 50 Finance companies Consumer installment credit, 42, 43 Assets and liabilities, 39 Consumer prices, 46, 51 Business credit, 39 Consumption expenditures, 52, 53 Loans, 18, 19, 20, 42, 43 Corporations Paper, 25, 27 Profits and their distribution, 37 Financial institutions Security issues, 36, 66 Loans to, 18, 19, 20 Cost of living (See Consumer prices) Selected assets and liabilities, 29 Credit unions, 29, 42, 43 Float, 4 Currency and coin, 5, 17 Flow of funds, 44, 45 Currency in circulation, 4, 13 Foreign banks, assets and liabilities of U.S. branches and Customer credit, stock market, 28 agencies, 22 Foreign currency operations, 11 Foreign deposits in U.S. banks, 4, 11, 18, 19, 20 DEBITS to deposit accounts, 12 Foreign exchange rates, 68 Debt (See specific types of debt or securities) Foreign trade, 55 Demand deposits Foreigners Adjusted, commercial banks, 12, 14 Claims on, 56, 58, 61, 62, 63, 65 Banks, by classes, 17, 18-21 Liabilities to, 21, 55, 56-60, 64, 66, 67 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

77 GOLD REAL estate loans Certificates, 11 Banks, by classes, 18-20, 41 Stock, 4, 55 Rates, terms, yields, and activity, 3, 40 Government National Mortgage Association, 35, 40, 41 Savings institutions, 27 Gross national product, 52, 53 Type of holder and property mortgaged, 41 Repurchase agreements and federal funds, 6, 18, 19, 20 HOUSING, new and existing units, 50 Reserve requirements, 8 Reserves INCOME, personal and national, 46, 52, 53 Commercial banks, 17 Industrial production, 46, 48 Depository institutions, 3, 4, 5, 14 Installment loans, 42, 43 Federal Reserve Banks, 11 Insurance companies, 29, 32, 33, 41 Member banks, 14 Interbank loans and deposits, 17 U.S. reserve assets, 55 Interest rates Residential mortgage loans, 40 Bonds, 3 Retail credit and retail sales, 42, 43, 46 Business loans of banks, 26 Federal Reserve Banks, 3, 7 SAVING Foreign central banks and foreign countries, 67 Flow of funds, 44, 45 Money and capital markets, 3, 27 National income accounts, 53 Mortgages, 3, 40 Savings and loan assns., 3, 9, 29, 33, 41, 44 Prime rate, commercial banks, 26 Savings deposits (See Time deposits) Time and savings deposits, 9 Securities (See also U.S. government securities) International capital transactions of United States, 56-67 Federal and federally sponsored credit agencies, 35 International organizations, 58, 59-62, 64-67 Foreign transactions, 66 Inventories, 52 New issues, 36 Investment companies, issues and assets, 37 Prices, 28 Investments (See also specific types) Special drawing rights, 4, 11, 54, 55 Banks, by classes, 17, 29 State and local governments Commercial banks, 3, 15, 17, 18-20 Deposits, 18, 19, 20 Federal Reserve Banks, 11, 12 Holdings of U.S. government securities, 32, 33 Savings institutions, 29, 41 New security issues, 36 Ownership of securities issued by, 18, 19, 20, 29 LABOR force, 47 Yields of securities, 3 Life insurance companies (See Insurance companies) Stock market, 28 Loans (See also specific types) Stocks (See also Securities) Banks, by classes, 17, 18—21 New issues, 36 Commercial banks, 3, 15, 17, 18-21, 22, 26 Prices, 28 Federal Reserve Banks, 3, 4, 5, 7, 11, 12 Insured or guaranteed by United States, 40, 41 Savings institutions, 29, 41 TAX receipts, federal, 31 Time deposits, 3, 9, 12, 14, 17, 18-21 MANUFACTURING Trade, foreign, 55 Capacity utilization, 46 Treasury currency, Treasury cash, 4 Production, 46, 49 Treasury deposits, 4, 11, 30 Margin requirements, 28 Treasury operating balance, 30 Member banks Borrowing at Federal Reserve Banks, 5, 11 Federal funds and repurchase agreements, 6 UNEMPLOYMENT, 47 Reserve requirements, 8 U.S. balance of payments, 54 Reserves and related items, 14 U.S. government balances Mining production, 49 Commercial bank holdings, 18, 19, 20 Mobile home shipments, 50 Member bank holdings, 14 Monetary aggregates, 3, 14 Treasury deposits at Reserve Banks, 4, 11, 30 Money and capital market rates (See Interest U.S. government securities rates) Bank holdings, 17, 18-20, 32, 33 Money stock measures and components, 3, 13 Dealer transactions, positions, and financing, 34 Mortgages (See Real estate loans) Federal Reserve Bank holdings, 4, 11, 12, 32, 33 Mutual funds (See Investment companies) Foreign and international holdings and transactions, 11, Mutual savings banks, 3, 9, 18-20, 29, 32, 33, 41 32, 67 Open market transactions, 10 NATIONAL defense outlays, 31 Outstanding, by type and ownership, 32, 33 National income, 52 Rates, 3, 27 Savings institutions, 29 OPEN market transactions, 10 Utilities, production, 49 PERSONAL income, 53 VETERANS Administration, 40, 41 Prices Consumer and producer, 46, 51 Stock market, 28 WEEKLY reporting banks, 18-23 Prime rate, commercial banks, 26 Wholesale (producer) prices, 46, 51 Production, 46, 48 Profits, corporate, 37 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories A _ 0) LEGEND Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories Federal Reserve Bank Facility ^ Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

79 Publications of Interest FEDERAL RESERVE CONSUMER CREDIT sumer credit protections. This 44-page booklet ex- PUBLICATIONS plains how to use the credit laws to shop for credit, apply for it, keep up credit ratings, and complain about an unfair deal. The Federal Reserve Board publishes a series of Protections offered by the Electronic Fund Transfer pamphlets covering individual credit laws and topics, Act are explained in Alice in Debitland. This booklet as pictured below. The series includes such subjects as offers tips for those using the new "paperless" syshow the Equal Credit Opportunity Act protects wom- tems for transferring money. en against discrimination in their credit dealings, how Copies of consumer publications are available free to use a credit card, and how to use Truth in Lending of charge from Publications Services, Board of Goverinformation to compare credit costs. nors of the Federal Reserve System, Washington, The Board also publishes the Consumer Handbook D.C. 20551. Multiple copies for classroom use are also to Credit Protection Laws, a complete guide to con- available free of charge. LE4BMO LE4SING The LE4SMG Equal Credit LE4SMG Opportunity Act and TRUTH IN LE4SING Credit Rights In Housing ^^Alice What If Thithln You Lending Borrow Debitland Means To Buy To You Stock— The Equal Credit Opportunity Act and... Fair WOMEN Credit YOU USE A Billing CREDIT CARD L Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis